Investment Banking Analyst Track · Timed Exercises
Timed Exercises
Timed modeling tests (LBO / DCF build)
Many banks, especially middle-market firms and boutiques, and increasingly some bulge brackets, administer a timed modeling test during the interview process, and the same skill is central to the private-equity interviews most analysts pursue next. The test typically asks you to build, in 60–90 minutes, either a three-statement model, a DCF, an LBO, or an accretion/dilution model, from a provided set of assumptions or a blank template. The evaluation is not just whether the numbers are right but the speed and cleanliness of your build, whether the model is internally consistent and balances, and whether you applied the right structure (clearly labeled inputs, clean formulas, no hardcoded numbers, sensible formatting). The key skills: Excel fluency (keyboard shortcuts, no mouse), the ability to build a model from scratch without a template, and the discipline to check that the balance sheet balances and cash ties out. Time management is critical: you get more credit for a clean, complete, well-structured model with rough assumptions than for a half-finished one with perfect precision.
Why this matters
Modeling tests are a hard gate in many processes, and the same modeling speed and cleanliness is exactly what the analyst job (and the PE recruiting that follows) demands daily.
What a timed modeling test actually covers
A timed modeling test typically asks a candidate to build a simplified LBO or DCF from a blank spreadsheet within a set time limit (commonly 30-90 minutes), given a short prompt with the key assumptions (purchase price, growth rates, leverage, and so on). It's testing raw Excel fluency and modeling muscle memory under real time pressure, can the candidate build a clean, correctly linked model fast, without needing to look up formulas or structure, more than any creative or strategic judgment.
This is exactly why the paper LBO and DCF walkthrough preparation covered elsewhere directly transfers here: the conceptual shape of the model needs to already be second nature, so the time pressure of the exercise is spent executing in Excel, not re-deriving the structure from scratch.
How to prepare
The most effective preparation is repetition: building the same core models (a simplified 3-statement model, LBO, DCF) repeatedly from a blank sheet, under a self-imposed timer, until the structure, formulas, and formatting habits become close to automatic. Pre-built templates and keyboard-shortcut fluency (covered in the Excel lessons) both compound directly here, every second spent navigating the mouse or looking up a formula is a second not spent on the actual analysis.
Practicing with a genuinely blank sheet (rather than only ever editing a pre-built template) matters specifically because the real test usually starts from nothing, and building the structural instinct, where revenue projections go, how the debt schedule links to the cash flow available for paydown, is exactly the skill a template can mask if that's all a candidate has ever practiced with.
Working under the time pressure itself
A candidate under time pressure should prioritize getting a complete, correctly linked model built first, then refine, a fully built but slightly rough model generally scores better than a beautifully formatted model that's only half-finished when time runs out, since a broken link or incomplete structure means the exercise can't be properly evaluated at all. Sanity-checking outputs along the way (does this IRR look plausible, does the balance sheet actually balance) catches errors early, when they're still cheap to fix, rather than at the very end when there's no time left to trace back through the model.
Staying calm and working methodically through the buildup, resisting the urge to skip steps or rush key formulas, is itself part of what's being observed, since it's a reasonable proxy for how the candidate will behave building a real model under a live deadline on the job.
Worked example
A 90-minute LBO test might provide: target financials (revenue, EBITDA, margins), a purchase price and financing structure (debt at 5× EBITDA, equity plug), interest rates, D&A, capex and working-capital assumptions, and an exit multiple. You must build: sources & uses, a debt schedule, a simplified income statement and cash flow, the debt paydown, and the exit returns (MOIC/IRR). A clean build separates inputs (blue font) from formulas (black), uses no hardcoded numbers, ties the balance sheet, and produces a defensible 2.5× MOIC / ~20% IRR. You finish with 10 minutes to error-check, not to build.
Practice
Time yourself building an LBO and a DCF from scratch in 90 minutes each, at least once a week, and review your build for hardcodes and balance-sheet errors.
Interview checks
- You have 90 minutes: build an LBO from these assumptions.
- Build a DCF and tell us the implied share price.
Mock interview
LBO Modeling Test: Full Walkthrough of a 60-Minute Test (Blank Sheet)Breaking Into Wall Street (Mergers & Inquisitions)Questions to expect
- You have 60 minutes, starting from a blank Excel sheet: build an LBO model for a private, family-owned manufacturer with $500M in revenue and 20% EBITDA margins, being acquired for 12x LTM EBITDA in a cash-free, debt-free deal with total fees equal to 2% of Purchase Enterprise Value. What's the sponsor's IRR?
- Build a DCF and tell us the implied share price.
Strong vs. weak answers
A weak test has a correct answer but a messy, hardcoded, non-balancing model. A strong test is clean, fast, balances, ties cash, and uses proper input/formula separation, even if the final number is directionally rather than precisely right.
Common failure modes
- Hardcoding numbers instead of linking formulas.
- Spending too long on one section and not finishing.
- Submitting a model that doesn't balance or tie out.
Resources
- BIWS / Wall Street Prep, Excel and modeling courses — The standard courses for building LBO/DCF/three-statement models from scratch at interview speed.
