420 thoughts on “Comments / Suggestions / Questions…”

  1. Hi Andrew,

    First of all, I love your site – so much information and tips.

    I started working for a bulge bracket bank in their Technology division 6 months ago, but soon became interested in ibanking and want to make the switch. I’ve been doing some research and heard it’s hard to move from a back office role to front office – is this true? What would be the best way to transition my career at this point? Even if i was to get my MBA, how would I break into IB after working in the back office?

    Thanks so much,
    Katy

    1. Katy,
      Unfortunately, it is very hard to switch from bank office to front office. If you go to a top business school for your MBA, you should have a great shot at making the transition. Most MBA students targeting ibanking are career switchers, either from something else in finance (i.e. your situation) or something totally different. Without the MBA you can try to network you way in to a front office position within your current bank or at other banks. But it definitely will be a challenge.

  2. what is the effect of increase in working capital on cash flows.
    what is the impact on cash flow if depriciation changes from 10 years to 5 years

    1. if your working capital requirement increases then your free cash is going to go down

      by changing depreciation from 10 to 5 years – annual depreciation is higher so your annual tax shield is higher – higher cash flows

  3. Hi Andrew,
    Many thanks for this great site

    On a resume; it is acceptable to use semi-colons instead of commas for words separation in 1 bullet sentence, Dummy example:
    examining micro/macro-economic factors; SWOT analysis; share performance analysis; comparable company analysis; Porter’s 5 forces analysis; financial performance analysis

    Keeping in mind, those are minor tasks for a univ project therefore no need to illustrate further on each point. I have quite few bullets with lots of independent words like the above example, not sure if that’s okay or I should revert to the comma instead.

    Appreciated
    All the best for the New Year

    1. Jason,
      Commas are more widely used in those circumstances, and would be my personal preference. However, I don’t think anyone will ding you for using semicolons.

  4. Hi Andrew,

    is there any material to prepare for GCM (ECM and DCM) positions? Is there anywhere where I can check deals?

    1. Nico,
      I’m not aware of any but you might want to try http://www.mergersandinquisitions.com. That site often has blog posts related to specific groups. Generally speaking, ECM and DCM interviews are less technical that traditional IB interviews and more markets related. To check deals (and what banks executed them), you would really need a paid resource such as Capital IQ.

      1. and further to that – from what i understand it is a lot harder to get into ECM/DCM as an undergrad. usually viewed as a sort of ‘second degree’ – prove yourself in banking first before going into ECM

  5. Hi Andrew,

    I bought the self study program (Integrated Cash Flow Model) and found it very very good, it realy helped me, thanks for such a great program. You also mention in the presentation that other models such as DCF, LBO and M&A can be built on the Integrated Cash Flow Model. Do you currenty (or in pipeline)have self study programs for building these models

    1. Sukhveer,
      Thanks very much for your kind feedback on the self study program. I’m really glad to hear that you found it useful. Unfortunately, I haven’t put out any additional self study models. I had intended to, but got sidetracked by other projects. Sorry!

  6. Hi Andrew,

    I just had a quick technical question. Company A is buying company B in an all stock transaction. Compant A is offereing 0.5 of its shares for 1 share of company B. They both have the same P/E ratio. Is this accetive or dilutive?

    Thanks!

    1. Other things equal, in all stock deal if the P/E ratios are the same, the deal is breakeven (neither accretive or dilutive).

  8. Hi there and congrats for the website, mess I did not find it before!
    Here you are a technical question: let’s say BankA and BankB (both non listed and fully owned subsidiaries of bigger banking groups) want to merge.
    How do I calculate the capital impact (Regulatory Cap/RWA) at BankA GROUP Level, assuming BankA decconsolidates from its group?
    I have two options I’m working on, on the two of them RWA is not in discussion and is calculated by subtracting BankA RWAs from its GROUP total, the tricky part comes with Numerator:
    Option A: Value of BankA – TCE of BankA
    Option B: Value of BankA – historic price of BankA
    I know the calculations needs some more “fine tunings”, but this is definitely the main driver.
    Thanks in advance

  9. Hi Andrew,

    Thanks for the great site and I definitely appreciate it.

