Since SA recruiting is being pushed up earlier and earlier, are BB banks expecting candidates to know everything from Financial Accounting to LBO Modelling for their technical interview questions? I figured since they are interviewing candidates who aren't even halfway through their sophomore summer internships they will be more lax when it comes to technical ability.
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I would also like to know the answer to this one
Bump
Name a fundamental flaw when calculating beta over a long time horizon?
Assuming capital structure remains consistent?
It has a survivorship bias baked in as the comparison index is dynamic.
I mean if interviews were in late August or early September like last year, I'd be a few weeks into my first finance class so I don't feel like I would know that much more going in vs this year.
SA Technical Interviews (Originally Posted: 06/08/2015)
For summer analyst positions in investment banking, to what extent should one know about the following for the sake of interviews?
DCF models Merger models lbo models
I'm assuming that analysts/associates don't want an intern who's clueless.
Write know I'm memorizing the BIWS interview guide for each of these things. Am I wasting my time learning about Merger models and LBO models?
Know basic accounting, how the financial statements are tied together, etc. Memorizing the models is useless if you don't understand what they mean.
Any more input?
Before starting with an interview guide, try taking an online modeling class. I like the basic one from BIWS (they advanced one is overkill and not needed). That will get you building the models, so that when someone asks you "How do you calculate FCF?" or something more tricky like "What effects the DCF more: revenue or terminal number?", you are not just rambling off a memorized answer, but rather speaking from experience.
I would go ahead and learn all three of those models because if you ever get an interview at a top firm and miss a question, you will kick yourself. Might as well be overprepared.
SA Technical Interview (Originally Posted: 07/03/2015)
When interviewing undergrads for an SA position, would you ever ask about Fifo vs. Lifo (an accounting concept), or minority interest / investments in equity interests?
What are some examples of questions that could be asked?
In a rising price environment, all else the same, which company would have a higher EV / EBITDA multiple, a company with FIFO or LIFO accounting? Why do you add back minority interest in an EV calc? Why do you subtract investments from an EV calc?
If you majored in accounting/finance, one can expect you to know the basic accounting principles, including LIFO/FIFO and some basic balance sheet / P&L implications. But that’s definitely more technical than minorities or associates which are part of one of the most basic concepts in M&A (Enterprise Value), so definitely worth remembering. While you can BS your way around the first, it’s not so easy with the second – so you better understand the concept.
Common questions, in addition to TorontoMonkey1328 list: How does the accounting treatment differ if you own 10%, 30%, 60% or 100% of a company? How would you value minorities (book value vs. market/exit value)? The more you know, the more detailed the questions will be. Not much sense asking a history major about technical stuff as opposed to a finance grad.
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