Investment Bank Equations to Know for Interview: Second Round Prep Guide
Interviews
Eight investment bank equations to rehearse out loud before a live second round, plus follow-up twists, division depth, and the behavioural prep that sits around the maths.
Candidates often treat second rounds as "HireVue but on Zoom." That misunderstanding costs offers. Second rounds are where interviewers probe, interrupt, and compare notes with what you already submitted. If your motivation story shifts or your technical answer is pure memorisation, you stop advancing, even with a strong CV.
This guide explains what changes after HireVue, what UK banks typically test, how to prepare technicals and behaviourals for live follow-ups, and how second rounds differ from superday investment banking finals. For equation-level IB technicals practice before your live slot, use our investment banking technical interview questions guide in parallel with this stage map.
Where second round sits in the UK process
Typical sequence for summer analyst routes:
- Online application and CV screen
- Psychometric or situational tests (some banks)
- HireVue or recorded video
- Second round: live phone or video with analyst/associate (sometimes two sequential interviews)
- Final stage: superday or assessment centre with multiple exercises and senior interviews
Not every bank labels stages the same way. Some combine phone screen and second round; boutiques may skip HireVue and start live earlier. The prep principle holds: each live round increases depth and consistency checks.
| Stage | Primary filter | Typical format |
|---|---|---|
| HireVue | Communication, motivation, light commercial | Recorded, timed |
| Second round | Logic, CV integrity, applied technicals | Live, follow-ups |
| Superday / AC | Endurance, culture, harder technicals | Multi-session day |
If you are still preparing for first-round phone screens, read our investment banking phone interview guide first — then level up using the sections below.
What changes after HireVue
Three shifts catch unprepared candidates.
Follow-ups replace one-take answers
HireVue rewards concise first answers. Second rounds reward adaptability: "You mentioned multiples — why not DCF here?" or "That contradicts what you wrote on your cover letter — explain."
Fix: practise answering the same prompt three ways in two minutes. If you only know one script, you will fail follow-ups.
Technicals move from definitions to application
Second rounds rarely ask "What is WACC?" in isolation. They ask "Walk me through how you'd value this business" or "What happens to EPS if…?" with pushback on assumptions.
Use first-principles guides for depth:
- Investment banking technical questions (including IB technicals equations to know cold)
- Three statement interview questions
- DCF interview questions
Consistency with your application becomes explicit
Interviewers have your CV, cover letter, and sometimes HireVue transcripts. They test whether the same person shows up live.
Master document: one page with your stated division choice, top three CV bullets, motivation narrative, and two deal or market stories. Every answer should trace back to it.
What second round interviewers score
| Dimension | What good looks like | Red flag |
|---|---|---|
| Technical intuition | Clear steps, stated assumptions, sanity checks | Formula recitation without logic |
| Commercial awareness | Second-order "so what" for the desk | Headline summary only |
| Behavioural fit | STAR with ownership and reflection | Over-polished script, no detail |
| Communication | Direct answer first, then support | Rambling or defensive under pushback |
| Motivation | Firm- and division-specific | Generic prestige answer |
Senior bankers sometimes join second rounds at smaller firms. Treat every interviewer as if notes will be shared — because they often are.
Technical prep for second round depth
You do not need modelling test perfection. You need ninety-second ownership of core topics.
Accounting: $10 depreciation walkthrough, inventory purchase, and AR increase. See three statement interview questions.
Valuation: when comps beat DCF; EV bridge sanity checks. See valuation interview questions.
M&A logic: accretion/dilution intuition, not spreadsheet precision. See accretion dilution interview questions.
Commercial: one macro story and one sector story with MAPS-style implication. See our macro economics finance interview guide.
Practice loop: pick five prompts, set a timer for ninety seconds each, then have a partner ask two follow-ups per prompt.
Investment bank equations to know for interview
Candidates search investment bank equations to know for interview the week before a live second round. Banks do not expect Excel. They expect you to speak the logic when assumptions change mid-answer.
Core equation table (memorise the logic, not notation)
| Equation or ratio | What it measures | Ninety-second verbal target | Typical follow-up twist |
|---|---|---|---|
| Enterprise value = equity value + net debt (+ minority, preferred as relevant) | Total firm value to all capital providers | "EV is what a buyer pays for the whole capital structure; equity is what's left for shareholders after net debt." | "Walk me from EV to equity value with one adjustment." |
| Unlevered FCF = EBIT × (1 − T) + D&A − CapEx − ΔNWC | Cash before financing | "Start after tax operating profit, add back non-cash D&A, subtract reinvestment and working-capital drag." | "Why add D&A back if it's a real economic cost?" |
| WACC = (E/V)×Ke + (D/V)×Kd×(1 − T) | Blended discount rate | "Blend cost of equity and after-tax cost of debt by their share of firm value." | "Rates rose — what happens to DCF and multiples?" |
| EV/EBITDA | Relative valuation multiple | "Compare enterprise value to operating cash proxy; useful when earnings are distorted or capital structure differs." | "When do comps beat DCF for this sector?" |
| Net debt / EBITDA | Leverage screen | "How many years of EBITDA to repay net debt; covenant and LBO sanity check." | "Is this leverage plausible for an LBO at 6×?" |
| Interest coverage = EBITDA / interest expense | Debt service headroom | "Operating cash proxy versus cash interest; lenders care when coverage tightens." | "Coverage falls — what happens to refinancing risk?" |
| Equity value = EV − net debt | Bridge from enterprise to equity | "Same bridge as row one, solved for equity after you have EV from DCF or comps." | "Minority interest in the bridge — where does it sit?" |
| Accretion / dilution (direction) | EPS impact of a deal | "If the buyer's P/E is lower than the effective P/E paid for the target, all-stock deals tend to dilute EPS." | "All-stock vs cash — which is more accretive here?" |
How to use the table: Pick one row per day. Set a ninety-second timer. Explain without notes. Then let a partner ask one twist from the right-hand column.
