What the interview is for
An analyst is hired to do three things: produce accurate work quickly, under pressure, for long hours, without complaint; understand enough finance to know when the work is wrong; and be tolerable to the people who will sit next to them while they do it. Every investment banking interview, in every market, is a test of those three things, and every question you will be asked is a way of getting at one of them. Once you see that, the interview stops looking like an exam with an endless syllabus and starts looking like what it is: a short list of question types, repeated in slightly different words, by people who have usually been doing this for years and can tell within a minute whether you have understood the question or memorised an answer to it.
This guide goes through the five parts of the interview, the question types inside each, and the reasoning the interviewer is listening for. The examples are the Academy's own. We have deliberately not written model answers for the fit questions, because an answer that is not yours is worse than no answer, and because the interviewer has heard the borrowed version. For the technical questions we give the structure of a good answer and the mistake that reveals a memorised one.
The notes that I took in class were incredibly useful, and I used them as study guides when preparing for my interviews so that I would be well-versed in any concepts that might arise during the course of my interviews.
How the process runs, and where it differs
In the United States, a candidate who gets past the application typically has one or two phone or video interviews with an analyst or associate, then a "superday": four to six interviews in one day, including senior bankers, after which the group meets and decides. Many banks add a recorded video interview at the start, in which fixed questions appear on screen and you answer to a camera with a short preparation time. The content across all of these rounds is the five parts described below, with the technical weight heaviest in the early rounds and the judgement about you heaviest at the end.
In London and most of continental Europe the early stages are more structured. After the online application come numerical and situational-judgement tests, then a recorded video interview, then an assessment centre: a half or full day combining a group exercise, an individual case study or presentation, sometimes a written exercise, and two or more interviews, with assessors scoring every candidate against a published list of competencies. The interviews inside an assessment centre ask the same five parts. The group exercise and case are additional, and a separate section below covers them. Continental offices may also run the interview partly in the local language for client-facing roles.
Whichever market, assume every interviewer has your CV in front of them and has read it in the thirty seconds before you walked in. Everything on it is fair game, in detail.
Part one: your story
"Tell me about yourself." "Walk me through your CV." "How did you end up here?" This is the first question in nearly every interview and the most under-prepared, because candidates assume they know their own lives. The interviewer is not asking for a chronology. They want a two-minute account that explains why a person with your history wants this job, with each step leading to the next, ending in this room.
A useful structure has four parts. Where you started, in one sentence. The moment or experience that pointed you towards finance, which must be specific: a course, an internship, a family business, a deal you followed, a problem you could not stop thinking about. What you did about it: the internships, the courses, the modeling you built, the people you spoke to. Why this firm and this group, now. Delivered without notes, in under two minutes, with the energy of someone telling a story they find interesting rather than reciting one.
The mistakes are predictable. Listing the CV in order with no thread. Starting with where you were born. Claiming a lifelong passion for mergers that began at age twelve. Explaining a non-finance degree apologetically rather than as an asset. And, for career changers and non-target candidates, failing to address the obvious question: if you wanted this, why did you not do it earlier? Answer it before they ask.
Expect follow-ups on anything you mention. If you say you built a discounted cash flow model on a listed company during an internship, the next question is what discount rate you used and why. Everything in the story must be defensible to one level of detail beyond what you said.
Part two: motivation
"Why investment banking?" "Why this bank?" "Why this group?" "Why London rather than New York?" "What else are you interviewing for?" These test whether you have understood what the job is and have chosen it rather than drifted towards it, and whether you will accept the offer if you get it.
"Why banking" needs an answer that could not also be given for consulting, asset management or a graduate scheme at an insurer. The honest reasons are usually some mix of: the work itself (valuation, structuring, the mechanics of how companies are bought, sold and financed), the pace and the volume of responsibility early, and the fact that it is the training ground from which many other roles in finance are entered. Say the ones that are true for you, with a specific example of having tested that interest: a deal you followed closely, a model you built, a conversation with someone in the job that confirmed rather than deterred.
"Why this bank" cannot be answered with the firm's own marketing. It can be answered with something you know about the bank that a competitor cannot claim: a strength in a sector you care about, a recent transaction you have read about and can discuss, the structure of its analyst programme, and above all, people. If you have spoken to three people at the firm, say so, by name if they gave you permission, and say what they told you that shaped your view. That is what a credible answer sounds like, and it is the main reason the networking in the breaking-in guide matters.
"Why this office" is a real question in Europe. A candidate interviewing in Frankfurt or Zürich should have a reason for that city that is about the market and the work, and should expect the language question to follow. "Why London" from an American interviewer at a London desk is a question about whether you understand that London recruits, works and pays differently from New York, and whether you will still be there in three years.
