420 thoughts on “Comments / Suggestions / Questions…”

  1. Hi Andrew,

    Thank you so much for all your help. I’ve actually read through your website already and have looked through Wallstreetoasis to prepare for my upcoming final round interview with Houlihan lokey FAS group. I was wondering if there is anything else I need to prepare?

    Is there any recent interesting news about them? I looked onto their website but not seem to have much.

    Thanks a lot!

    Edwin

    1. Edwin,
      Houlihan Lokey interviews tend to be pretty technical so I would definitely be prepared for them. As for recent news I don’t know of any off hand. I would do a quick Google News search for them and see what comes up.

    2. Hi Andrew,

      I know everyone’s already said it, but thanks a lot for the site! I’m finding it really helpful in preparing for my IB interview. Just as a suggestion for the accounting section, I know it’s a basic thing but I think it might be useful to have another thing on non-cash items in the financial statements. For example, how an increase in accounts payables can be translated into a decrease in net income and an increase in cash flows from operations. This site was helpful in filling in the holes. http://www.investopedia.com/articles/04/033104.asp. Thanks again!

  2. Hello Andrew,

    Awesome website, I really admire your patience and knowledge. I will have an assessment center for Equity research position in a BB. They said it’ll contain a case study.

    Could you figure out what a case study for research guys will be like? Should I sharpen some valuation methods and/or financial ratio analysis?

    Thank you and best regards,

    1. Matt, I am not very familiar with interviews for equity research positions so I really can’t give advice with regards to the case study. I would have a basic understanding of valuation (specifically equity multiples like P/E) and financial ratio analysis, as you mentioned. I wouldn’t expect it be as technical as investment banking interviews, but that is just a guess on my part. You may want to search or ask this question on http://www.wallstreetoasis.com or http://www.analystforum.com as you might find more folks that have gone through ER interviews on those sites. Sorry I can’t be more helpful.

  3. Hi Andrew,

    wonderful site, first time looking at it in detail and wished i could’ve gone through it sooner 🙁

    I have a quick question.. What are the main differences in i-banking groups (ex. you mentioned product groups, industry groups etc.) and what differentiates their work from each other? i got superday coming up for a intern position called Client Management Analyst at a BB, and from what i was able to figure out so far it’s a coverage position… how is coverage different from the rest if any main differences at all?

    Thanks a million.

    1. Myv,
      Generally the work between product and coverage groups is about the same, in that you do analysis, valuation, presentations, etc. However, product groups such as M&A or leveraged finance tend to do more modeling and coverage groups tend to do more pitching. However, there are exceptions as certain banks (and certain groups within banks) operate differently. I’m not familiar with the Client Management Analyst position so I can’t comment specifically on it.

  4. Hello, Andrew!
    I have perhaps stupid question but nevertheless.. When a company goes public, it issues shares and investors buy these shares.. I wonder to whom belong shares that circulate in the stock market? to the company or investors or somebody else?

    1. Steven, I’m not 100% sure that I understand your question. As you correctly say, when a company goes public (IPO) investors buy these shares. These investors are then free to sell to other investors, who can then sell to yet other investors, etc. This is what’s known as the “stock market.” Whoever buys the shares, owns the shares. Does that help you?

  5. Andrew,

    I want to say that you have a wonderful site here. I have a query for you. I am a recently qualified chartered accountant in Canada (24 yrs old), and work for a BIG firm. I have spent the last 4 years in financial services, and have a pretty good grip on the industry. I do not have a CFA or MBA or any finance related designation.

    My question to you is, in your experience have you ever seen a certified accountant (CPA or CA) become an ibanker? If so what type of obstacles do i face if i wanted to pursue this career path. Being a CA would i have a leg up on say someone who just has a finance degree, or would i be judged pretty much at the lowest level?

    thanks for your help

    1. Mike, I have seen plenty of CPAs become investment bankers. Typically, however, this happens after they get an MBA at a top business school. Folks with accounting backgrounds tend to do well as Investment Banking Associates. It may be possible for you to make the switch into investment banking without the MBA but you would likely start as a first year Analyst. If you want to give that a shot then try to network your way to get interviews. If you are serious about banking, I would start thinking about getting an MBA.

