Do the accounting skills required for Fixed Income differ from those required for equity?
Just finishing off an entry level accounting course related specifically to ratio analysis. All of the cases I've been assigned to are only concerned with buy or sell a stock (sometimes short too), in conjunction with constructing a DDM as well
I have not yet been assigned to a case for bonds. Do the same accounting measures apply to fixed income as well? (estimating solvency and ability to generate cash long-term, measuring leverage, consistency of earnings etc etc). Of course equities are not similar to fixed income in a lot of ways. Eg companies can flake on paying dividends and just buyback shares and exercise employee options, whereas in fixed income they're legally obligated to make coupon payments.
I know that accounting is the lingua franca in AM. Would appreciate any insight here. Thank you.
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