What I’d want to learn in investment banking

2 minute read

* *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:

  • 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
  • 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

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