M&A Interview Questions for CAs [2026]

This page collects the M&A interview questions candidates report being asked in Big 4 transaction advisory, investment banking, and corporate M&A interviews in India. Below are the real questions grouped by theme, what each one tests, sample strong answers to the most common ones, and a preparation plan for the valuation concepts interviewers probe most.

Table of Contents

• Technical M&A Interview Questions
• Scenario and Deal M&A Interview Questions
• What the Interviewer Is Testing with M&A Interview Questions
• How to Prepare for M&A Interview Questions
• FAQs on M&A Interview Questions

Technical M&A Interview Questions

Candidates report that M&A interviews at the Big 4 almost always open with a rapid-fire check of valuation fundamentals. The questions below are the actual ones reported, reworded slightly for clarity.

1. Explain the PE ratio

• Explain the price-to-earnings ratio and what it tells you about a company.

The PE ratio is the market price per share divided by earnings per share, and it shows how much investors are willing to pay for each rupee of earnings. A strong answer goes beyond the formula: mention trailing vs forward PE, why high-growth companies trade at higher multiples, and that PE alone never justifies an acquisition price without earnings quality checks.

2. Explain the CAPM model

• Explain the Capital Asset Pricing Model.

CAPM gives the expected return on an asset as the risk-free rate plus beta times the market risk premium. Interviewers use it to check whether you understand the cost of equity, since it feeds directly into WACC and therefore into every DCF. Revise what beta measures, which risk-free rate practitioners use, and the key assumptions behind the model.

3. Walk me through a DCF model

• Walk me through a DCF model, usually of a company you covered during your articleship.

This is the make-or-break question. Pick one company you genuinely worked on, lay out the structure: project free cash flows for five to ten years, estimate a terminal value, discount at WACC, and arrive at enterprise value. Know every assumption you made and be ready to defend it. Interviewers do not expect a perfect model; they expect you to own yours.

4. What is IRR and how is it used?

• What is the internal rate of return, and where does it matter in deals?

IRR is the discount rate at which the NPV of a project or investment equals zero. Private equity and deal teams use it as the headline return metric because it is easy to compare against a hurdle rate. Know its weaknesses too: multiple IRRs with unconventional cash flows and the reinvestment-rate assumption, which is exactly why interviewers pair it with NPV.

5. What is the repo rate, and why does it matter in valuation?

• What is the repo rate, and how does it connect to deal valuation?

The repo rate is the rate at which the RBI lends to commercial banks, and it anchors the interest-rate environment. A change in the repo rate moves borrowing costs, which changes WACC, which changes every DCF valuation. A strong answer connects the macro (RBI policy) to the model (the discount rate) in one clean line.

Scenario and Deal M&A Interview Questions

After the fundamentals, interviewers switch to scenarios that test commercial judgment.

6. Negative working capital: explain the scenario

• A company has negative working capital. What does that tell you?

Sample strong answer: negative working capital means current liabilities exceed current assets. In businesses like FMCG or retail this can be healthy, it shows the company collects cash from customers before paying suppliers. But it can also signal liquidity stress if payables are being stretched because cash is tight. A complete answer names the sector, checks the cash conversion cycle, and asks whether the pattern is structural or a one-off.

7. Gearing ratio of an IPO-bound company

• A company is about to launch an IPO. You are given its gearing ratio. Comment on it.

The gearing ratio (debt to equity) tells you how leveraged the company is before it lists. High gearing ahead of an IPO raises questions about financial risk, the interest burden on future profits, and why the company needs public money: to fund growth or to repay debt. Interviewers want a judgment call, not just a definition, so say what level would concern you and what you would investigate next.

8. Dilutive vs accretive PE: which is better for an acquirer?

• What is the difference between a dilutive and an accretive deal? Which is better for the acquirer?

Sample strong answer: a deal is accretive if the acquirer’s earnings per share rise after the acquisition and dilutive if EPS falls. All else equal, acquirers prefer accretive deals, but EPS accretion is not the same as value creation. A complete answer adds that the purchase price relative to the target’s earnings, the financing mix (cash vs stock), and the realisation of synergies matter far more than the first-year EPS arithmetic.

9. How does goodwill play a role in a merger?

• How does goodwill arise in a merger, and why does it matter?

Sample strong answer: goodwill is the excess of purchase consideration over the fair value of identifiable net assets acquired, recognised under Ind AS 103 on the acquirer’s balance sheet. It captures the premium paid for synergies, brand, and customer relationships. It is not amortised but tested annually for impairment, so an overpaid deal shows up later as an impairment charge. Interviewers ask this to check whether you link deal pricing to post-deal accounting.

10. What are the types of synergies?

• What are the types of synergies in an M&A deal?

Sample strong answer: synergies fall into three buckets. Revenue synergies come from cross-selling, wider distribution, or pricing power. Cost synergies come from eliminating duplicate functions, consolidated procurement, or shared facilities. Financial synergies come from a lower cost of capital, better debt capacity, or tax benefits. A sharp answer adds that cost synergies are easier to realise than revenue synergies, which is why experienced acquirers discount revenue synergy claims heavily.

What the Interviewer Is Testing with M&A Interview Questions

Four things stand out. First, ownership of your articleship work: the DCF question is really asking whether your stated experience is real. Second, the bridge between accounting and valuation: the goodwill and EPS accretion questions check whether you see how a deal hits the financial statements. Third, commercial judgment: the IPO gearing and negative working capital scenarios have no textbook answer, and the panel wants to hear you reason. Fourth, macro awareness: the repo rate question checks whether you connect RBI policy to the discount rate in your models.

How to Prepare for M&A Interview Questions

1. Rebuild one DCF from your articleship from memory. Know every input, especially the growth and WACC assumptions, and be ready to defend them.
2. Revise the core formulas cold. PE, CAPM, IRR, NPV, WACC, the gearing ratio, and the synergy categories above. Definitions are the floor; application is the test.
3. Learn the Ind AS 103 basics. Purchase price allocation, goodwill recognition, and annual impairment testing come up in almost every M&A interview for CAs.
4. Follow one or two recent Indian deals. Be ready to discuss the deal rationale, the price paid, and whether it looks accretive. Candidates report that interviewers ask for your view on current deals.
5. Practise the judgment questions out loud. The dilutive vs accretive and negative working capital questions reward structured thinking: state the principle, weigh both sides, then give a conclusion.

For company-specific context, review the technical guidance on the ICAI website.

FAQs on M&A Interview Questions

Do Big 4 M&A interviews focus more on valuation or accounting?

Candidates report a mix, with valuation concepts (DCF, multiples, IRR) carrying the most weight and accounting questions (goodwill under Ind AS 103, EPS accretion) used as follow-ups. Prepare both, since the panel typically includes people from both sides.

What if I did no M&A work during my articleship?

Be honest about it, then show preparation. Build a practice DCF on a listed company, learn the synergy framework, and follow recent deals. Interviewers respect candidates who prepared deliberately over candidates who exaggerate thin experience.

Is the CAPM question just a formula check?

No. The formula is the easy part; the follow-ups test whether you know where each input comes from in practice, such as which risk-free rate to use and why beta differs across industries. That is what the panel is really checking.

Which certification helps for M&A roles?

Candidates commonly mention the CFA charter as the most recognised complement to a CA for valuation-heavy M&A roles, alongside financial modelling courses. No certification replaces the ability to walk through a DCF confidently in the interview itself.

Also see our Wipro CA interview questions for another corporate finance interview experience.

Next step: browse more real interview experiences in our Interview Prep section, and use the free Study Timetable Generator to plan your revision of valuation concepts before the interview.