IB Technicals: Investment Banking Technical Questions Guide
This is a technical-only deep dive for candidates who keep hearing "good potential, not interview-ready". Learn how to reason through accounting, valuation, and deal logic.
Almost every rejected candidate says the same thing afterwards: "I knew this at home." That gap is the whole story of IB technicals. At home you answer your own version of a question at your own pace. In the room, a banker changes one assumption mid-sentence, asks you to skip the formula, or says "walk me through the other side," and a memorised paragraph collapses the moment it gets interrupted. Technicals are a speaking skill under pressure, not a library project, which is why candidates who read four hundred question PDFs still freeze on the fifth follow-up.
If you have not read the broader process context yet, start with the investment banking interview questions guide for HireVue, superday, and behavioural framing. This article owns IB technicals only, the accounting linkage, valuation intuition, and deal logic that make up the reasoning half of the interview. Do not merge the two into one prep document: that is how candidates end up sounding rehearsed on fit and shallow on technicals. Start for free to map technical prep to each bank, division, and interview stage on your application tracker instead of working through one generic question PDF.
What interviewers actually mean by "IB technicals"
The phrase covers three buckets, and interviewers rarely announce which one they are in, so you have to infer it from the shape of the question. Accounting linkage prompts, a change in D&A, inventory moving, debt-funded capex, are really asking whether you can trace one change through the income statement, balance sheet, and cash flow statement without freezing. Valuation prompts, a DCF walkthrough, a comps question, "is 12x expensive?", are testing whether you know when a method fits and when it misleads. Deal and credit logic prompts, accretion direction, an LBO sketch, covenant headroom, are checking whether you can think like a banker under imperfect information.
Strong candidates treat all three as spoken reasoning rather than silent memorisation. When an interviewer says "good start, now what if tax is zero?" they are checking whether your framework survives a twist, which is exactly why flashcard-only prep collapses in second round interviews even after a smooth HireVue. Depth also shifts by division: a global markets superday may stop at commercial awareness plus light product questions, while an M&A or leveraged finance route often pushes all three buckets before lunch. Match your depth to the division on your tracker, not to the longest PDF you happened to download.
How technical rounds are actually scored
Interviewers are rarely checking whether you can repeat a textbook definition. They want to know four things: can you reason from a change in one line item to its downstream effects, can you make assumptions explicit and defend them, can you recover when interrupted or challenged, and can you communicate technical ideas in plain language rather than jargon. Strong answers have a clear sequence before the detail arrives and explain why something happens, not just what happens; weak answers wander into tangents, dump formulas without context, and freeze the moment the scenario changes. Build your prep around those four signals rather than the sheer volume of questions you have completed, because volume is the easiest metric to hit and the least correlated with a pass.
Building fluency without flashcard burnout
Live interviews reward verbal reasoning under interruption, not silent recall, so treat prep as a speaking exercise from day one. Speak before you read: two timed verbal answers daily, recorded on your phone, exposes gaps that flashcards hide completely. Add one twist per drill, changing tax, leverage, or working capital after each walkthrough, since that mirrors exactly what a banker will do to you live. Rotate buckets across the week, accounting on Monday and Wednesday, valuation on Tuesday and Thursday, deal logic on Friday, so you never over-index on your favourite topic. Keep an error log and re-test any bucket where you stumbled within seventy-two hours, so the same superday failure does not repeat itself.
A workable weekly minimum is ninety minutes: thirty minutes on three-statement twists (see our three statement interview questions guide), thirty minutes on valuation scenarios like DCF direction and comps sanity checks, and thirty minutes on a mixed mock with a peer who interrupts you every twenty seconds. If you only have one week before a superday, flip that ratio to two-thirds timed mocks and one-third reading.
Answering technicals when you get interrupted
Most technical prep online is static, flashcards, PDF lists, YouTube walkthroughs, but live rounds are dynamic. Interviewers interrupt, swap assumptions, and ask "why" before you finish the algebra. A three-beat verbal structure survives that better than a memorised paragraph: frame the question in five to ten seconds by naming the bucket and your starting assumption, walk the mechanism in forty-five to sixty seconds in plain language before any formula, then check for ten to fifteen seconds by stating what would change the conclusion.
For "depreciation rises by ten pounds," that sounds like: "This is a non-cash income statement charge, so net income falls unless tax shields offset it. Cash flow from operations adds depreciation back, so CFO is unchanged if tax is flat. On the balance sheet, PP&E is lower by ten. If you interrupt me with debt financing, I would add interest expense and trace the cash interest payment through the cash flow statement." That pattern beats a rehearsed script because each beat gives the interviewer a natural pause to twist the scenario, and the twists themselves are predictable once you have practised enough of them: "what if tax is zero?" wants you to adjust only the tax line and hold the rest of the linkage; "skip the formula" wants a direction, "higher WACC lowers value, all else equal"; "too much detail" wants a one-sentence summary with an offer to go deeper; and "what would you do on the job?" wants sanity checks like peer multiples or covenant headroom, not academic recitation. Practise with a friend who is allowed to interrupt every twenty seconds. If your logic survives that, you are interview-ready, not just PDF-ready.
