IB Advisory interview prep.

Sell-side execution discipline + memo-grade technical rigor. Treats the candidate as an incoming Analyst who needs to be deal-ready from day one, comfortable walking through accretion/dilution on a whiteboard, defending a valuation in three methodologies, and discussing recent deal activity in...

What interviewers look for

  • Does the candidate know the technicals cold? Hesitation on accounting walkthroughs is disqualifying.
  • Can the candidate walk through a deal, their own or a recent named transaction, with mechanic-level detail?
  • Does the candidate understand WHY each valuation methodology is used, not just what they are?
  • Will the candidate survive 80-100 hour weeks? Interviewers screen for stamina, attention to detail, and willingness to grind.
  • Does the candidate have a coherent 'why banking' story that holds up under probing about pay, hours, and exit opportunities?
  • Does the candidate show commercial judgment on recent M&A activity in the firm's sector, not just memorized deal facts?

Behavioural questions to expect

  1. Walk me through your CV.

    What it tests: Story coherence and conviction. Whether the candidate can land on banking as the logical next step. The MOST IMPORTANT question in IB interviews; usually opens the conversation.

  2. Tell me about your most impressive project or accomplishment.

    What it tests: Substance over polish. The interviewer wants quantitative detail and ownership signals.

  3. Tell me about a weakness, a failure, or feedback you've received and worked on.

    What it tests: Self-awareness + ability to take a real critique without deflecting + evidence of improvement over time. Cross-role canonical question. Candidates who give 'fake weaknesses' (perfectionist / work-too-hard) downgrade immediately. IB MDs particularly screen for this because 80-100hr/week teams require self-aware people who handle feedback well.

  4. Why investment banking?

    What it tests: Whether the candidate has done the research and understands what bankers actually do day-to-day, vs. attractive-sounding clichés about 'making deals happen' or 'high finance'.

  5. Why this firm?

    What it tests: Whether the candidate can distinguish this firm from others. MDs hear generic 'great platform' answers all day, they downgrade for them. The bar is firm-specific evidence.

  6. Why the sector? (e.g. Why M&A? Why Healthcare? Why Tech?)

    What it tests: Specificity of interest. Whether the candidate has a real reason to prefer one group over another, or just took the first interview they could get.

  7. What do you think makes this firm distinct from a leading competitor?

    What it tests: Whether the candidate has researched the firm beyond marketing materials. MDs probe for substantive differentiation.

  8. Do you know what banking hours are really like? Why are you OK with that?

    What it tests: Whether the candidate has realistic expectations and the stamina to follow through. Most candidates underestimate the hours; interviewers probe to surface unrealistic expectations.

Technical concepts to master

Three financial statements, connections you'll be probed on

Income statement (IS) overview
Profitability over a period. Revenue → COGS → Gross Profit → OpEx → EBITDA → D&A → EBIT → Interest → EBT → Tax → Net Income.
Balance sheet (BS) overview
Snapshot at a point in time. Assets (current + non-current) = Liabilities (current + non-current) + Shareholders' Equity.
Cash flow statement (CFS) overview
Cash movement, grouped by operating / investing / financing.
Statement connections, the canonical question
How the three statements link: Net Income flows from IS to CFS (operating) and to Retained Earnings on BS. D&A flows from IS to CFS (add-back) and reduces PP&E on BS. CapEx flows from CFS (investing) and increases PP&E on BS. Change in debt flows from CFS (financing) and updates liabilities on BS. Change in cash from CFS updates cash on BS.

Enterprise Value vs Equity Value, the bridge

Equity Value (Market Cap)
Value of the company to its equity shareholders: share price × diluted shares outstanding.
Enterprise Value
Value of the company's core operations to ALL investors (debt + equity + preferred).
The bridge. Equity Value → Enterprise Value
Start with Equity Value; add net debt (debt − cash); add preferred and minority interest.
Why cash is subtracted
Acquirer effectively gets the cash back upon acquisition, it reduces the net price paid for the operating business.

The three core valuation methodologies

Discounted Cash Flow (DCF)
Intrinsic valuation: project unlevered free cash flows, discount at WACC, sum to get Enterprise Value.
Public Company Comparables (Comps)
Relative valuation: apply the multiples of similar publicly-traded companies to your target's metric.
Precedent Transactions
Relative valuation: apply multiples paid in recent M&A transactions of similar companies.
When each is most relevant
DCF: standalone valuation, no good comps exist, you need intrinsic value. Public comps: ongoing operating valuation, market-based sanity check. Precedent transactions: M&A or take-private scenarios, control valuation.

Merger model, accretion/dilution and deal mechanics

Accretion / dilution, the math
Compare combined Pro-Forma EPS to acquirer's standalone EPS. Accretive if PF EPS > standalone; dilutive if PF EPS < standalone.
Form of consideration, cash vs stock vs debt
Cash: uses balance sheet cash or debt financing; no new shares. Stock: issues new acquirer shares to target shareholders; dilutive at share level. Debt: issues new debt; accretive if interest expense < incremental earnings.
Synergies, revenue vs cost
Revenue synergies: cross-sell, geographic expansion, pricing power post-deal. Cost synergies: headcount reduction, facility consolidation, procurement leverage.
Control premium
The amount above unaffected share price that an acquirer pays to take control of a company.

LBO fundamentals, capital structure and returns

LBO structure
Acquire a company using a high % of debt and a small % of equity. Use the target's cash flows to pay down debt; exit in 3-7 years for returns via equity appreciation.
Returns drivers, the three sources
(1) EBITDA growth (operational improvement + organic growth), (2) Multiple expansion (exit at higher multiple than entry), (3) Debt paydown (deleveraging).
Capital structure, debt tranches
Multiple debt layers with different priorities, rates, and terms. Senior secured (revolver, term loan A/B) → unsecured (high yield) → subordinated → mezzanine → equity.
Paper LBO, the simplified math
Mental model: entry EV, debt/equity split, project EBITDA growth + debt paydown, exit at assumed multiple, compute MoM and IRR.

Practical drills

  • Walk me through a DCF analysis from start to finish.
  • Depreciation goes up by $10. Walk me through what happens to the three financial statements. Assume a 40% tax rate.
  • A the sector company with $500M revenue and $100M EBITDA, growing 15% YoY, is being sold. How would you value it?

Smart-question anchors

  • Group-specific deal flow: how the team's deal mix has evolved over the last 12-24 months; what types of mandates are winning vs declining
  • Analyst experience and learning curve: what does year-one look like; how do staffers balance modeling depth vs. exposure breadth
  • Sector or product specialization signal: where the group is investing in headcount; which sub-sectors are seeing senior banker conviction
  • Promotion path and culture: what differentiates Analysts who get promoted vs. those who exit; how does the group balance long hours with development
  • Recent landmark transaction: ask about the specific dynamics behind one named deal (without asking for confidential info), shows you've done your homework

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