The Right Study Order for IB Technical Questions (Accounting First)

Most candidates prep IB technicals in whatever order their guide lists them, or worse, they jump straight to the topics that sound impressive, like LBOs. The problem is that investment banking technicals are not a flat list of facts. They are a dependency chain: each topic quietly assumes you have mastered the one before it.

Study them out of order and you end up memorizing answers you cannot defend. Study them in order and each new topic takes less time than the last, because you are reusing machinery you already built.

The dependency chain in one view

Here is the sequence and what each layer borrows from the previous one. Everything downstream of accounting is, at some level, an application of the three statements.

• Accounting: the three statements and how they link — the raw material for everything else
• Enterprise value vs equity value: built from balance sheet items and market values; defines what every multiple measures
• Valuation and multiples: EV and equity value applied to comps and precedent transactions
• DCF: cash flow forecasting (accounting) discounted at WACC (capital structure, which is the EV bridge again)
• M&A: two sets of statements combined, plus deal financing and purchase accounting
• LBO: a DCF-like forecast with a leveraged capital structure and a debt paydown schedule

Why accounting must come first

Nearly every classic technical question resolves to statement mechanics. Walk me through 10 dollars of depreciation is an accounting question. Why do you add back D&A in a DCF is an accounting question. Why does an increase in working capital reduce cash flow, how goodwill hits the balance sheet in a merger model, why paying down debt builds equity value in an LBO — accounting, accounting, accounting.

Interviewers also use accounting to test depth. A candidate who memorized a DCF script but cannot explain why unlevered free cash flow starts from EBIT rather than net income gets exposed in one follow-up. If your accounting is solid, follow-ups become easy; if it is shaky, every downstream topic is a house on sand.

EV vs equity value: the shortest topic with the highest leverage

This topic is maybe a day of work, but skipping it is the single most common sequencing mistake. Enterprise value is the value of a company's core operations to all capital providers; equity value is what belongs to shareholders. The standard bridge is equity value plus debt, preferred stock, and noncontrolling interests, minus cash and equivalents, with conventions varying at the edges (leases, pensions, investments).

Every multiple you will discuss in valuation pairs a numerator with a consistent denominator: EV with metrics available to all capital providers (revenue, EBITDA, EBIT), equity value with metrics available only to shareholders (net income, hence P/E). Learn this before comps and the whole multiples conversation becomes mechanical.

Valuation before DCF, DCF before M&A and LBO

Comps and precedent transactions come next because they are conceptually lighter than a DCF: pick a peer set, spread the multiples, apply them. The judgment questions (why do peers trade at different multiples, why do precedents usually come in higher than trading comps) are answerable with growth, margins, risk, and control premium logic.

The DCF then adds forecasting and discounting on top. WACC only makes sense once you understand the EV bridge, because the weights in WACC are the same debt and equity pieces. M&A and LBO come last: an accretion/dilution analysis is two income statements combined with financing effects, and an LBO is a returns-focused cash flow model where debt paydown does the heavy lifting. Both are quick to learn once the earlier layers exist, and slow and confusing if they do not.

How to run the sequence in practice

Sequencing does not mean finishing one topic forever before touching the next. It means you introduce topics in order, while continuously drilling everything already introduced. Old topics never leave the rotation; they just take fewer minutes per day.

1. 01Learn accounting until the classic walkthroughs are automatic (usually 2 to 4 days of focused work)
2. 02Add EV vs equity value and lock in the bridge and multiple-pairing logic (1 day)
3. 03Add comps and precedent transactions (1 to 2 days)
4. 04Add the DCF: FCF build, WACC, terminal value (2 to 3 days)
5. 05Add M&A: accretion/dilution and purchase accounting (1 to 2 days)
6. 06Add LBOs, finishing with a paper LBO on real paper (1 to 2 days)
7. 07Every day, run a mixed drill across all topics introduced so far

Signs you moved on too early

The chain fails quietly, so watch for these symptoms. Each one points to a specific upstream gap, and the fix is always to go back one layer rather than grinding harder on the current one.

A tool that mixes old and new topics automatically, like the Daily 10, surfaces these gaps early because yesterday's accounting keeps showing up next to today's DCF questions.

• You can recite the DCF but freeze when asked why D&A is added back: go back to accounting
• You mix up which multiples use EV vs equity value: go back to the bridge
• WACC feels like an arbitrary formula: revisit capital structure and the EV bridge
• Accretion/dilution answers rely purely on the memorized P/E rule: rebuild the pro forma EPS logic from the income statement
• The paper LBO falls apart at debt paydown: revisit the cash flow statement

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