Investment Banking Interview Questions: Technicals, Fit, and How to Walk Through a DCF

Investment banking interview questions come in four flavors: your story, fit, deals and markets, and technicals. Most candidates slip on the technicals. And one question shows up almost every time: "Walk me through a DCF." Below you'll find the questions, sample answers you can adapt, and a plan to practice them out loud.

Summer 2027 superdays and the first summer 2028 rounds run through fall and winter, so if a first round is on your calendar, start drilling this week. Already have a final-round invite? Our superday guide walks through the format, from the first handshake to the thank-you note. Facing a recorded video round first? See our HireVue interview guide.

TL;DR

• Investment banking interview questions fall into four groups: your story, fit, deals and markets, and technicals (accounting, enterprise value, valuation and DCF, M&A, LBO). Wall Street Prep calls "walk me through a DCF" "almost guaranteed."

• Evercore's own prep page lists the technical areas it expects: accounting, three-statement modeling, DCF and WACC, comps and precedents, and M&A.

• Short on time? Prioritize accounting, enterprise value vs. equity value, and the DCF. LBO questions are rarer for summer analyst candidates.

• Below: sample answers, a 60-second DCF answer, worked numbers for the $10 depreciation question, and a four-week practice plan.

Externships are short, remote professional experience programs where you work on real projects for real companies. The Yinan Zhao Investing & Financial Modeling Externship, the Attronica FP&A & Private Company Valuation Externship and the HP Tech Ventures Deal Sourcing & Startup Analysis Externship give you a model you can walk an interviewer through. Explore all Externships.

What Do Investment Banking Interviews Actually Test?

An investment banking interview tests two things at once: whether you can do the analyst work (accounting, valuation, modeling logic) and whether a team wants to spend long weeks sitting next to you. Every question maps to one of those goals.

Every single one.

The Four Types of Questions

Mergers & Inquisitions, one of the most widely read banking prep sites, sorts interview questions into four types: your story, fit questions, deals and markets, and technical questions (Mergers & Inquisitions). It says you can prepare for "3 / 4 of them in 1-2 days (or less)." The fourth type takes weeks. Guess which one.

From our years on the recruiting side, working with employers on how they score candidates, we know interviewers grade structure and composure more than perfection. A clean 80% answer usually beats a rambling 100% one. (Usually. A wrong answer delivered confidently is still wrong.)

Which Questions Come in Which Round

Questions get harder as you move through the process. Morgan Stanley says its interviews "could be competency, strengths based, skills based or technical" (Morgan Stanley). And the mix shifts by round. The table shows the usual pattern.

What Fit and Behavioral Questions Do Banks Ask?

Fit questions check two things: whether your reasons for banking are real, and whether you'd hold up on a team. They feel easy. That's exactly why people under-prepare them.

Your Story and "Why Investment Banking?"

"Walk me through your resume" usually comes first, and it sets the tone for everything after. Aim for about 90 seconds with four beats: where you started, what got you interested in finance, what you did about it, and why this bank now. Evercore's own prep page tells candidates to "craft a personal pitch" and to be ready to answer questions about their resume and past experience (Evercore).

"Why investment banking?" needs a reason only you could give. Honestly, "I like fast-paced environments" could come from anyone in the building. "I built a valuation for a small company and wanted to see how the numbers hold up on a real deal" sounds like a person. Then answer "why our firm?" with something specific: a group, a recent deal, a conversation with someone there. Our guide to answering "tell me about yourself" has a fill-in structure, and your resume should back up every line (see our resume format guide).

Strengths, Weaknesses, Teamwork and Failure

Expect some version of these:

1. What's your greatest strength? Pick one that matters for an analyst (attention to detail, stamina) and prove it with a story.

2. What's your biggest weakness? Name a real one and what you're doing about it.

3. Tell me about a time you worked on a team under pressure. Banks run on teams and deadlines, so pick a story where the pressure was real and the result is something you can measure.

4. Tell me about a time you failed. They want ownership and a lesson, not a humble brag.

5. Where else are you interviewing? Be honest and consistent: other banks, same type of role.

Use STAR (situation, task, action, result). But keep each answer under two minutes, because a five-minute story loses the room. Our STAR method guide has examples.

