Your Complete Guide to Finance Interview Preparation

The Finance Interview Basics guide you step by step through everything you need for successful finance interviews. You’ll learn general information about finance interviews and how to prepare effectively.

It also covers methods and tools, including valuation models and business frameworks, as well as finance fundamentals: financial statements, finance processes, key figures, and essential terms.

This guide provides everything you need to master finance interviews confidently and kickstart your career in finance.

Step 1 - General Info

What do you need to know about interviews in the finance industry? What types of interviews can you expect? Find all this and more right here!

Begin with the key articles to get started:

Why Are Finance Interviews So Important?

If you're applying for a job in finance, you'll quickly notice that the interviews are tough. They are often challenging, highly technical, and very different from standard job interviews. Especially in the beginning, this can feel quite intimidating.So why is that? Why do investment banks and other financial firms rely on this specific type of interview? And what can you take away from it as a candidate?That’s exactly what we’re going to look at today. We will explain step by step what finance interviews are all about, why they are structured in such a unique way, and what valuable lessons you can take from the whole process.

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Typical Structure of a Finance Interview

Looking to break into the finance industry? Then you should be prepared for a demanding, multi-stage application process. Unlike in many other fields, the interview doesn’t come right after your CV is screened. Instead, you’ll often start with online assessments and other tests designed to evaluate your analytical thinking and numerical skills.Only after that comes the part that’s crucial in almost every recruitment process: the personal interview. There are usually several of them – either spread out across multiple rounds or bundled into what’s known as a Superday. On that day, you’ll go through multiple back-to-back interviews with employees from different teams or levels of seniority. In the end, these conversations are what determine whether or not you’ll receive an offer.In this article, we’ll take a closer look at how a typical finance interview is structured. You’ll learn which skills matter most, why this format is so widely used, and how you can best prepare for it.

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Case Studies

When preparing for a finance interview, your first thoughts are probably about technical questions on valuation, financial statements, or key performance indicators. But increasingly, banks, investment funds, and corporates are using a different format: the case study.Although often associated with consulting, case studies are now a common part of finance recruiting, especially when the goal is to assess your strategic thinking, analytical approach, and understanding of business dynamics.

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Be sure to check out the following articles to expand your knowledge:

Technical Interviews Personal Fit Interviews Market Questions Brainteaser

Step 2 - Finance Interview Preparation

From self-study to mock interviews and professional coaching – learn more about how to successfully prepare for your finance interview.

Begin with the key articles on finance interview preparation:

Preparation Plan

Preparing for a finance interview can quickly feel overwhelming, especially if it’s your first in-person interview at an investment bank, private equity firm, or venture capital company. These interviews are often quite challenging, typically testing your technical knowledge, personal fit, and even mental math skills right on the spot. To make a confident impression, you’ll need more than just what you learned in class.With a structured plan, you can build your preparation step by step and focus on the topics that truly matter in the interview.

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Self-Study

Self-Study is the foundation of any solid finance interview prep. It’s not just about memorizing definitions. It’s about building a solid understanding of financial concepts and relationships that you can apply confidently during interviews.Self-Study should typically be the first step in your finance interview preparation. Focus on building a solid understanding of accounting, valuation, and M&A – you’ll need that foundation to apply concepts confidently later.

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Be sure to check out the following articles to expand your knowledge on finance interview preparation:

Practice with Peers Practice with Coaches

Step 3 - Valuation Models

Learn the key valuation methods used in finance interviews – from DCF to comparables – and understand when to apply each approach to impress your interviewer.

Begin with the key articles on valuation models:

Market Approach

The market-based approach is one of the three primary methods of business valuation, alongside the income approach and the asset-based approach. Instead of projecting future earnings or adjusting balance sheet values, it determines value by comparing a company to similar businesses (Comparable Company Analysis) or transactions (Precedent Transactions Analysis) in the market. The underlying idea is straightforward: the market prices paid for comparable firms provide a benchmark for what the target company should be worth.This approach typically relies on valuation multiples such as EV/EBITDA, P/E, or EV/Sales, derived from public company data or recent M&A deals. By applying these multiples to the target’s financials, analysts can estimate its market value under real-world conditions. The challenge lies in carefully selecting and interpreting the peer group, since differences in growth, risk, and profitability can significantly affect the outcome.