  6. Thank you for this fantastic site. I want to work at a BB bank and I know they finish hiring as early as October and I missed it due to some letimate reasons. I am a senior at a top-10 school and they all came to our campus, also I have access to many alums working at Wall Street. Of course I am trying to leverage these assets, but most people say that it is over. My question to you is that do I have a chance at all, and what should I do besides reaching out to alums which are not very responsive at this time of the year?

    1. Kevin,
      The good news is that yes, it is possible to still get a full-time banking offer, even though full time recruiting is over. The bad news is that it is very difficult (especially bulge bracket). You need to keep reaching out to bankers through your network, even if they are not very responsive. Sometimes slots do open up because someone will renege on an offer. This can happen even days before training starts in the summer. If a bank does need to fill a slot, you need to be on the top of their radar screen so keep networking. It may also help you that people seem to think that the economy is improving and therefore the job market is also improving (banking recruiting was certainly better this year than last year – though not at the levels of the bubble years). A bank may decide that they do have a need for additional analysts, beyond the number for which they gave offers in the fall. However, this is less likely for bulge bracket banks and more likely for boutiques. So beyond just networking, my advice to you is to seek out boutiques and not just limit yourself to bulge brackets. Boutiques tend to be more flexible with their hiring needs. If you get good deal experience at a boutique, there’s always the chance to trade up to a BB after as a second or third year analyst.

  7. Andrew,

    Amazing site you have here. I had a MBA related question to ask you. I am a Chartered Accountant with about 2.5 years experience at a Big firm. I plan to get my MBA in the next year or two and specializing in finanace as i am keen to get into investment banking. A few queries for you:

    a) Will having a MBA (from a top 50 school worldwide) mean i am close to guaranteed at least interviews in BB companies in the area of investment banking? Or put it simply, can i at least assured i have a better shot at landing an IB job as opposed to right now?

    b) Do all MBAs start as associate 1? Also what is the earning potential of an associate 1 and how many years of Associate work would be needed before getting up to management level for a potential MBA and CA like myself?

    Thanks for your help. I am just trying to see if an MBA is worth it, since you know it is a pretty big financial undertaking. For me “worth it” would mean at least 110K salary starting out first year after i graduate from MBA. Is this feasible or should i wake up and smell the coffee?

    Thanks

    Maurice

    1. Maurice,
      There are only about 10-12 business schools in the US (and a handful more in Europe) that are considered target schools for bulge bracket investment banking MBA recruiting. These are pretty much the top 10-12 schools in most rankings. If you are at one of these schools, you have a good shot at getting a lot of interviews (though there is no guarantee – you still have to do networking and a lot of informational interviews). Beyond these schools, it is not impossible but much more difficult to get interviews at bulge bracket banks for IB. You have to do much more work since the banks won’t recruit in campus.

      Essentially all MBAs start as first year associates. You can search around the internet for first year associate compensation for the last couple of years but yes, bulge bracket comp for 1st year associates is above $110k (expect about twice that – or a little more). Keep in mind that compensation includes your base salary and bonus, of which the bonus is completely discretionary and depends highly on market conditions, and may be paid out partly in stock.

      With regards to how many years until you get into a management position, it depends on what you mean by “management position.” Some managing directors become heads or co-head of their groups (this will generally take maybe 10-12 years or more) but very few investment bankers have true management positions. If you are interested in management don’t go into investment banking.

  8. Wonderful sight. I am doing my Exec MBA from the top tier business school (ranked # 1) with 13 yrs of IT experience. I want to switch careers from IT to IB M&A. Exec MBA donot offer campus recruitmen or career services. One of my professors have promised to arrange for the interviews. Are there any other sources of networking with IB people or firms?

    I am presently reading fundamentals of corporate valuation by training the street and valut guide to finance interviews. I am confused and also struggling to prepare for the interviews. I would like to know the structure of an Inteview and how to prepare for the same.

    Also, what are my chances of getting into a BB firm with IT experience. Do the IB firms recruit associates on adhoc basis through references.

    I really appreciate your advice.

    Thanks,
    Kay

    1. Kay,
      I don’t want to sound overly negative, but it is going to be very difficult for you to switch to IB. Investment banks, especially bulge bracket firms, tend to only hire new associates through on campus recruitment at top MBA (not Exec MBA) programs. There are exceptions but they are few. I do know of a few Exec MBAs who have been successful but they tend to have significantly less than 13 year of work experience. Banks tend to only hire on an “adhoc” basis, as you say for experienced associates, not new associates. The exception might be someone coming from a top law firm. As for networking, use everyone you know, including professors, classmates, friends, alumni of your school, etc. With regards to interviewing, take a look at the rest of this website. Much of the content relates to interviewing.

