How to Prepare for Investment Banking Interviews

Free sample from the Deskcraft question bank

Preparation is not reading more, it is practising under pressure. This guide walks the ground you must cover — accounting, valuation, M&A, LBO and fit — with a real sample from the Deskcraft bank.

1. Walk me through the sell-side M&A process.

Model answer

Preparation of financials, the CIM and a data room; buyer outreach with a teaser and NDA; first-round indications of interest; management presentations and due diligence for selected buyers; final bids with a marked-up purchase agreement; negotiation and signing; then regulatory approval and closing. The banker runs a competitive auction to maximize price and certainty.

2. Walk me through the three financial statements and how they connect.

Model answer

The income statement shows profitability over a period, ending in net income. The cash flow statement starts from net income, adds back non-cash items (D&A, SBC), adjusts for changes in working capital, then shows investing and financing flows to reach the change in cash. The balance sheet is a point-in-time snapshot: net income flows into retained earnings, the ending cash from the CFS becomes cash on the BS, and PP&E links via capex and depreciation. Assets = liabilities + equity must always hold.

3. What are the three financial statements and what does each show?

Model answer

The income statement shows profitability over a period (revenue down to net income). The balance sheet shows financial position at a point in time (assets = liabilities + equity). The cash flow statement shows actual cash movement over a period across operating, investing and financing, reconciling net income to the change in cash. They link: net income flows to the CFS and to retained earnings, and ending cash on the CFS is the cash line on the BS.

4. Why investment banking, and why our firm specifically?

Model answer

Banking: transactions as the fastest way to learn how companies are valued, financed and sold; intensity and ownership early; evidence from things already done (internships, clubs, courses). Firm: concrete hooks — deals the firm did, group strengths, people spoken to (names if true), culture/platform fit. The firm part must be impossible to copy-paste to a competitor.