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Thread: What is Investment Banking?

  1. #151
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    It seems that getting an investment research/equity research role is easier than the investment banking roles. But you can shift from one to another within a few years. So one strategy can be to get into the research side and then slowly work your way to the banking side.

  2. #152
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    Found a job posting related to investment banking:

    Experience : 2 – 4 Years

    Job Profile:
    * Researching/analyzing single credits and principal investment opportunities
    * Conduct relationships with appraisers, lawyers and other external advisors
    * Conduct due diligence and valuation of assets and provide inputs on pricing

    Liaise with borrowers on timing of settlementsThe ideal candidate should show the following competencies. Since the business is operationally intensive it requires an individual who is numerate, organized and with very good attention to detail. He should have experience in credit research/equity research & good in excel skills. The individual should also show Strong technical and quantitative ability. He/she should be highly quantitative, with a basic understanding or finance and derivatives. He/she needs to be well versed in Quantitative programming & MS Office applications.

    The candidate should be from a top tier engineering/management school with preferably 2-4 years relevant experience. In addition he/she should possess excellent communication skills – written and verbal. You should also have a commitment & motivation for self development and growth and have a Desire to work in a fast paced, challenging environment. Finally Ideal candidate should have a Superior analytical aptitude, problem solving abilities.

    If your list of assets includes strong communication skills (ability to converse clearly with regional and global business managers) and leadership skills this is an outstanding opportunity to enjoy the rewards of working with a world-leading business committed to supporting both your professional development and your work-life balance.

    Please initiate a discussion or share your resume at cognushrconsulting@gmail.com

  3. #153
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    Buy side vs Sell side Analyst

    Which is better - to become a buy side analyst or a sell side equity research analyst?

  4. #154
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    Buy-side analyst and sell-side analyst

    Quote Originally Posted by naveen View Post
    Which is better - to become a buy side analyst or a sell side equity research analyst?
    Naveen,

    Before you can decide which is better, you'll have to understand what is the kind of work on each side. A sell-side analyst can be a part of the Equity Research team of an Investment Bank. They regularly publish reports on the companies that they cover and try to predict a price target.

    A buy-side analyst analyzes the financials of a company to help an investment manager make good investment decisions. In a buy-side, you can be part of an Asset Management company that's managing some mutual funds.

    A sell-side firm sells research reports and makes money from brokerage. So the reports may have a bias towards more "Buy" ratings. In a buy-side, your research will affect the performance of the portfolio.

    It depends where you will enjoy the work and have greater career progression. I had a better experience on the buy-side than on the sell-side.

    Thanks,
    Sougata

  5. #155
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    Opening for an Investment Banking Analyst position

    There is a job opening for an Analyst position. The job description is:

    An opportunity with one of the bulge bracket banks. Analysts will be expected to focus on capital market execution and provide transaction support, working alongside senior professionals who will encourage you to go beyond the numbers and think creatively. Analysts will also take lead in co-ordinating with internal Syndicate, Distribution and Corporate Access teams on multiple transaction aspects to deliver the Morgan Stanley franchise for the clients.

    You can find the details below:
    http://www.vitoindia.com/vacancyDesc...es&vacCode=819

  6. #156
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    There is another investment banking job for CAs only in the same site:
    http://www.vitoindia.com/vacancyDesc...es&vacCode=826

  7. #157
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    Investment Banking: The First Step

    "Investment Banking: The First Step" a book for IB aspirants.

    Read more about the book at http://theibclub.com/the-ib-steps.html


    Author: Tapan Jindal
    Publishers: Bharat Law House

  8. #158
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    Look for a basic book on investment banking: "Investment Banking: The First Step"

    http://theibclub.com/the-ib-steps.html

  9. #159
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    How to prepare for Finance Job Interviews?

    Got this useful article from an email from WSP:

    Technical Interview Best Practices
    Before we get to accounting questions, here are some interview best practices to keep in mind when getting ready for the big day.

    Be prepared for technical questions. Many students erroneously believe that if they are not finance/business majors, then technical questions do not apply to them. On the contrary, interviewers want to be assured that students going into the field are committed to the work they’ll be doing for the next few years, especially as many finance firms will devote considerable resources to mentor and develop their new employees. One recruiter we’ve spoken to said “while we do not expect liberal arts majors to have a deep mastery of highly technical concepts, we do expect them to understand the basic accounting and finance concepts as they relate to investment banking. Someone who can’t answer basic questions like ‘walk me through a DCF’ has not sufficiently prepared for the interview, in my opinion”. Another added, “Once a knowledge gap is identified, it’s typically very difficult to reverse the direction of the interview.”

    Keep each of your answers limited to 2 minutes. Longer answers may lose an interviewer, while giving them additional ammunition to go after you with more complicated question on the same topic

    It’s ok to say “I don’t know” a few times during the interview. If interviewers think that you’re making up answers, they’ll continue probing you further, which will lead to more creative answers, which will lead to more complicated questions and a slow realization by you that interviewer knows that you don’t really know. This will be followed by uncomfortable silence. And no job offer.

