The importance of Financial Accounting

Hey PE monkeys,

I'm hopefully doing a PE internship this summer, but have not taken any accounting classes. Thus I need to brush up a bit.

I know how a 3-statement model works and its connections etc. Meaning of different line items.

However, I have the opportunity to do a class in Financial Statement Analysis or Financial Accounting. Which would you prefer I did as prep?

Is it essential for a PE analyst to actually have taken classes in Financial Accounting?

Sorry if my question is stupid.
Happy new year to ya all

 

I wasn't a business major but I'm pretty sure financial accounting would be the basis of any other classes revolving around finance/accounting (including financial statement analysis).

"Is it essential for a PE analyst to actually have taken classes in Financial Accounting?"

No, but I would highly recommend it.

 

Thank you. Your comment is well received.

It is a prerequisite to complete the course, you're correct. But I wouldn't it be more important to analyze and understand financial statements and not necessarily know the rules of producing one - which is something I feel like the financial accounting course is much about.

 

You should take both in all honesty. Sometimes it's not what you don't know that gets you in trouble, it's what you think you know but are actually wrong about. If you already know the material it should be a breeze anyways, right?

 

To agree with everyone else, financial accounting is absolutely beneficial to a career in banking. I took financial, managerial and advanced financial accounting (no, I was not an accounting major), and the combined knowledge I gained from the classes definitely helped me land my boutique IB internship, and, ultimately, my FT BB role.

While it is not essential by any means, it definitely helps to have a leg up over a lot of the competition, and by knowing financial accounting, you allow the interviewer to ask you more interesting valuation and analytical questions - strong answers to those questions will definitely help you to shine in the interview.

IBanker www.BankonBanking.com Articles, News, Advice and More Break Into Investment Banking

 

I took financial accounting and as an undergrad interested in finance (assuming you go to a school that does not have a finance major), it is easily one of the more interesting, real-world applicable courses you will take. Definitely beats out micro econ

 
PocketHandkerchief:
How did you go about taking graduate courses as an undergrad though?

No, finance and accounting majors are not offered at the undergrad level at my college. Introductory graduate courses are mostly open to undergrads as well with one caveat being that not all of these courses are accepted by the college towards your degree or major.

While Financial Accounting is important, I think finance is 95% about previous work experience and networking rather than coursework / GPA, so long as you meet the minimum thresholds there.

Edit: I've just come up with a brilliant idea. Since it may not be taken for credit, why would I register for the course and pay $4k? I can just show up and learn things without all the hassle of sitting exams.

 

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