Houlihan Lokey — Investment Banking Mock Interview
SEC filings, restructuring scenarios, LIFO vs. FIFO in inflation, convertible bond accounting, and inventory write-off mechanics
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How to Prepare for Houlihan Lokey Interviews
Know SEC Filing Differences
Houlihan Lokey opens with 10-K versus 10-Q distinctions. Know that 10-Ks are annual, audited, and comprehensive, while 10-Qs are quarterly, unaudited, and focused on updates. Three 10-Qs plus one 10-K cover a full fiscal year.
Prepare for Restructuring Capital Structure Analysis
The interview presents a two-tranche debt structure (first lien and unsecured) against an enterprise value, then layers in cash and margin constriction scenarios. Practice computing recovery rates and explaining how each variable shifts debt trading levels.
Understand LIFO Versus FIFO Cash Flow Implications
In an inflationary environment, LIFO produces higher COGS, lower taxable income, and therefore higher cash flow through the tax shield. The interview specifically asks about a natural resource company experiencing sharp price increases, making the cash flow benefit of LIFO the key insight.
Master Convertible Bond Accounting Under Current Standards
Houlihan Lokey tests convertible bond accounting under ASC 470-20 as amended by ASU 2020-06. Know that most convertibles are recorded entirely as debt at issuance (no bifurcation), and upon conversion, the carrying value transfers to common stock and APIC with no gain or loss recognized.
What Makes Houlihan Lokey Interviews Unique
Restructuring Debt Trading Level Analysis
The interview features a multi-step restructuring scenario where you calculate implied equity value from enterprise value and debt, then analyze how adding cash and how margin constriction each affect the trading prices of first lien and unsecured debt tranches.
Depreciation Overstatement Correction Walkthrough
A unique twist on the standard depreciation three-statement question: rather than adding depreciation, you must correct an overstatement by reducing it. This reversal catches candidates who only practice one direction and tests whether they understand the mechanics deeply enough to work in reverse.
Inflationary Inventory Accounting Application
Rather than asking about LIFO and FIFO abstractly, the interview frames it around a specific scenario (natural resource company with sharp price increases) and asks which method produces higher cash flow. This applied approach tests practical understanding.
Complex Inventory Write-Off Three-Statement Impact
The interview requires walking through both the initial inventory purchase (cash-to-inventory swap with no income statement impact) and then a 50% write-off. The write-off is a non-cash charge that creates a tax shield, resulting in a net positive cash impact.
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About This Houlihan Lokey Mock Interview
This session simulates a Houlihan Lokey technical interview covering 10-K versus 10-Q filing differences, inventory and accounts payable cash flow impact, lily pad doubling brain teasers, EV/EBITDA valuation from revenue and margin inputs, financial risk definition (systematic versus unsystematic), three-statement depreciation walkthroughs (both increase and correction of overstatement), LIFO versus FIFO inventory accounting in an inflationary environment, restructuring scenario analysis (first lien and unsecured debt with enterprise value shortfall, impact of cash and margin constriction on debt trading levels), the eight-ball balance scale brain teaser, convertible bond accounting (at issuance and upon conversion under ASC 470-20), and a complex inventory purchase and write-off three-statement walkthrough.
This topic is part of the Firms section of our investment banking mock interview library. Each session includes multi-speaker audio with realistic interviewer questions and candidate responses, plus a full interactive transcript you can follow along with or study independently.
Audio Recording
12 minutes of multi-speaker audio
Full Transcript
Interactive transcript with timestamps
1 Technical Session
Houlihan Lokey - Technical Interview
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Seen on Twitter
heard all the new kids use IB Vine now. the questions on IB Vine helped me get the concepts down when I had to recruit and make a lot of BB/MM interviews easier than I expected for techs
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Analyst
The IB Vine technical prep is beyond helpful, it's so much more fun quizzing myself every now and then vs. reading through the guides again.
Analyst
I personally found that the 'IB Vine Select' collection had some of the exact questions I was asked in my Qatalyst interviews.
Analyst
Thanks for starting up IB Vine. Couldn't have landed my offer without your help!
User Story
I honestly think you're doing gods work since IB Vine democratizes the whole interview process and helps a lot of students ace their interviews.
Analyst
I found this website really helpful, which also helps me better prepare for the technical interview in IBD position and get an offer.
Seen on WallStreetOasis
Check out IB Vine, specifically the 'IB Vine Select' questions. Once you can get a handle of those, it seems like you are in a spot where you're applying the concepts rather than simply memorizing them
Analyst
I've used IB Vine for my recruitment, and I could not imagine the journey without it. Thank you for creating a phenomenal resource.
Seen on WallStreetOasis
Beyond the 400 questions guide, try to understand a deeper level and the underlying concepts of the questions being asked. Use ibvine, it really helps.
Seen on WallStreetOasis
IB Vine has excellent questions, especially multistep ones. In my experience I've gotten grilled on accretion/dilution, bond math, and merger model questions. IB Vine has great practice for all of those.