The best fit answers are about finished work. At Extern, we've seen it across thousands of one-on-one conversations with students: the ones who handle behavioral questions well can describe a real project in detail, including the part that went wrong. One finished project can cover strength, teamwork and failure in a single interview.

What Accounting Questions Come Up in IB Interviews?

Accounting sits under every other technical question, so most interviewers start here. Skip it and the rest falls apart.

Walk Me Through the Three Financial Statements

Here's a model answer you can adapt:

"The income statement shows revenue, expenses and net income over a period. The balance sheet shows what the company owns (assets) and what it owes and is worth to shareholders (liabilities and equity) at a point in time, and assets always equal liabilities plus equity. The cash flow statement starts with net income, adjusts for non-cash items and working capital, then adds investing and financing cash flows. Net income flows into retained earnings on the balance sheet, and the ending cash on the cash flow statement becomes cash on the balance sheet."

That's about 30 seconds.

So stop talking and let them follow up.

How Does a $10 Increase in Depreciation Affect the Statements?

This is the classic follow-up, and plenty of candidates who nailed the three statements trip on it. Assume a 25% tax rate:

1. Income statement: operating income falls by $10. Taxes fall by $2.50, so net income falls by $7.50.

2. Cash flow statement: net income is down $7.50, but you add back the $10 of depreciation because it's non-cash. Cash goes up by $2.50.

3. Balance sheet: cash is up $2.50 and PP&E is down $10, so total assets fall by $7.50. On the other side, retained earnings fall by $7.50. Both sides drop by $7.50, so it balances.

And if you want to check your work, the table lays out every line.

What Is the Difference Between Enterprise Value and Equity Value?

Enterprise value is what a company's core business is worth to everyone who funds it. Equity value is what it's worth to shareholders alone, and the gap between them is mostly debt and cash.

The Definitions Interviewers Want

Enterprise value (EV) is the value of a company's core operations to all capital providers: shareholders, lenders and preferred investors. Equity value (market capitalization for a public company) is the value that belongs only to common shareholders. Mergers & Inquisitions says that if you're short on time, you should "focus on accounting, equity value and enterprise value, and valuation and DCF analysis," because those are the most common topics in entry-level interviews. Why bother with EV at all? It lets you compare companies that carry very different amounts of debt.

The Bridge and Classic Follow-Ups

The basic bridge is: enterprise value = equity value + debt + preferred stock + noncontrolling interest − cash.

Then the follow-ups start:

• Why do you subtract cash? Cash isn't part of core operations, and an acquirer could use it to pay down part of the price.

• Which multiples use EV and which use equity value? Match the numerator to the metric. EV pairs with metrics available to all investors (EV/EBITDA, EV/Revenue). Equity value pairs with metrics after interest (P/E).

• If a company raises $100 of debt and holds the cash, what happens to EV? Nothing. Debt rises by $100, but cash rises by the same $100, so the two cancel out and enterprise value doesn't move.

How Do You Answer "Walk Me Through a DCF"?

A DCF values a company as the present value of the cash it'll generate in the future. Your answer should take about a minute and hit six steps, in order.

The 60-Second Answer

Wall Street Prep says this question "is almost guaranteed to be asked in an interview setting" for investment banking and other front-office roles, and advises keeping the answer concise (Wall Street Prep, updated January 2024). Here's a version you can say out loud:

1. Project free cash flow. "First, I'd project the company's unlevered free cash flow for five to ten years, based on assumptions for revenue growth, margins, working capital and capex."

2. Define it. "That's EBIT times one minus the tax rate, plus D&A, minus the increase in working capital, minus capex."

3. Estimate terminal value. "Then I'd estimate the value of all cash flows after that period, using either a perpetuity growth rate or an exit multiple like EV/EBITDA."

4. Discount it all. "I'd discount both back to today at WACC."

5. Add it up. "Together, that's the implied enterprise value."

6. Get to a share price. "From there, I'd subtract net debt and other non-equity claims to get equity value, divide by diluted shares, and compare the result to the current price. I'd also run sensitivities on WACC and the terminal value assumptions."

But skip the formulas unless they ask. They're checking whether you know the logic and the order, not whether you memorized a textbook.

The Follow-Ups You'll Get Next

But the DCF answer is really an opening. Interviewers almost always push on it, so have one-line answers ready:

• What is WACC? The blended cost of the company's debt and equity, weighted by how much of each it uses: (E/V) × cost of equity + (D/V) × cost of debt × (1 − tax rate).

