Investment Banking Modelling Test: Format and Practice
Investment banking modelling test format across firms: task types, review discipline, and ten valuation and LBO questions spanning six banks.
On this page
An investment banking modelling test assesses financial-statement linkages, DCF construction, valuation multiples, and transaction logic, but no bank publishes one universal workbook, time limit, or software format; UBS's own careers page describes online assessments (verbal, numerical, and inductive-logical reasoning) as a distinct, earlier stage from any live modelling exercise (official, checked September 2026), while modelling tests themselves are typically administered live or take-home at the discretion of the specific group and office. This guide covers the task families a modelling test can draw from, a comparison table, ten valuation and LBO questions spanning six banks, and a reliable review sequence.
TL;DR
- No universal modelling-test format, time limit, or software applies across banks (no bank publishes one).
- UBS's online assessments (verbal, numerical, inductive-logical) are a distinct earlier stage, not the modelling test itself (official).
- The four recurring task families are statements, DCF, multiples, and transaction logic.
- Review discipline (units, signs, links, balance) matters more than typing speed.
- Our catalog spans 111 firm-specific technical questions across seven banks for modelling-adjacent practice.
What this means for your prep
Because no fixed format is published, optimizing for one rumored time limit or task type is the wrong strategy. Instead, build fluency across the four task families below so you can construct any of them cleanly under time pressure, and build a review habit you can run in the last few minutes regardless of which task you were given. A modelling test rewards a candidate who catches their own sign error or broken link before submitting, not one who typed the fastest.
What task families and firm-reported patterns show up?
| Task family | Core check | Firm pattern (reported) | Your prep move |
|---|---|---|---|
| Financial statements | Links and balance | General technical core across firms | Build a three-statement model from a blank sheet twice |
| DCF | Cash flow, discount rate, terminal value | Moelis: "walk me through a DCF" leads with five-step structure | State structure before numbers, every time |
| Multiples | Comparable set consistency | Evercore: DCF-vs-precedent-transaction gap questions | Practice reconciling two valuation methods that disagree |
| Transaction / LBO | Purchase price, financing, returns | Evercore, Moelis: full LBO walkthrough with follow-ups | Rehearse sources-and-uses, debt schedule, and exit in sequence |
Every firm pattern above is reported by candidates; no bank publishes its modelling-test format.
Practice inside this guide
Valuation multiples
Question 1 of 3
Comparable companies trade at 5.5x EBITDA and the company earns $45 million of EBITDA. What is the implied enterprise value?
What ten valuation and LBO questions should you practice?
These are original IB Offer practice questions modeled on publicly reported interview and modelling patterns from six banks, not leaked or verbatim firm content, grouped by task family.
Financial statements
UBS-style: "Walk me through how the three financial statements connect." Net income flows from the income statement to retained earnings on the balance sheet and to the top of the cash flow statement; the cash flow statement's ending cash becomes the balance sheet's cash line. In a model, broken links here (a schedule not tying to the balance sheet) are the single most common error reviewers catch.
Evercore-style: "Is it possible to have negative shareholders' equity, and what does it mean?" Yes, most often after a leveraged recapitalization or sustained losses exceeding contributed capital. In a model, a negative equity balance is not automatically an error, but it should prompt you to double-check your debt and retained-earnings roll-forward.
DCF
Moelis-style: "Walk me through a DCF." Lead with the five-step structure: project unlevered free cash flow, choose a discount rate, calculate terminal value, discount everything to present value, then bridge enterprise value to equity value. In a model, build these as five distinct, labeled blocks so a reviewer can trace your logic without asking.
UBS-style: "What is the difference between a levered and unlevered DCF?" Unlevered discounts unlevered free cash flow at WACC to reach enterprise value; levered discounts levered free cash flow at cost of equity to reach equity value directly. Mixing the two (discounting unlevered cash flow at cost of equity) is a common modelling-test error worth explicitly guarding against.
