January 31st, 2012 | 
Author: These are the top 10 most important questions you need to know when interviewing at an investment bank.
Tell Me About Yourself
It is best to start with the place you grew up and move chronologically until you get to why you are there. Regardless, this is usually the first chance to leave an impression, make it count.
Why This Firm?
You should indicate both the dominance of the firm and your personal reasons for wanting to join. If you are interested in community service and the firm has a set community service program, highlight it. This will let the firm know you have researched them and highlight your own personal motivations.
Why Banking Over Consulting or Sales and Trading?
You need to highlight the advantages of investment banking over any other industry. You could mention how you love that banking is a goal-oriented industry as opposed to a fee based industry like consulting. You could also explain how you like the nature of the work better. Have conviction is what you say and you will ace this question.
Why Investment Banking?
If you don’t know why you are sitting in front of your interviewer, there’s no way you’re going to get the job. The best to way to answer this question is to be honest, but highlight how each and every one of your experiences has led you to banking. I would start with something from your upbringing and move on to your coursework and internships.
Walk Me Through The Financial Statements
Financial statements are what you, as an analyst, will be sifting through all day so you should know your way around them. As a tip, I would start with the balance sheet and know each major line item. Stay calm, move at a comfortable place, and keep track of what you have already said. You want to convey that you know the statements like the back of your hand.
How Would You Value a Company?
This may be the most important question of all. Valuation is crucial in investment banking so you should definitely know how to do it. The four main ways to value a company are the comparable companies analysis, the precedent transactions method, the discounted cash flows analysis, and the leveraged buyout. Know these methods in and out and make sure you can talk about each step.
Walk Me Through A Discounted Cash Flows Analysis
This one builds on the previous question. A discounted cash flows analysis values a company based on the present value of its future cash flows. In addition to knowing how to explain what this methodology is, you should know each step. You can find this information on numerous websites such as Street of Walls. Make sure not to sound too robotic and try to cut down on formulas as much as possible.
What Things Would You Look For When Researching A Company?
This question is looking for very specific things. You want to give a proper mixture of financial information and other relevant information. I would start by saying position in the industry, financial metrics like EV/EBITDA, growth rate, and business model. These are only a few examples. You should do your research before the interview. Pick a few stocks and figure out what information is relevant.
Depreciation Rises By $x, Walk Me Through The Impact on The Statements
You can expect to get this question 9 out of 10 times. This tests your understanding of the financial statements and how they are connected. Understanding the connection between the statements is key to approaching this question. I would start with the income statements, move on to the statement of cash flows, and finish with the effect on the balance sheet.
Tell Me About A Recent Deal
You want to pick an M&A deal for this one unless you are interviewing specifically with a group like Financial Sponsors. Make sure to know the price paid, relevant multiples, and the investment banks that performed the deal. This is another crucial question because it gauges your interest in the markets and investment banking. Smile and act relatively excited about points of the deal.
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