The balance sheet shows the company’s assets, as well as its liabilities and stockholder’s equity. If these shares should be repurchased, this reduces the number of shares available, which then increases EPS. 0
Now that you’re prepared, it’s time to start applying. The transactions approach is where you compare the company to other competitors that have recently been acquired. “The issuance of debt increases the after-tax interest expense, ultimately lowering EPS. h��VkLW�3w��`e}Q���#��.���6cXD�V���"�&�U[��M�jd+7)6ZjJ�Z�X1�UXЩA��Q*6�HX�&v�)4$��sϽ�3ПM��vr�y|�;߹C!���3n�"�cE4N�&Dп���m7Қ,'���e�����G�Z\n�����VO>���K�Y�[������� x��{��A�u_��[�4�Z$��jyUQ��[x��8�B�(?q&?0o���a�[n�"��l7$�������C�ވ{��1�P~f��,�ⰸh�\�ISѼ5�*�Y��F��x���6��c��e�F�8(w�q�N��� �}|Γ�D�L��?�A�{����;���^�A�$: +p� y��5�z���$�����|*��G�"�)�Y��i\���?ɞ��Gq�X]�R��s��xў�c����+��L3�.���dك3���}�x�|3�,5�I�Y�O*��2l�jh��%9�Yw�������+_w�)����hw�����O۟u�5��o�����'��q�گW�'�i&k��?����o��I�i���9995�_a����[_溝������sFH��WR I was able to shadow employees in several positions, including account managers and managing directors. I’ve always loved numbers and have a strong background in statistics and economics, so I’m excited to bring that to your company.”. I’m excited to gain a deep understanding of the nature of large corporate transactions and be able to use that knowledge to have a long and fulfilling career.”. This is another one of those questions that you can almost guarantee you’ll be asked during your interview. h��Wmo�F�O��-���_4�Y4m��� TGK��R&+H��K�t��:�0�xw��9IS�Z����=�s&=N8�8�$3� �� �h�1�9E�e^��c�ϑ�LZ����%���\�*Z�> '����Ӝf:7�f�P� Three weeks into it, I was pretty miserable, and I realized I had to re-evaluate my career path, which was really intimidating. What follows is a list of 400 investment banking interview questions and answers, divided into different types of “fit” questions (personal, team / leadership, “why banking,” etc. Y̾����^����Û�^������/����y(W՟�iՇ,6��X��|�{���P2O�|��7zԒ��e��*������7��[�֫�d�����^Ͷ�ME�/�DZ���i����e[}�H^��}�����ټl*�䪳�jwG ��z;�6��_���E���'y�>���g��S�P��)���j� h�bbd```b``"]��EɲDVւH��`��`��d��b3��@"�z���[@�@3("�3��� � ]@' Top Investment Banking Interview Questions (and Answers) The purpose of this Investment Banking Interview Questions and Answers is simply to help you learn about the investment banking interview topics. vF��D���k>�;Og0��s����Ӧ�([�����~p��✿����wg�g�2%m&�cV�L���L�s>�ڛyw\�e�1�g7_:��]U�&u�t{{ �z&%M��L�A�3���\f����� D�6hX�Lµ�| l�~�y�f�`r�)p:'`*�����혻������i�*/0�b�lΉ!�g�b��G�}�.�ߟ0� ��_�p|��0a`�䳣b�D�2�|��c�]���5�Q/�d5�PV����mY]^u�K�/��+���`Q\��6������v�J�+q�Ic,mpN�ŲZ|q\,����o� /�j�(1m�z_,�':��פ��^M��I�o�n~�|�S�{�B�îXT�I}�(��{(���T&z. %F����W� 2l| Lastly, the statement of cash flows illustrates the cash account on the balance sheet and accounts for the entire period.”. ), technical questions (accounting, valuation, DCF, merger models and LBO models, and brain teasers), and other topics (restructuring, distressed M&A, and discussing transactions).