- Multiple Expansion / 10xEBITDA (interview modeling tests) — Community-shared sample modeling tests and the evaluation criteria; also Multiple Expansion's public practice tests.
Expert signals
The candidate who stands out builds in a clean, conventional structure with zero hardcodes, finishes early, and spends the remaining time error-checking and tying out.
Confidence
high
Sources
- BIWS/Wall Street Prep
- WSO community
- practitioner interview tests
Case interviews (mostly boutiques)
Full consulting-style case interviews are rare in banking, they are far more common at boutiques and advisory-focused firms (and at the strategic-advisory firms that resemble consultancies) than at bulge brackets, but a light version of case-style reasoning appears in the form of 'a client wants to sell their company, how would you advise them' or 'walk me through how you'd advise a client on this acquisition.' The difference from a consulting case is the finance-centric framing: the questions are about valuation, deal process, capital structure, and strategic options, not about market entry or operations. The approach is the same as the brainteaser/estimation skill set: structure the problem, state your framework, walk through it, and land on a recommendation. You do not need heavy case prep for most IB interviews, but you should be able to structure an open-ended advisory question into a coherent answer (objective → analyses → recommendation).
Why this matters
Case-style questions appear at advisory boutiques and in the open-ended 'what would you advise' prompts, and the same structured thinking is the core of the analyst's on-the-job judgment.
What an IB case interview looks like
Case interviews are more common at boutiques and elite advisory firms than at bulge brackets, and typically present a business scenario, should a company make an acquisition, how should it value a target, what's driving a company's performance issue, followed by a structured discussion where the candidate builds and defends an analytical framework, sometimes with basic supporting calculations, over 20-45 minutes. It's less standardized and less purely quantitative than a consulting case, and more closely tied to the technical valuation and deal concepts covered throughout this curriculum.
Because every firm's specific case style differs, the best preparation is being extremely comfortable with the underlying technical material (valuation methods, deal rationale, basic modeling) rather than memorizing case frameworks from a different industry's interview style.
Structuring the response
A strong case response starts by clarifying the actual question and laying out a clear structure before diving into analysis, for example, for an acquisition case: strategic rationale, valuation, financing and deal structure, and key risks, narrating the structure out loud so the interviewer can follow the logic and redirect if needed, rather than working silently and presenting only a final answer.
This is the same skill tested throughout technical interview preparation more broadly: reasoning out loud, in a clear logical sequence, using the frameworks (valuation methods, synergy analysis, financing tradeoffs) covered elsewhere in this curriculum, applied here to a less scripted, more open-ended prompt.
Handling ambiguity and incomplete information
IB case prompts are often intentionally under-specified, without every number needed for a precise calculation, testing whether the candidate can identify what additional information they'd want, make reasonable stated assumptions to fill the gaps, and still reach a defensible conclusion, rather than stalling because the prompt isn't fully complete. Explicitly naming an assumption ('I'll assume a 20% tax rate since none was given') and moving forward is the expected behavior, not a workaround.
This mirrors real deal work closely: bankers constantly work with incomplete information under time pressure and are expected to make sound, clearly-stated judgment calls to keep moving rather than waiting for perfect data, which is exactly the instinct a well-handled case interview is meant to surface.
Worked example
'A founder wants to sell her company. How would you advise her?' A structured answer: 'First I'd clarify her objectives, maximize price, speed, confidentiality, or something else, because the process depends on it. Then I'd value the company (comps, precedents, DCF) to set expectations. Then I'd design the process: a broad auction maximizes price but is slower and less confidential; a targeted process is faster and more discreet but may leave money on the table. I'd prepare the CIM and buyer list, run the process, and negotiate the final terms. My recommendation would depend on her priorities.'
Practice
Practice structuring open-ended advisory questions out loud (sell-side, buy-side, capital raise) with a consistent objective → analysis → recommendation structure.
Interview checks
- How would you advise a client on selling their company?
- Walk me through how you'd advise on an acquisition.
Mock interview
Merger Model: Assessment Centre Case StudyBreaking Into Wall Street (Mergers & Inquisitions)Questions to expect
- A founder wants to sell her company. How would you advise her?
- Walk me through how you'd advise a client on an acquisition.
- Company A is acquiring Company B in an all-share deal, walk me through the accretion/dilution math across a few different premium levels.
Strong vs. weak answers
A weak answer dives into tactics with no structure. A strong answer first clarifies objectives, then applies a framework (valuation → process design → execution → negotiation), and lands on a recommendation tied to those objectives.
Common failure modes
- Jumping to a solution without clarifying objectives.
- No clear structure or framework.
- Confusing this with a consulting-style market-entry case.
Resources
- Mergers & Inquisitions, advisory/case questions — The open-ended advisory question format and how to structure the answer.
- Rosenbaum & Pearl, Investment Banking — The M&A process and valuation material that supplies the framework for these answers.
Expert signals
The candidate who stands out starts every advisory answer by clarifying the client's objectives, then tailors the recommendation to them, mirroring how a senior banker actually thinks.
Confidence
medium
Sources
- M&I
- Rosenbaum & Pearl (Wiley)
Pathweys