Interview Prep
Technical Study Roadmap
Accounting, valuation, DCF, and M&A — what to study, in what order, and how deep.
12 min read
Technical preparation is not about memorizing every possible question. It is about understanding the core concepts well enough to explain what they mean, why they matter, and how the logic works.
How To Use This Roadmap
- What does this concept mean?
- Why does it matter in investment banking?
- How would I explain it clearly in an interview?
Level 1: Accounting Foundations
Accounting is the foundation for valuation, transaction analysis, LBOs, and credit.
What To Study
- The three financial statements and how they connect
- Revenue, EBITDA, EBIT, net income, and cash flow
- Depreciation and amortization
- Working capital and deferred revenue
- Debt, interest, taxes, and shareholders’ equity
Some Concepts That You Should Be Able To Explain
- How a $10 increase in depreciation flows through the statements
- Why net income differs from cash flow
- How working capital affects cash flow
- Why depreciation is added back
- How debt affects the statements
Level 2: Enterprise Value and Equity Value
These concepts are central to valuation and transaction analysis.
What To Study
- Equity value, enterprise value, and market capitalization
- Net debt and cash
- Minority interest and preferred stock
- Fully diluted shares
- Options, warrants, and convertibles
Some Concepts That You Should Be Able To Explain
- The difference between enterprise and equity value
- Why cash is subtracted and debt is added
- How options affect diluted equity value
- Why different value measures use different value measures
Level 3: Valuation
Candidates should understand the major methodologies and when they are used.
What To Study
- Comparable companies
- Precedent transactions
- Discounted cash flow
- Trading and transaction multiples
- WACC, free cash flow, terminal value, and sensitivity analysis
Some Concepts That You Should Be Able To Explain
- The main valuation methods
- Why methods produce different outputs
- How a DCF works
- Why precedents may imply higher values
- How WACC and growth affect a DCF
Level 4: M&A and Merger Model Basics
Classic banking, generalist, and M&A candidates should understand transaction logic.
What To Study
- Strategic buyers versus sponsors
- Accretion and dilution
- Purchase price and sources and uses
- Goodwill and synergies
- Cash, stock, and debt consideration
- Pro forma ownership and EPS impact
Some Concepts That You Should Be Able To Explain
- What makes a deal accretive or dilutive
- How synergies affect a deal
- Why goodwill is created
- How consideration choices differ
- Why a company may acquire another
Level 5: LBO and Sponsor Basics
LBO concepts matter for sponsor, leveraged finance, private equity, and credit-oriented roles.
What To Study
- LBO structure and debt financing
- Sources and uses
- Debt repayment
- Exit multiple
- IRR and multiple of invested capital
- Leverage, interest coverage, and free cash flow
Some Concepts That You Should Be Able To Explain
- How an LBO works
- What makes a good LBO candidate
- How leverage affects returns
- How debt paydown creates equity value
- How purchase price and exit multiple affect returns
Level 6: Product and Financing Group Concepts
Financing-oriented groups often care more about capital structure, credit, market conditions, interest rates, and investor appetite.
- Debt capacity, leverage ratios, interest coverage, and free cash flow
- Refinancing risk and credit ratings
- Secured versus unsecured and senior versus subordinated debt
- High-yield bonds versus leveraged loans
- The Federal Reserve, inflation, and interest rates
- Treasury yields, credit spreads, and bond prices
- How market conditions affect debt and equity issuance
Suggested Study Order
- Learn accounting and the three statements
- Study enterprise value and equity value
- Learn comparable companies, precedents, and DCF valuation
- Study LBO basics and sponsor returns
- Add M&A, accretion/dilution, synergies, and goodwill
- Add topics specific to your target product or group
What To Prioritize By Role
Generalist / Classic Banking
- Accounting
- Enterprise and equity value
- Valuation and DCF
- M&A and LBO basics
- Market awareness
M&A
- Accounting
- Valuation and DCF
- Accretion/dilution
- Merger model basics
- Deal rationale, synergies, and precedents
Leveraged Finance
- Accounting and enterprise value
- LBO basics
- Debt capacity and credit metrics
- Leverage and interest coverage
- Free cash flow
- Loans, high-yield bonds, rates, and spreads
Debt Capital Markets
- Interest rates and Treasury yields
- Bond pricing and credit spreads
- Credit ratings
- Debt issuance and refinancing
- Investor demand and macro conditions
Equity Capital Markets
- Equity value and market capitalization
- Dilution
- IPOs and follow-on offerings
- Convertible securities
- Investor appetite, market conditions, and valuation multiples
Practice Strategy
- Learn the concept
- Write a simple explanation in your own words
- Practice saying it aloud
- Try related questions
- Review what you missed
- Repeat until the logic feels natural
Build a Personalized Technical Plan
Your preparation should reflect your background and target groups. A tutor can help create a study plan specific to your path.