Investment banking can be stressful, and the interviewer wants to know that you won’t buckle under pressure. One of the best ways to do this is through practice, practice, practice, so read on for our top investment banking interview questions and answers. The interviewer wants to know why you (and you alone) are the best candidate for the job, so don’t be modest. We were able to complete the project on time and to our client’s satisfaction.”. Be enthusiastic and keep your answer to a minute or less, ending on a positive note. To make yourself stand out from the crowd, it’s vital that you’re prepared for your interview. 3556 0 obj <>/Filter/FlateDecode/ID[<2872C04D5F24B54E8CFBDCA8F0EBA71C><75B47B64DABF404392B1F81DE0B545F4>]/Index[3543 33]/Info 3542 0 R/Length 82/Prev 690337/Root 3544 0 R/Size 3576/Type/XRef/W[1 3 1]>>stream Take this question as an opportunity to showcase your flexibility and drive. 7�̧hK*S �O_lX]Oe�ϭI�A{����郱�ax}���*Ah��E��?��Xh}�,�0�b�3��dp� �qV�Z/� �x �����3�E�¤�����#e����ŀ �l/�X�ho�W�괾�1���b|y1b���PR}T ����n�ѡ�)q;Ho~&(ai�L��+����cVLEv�L��Ra���H�H ��m�Ř�h�CZ1 a"=�� �Y������l��`�q@g��� �Q $P��OG�Rt��*�eб�N �Y��0k)�P0���H'�"��G����;Ac���2ʚ�� �� �ԫ�Z�S��b#����pA���~��?���r�ʢ��xR��M���"Ay>�y,M��l�� ����m��"1��� ��6�j�ʲ���v硸�Pƍ ����P�2�` ��� This question is about proving your resilience, so tell a compelling story using the STAR method . h�ܕL[U�ϻ}о��R��KG[ʏ�m7�&�VQ�����c�J��y��\��̐�����QԚ&{.�.d�31Fݢ1!�Q����^_��������=��9�6� � ��g���E���0f��r�^�����4�N�0ou�ByQ����Q���v���?��F���o"��n�%D����Z��[�¹��eH����:k�&��v�aِ��UhL��$,BC�i��!&�������/�pO�烞e>K�D���e�J����*� ��\��$�����L�w��i�k\�{��Ս�*���S�0UwDx�B�[R-�kX_Y�`�����w�^y�z���F��W�Kou?��R8>� W���z���hW��9�ξ�k�ҾEw�������p]K���گ~-#$��=;�g�mm^w�'p�x�8yr��MMYGb�9(\��e��$Gb�x�ru�J�����t D�*cO�s&��߭r�x�"����OЌ�Eyk ܺ��wV��(^��1�����Y���Ckw�u^����X�}���@�ӵ�l�+�W�t@%U����(������\ŨR�1�9�])ҊΆ�l�+ߍ'/�h2w1+��b�}◟c���l���R ����$+:���Fڬ��[�TM�t��P�O�*g>��r�N�d���k�Ⱦ9q� &0c�Ge�G�,�0*?$a��P�wl�tI�!�D#:�ICӱ���;iX�'iq�bD�Y���9vG��U��h䤁���>��e>�@�����v�UxNIFD�jnJ���жS��"�ӱG��Պ�I�ʎ��PB������̕*�����CR�'?�ɫC{V��Y������on|�>F[F�����������Gm�_�ڣ���|s76�����.�Da��7���� ˽��L�A�?0�3��~\?
Financial statements offer companies a way to look at different elements of their business.
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The 400 Investment Banking Interview Questions & Answers You Need to Know Last summer, I interned at a small firm, like this one, and I thoroughly enjoyed the experience. If you can answer this question well, it can be your golden ticket to an offer. %PDF-1.5 %���� Walk me through the highlights of your resume. �魧���վڮ��FkS�����4�äi�8r8����� What can you bring to this role that other applicants cannot? �� R��� "�L���j3012�d�&ќ���E�=@� � 5 '������g ��.� �C�Q�Nf�m��{@1��R��d� 1��}�D�#�s�3eSF���Ȥ�) 0v�d61?\D&3�Đb�1�2�dG�jL݁/�v(���|g��q@��q4�2�VJ� Convey your relevant skills and experiences, with a focus on past successes and how you can add measurable value to the company. Tell me about a hurdle or obstacle you overcome. endstream endobj startxref �_�$�V��)�"���2�:K��f��*ٯ�v�j�DÏ�e\֩�|�F�&r�w��^�t� �M�E�]9��a What happens to earnings per share (EPS) if a company decides to issue debt to buy back shares. endstream endobj 1014 0 obj <> endobj 1015 0 obj <>/Rotate 0/Type/Page>> endobj 1016 0 obj <>stream
Thus, it is necessary that you should be able to explain it to clients as well. Getting through that challenging time taught me to never settle and to keep pushing myself.”. The 400 Investment Banking Interview Questions Answers University of Texas – McCombs School Standard Questions : 1. ), technical questions (accounting, valuation, DCF, merger models and LBO models, and brain teasers), and other topics (restructuring, distressed M&A, and discussing transactions). While it may seem simple, the interviewer is trying to determine what drove your decision to go into investment banking—and whether their company will be a motivating environment for you. “Tell me about yourself” is a classic interview question. What can you bring to this role that other applicants cannot? ��$��j�)�~�ڨ, 9G�ӏ What is typically higher the cost of debt or the cost of equity? The interviewer wants to get a sense of your general background and experience. Separate yourself from your competitors by sharing concrete examples of your unique capabilities. While there, I created reports, supported client negotiations, and created valuations using DCF analysis and public comparables. “There are a few different ways you can value a company: the multiples approach, the transactions approach, and the DCF approach. 8�� ph7'�#��l)Yx�F�C��l��r ����&�[��I���h�)o����?�MH�捊�y���z�@-|NZg�@a8�j�9+�������c��ܳd�y��G�>�����rA�/�̗sa�OT'?2�xq6�����E�H? EPS is a key metric in fundamental analysis, and it is crucial for stock investors to understand.