    Recently I came across a difficult question in my interview, “If you can have only one financial statement, which one will you pick and why”. Do you have any idea regarding this? I did some research on google but it seems people have different answers.

    Many thanks in advance.

    Best Regards,
    Joey

    1. Joey,
      I hate this question. It is a stupid question. And to be frank, I have no idea what the answer is because you would never ever do any analysis with just one financial statement. But okay, if you are asked this in an interview, you need to answer it. I would say the following: First, it depends on the situation and the type of company. If I were analyzing a financial institution such as a bank, I would say the balance sheet (though in today’s world, nobody on Wall Street can get a good understanding of a bank’s financial position given all the derivative exposure and off-balance sheet stuff – but that’s a discussion for another time). For most other companies/industries, I would likely want the income statement to get a quick understanding of revenue growth, margins and profitability. That’s the best answer I can give you.

  10. First of all, thank you for the great resources on the website!

    I ran into a couple interview questions that confused me a bit and was hoping to get some clarity.

    Both were accounting related.
    Q1: Let’s say I have a factory with a book value of 6. I was able to sell it for 10. Walk me through what happens on the statements. No tax.

    My thoughts:
    I/S -> nothing
    B/S -> Assets: Cash +10, PPE -6 = (+4) L+E: SE +4 = (+4)
    CFS -> ?

    Q2:
    a) I want to buy a factory for 100 with 50% cash and 50% debt. Walk me through what happens to the statements.

    I/S -> nothing
    B/S -> Assets: Cash -50, PPE + 100 = (+50) L+SE: Debt +50 = (+50)
    CFS -> ?

    b) What happens after year 1 with 40% tax and 10 year straight line depreciation.

    (I was able to get part B with no problems at all, but part a threw me for a loop when trying to figure out the CF statement.)

    Thanks for the help.

    1. Sam,
      Q1:
      IS: Net income +4 due to gain on sale
      CF: Net income +4 (CF from operations), Sale of Assets +6 (CF from investing). Net effect, Cash +10 (remember decreasing an asset is a SOURCE of cash)
      BS: Cash +10, Fixed Assets -6, so net Assets +4, Retained Earnings +4 and we are balance

      Q2 (Part A):
      IS: no change
      CF: Purchase of assets/capex +100 (so -100 cash from investing), debt +50 (+50 cash from financing), so net -50 cash
      BS: Cash -50, Fixed Assets +100 (so net assets +50), debt +50 and we are balanced.

      For these types of questions, always do the income statement first, then the cash flow and last the balance sheet

  11. Hi Andrew
    first of all,
    Thank you for the great resources on the website~

    Recently I came across a fit question in my interview,
    “How do you persuade others to achieve a desired result”

    My story is to find sharing opinion, use data and facts, finaly persuaded my colleagues to accept my proposal

    is it right?

  12. Hey Andrew, thanks for everything on this website. The in-depth explanations are very helpful, and allowed me to prepare effectively for this past recruiting season to get a full-time offer at a TAS. I was wondering what information you had on some middle market investment banks. The three I am interested in are BMO Capital Markets, Duff & Phelps investment bank, and Houlihan Lokey. Could you possibly compare each to other firms? Can you speak in particular to their offices in New York and Chicago. Are they a reputable firms, what sort of coverage do their analysts get, are their analysts comparable (skills, pay, hours, etc.). Thank you.

      1. and further to that – pay will be on par with american bulge brackets, and BMO is big in the energy/natural resource space. The fact that I have never even heard of the two other firms speaks to BMO’s reputation/size…

  13. Dear Sir

    Just to seek some clarifications as I find that many people are quite perplexed or confused with the following:

    1) For the computation of group/consolidated ROE, do we minus profit attributable to minority interests (MI) from the net profit in the numerator and also minus MI from total shareholders funds from the denominator? What is the actual formula?

    2) For computation of group/consolidated gearing ratio or net gearing ratio,do we minus MI from the total shareholders funds?

    3) Is there a difference between net profit attributable to shareholders of company and net profit attributable to owners of company?

