JP Morgan Interview Questions- Detailed Tutorial with Template

If you’re preparing forJP Morgan interview questions or other roles at Corporate Finance roles at JP Morgan, understand this clearly:

The spreadsheet test is where most candidates get eliminated.

This isn’t just an Excel test.

It’s a structured thinking test under pressure.

Crack the JP Morgan Investment Banking Spreadsheet Round

Master NPV | 3-Statement Linkages | DCF | Trading Comps

If you’re preparing for Investment Banking or Corporate Finance roles at JP Morgan, understand this clearly:

The spreadsheet test is where most candidates get eliminated.

This isn’t just an Excel test.

It’s a structured thinking test under pressure.

In this detailed guide, we break down:

✔ How the spreadsheet round works

✔ The exact case types asked

✔ Step-by-step solving logic

✔ What interviewers are actually testing

✔ How to practice strategically

Understanding the JP Morgan Interview Structure

Investment Banking and Corporate Financial Analyst roles typically follow a structured process:

1️⃣ HR Screening Call

• Communication skills
• Educational background
• Role alignment

2️⃣ Online Assessment

• Logical reasoning
• Quantitative aptitude
• Situational judgment

3️⃣ Video Screening

• Structured thinking
• Clarity of explanation
• Confidence

4️⃣ Technical Round 1

• Finance concepts
• Accounting questions
• Valuation basics

5️⃣ Technical Round 2 (Spreadsheet Test)

This is the most decisive round.

Why the Spreadsheet Test Is Critical

This round simulates real analyst work:

• You are given assumptions
• You are given partial financial data
• You must build structured outputs
• You must arrive at valuation conclusions

They are testing:

• Financial statement understanding
• Logical sequencing
• Sign discipline
• Valuation knowledge
• Speed + accuracy

NPV Case – The Perpetuity Trap

📌 Case Setup

• Project Cost: $1 billion
• Annual Post-tax EBIT: $10 million
• WACC: 10%
• No growth mentioned

Question:

Buy, Sell, or Reject?

🧠 Step 1: Identify the Structure

Since no time period is given and the cash flow is constant, this is a perpetuity.

Use Gordon Model with g = 0:

PV = \frac{CF}{WACC}

PV = \frac{10}{0.10} = 100

🧮 Step 2: Compare with Investment

Investment = 1,000 million

PV = 100 million

NPV = 100 – 1000 = -900

✅ Decision: Reject

The project destroys value.

🎯 What Interviewers Are Testing Here

• Do you recognize perpetuity instantly?
• Do you know when to use WACC?
• Can you convert billion to million quickly?
• Can you interpret negative NPV correctly?

If you want more structured NPV and valuation-based practice, explore our:

👉 Financial Modeling Interview Questions Bank

Financial Statement Linkages Test

This is where candidates start collapsing.

You are given:

• Revenue growth %
• EBITDA margin
• Tax rate
• Depreciation
• Partial balance sheet
• No working capital details

And asked to:

Build Income Statement → Cash Flow → Balance Sheet

🏗 Step 1: Build Income Statement

Revenue

Revenue₁ = Revenue₀ × (1 + Growth)

EBITDA

EBITDA = Revenue × Margin

EBIT

EBIT = EBITDA − Depreciation

Tax

Tax = EBIT × Tax Rate

Net Income

Net Income = EBIT − Tax

💰 Step 2: Build Cash Flow Statement

Start with:

Net Income

Add:

• Depreciation (non-cash)

Subtract:

– Capex (if any)

– Increase in Working Capital (if any)

Result:

Change in Cash

🧾 Step 3: Update Balance Sheet

Assets

Cash = Old Cash + Change in Cash

PPE = Old PPE − Depreciation (if no capex)

Equity

Retained Earnings += Net Income

Debt

Unchanged (if no financing)

🔍 Final Check

Does:

Assets = Liabilities + Equity?

If not — your model is wrong.

🎯 What They’re Actually Testing

• Do you know Net Income flows into retained earnings?
• Do you know depreciation reduces PPE?
• Do you know depreciation increases cash flow?
• Can you maintain sign discipline?

If you’re new to 3-statement modeling, start here:

👉 Financial Modelling Interview Questions for Freshers

DCF Spreadsheet Case

Now comes the serious valuation test.

