Houlihan Lokey Interview Questions & Answers
Master M&A, restructuring, valuation and analyst interviews with 37 technical and behavioural questions, worked financial cases and a two-week preparation plan.
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How to prepare for a Houlihan Lokey interview
Houlihan Lokey is an independent investment bank with three principal practices: Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory. The best preparation depends on the team you’re applying to.
Valuation, DCF, deal rationale, transaction processes and LBOs.
Credit, liquidity, debt seniority, recoveries and distressed valuation.
Fairness opinions, portfolio valuation and purchase price allocation.
Candidate reports describe technical interviews and, in some cases, Superdays or assessment centres. No single sequence applies to every office, position or recruitment year.
Reported interview stages
The following is a preparation framework based on candidate experiences—not an official standardised hiring funnel.
Candidate-reported examples include DCF walkthroughs, debt waterfalls, accounting changes, restructuring bond mathematics and motivations for restructuring.
37 Houlihan Lokey interview questions with answer guidance
Use the category filters to prepare for the role you want. These are original study questions informed by Houlihan Lokey’s service lines and candidate-reported themes; they are not a guaranteed interview script.
1. Walk me through your CV and why investment banking? Fit & motivation
Answer framework: Tell a 90-second story: education, analytical exposure, deal interest, and why advisory work.
2. Why Houlihan Lokey rather than a bulge-bracket bank? Fit & motivation
Answer framework: Compare independent advisory, middle-market M&A, restructuring, and valuation; connect to your experience.
3. Why financial restructuring instead of M&A? Fit & motivation
Answer framework: Discuss capital structure complexity, downside analysis, stakeholder negotiation and creditor recoveries.
4. Describe a time you managed competing deadlines. Fit & motivation
Answer framework: Prioritise materiality, agree expectations early, show concrete output.
5. Tell me about a time you found an error in your work. Fit & motivation
Answer framework: Explain verification, ownership, escalation and controls.
6. What recent transaction interests you? Fit & motivation
Answer framework: Select a verifiable deal and explain buyer logic, financing, valuation and execution risk.
7. Walk me through a DCF. Accounting & valuation
Answer framework: Project unlevered free cash flows, discount at WACC, estimate terminal value, bridge enterprise to equity.
8. How do the three financial statements link? Accounting & valuation
Answer framework: Net income flows to retained earnings and cash flow; D&A, capex and working capital reconcile cash.
9. If depreciation increases by $10 and tax is 25%, what happens? Accounting & valuation
Answer framework: Net income falls $7.5, cash from operations rises $2.5 after add-back; PP&E and equity decline $10 and $7.5 respectively, cash rises $2.5.
10. Enterprise value versus equity value? Accounting & valuation
Answer framework: EV values operations for all capital providers; bridge with net debt and other non-equity claims.
11. Why can two companies have different EV/EBITDA multiples? Accounting & valuation
Answer framework: Growth, margins, risk, cash conversion, capital intensity, quality and control.
12. How does an increase in net working capital affect free cash flow? Accounting & valuation
Answer framework: It consumes cash; subtract change in NWC from unlevered free cash flow.
13. How would you value a loss-making business? Accounting & valuation
Answer framework: Revenue multiples, unit economics, DCF scenarios, assets and comparable transactions.
14. How do you calculate WACC? Accounting & valuation
Answer framework: Weight after-tax cost of debt and cost of equity by market-value capital structure; adjust assumptions to context.
15. Walk me through an accretion/dilution analysis. M&A & LBO
Answer framework: Estimate purchase price and financing, combined earnings, incremental interest, synergies and share count.
16. What drives an LBO's returns? M&A & LBO
Answer framework: Entry price, debt leverage and paydown, EBITDA growth, cash generation and exit multiple.
17. Why might a strategic buyer outbid a financial sponsor? M&A & LBO
Answer framework: Synergies and strategic benefits may support a higher price, subject to integration and risk.
18. What is the difference between a sell-side and buy-side mandate? M&A & LBO
Answer framework: Sell-side manages positioning, auction and negotiation; buy-side screens, values, diligences and bids.
19. How would you evaluate a £200m acquisition? M&A & LBO
Answer framework: Analyse standalone value, synergies, financing, execution risks and downside scenarios.
20. What causes a company to become distressed? Restructuring & credit
Answer framework: Liquidity shortfalls, unsustainable leverage, operational deterioration, maturities and covenant pressure.
21. Term loan versus revolving credit facility? Restructuring & credit
Answer framework: Term loan is funded and repaid per schedule; RCF allows drawing and repaying within a commitment, subject to terms.
22. What is payment-in-kind interest? Restructuring & credit
Answer framework: Interest capitalised into principal rather than paid in cash; helps liquidity but compounds leverage.
23. Explain the order of creditor recoveries. Restructuring & credit
Answer framework: Read legal priority, security, guarantees, jurisdiction and intercreditor agreements before modelling a waterfall.
24. How can pari passu debt trade at different prices? Restructuring & credit
Answer framework: Different maturity, collateral/guarantees, liquidity, documentation, options and market technicals may matter.
25. What is a 13-week cash flow forecast? Restructuring & credit
Answer framework: A near-term weekly receipts/disbursements forecast used to manage liquidity.
26. How would you modify a DCF for a distressed business? Restructuring & credit
Answer framework: Stress revenue and margins, near-term liquidity, probability-weighted outcomes, capital needs and going-concern viability.
