Financial Modeling and Valuation
Financial
–
Modeling
Key Concepts
and Valuation
Financial
for Investment
–
Modeling
KeyBanking
Concepts
and Valuation
Interviews
for Investment
–
Study
KeyGuide.pdf
Banking
Concepts
Interviews
for Investment
Study Guide.pdf
Banking Interviews Study Guide.pdf
● Financial Modeling and Valuation –
Key Concepts for Investment
Banking Interviews Study Guide
Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_
Financial Modeling and Valuation
Financial
–
Modeling
Key Concepts
and Valuation
Financial
for Investment
–
Modeling
KeyBanking
Concepts
and Valuation
Interviews
for Investment
–
Study
KeyGuide.pdf
Banking
Concepts
Interviews
for Investment
Study Guide.pdf
Banking Interviews Study Guide.pdf
,Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf
Walk me through your resume (30s structure). Beginning (background) → finance spark → 3 relevant skills/experiences → why
this firm/group → future goals.
Why investment banking? Full end‑to‑end deal exposure, fast technical/transaction reps, aligns with my skills
and goals.
Three financial statements and purpose. Income Statement (period performance), Balance Sheet (snapshot: assets =
liabilities + equity), Cash Flow Statement (actual cash O/I/F).
How do the statements link? Net income → CFS top; add back non‑cash (D&A), adjust Δ working capital → CFO
→ CFI/ CFF → ending cash on BS; net income → retained earnings.
Define revenue vs net income. Revenue = sales (top line). Net income = revenue − all expenses & taxes (bottom
line).
What is working capital? Current assets − current liabilities (operational version excludes cash & short‑term
debt).
What does a positive ΔOWC mean for cash? Positive ΔOWC = use of cash (cash outflow).
What does a negative ΔOWC mean for cash? Negative ΔOWC = source of cash (cash inflow).
Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf
, Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf
If depreciation rises by $10 (25% tax), what happens? IS pre‑tax −10 → net −7.5; CFS net −7.5 + addback 10 → cash +2.5; BS cash +2.5, PP&E
−10, equity −7.5.
Customer prepays $1,000 for annual service — Immediate: Cash +1,000; Deferred revenue +1,000. Recognize monthly revenue over
accounting? 12 months.
Define EBITDA. Earnings before interest, taxes, depreciation & amortization; proxy for operating
cash flow.
Equity value vs enterprise value (EV). Equity = market cap (shares*price). EV = equity + net debt + pref + minority − cash
(value of operations).
Why pair EV with EBITDA? EV is capital‑structure neutral; EBITDA is pre‑debt operating metric.
Basic comps process. Select peers (industry/size/geo) → compute LTM/forward metrics → derive
multiples → apply medians to target metrics → implied EV/equity.
Main difference: precedents vs comps. Precedents reflect real transaction prices & control premium; comps use live
trading multiples.
Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf
Financial
–
Modeling
Key Concepts
and Valuation
Financial
for Investment
–
Modeling
KeyBanking
Concepts
and Valuation
Interviews
for Investment
–
Study
KeyGuide.pdf
Banking
Concepts
Interviews
for Investment
Study Guide.pdf
Banking Interviews Study Guide.pdf
● Financial Modeling and Valuation –
Key Concepts for Investment
Banking Interviews Study Guide
Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_
Financial Modeling and Valuation
Financial
–
Modeling
Key Concepts
and Valuation
Financial
for Investment
–
Modeling
KeyBanking
Concepts
and Valuation
Interviews
for Investment
–
Study
KeyGuide.pdf
Banking
Concepts
Interviews
for Investment
Study Guide.pdf
Banking Interviews Study Guide.pdf
,Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf
Walk me through your resume (30s structure). Beginning (background) → finance spark → 3 relevant skills/experiences → why
this firm/group → future goals.
Why investment banking? Full end‑to‑end deal exposure, fast technical/transaction reps, aligns with my skills
and goals.
Three financial statements and purpose. Income Statement (period performance), Balance Sheet (snapshot: assets =
liabilities + equity), Cash Flow Statement (actual cash O/I/F).
How do the statements link? Net income → CFS top; add back non‑cash (D&A), adjust Δ working capital → CFO
→ CFI/ CFF → ending cash on BS; net income → retained earnings.
Define revenue vs net income. Revenue = sales (top line). Net income = revenue − all expenses & taxes (bottom
line).
What is working capital? Current assets − current liabilities (operational version excludes cash & short‑term
debt).
What does a positive ΔOWC mean for cash? Positive ΔOWC = use of cash (cash outflow).
What does a negative ΔOWC mean for cash? Negative ΔOWC = source of cash (cash inflow).
Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf
, Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf
If depreciation rises by $10 (25% tax), what happens? IS pre‑tax −10 → net −7.5; CFS net −7.5 + addback 10 → cash +2.5; BS cash +2.5, PP&E
−10, equity −7.5.
Customer prepays $1,000 for annual service — Immediate: Cash +1,000; Deferred revenue +1,000. Recognize monthly revenue over
accounting? 12 months.
Define EBITDA. Earnings before interest, taxes, depreciation & amortization; proxy for operating
cash flow.
Equity value vs enterprise value (EV). Equity = market cap (shares*price). EV = equity + net debt + pref + minority − cash
(value of operations).
Why pair EV with EBITDA? EV is capital‑structure neutral; EBITDA is pre‑debt operating metric.
Basic comps process. Select peers (industry/size/geo) → compute LTM/forward metrics → derive
multiples → apply medians to target metrics → implied EV/equity.
Main difference: precedents vs comps. Precedents reflect real transaction prices & control premium; comps use live
trading multiples.
Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf Financial Modeling and Valuation_ Key Concepts for Investment Banking Interviews.pdf