  9. Hi Andrew ,
    Thank you for such great site. I have a doubt regarding the calucation of terminal value by dividend growth model the formula is FCF/WACC-g,
    Why are we subtracting g i.e growth in economy from WACC as such, While projecting the income statement we are increasing the sales so does’nt that take in to account the growth?

    1. Amit,
      The perpetuity growth or Gordon Growth method of forecasting the terminal value in a DCF assumes that the cash flows of a company grow forever at a certain growth rate (the is the “g” in the formula FCF*(1+g)/WACC-g). Without subtracting the growth rate from WACC in the denominator, you would be assuming a terminal value with no growth. The forecasted cash flows only take into account growth in the projection years (e.g. 5 years) but not in the terminal period (e.g. year 6 to infinity).

  10. Hi Andrew,

    Firstly, thank you for the website.

    I am graduating in 2 months time with a accounting and finance degree. I have taken up a job offer in one of the Big 4 accounting firms and would be joining their Audit-Financial Services department. I would be doing my CFA part time whilst working. I plan to join an IB upon completion of my CFA and after gaining some work experience. Is that possible? Or is the door to an IB permanently shut if I don’t join them right out of school?

    Cheers,
    Lee

    1. Lee,
      The door to IB is not permanently shut if you don’t join right out of school but it is a difficult switch to make. The CFA really doesn’t help you much recruiting for IB (it helps for other areas of finance such as asset management and equity research). You’re going to have to do some pretty good networking to get IB interviews but it might be possible, especially if the job market continues to improve. If you aren’t able to land an IB Analyst job, you might want to consider a backup plan of getting your MBA in a few years from a top school and then entering post MBA as an Associate.

      1. Andrew,

        Thank you for your reply.

        Another quick question. Can I apply to join next years (Sept 2011) cycle as a fresh-grad analyst even though I graduated in 2010? Hopefully with a some what relevant work experience and a degree with actual good grades (as opposed to one with predicted good grades), they would actually bother to interview me this time around.

        Cheers,
        Lee

        1. Lee, you can apply but it’s going to be tough to be included with the same consideration as the folks still in school. That’s not to say it’s impossible to break into banking a year out of school. But it likely requires networking on your part to get your resume in front of bankers rather than the traditional on campus recruiting process.

  11. 32 y.o. doctor of pharmacy (Pharm. D. degree) with 8 years of experience in the pharmaceutical / biotech industry. Varied experience, including marketing research, sales, and currently as a medical science liaison – a high science field based job, calling on physician researchers.

    I’ve been fascinated with finance for some time now, and have spoken to a friends in i-banking about how to get in. Everything ponts to a top 10 full time mba as THE solution to get in. My question is, is a career change at my age even realistic to consier if I specialize in finance at #1 ranked part time mba program at NYU stern?

    I’ve wrestled with full time vs part time for a while, and decided to pursue the part time program at Stern… due to financial reasons. I’m making well over 6 figures right now and the opportunity cost to go full time would just be too much. I’ll probably be 35ish when I finish the part time program, and will have to pay for it myself, since my current employer will not support me.

    I’m fully aware that IBanks don’t recruit from pt programs, nor can part timers participate in ANY on campus recuiting events. Thus, I will need to rely on the alumni network, and any other contacts I can make myself.

    My question is: would an attempted career change via this route be an exercise in futility? Upon graduation from the PT program, would IBanks consider me too old and snub my academic pedigree, OR, would they value my tenacity, science background, and niche industry expertise? (I’d definitely focus on healthcare/biotech banking).

    Any insight offered would be extremely appreciated.

