Comprehensive breakdown of top technical interview questions on accounting walk-throughs, enterprise value calculations, DCF mechanics, and deal rationale.
Top Technical IB Interview Questions & Models
Investment Banking interviews test both technical modeling precision and business intuition. Here are the core topics asked during bulge bracket and boutique firm rounds:
1. Accounting & Statement Interconnections
Q: If Depreciation increases by $10, how does it affect the 3 financial statements?
Answer: Income Statement: Operating Income drops by $10. Assuming a 20% tax rate, Net Income drops by $8. Cash Flow Statement: Net Income is down by $8, but add back $10 of non-cash Depreciation, so Cash from Operations increases by $2. Balance Sheet: Cash increases by $2, PP&E decreases by $10, and Retained Earnings decreases by $8 (Assets = Liabilities + Equity balances).
2. Enterprise Value vs Equity Value
Enterprise Value (EV) = Equity Value + Total Debt + Preferred Stock + Minority Interest - Cash & Cash Equivalents.
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