On other interviews: be honest and brief. Interviewers compare notes across firms. Saying you are also interviewing with two comparable banks is fine. Saying you are only interested in this one, to an interviewer who knows you interviewed down the street yesterday, is not.
Part three: technical questions
Technical questions test whether you understand the connections: between the three financial statements, between the valuation methods, between a change in one number and its consequences everywhere else. Interviewers are listening for the "because". A candidate who says that depreciation reduces net income, and stops, has memorised a fact. A candidate who says that depreciation reduces pre-tax income, which reduces tax, so net income falls by less than the depreciation charge, and that the cash flow statement adds the full non-cash charge back, so cash actually rises by the tax saved, has understood the system. The second candidate gets a harder question next, which is the goal.
The difficulty scales with your background and with how well you answer. An undergraduate with a history degree will not be asked to build a leveraged buyout model from memory. They will be asked the questions below, and if they handle them, a few harder ones. A finance master's student or a lateral hire will start further along. Below are the question types, grouped, with the structure of a strong answer and the error that gives a weak one away.
Accounting and the three statements
| Question type | What a strong answer contains | What gives a weak one away |
|---|---|---|
| How do the three statements link? | Net income from the income statement is the first line of the cash flow statement and flows into retained earnings on the balance sheet; non-cash charges are added back; changes in working capital, capital expenditure and financing move cash; the closing cash is the balance sheet cash; the balance sheet balances through retained earnings and cash. | Reciting the three statements' names and contents without saying how a number moves between them. |
| A single item changes (an expense rises, inventory is bought, a non-cash charge increases): walk me through all three statements. | Start on the income statement if the item hits it, apply tax, carry net income to the cash flow statement, adjust for the cash or non-cash nature of the item, arrive at the cash change, then show the balance sheet balancing: assets on one side, liabilities and equity on the other. | Forgetting tax. Treating a non-cash charge as a cash outflow. Reaching a balance sheet that does not balance and not noticing. |
| What is working capital and why does it matter for cash? | Operating current assets less operating current liabilities, excluding cash and debt. An increase absorbs cash because the company has paid for inventory or extended credit to customers before collecting; a decrease releases it. Growth businesses often consume cash through working capital even while profitable. | Defining it as current assets minus current liabilities including cash and debt, and having no view on why it matters. |
| Why can a profitable company run out of cash, or a loss-making one generate it? | Timing differences between accrual accounting and cash: working-capital build, capital expenditure, debt repayment on one side; large non-cash charges, asset sales, working-capital release on the other. | Saying it cannot happen. |
| What is EBITDA and what is wrong with it? | Operating profit before depreciation and amortisation: a rough proxy for operating cash generation that ignores capital intensity, working capital and tax, which is why it flatters capital-heavy businesses and why lenders and buyers adjust it. | Calling it cash flow. |
Valuation
| Question type | What a strong answer contains | What gives a weak one away |
|---|---|---|
| What are the main valuation methods and how do they compare? | Trading comparables (what the market pays today for similar listed companies), precedent transactions (what acquirers paid for similar companies, usually including a control premium), and discounted cash flow (intrinsic value from forecast cash). Each answers a slightly different question, so they are presented together and the differences explained, not averaged. | Ranking them as "most accurate" without saying what each is measuring. |
| Walk me through a DCF. | Forecast unlevered free cash flow for five to ten years; estimate a discount rate as the weighted average cost of capital; compute a terminal value by perpetuity growth or exit multiple; discount everything to today to get enterprise value; subtract net debt and other claims to get equity value. Say which assumptions drive the answer. The worked example in this series is built to be the answer to this question. | Any version that does not mention the terminal value, or that discounts net income. |
| Enterprise value versus equity value? | Enterprise value is the value of the operating business to all capital providers; equity value is what is left for shareholders after debt holders and other claims. Bridge: equity value plus debt, preferred and minority interests, less cash. Multiples must match: enterprise value over EBITDA, equity value over net income. | Mixing the numerator and denominator of a multiple, or saying cash is added to get enterprise value. |
| What discount rate, and how do you get it? | WACC: cost of equity from the capital asset pricing model (risk-free rate plus beta times the equity risk premium, with beta taken from comparable companies and re-levered), after-tax cost of debt from current yields, weighted by target market-value capital structure. | Using a round number with no idea where it came from, or forgetting the tax shield on debt. |
| Why might two companies in the same sector trade on different multiples? | Growth, margins, returns on capital, risk, capital intensity, leverage, size and liquidity, quality of management and governance, accounting differences. A good answer picks two or three and gives a mechanism for each. | "Because one is better." |