    Accounting Questions to Be Prepared For

    Accounting is the language of business, so don’t underestimate the importance of accounting questions. Some are easy, some are more challenging, but of all of them allow interviewers to gauge your knowledge level without the need to ask more complex valuation/finance questions. Below we have selected most common accounting questions you should expect to see during the recruiting process.

    Why do capital expenditures increase assets (PP&E), while other cash outflows, like paying salary, taxes, etc., do not create any asset, and instead instantly create an expense on the income statement that reduces equity via retained earnings?

    Capital expenditures are capitalized because of the timing of their estimated benefits – the lemonade stand will benefit the firm for many years. The employees’ work, on the other hand, benefits the period in which the wages are generated only and should be expensed then. This is what differentiates an asset from an expense.

    Walk me through a cash flow statement.

    Start with net income, go line by line through major adjustments (depreciation, changes in working capital and deferred taxes) to arrive at cash flows from operating activities.

    Mention capital expenditures, asset sales, purchase of intangible assets, and purchase/sale of investment securities to arrive at cash flow from investing activities.
    Mention repurchase/issuance of debt and equity and paying out dividends to arrive at cash flow from financing activities.

    Adding cash flows from operations, cash flows from investments, and cash flows from financing gets you to total change of cash.

    Beginning-of-period cash balance plus change in cash allows you to arrive at end-of-period cash balance.

    What is working capital?

    Working capital is defined as current assets minus current liabilities; it tells the financial statement user how much cash is tied up in the business through items such as receivables and inventories and also how much cash is going to be needed to pay off short term obligations in the next 12 months.

    Is it possible for a company to show positive cash flows but be in grave trouble?

    Absolutely. Two examples involve unsustainable improvements in working capital (a company is selling off inventory and delaying payables), and another example involves lack of revenues going forward.in the pipeline

    How is it possible for a company to show positive net income but go bankrupt?

    Two examples include deterioration of working capital (i.e. increasing accounts receivable, lowering accounts payable), and financial shenanigans.

    I buy a piece of equipment; walk me through the impact on the 3 financial statements.

    Initially, there is no impact (income statement); cash goes down, while PP&E goes up (balance sheet), and the purchase of PP&E is a cash outflow (cash flow statement) Over the life of the asset: depreciation reduces net income (income statement); PP&E goes down by depreciation, while retained earnings go down (balance sheet); and depreciation is added back (because it is a non-cash expense that reduced net income) in the cash from operations section (cash flow statement).

    Why are increases in accounts receivable a cash reduction on the cash flow statement?

    Since our cash flow statement starts with net income, an increase in accounts receivable is an adjustment to net income to reflect the fact that the company never actually received those funds.

    How is the income statement linked to the balance sheet?

    Net income flows into retained earnings.

    What is goodwill?

    Goodwill is an asset that captures excess of the purchase price over fair market value of an acquired business.

    Let’s walk through the following example: Acquirer buys Target for $500m in cash. Target has 1 asset: PPE with book value of $100, debt of $50m, and equity of $50m = book value (A-L) of $50m.
    Acquirer records cash decline of $500 to finance acquisition
    Acquirer’s PPE increases by $100m
    Acquirer’s debt increases by $50m
    Acquirer records goodwill of $450m

    What is a deferred tax liability and why might one be created?

    Deferred tax liability is a tax expense amount reported on a company’s income statement that is not actually paid to the IRS in that time period, but is expected to be paid in the future. It arises because when a company actually pays less in taxes to the IRS than they show as an expense on their income statement in a reporting period.
    Differences in depreciation expense between book reporting (GAAP) and IRS reporting can lead to differences in income between the two, which ultimately leads to differences in tax expense reported in the financial statements and taxes payable to the IRS.

    What is a deferred tax asset and why might one be created?

    Deferred tax asset arises when a company actually pays more in taxes to the IRS than they show as an expense on their income statement in a reporting period.
    Differences in revenue recognition, expense recognition (such as warranty expense), and net operating losses (NOLs) can create deferred tax assets.

  10. #160
    MadisonBrowning
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    The BEST advice you have received to Break into Investment Banking???????

    So I'm a newbie to this forum, and I've found DaulatGuru to be an AMAZING resource - I've spent the past 2 days solid reading all of the posts here.

    Basically I'm really nervous about sitting my IB interviews, and I need all the prep I can get. I'm fine with Fin Modelling etc but its really the interviews that are really got me nervous. I've heard they can be absolutely ruthless.

    I've found a few great free resources, notably M&I (but found them a bit too 'salesy'), Management Consulted - though for MCs I still found the learnings transferrable, and Inside Investment Banking's free tutorials have been really helpful also.

    But I want to keep learning as much as I can so I'm fully prepared, so the buck can't just stop here.

    Could anyone give me any tips for my resumes & interviews, I'm getting really desperate, and I want to be fully prepared.

    What was your experience like?

    Any help would be greatly appreciated.

    Thanks,

    Madison

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