Barclays IB Interview Questions

Analyze revenue growth (organic vs. acquisitions), margin trends driven by commodity/labor costs, balance sheet leverage capacity for a dividend recap at 4-5x EBITDA, goodwill indicating past acquisitions, and whether the forecast's growth and margin assumptions are operationally supported.

At transaction: no income statement impact; balance sheet shows PP&E up $150mm and debt up $150mm; cash flow statement has -$150mm in CFI and +$150mm in CFF, netting to zero cash change.

Increase depreciation by $100: net income falls $75 (after 25% tax shield), cash rises $25 (depreciation add-back exceeds net income drop), and net PP&E falls $100, with retained earnings down $75—balance sheet balances.

Use excess cash first, then layer on debt up to the firm's credit capacity, and finally issue stock if needed—or lean into stock earlier if the acquirer's shares are overvalued—balancing accretion, leverage, and dilution.

Enterprise Value equals Equity Value plus Total Debt, Preferred Stock, and Minority Interest, minus Cash and Cash Equivalents—essentially adding debt-like claims senior to equity and subtracting non-operating assets to isolate the value of core operations.

No income statement impact. On the balance sheet, cash decreases by $60mm and inventory increases by $60mm. On the cash flow statement, operating cash flow decreases by $60mm due to the increase in inventory.

Yes, the deal is almost certainly profitable because even without multiple expansion, EBITDA growth increases enterprise value and debt paydown shrinks the debt balance, both of which expand equity value and generate returns for the sponsor.

No — EPS accretion is a mechanical accounting outcome driven by P/E arbitrage or leverage effects, while value creation requires the deal's NPV to be positive, meaning returns on invested capital exceed WACC and synergies justify the premium paid.

For a company like Danaher, potential acquisition targets are mid-cap life sciences software firms that fill its workflow-automation gap, offer cross-sell synergies into its installed instrument base, and trade at valuations supporting EPS-accretive deals.

As of mid-2025, the 10-year Treasury is trading around 4.45% and the 30-year around 4.75%, with yields recently driven higher by sticky inflation data and elevated term premium expectations.

Unlevered free cash flow (free cash flow to firm), because it is discounted at WACC to arrive at enterprise value, keeping operating performance separate from financing decisions and avoiding double-counting the impact of debt.

Because accretion/dilution is the single most-watched shorthand metric by analysts and investors, and dilutive deals trigger immediate stock pressure, downward EPS revisions, and internal governance friction—making it a binding political and market constraint even though it doesn't measure true value creation.