How Important is Accounting in PE?
Obviously all the basics of accounting are very important in PE, IFRS 16 in REPE and operating assets, there are certain treatments of all kinds of line items.
Specifically, this thread is about double-entry book keeping.
As an An1 at an M&A house, Dr this and Cr that gets thrown around a lot by those with past accounting expirience, do all M&A analysts learn this in the end and should I make a start now?
TL;DR: How important is knowing double-entry book keeping for PE and how important is accounting knowledge for PE in general?
Irrelevant beyond commercial topics
Not important
Cheers, so what other technicals are acctually important for PE, beyond the various complexities term sheets bring into modelling LBOs and operating periods?
Is it just a comprehensive understanding of corporate finance, or is there more I should be thinking about?
goes to all SOFRsoGood OnceABanker
Understand the revenue to EV to equity value bridge and be able to think through how what the business does and decisions the owners make and assumptions you accept regarding all components of entry operations capital structure and exit impact that equation
Start there and you’ll hit the ground running
Much appreciated, I'll take some time to conceptualise and be in touch if any questions.
In my experience so far, not really important at all. However, you'll notice that it's quite confusing how accounting focused some interview questions are / some prep guide are
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