Lazard-style: "What is terminal value, and what are the two methods to calculate it?" Gordon Growth grows the final cash flow in perpetuity; the exit multiple method applies a market multiple to the final year's metric. In a model, always calculate both and flag a large divergence rather than presenting only one.
Multiples
Evercore-style: "Your DCF implies 50 dollars a share, but precedent transactions imply 70. What explains the gap?" Precedent transactions embed a control premium and deal-specific synergies a standalone DCF does not capture; your DCF's terminal-value or discount-rate assumptions could also be conservative. In review, never let two methods silently disagree without a stated explanation.
Moelis-style: "A company trades at 10x EV/EBITDA and 4x Net Debt/EBITDA, with equity value of 300. What is its enterprise value?" Solve algebraically: 10x EBITDA = 300 + 4x EBITDA, so EBITDA = 50 and EV = 500. In a model, build this as an explicit algebraic check cell rather than trial and error.
Transaction and LBO
Evercore-style paper LBO: entry at 1,000 (10.0x, 100 EBITDA), 600 debt and 400 equity. EBITDA grows to 150 over five years, 250 of debt repaid, exit at the same 10.0x. Exit EV = 1,500, exit debt = 350, exit equity = 1,150, MOIC = 2.9x. Build entry, operating period, and exit as three separate, clearly labeled sections.
Moelis-style: a sponsor acquires a company with 200 million EBITDA at 10x entry (60% debt), EBITDA grows to 300 million, 400 million of debt repaid, exit at 10x. Exit EV = 3,000, exit debt = 800, exit equity = 2,200, MOIC = 2.75x, roughly a 22% five-year IRR. Cross-check MOIC against your IRR estimate using the rule of thumb that a 5-year 2.75x MOIC implies an IRR in the low-to-mid twenties.
Lazard-style accretion/dilution: acquirer with 200mm shares, 2.00 EPS, trading at 40; target with 50mm shares, 1.60 EPS, all-stock at 24 per share, 10mm pre-tax synergies at 25% tax. New shares issued = 30mm, combined net income = 487.5mm, combined shares = 230mm, pro forma EPS = about 2.12, accretive versus 2.00. Read comparable company analysis and how to solve a paper LBO for the full worked mechanics behind these tasks, and drill the EPS math itself with the accretion dilution practice questions.
How should you review the model before submitting?
Check the objective first: what decision does this model need to support? Then check input units and formula consistency across every row, signs (is a cash outflow negative where it should be), circularity (does the debt schedule reference the interest expense it creates without breaking), and whether the balance sheet actually balances. Finally, review the conclusion in prose, not only the spreadsheet: could you explain your output number and its main driver out loud in two sentences?
What should you do when the format is unknown?
Practice small, complete builds across all four task families rather than optimizing for one rumored 60- or 90-minute format. A candidate who can build a clean three-statement model, a DCF, a multiples cross-check, and a basic LBO from scratch adapts to almost any modelling-test variant a specific group or office chooses to run.
Frequently Asked Questions
Is every modelling test done in Excel?
No universal software is published across firms; follow the specific instructions in your invitation.
Are keyboard shortcuts the main skill being tested?
No. Speed helps, but correct logic, clean structure, and review discipline matter more than typing speed alone.
Do all banks give a take-home modelling test?
No. Format (live, take-home, or folded into a live technical interview) varies by firm, group, and office, and is not standardized.
Are the ten questions above real leaked questions from these firms?
No. They are original IB Offer practice questions modeled on publicly reported interview and modelling patterns across six banks, built to teach the same depth, not verbatim firm content.
Where can I practice more valuation and LBO questions?
Our drills library matches practice by domain, including DCF, valuation comps, and LBO modelling.
Sources
- UBS: Summer Internship Program (official, checked September 2026)
- CFA Institute: Equity Valuation (checked September 2026)
- NYU Stern Valuation Lectures (checked September 2026)
- SEC Financial Statements Guide (checked September 2026)
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