Modelling and Assumptions - when am I expected to know how to build models and make assumptions
I have an IB SA position lined up for summer 2020 at a BB and in my current internship I have been told my presentations lack numbers (which I would obviously get from making assumptions and building more complex models). No one has taught me anything, they just expect me to know it. I just finished my second year as an undergrad and have no idea what to do. Do you get taught these things at some point or am I required to teach myself - and if so what are the best ways to teach myself these skills. I don't want to be under prepared when I start my internship next summer.
I believe the first week at a BB, is a in-depth training class to learn all fundamentals of modeling and valuations.
You won't be expected to do much modeling in your summer. If you are doing something quantative, they will walk you through it.
Does this apply for stock pitches too?
I didn't have a stock pitch/intern project, so can't comment there. You'll probably have to model for that but you have a lot of time so can get help.
In your free time before your IB SA starts, pick a company and build out a model for them. Start with the 3 statements (can pull from Bamsec - cite every source with links, good practice for IB), and then project out an income statement from there for the next 5 years.
That's a good basic model, and you will have to justify your assumptions (growth rate for sales? decrease G&A at all) which you can do by looking at company statements in earnings calls/presentations, historical rates, or comps. From there you can add in an acquisition and build a pro forma company, but that's more complicated.
You won't be making models or any assumptions as an IB SA, but you will full time. The week of training is minimal for most banks, and you'll learn most of this on the job. If you have free time this year, learning how very basic models work like the one above is a good use of time as general knowledge.
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