How deep technicals go by stage
Technical depth is not uniform across the process, and mis-calibrating your prep wastes real hours. A first phone screen usually stays light: accounting one-liners, an EV bridge, and clean communication matter more than twisty follow-ups. A second round adds twists on linkage and DCF that reward verbal drilling over pure recall. A superday or final round for IB and leveraged finance routes goes full stack, mixed mocks, paper LBO direction, and division-specific judgement, while markets routes often stay lighter on pure accounting and heavier on commercial awareness (see our commercial awareness markets guide). If your phone interview is next week, do not spend three days on paper LBOs unless the desk explicitly tests sponsor-style maths; if your superday is next week, flip the ratio toward timed mixed mocks.
Equations to know cold, and where to drill them
Candidates search for the equations to know for interview because bankers expect you to speak maths without opening Excel. The full equation table, follow-up twist drills, and second-round depth live in our investment bank equations second round guide, which is where you should go for the eight formulas worth rehearsing out loud. Use this guide instead for the three you should be able to state at speed without thinking: the enterprise value bridge (equity plus net debt and adjustments, always stating what you added), unlevered free cash flow as the DCF building block (D&A add-back and capex discipline), and WACC as the discount rate that links rate moves to both DCF value and multiples. If your live round is within two weeks, start with the second round equations guide and come back here for three-statement walkthroughs, DCF scenarios, and paper LBO direction.
Three-statement linkage: the non-negotiable foundation
Most technical interviews still begin here, because it is the fastest way to test whether your thinking is grounded. For scenario drills, follow-up twists, and a one-week plan focused only on accounting linkage, see our three statement interview questions guide. Start with one standard walkthrough, a non-cash charge like higher depreciation, then practise variations: a working-capital movement in inventory, receivables, or payables, and a financing change like new debt, interest effects, or repayments. Always state your assumptions out loud as you go, tax treatment, timing (same-period versus next-period effects), and whether cash actually moves, because that habit is what prevents panic when an interviewer asks "what if tax is zero?" or "what if this is financed with debt?"
A useful daily routine is twenty minutes: ten minutes of verbal walkthroughs, ten minutes of interviewer-style twists. If your explanation cannot survive a basic twist, it is memorised rather than understood, and the gap will show up in front of a banker eventually.
DCF intuition without hiding behind algebra
You do not need to derive every equation from scratch in an interview. You do need to explain why discounted cash flow works conceptually: why enterprise value comes from future unlevered free cash flow, why the discount rate reflects risk and opportunity cost, why terminal value can dominate the whole output if assumptions get sloppy, and why sensitivity analysis matters more than one falsely precise number. Interviewers often probe judgement rather than mechanics, asking which assumptions are most fragile in cyclical sectors, when a DCF becomes less credible, or how a rates move would influence your valuation thinking. Answer those with practical reasoning and you signal commercial maturity rather than exam memory. For a DCF-only deep dive with verbal frameworks, terminal value traps, and one-week drills, see our DCF interview questions guide, and in prep, get in the habit of justifying each assumption in one sentence; if you cannot, tighten your model logic before memorising any outputs.
M&A technicals as a logic test, not a formula test
M&A questions are not only about landing on a final accretion or dilution percentage. They test whether you understand value transfer and financing trade-offs: why a strategic buyer might pay a higher multiple than a sponsor, how financing mix affects EPS outcomes, why synergies can change deal attractiveness, and where integration risk can erode headline economics. A strong answer sequence defines the objective (value creation, EPS impact, strategic fit), lists the key drivers (purchase price, financing cost, synergies, amortisation), states directionally what likely happens and why, then names one risk that could reverse that result. Directionally correct logic with transparent assumptions beats fake precision every time, and for a dedicated drill on EPS accretion, financing mix, and synergy logic, see our accretion dilution interview questions guide.
Paper LBOs matter even outside sponsor groups
Many candidates postpone LBO work, assuming it only shows up in private equity interviews. That is risky, because a paper LBO is really a compact stress test of leverage intuition, returns thinking, and mental arithmetic under time pressure, and it appears in generalist IB interviews more often than people expect. You do not need full spreadsheet outputs, just a disciplined framework: entry value and leverage split, cash generation and debt paydown logic, and exit assumptions with a rough IRR range. If this is a current weak spot, the paper LBO interview guide will build speed and rounding discipline faster than reading more theory, and the exercise itself sharpens broader technical confidence because it forces coherent thinking across accounting, valuation, and capital structure in one go.