For broader IB technicals beyond equations (accounting linkage, paper LBO, division depth), see our investment banking technical questions guide. That guide covers the full technical stack; this section is the canonical equation list for live rounds between HireVue and superday.
Follow-up twist practice (one week before second round)
| Twist | What a strong answer sounds like |
|---|---|
| "Tax rate is zero" | "Unlevered FCF starts from EBIT with no tax shield; WACC debt term loses the (1 − T) benefit on Kd." |
| "CapEx doubles" | "Unlevered FCF falls dollar-for-dollar in the near term; DCF value drops unless growth narrative justifies reinvestment." |
| "Rates rose 200 bps" | "WACC up → DCF down; multiples often compress in parallel as discount rates rise." |
| "All-stock acquisition" | "Check P/E paid vs buyer P/E for EPS direction; financing mix drives accretion more than headline synergy." |
| "Walk EV to equity with pension deficit" | "Treat unfunded pension like debt-like claim in the bridge unless interviewer specifies otherwise." |
Practise one twist per equation. Second rounds fail candidates who recite perfectly but freeze when the scenario shifts.
Equation mistakes that fail second rounds
| Mistake | Why interviewers stop you | Fix |
|---|---|---|
| LaTeX-style notation out loud | Sounds like memorisation, not thinking | Plain English: "cash flow after tax, add D&A back, subtract CapEx" |
| Fifty formulas, zero twists | No proof you understand inputs | Master eight rows in the table above |
| DCF without stating WACC assumption | Looks like template recall | "I'll assume mid-teens WACC unless you want a different capital structure" |
| Comps without EV bridge | Confuses equity and enterprise value | Always say whether your multiple is on EV or equity |
| Ignoring division context | ECM candidate reciting LBO math | Match equation depth to division table below |
Second round vs superday depth: at this stage, interviewers want direction and assumptions, not spreadsheet precision. Say your steps, state one assumption, pause for pushback. Save full modelling stamina for superday investment banking prep.
Division-by-division second round technical depth
| Division | Second round technical intensity | What to prioritise |
|---|---|---|
| M&A / coverage | High | Three statements, EV bridge, accretion intuition |
| Lev fin / DCM | High to medium | Leverage ratios, interest coverage, paper LBO direction; add credit interview questions for lending-side follow-ups |
| ECM | Medium | Comps, market timing, dilution basics |
| Global markets / S&T | Low to medium | Commercial + macro; light valuation |
| Equity research | Medium | Sector thesis, valuation framing, writing clarity |
Mismatch kills more second rounds than weak maths: an ECM motivation on a lev fin desk invites trap questions. Align your master document with the single division on that application.
Behavioural and fit prep
Second rounds still weight airport test dynamics: would they want you on a deal team at midnight?
Reuse four to six STAR stories covering:
- Leadership under ambiguity
- Failure and learning
- Conflict resolution without drama
- Analytical work with real stakes
Keep stories consistent with HireVue answers but not word-identical — live conversation should sound natural. For motivation depth, see why investment banking interview answer guide.
Logistics and performance on the day
Environment: quiet room, stable connection, charged device, water nearby. Test audio five minutes early.
Structure each answer:
- Direct answer in one sentence
- Two supporting points or steps
- Stop — let them follow up
When stuck: narrate your thinking. "I would start with the income statement impact, then cash flow, then balance sheet — depreciation reduces EBIT by ten…" Partial progress beats silence.
Questions for them: one thoughtful division-specific question beats three generic ones. Ask about deal mix, training, or how juniors get staffed — not salary or hours in round two.
Common second round mistakes
| Mistake | Why it fails | Fix |
|---|---|---|
| Reusing HireVue scripts verbatim | Sounds robotic on follow-up | Frameworks, not transcripts |
| Ignoring CV bullets | Easy trap questions | Rehearse every line you wrote |
| Over-technical monologues | Loses interviewer interest | Answer, pause, invite follow-up |
| Division mismatch | ECM motivation on lev fin desk | One narrative per application |
| No mock live practice | First interruption derails you | Mock with interruptions weekly |
Two-week prep plan before second round
Days 1–3: Master document + CV bullet defences; record four STAR stories.
Days 4–7: Ninety-second technical practice (five topics per day) with follow-ups.
Days 8–10: Firm-specific motivation and one recent deal or market view per bank on your tracker.
Days 11–14: Two mock live interviews back-to-back; debrief inconsistencies.
If you cleared HireVue recently, revisit HireVue finance interview tips and identify which answers felt thin — those are second-round targets.
How Finbound fits second round prep
Second rounds are the first live proof that your HireVue story and technical answers hold under interruption. Keep each bank as its own application with the correct stage, then let Finbound's study algorithm rank technical refresh for firms already past video screens above portals still in draft.
For spoken practice that feels like the call, use Finbound's Telephone Interview Prep: three firm-linked questions, 60 seconds each, and Fintelligence feedback from the transcript. Practice stays saved against that bank so maths and motivation for Goldman do not get mixed up with another firm still waiting on a portal. Start for free to add the banks; the free plan includes three tool practice runs. Open Finbound's Telephone Interview Prep when you want the timed audio mock.
The investment banking second round interview is winnable when you treat it as thinking under follow-up, not a repeat of HireVue with a human on screen. Save full superday endurance prep for when you advance.
Build your one-page master document and schedule one mock second round with follow-ups this week.
What to do after reading this
Heading into a live second round? Rehearse eight equations out loud with one follow-up twist each, then mock one interrupted call before the real screen.
When you advance, read the superday investment banking guide for final-day stamina.