How necessary is it to learn Financial Modeling before recruiting during undergrad?

totally unnecessary. no interviewer will ask you to go through financial modeling in depth (how to structure a model) in an interview. it's usually very high level and they grind you more on the concepts of a DCF or LBO than ask you about the mechanics of modeling. i guess some people think its good to write that you have financial modeling experience in your resume but i think every interviewer no this is BS.

focus on networking, get the job and you will learn all the modeling on the job.

Thanks. That is the exact answer I was hoping for actually.. I think its absurd my fellow classmates do crap like this in their free time, when they should smile and dial and get contacts with this time. They don't get it I guess, but hey whatever more for me.

I beg to differ...

It's a plus if you know how to model, not just run through the concepts. I was asked during interviews how my modeling skills were and it was definitely better to have some experience. Learning how to model complex LBOs on your free time is likely overkill, but if you have no life, it wouldn't be a bad thing to do.

I had zero modeling knowledge going into my ER internship. When I started I was really just thrown into it and my Sr. Analyst spent a day teaching me. I don't think its hard once you learn what's going on and maybe jot a couple quick notes down. Practicing on the job is hands down the best way to learn and retain in my opinion.

The difference comes out when you start working where others can see right away whether you are good or not. If you are, it can bring you a long way. Especially if you are an intern. I definately think it's worth investing some time learning the basics at the very least

I knew how to do 3-statement modeling by the end of my sophomore summer (did no-name boutique M&A), I am at a PE fund, right now. I got the offer in ~November, so I did not participate in investment banking recruitment. I think you should invest as much time as you have into learning about corporate finance, it can only help.

Right, I mean I have all the study guides at home with me, it is just impossible to find time. Especially this summer which is when I wanted to get it done. I mean do the people that do these things not have internships or classes or anything? I am up at 6:00, and won't get home until 11 or 12. Weekends are tough too, I just don't understand how people have time for this.

I may have repeated this a thousand times so here comes #1001. Shift the focus from "Do I need A to get B", and try asking "Do I really understand what B is about?" instead. If you find that B is a lot about A, and A can be learned outside the job, then learn A, not because it's a condition to get a job, but because it WILL BE THE JOB. Succeeding in IB requires a level of commitment that you are NOT signaling by not learning modeling. Remember you are not doing this just for the sake of having a Goldman Sachs business card with your name. It's too fucking work for you not to excel at it.

Try to balance it and see if it is possible to spend an hour or two everyday than trying to pull multiple hours at once.

Thanks, ill see what I can do

SenhorFinance dropping the knowledge. Could not be said better. So yes OP, learning modeling will certainly help you and show commitment in interviews. If you're a very capable modeler by the start of recruiting, and can spin it to sound even more advanced in an interview, then you're golden.

It depends on your undergrad. If you go to Williams or Dartmouth nobody expects you to know finance or accounting. Different if you are at Stern or Wharton.

Networking and developing proficiency in basic financial modeling are not mutually exclusive

It's not necessary but it helps when you're talking to people (no one is going to grill you) when you've learned some and it's also helpful for your own sake for two reasons: 1. To see if you will actually like banking 2. To be more prepared for your internship.

It's probably overkill to spend hours and hours upon to master it (like the above poster compared it to playing piano). But there is a learning curve, that if you already have spent roughly 10 total hours working on, that can be of real value to you.

Question regarding modeling myself:

Has anyone looked at the Operational/M&A/LBO models on macabacus? I've started looking at those a little and trying to build my own off from those, but they seem ridiculously complex and superfluous. Are these models legitimate in the sense that they are what's used in IB in the regular course of business?

I don't think it matters and when I interviewed potential analysts it was a nonfactor. It does not take long to figure out how to model and you won't be assigned modeling, or at least anything important, assignments out of the gate, regardless of your knowledge. So by the time you are you should have practiced in the office setting and gotten up to speed. If you have free time by all means learning is great. But I would not recommend making other scarifies to focus on learning modeling.

That said, in my opinion people without work experience put a great importance on "modeling" but really its just a tool that one easily learns, quickly. Developing a greater understanding of finance, strategy, market dynamics, business concepts, etc. is far more important.

Here's the truth. If you are paying to learn financial modelling (dropping several thousand dollars on a course) and do not have a job lined up you have just wasted your money.

When you interview you want to know all the answers to technical questions, investment banking fit questions, research fit questions, sales and trading fit questions etc. Once you have landed the job you can now consider a financial modeling course.

When you join an investment bank they will have templates for you already, for example you will not be "building from scratch" a bunch of financial models or analysis from day one. Anyone who tells you that you will walk into the door and be asked to build a three statement model from scratch on day one is simply trying to steal your money and make you pay for some obscure financial modeling course.

If you believe your skills are weak in financial modeling, lets say you broke in as a Biology major then it may be worth it for you. So you need to analyze what your skills are after you have the job offer in your hand. If you somehow landed an investment banking job with zero finance courses, then yes it would be wise to know how to build a basic three statement model before you go into training because you want to be even keel with your peers.

TL;DR: Only learn this skill if you feel you are not good at financial modeling (no heavy finance experience) and already have a job lined up. Taking advanced financial modeling courses with zero offers or interviews is akin to painting your ferrari that currently has no wheels or motor. You're better off networking see advice here: //www.wallstreetoasis.com/forums/laid-off-today-seeking-advice-and-help

Friend of mine was asked in an interview for an internship in, "What assumptions from the balance sheet are needed to complete a DCF model?"

My friend (who had already graduated) said (and this kinda annoyed me), "How am I supposed to know that crap? Maybe if I came from Wharton, but we don't learn that [at our school]". Needless to say, he didn't get the internship.

Conversely, I'm a Junior and I can answer that question because I learned it outside of school. Will it be a deal-breaker for me as it was for him? I don't know (I'm also trying to get into ER and he was looking at PE).

So my point is this: I like giving anecdotes. At least this one was relevant.