    1. Mike,
      You ask good questions but there are no precise answers. With regards to age, mid 30’s is definitely on the older side for incoming Associates but not so far out of line. Most new Associate coming out of MBA programs are late 20’s/early 30’s. With regards to part-time MBA such as Stern, as you mentioned, you are hugely disadvantaged vis a vis full-time students if you are not able to participate in on-campus recruiting (OCR). On that note, you may want to look into Columbia’s EMBA (part-time) program as they do allow you to participate in OCR as long as you are not sponsored by your employer. Having said that, if you are really good at networking and have a really good “story” for why you want to pursue healthcare banking, then you definitely have a shot coming out of a part-time MBA program. It will take a lot of effort but it is probably doable, especially given your healthcare background. It’s hard to give odds and without such odds, it’s hard to do a cost/benefit analysis on the P-T MBA. Long story short, difficult but not futile. One last thought that you should think about: if you’re already making good money in your current field, really ask yourself why you want to do banking. You’d likely be taking a rather large step down on the totem pole, so to speak, starting as a first year Associate. The sacrifices (lifestyle, etc.) are pretty significant.

  12. Hi Andrew,

    Thanks so much for your insighful response. You have a great website, and are truly helping people by giving them the perspective on an insider. You’re right about the sacrifices being significant – if I am successful in landing an associate position out of the part-time mba program, I’d basically wouldn’t see my family or have any semblance of a life until 40 years old, (when I’d probably be at the VP level) correct?

    Also, I realize that there will always be a need for ibanking services, and thus there will always be a need for ibankers and dealmaking. However, with all of this stuff going on re: financial reform, politics, Goldman Sachs, etc., do you think the outcome might severely affect the salaries that bankers will make in the future?

    Again, thanks for your help Andrew.

    1. Mike,
      Yes, you’re correct, you don’t have much of a life as an Associate. Even at the VP level, life is still pretty tough, even if the hours are somewhat better. You tend to travel much more at the VP levels and above.

      There’s no question that current events (financial reform, etc.) may have a big impact on the investment banking industry, including salaries but it’s probably impossible to predict in the near term. Right now, banking activity is heating up again as the world’s central banks and govts have been successful (so far) at reinflating the bubble. My personal belief is that long-term, this is unsustainable and finance as an industry has to shrink which will likely have a negative impact on compensation.

  13. Hey Andrew,

    Thanks for this website, it is nice to find some good free info out there. Quick Question isn’t the perpetuity formula for estimating TV = FCF(1+G)/(WACC – G)since you have to estimate the FCF will grow at your predetermined growth rate for year t into infinity? Just wondering because I have gone through some other interview guides and a financial modeling course and I have a first round Summer Analyst interview in 3 hours from now so seeing this really worried me. Thanks in advance

    1. Daniel, yes your formula is correct. That was a mistake in the comment above, which I’ve fixed. Good luck with your interview.

  14. Hey there,

    thanks for the good help on the topic!

    Found a mistake in your brainteaser category:

    https://ibankingfaq.com/category/interviewing-brainteasers/

    “Q:You have 100 balls (50 black balls and 50 white balls) and 2 buckets. How do you divide the balls into the two buckets so as to maximize the probability of selecting a black ball if 1 ball is chosen from 1 of the buckets at random?

    A:Just to be perfectly clear, you are assuming that one of the two buckets is chosen at random and then one of the balls from that bucket is chosen at random. You want to put 1 black ball in 1 of the buckets and all of the other 99 balls in the other bucket. This gives you just slightly less than a 75% change of having a black ball chosen. The math works as follows: There’s a 50% chance of selecting the bucket containing 1 ball with a 100% chance of selecting a black ball from that bucket. And a 50% chance of selecting the bucket containing 99 balls with a ~49.5% (45/99) chance of selecting a black ball from that bucket. Total probability of selecting a black ball is (50% % 100%) + (50% * 49.5%) = 74.7%.”

    In the end its NOT (45/99) but (49/99) – just one black ball is missing, 50-1=49, maths should be clear! 🙂

    Cheerio,
    Tioo

  15. Hi Andrew,

    I’m looking to break into IB straight out of college.

    This is a great site, really helpful, just curious about your opinion. I’ve just finished reading Benjamin Grahams ‘Security Analysis’as well as the ‘intelligent investor’ as well as Warren Buffett’s ‘Biography’.

    Clearly Buffett and Grahams opinions about the efficiency of the markets, and value investing are at odds with yours, and I respect both views.

