Hi all --
I've had a couple of informal interviews and a formal interview in equity research in healthcare. I know the space well but lack financial modeling expertise. I know this is a basic question, but I couldn't find something with the search option.
Can someone please explain what financial modeling exactly is and how I might be able to get a better sense of some of the basics?
| +81 | Q&A - Buyside Equity Research Analyst/PM | 29 | 6d | |
| +32 | How the heck do you learn all of this stuff? | 10 | 1d | |
| +28 | My experience on the sell side | 20 | 2w | |
| +24 | Clues in Financial Reporting Analysis | 7 | 3d | |
| +17 | Am i fairly compensated? | 9 | 4d | |
| +14 | Data Science to PM | 8 | 1w | |
| +14 | Heard they don’t model at Oppenheimer | 10 | 2w | |
| +12 | ER - Remote Jobs? | 8 | 6d | |
| Equity Research at Bank vs IG, High Yield & Leveraged Loans Research at Asset Manager | 4 | 2d | ||
| +11 | Who uses sell-side Strategists? Are they valuable? | 4 | 1w |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
pm me
You honestly should not waste time with ER interviews without knowing what financial modeling is. I don't see any upside to that strategy, but I see tons of downside. Great industry experience or a PhD / BSEE background can be a prized asset in sectors like healthcare or tech, so you could become a legitimate candidate for ER (assuming your background is as you claim).
But a total lack of financial modeling comprehension will be greatly worrying to an interviewer, so I advice you to proceed with caution as second chances are few and far between in this industry right now.
So what do you need to familiarize yourself with to get an associate job? 1) You need to know about accounting, 2) You need to know how to read a company's financial statements, and 3) You need to be able to use excel. And obviously before going into an interview for a Research position, the interviewer will expect you to have done some research about the position.
If you are truly serious about a position in ER, you should check out the CFA exam (or an MBA, but that's a whole different topic). By studying for and passing the CFA Level 1 exam, you would greatly increase your chances at landing a spot in Equity Research. But at least familiarizing yourself with the material would be an excellent idea.
Gamenumbers, i actually dont like ur answer. Could you pls improve it
The answer to the question is in gamenumber's 3rd paragraph. As to why you have to know these things: basically, to be able to A) price a company, B) see how the company price changes based on various inputs. If you can't put a price on a company, it's really tricky to say whether it's good value or not. To be able to present a thorough and convincing analytical case of a company, you have to be able to present a spreadsheet with its financial data (balance sheet, cash flow, income statement) forecasted into the future and ideally know some way of putting a value on it.
We're not talking physics models here, just a basic spreadsheet of accounting numbers, but ER places aren't keen at teaching people new tricks unless (as mentioned) you have really good industry specific knowledge.
Thanks for posting, and please keep us (me) up to date - I am from healthcare (specifically, HIT) as well and looking to eventually break into ER. If you don't mind me asking, what's your background?
Woops - I forgot to look at the date/timestamp. Sorry for the bump.
Sed molestiae placeat iure quasi qui. Sint ab voluptates explicabo asperiores laudantium quibusdam eos qui.
Aut odio velit excepturi dolorem nihil pariatur quae. Blanditiis qui ipsam occaecati maiores officiis quia occaecati. Molestiae provident voluptatibus occaecati nemo quia qui et. Saepe repellat et adipisci non sed.
Quam labore harum quisquam sapiente et at. Modi cupiditate qui molestias nemo iure molestias mollitia nesciunt. Voluptatem dicta et maiores praesentium amet dolorem. Eum temporibus praesentium hic ex illo.
Eum cumque ea aut blanditiis. Numquam enim voluptatum sequi labore laborum quod quos. Adipisci officia maxime rerum et molestiae. Aut pariatur veritatis eveniet optio odio. Facilis enim est magnam magnam tempore omnis. Dolor fugit velit esse. Eum debitis voluptatum voluptates ullam vel est suscipit facilis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...