how comfortable should I be with accounting/valuation concepts?
Hi all.
I am currently heading into my fourth week as a SA in a regional M&A boutique. I'm not gonna lie I got this job through connections and was not tested in technical stuff. I have good grades (3.65 gpa) in a semi-target and have always gotten A or A- in accounting/finance classes including higher level ones like Investments and Fixed Income Sec. They've been nice enough to let me start doing valuations for some companies, and while I've obviously managed to get the DCF running, I have a hard time with fully grasping and remembering the material. I still get confused with concepts like working capital and often forget simple formulae/forget the meaning of some items in the formula. Some of the uncommon line items in firm's financial statements were truly foreign to me. I didn't even know coming into the job that you had to include ERP and country risk premium or the importance of unlevered beta to the WACC's calculation. I am slow on everything I do, including making slides or simple comps and precedents because i get nervous and want to check everything excessively.
All of this has made me wonder if I am truly fit to work in this industry/sell-side in general. Am i stressing/expecting too much out of myself or is this not for me? How comfortable should I be with accounting/valuation concepts? Should I be able to forecast stuff such as the effect of tax benefits and additional CAPEX/depreciation from a new plant, or is it normal to struggle?
Thanks a lot in advance. Open to any and all sorts of criticism.
don’t worry, you can’t be any worse than MBA associates
I know everyone talks about how much they grind on this stuff out there, but you're only a summer analyst. Keep an open mind, read up on the concepts you're struggling with, and you'll start to understand them intimately in time. I studied finance in school and when I hit the desk I still didn't understand the applications well until after I got real reps in. Happy to say I've been a top performer over 6 years in IB and PE but if you asked me how I felt during my summer analyst years I would've felt lost. Just keep putting in the effort, you're not expected to know everything all at once.