| How would you value a company with no profits, or a bank, or a mining company? | Revenue or user-based multiples and a longer-dated DCF for early-stage companies; dividend discount or price-to-book and return-on-equity approaches for banks, where debt is operating rather than financing; net asset value and commodity price decks for resource companies. The point is recognising when the standard toolkit does not fit. | Insisting on a DCF for everything. |
Transactions
| Question type | What a strong answer contains | What gives a weak one away |
|---|---|---|
| What makes an acquisition accretive or dilutive? | Whether the acquirer's earnings per share rise or fall after the deal, which depends on the price paid relative to the target's earnings and on how it is financed: the cost of the financing (after-tax interest on debt, the acquirer's own earnings yield for shares) compared with the target's earnings yield at the purchase price, plus synergies. | Saying any deal paid for in cash is accretive, without reference to the cost of the cash. |
| How does a leveraged buyout create a return? | A sponsor buys a business using a large proportion of debt, uses the business's cash flow to pay the debt down over several years, and sells it; the equity return comes from debt paydown, earnings growth and any change in the exit multiple. The limiting factor is how much debt the cash flows can service. | Thinking the return comes from the leverage alone, with no mention of cash flow or exit. |
| Why would a company issue equity rather than debt, or the reverse? | Cost, flexibility, dilution, covenants, leverage capacity, market conditions, signalling, what the money is for. Debt is cheaper but must be serviced; equity is permanent but dilutes. | Not knowing that debt is usually cheaper than equity, or why. |
| What happens in an initial public offering? | Selection of banks, due diligence and the prospectus, valuation and pricing range, marketing and bookbuilding, pricing, allocation, first day of trading and stabilisation. The Glacier Point module walks through a fictional one in full. | Only describing the first day of trading. |
How technical answers are judged
Interviewers use three signals. Can you get to the answer? Do you explain the mechanism, not just the result? And when pushed one step past what you know, do you reason out loud or guess? The third matters most. "I have not come across that, but if the cost of debt rises then the weighted average rises, so the value falls, and the effect is larger for a more leveraged company" is a far better answer than a confident wrong number. Nobody is hired for knowing everything. People are rejected for pretending to.
My strong interest in the curriculum and opportunities at Swiss Finance helped me to apply my knowledge in finance and accounting to such jobs and to be able to answer any question an interviewer asks me however technical it may be.
Part four: deals and markets
"Tell me about a deal you have followed." "Pitch me a stock." "What is happening in markets that matters to our clients?" "What has the central bank done this year and why does it matter for a company thinking about a bond issue?" These test whether your interest in finance extends beyond the interview.
For a deal, prepare two, in sectors the group covers, and know them properly: the parties, the rationale from each side, the price and the implied multiple, how it was financed, the market's reaction, what you think of it and why. Choose deals you can discuss, not the largest ones in the news, and if the firm advised on one of them, know which side. For a stock, pick a company whose business you can explain in a sentence, have a view with two or three reasons, know the valuation roughly, and know what would prove you wrong. For markets, the honest preparation is reading the financial press every day for the months before interviews, so that you have opinions rather than headlines.
In Europe, expect a local angle: a Frankfurt interviewer may ask about a German transaction; a Zürich interviewer may ask about Swiss banking consolidation; a Stockholm interviewer about a Nordic listing. Reading the local market for a few weeks before the interview is a small effort that few candidates make.
Part five: brainteasers and mental arithmetic
Some interviewers, more in the United States than in Europe, add a short mental arithmetic or logic question: a percentage, a quick multiplication, a sequence, a question with no clean answer that is designed to show how you think. These are less common than they were, but they appear, and the preparation is cheap. Practise arithmetic without a calculator for ten minutes a day for a month: percentages, multiplication of two-digit numbers, rough division, quick estimates of a multiple from two numbers. When a brainteaser comes, say your reasoning aloud, state your assumptions, and arrive at an answer. An interviewer who asks how many cars cross a bridge in a day does not know the answer either; they want to watch you decompose the problem.
The European layer: tests, video interviews and assessment centres
Candidates applying in London or on the continent meet three stages that American candidates mostly do not, and each has its own preparation.
Online tests
Numerical reasoning tests present a chart or table and ask a question with five answer options under a time limit. They are learnable: the question types repeat, and the constraint is speed, which comes from practice. Situational-judgement tests present a workplace scenario and ask what you would do. The answers that score are the ones consistent with the bank's own published values, which are usually about escalating, communicating and taking ownership rather than heroics. Some banks use a game-based or cognitive assessment instead; practise whatever the bank says it uses.
