How should I start preparing for a technicals?

To start preparing for technicals as an incoming sophomore, here’s a structured approach based on the most helpful WSO content:

1. Master the Basics

• Begin by familiarizing yourself with the core technical concepts that are commonly tested in investment banking interviews. These include:
  • Accounting fundamentals (e.g., three financial statements and how they link together).
  • Valuation methods (e.g., DCF, comparable companies, precedent transactions).
  • Key metrics and multiples (e.g., EV/EBITDA, P/E).
  • Basic corporate finance concepts (e.g., WACC, CAPM).

2. Use Comprehensive Guides

• Memorize all the questions and answers from a reputable interview guide. According to WSO threads, the Wall Street Oasis Technical Interview Guide is highly recommended. Ensure you know all the content, not just most of it. If your guide is shorter than 60 pages, it might not be comprehensive enough.

3. Understand the 'Why'

• Don’t just memorize answers—learn the reasoning behind them. For example, understand why certain valuation multiples are used in specific scenarios or how changes in one financial statement affect the others.

4. Practice Out Loud

• Practice explaining concepts verbally. As one WSO contributor put it, “Watching a video or reading isn’t enough—you need to act yourself.” Walk through scenarios like how the three financial statements change with a specific transaction. This will help you stay composed under pressure during interviews.

5. Focus on Weak Areas

• Interns often struggle with:
  • Walking through a DCF or explaining WACC.
  • Linking the financial statements.
  • Handling unexpected technicals like PiK interest or niche valuation methods.
• Identify your weak spots early and dedicate extra time to mastering them.

6. Leverage Networking

• Ask people in your network about the types of technical questions they encountered during interviews. This can give you a sense of what to expect and help you tailor your preparation.

7. Resources

• Wall Street Oasis Technical Interview Guide: A top-rated resource for comprehensive technical prep.
• Practice Modeling Exams: Some banks include modeling tests, so practicing these can be beneficial.
• Online Forums: WSO forums often have threads with shared experiences and additional tips.

8. Start Early

• Since recruiting timelines are moving earlier, begin your preparation now to stay ahead of the curve. Networking and technical prep should go hand-in-hand.

By following this roadmap, you’ll build a strong foundation and be well-prepared for technical interviews. Good luck!

Sources: Superday Advice From a Tired Interviewer, Superday Advice From a Tired Interviewer, https://www.wallstreetoasis.com/forum/private-equity/on-cycle-recruiting-2018-what-to-expect?customgpt=1, https://www.wallstreetoasis.com/forum/investment-banking/non-target-to-bb-ib-sa?customgpt=1, Non-target to BB IB SA