    How would you say that they are wrong? are they just a 3-sigma event? surely there is some grossman-stiglitz paradox where information is costly and therefore it is possible to beat the market by studying an exorbitant amount of information?

    look forward to hearing from you,

    Peter Atkins

    1. Peter,
      You’ve got to remember that Graham published Security Analysis in 1934 and the Intelligent Investor in 1949. The markets were very different then. They were definitely orders of magnitude less efficient back then. I’m not saying that there are no opportunities to outperform in the markets today but those opportunities are likely going to be in the less efficient markets (e.g. small cap stocks with little analyst coverage and limited institutional money). Even those opportunities are hard to spot. Without non-public information it is extraordinarily difficult (I would say impossible) to consistently outperform the market buying large cap stocks. Remember also that Buffett is mostly buying entire companies, not stocks and holding them for a very long time. Since he doesn’t really have investors to answer to (the way a hedge fund or mutual fund does) he can do that. Most investors cannot.

      1. Although I disagree with you on market efficiency, there are several overlooked ways Warren Buffett made money that explain his out performance. The biggest factor is his insurance holdings. They allow him to leverage his returns with free money (i.e. a <100 combined ratio). Those insurance companies can get more profitable deals than other firms because Berkshire is considered a financial fortress. Finally, he buys private companies at discounts because owners do not want to sell to the public or PE firms.

  16. Andrew,

    Great site! I am very interested in investment banking and am a Junior undergraduate at a non-ivy league school. I’m interested in landing an internship for next summer. Without I-banks recruiting on my campus what is the best way to make it?

    Thanks!
    Josh

    1. Josh,
      If you are at a non-target, you will have to network your way into an internship. It will be a lot of work but plenty of people from non-targets land internships and full-time jobs in banking. Use your alumni network, friends and family, etc. Also contact the banks (or at least visit their websites) in which you have an interest and find out their recruiting policies for students at non-target schools.

      1. Andrew thank you for answering my original question! I now have another:

        Today I received an internship offer for next summer (leading into my senior year) as a Corporate Banker in Chicago at a large regional bank. I received this deal after earning strong reviews by completing a similar internship with the same bank this past summer. The deal “explodes” in three weeks and although it is a fantastic opportunity my dream is to land an investment banking internship.

        What should I do? I don’t want to turn it down and risk coming out internship-less if I am not hired in January by an I-bank, but at the same time am not sure if accepting it and reneging it is a good idea either. What are the consequences to both of these decisions?

        Thanks for your help!

        1. I agree, you don’t want to come out “internship-less.” Ultimately, you have to do what’s best for your own career.

  17. Hi Andrew!!!!! I want to say that you have a wonderful site here.I am very interested in investment banking.
    I am 3rd year bachelor student in Business management.We need to prepare a University project and i have opted for Investment banking.So can plz tell me what all stuff should i include and plz share with the links regarding I-Banking .
    Waiting for your Reply
    Thanking You
    Ajinkya

  18. Hi, Andrew
    Very helpful site! Thanks! Could you tell me about “investments in the associates” as its the opposite of minority interest and is deducted from EV unlike minority interest. Could you please tell me how it is defined?

  19. Hi Andrew,
    When deciding on a non ivy league MBA program is it best to take location of the school into account (New York or Chicago) or does this not matter?

    1. It does matter to some extent because you’ll have much more opportunity to network if you are in NY than in other cities.

  20. Hello Andrew,

    Can you tell me about background checks for bulge bracket. In Texas reckless driving is 20 mph over the limit and its a misdemeanor B. It was a small town and I am sure it will be shot down to a misdemeanor C or even thrown out. I wanted to know if this would hurt the chances of getting a bad background. Should I just tell HR right away after I sign my offer sheet?

    Also, freshmen year of college I quit BOA teller position and a walmart position with out two week notice would that hurt if me because they might be ineligible for rehire or could I just keep those off my application. Would that hurt me to keep off the application?

    1. Jacob,
      I’m not an expert in background checks – that is something handled by HR and not the bankers. However, if it were me, I really wouldn’t worry about the traffic ticket. It doesn’t sound like a big deal and I would just explain it only if they bring it up. With regards to the two positions that you quit, you can keep them off or put them on. I don’t think not having given 2-weeks notice will matter. A background check will likely just confirm the dates that you worked at those positions.

  21. Hi Andrew,

    With great luck, I’ve managed to get myself into an interview with a bulge bracket M.D.

    I have no experience in corporate finance, though I think I will be able to impress with personality and other accomplishments.

    If the stars align and things go excellent, are odds good that I will start as an intern? I guess my question is how common are internships outside of the summer interns?

