Goldman Sachs IBD Interview Questions – First Round Interview

by Mai Le | Nov 6, 2016

*** Report on Goldman Sachs IBD interview questions and details of the sessions from Cover Letter Library candidates’ experiences. This is based on GS first round interviews for Investment Banking Division in London in 2013. There may be some variations depending on the offices or other new updates to the recruitment practice by the bank – so please use this as rough reference only ***

Goldman Sachs interview questions

The first stage of the GS Investment Banking Division assessment process is one one to one 30 minutes interview.
The interviews cover a broad spectrum i.e. if you have the relevant skillset for Investment Banking Division in banking, your understanding of investment banking and the division, commercial awareness. They will also ask CV, motivation and competency based questions.

Below is a selection of the questions you are likely to be asked based on feedback I have received. I encourage you to be prepared for the variety of questions listed below. The more prepared you are the more likely you are to do well.

FIRST ROUND INTERVIEW:

Competency / Motivation:

 Tell them about yourself
 What have you been up to recently
 How does consulting differ from investment banking
 What leadership experience do you have and what is your leadership style.
 Please give me an example of a time when you have dealt with a difficult team member.
 Discuss a recent economic development that impacts on Investment Banking Division specifically.
 Why IBD?
 Why did you choose to do engineering (or an unrelated degree) and then pursue banking?
 Why not choose consultancy?
 Which particular area of Investment Banking would you like to work for – M&A or Financing
group?
 Why Goldman Sachs?
 Why Investment Banking Division at Goldman Sachs over somewhere like Barclays or MS?
 Why you?
 What skills do you think are important in IBD?
 Walk me through your CV? Make sure you know your CV inside out – they pick up on all the
small points.

  • Talk us through your CV and highlight anything that you think is relevant and that you wish to discuss.
  • Highlight a few extra-curricular activities written on your CV and mention why they’re important for you.

 What have you learnt from your work experience? What did you do? What did you like or dislike
about your work experience or internship.
 Have you ever failed at anything?
 Tell me about a time that you made a mistake and what did you learn from it.
 Tell me about a time when you had to lead a team
 Name me a time when you experienced conflict with someone? How did you deal with it?
 If you had to do something either of low quality in a short amount of time or of high quality and
negotiate the time constraint, how would you go about it?
 Tell me about a time you had to make an ethical decision.
 If there was a known source of oil in Alaska, how would you value that piece of land and the
process required to suggest a suitable amount of investment to buy this land?

  • How this valuation would differ if the oil was located in Scotland instead
  • If you had a piece of land in Alaska that was rumoured to have oil and someone offered you £1m for it. What would you do? How would you go about it! What are the costs you will face?

Technical / commercial awareness:

 Walk me through a recent deal? Learn the ins and outs of one or two deals. You may be asked your opinion about whether it was a fair price/valuation and why, valuation multiples and about the synergies and strategic rationale of the deal.
 What was it about that deal that interested you?
 Is there anything in the news or FT that you’ve read recently that you have a view about or that you want to highlight?
 Discuss a recent economic development that impacts on Investment Banking Division specifically.
 Walk me through a deal that was not successful. Why was it not successful?
 Calculate the rate of return on an investment of 10, which returns 30 in 5 years.
 Valuation? What are the 3 main methods of valuing a company?

  • DCF – be able to work through a DCF and make sure you know WACC and WACC’s relation to debt and equity. Follow on questions e.g. components of DCF, how do you work out Net Working Capital and the assumptions behind the DCF model.
  • WACC vs. hurdle rate, which would you use?
  • Which yields a higher valuation – dividend discount model or FCF discount model
  • How to perform comparable company analysis, comparable transaction analysis o Advantages and disadvantages of each method

 Have sound understanding of the three main financial statements, know where to locate specific items on them (e.g. A/R, CapEx) and how they fit together.
 How do you get to any one of the multiples from your statements?
 How is depreciation reflected on the 3 financial statements.
 Understand Multiples (e.g. EV/EBITDA P/E) and key statistics such as EBITDA.
 What is Enterprise Value?
 Where do you see the Eurozone going? Be able to discuss current financial issues like the euro/financial crisis. It is important that you are able to talk retrospectively and give your
opinion on what the future holds.
 What is your opinion of the markets?
 Imagine you are a hedge fund manager. Where would you put your money and why?
 What is a bond?
 Whose bond yield is higher Spain or UK?
 Will the UK’s bond yield be higher now than 10 years ago?
 You may not be interviewed by M&A only, so it is useful to have an understanding of the other
areas within Investment Banking Division and how they work together e.g. ECM / DCM, corporate broking.

At the end, the interviewers may ask about personal interests and hobbies (e.g. what are you doing this weekend? What do you do in your spare time? Anything fun in London?
You will get the chance to ask some questions at the end of the session, so have some good questions ready.

Goldman Sachs Overview

Website: www.goldmansachs.com
Headquarters: New York, NY
Size: 10000+ Employees
Founded: 1869
Type: Company – Public (GS)
Industry: Investment Banking & Asset Management
Revenue: $10+ billion (USD)

Related topics:

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Written By Mai Le

Mai worked for Goldman Sachs in London for many years as an investment banking associate. When she was at LSE, her seniors used to pass her notes of their interviews as well as their cover letters, which helped her tremendously in her job search. This site is a way for her to pay it forward, obtaining qualified materials from her friends and contributors, and building a similar community to pass the resources on to you.

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