Investment Banking Mock Interview Tips: Mastering the Path to Success

Last updated on October 23rd, 2024 at 04:11 pm

ALLEN ARAVINDAN,CFA

So, if you are planning on giving an investment banking mock interview it might be a good idea for you to test your skills at the current level. So before you go ahead and give this test, it would be wise first to brief you on what are the various stages of investment banking interview.

So broadly, the investment banking interview is divided into three stages

• First, there is a written test which will be technical
• Second, there usually is an in person interview, which is again technical
• Final, there can be either more technical rounds or there can be an HR round.

So, in the current test, you will get tested only for technical first round.

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Created by mentorme78

Investment Banking Interview

This is sample replica of a real investment banking interview. Use this mock to assess,if you are prepared and which areas you lack knowledge for.

1 / 14

1.  Company a has business of software development. Company has contract from BOB on 1st February 2019 to build cash management software for them. Total contract value at hundred $1,000,000. BOB has given 50% payment at the time of placing the order and 50% after delivery of second phase.  Product will be delivered in three phases, first phase (30%) will be delivered at December 2019, second in June 2020 (20%) and 3rd in March 2021 (50%). What will be the financial impact for company a for calendar year FY 2019?

revenue of $300,0000 and deferred revenue of $20,000,00

o Revenue of $50,000,00 and deferred revenue of $50,000,00

o Revenue of 1 million dollars

o revenue of $15,000,00 and deferred revenue of 3.5 million

2 / 14

Company A, an Indian company supplying software to USA. USD is expected to appreciate against INR, whereas inflation is expected to rise in India. The company has a policy of 100% hedge for all the billings. How will this impact the total revenue of the company?

o Increase

o no change

decrease

3 / 14

Nasper's originally invested in Flipkart in 2012 and has invested 616 million dollars over a period of time. naspers stake in Flipkart sold to Walmart for 2.2 billion dollars. Walmart will have to withhold 10% of the amount and pay the same to the Indian government as tax deducted. Nasper’s balance sheet will

o Reduce by 616 million dollars

o increase by one .36 billion dollars

o no change in nasper’s balance sheet

o increase by 1.9 8 billion dollars

4 / 14

A firm has net sales of $3,500, earnings after taxes (EAT) of $1,000, depreciation expense of $500, cost of goods sold (COGS) of $1,500, and cash taxes of $500. Also, inventory decreased by $100, and accounts receivable increased by $300. What is the firm's cash flow from operations?

$1,800

$1,200

$1,300

5 / 14

There are two companies, one which pays dividends and the other does not. Which one will have a higher ROE?

The one that pays diviend

The one that doesn't pay dividend

Both will have same

6 / 14

If depreciation increases by 100. While revenue is 1000 and existing depreciation is 50, the tax rate is 30%. Then

Net Income Reduces by 14%

CFO Increases by 5%

Net Income Increases by 14%

7 / 14

A key limitation of balance sheets in financial analysis is that:

Some items are recognized when they are unlikely to reflect a flow of economic benefits

Liquidity and solvency ratios require information from other financial statements

Different balance sheet items may be measured differently

Balance sheet values may use a mixture of measurement bases (historical cost, fair value, etc.). As a result, balance sheet values of assets, liabilities, and equity may not reflect their intrinsic values. Balance sheets provide the information necessary to calculate the firm's solvency and liquidity ratios. Items are recognized on the balance sheet only if a flow of future economic benefits to or from the firm is probable.

Done

8 / 14

Watch the below interview of Titan CEO First.

https://www.youtube.com/watch?v=nzFUVL7cYWw

What is the reason for Titan Missing its target benchmarks?

Covid 19

Low company growth versus Retail Growth

Higher Investments

9 / 14

Which of the following statements is CORRECT regarding the reporting of earnings per share (EPS)?

The EPS when antidilutive securities are converted into shares of common stock is less than basic EPS.

Diluted EPS must be less than or equal to basic EPS.

Basic EPS can be less than diluted EPS.

Basic EPS can be less than diluted EPS.