    The site is great, the work you’ve put in is much appreciated,
    -Alex

    1. Alex,
      Internships are not that common outside of the typical summer internship but not completely unheard of. I would venture to guess that it is more likely to be possible at a boutique bank than a bulge bracket bank.

  22. Hello Andrew,
    My gpa I used was cumulative for both schools, so I got an offer should I let HR know that my GPA is that listed is for both schools. Or will I get an opportunity to write my gpa down again. Also I was expecting to get a 3.6 but I ended up with a 3.5. Should I just let HR know

    1. Casey, I wouldn’t worry about it. Since it is a minor difference, only address it if HR asks, which would only happen if they ask for a transcript.

  23. Andrew,
    First, I want to say thanks for creating this wonderful site!
    Second, I’m on a non-summer internship (so off-cycle internship) at a BB. Unfortunately, I will be recruiting for a summer internship DURING that internship. I’m submitting my resume for summer recruiting around week 2 of my off-cycle internship. It would huge to have this off-cycle internship on my resume, but since I’m only at the start of it, what’s the best way of including it and presenting it on my resume?

    Thanks,
    Tina

    1. Tina,
      I would definitely put the internship on with the date you started – “present”. try to put any experiences that you’ve already had in the internship on the resume. keep updating the bullets for the internship as you do more things in the internship.

  24. Hi Andrew,

    I am interviewing for an analyst position in the energy group at a fairly large bank. Do you happen to know of any valutaion techniques, financial ratios, or other quirks which are specific (or maybe of greater importance) to the energy sector?

    Thanks, and thanks for developing this site!

    Ben

    1. Ben,
      Best thing to do is to read some equity research reports on the energy sector to get up to speed on the metrics used in the industry.

  25. Hi andrew;

    In order to help for future interviews, I would like to post a question I had in a recent interview.

    The question was : what is the difference between operating and financial lease? and how would you compare the EV/EBITDA ratios of two companies, one with operating lease and the other one without it in order to find the EV of a third company?

    Thanks a lot. I hope the question would be useful for future interviews.

  26. Hi Andrew,

    Very informative site. I have an MBA related question.
    I have been working in the IT industry (Financial Services) and have 6 years of experience and an intend to do an MBA to switch career paths.

    Am interested into getting into an Investment Bank , but wanted to know whats the best way to use my IT experience – would an industry coverage grp be the best bet? And in what sort of role?

    Your help is appreciated.

    1. Anand,
      Honestly, your IT experience won’t likely be very helpful in getting you into IB – even in a tech coverage group. Not to say you can’t make the career switch (many do from top MBA programs) but the IT experience doesn’t really differentiate you. If you are recruiting from an MBA program, the only role you’ll be applying for is Associate.

  28. Hi Andrew,
    I am a first year MBA student recruiting for investment banking. If on campus internship search is unsuccessful in January, are there any opportunities later in the semester for an internship? Also, in such a scenario what would be a good strategy for an off campus internship search? Your response will be greatly appreciated.

  29. Hi Andrew,

    I am interested in switching my career to IB. How’s my chance looking as a 25-26 year old new actuary? Is an MBA a definite requirement?

    Thanks!

  30. Awesome site! You actually recommended it to me while I was in one of your classes last year.

    Can you possibly post some interview type questions that deal with P/E and other ratios? I faced questions like this one:

    A company has a P/E ratio of 10. Let’s say they found a way to be more efficient and cut costs of $10 million. What is the new P/E ratio?

    I may have butchered the way the question was phrased but hopefully you got the gist of it.

    Thanks!

  31. @Sam. You either need to know the CMP or the Earnings(absolute in $Millions)
    P = 10E
    New P/E is (10E)/(E+10)
    Obviously the new P/E will be lesser than the older one 🙂

  32. Hello Andrew,

    I am working as System Engineer/Analyst in IT field since 5 years. I have much more liking to work in Investment banking firm in the IT field. I would like to how to get an interview in IB for Business analyst, Quality Assurance Analyst, etc. striclty IT related jobs. Also, I would like to know changing career towards finance by doing MBA in Finance or MS in Finance. Which degree worth more? Does age matters(I am 32 right now)?

  33. I am trying to figure out what holds more weight (for investment bankig purposes): an MBA or a masters of science in finance. i’m not necessarily trying to break into a top bulge bracket bank, but i also don’t want to waste my time going for a MS in finance if it is going to be ignored my middle market banks or boutique banks. what is your experience/thoughts on this matter? i would REALLY appreciate any help.