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Income Approach

The income approach is one of the three primary asset and company valuation methods. The other two are market approach and asset-based approach. These categories are based on the sources of inputs and valuation processes.Within each of these major categories, there are several valuation methods professionals use. This guide will focus on the income approach, including related sample interview questions.

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Multiples

Multiples are a key analysis tool within the market-based valuation approach. Instead of projecting a company’s future cash flows, this method determines value by comparing a business to similar companies or past transactions. The idea is simple: if comparable firms trade at certain valuation ratios, such as EV/EBITDA or P/E, the target company should trade at a similar level.This makes multiples a relative valuation method, in contrast to income-based approaches like the Discounted Cash Flow (DCF) analysis, which estimate intrinsic value by discounting future cash flows. By focusing on observable market data, multiples provide a quick and practical way to assess value, but they also depend heavily on finding truly comparable companies or deals.

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Discounted Cash Flow Analysis (DCF)

The discounted cash flow (DCF) analysis is one of the most important valuation methods in finance. Among the commonly used valuation models, the DCF method belongs to the income-based approaches.It complements market-based methods like multiples or transaction analyses as well as asset-based approaches like the net asset value. The DCF method is one of the most frequently used models in practice, especially in investment banking, private equity, and strategic corporate valuation.

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Leveraged Buyout Model (LBO)

A Leveraged Buyout (LBO) Model is a popular financial analysis tool for private equity firms, typically built in Excel. It’s used to assess whether a company is worth acquiring primarily with debt. In an LBO, private equity firms or investors purchase a company by combining equity, or their money, with debt. The model projects the target company's financial performance, including revenue, expenses, and cash flow, post-acquisition to show how its cash flow will be used to service and pay down the large amount of debt taken on. The main purpose of building an LBO model is to determine the potential returns for the equity investors, like the private equity firm, by calculating metrics such as Internal Rate of Return (IRR) and Multiple on Invested Capital (MOIC) at the time of an eventual sale or exit. It also helps assess the company's ability to handle the debt burden.

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Be sure to check out the following articles to expand your knowledge on valuation models:

Capitalization of Earnings Method Dividend Discount Model (DDM) Gordon Growth Model (GGM) Capital Asset Pricing Model (CAPM) Residual Income Model

Step 4 - Business Frameworks

Learn key business frameworks like SWOT, PESTEL, Porter’s Five Forces & more to structure your thinking and impress in finance interviews.

Begin with the key articles on business frameworks:

SWOT Analysis

In finance, strategic frameworks can make a real difference when it comes to understanding a company's position and long-term potential. Among them, the SWOT analysis stands out as a clear and practical method for assessing where a business stands and what factors could shape its future. Whether you're evaluating a target company, preparing for a case interview, or making investment decisions, mastering SWOT can give your analysis more depth and direction.

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Porter’s Five Forces

Porter’s Five Forces is a strategic analysis framework that helps companies and consultants assess the competitive landscape and overall attractiveness of an industry. Developed in 1979 by Harvard professor Michael Porter, the model analyzes five key forces that determine how profitable or challenging a market is.These five forces evaluate, for example, the bargaining power of suppliers and customers, the ease of market entry for new players, the threat of substitutes, and the intensity of competition among existing firms.Analyzing these forces helps businesses identify market opportunities, assess potential risks, and build sustainable competitive advantages. The framework also supports strategic decision-making – such as whether to enter a market, how to position a product, or where to allocate resources.

