investment banking analyst interview
the analyst interview is the most demanding stage in IB recruiting. here it's not enough to know the concepts – you have to apply them under time pressure, deliver in the modeling test and convince consistently across several conversations in the superday. this page shows you what distinguishes analyst interviews from internship interviews, what technical depth is expected, and works through typical questions with a full solution.
what makes analyst interviews more demanding
at analyst level the bank is hiring someone expected to deliver in the deal team from day one. the bar is correspondingly higher: a detailed understanding of valuation and LBO, confidence on M&A questions such as accretion/dilution, and the ability to calculate cleanly under pressure. many processes include a modeling test or a case study and end in a superday with several conversations.
the behavioral part is also assessed more maturely. it's no longer just about interest, but about resilience, commitment and a realistic picture of the job. anyone who has already done relevant internships must show what they concretely learned from them.
the modeling test and the case study
many DACH banks build in a modeling test: in a limited time you're asked to build or extend a 3-statement model, a DCF or an LBO. this can't be learned at the last minute – the linkage of the statements, the debt schedule and the returns logic have to be second nature. the best approach is to practice the underlying concepts with flashcards until they can be recalled automatically, and to work paper versions in your head.
sample questions with worked answers
„a buyer on a P/E of 15 acquires a target on a P/E of 10 in an all-stock deal. accretive or dilutive?"
worked answer: accretive. the rule of thumb for all-stock deals: if the buyer's P/E is higher than the target's, the transaction is accretive. the buyer is valued at 15 times its earnings but buys the target's earnings at 10 times – so more cheaply than it is itself valued in the market.
thinking in terms of returns instead: the target delivers an earnings yield of 1/10 = 10 %, while the newly issued shares „cost" the buyer only 1/15 ≈ 6.7 %. 10 % comes in, 6.7 % goes out – earnings per share rise. hence accretive.
„when is cash financing more accretive than stock financing?"
worked answer: it comes down to the cost of financing. with cash (from excess liquidity or debt) you compare the after-tax cost with the target's earnings yield. at low interest rates the after-tax cost of debt is often well below the target's earnings yield – then the transaction is strongly accretive. stock financing is usually more expensive, because equity carries higher return expectations (high P/E = low earnings yield). rule of thumb: at favorable rates, cash and debt financing tend to be more accretive than stock.
„why do you discount unlevered free cash flows at the WACC?"
worked answer: unlevered free cash flow is measured before interest payments and therefore belongs to all providers of capital – equity and debt. the WACC is precisely the weighted return expectation of these two groups. cash flow and discount rate have to match the same group of capital providers. discounting levered cash flows (after interest, i.e. for shareholders only) at the WACC would be inconsistent – those would have to be discounted at the pure cost of equity.
practice specifically at analyst level
depth comes from repetition. deepen the two core topics separately: our hub on DCF interview questions and the one on LBO modeling interview questions cover the technical side; the fit part at a more mature level is handled by the hub on behavioral interview questions. the full overview is provided by the guide to IB interview preparation.
analyst level, ready to recall under pressure.
practice DCF, LBO, M&A and modeling logic across three difficulty levels – advanced for director and MD level. 3 days with 50 cards free, over 1,200 cards with full access.
frequently asked questions about the analyst interview
the technical depth. at analyst level it's not enough to know the concepts – you have to apply them under pressure. expected are a detailed understanding of DCF and LBO, accretion/dilution in M&A, sometimes a modeling test or a case study, and a superday with several conversations. behavioral is also assessed more maturely: resilience and commitment count for more.
a modeling test requires you to build or extend a model in a limited time – for example a 3-statement model, a DCF or an LBO. this is only mastered through repetition: the linkage of the statements, the debt schedule and the returns logic have to be second nature. anyone who can confidently answer the underlying flashcards has the concepts the test asks for.
well enough to judge in your head. the core rule: in a pure all-stock deal the transaction is accretive when the buyer's P/E is higher than the target's – then it buys more cheaply than it is itself valued. with cash or debt financing you compare the after-tax cost of financing with the target's earnings yield.
typically two to four rounds, often with a final superday or assessment center. there you have several conversations back to back – with analysts, associates and sometimes VPs or directors. each round mixes technical and fit, with the depth increasing the higher you go.
through structure and practice. if you recall the same sequence for every question – state the approach, then calculate – you come across as composed even when a number gets stuck. the more often you've played questions through out loud, the less the format surprises you. confidence comes from repetition, not from talent.
a large share of permanent analyst roles is filled through return offers from internships. beyond that, banks recruit directly on an ongoing basis – often several months before the desired start date. unlike in the US, there is no single rigid cycle; those who are flexible and apply early find entry opportunities outside the classic windows too.