  34. Hi Andrew,
    My interest in becoming an investment banker has led me to this site. Firstly, its great and has provided me with plenty of valuable information.

    After applying for Graduate Programs, I am sitting here worried because I have received a couple of rejection emails. Is this the end? I Graduate at the end of this year and I read above it’d be hard to compete with the fresh graduates next season. Would I be best applying for summer internships as well? Although I will complete a business degree in a top University, my grade average isn’t fantastic – due to a few reasons. My ultimate question is, for those without the fantastic grades, but with great extra curricular activities – how can I force my way in? I’m starting to think I will not make a Grad Program.

    Mark.

    1. you’ve got to network, network, network. it’s not going to be easy but it’s not impossible either, given your situation. you could try for a summer internship, but since you’ll be graduating, most firms won’t really consider you.

  35. Hi Andrew,

    I’m currently a sophomore, and have gotten an interview with a boutique investment bank. I’m trying to prepare for the interview but curious if the questions asked will consist of more technicals or qualitative questions. I tired doing research on the firm itself but their site doesn’t have much information on the investment banking side. I have also taken a Investment Banking course which I have on my resume, but being a sophomore and not being able to take higher level finance and accounting classes, I have only been able to grasp the basics on the work Investment Bankers do. Any pointers on how I talk about the course I took and put on my resume, and specify how I was only able to grasp the basics. Thank you.

    1. Shekhar,
      I can’t say for sure but most internship interviews (especially if you are a sophomore) tend to be more qualitative than technical. I would just be able to talk about what you’ve learned. They won’t expect you to be an expert but that you’ve already been introduced to relevant topics should be helpful to you.

  36. Hi Andrew,

    Great website!!! Thanks a lot for all this information, it is really appreciated.

    Your technical questions have helped me a lot. I recently had an interview with an IB (not in the US) and I was pleasantly surprised when I got some ditto questions as on your website. I would request you to add more technical questions if you can, they have been extremely helpful.

    Thanks again & keep up the wonderful work.

    1. Danny,
      Thanks for the kind words. If you have technical questions that you recommend adding that you might have gotten in interview, definitely let me know.

  37. Understood from your website, the typical iBank hierarchy is (1) Analyst, (2) Associate, (3) Vice President, (4) Senior Vice President/Director and (5) Managing Director.

    Are “Associate” and “Associate Vice President” the same? Or are they different levels?

    1. No investment banks (or investment banking divisions) that I am aware of use the title “Associate Vice President.” Other divisions of a bank might use that title. Associate and Associate Director, on the other hand are usually the same level.

  38. Well, some questions off the top of my head are:

    1.) Impact of changes in Working Capital (Invesntory, Receivable, Payables etc) on Free Cash Flow (I guess its straight forward if you know the formula.

    2.) How are Associated Companies treated in the calculation of Free CF.

    3.) How would you calculate the cost of capital if the country does not have govt. bonds, thus no Risk free rate. (I thought this question was interesting)

  39. Hi, Andrew

    I would appreciate if you could help me with the following:
    Is it right to use different discount rates at different years of venture project life as the risks are changing enormously. If yes should I simply divide CF by the rate or use formula as in the ordinary discount factor.

  40. Hi Andrew,

    I want to thank you so much for this website it has been extremely helpful in interviewing at the bulge brackets, and I would say it is significantly more helpful then the vault guide to finance.

    By way of background I am a Lawyer who has worked in M&A consulting at one of the big four for the 8 months and I graduated Law School about a year ago. My goal was to get a job in banking right our of law school but because of the economic situation it became impossible. Instead of taking a job in corporate law I decided that it made more sense to take this job in M&A consulting while although I serve as a legal and tax advisor I do have exposure to the financial aspects of the due diligence process as well.

    I have recently begun interviewing again and it seems that I will have the opportunity to take a position in the office of a top bulge bracket in LA or at a top bulge bracket in NY. The position will be a first year analyst in NY and a 2nd year analyst in LA. I grew up in LA and it has always been my intention to eventually work in LA, hopefully within the finance industry, i.e. PE, hedge funds, or continue in banking. I have been told that taking a I Banking job in LA will significantly reduce my exit opportunities even within the LA market within the PE and Hedge Fund space in particular. I would be very interested to hear your thoughts on my situation and what you think I should do. Thanks so much.

