Banking technicals are rapid-fire. Forty-five seconds to answer "walk me through a DCF," twenty seconds to answer "which is higher, cost of debt or cost of equity?" The format punishes hesitation and rewards pattern-matched fluency — you cannot reason your way through 30 technicals in an hour, you have to know them cold. This guide covers the canonical question bank every bulge bracket and elite boutique draws from, the rubric VPs use when grading, and how to drill flashcards with spaced repetition against a voice interviewer.
What a technicals round looks like
A standard technicals session runs 30 to 45 minutes with one or two interviewers firing questions in sequence:
- Warm-up accounting (5 min). Three statements, how they link, basic ratios. The interviewer is watching whether you trip on a basic "if depreciation goes up by 10, walk me through the statements."
- Valuation core (10–15 min). DCF mechanics, comps vs. precedents, WACC, multiples. Expect three to six questions here with one or two follow-ups each.
- M&A and LBO (10–15 min). Accretion/dilution, sources and uses, basic LBO math, paper LBO if the firm runs them.
- Deal experience and curveballs (5–10 min). "Which recent deal caught your eye?" "What's happening with rates and what does that mean for M&A volume?" "Why this industry?"
Tone is terse. You are expected to answer in 30 to 60 seconds for most questions — longer answers feel like you are compensating for not knowing.
What interviewers actually score
- Fluency. Do you answer in seconds without dead air? Can you walk through a three-statement linkage without pausing to think about which account flows where?
- Depth when prompted. When they say "go deeper," can you? "Walk me through a DCF" has a 30-second answer and a 5-minute answer depending on the follow-up.
- Accuracy. A wrong answer delivered confidently is worse than an honest "I'm not sure" — wrong confident answers get flagged by the interviewer and shadow the rest of the round.
- Business context. A technically perfect DCF answer that misses why DCF is weaker for banks or commodities loses to a technically solid answer that brings the context.
- Recovery. When they correct you, how gracefully do you integrate and move on?
The canonical question bank
Roughly 200 questions recur across banks. The clusters:
- Accounting fundamentals. How do the three statements link? If depreciation goes up by 10, walk through the statements. What is working capital? Deferred taxes? Goodwill and why it is not amortized?
- Valuation methods. DCF walkthrough. Why unlevered free cash flow? Terminal value — perpetuity growth vs. exit multiple. When to use comps, when to use precedents, when DCF is unreliable.
- WACC and cost of capital. How to compute WACC. Cost of equity via CAPM. Why cost of debt is after-tax. Beta — levered vs. unlevered, when to relever.
- Multiples. EV/EBITDA vs. P/E — when each applies. Why EV/EBITDA for cross-capital-structure comparisons. Forward vs. LTM multiples.
- Enterprise value vs. equity value. What bridges them. Why cash is subtracted. How minority interest and preferred factor in.
- M&A mechanics. Accretion/dilution rules of thumb. Cash vs. stock vs. mix. Synergies — revenue vs. cost, which are believed.
- LBO basics. What makes a good LBO candidate. Sources and uses. How sponsors create returns — deleveraging, multiple expansion, EBITDA growth.
- Market awareness. Rate moves and deal volume. Recent notable deals. Your industry of interest and why.
Preparation roadmap
- Weeks 1–2: Learn the material. Work through a canonical banking interview guide — WSO, M&I, or equivalent. Your goal is comprehension, not speed. You should be able to explain each concept from first principles.
- Weeks 3–4: Flashcards. Convert the question bank into flashcards. Drill daily with spaced repetition. Target 80%+ correct at normal speaking speed.
- Week 5: Speed drills. Timed sessions — 20 questions in 15 minutes, then 30 in 20 minutes. Record yourself and listen for filler words, dead air, and answers that trail off.
- Week 6: Live mocks. Real voice-based mocks under superday conditions. Two to three full technicals rounds per day.
The most common failure mode is strong comprehension with weak speed. You know the answer but it takes 90 seconds instead of 30. Interviewers experience that as "does not know it well enough." Flashcards fix this.
How to practice with InterviewDen
The Banking Technicals rapid-fire track on InterviewDen drills exactly this — a voice-driven AI interviewer fires questions from the canonical bank, listens to your spoken answer, grades it in real time against the reference, and tracks your weak spots for spaced-repetition follow-ups.
The system knows which questions you have missed recently and re-surfaces them. It penalizes hesitation the way a real VP does. The debrief flags which clusters (accounting, valuation, M&A, LBO) you are weakest on and what to drill next.
Start a drill session from banking technicals practice — pick difficulty and category, or let the system pick based on your history.
Common mistakes
- Memorizing wording instead of understanding. Your rehearsed "walk me through a DCF" sounds great until the interviewer asks "why do we use unlevered free cash flow and not net income?" and the rehearsal falls apart.
- Long-winded answers. "Walk me through a DCF" should take 30–60 seconds. A 3-minute answer signals insecurity.
- Mixing EV and equity value. The single most common technical error. When in doubt, slow down, state which you are computing, and bridge explicitly.
- Forgetting the tax shield. After-tax cost of debt in WACC is a frequent slip-up under time pressure.
- Refusing to admit uncertainty. If you do not know, say so once and pivot. Do not bluff — VPs catch bluffs in 10 seconds.
- Skipping market awareness. "I don't really follow deals" is disqualifying. Read the FT or WSJ deals column daily in the weeks leading up to the interview.
FAQ
How many technicals questions should I memorize?
Around 150–200 canonical questions, drilled to sub-60-second fluency. The full bank is longer but 80% of questions come from this core.
Do I need to remember exact formulas?
Yes for the main ones — WACC, CAPM, perpetuity growth formula, cost of equity. The interviewer expects instant recall, not derivation.
What if I majored in something other than finance?
You need to invest more time on accounting mechanics, but non-finance majors consistently place into banking. Eight to twelve weeks of technicals drilling plus two dedicated mock interviews per week is a workable plan.
Should I prepare differently for bulge brackets vs. boutiques?
Core technicals are the same. Boutiques (Evercore, Moelis, Lazard, Centerview, PJT) tend to run longer, deeper technical rounds and push harder on LBO and DCF nuance. Bulge brackets (Goldman, Morgan Stanley, JPM) vary by group but run wider coverage.
How strict are interviewers about specific numbers (e.g., exact beta)?
They do not expect memorized betas. They expect you to know how to compute and interpret them. If asked for a number, say "a typical software company beta is around 1.2–1.5" — ranges are fine.
Do I need to know about tax reform, rate changes, or other macro topics?
Yes, at a high level. Interviewers commonly ask "what is happening with rates and what does that mean for deals?" You should have a one-minute answer ready.
What about group-specific technicals (e.g., FIG, natural resources)?
If you are interviewing for a specific group, research the sector-specific adjustments — bank valuation uses P/TBV, energy uses NAV, REITs use FFO. Generalist interviews rarely go that deep.