How to Switch From CA to Investment Banking: A Case

A Chartered Accountant can move into investment banking, and one of the clearest routes in is through valuations, where accounting knowledge is a genuine advantage rather than a gap to explain away. The interview will still test judgement that accounting alone does not teach: how to value something that does not sit cleanly on a balance sheet, how to talk about uncertainty without hiding behind a single number, and how to choose the right valuation method rather than default to the familiar one.

Jahnavi Raval, a fresh CA, was asked to value a brand sitting inside a company in her valuations interview at Transaction Square, where she has since joined as Consultant, Valuations. Not value the company. Value the brand specifically. It is a fair test of exactly the gap that separates a strong accountant from someone ready for deal work.

Accounting tells you what a business earned. It does not tell you what someone should reasonably pay to own it. That second question is where valuations work actually lives, and it is a different discipline, built on judgement rather than recorded fact. This article walks through the four areas that came up in her interview and why each one matters, because the same ground shows up in most valuation interviews, not just this one.

How do you value a brand in an interview?

You value a brand by reasoning towards a defensible figure through a recognised method, most commonly royalty relief, rather than trying to read the value off a balance sheet where it usually does not appear.

A brand rarely sits on the accounts at a number anyone can point to and defend. Under the royalty relief approach, you estimate the royalty rate the business would otherwise have to pay a third party to license a brand of similar strength, apply that rate to projected revenue, and discount the resulting stream back to a present value. An alternative is to estimate the extra earnings the branded product commands over an unbranded equivalent, and value that premium directly.

Neither approach produces a precise, provable number. What an interviewer is really testing is whether a candidate can walk through the logic calmly, state the assumptions clearly, and defend them under a follow-up question, rather than freeze because the number cannot be looked up.

Why does scenario based valuation matter more than a single number?

Scenario based valuation matters because a valuation is a view taken under genuine uncertainty, and offering one confident number usually signals that the underlying uncertainty has not been understood, not that it has been resolved.

Rather than handing over a single figure, the stronger approach is to talk in cases: a base case built on the most likely assumptions, a better case if growth or margins come in ahead of plan, and a worse case if they do not. This is not hedging. It shows the interviewer that the candidate understands which assumptions actually drive the outcome, and by how much, which is a more useful skill on a live deal than false precision ever is.

How do you choose between EV/EBITDA, P/E, and EV/Sales?

You choose a valuation multiple based on what it isolates and what it ignores, and picking the wrong one for the situation is itself a signal of weak judgement, regardless of how the maths is done afterwards.

Multiple	What it captures	Where it works well	Where it misleads
EV/EBITDA	Operating performance, before capital structure and tax	Comparing businesses with different debt levels or tax positions	Capital-intensive businesses where depreciation genuinely reflects reinvestment needs
P/E	Earnings available to equity holders, after interest and tax	Simple, widely used, easy to benchmark against listed peers	Distorted by one-off items, differing leverage, and differing tax rates across peers
EV/Sales	Revenue scale, regardless of profitability	Early-stage or loss-making businesses where earnings multiples do not apply	Says nothing about margin, so two businesses can share the multiple and differ hugely in quality

Picking one of these over another is already an argument about the business, its capital structure, its stage, and what actually drives its value. A candidate who can explain why EV/EBITDA fits a mature, profitable business better than P/E, or why EV/Sales is the only sensible option for a loss-making one, is demonstrating judgement that goes well beyond knowing the formulas.

Why does understanding what investment banking actually does matter in an interview?

A clean, simple picture of what investment banking does, advising companies on raising capital and on mergers and acquisitions, makes every technical answer that follows land better, because the interviewer can see the detail sitting inside a correct overall structure.

This sounds basic, and it is, which is exactly why it gets underestimated. A candidate who can explain the whole first, then move into the detail, is easier to follow and easier to trust than one who launches straight into a formula without establishing why it matters. Explaining the big picture clearly is not a warm-up question to get through quickly. It sets the frame the rest of the interview is judged against.

What this means if you are considering the same move

None of the four areas above require years of deal experience to prepare for. They require understanding the logic well enough to explain it calmly, under a follow-up question, without reaching for a memorised script. A Chartered Accountant already has the accounting foundation most candidates are still building. What closes the gap is practising the judgement layer that sits on top of it: brand and intangible valuation, scenario thinking, and choosing the right multiple for the right business.

FAQ

Can a Chartered Accountant move into investment banking?

Yes. Accounting is a strong foundation, and valuations roles in particular value that background highly. The gap to close is usually judgement around uncertainty and method choice, not technical accounting knowledge.

How do you value a brand that does not appear on the balance sheet?

Common methods include royalty relief, which estimates the royalty a business would otherwise pay to license a similar brand, and the premium profits method, which values the extra earnings a branded product commands over an unbranded equivalent.

Why should you give a range instead of one valuation figure in an interview?

A single confident figure often signals that the underlying uncertainty in the assumptions has not been understood. A base, better, and worse case shows which assumptions actually drive the outcome.

When should you use EV/Sales instead of P/E or EV/EBITDA?

EV/Sales is most useful for early-stage or loss-making businesses, where earnings-based multiples such as P/E or EV/EBITDA cannot be applied because there are no meaningful earnings to measure.

What is the most underrated question in a valuation interview?

A simple, clear explanation of what investment banking actually does. It sets the frame the rest of the interview is judged against, and a strong technical answer lands better once that frame is established.