You are given:

• Base revenue
• Growth rate
• EBITDA margin
• Tax rate
• Capex %
• NWC %
• WACC
• Terminal growth rate
• Shares outstanding
• Net debt

Your job:

✔ Forecast

✔ Build FCFF

✔ Discount cash flows

✔ Compute Terminal Value

✔ Derive Share Price

📈 Step 1: Forecast Revenue

Revenueₜ = Revenueₜ₋₁ × (1 + Growth)

📊 Step 2: Compute EBITDA & EBIT

EBITDA = Revenue × Margin

Depreciation = Revenue × Dep %

EBIT = EBITDA − Depreciation

📉 Step 3: Compute NOPAT

NOPAT = EBIT × (1 – Tax)

💡 Step 4: Free Cash Flow to Firm (FCFF)

FCFF = NOPAT + Depreciation – Capex – \Delta NWC

Common mistake:

Adding capex instead of subtracting.

📐 Step 5: Discounting

Since we use FCFF:

Discount using WACC.

DF = \frac{1}{(1+WACC)^t}

PV = FCFF × DF

🔄 Step 6: Terminal Value

TV = \frac{FCFF_{final} × (1+g)}{WACC – g}

Discount back to present.

🏦 Step 7: Enterprise to Equity

Enterprise Value = Sum(PV of FCF) + PV(Terminal Value)

Equity Value = EV − Net Debt

Implied Price = Equity ÷ Shares

📚 For Deep Valuation Practice

👉 Top 40 Valuation Interview Questions (With PDF)

Trading Comparables (Relative Valuation)

Banks never rely on only DCF.

They triangulate.

Step 1: Compute Enterprise Value

EV = Market Cap + Debt − Cash

Step 2: Compute Multiples

EV / EBITDA

EV / EBIT

Step 3: Find Median Multiple

Use:

=MEDIAN(range)

Or

=PERCENTILE.INC(range, 0.25)

Step 4: Apply to Target

Target EV = Median × Target EBITDA

Equity = EV − Net Debt

Price = Equity ÷ Shares

🔍 Sanity Check

Implied equity should not be negative.

What Separates Selected Candidates

🚀 1. Structured Assumption Box

Keep:

• Growth
• Margins
• Tax
• Capex %
• NWC %
• WACC
• g

Clearly visible.

🧮 2. Unit Consistency

Always write:

“All figures in $ million”

🔄 3. Two Sanity Checks

✔ Balance sheet balances

✔ Implied share price reasonable

Career Strategy Beyond JP Morgan

If you’re building valuation + modeling depth, you should also explore:

👉 Top Internships for Equity Research Analyst in India

Because ER internships build:

• Financial modeling discipline
• Sector analysis ability
• Valuation reasoning

Which directly helps IB interviews.

Interview Pattern Comparison

Different finance firms test differently.

For example:

👉 CRISIL interview structure

👉 Gallagher interview patterns

Understanding multiple formats makes you versatile.

FINAL SECTION: How to Actually Prepare in 10 Days

Day 1–2

3-statement linkage drills

Day 3

NPV & perpetuity variations

Day 4–6

DCF builds (5 variations)

Day 7–8

Trading comps build

Day 9

Timed mock (2 hours)

Day 10

Error correction & speed optimization

Final Thought

The spreadsheet round is not about remembering formulas.

It’s about:

• Understanding how money flows
• Connecting assumptions to valuation
• Maintaining logic under pressure
• Checking your own work

If you can confidently build:

✔ Perpetuity NPV

✔ 3-statement mini model

✔ FCFF DCF

✔ Trading comps valuation

You are already ahead of 80% of candidates.

Related Articles

• EBITA Meaning Demystified: Understanding the Financial Metric
• Advance Financial Modeling
• How to calculate Degree of Financial Leverage?
• How can you Grow your Career with an Advanced Excel course?
• Valuation Interview Questions with Solutions and live mock test

Summary

Article Name

JP Morgan Interview Questions

Description

This article provides a complete breakdown of how to prepare for the Investment Banking spreadsheet round at JP Morgan, focusing specifically on the technical Excel case study that often determines final selection.The guide begins by explaining the overall interview structure — from HR screening and online assessments to technical interviews — highlighting why the spreadsheet test is the most decisive round. Unlike theoretical finance questions, this round simulates real analyst work: building models, connecting financial statements, performing valuations, and arriving at structured conclusions under time pressure.

Author

Allen Aravindan

Publisher Name

mentormecareers

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