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PESTEL Analysis

Whether it’s new markets, changing regulations, or technological developments, companies must continuously understand and assess their environment to identify risks and opportunities early on. This is exactly where business analysts and consultants come in: they help organizations spot market risks and opportunities at an early stage. To do this, they rely on analytical tools that systematically evaluate both internal factors and external influences. Among the most popular methods, alongside the SWOT analysis and Porter’s Five Forces, is the PESTEL analysis.While SWOT examines both internal and external factors, PESTEL zooms in on the external components. Thus, it offers more insights into the macro-environmental forces that create those opportunities and threats to help in strategic planning and informed decision-making.

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Step 5 - Financial Statements

Want to get comfortable with the numbers behind every business? It all starts with the financial statements. We’ll show you the basics right here.

Begin with the key articles on financial statements:

Income Statement

An income statement, also known as a profit and loss statement (P&L), is one of the three primary financial statements alongside a balance sheet and cash flow statement. Together, they give a report of a company’s financial health and performance over a specific period. But the income statement is often the starting point for financial analysis and valuation work. So, as you prepare for finance interviews, you must master the income statement including what it is, its structure and purpose, key concepts and terminology, and effects of different transactions. This guide will cover all that plus the connection between the three statements and common interview questions about the income statement.

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Balance Statement

The balance sheet, also known as a statement of financial position, is one of the three most important financial statements. The other two are the income statement and statement of cash flow. Each has its purpose, but together they reveal the profitability, financial stability, and cash flow sustainability of a company.As for the balance sheet, it gives you a clear view of what the company owns, what it owes, and what belongs to its owners. If you’re preparing for finance interviews, it’s important to understand the parts of a balance sheet, how to read and interpret it, and the common interview questions around it. Read on to learn everything you’ll need to be well-prepared and confident.

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Cash Flow Statement

The cash flow statement is one of the three most important financial reports used by companies, alongside the balance sheet and the income statement. It shows how actual cash flows develop within a business, so when and how much money flows in or out of the company. This provides direct insight into a company’s liquidity and its ability to meet financial obligations.Unlike the cash flow statement, the balance sheet and income statement are based on the accrual accounting principle. Under this approach, revenues and expenses are not recorded when cash changes hands but are instead assigned to the accounting period in which they are economically incurred.In contrast, the cash flow statement is based on actual cash movements, therefore serving as a powerful tool in financial analysis. By focusing on real cash flows, it enables analysts to cut through the complexity of accounting and assess whether a company is truly generating cash or rather burning it.

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Step 6 - Processes in Finance

Learn core processes in finance – from M&A to IPOs. Essential knowledge to master applications, ace interviews, and kick-start your career in the industry.

Begin with the key articles on processes in finance:

Sell-Side M&A

In finance, Mergers & Acquisitions (M&A) refers to the process of mergers and corporate takeovers, where companies are combined or acquired to achieve strategic growth, greater efficiency, or competitive advantages.In mergers and acquisitions (M&A), every deal has two sides: the sell-side and the buy-side. The sell-side team represents the seller and supports them in preparing the business for sale, reaching out to potential buyers, and negotiating the best possible price and terms. On the other side, the buy-side team works with the acquirer to identify attractive targets, evaluate them, and execute the purchase.Investment banks and advisory firms often act on either side of a transaction. Most firms work on both buy-side and sell-side assignments across different deals, but never on both sides of the same transaction as that would create a conflict of interest. This guide will focus on the sell-side M&A process and provide sample interview questions to help you prepare for investment banking interviews.

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Buy‑Side M&A

In finance, Mergers & Acquisitions (M&A) refers to the process where companies are combined or acquired to achieve strategic growth, efficiency, or market advantages.Mergers and acquisitions (M&A) transactions have a buy-side and a sell-side. The sell-side team represents the seller and works to market the business to potential buyers, while the buy-side team represents the acquirer. For the buyers or acquirers, the focus is on acquiring the right target with minimal risk and maximum strategic or financial upside. So it requires a lot of due diligence, valuation analysis, and strategic assessment.Read on to understand the entire buy-side M&A process and get some practice questions to prepare for finance interviews.

