I kept interview notes for fifteen years and the striking thing reading back is the repetition: the same failed answers, almost word for word, from different candidates in different cities in different years. So here they are, the ten I heard most, each with why it fails and the fix. Treat this as the series' error catalogue; every fix links to the article that covers it properly.
The ten, from my notes
- 1 · 'EBITDA is basically cash flow.' Fails because EBITDA ignores capex, working capital, interest and tax; a growth company can post record EBITDA while burning cash. Fix: one sentence listing what it excludes, then the honest use case, comparability across capital structures.
- 2 · The depreciation walk, out of order, no tax rate. Diving into numbers without stating the assumption, or starting at the balance sheet. Fails on process, not knowledge. Fix: assumption first, then income statement, cash flow, balance sheet, then the balances check, exactly as the three statements article drills.
- 3 · 'You subtract cash because you get it when you buy the company.' The folk version of the EV bridge. Fails because it explains a transaction, not a concept. Fix: cash is non-operating and offsets debt; the enterprise-versus-equity article has the derivation.
- 4 · Interest expense inside unlevered free cash flow. The DCF's cardinal sin: levered flows discounted at WACC values nothing coherent. Fix: whose-cash discipline, flows to all providers, rate for all providers, per the DCF anchor.
- 5 · 'More debt always lowers WACC.' Fails on the second question, so why not finance with 99% debt? Fix: the shallow U, cheap debt first, then rising equity risk and distress cost, as the WACC article sketches.
- 6 · Panic at negative working capital. Candidates treat it as an error. Fails because for many retailers and subscription businesses it is a feature: customers fund the operations. Fix: know the business models where liabilities lead receivables and say so calmly.
- 7 · Mid-year convention, recited then dropped. Mentioning the flourish invites the follow-up, what does it correct for, which the candidate then fails. Fix: never deploy vocabulary you cannot defend one level down. This rule alone would have saved dozens of interviews.
- 8 · 'Accretive means it is a good deal.' Fails because accretion is ratio arithmetic and value is synergies against premium. Fix: the trap paragraph in the accretion-dilution article, verbatim if necessary.
- 9 · Freezing on 'which methodology gives the highest value and why?' There is no fixed ranking and pretending there is fails. Fix: precedents usually sit high on control premiums, the DCF goes wherever its terminal assumptions send it, trading comps track the market's mood; explain the drivers, then commit, as the comps article argues.
- 10 · The invented number. Asked something unknown, the candidate manufactures a confident answer. Fails instantly and colours everything before it. Fix: 'I do not know the figure, but here is how I would reason to it', which scored, in my notes, every single time it was used.
The pattern underneath the ten
Read the list again and notice: barely any are knowledge gaps. They are precision failures under mild pressure, missing assumptions, borrowed sentences one level deep, confidence outrunning understanding. Which dictates the preparation: not more reading, but rehearsal aloud, with a listener, at speed, until the correct versions are motor memory. The candidates who did that were audibly different within two minutes and the ones who had it examined by someone who kept notes like these tended to stop appearing in them. That, precisely, is the IBD Recruiting Review.
FAQ
What are the most common technical interview mistakes?
Calling EBITDA cash flow, walking statements out of order, folk explanations of the EV bridge, interest inside unlevered cash flow and claiming more debt always lowers WACC.
What should I do if I do not know a technical answer?
Say so and reason aloud: I do not know the figure, but here is how I would think about it. In fifteen years of notes, that sentence scored every time it was used.
Why do prepared candidates still fail technicals?
Precision failures under pressure, not knowledge gaps: missing assumptions, borrowed sentences one level deep and vocabulary that cannot survive a follow-up.
Former Executive Director in TMT Investment Banking at Nomura and M&A banker at BNP Paribas. Top-rated mentor with 300+ sessions. About