10 / 14

company A, had invested  $1,000,000 in Company B in the year 2015 which is sold now and received  $50,000,000. Company A will report $50,000,000 as proceeds from the sale of assets in

o Operating income

o investing cash flow

o operating cash flow

11 / 14

If management decided to increase all the future credit purchase by 10 more days, how will it impact cash conversion cycle ?

o decrease

o no change

o increase

12 / 14

Company has net income of $50, a working capital investment of $4, beginning fixed assets of $500, ending fixed assets of $530, depreciation of $27.00, Income tax of $5. what is FCFE?

$38

$43

$98

13 / 14

Which of the following transactions is most likely to be recognized on a firm's statement of changes in equity?

Buying a machine from an equipment dealer

Declaring a dividend on common shares

Investing cash in an exchange-traded fund

Declaring a dividend decreases shareholders' equity and is reflected on the statement of changes in shareholders' equity. Buying a machine is unlikely to change shareholders' equity at the time of purchase. Investing cash in a security is an exchange of one asset for another and is also unlikely to change shareholders' equity at the time of the investment.

14 / 14

At 200 million dollars of revenue, the company has Net margin of 25%, and a dividend payment ratio of 20% but at the same time company has decided to use the same dividend payout money to repurchase $5,000,000 worth of shares. What will the effect be on retained earnings?

o $40,000,00

o $50,000,00

o $35,000,00

o $45,000,00

Your score is

The average score is 47%

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Preparing for the Investment Banking Interview

Preparing for investment banking interviews can be a daunting task, but with the right guidance and practice, you can excel. In this comprehensive guide, we will provide valuable tips and strategies to help you ace your investment banking mock interviews. From mastering technical knowledge to honing your behavioral skills, we will cover it all. Additionally, we will highlight the Mentor Me Careers Financial Modeling Course, a valuable resource that offers in-depth training on financial modeling. By implementing these tips and leveraging the course, you’ll gain the confidence and expertise needed to succeed in your investment banking career.

Research and Understand the Firm

Before your mock interview, thoroughly research the investment banking firm you are targeting. Familiarize yourself with their recent deals, company culture, and industry focus. This will demonstrate your genuine interest and allow you to tailor your responses during the interview. For example, if the firm recently closed a significant merger deal, mention it and discuss its implications for the industry.

Master Technical Knowledge

Investment banking interviews often include technical questions to assess your understanding of finance and accounting concepts. Practice answering questions on valuation methods, financial statements, and financial modeling. The Mentor Me Careers Financial Modeling Course offers comprehensive modules that cover these topics in detail, providing you with the knowledge and skills needed to excel in technical interviews. For instance, you can learn how to build a three-statement financial model and perform discounted cash flow (DCF) analysis.

Develop Strong Communication Skills

Effective communication is crucial in investment banking. Practice presenting your ideas clearly and concisely. In your mock interviews, focus on delivering concise responses that demonstrate your understanding of complex concepts. Use specific examples from your past experiences to illustrate your points. The Mentor Me Careers Financial Modeling Course also emphasizes effective communication through its presentation and pitching exercises, enabling you to articulate your ideas confidently.

Showcase Problem-Solving Abilities

Investment banking involves solving complex problems under tight deadlines. During mock interviews, expect case studies and brainteasers that assess your problem-solving skills. Develop a structured approach to tackling these challenges, and showcase your ability to think critically and analytically. The financial modeling techniques taught in the Mentor Me Careers course can greatly enhance your problem-solving abilities, equipping you with the tools to analyze financial data and make informed decisions.

Emphasize Teamwork and Leadership

Investment banks value teamwork and leadership qualities. Highlight instances in your mock interviews where you effectively collaborated with others and demonstrated leadership skills. Discuss group projects, extracurricular activities, or work experiences that showcase your ability to work well in a team environment. The Mentor Me Careers Financial Modeling Course also offers team-based exercises, enabling you to develop and demonstrate your teamwork capabilities.

Conclusion

Mastering investment banking mock interviews requires a combination of technical expertise, communication skills, problem-solving abilities, and a strong understanding of the industry. By incorporating the tips provided in this guide and leveraging the Mentor Me Careers Financial Modeling Course, you can greatly enhance your interview performance. Remember to research the firm, master technical knowledge, communicate effectively, showcase problem-solving abilities, and emphasize teamwork and leadership. With dedication and practice, you’ll be well-prepared to navigate the challenging investment banking interview process and secure your dream role.

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