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Leveraged Buyout (LBO)

A Leveraged Buyout (LBO) is a type of acquisition where a buyer chooses to finance the purchase using borrowed money or debt and some cash investment, known as equity. So, the "leverage" in leveraged buyout refers to this heavy use of debt financing. In most LBOs, 60-90% of the purchase price comes from borrowed money, while only 10-40% comes from the buyer's own cash.The buyer uses the future cash flows and assets of the company being acquired as collateral for the loans. They can also use the assets of the acquiring company if necessary. Over time, the debt is paid back using the cash that the target company generates. The buyers aim to exit profitably through a sale, merger, or public offering after improving the company's performance and paying down the debt.

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Key Figures & Terms

Understand the most important financial indicators and industry-specific terms, and learn how to apply this knowledge confidently to analyze, interpret, and act on financial information.

Key Figures & Terms

Learn key figures and terms of the finance industry – essential knowledge for applications, interviews, and your successful start in the field.

EBIT EBITDA Present Value Equity Value Enterprise Value Time Value Intrinsic Value WACC Return on Equity (ROE) Compound Annual Growth Rate CapEx OpEx Tax Shield

Next Step: Practice With Peers

The best preparation is practice. The more interview situations you train, the more confident you’ll be in the real conversation. Once you’ve mastered the basics, you should practice mock interviews with other candidates – focusing on common technical, accounting, and valuation questions. This allows you to apply your knowledge in a realistic setting, receive feedback, and build confidence for the actual interview.

Not sure what to expect in mock interviews? Here are some helpful resources.

Meeting Guide: How Do Mock Interviews Work on PrepLounge?

Read this article to learn how to make the most of mock interviews.

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Example Meeting

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What are the Finance Interview Basics?

The Finance Interview Basics are a comprehensive introductory course that provides all the theoretical fundamentals you need to succeed in your interviews. The learning path guides you step by step through key topics such as structuring, frameworks, math, and essential finance skills. The goal is to give you a solid understanding of the core components of a interview before you move on to practical practice. Your progress is saved along the way, so you can easily continue where you left off.

How do the Finance Interview Basics support my interview preparation?

The Finance Interview Basics help you understand the mindset and working methods of professionals, enabling you to respond to real interview questions in a structured and confident way. You not only learn how interviews are built but also which approaches top candidates use to develop strong, convincing solutions. Through clear explanations, examples, and practical frameworks, you build your skills step by step.

Who are the Finance Interview Basics best suited for?

The course is particularly helpful for beginners who have little to no experience with interviews or the finance industry and are looking for a clear, structured introduction.

At the same time, more advanced candidates also benefit, as many sections are perfect for refreshing knowledge or deepening topics. If you already have experience and only need a specific framework or calculation method, you can simply use the search function to jump directly to the article you need.

Is theory alone enough, or should I also practice interviews with peers?

Theory is absolutely essential – but we strongly encourage you to apply what you’ve learned in real interview situations afterward. It’s only through practicing with peers that you truly see how confidently you can use the concepts and where there’s still room for improvement. Direct feedback helps you identify your strengths and weaknesses much faster and allows you to work on them in a focused way.

You can schedule your interviews on our Meeting Board!

Do I need prior knowledge to start with the Finance Interview Basics?

No, you don’t need any prior knowledge to get started. The Finance Interview Basics are designed to guide you step by step through all essential concepts – whether you're completely new to finance or simply looking to refresh specific areas. You can begin right away and work through the content at your own pace.

Should I complete the entire Finance Interview Basics to be fully prepared?

If you have enough time, we highly recommend working through the entire course. Each section builds your understanding step by step and teaches essential skills that matter in the interview process. Candidates who go through all the content and then apply the knowledge in practice are typically much better prepared than many of their competitors.

Are the entire Finance Interview Basics available for free?

Yes, all articles within the Finance Interview Basics course are completely free to access – even without a Premium membership. This ensures that everyone has access to the essential foundations needed for a successful interview preparation. You can explore the full course at your own pace without any cost barrier.