An Analyst / Associate's Checklist
I wanted to put together a learning plan which tracks useful links / resources to read ahead of starting my PE stint in a couple months.
Appreciate if the community can provide ideas to improve this list. Hopefully this can also help people be more prepared as they embark on their career in IB / PE.
I would categorise these into a couple of knowledge areas:
-
Financial and Accounting Concepts
-
Financial Analysis
-
Process / Execution Knowledge
__________________________________________________________
-
Financial and Accounting Concepts
-
Thorough understanding of financial and accounting concepts are basic hygiene factors that analysts and associates are expected to be equipped with
-
However, these may oftentimes be neglected / forgotten along the way as we spend 16 hours a day aligning logos
-
Read, read and read to refresh memory on various terms and concepts. Below are a few resources with useful Finance and Accounting 101 materials:
-
Corporate Finance Institute (CFI) provides a useful glossary of financial and accounting terms:
-
Macabacus is a treasure trove of information:
-
Wall Street Prep also has a couple of useful resources:
-
This one on debt is useful: https://www.wallstreetprep.com/knowledge/ultimate-guide-to-debt-leveraged-finance/
-
Breaking into Wall Street has video tutorials for those who prefer to watch and learn: https://breakingintowallstreet.com/biws/kb/
-
-
-
-
-
LBO models are the bread-and-butter of any PE analyst / associate
-
However, before diving into building an LBO model, it is important to master the art of building and structuring an operating model
-
Build a standalone model from scratch. Practice makes perfect
-
Modelling best practices:
-
Step-by-step guide to building an operating model:
-
-
Once comfortable with building a fully linked 3-statement model, it's time to learn the sexy stuff
-
-
Financial Analysis
-
This is where you put together your knowledge in financial & accounting and modelling prowess
-
Below are some analysis and useful resources:
-
-
http://sellsidehandbook.com/2018/09/23/analyzing-financial-statements-and-ratios/
-
https://corporatefinanceinstitute.com/resources/knowledge/finance/types-of-financial-analysis/
-
https://corporatefinanceinstitute.com/resources/knowledge/finance/analysis-of-financial-statements/
-
https://corporatefinanceinstitute.com/resources/knowledge/finance/financial-ratios/
-
-
IRR & MoM:
-
Other analysis
-
EVA: https://corporatefinanceinstitute.com/resources/knowledge/valuation/economic-value-added-eva/
-
ROE: https://corporatefinanceinstitute.com/resources/knowledge/finance/what-is-return-on-equity-roe/
-
ROA: https://corporatefinanceinstitute.com/resources/knowledge/finance/return-on-assets-roa-formula/
-
-
-
-
Process / Execution Knowledge
-
Execution work takes up most of our time as a junior deal team member. Apart from being a numbers monkey, we are expected to lead parts of the investment / transaction process
-
Understanding deal mechanics and how to run a process / due diligence would make you a more valuable monkey
-
Private equity investment process: https://www.streetofwalls.com/finance-training-courses/private-equity-training/private-equity-investment-process/
-
M&A sale process:
https://macabacus.com/mechanics/sale-processes -
Deal structures:
https://macabacus.com/restructuring/spin-offs
https://macabacus.com/strategies/overview -
SPA negotiations:
https://macabacus.com/mechanics/agreements -
Private vs public transactions:
https://macabacus.com/mechanics/private-vs-public
-
-
-
Industry Knowledge
-
For those joining a sector-focused team, getting up to speed with the industry would make you appear more intelligent and save you time when evaluating an opportunity / working on a transaction
-
As I will be joining a consumer-focused fund, I will start by collating knowledge pieces on the Consumer / Retail sectors
-
Sell-side handbook on Consumer & Retail: http://sellsidehandbook.com/industries/consumer-products-retail/
-
Basic overview of the consumer sector: https://www.wallstreetoasis.com/forums/basic-overview-of-the-consumer-sector
-
What you do in the Consumer Retail Group at an Investment Bank: https://www.mergersandinquisitions.com/consumer-retail-investment-banking/
-
S&P Primer on Consumer Discretionary: https://www.spglobal.com/spdji/en/documents/education/education-sector-primer-series-consumer-discretionary.pdf
-
S&P Primer on Consumer Staples: https://www.spglobal.com/spdji/en/documents/education/education-sector-primer-series-consumer-staples.pdf
-
-
Appreciate any contribution / feedback. Will continue to update and refine this post to keep track of useful resources. Thanks!
One of the best posts in the history of WSO