    4) Is there a difference between total equity and total shareholders funds?

    Thanks and Regards.

    CF Chong from Malaysia

  14. Hi Andrew, I am a final year student of software engineering in Sydney. My GPA is about 3.25, I have commercial bank working experiences . I like to apply investment bank. Can you give me some suggestions hot to apply and which is best way to me. Thanks

    1. campus recruitment program? usually the only way to get in. with a 3.25 – going to need A LOT of networking.

  15. Hey!

    I am a 19 year old Swedish student and I`ll finish school this year and I am going for uni. I have superb grades and I love I-Banking. The current dream is to become a analyst in M&A. But the big question is, what should I do now? What should I study? Were should I study? I`m sure I have what it takes, I just need to find a way to show my talents 🙂

    Thank you verry much for your amazing site!

  17. Dear Andrew,

    Although it is first time I am on your website but given the comments I have read, I hope you can be of help to respond to my academic question:

    1. When a company incurs expenses:
    a) Assets may increase,
    b) Liabilities may increase,
    c) Cash may increase,
    d) Common Stock may decrease.

    I thought that the right answer is d) but it was incorrect. Can you assist, please. Thanks much in advance & Best. A

    1. d is the worst answer to choose..incurring expenses has nothing to do with common stock. common stock would only increase or decrease from a financing or a recap…incurring expenses will most likely increase liabilities: for example if you have an employee working for you you would recognize his salary as an expense…if this is yet to be paid then you to balance the expense entry you would increase salary payable or something similar..

    2. – assets will increase if the expense is capitalised or if the expense is prepaid
      – liabilities will increase if the expense is recognised but not yet paid (ie. accrued expense)
      – cash will not ever increase
      – common stock will not ever increase

  18. Andrew,

    to echo others, great site. Two questions:

    1. You mention that Debt or Equity Capital markets are typically viewed as “investment banking-lite” with a slightly better lifestyle but also diminshed career prospects/ compensation and lower status perception. Can you distinguish the difference between the capital markets functions and other investment banking functions as well as the exit strategies/ career prospects for each?

    2. For prospective MBA students deciding between management consulting and investment banking. What are the pros and cons of each career in terms of career prospects for someone looking to stay in finance and is willing to endure the grind of the IB lifestyle but probably not for more than 5 years and will want an exit strategy.

    Thanks

  19. Hi Andrew
    I am now the second year PhD student in Economics in a top 50 university in US. Due to the job market for Econ PhD is so bad, I consider go to financial industry after graduation. I concentrate on econometrics and financial economics and I have BA in accounting and MA in statistics, but I still find it is so hard for a PhD to find an intern in IBD. Do you have any suggestions for my situation? It is hard for me to give up my current PhD studies but I sill consider to have an MBA degree after graduation.

    But could you please offer me some suggestions for PhD students especially Econ PhD students who desire for IBD?

    Thanks a lot!

  20. Hi Andrew,

    I am negotiating an offer with a top investment management firm for a technology position in the US. And I’m unsure how the hierarchical levels work in investment management for technology and I was wondering what level I would fit in – associate, VP etc. and what is the norm with my level of experience.

    My background – BE Computer Science, MS Computer Science and 7 years in technology with a brand name company (Microsoft, Google, Yahoo, Facebook).

    I appreciate your reply in advance.

    Thanks,
    Keith

    1. Keith,
      Unfortunately, I don’t really have any insight into the hierarchy for technology positions – sorry.

  21. Hi Andrew

    Is it easier to be hired as an Analyst when you are a student straight from University than when you’ve made a career change and you are in your 30’s?

    Thanks
    Lebohang

    1. Lebohang, It is (nearly) infinitely easier to be hired as an Analyst in investment banking straight out of university. It is (nearly) impossible to get hired as an Analyst in your 30’s as a career changer. At that point, your only realistic shot is out of a top MBA program, in which case you’d be going for an Associate position.

  22. Hello Andrew,

    I am currently entering the final year of an undergraduate degree in Economics at a top 10 UK university and I am on target for a 2.1. I currently have no experience in IB and I wanted to know whether it would be advisable to either apply to graduate programmes (being up against others with far more experience) or apply to summer internship programmes.