27. Chapter 11 versus out-of-court restructuring? Restructuring & credit
Answer framework: Court-supervised process with legal protections versus consensual negotiations; exact rules depend on jurisdiction.
28. What is a debt-for-equity swap? Restructuring & credit
Answer framework: Creditors exchange debt claims for ownership, reducing leverage while diluting existing shareholders.
29. What is a fairness opinion? Financial & valuation advisory
Answer framework: A financial opinion to a board on fairness from a financial point of view, not a guarantee of deal success.
30. How do you value a private-equity portfolio company? Financial & valuation advisory
Answer framework: Select methodology, calibrate against transactions, consider illiquidity, leverage and valuation policy.
31. Explain purchase price allocation. Financial & valuation advisory
Answer framework: Identify and measure acquired assets and liabilities at fair value; residual is generally goodwill.
32. What is the difference between enterprise and equity waterfall values? Financial & valuation advisory
Answer framework: Enterprise value funds the capital stack; residual after senior claims flows to junior claims and equity.
33. How would you value an illiquid minority stake? Financial & valuation advisory
Answer framework: Consider rights, marketability, valuation methodology, relevant discounts and observed transactions.
34. A company has £60m EBITDA and trades at 8×. What is EV? Case & mental maths
Answer framework: £480m, before net debt and other equity bridge adjustments.
35. If net debt is £170m, what is equity value? Case & mental maths
Answer framework: £310m, assuming no other adjustments.
36. A borrower has £100m senior debt and £250m unsecured debt; enterprise proceeds are £220m. What are recoveries? Case & mental maths
Answer framework: Senior receives £100m (100%); unsecured receives £120m (48%), before costs and other claims.
37. If EBITDA falls from £60m to £45m and the multiple falls from 8× to 6×, what happens to EV? Case & mental maths
Answer framework: EV falls from £480m to £270m, a £210m or 43.75% decline.
Worked M&A valuation case
A hypothetical company generates £60 million of EBITDA and is valued at 8× EV/EBITDA. Net debt is £170 million.
Enterprise value to equity value bridge
Calculation: £60m × 8 = £480m enterprise value; £480m − £170m = £310m equity value, assuming no other adjustments.
How to discuss the result
Explain how growth, profitability, cash conversion, sector comparables and transaction control premiums affect the multiple. Then discuss diligence, financing, working capital adjustments and downside cases. For a sponsor buyer, consider leverage and exit returns.
Worked restructuring interview case: creditor waterfall
A distressed business has £100m senior secured debt and £250m unsecured debt. Assume £220m of distributable proceeds, no other priority claims or costs, and the unsecured claims rank equally.
Allocate £220m of recoveries
Solution: Senior secured lenders receive £100m. The £120m residual goes to unsecured creditors, who recover 120 ÷ 250 = 48%. Existing equity receives nothing.
Follow-up questions an interviewer might explore
How would recoveries change with superpriority financing, administrative expenses, guarantees or different collateral pools? Why might unsecured debt trade at different prices? When is a debt-for-equity swap preferable to an asset sale? What is the role of a 13-week cash flow forecast?
This is a simplified teaching example. Real recoveries depend on jurisdiction, legal documentation, collateral, fees, priority and valuation.
Choose the right technical preparation track
Corporate Finance
Prioritise DCF, comparable companies, precedent transactions, transaction structure, accretion/dilution and LBOs.
Financial Restructuring
Prioritise creditor waterfalls, liquidity, debt terms, distressed valuation, bond maths and liability management.
Financial & Valuation Advisory
Prioritise fair value, private company valuation, fairness opinions, purchase price allocation and financial modelling.
14-day analyst interview preparation plan
Houlihan Lokey interview FAQs
What questions are asked in Houlihan Lokey interviews?
Candidates report behavioural, accounting, valuation, DCF, restructuring, credit and modelling questions, depending on team and seniority.
Is the Houlihan Lokey interview technical?
Many analyst and summer analyst candidate reports describe technical questions, but the depth varies across Corporate Finance, Financial Restructuring and Financial and Valuation Advisory.
Does Houlihan Lokey use a Superday?
Some candidate reports describe multiple interviews or Superdays. It is not a confirmed universal stage.
What should I study for a restructuring interview?
Study capital structures, debt documentation, creditor priority, liquidity, bond maths, recovery waterfalls, distressed valuation and Chapter 11 concepts where relevant.
What is the difference between Corporate Finance and Financial Restructuring?
Corporate Finance focuses on M&A and financing advisory; restructuring focuses on distressed situations, liquidity, creditor negotiations and balance sheet solutions.
Are these actual interview questions?
Some topics come from candidate-reported interviews. The question bank and cases are independently authored practice material; no future interview question is guaranteed.
How should I prepare for an M&A analyst interview?
Master accounting, EV-to-equity bridges, DCF, trading comparables, precedent transactions, accretion/dilution, LBO drivers and transaction rationale.
How long should I prepare?
A focused two-week plan can help, but the right duration depends on your technical foundation and the specific team.
Sources and methodology
Official Houlihan Lokey sources establish the firm’s service lines. Candidate-reported interview details are anecdotal. All numerical exercises and answer frameworks here are independent practice material.
Official services overview ↗Financial Restructuring ↗Financial and Valuation Advisory ↗Company Advisory and liability management ↗Candidate interview reports (Glassdoor) ↗Financial Restructuring Summer Analyst reports ↗Independent educational guide by Senna; not affiliated with or endorsed by Houlihan Lokey. Photography is illustrative. Check image licensing and confirm the canonical slug before publishing.