    1. Mike,
      Thanks. If you are happy in LA and you have a good offer there, then I would probably take that. I wouldn’t worry about exit opportunities of LA vs. NY, as long as you get good deal experience. Especially true if you want to stay in the LA area.

  41. Hi Andrew,

    Firstly, I would like to thank you for your website. It helped me a lot through my interviews for an internship position.

    Now, I would like to apply for a graduate position in London and I’m facing a very stange question in an online application. In fact, I have to describe how to value a company in 250 words: the steps and what might impact the valuation. I really don’t know what to write about these “impacts”, especially in an 250 word answers. Would you have a few hints?

    Thanks a lot,

    D.

  42. Hi Andrew,
    This is such a wonderful site! The information is really helpful. I had a few questions about trying to secure a full time IB job. I am currently a rising senior and have had three internship experiences in commercial banking though the latest one was in corporate finance M&A. I was wondering if these would help in trying to secure a full-time IB position. Also, my school is a non-target school for a lot of IB firms so I was wondering if you could give me some advise on how best to network and get my resume in front of people. I’ve used the alumni from our school, but other methods would be really welcome. Last of all, I was wondering where I could get a list of boutiques in NY and Chicago, I’ve tried searching for them but they are very scattered, I just want to make sure I’m not missing out. Thank you so much for your time.

  43. Dear sir,,,

    After compliment

    I would like to take this opportunity to thank you for this site , actually i have a question about RAB method

    Regulated asset base , need explanation and when we use it

    thanks

  45. I got one another doubt, please try to clear it as well. When & why does an analyst decide to go for FCFE (Free cash flow to equity) of FCFF (Free cash flow to firm)? How do we do that?

  46. Andrew, do you think it’s foolish or appropriate to use a mail address like “name”.ibanker@gmail.com? Last year at a bank recruiting events a banker at MS joked about this and asked us to use a mail like “name”.morganstanley@gmail.com. I’m a bit confused. Thanks.

    1. Elvi,
      i wouldn’t use an email like that. you will get made fun of, and even though it is not really a big deal, it is not worth the risk.

  47. Hi,
    Can you help me out.
    I am doing Masters in Banking and finance and now i am in dissertation. Can you suggest me topics related to investment banking?

  48. Hi Andrew,
    very useful and informative website, thank you.

    I was wondering what are the prospects to move from sales to Corporate Finance? I am just about to start a junior role at a bank on the commodity sales desk. Although I am very excited I was told sales is largely relationships driven, while I do enjoy the client contact aspect I am also interested in a more analytical and quant. role. Would it be difficult to transfer if sales turns out to be not my fit?
    thanks.
    Misha

    1. Misha,
      Yes, it is difficult to transfer into the investment banking division. Perhaps not impossible if you can network with the bankers, but difficult.

  49. hi Andrew,

    Monday I will go for interview at Singapore Mercantile Exchange ( a company trading multi-product commodity and currency derivative exchange) for fresh risk management position.

    To be honest, I dont know what is this position look likes and how should I prepare for the interview? Please give me some advice. Thanks

    1. Vincent,
      Good luck with your interview. Unfortunately, my area of expertise is not in risk management so I really can’t help you.

  50. Hi Andrew,
    My interest in becoming an investment banker has led me to this site. Firstly, its great and has provided me with plenty of valuable information.

    After applying for Graduate Programs, I am sitting here worried because I have received a couple of rejection emails. Is this the end? I Graduate at the end of this year and I read above it’d be hard to compete with the fresh graduates next season. Would I be best applying for summer internships as well? Although I will complete a business degree in a top University, my grade average isn’t fantastic – due to a few reasons. My ultimate question is, for those without the fantastic grades, but with great extra curricular activities – how can I force my way in? I’m starting to think I will not make a Grad Program.

    jahid.

    1. Jahid,
      Thanks. It is hard to compete with fresh graduates. Generally speaking, unfortunately, the large banks won’t really consider you for summer internships if you’ve already graduated. Not to say you can’t try tough. It is possible to make it without stellar grades, if you are really committed. Not sure what country you are in, but at least in the U.S. that means networking your way in. Otherwise, you can always consider an MBA program in a few years.

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