Do banks already have pre-formatted - templates / models in Excel that are used for building a DCF Model, LBO, Comps, etc
Or do new analysts need to start with a new spreadsheet...and follow a particular format ?
Can these models...be easily instanstiated in a powerpoint presentation ?
Thanks
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I dont work in banking but I do know that most BB use a standard proprietary template that can easily be inserted into Powerpoint. The origianl model that we began using at my current PE shop was essentially hijacked from one of our banking advisors and then formatted to our liking.
Is modeling a pre-req for an analyst or do they pick it up during their 6 week training/on the job experience? What are the other requesite skills needed to enter a BB as an analyst?
1) Yes to the templates, both at the bulge brackets and middle market shops. But like any template, you customize it after you've started working with it. As a general rule, all analyses in Excel are pasted in to PowerPoint and Word as needed. Those embedded table/chart abominations just don't work for what we do, typically, though occasionally they will come in handy.
2) Modeling is certainly not a pre-req for an analyst anywhere, at the ground floor, though experienced lateral hires, particularly from PE, better know what they're doing. Banks hire people into first year and summer positions with all sorts of backgrounds, and very few hires, even the ones with finance degrees, have done any kind of modeling that even approaches what they will be doing on the job.
Most people first begin to pick it up in training, but really you don't know it until after you've built some models of your own. When I say that, I am completely excluding any plugging and chugging work first years or summers may do in templates. One exercise I do with my analysts who are new to modeling, when time permits, is to have them put together a model using a gutted template with all the formulas, hard coded figures, and other cell references deleted. You really don't understand those things 100% until you've put all the wiring in place and have had several rage blackouts fighting to make a balance sheet balance. Even then, though, you just understand the science behind modeling--just because you can build a race car doesn't mean you know how to drive it. Truly understanding how to use a model as a valuation and analytical tool (whether it be DCF, LBO, etc...) takes at least a couple of years of experience, usually more.
you learn modeling on the job as well as just about everything else...training, at least in my experience, was a time to get know other analysts and go over some finance/accounting - you get introduced to modeling/comps but you dont really get familiar with it until a few months into the job.
As for the original question - there are templates for comps/models that you can use but you will reformat these templates a bunch - sometimes its just easier to create your own
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