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Learn technicals

The technical interview canon as a path of short lessons: pick an answer, fill the gap, work out the number, put the steps in order. Wrong answers come back until they stick, and finished lessons come back for review when you are about to forget them.

The technicals asked in banking interviews, from the three statements and the depreciation walkthrough to the DCF, accretion/dilution and a paper LBO.

Play the first lesson without an account. Sign in (free) to save your progress, unlock the path and get reviews when they are due.

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Unit 1

The three statements

What each statement shows, when revenue and costs are booked, and how the three fit together.

0/5 lessons

  1. StartWhat the income statement shows10 exercises
  2. What the balance sheet showsFinish the lesson above first
  3. What the cash flow statement showsFinish the lesson above first
  4. Cash versus accrualFinish the lesson above first
  5. How the statements linkFinish the lesson above first

Unit 2

Walking a change through the statements

The interview classic: take one change through the income statement, cash flow statement and balance sheet with numbers.

0/5 lessons

  1. The method and depreciation up by 10Finish the lesson above first
  2. Any tax rate, and write-downsFinish the lesson above first
  3. Inventory and working capitalFinish the lesson above first
  4. Debt, capex and equity movesFinish the lesson above first
  5. Deferred revenue, accruals and stock compFinish the lesson above first

Unit 3

Deeper accounting

Deferred taxes, goodwill, EBITDA add-backs, leases under both regimes and the red flags of low-quality earnings.

0/3 lessons

  1. Deferred taxes and NOLsFinish the lesson above first
  2. Goodwill, intangibles and EBITDA add-backsFinish the lesson above first
  3. Leases and quality of earningsFinish the lesson above first

Unit 4

Enterprise value, equity value and multiples

What a company is worth to its shareholders versus to all its investors, how to count shares, and which multiples to use.

0/5 lessons

  1. Equity value and enterprise valueFinish the lesson above first
  2. The bridge, item by itemFinish the lesson above first
  3. Diluted sharesFinish the lesson above first
  4. EV events and matching multiplesFinish the lesson above first
  5. Comps, precedents and the football fieldFinish the lesson above first

Unit 5

Time value, cost of capital and the DCF

Discounting, perpetuities, CAPM, beta, WACC, free cash flow and terminal value, then the whole DCF end to end.

0/5 lessons

  1. Present value and perpetuitiesFinish the lesson above first
  2. Cost of equity, cost of debt and CAPMFinish the lesson above first
  3. Beta and WACCFinish the lesson above first
  4. Walk me through a DCFFinish the lesson above first
  5. Terminal value, mid-year and sensitivityFinish the lesson above first

Unit 6

M&A and accretion/dilution

Why companies buy each other, whether a deal helps or hurts EPS, and how the purchase price lands on the balance sheet.

0/3 lessons

  1. Why deals happen and how they are paid forFinish the lesson above first
  2. Accretion and dilutionFinish the lesson above first
  3. Purchase price allocation and goodwillFinish the lesson above first

Unit 7

The LBO, capital markets and review

How a buyout works, how returns are measured, the capital markets vocabulary interviewers expect, and a mixed review.

0/4 lessons

  1. The LBO and its debtFinish the lesson above first
  2. LBO returns and the paper LBOFinish the lesson above first
  3. Capital markets basicsFinish the lesson above first
  4. Mixed review: the interviewFinish the lesson above first

End of the IB path. Reviews keep coming as lessons fall due.