    Many Thanks,

    Terrence

  23. Hi Andrew,

    I was wondering if you could give a brief explanation what companies need to pay to completely buy out the other: market cap or enterprise value.

    I’m a bit confused because some models (comparables, DCF) use enterprise value reasoning that you have to buy the debt of your target as well. Merger models (100% stock purchase) focuses on buying the stocks only.

    Thanks!

  24. Hi Andrew,

    I’m confused by the many financial modeling courses out there – is financial modeling actually a part of the interview? How important is this compared to valuation questions?

  25. hi,
    I have a question.
    A company has a WACC of 10% and operates in the U.S.
    You are asked to prepare a DCF for a private company that operates in Russia. Should the WACC for this business in Russia be higher/lower compared to the U.S. company?why?

    Great website btw…

    1. The WACC will be higher for the business in Russia than the US for a couple of reasons. The first is that the company is private (assuming that the company in the US is public), which makes transparency an issue. It is often difficult to get accurate financial information about a private company, because it isn’t readily available as it would be for a public company.

      The second main reason why the Russian company would have a higher WACC is that the financial markets in Russia and the other BRICS aren’t as developed as they are in the US. So, assuming everything is equal (the financials) for the US and the Russian company, investors will demand a higher return for the Russian company to compensate them for the added risk of not having the liquidity or transparency that comes with a strong capital market like the US.

  26. Hey Andrew,

    First off, thanks for all the information on the website. It has been really helpful in getting more information.

    I had a question about how the interview process worked for Summer Analyst Internship positions at the bulge bracket banks? Are the interview questions similar to the ones you have under the interview section? Is there anything a student could do to set themselves apart from other applicants? Lastly, do you have any sort of advise that would help during the process?

    Thanks,
    James

  27. Hi Andrew.

    Really, really extraordinary site. Loved it. And Thank you so much about all the helpful information.
    And several questions,please answer at your convenience.
    1. How do you understand the internal liquidity of IB? Its importance, benefit or anything.
    2. I am worried that there will be more kinds and amount of technical questions in the interview. Do you have any recommended reference(books, websites and any other sort of stuff) of those questions?
    3. Could you please briefly introduce the process of IPO and about the work to be done during one.
    4. Is interview going to be easier for students applying for intern positions in IB? What are the divisions in IB, their responsibilities and difference of the abilities and characteristics they want from people they hire?

    Much thanks.
    Arietta

  28. Andrew,

    Great site, really helpful. Quick question, would a 3.5 – 3.6 from a top 5 US undergrad b-school (with economics double major) get you a decent shot at BB’s or MM’s? Question applies for IB as well as ECM/DCM.

    Cheers.

    1. Ignacio, yes you should have a good shot. Obviously it is easier if you are at a target recruiting school for IBs but even if you are not you can make it happen, with a lot of networking.

        1. Well, in good markets yes, in bad job markets no. These schools are on the margin for bulge brackets. Sometimes it depends if school like this has a strong advocate on the recruiting team. Having said that, some investment banks should come on campus to all of the schools, even if they are regional (or regional offices). i.e. Wash DC based banks coming to UVa, Chicago based banks coming to UMich, SF based banks coming to UCB.

  29. Hi Andrew,
    great site! a pitty I didn’t come across it during my interview process last year. Will def. recommend it to people.
    I am seeking your advice for a potential switch in positions. I am currently a 2nd year analyst in an ECM group of a pan-european investment bank (part of a universal bank) and wish to switch to Leveraged Finance. ECM at my bank institution is different from most others as M&A and ECM each have their own corporate finance team (in which I am) and not a seperate IBD unit. However, I would really like to set foot in a LevFin group as I spent three months in our group as part of a rotation i was granted during my first year and really liked it. Our LevFin group doesn’t hire at the moment. How do you estimate my chances to move to LevFin at another bank and how would I best tailor my application? Should i try explaining in the cover letter already how my ECM group is different from others to make people aware that I am frequently building integrated models, valuations etc.? Scared I get rejected just because people see ECM on the CV…
    Any advice is greatly appreciated!
    Thanks in advance
    Alex

