How much technical knowledge do you actually need for a first-round IB interview?

Whether you're aiming for Investment Banking, Private Equity, or Venture Capital, your path to a finance career usually involves a multi-stage and demanding selection process. Alongside online tests and questions about your personality and motivation, the technical interview is typically a central component.Technical questions can appear at different stages of the process. In many cases, there is a dedicated technical interview, which is often part of the final round or a Superday. Depending on the firm, technical elements might also be assessed earlier, such as during an initial video interview or screening call.In this article, we'll walk you through the key technical topics typically covered in finance interviews, the types of questions you can expect, and how to prepare effectively to impress your interviewers. Why Are Technical Interviews in Finance So Important?In the financial industry, you simply can't avoid technical interviews – and for good reason. In areas such as Investment Banking, Private Equity, Corporate Finance, or Asset Management, employers expect a solid grasp of financial concepts from day one.Even as an intern or analyst, you'll likely be involved in complex projects, preparing market and company analyses, assessing business models, or analyzing financial statements. Technical know-how is a must-have to quickly contribute and take on responsibility.In the interview, recruiters want to see whether you’ve mastered the core concepts, can think logically and explain your ideas clearly and in a structured way. Your comfort with numbers, analytical mindset and overall business understanding also play a big role. What Is Assessed in a Technical Interview in Finance?Technical interviews in finance focus on concrete core areas relevant to your daily work. The emphasis is less on memorizing formulas and more on your understanding of financial interconnections, your analytical skills, and structured thinking.Here are five key topic areas you will almost certainly encounter:1. Accounting and Financial StatementsYou need a solid understanding of the three core components of financial reporting: the Income Statement, Balance Sheet, and Cash Flow Statement. Interviewers often test whether you can explain how these statements are connected.For example, you should know how changes in depreciation, provisions, or accounts receivable impact profit, equity, or cash flow. Questions may include how specific business transactions affect the balance sheet or income statement or how to interpret individual line items. Strong answers demonstrate comfort with accounting fundamentals.2. Company Valuation (e.g., DCF, Multiples)In many finance positions, the ability to value a company is essential. That means you should understand the core approaches, especially Discounted Cash Flow (DCF) analysis, and valuation using multiples such as EV/EBITDA.You’re not expected to build a full valuation model from scratch, but you should understand the logic behind it. What assumptions influence the result? When is each method appropriate? What does a high or low multiple tell you compared to industry peers? These kinds of questions help interviewers assess how well you can apply valuation concepts in context.3. Financial Ratios and KPIsInterviews often test your ability to work with financial metrics. These include classic ratios like profit margin, equity ratio or return on equity (ROE), as well as operational KPIs that vary depending on the role and sector. What matters most is not just knowing the formulas, but being able to interpret the numbers in context.What does a certain ROE indicate about a company? What risks might be hidden behind a high level of debt? How can you spot trends by looking at a set of KPIs over time? If you can answer these questions clearly, you’re showing that you understand the bigger picture, not just the math.4. M&A and LBO FundamentalsIf you're applying to roles in Investment Banking or Private Equity, you’re expected to be familiar with the basics of M&A transactions and leveraged buyouts (LBOs). That includes understanding how a deal is structured – from purchase price and financing to the exit strategy.You should know how capital structure affects returns, what multiple arbitrage means, and how operational improvements can influence valuation and investment outcomes. Familiarity with due diligence processes and the role of advisors in M&A deals may also come up in the interview.5. Economic and Market UnderstandingTechnical interviews don’t just test your numerical skills, they also assess your ability to analyze broader economic developments. You might be asked to evaluate interest rate or inflation trends, or reflect on the impact of geopolitical events on capital markets and businesses.These types of questions are designed to sense your interest in economic topics and your ability to think beyond the numbers. For roles focused on strategy or investments, this kind of broad commercial awareness is a real asset. Sample Questions in Finance InterviewsTo help you get a better idea of what to expect, we’ve listed some common technical questions that often come up in finance interviews:How are the balance sheet, income statement and cash flow statement connected?What happens to cash flow when accounts receivable increase?How does the DCF model work, and what are its main weaknesses?What does an EV/EBITDA multiple tell you, and how would you interpret a particularly high value?What’s the difference between gross and net debt?How do you calculate ROE, and what does a very high ROE mean in practice?How does rising inflation affect company valuations?What are the risks involved in a leveraged buyout?Why is beta important in the CAPM, and how can you determine it?What would be a sensible exit strategy for a PE investment in a fast-growing SaaS company?💡 If you want to strengthen your understanding of key financial concepts and valuation methods, practicing these types of questions is one of the best ways to prepare. Take a look at our question sets to get started:

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