• Why use unlevered free cash flow? It's the cash available to all investors before interest, so it matches enterprise value and a discount rate (WACC) that covers both debt and equity.

• What's a DCF most sensitive to? The discount rate and the terminal value, which often makes up the majority of the total value.

What Valuation Questions Should You Expect Beyond the DCF?

Interviewers also ask about the two other standard methods, comparable companies and precedent transactions. Evercore's prep page lists trading comps, precedent transactions, EV/EBITDA, EV/EBIT and P/E alongside the DCF, which is a pretty clear signal of what its bankers expect.

Comps, Precedents and DCF Compared

A classic question is "Which valuation method gives the highest value?" The usual answer is precedent transactions, because acquirers pay a control premium on top of the market price. But it depends on market conditions and which deals exist, so say "usually" and explain why. Here's how the three compare.

Also rehearse "How do you pick comparable companies?" (industry, size, growth, geography) and "When wouldn't you use a DCF?" (early-stage companies with unpredictable cash flow, or banks, where debt is part of operations).

What M&A and LBO Questions Do Summer Analyst Candidates Get?

M&A questions come up a lot, because advising on acquisitions is core to the job. LBO questions are less common. Less, not zero.

Why Companies Merge and Accretion/Dilution

Start with "Why would a company acquire another one?" Good reasons: faster growth, buying a product or team, entering a new market, or cutting costs by combining operations (synergies). Next comes "Why pay with stock instead of cash?" Maybe the buyer's shares look expensive, it lacks cash or debt capacity, or the seller wants a share of future upside.

The most common M&A math question is accretion/dilution: will the deal increase or decrease the buyer's earnings per share? A quick rule for an all-stock deal is to compare P/E multiples. If the buyer trades at 15x earnings and buys a company at 10x, the deal is accretive, because the buyer is using expensive "currency" to buy cheaper earnings. Flip it, with the buyer's P/E lower than the target's, and the deal is dilutive. Synergies and deal costs can change that in a real model, so mention them.

LBO Basics (and How Much to Worry)

Wall Street Prep notes that LBO questions for summer analysts are "rare" (Wall Street Prep), but rare isn't never. Know two answers:

• Walk me through a basic LBO. A private equity firm buys a company using a lot of debt and a smaller amount of equity. The company's cash flow pays down the debt over several years. Then the firm sells the company, and the return comes from debt paydown, earnings growth and any increase in the exit multiple.

• What makes a good LBO candidate? Stable, predictable cash flow, low capex needs, a strong market position, assets that can support debt, and a realistic way to sell later.

For most summer analyst interviews, that's enough, though if you're also interviewing for private equity roles you'll want to go a lot deeper.

How Do You Talk About Deals and Markets in an Interview?

Expect at least one "tell me about a deal you've followed" or "what's happening in the markets?" question. It's there to test whether your interest goes beyond the salary.

Pick One Deal You Know Cold

You need one deal you can discuss for five minutes, not ten you can name. Evercore tells candidates to stay current through the Wall Street Journal, Bloomberg, Morning Brew and its own podcast, The Edge. Pick a deal from the last six to twelve months, ideally one the bank you're interviewing with advised on, and prepare these five points:

1. Who bought whom, and roughly for how much.

2. Why the buyer wanted it.

3. How it was paid for: cash, stock or debt.

4. How it was valued, for example the EV/EBITDA multiple compared with peers.

5. Your view: was it a good deal, and what's the one risk that could make it look bad two years from now?

That last point matters most. An opinion with one solid reason sounds like an analyst; a recap of a news article doesn't. And the same deal makes a strong opener in a coffee chat.

Markets Questions

Common versions: "What are interest rates doing and why does it matter for M&A?" and "Pitch me a stock." You don't need predictions. What you need is to connect the news to deals: higher rates make debt-funded acquisitions and LBOs more expensive, for example. If you don't know a number, say so and reason about direction. Interviewers forgive gaps. They don't forgive bluffing.

How Should You Prepare for IB Interview Questions?

Prepare in order: story and fit, accounting, EV and the DCF, then valuation and M&A, with mock interviews throughout. New to accounting? Give yourself more than four weeks, and probably a lot more than that.