  30. Hi Andrew,
    I do really appreciate your efforts. It’s very nice of you to build up such a informative site! Strongly recommend to those who wanna take a close look at the IB industry.
    I have a question which is not covered in the FAQ Categories.In the case of FCFF forecasting, FCFF is calculated by EBIT(1-Tax rate) and subtracting incremental fixed capital and working capital expenditures. To estimate those three parts, the sales-based forecasting mothod is usually used. So how to do sales forecast for a specific company? Is there some analysis models available for such estimate? I found it a little confusing when using time series model because such model does not take into consideration of the forward independent events. Since I am a student, I wanna know how the investment bankers deal with such estimate. For example, the iPhone sales forecast.
    Thanks in advance
    Alan

  31. On the spot make pitch as a tea company acquiring a sugar firm.?
    & How would you value for example facebook ?
    these were asked in the last year’s interview

  32. Hi,

    I recently went for an interview for a role in the debt capital markets origination team of a reputed investment bank. The person who took my interview has asked me to make two teasers of any two companies of my choice. Each teaser should be 2 pages max. One company should be levered and the other should be unlevered. Both should have a AA rating at least. He said that it should be made from a perspective of pitching to mutual funds to invest in the bond issues of these companies. I am slightly confused as to how to go about this. What kind of information do you think my teaser should contain? Plus, are there even companies which are completely unlevered. Also, is he implying a hypothetical situation where the companies have not issuing debt, but if they would then this is what I would have to make. Or, does he want me to make teasers on companies that are actually issuing debt in the near future or now? Any kind of help would be highly appreciated. Thank you.

  34. Hi !
    I am Chartered Accountant & Company Secretary from India
    I have done Diploma in IFRS from ACCA London
    I have completed an intensive training in Investment Banking
    I want to ask “Is a Chartered Accountant and more so a person having Qualifications that i have, can break in Investment banking Merger & Acquisitions.”
    Awaiting ur Reply!!
    Kind Regards,
    Akshay Lad

  35. Hey Andrew,

    First of all I want to say this website is amazing! Really helps me out in prep for interviews.

    I have a question for the answer you posted for one of the accounting questions:

    Same question as the previous but the company finances the purchase of equipment by issuing debt rather than paying cash.

    First Year: Income Statement: No depreciation and no interest expense so no change. Cash Flow Statement: No change to net income so no change to cash flow from operations. Just like the previous question, we’ve got a $100 increase in capex so there is a $100 use of cash in cash flow from investing activities. Now, however, in our cash flows from financing section, we’ve got an increase in debt of $100 (source of cash). Net effect is no change to cash. Balance Sheet: No change to cash (asset), PP&E (asset) up $100 and debt (liability) up $100 so we balance.

    Second Year: Same depreciation and tax assumptions as previously. Let’s also assume a 10% interest rate on the debt and no debt amortization. Income Statement: Just like the previous question: $20 of depreciation but now we also have $10 of interest expense. Net result is a $18 reduction to net income ($30 x (1 – 40%)). Cash Flow Statement: Net income down $18 and depreciation up $20. No change to cash flow from investing or financing activities (if we assumed some debt amortization, we would have a use of cash in financing activities). Net effect is cash up $2. Balance Sheet: Cash (asset) up $2 and PP&E (asset) down $20 so left side of balance sheet down $18. Retained earnings (shareholders’ equity) down $18 and voila, we are balanced.

    In the second year you started paying interest and depreciation expenses. In this case you assumed a tax rate of 40% and the effect on Income Statement is ($30 x (1 – 40%)). But isn’t interest expense on debt tax deductible? How come it isn’t ($20*(1-40%))+$10? So you do not have the tax effect on the interest expense bit.

    If you could shed some light on this I would greatly appreciate it.

    Many thanks,
    Jeremy

  36. Hi Andrew,

    I am wondering if two firms have same P/E but different EV/EBITDA ratio, which one has a higher leverage? Thanks.