In the fast-paced world of investment banking, time is money, and you’ll need to be well prepared to succeed. Then, I would arrive at the enterprise value for the business.”. I generally prefer the DCF approach, because it’s academic and data-based.”. Be prepared to answer follow-up questions about which industries you’re interested in and the valuation multiples you’d use. Show your versatility with an answer like this: “A company should consider issuing debt instead of equity when the expected return on equity is higher than the expected return on debt. If you want a career that you can take to the bank, look no further than the world of investment banking.
What would previous co-workers and managers say about you? One time, I was working on a project with a small team, and we were just putting the finishing touches on it, when the system crashed. In the world of investments, a discounted cash flow (DCF) analysis is the method used to value a project, company, or asset through the concept of the time value of money. �~j���I0 �pO�&���yDp,'%+6��\ � ߀s:��X�m�FZi\��Q.JXӂ/ /�F:����T��MKB�x ��i��B�dG�K\�E?�5!T�z2�ం��Uk�GhB:\�����u�K�ՠ��лŏ�q��m���*�4Qv�vNtT�|�(��9,"E �QA,mu���o��/�_\]��$�$[)� No matter what position you’re interviewing for, a great interview is the first step to getting the job.
In addition, this is the perfect opportunity to explain any gaps or unusual entries on your resume. 1025 0 obj <>/Filter/FlateDecode/ID[<27F7EDF80602545E262AB20EB5C8B523><871A780E7C691F46874CC4F5DD493FA8>]/Index[1013 26]/Info 1012 0 R/Length 78/Prev 1036404/Root 1014 0 R/Size 1039/Type/XRef/W[1 3 1]>>stream They should also consider it if it has taxable income that can benefit tax shields. “Two years ago, I landed my dream internship at a large investment bank. I’m aware that the position requires long hours, but I thrive on that. Luckily, I had been backing up all our data manually at the end of every day, so we only had to redo a little of the work. What is your story, walk through the decisions you have made, and how that relates to your current interest in Investment Banking.. This question allows the interviewer to assess whether you’re a match for the role, why you’re different from other candidates, and whether you’re self-aware. It’s important to be honest in your answer, as there’s a good chance the interviewer will follow up with your references to see if the descriptions match. 3575 0 obj <>stream “I’m due to graduate with a degree in finance this May, and I can’t wait to get started on my career in investment banking.
黖��8���0�,΅>2���d_N�R{�_1��a�@�ʦJF��/�[��\��i�t�`�``�P���5��]���s�*Juf#(ɀ�E��o��T.�A�ۂ:Tq�H��`�o�W���M���@����U� �٠�@i��)[@?��)���UDGr ޥQ ��=?� Your interviewer will want to ensure you know it inside and out: “The first step of a DCF model is to build a five-year forecast of the three financial statements, based on certain assumptions of how the business will perform. 1038 0 obj <>stream %%EOF 3543 0 obj <> endobj Please walk me through the three financial statements.
Next, I would calculate the terminal value through the perpetual growth rate, before discounting the forecast period and the terminal value back to the present value with a discount rate. Keep your response clear, concise, and free of too much jargon. And the DCF approach is where you discount the values of future cash flows back to the present. Furthermore, having studied abroad in Japan and spent two years in England, I’m able to connect quickly with people from diverse backgrounds.”. %%EOF
0 The income statement covers a specific period of time and displays the profitability of the company. Additionally, it may be a good choice if the firm has steady cash flows available and is able to immediately make its interest payments.”. Put their mind at ease by demonstrating that you know what the job entails and you truly love doing it. ��j�.