What I’d want to learn in investment banking

Note: this is a backdated post from a framework I used in the past, edited for brevity. If you like this, you might like my newsletter:

Back when I was leaving investment banking I wanted to reflect on what I’d learnt. Partially because of that, I put together a list of topics that I thought a junior banker should aim to be familiar with during their time there. The list is neither meant to be comprehensive, nor do I think you can be an expert at all the areas after just a few years. Admittedly I’ve already forgotten some of the areas below. However, I still believe it is helpful for reference. The list is below:

Finance related

• Overview of what IB is
• Equity
  • IPO
  • Follow ons
  • Share buybacks
• Debt
  • Revolving credit
  • Term loans
  • IG
  • HY
• Convertibles
• M&A
  • Business separation types
  • Reverse Morris Trust
  • Earn outs
• Corporate finance
  • Activism
  • Credit ratings
  • ROIC
  • Capex vs opex
  • Tracking stock
  • Dividends
• Valuation
  • DCF
    • Terminal value
    • Unit consistency
  • LBO
    • IRR calculation
    • How return is generated for the PE firm
  • Trading comps
  • Transaction comps
  • Equity vs enterprise value
• Financial statements
  • Income statement
  • Balance sheet
    • Cash and liquidity, level 1/2/3
    • Net working capital
      • A/R factoring
    • Debt face vs B/S value
    • Types of shares/options
  • Cash flow statement
    • Accounting income vs Cash Flow
  • Non GAAP metrics
    • Stock based compensation
    • Amort of purchased intangibles addback
  • Credit agreements and loan documents
• Finance theory
  • Discount rates / present value
  • Beta
  • Market efficiency
  • Option valuation
  • Behavioural finance

Excel related

• Best practices
  • Sourcing and commenting
  • Input data once and referring to that input throughout
  • Consistent layout and structure, ‘matrix integrity’
  • Colour coding
  • Grouping, not hiding rows and columns
  • Aligning text rather than merging cells
  • Avoiding hardcodes in formulas where possible
  • Table of contents for calculations and figures
• Formulas
  • If it’s complicated, break it up. Simple is good
  • Vlookup vs index match
  • Choose vs offset
  • Sumproduct
  • Sumifs functions
  • Countifs functions
  • Arrays
  • Transpose
  • Volatile functions
  • Date functions
  • Cell() function
  • Indirect
  • Rank
  • Iferror
  • Rounding functions
  • Max/min
• Excel functionality
  • Data tables
    • Linked inputs instead of hardcodes
    • Cross tab data tables
  • Go To Special
    • Constants, formulas, visible
  • Paste Special
    • Paste Special links
  • Pivot table
    • Getpivotdata
  • Remove duplicates
  • Moving and sizing charts w/ cells
  • Named ranges
  • Solver and goal seek
  • External links vs drop-in tabs
    • Breaking links, changing source of links
  • Cell formatting codes
  • Tracing precedent/dependent cells
  • Error checking, formula integrity checking, stepping into formulas
  • Alt hotkey for inserting symbols
  • Fill left/right/down
  • Moving, copying, hiding sheets
  • Clearing formats
  • Navigation of excel
    • Ctrl Home and End
    • Ctrl page up/down
    • Ctrl arrow
• Macros
  • Very hidden tabs

Powerpoint

• Gridlines and guides
• Slide master
• Alignment
• Selection pane
• Grouping & ungrouping
• Picture editing
  • Compress pictures
  • Set transparent colour
  • Cropping
  • Freeform shapes
• Charts
  • Changing chart type
  • Selecting data
  • Dealing with or creating gaps in data
• Clear formatting
• Quick access toolbar
• Cleaning up stuff off the slide or notes sections

Feel free to reach out with any clarifications; email is in the sidebar.

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