Recorded video interviews
You see a question, have a short time to think, then record an answer to the camera with no interviewer. The questions are the fit questions from parts one and two, plus sometimes a technical one. Candidates do badly on these not because the questions are hard but because talking to a camera is strange. Rehearse by recording yourself. Look at the lens, use the thinking time to pick two points, answer in under ninety seconds, stop.
The group exercise
A small group is given a business problem and a time limit and asked to reach a recommendation, while assessors watch. It is not a competition to speak most. Assessors score contribution, listening, structure and whether the group reached an answer. The candidates who score well summarise where the group has got to, bring in a quiet member, keep the time, and offer a recommendation at the end. The ones who score badly dominate, interrupt, or disappear.
The case study
An individual exercise: a short document about a company and a decision, time to read and analyse, then a presentation or interview on your recommendation. The structure that works is the one analysts use at work: what is the question, what are the options, what does the evidence say about each, what do you recommend, what are the risks. The numbers in the case are there to be used; a recommendation that does not refer to them is not a recommendation. If a modeling test is included, it is usually a simplified three-statement or valuation exercise in a spreadsheet, and the DCF guide covers the mechanics.
How to prepare: six weeks
| Week | Focus | Output |
|---|---|---|
| 1 | Your story and motivation | A written two-minute story, said aloud ten times, then rewritten. Three specific reasons for each firm on your list. |
| 2 | Accounting | The three-statement links written out from memory. Five "one item changes" walk-throughs done on paper, with tax, until the balance sheet balances every time. |
| 3 | Valuation | A DCF you built yourself, on a company you chose, with every assumption defensible. The enterprise-value bridge for that company. |
| 4 | Deals and markets | Two deals learned in depth. One stock pitch. A daily reading habit established. |
| 5 | Practice interviews | At least three full mock interviews with someone who will push back, ideally someone who has worked in the industry. Record them. |
| 6 | Tests, video, assessment centre (Europe); arithmetic and brainteasers (United States) | Timed numerical tests daily. Two recorded video answers. One group exercise with friends, timed, with someone assessing. |
The common thread is production. Reading about interviews does not prepare you for them; writing your own answers, building your own model and saying things aloud does. Candidates who prepare from a list of other people's answers tend to sound like it, and interviewers, who have heard the list, move on to the questions the list does not cover.
I believe that I emerged from the program ready to interview for competitive positions with confidence, as well as with a great network of friends.
On the day
Arrive early, dressed as the bankers dress. Bring copies of your CV. Shake hands, sit when asked, keep your hands still. Answer the question that was asked, then stop; silence after a complete answer is not a problem, and filling it is. When you do not know something, say so and reason. Ask two questions at the end that show you have thought about the job: how the group staffs analysts across deals, what the strongest first-year analysts did differently, what the interviewer would change about their own first year. Do not ask about hours, pay or exit opportunities. Afterwards, a short email of thanks to each interviewer, the same day, that refers to something specific from the conversation.
The lessons I have learned from you regarding office composure as well as interview skills have been invaluable to me, and I will take them with me to the recruiting sessions this Fall and to my job in the future.
The judgement being made at the end of a superday or an assessment centre is not whether you were the most technically fluent candidate. It is whether a team of tired people wants to add you to it. Technical fluency gets you to the final round. Being clear, honest, prepared and easy to work with gets you the offer.
Questions people ask
- How technical are investment banking interviews for undergraduates?
- Technical enough that you must know the three-statement links, the main valuation methods and the basic vocabulary of a deal, but not so technical that you will be asked to build a model from memory. Expect two to five technical questions per interview, increasing in difficulty if you answer well.
- What is a superday?
- The final round in the American process: a series of back-to-back interviews, typically four to six, held on one day at the bank's office or by video, after which the group decides on offers.
- What happens at an assessment centre?
- A half day or full day used by banks in the United Kingdom and continental Europe for final-round candidates. It typically combines a group exercise, an individual case study or presentation, a numerical or written test and two or more interviews, with assessors scoring each candidate against a fixed set of competencies.
- Should I say I want to do private equity after two years?
- Not in an investment banking interview. The bank is hiring you to work for it. Talk about what you want to learn and do in banking; your longer-term plans can stay your own.
Practise with people who have sat on the other side of the table
The Academy's Mentorship Program pairs you with a senior finance professional for one-to-one sessions, including interview preparation on your own answers, your own models and your own deals. It runs alongside or independently of the Investment Banking Course.
The Mentorship Program →