Technical Interview Guide - Investment Banking

Technical interviews are a crucial part of the investment banking recruitment process. These interviews assess your financial knowledge, analytical abilities, and problem-solving skills. Investment bankers must quickly analyze financial data, understand valuation methodologies, and communicate insights effectively. Technical interviews aim to evaluate your readiness for this demanding environment.

This guide covers the common interview formats, key topics assessed, and how to prepare effectively.

📋 Technical Interview Format


While there may be some technical questions in the HireVue process, a more in-depth technical interview typically occurs during the final round of interviews or on Assessment Day. This stage often includes multiple back-to-back interviews alongside the behavioural interview.

These sessions might last around 10 minutes each and are usually conducted by a VP or associate with a list of prepared questions. Unlike the behavioural interview, the technical interview is far more methodical and structured, feeling less like a conversation and more like a series of questions.

📚 Key Topics to Master

Technical interviews typically cover the following topics:

Accounting & Financial Statements 📈

A solid understanding of accounting is essential for financial modeling and valuation. Expect questions on:

• Three financial statements (Income Statement, Balance Sheet, Cash Flow Statement)

• How the statements link together

• Key accounting concepts (accruals, depreciation, goodwill, working capital)

• Walk me through how $10 of depreciation affects the three statements

Valuation Techniques 💸

Investment bankers need to determine a company's worth using different methodologies. Be prepared to discuss, define or explain:

• Comparable Company Analysis (Trading Comps)

• Precedent Transaction Analysis (Deal Comps)

• Discounted Cash Flow (DCF) analysis

  • How to calculate free cash flow (FCF)

  • Weighted Average Cost of Capital (WACC)

  • Terminal value (Gordon Growth vs. Exit Multiple)

• When to use different valuation methods

Mergers & Acquisitions (M&A) 🎓

Understanding the mechanics of M&A is key. Be prepared to answer questions on:

• Accretion vs. dilution analysis

• Purchase methods (cash, stock, debt)

• Synergies and their impact on valuation

• Goodwill and purchase price allocation

Leveraged Buyouts (LBOs) 🎡

LBOs test your understanding of debt financing and financial modeling. Key topics include:

• LBO mechanics and capital structure

• Sources and uses of funds

• Calculating internal rate of return (IRR)

• Typical characteristics of LBO targets

Market & Industry Knowledge 📊

Investment bankers need a strong grasp of market trends and financial instruments. Expect questions on:

• Interest rates and their impact on valuations and/or bond yields

• Equity vs. debt financing

• Recent deals and market movements

• Key industry trends and drivers

Brain Teasers & Mental Math 🧠

Quick thinking and numerical fluency are important in banking. Sometimes assessors may even finish their interviews with a riddle or a brain teaser. Expect:

• Basic mental math (e.g., division, percentages, multiplication)

• Estimation problems

• Logic puzzles and brainteasers

• Riddles

🚀 Tips for Success

• Think out loud: Show your thought process clearly.

• Stay structured: Break down complex questions step by step.

• Ask clarifying questions: If something is unclear, request additional details.

• Don’t rush: Take a moment to collect your thoughts before answering.

• Be confident: Even if unsure, explain your reasoning logically.

📚 How to Prepare


Preparation is key to success in technical interviews. Follow these steps:

Master Technical Concepts 📖

Ensure you understand all core financial concepts and can apply them confidently.

Review Company-Specific Topics 🔍

Different firms emphasise different areas, so research each bank’s interview style.

Practice Questions 📝

Work through as many practice problems as possible, paying particular attention to your weak areas. Many banks tend to recycle the same questions, so it's a good idea to do some online research to see what previous candidates have been asked.

👉 Go to the technical question section of GradIQ's Investment Banking Preparation Resources for our recommended question banks.

Mock Interviews 🎯

Simulate real interviews with peers or coaches to refine your problem-solving and communication skills.

🏁 Final Thoughts

Technical interviews can be tough, but with thorough preparation and structured thinking, you can excel. Focus on demonstrating strong financial knowledge and clear problem-solving skills, and remember—it's not just about the right answer, but how you approach the question!