Equity Research Intern Interview on Monday...

What should I expect? It's a boutique shop in the southern region, and I'm curious what questions to expect. Detailed Balance sheet, income statement analysis? Anybody would be greatly appreciated. It would be a great first step for me and I'd love this job.

ps - mod note: here's a great discussion on ER interviews.

Comments (22)

Nov 24, 2009

really know how to breakdown the financial statements of the company, be familiar with terms such as net leverage, EBITDA, gross margins, free cash flow and other terms that are a part of financial statement analysis
have a general idea of what the latest news is in different industries/sectors, have an opinion about the market and economy

Nov 24, 2009

i interned in ER at a major BB last summer and only got fit questions in the firstround. in the second round, they asked what the connections were with the 3 major financial statements, which was most important, which stocks i liked, etc. i also had to pitch a stock and do a case-like interview.

Nov 25, 2009

Some shops want a quant jock who just updates spreadsheets while others want someone who can think on their own to come up with good insights. Play to your strengths. If you are an Excel or valuation guru, show them how you can add value but if you prefer to search the web, read company filings and cultivate industry/company contacts, show them that. In a perfect world, you'd learn more about the position they need to fill. The most intelligent question I would start with is "are you looking for someone to be more quantitative such as using Excel or more qualitative like channel checking and reviewing company filings/presentations?" Once you have that answer, go down the path they want.

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Nov 28, 2009

This is going to be a final round interview with the MD fwiw. Also bracelet, would you suggest just learning all of those 200 questions in the break into banking questionairre. Those q's seem to pop up alot.

Nov 29, 2009

I haven't seen the Break into Banking questionnaire, but it really does depend on the shop. Like I said, I interned at a top BB EQR department and the technicals again dealt with financial statement analysis, knowing a couple of the major metrics (PE, EV/EBITDA), and how they are used in valuing a company -- I'm talking multiples and how they are applied. Feel free to shoot me a message if you want more info.

Dec 1, 2009

Well the interview went pretty smooth. The MD asked about what stocks I followed. Walk me through the income statement and how would you do a DCF. What factors contribute to stock growth. How to calculate WACC. Walk him through the resume. Not nearly as hard hitting as I thought it would be. We just chatted for a while, like 1. 5 hours, and I think that it went pretty well. We shall see some time next week. Thanks for all the help guys.

Dec 6, 2009
FutureBanker09:

Well the interview went pretty smooth. The MD asked about what stocks I followed. Walk me through the income statement and how would you do a DCF. What factors contribute to stock growth. How to calculate WACC. Walk him through the resume. Not nearly as hard hitting as I thought it would be. We just chatted for a while, like 1. 5 hours, and I think that it went pretty well. We shall see some time next week. Thanks for all the help guys.

which one you interviewed with

Dec 6, 2009

Hehe, I'll keep that close to the visit until or if I get an offer..

Dec 6, 2009

Basic questions interviewers ask include:
Why ER?
Why do you want to work in ER coming from a LAC?
Do you invest in the stock market?
Can you pitch me any longs? Do you have any shorts?
Walk me through you resume

In your research really try to understand what you are applying for. Most of the old topics cover what you need to know ad nauseum.

Dec 6, 2009

A lot tougher than I had imagined. Asked me to pitch a consumer product (less from a company standpoint but why should she buy it), and then asked a bunch of financial and quantitative questions. I was a little surprised to be honest- thought it would be much more fit type for the first round, but it was easily 50% technicals if not more.

Dec 6, 2009
Black Jack:

A lot tougher than I had imagined. Asked me to pitch a consumer product (less from a company standpoint but why should she buy it), and then asked a bunch of financial and quantitative questions. I was a little surprised to be honest- thought it would be much more fit type for the first round, but it was easily 50% technicals if not more.

Care to expand on that? Questions like what?

Dec 6, 2009

That's understandable. It's a MM bank so they do not have as much resources as the bigger banks for training. They want to make sure all their associates are up to par on their financial acumen. Take this as a learning experience and just prep harder for the next interview.

Dec 6, 2009

-Difference and explain operating vs. financial leverage- this was the one I didn't know
-Explain working capital and why it is important
-Explain how changes in depreciation flow through the different statements
-Estimate and walk through your thought process how much it costs to drive from Anchorage Alaska from Philadephia PA
-Walk through a dcf and explain why we use unlevered fcf
-Explain the pros and cons of the different methodologies for valuing a company (Comps, precedents, dcf)

Dec 6, 2009

Somehow passed on to the analytical tests 2nd round and then got invited in for a super day. Am likely going to decline because I'm not available on the day and have since applying decided I am not incredibly enthusiastic about the position, but I am definitely shocked to have made it this far given how tough the first interview was.

Dec 6, 2009

The writing exercise could be about a stock or anything else where you'll be asked to make an argument supporting a particular perspective. Research analysts write many notes and reports that are sent to investors making the case for buying/selling a stock. You need to be able to write concise arguments supporting your perspective.

The talk with the analyst is presumably an interview where you'll be asked about any stocks you like and why, probed on your understanding of finance, and asked questions about things you have on your resume. In research, unlike IBD, fit with the person who hires you is critical. You would work directly and probably exclusively with the analyst, so it's important that he/she not only feel that you can do the job well, but that you're someone they could be happy working with.

Here are a few pieces of advice to take a look at

5 Common investment banking interview Questions That Most People Screw Up - http://bit.ly/7DWId Equity Research Associate Job Summary - http://bit.ly/19K7oM
DCF Example - Valuing a Cow http://bit.ly/cYKrU
Good luck in the interview.

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Dec 6, 2009

If you mean Morningstar, the writing exercise will be 2 parts. One is a stock recommendation (buy, sell, hold) based on some background information and basic financial statement data. The important thing is demonstrating organized logic for this first part (no right or wrong answer). I said buy while my friend said sell for the same exact question, and we both moved on to the final rounds. The data is intentionally ambiguous so that you can argue either way. Just be logical and organized. I would also recommend that you choose a particular stance and stick with it, even if you know obvious counterpoints. Don't argue for every stance or stray from your thesis, though it's acceptable to mention a few risks. The other writing activity is a creative writing exercise. For this, think outside the box. I don't remember how much time they gave me in total, but that's what I had to do.

At the interview, it will be mostly fit, but if you have a finance or accounting background, they will ask technicals. It will be about financial statements, valuation, DCF, etc.

I had to also prepare a lengthy stock pitch, but this was for FT recruiting.

Dec 6, 2009

Thanks for the extremely helpful comments. I had to write a "Corporate Profile" which is 5 sentence paragraph about a company. Besides that, I pre-wrote a stock pitch but unfortunately did not get through all of it (I thought it was pretty strong). The interview went really well so I will be waiting for the call.

Dec 6, 2009
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Dec 6, 2009