  37. Hi Andrew,

    First off, great site! I’ve been able to learn a lot and debunk many rumors that typically fly around a college campus about Investment Banking. As a sophomore, what internship opportunities (if any) are available to those with very little experience? Also, is it necessary to have an investment banking internship this summer in order to get the big internships next summer? Thanks a lot!

    1. Joe, it is unusual for sophomores to secure investment banking internships for the summer between sophomore and junior years. However, having a solid internship in something finance related is certainly helpful for the recruiting process that you will go through next year for the real internship recruiting. Try to find something that will give you meaningful finance experience and that will help support your story for next year as to why you want to do banking.

  38. In lieu of final requirement on our subject Banking and Financial Institution we would like to ask information regarding your Company, ICCP.

    Questionnaire Regarding Investment Houses:

    1. Do investment houses differ from an investment company and investment bank? If there is, what are your advantages over them?
    2. How are investment houses formed?
    3. What are the functions of this type of financial institutions?
    4. Are other than underwriting securities, what are the other activities you do?
    5. Do you sell stock of your own other than stocks of other Corporation?
    6. How much should a company earn to be able to sell stocks?
    7. Are you involved in quasi-banking activities?
    8. What are the goals of companies like yours?
    9. At what year does the investment house would start to earn profit?
    10. Describe the underwriting process.
    11. How does investing in this type of institution works?
    12. What are the requirements in order to be able to invest?
    13. What are the benefits we get from investing?
    14. What are the different types of groups within an investment bank?
    15. What is the typical hierarchy/ladder within an investment bank?
    16. What are the roles of these professionals included in the hierarchy? (briefly)
    17. Do you accept foreign investments? How do you deal with them?
    18. Can a small corporation form an investment bank? Or it has to be a big one?
    19. Is there a bulge bracket bank and boutique bank here in the Philippines? If there is, what type are you?
    20. What are the usual problems that the corporation encounters?
    21. Are there transactions that are hard to handle? What are these?
    22. Are there effects of global crisis in the investments from investors?
    23. Can students like us invest in this type of institutions?
    24. Why should we pick your company above others if we want to buy securities?
    25. Do you prioritize finance graduates over other applicants?

  39. Hi Andrew,
    In lieu of final requirement on our subject Banking and Financial Institution .

    Questionnaire Regarding Investment Houses:

    1. Do investment houses differ from an investment company and investment bank? If there is, what are your advantages over them?
    2. How are investment houses formed?
    3. What are the functions of this type of financial institutions?
    4. Are other than underwriting securities, what are the other activities you do?
    5. Do you sell stock of your own other than stocks of other Corporation?
    6. How much should a company earn to be able to sell stocks?
    7. Are you involved in quasi-banking activities?
    8. What are the goals of companies like yours?
    9. At what year does the investment house would start to earn profit?
    10. Describe the underwriting process.
    11. How does investing in this type of institution works?
    12. What are the requirements in order to be able to invest?
    13. What are the benefits we get from investing?
    14. What are the different types of groups within an investment bank?
    15. What is the typical hierarchy/ladder within an investment bank?
    16. What are the roles of these professionals included in the hierarchy? (briefly)
    17. Do you accept foreign investments? How do you deal with them?
    18. Can a small corporation form an investment bank? Or it has to be a big one?
    19. Is there a bulge bracket bank and boutique bank here in the Philippines? If there is, what type are you?
    20. What are the usual problems that the corporation encounters?
    21. Are there transactions that are hard to handle? What are these?
    22. Are there effects of global crisis in the investments from investors?
    23. Can students like us invest in this type of institutions?
    24. Why should we pick your company above others if we want to buy securities?
    25. Do you prioritize finance graduates over other applicants?

    1. Interest Charges would not be a part of your Free Cash flows because you are valuing the Firm and that would involve the valuation of both debt and equity.
      If you cut the part of interests you are actually targetting only the equity component in valuation since the cash given out to debtors is not included in your cash valuation.

      FCFF = NOPAT + depreciation – change in WC -change in Fixed Cap expenses

      Hope answered.

  42. Great site!!!

    Can anyone help me with the following question?