A Four-Week Practice Plan

If your interview is a month out, this plan covers the essentials:

1. Week 1: Story and fit. Write your 90-second story and five STAR stories, and say them out loud.

2. Week 2: Accounting. Drill the three statements and "what happens if" questions: depreciation, inventory write-downs, debt raises.

3. Week 3: Enterprise value and the DCF. Practice the 60-second DCF answer until you can say it without notes, then the follow-ups.

4. Week 4: Valuation, M&A and your deal. Learn the three valuation methods, accretion/dilution, LBO basics, and your one deal. Do at least two full mock interviews, out loud, with someone who'll actually push back on your answers.

Evercore recommends mock interviews with peers and alumni. It's also the step most people skip, because reading answers feels productive and saying them to a stranger feels awful.

Yet timing can sneak up on you. Yale's career office wrote in September 2026 that "some boutique investment banks may begin to accept applications as early as September/October 2026 for summer 2028" (Yale Office of Career Strategy). Our investment banking internships 2028 guide and finance internships 2027 guide track deadlines bank by bank.

Want a model to talk about when they ask what you've done? The Yinan Zhao Investing & Financial Modeling Externship has you build financial analysis you can walk an interviewer through, step by step.

Is Investment Banking Hard to Break Into?

Yes, and the numbers are brutal. J.P. Morgan drew 630,000 applicants for 4,100 intern roles in 2025, an acceptance rate of 0.7% (eFinancialCareers). Goldman Sachs accepted fewer than one in 100 internship applicants in 2026, the third straight year under 1% (Fortune, June 2026). Our investment banking acceptance rate breakdown shows how the odds shift by bank.

And interest isn't fading. In our 2026 post-program survey, Finance was the second most common "explore next" pick at 19.6%, and Goldman Sachs the second most-named dream company.

So what helps? Real work to talk about. Carlos Bruno, a student at the University of Central Florida, completed an Equity Research Externship with Yinan and landed a Finance Intern role at AAR Corp two months later. "This externship helped me become much more comfortable with Excel and financial analysis while also teaching me the fundamentals of equity research," he said.

If you want a valuation project of your own, the Attronica FP&A & Private Company Valuation Externship and the Mangusta Capital Deal Sourcing & Startup Analysis Externship give you deal-style analysis to bring into the room. Explore Externships to find one that fits your track.

Frequently Asked Questions

What are the most common investment banking interview questions?

The most common are "walk me through your resume," "why investment banking," "why our firm," "walk me through the three financial statements," "what's the difference between enterprise value and equity value," and "walk me through a DCF." Expect at least one question about a recent deal or the markets too.

How do you answer "walk me through a DCF" in an interview?

Keep it to about a minute. Project unlevered free cash flow for five to ten years, estimate a terminal value with a perpetuity growth rate or exit multiple, discount both to today at WACC, add them to get enterprise value, then bridge to equity value and divide by diluted shares.

Do investment banking interviews ask LBO questions?

Sometimes, but far less often for summer analyst candidates than for people interviewing for private equity or lateral roles. Prep guides such as Mergers & Inquisitions put accounting, enterprise value and DCF first. Know what makes a good LBO candidate and the basic mechanics, and you'll be covered for most undergrad interviews.

How long does it take to prepare for IB technical questions?

Plan on several weeks if you're new to accounting. Mergers & Inquisitions says you can prepare for the story, fit and deal questions in a day or two but recommends starting technicals about two to three months ahead with a limited finance background. Four focused weeks works if you already know the basics.

Are investment banking interviews more technical or behavioral?

Both, and it depends on who's asking. Junior bankers usually push harder on technicals, while senior bankers lean toward fit and motivation. First rounds tend to mix your story with basic accounting, and superdays add deeper valuation, deal and markets questions across several interviewers.

What questions should you ask at the end of an investment banking interview?

Ask about the interviewer's own work and the group: a recent deal they enjoyed, how analysts get staffed, or what separates strong summer analysts. Prepare a different question for each interviewer, because asking everyone the same thing on a superday looks rehearsed.

Is a non-finance major at a disadvantage in IB interviews?

Only if the technicals are shaky. Banks hire from many majors, and interviewers mostly care that you can explain accounting, valuation and a DCF clearly and give a convincing reason for choosing banking. A finance project you can walk through in detail helps close the gap.