User Story
As a nontraditional transfer student who has been rendered unavailable to many resources at my university (Leadership positions at clubs, immediately behind the recruiting cycle, etc.) IB Vine has been an absolute game changer in my IB prep.
Seen on WallStreetOasis
From my experience interviewing FT for IB, it’s not enough to just know the 400 questions anymore (it’s a good starting point) but to look at even more advanced questions. Would recommend IB Vine.
Seen on Twitter
heard all the new kids use IB Vine now. the questions on IB Vine helped me get the concepts down when I had to recruit and make a lot of BB/MM interviews easier than I expected for techs
User Story
Just got off the phone with a kid who interned at a Dallas PE firm. He mentioned that IB Vine helped him secure that internship as well as his Summer Analyst offer, especially since he came from a non-target with no resources.
Analyst
The IB Vine technical prep is beyond helpful, it's so much more fun quizzing myself every now and then vs. reading through the guides again.
Analyst
I personally found that the 'IB Vine Select' collection had some of the exact questions I was asked in my Qatalyst interviews.
Analyst
Thanks for starting up IB Vine. Couldn't have landed my offer without your help!
User Story
I honestly think you're doing gods work since IB Vine democratizes the whole interview process and helps a lot of students ace their interviews.
Analyst
I found this website really helpful, which also helps me better prepare for the technical interview in IBD position and get an offer.
Seen on WallStreetOasis
Check out IB Vine, specifically the 'IB Vine Select' questions. Once you can get a handle of those, it seems like you are in a spot where you're applying the concepts rather than simply memorizing them
Analyst
I've used IB Vine for my recruitment, and I could not imagine the journey without it. Thank you for creating a phenomenal resource.
Seen on WallStreetOasis
Beyond the 400 questions guide, try to understand a deeper level and the underlying concepts of the questions being asked. Use ibvine, it really helps.
Seen on WallStreetOasis
IB Vine has excellent questions, especially multistep ones. In my experience I've gotten grilled on accretion/dilution, bond math, and merger model questions. IB Vine has great practice for all of those.
User Story
As a nontraditional transfer student who has been rendered unavailable to many resources at my university (Leadership positions at clubs, immediately behind the recruiting cycle, etc.) IB Vine has been an absolute game changer in my IB prep.
Seen on WallStreetOasis
From my experience interviewing FT for IB, it’s not enough to just know the 400 questions anymore (it’s a good starting point) but to look at even more advanced questions. Would recommend IB Vine.
Seen on Twitter
heard all the new kids use IB Vine now. the questions on IB Vine helped me get the concepts down when I had to recruit and make a lot of BB/MM interviews easier than I expected for techs
User Story
Just got off the phone with a kid who interned at a Dallas PE firm. He mentioned that IB Vine helped him secure that internship as well as his Summer Analyst offer, especially since he came from a non-target with no resources.
Analyst
The IB Vine technical prep is beyond helpful, it's so much more fun quizzing myself every now and then vs. reading through the guides again.
Analyst
I personally found that the 'IB Vine Select' collection had some of the exact questions I was asked in my Qatalyst interviews.
Analyst
Thanks for starting up IB Vine. Couldn't have landed my offer without your help!
User Story
I honestly think you're doing gods work since IB Vine democratizes the whole interview process and helps a lot of students ace their interviews.
Analyst
I found this website really helpful, which also helps me better prepare for the technical interview in IBD position and get an offer.
Seen on WallStreetOasis
Check out IB Vine, specifically the 'IB Vine Select' questions. Once you can get a handle of those, it seems like you are in a spot where you're applying the concepts rather than simply memorizing them
Analyst
I've used IB Vine for my recruitment, and I could not imagine the journey without it. Thank you for creating a phenomenal resource.
Seen on WallStreetOasis
Beyond the 400 questions guide, try to understand a deeper level and the underlying concepts of the questions being asked. Use ibvine, it really helps.
Seen on WallStreetOasis
IB Vine has excellent questions, especially multistep ones. In my experience I've gotten grilled on accretion/dilution, bond math, and merger model questions. IB Vine has great practice for all of those.
User Story
As a nontraditional transfer student who has been rendered unavailable to many resources at my university (Leadership positions at clubs, immediately behind the recruiting cycle, etc.) IB Vine has been an absolute game changer in my IB prep.
Seen on WallStreetOasis
From my experience interviewing FT for IB, it’s not enough to just know the 400 questions anymore (it’s a good starting point) but to look at even more advanced questions. Would recommend IB Vine.
Seen on Twitter
heard all the new kids use IB Vine now. the questions on IB Vine helped me get the concepts down when I had to recruit and make a lot of BB/MM interviews easier than I expected for techs
User Story
Just got off the phone with a kid who interned at a Dallas PE firm. He mentioned that IB Vine helped him secure that internship as well as his Summer Analyst offer, especially since he came from a non-target with no resources.
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