    PE company acquired 10% of a portfolio company in the form of A preferred shares. The preferred shares have a liquidation preference, cumulative dividends of 10% of purchase price. The preferred also participates with the common in a liquidity event. Portfolio company has some revenue and is in its early stages.

    The transaction date was December 1, 20×0. Post money valuation was $30 mill. PE paid $3 mill.

    At December 31, 20×0, or a month later, the PE is valuing its investment at $6 mill or 100% increase based on the current value method. The increase in value is strictly due to taking advantage of the liquidation preferences and assuming there is a liquidity event at 12/31. There is no change in EV at year end.

    The valuation is by any means aggressive and makes no sense? Can anyone help me with a technical response as to why this will not be a reasonable valuation a month later?

    Any help would be greatly appreciated.

  43. Hi Andrew,

    I am now 32 and currently working as an Internal Auditor with a Big European Bank. Previously I work with Big 4 Accounting firm for 5.5 years auditing Financial Institution clients. I am a CPA and is a fellow member of ACCA.

    I have a good knowledge of the Finance environment and economy trends especially in Asia.

    At this point, do you think i have a short to switch career to IBanking?

    Many thanks for you help and advice in advance.

    Shawn

  44. Hi,I’m writing about banks and i’ll please you to explain to me how bureaucracy takes place in banks.Thanks

  45. Dear Andrew,

    I would appreciate it very much if you can kindly help me with these accounting questions since I will be having a SuperDay interview for a BB in NYC and since I never took accounting, I struggled alot preparing for the basics of accounting.

    1. How do debt refinancing and equity refinancing affect three financial statements.
    2. If you acquire a company, how will these affect three financial statements (It is different in terms of by cash and by account I assume?
    3. You’re company A and you raise capital through bonds to buy PP&E, after two years it is determined your value of the purchased equipment is actually lower by $2MM. You sell the equipment 5 years later. Tell me what happens to statements in each of the three stages.

    Thank you so much for reading my message.

  46. Hey Andrew, quick question here. How hard is it to get an analyst job with a big bank if you go to a school that is not in the top tiers? I am going to gt an undergraduate at the University of Oklahoma but I don’t see it on any lists of target schools, so I was wondering if it would even be possible to get good internships and an analyst job from a school that isn’t “top tier”.
    Thanks

  47. Hi
    This is an owesome site.

    My question is:
    I work for an IB IN technology, I develop general software like data transsmission protocols etc not related any specific lob.
    I want to migrate to the Business side within the firm(trading, equity, front office). What are my chances/options ? In my present situation I cannot afford to do MBA. Are there any other courses(like CFA) that will boost my career to move onto the business side.

    Thanks
    Kumar

  48. Hi,

    a pretty basic question, but do you recommend switching into private equity or a hedge fund after 3 years of investment banking (that’s the standard time to switch, right)?

    1. Dil,
      The standard type to switch into PE or HF is after 2 years at the analyst (pre-MBA) level. It is much much harder to make that switch at the Associate (post-MBA) level. Usually, if an analyst is given a 3rd year then they are likely to be promoted to Associate (without the MBA) and will stay in banking for a while. I certainly do recommend making the switch for analysts after the 2 years looking to stay in finance and jump to the buy-side.

  49. Dear Andrew,

    I do have a simple request. It’s not logic to add the initial equity value of current year (before the projection) to the NPV of the projected CF in order to get the enterprise value ? I have made several research and none has mentioned it. What do you think ?

  50. Hi,
    I’d like to get some advise on following case study:

    1. A company is trying to optimize staffing levels for its branch network.
    2. The company expects 2015 Revenue and Transaction volumes to grow by 4% vs. 2014.
    3. The minimum staffing level at each branch allows is 2 FTE (1 Service, 1 Sales).

    “Assuming the company expect to reduce FTE by 400, what would make a recommendation that gives the company the best chance of achieving its Revenue and Transaction goals as well as staffing recommendations ?”

    Given the Data Set:
    The data set includes Total Unit sales and Revenue for 2013, Transactions (Services) volume, as well as Sales and Service FTE for all branches in the Network as well as an identifier for a New branch that have been open for a year or less.

    Thanks

    .

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