Sample questions and the frameworks that survive follow-ups
Generic question banks list prompts without structure. Use these frameworks instead, so a follow-up does not collapse your answer.
| Question | Strong opening (first 15 seconds) | Follow-up to expect |
|---|---|---|
| Walk me through the three statements if depreciation rises by £10 | "Non-cash charge on the income statement; add back in CFO; PP&E down on balance sheet; no cash effect unless tax changes" | "What if financed with debt?" / "What if tax rate is zero?" |
| How do you value a company? | "Depends on sector and data: DCF for cash-generative businesses, comps for liquid peers, precedents for M&A context; I'd sanity-check each" | "When is DCF wrong?" / "Which multiple and why?" |
| What happens to WACC if rates rise? | "Cost of debt and equity both tend up; weighting matters; higher WACC lowers DCF value, all else equal" | "What about growth stocks vs utilities?" |
| Accretive or dilutive deal? | "Compare pro-forma EPS to standalone; drivers are purchase price, financing cost, synergies, and amortisation" | "What if synergies are delayed?" |
| EV/EBITDA of 12x: expensive? | "Versus peers and history; sector and growth matter; 12x can be cheap for a high-growth software name, rich for a cyclical miner" | "How does leverage change your view?" |
| Paper LBO: 5x entry, 50% debt, 2x EBITDA growth, 8x exit | "Sketch sources and uses, debt paydown from FCF, exit equity, rough IRR range, direction before precision" | "What if exit multiple compresses?" |
Practise each row out loud with a timer. Ninety seconds is the target length for second-round and superday technical slots; shorter is fine as long as the logic stays crisp.
Division-specific depth: M&A, markets, and leveraged finance
Not every desk tests the same stack, so align prep with the division on your application tracker rather than a one-size-fits-all pack.
| Division route | Technical emphasis | Typical depth in UK summer processes |
|---|---|---|
| M&A / coverage | Three statements, valuation, accretion or dilution, deal judgement | Medium to high from second round |
| Leveraged finance / DCM | Leverage, coverage, covenant logic, downside cases | High; overlaps with credit interview questions |
| ECM | Comps, market timing, dilution, investor positioning | Medium; less full LBO |
| Sales and trading | Macro, product basics, commercial awareness | Lower pure accounting; see commercial awareness markets guide |
| Restructuring | Downside cases, capital structure, liquidity | High on judgement; see restructuring career guide |
If you are interviewing across divisions, keep one accounting base and swap the top layer: an ECM candidate still needs EV bridge fluency, and an S&T candidate still needs clean verbal communication when a macro follow-up arrives. Bank-specific processes weight these differently too; UBS global banking and Deutsche Bank IB paths typically test technicals from second round onward, while markets routes lean commercial awareness over full LBOs.
Quick reference for the night before a phone screen or superday
Say each line out loud once. If you stumble, drill that bucket in the linked guide before your next mock.
| Topic | One-line answer skeleton | Deep dive |
|---|---|---|
| D&A +£10 | IS down; CFO add-back; PP&E down; cash unchanged unless tax shifts | Three statement guide |
| EV bridge | Equity + net debt (+ minorities as needed) | Valuation guide |
| DCF | Unlevered FCF, WACC, terminal value, sensitivity | DCF guide |
| Accretion / dilution | Pro-forma EPS vs standalone; price, financing, synergies | Accretion dilution guide |
| Paper LBO | Entry leverage, FCF paydown, exit multiple, IRR direction | Paper LBO guide |
| Credit downside | Leverage, coverage, covenant headroom | Credit interview guide |
A four-week plan if interviews are already moving
Give week one to accounting fluency: three-statement drills plus twist questions every day. Give week two to valuation intuition, DCF assumptions, comps logic, and sanity checks, using our valuation interview questions guide alongside your drills. Give week three to deal logic, M&A accretion or dilution prompts and mini cases from our accretion dilution interview questions guide. Give week four to integration: timed mixed technical mocks that include paper LBO direction. Throughout, record two technical answers daily and review them for clarity, keep an error log of repeated mistakes, and re-test weak topics every seventy-two hours. Tie the plan to your actual live deadlines rather than an ideal calendar; if a final round is close, prioritise mixed mocks over passive reading.
Mistakes that cost offers
Most technical rejections are process failures, not intelligence failures. Memorised answer blocks break on the first follow-up, so lead with logic-first frameworks instead. Ignoring assumptions makes an answer non-transferable, so state them early rather than after the fact. Chasing perfect precision slows your thinking and raises the odds of an error, so use sensible ranges and directionality instead. Skipping verbal practice means your knowledge stays silent under pressure, so explain out loud daily rather than reading silently. Avoiding your weakest topic leaves the gap exposed exactly when it matters most, in a final round, so prioritise that bucket first. And an equation dump with no intuition attached signals exam prep rather than banker thinking; lead with why, then the formula. Read your prep without speaking, running one division's pack across every application, and chasing new question PDFs are the three habits most worth dropping this week, in favour of two timed verbal answers daily, tasks mapped per firm and division on your tracker, and re-drilling the eight core equations until the twists feel boring.
What to do after reading this
Studying investment banking technical interview questions this cycle? Practise interrupted answers out loud, then map prep to the stage of each live application.
Return to the 400 IB questions / investment banking interview questions guide when you need process context across behavioural and technical stages. For paper LBO maths, use the paper LBO interview guide.
