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The 100 Questions.
The questions that come up again and again in finance interviews, with answers and short explanations. A free 14-page PDF.
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What’s inside
- Accounting basics9 questions
- Linking the statements8 questions
- Enterprise and equity value9 questions
- Multiples and comparables8 questions
- DCF8 questions
- WACC and cost of capital8 questions
- M&A9 questions
- LBOs9 questions
- Debt and leveraged finance8 questions
- Markets and deals8 questions
- Mental maths8 questions
- Fit and your story8 questions
Try five now.
Answer each one out loud before you open it.
Which statement shows a company’s financial position at a single point in time?
Balance sheet. The balance sheet is a snapshot on one date; the income and cash flow statements cover a period.
Equity value (diluted market capitalisation) is…
Share price × diluted shares outstanding. Use the market price and diluted shares. Book equity is a different, accounting number.
A DCF values a company as…
The present value of its future cash flows. Money in the future is worth less than money today, so future cash flows are discounted.
In a leveraged buyout, a private equity firm…
Buys a company mostly with debt, repays it, then sells. Debt magnifies the return on the sponsor’s equity.
Which is the strongest way to answer “Why investment banking?”
A specific experience that drew you to the work. Interviewers want a real story linked to the actual work, not the rewards.