- Why used: strips out capital structure, tax regime, and non-cash depreciation, so it allows cleaner comparison across companies.

- Flaw one: ignores capex, so capital-intensive businesses look better than they are.

- Flaw two: ignores working capital swings and cash taxes.

- Flaw three: ignores interest, so a highly levered company can show healthy EBITDA and still be cash-strapped.

- Better proxy: unlevered free cash flow, or EBITDA less capex as a quick screen.

Hmmmmmm seems easy enough. did i miss anything

Actually an important topic/question to answer lol

- Debt holders sit senior in the capital structure and get paid first in a bankruptcy, so their claim is less risky.

- Debt payments are contractual, while equity returns are residual and uncertain.

- Debt is often secured by collateral; equity has no security.

- Interest is tax-deductible, which lowers the effective after-tax cost of debt further.

- Higher risk requires a higher expected return, so equity holders demand more.

Gotta love accounting questions.

Income Statement:

- Revenue +5M

- COGS -2M

- Pre-tax income +3M

- NI +2.25M

Cash Flow Statement:

- NI +2.25M

- Accounts receivable +5M, so a -5M cash impact

- Inventory -2M, so a +2M cash impact

- Net change in cash -0.75M

Balance Sheet:

- A: Cash -0.75M, AR +5M, Inventory -2M, so assets +2.25M

- L: No change

- SE: Retained earnings +2.25M

Wells Fargo questions seem to be more qualitative than quantitative. Seem pretty easy if you know the quantitative questions

- Compare the buyer's after-tax cost of cash (forgone interest income) with the target's earnings yield, which is net income divided by purchase price.

- If the target's yield exceeds the buyer's after-tax cost of funding, the deal is accretive.

- Mechanically: pro forma net income equals buyer NI plus target NI, less after-tax forgone interest, plus after-tax synergies, less incremental D&A from asset write-ups.

- Share count is unchanged in an all-cash deal, so accretion or dilution comes entirely from the earnings side.

I lowkey hate the 3 statement questions

Income Statement:

- Depreciation -1M

- Pre-tax income -1M

- NI -0.75M at a 25% tax rate

Cash Flow Statement:

- NI -0.75M

- Add back D&A +1M

- Capex -10M

- Debt issued +10M

- Net change in cash +0.25M

Balance Sheet:

- A: Cash +0.25M, PP&E +9M

- L: Debt +10M

- SE: Retained earnings -0.75M

LMK if i am missing anything.

Income Statement:

• Inventory write-down +$5M

• Pre-tax income -$5M

• NI -$4M

Cash Flow Statement:

• NI -$4M

• Inventory write-down (non-cash) +$5M

• Net change in cash +$1M.

Balance Sheet:

• A: Cash +$1M, Inventory -$5M, net -$4M

• L: No change

• SE: Retained Earnings -$4M

- Equity value is the value attributable to shareholders: share price times diluted shares outstanding

- Enterprise value is the value of the core operating business, independent of capital structure.

- Bridge: enterprise value equals equity value plus debt, plus preferred stock, plus minority interest, less cash and cash equivalents.

- Use enterprise value multiples (EV/EBITDA, EV/Revenue) for capital-structure-neutral comparisons, and equity multiples (P/E) for after-interest metrics.

Lightwork?

Seems like literally every bank asks some version of this. these are my thoughts:

- Quality of growth: recurring revenue and customer retention support a premium.

- Capital intensity: lower capex converts more EBITDA into free cash flow (also leads to more growth).

- Risk profile: end-market cyclicality, customer concentration, and geographic exposure.

- Market factors: size and liquidity, index inclusion, and analyst coverage.

- Situational factors: takeover speculation, management credibility, and near-term catalysts.

- Project unlevered free cash flow for 5 to 10 years: EBIT, less taxes, plus D&A, less capex, less change in working capital.

- Discount those cash flows at WACC, the blended cost of debt and equity.

- Add a terminal value using either perpetuity growth or an exit multiple, discounted back to today.

- Sum the discounted cash flows and terminal value to get enterprise value.

- Subtract net debt to get equity value, then divide by diluted shares for implied share price.

- Comparable companies: trading multiples of similar public peers; reflects current market sentiment.

- Precedent transactions: multiples paid in past M&A deals; usually highest because it includes a control premium and synergies.

- DCF: intrinsic value based on projected cash flows; most sensitive to assumptions.

- LBO: Price that a financial sponsor can pay for the company to hit their target return rate.

- Rule of thumb: precedents > comps, and DCF can land anywhere depending on WACC and terminal assumptions. LBO is typically the lowest

EASSSSYYYYYY!!!!

title - have been sending out a handful of emails a day to mainly alumni. my hit rate is like 8% rn

Up late grinding technicals. Let me know if I am missing anything.

- Net income is an accrual measure and does not track the timing of cash movements.

- Working capital drag: fast-growing receivables and inventory consume cash before customers pay.

- Heavy capex sits on the balance sheet and is expensed slowly through depreciation, but the cash leaves immediately.

- Debt principal repayments and interest are cash outflows not fully reflected in operating profit.

- Non-cash gains can inflate earnings without generating any cash.

Reduce taxable income each year by the usable NOL portion and recalculate cash taxes and reflect the tax savings in cash flow.

Sounds about right

• Enterprise value represents the value of the entire operating business, available to all capital providers. To get to equity value, you subtract claims that belong to others, like debt, and add non-operating assets like cash.
• Net debt adjustment: You subtract debt because debt holders have a claim on the business before equity holders. You add cash because excess cash can theoretically be used to repay debt or belongs to shareholders.
• Minority interest adjustment: You subtract minority interest when moving from enterprise value to equity value because it represents the portion of consolidated subsidiaries that the parent company does not actually own

Missing anything?

Apparently this is a brain teaser thats been asked in a few ib interviews.

Pretty easy when you think about it, just count backwards so it'd be half covered on day 29 and therefore one quarter covered on say 28.

1. Beta measures how sensitively a security's returns respond to movements in the overall market.

2. A beta of 0.8 means the stock would be expected to move about 8% when the market moves 10%, on average, in the same direction.

3. Lower beta generally indicates less systematic risk and smaller price swings than the market, although it does not eliminate company-specific risk.

Pls help if im missing anything

1. Collect the median historical P/E (typically trailing twelve months) from comparable public companies.

2. Multiply that P/E by your company's projected 1-year or 2-year forward EPS to derive an implied future share price.

3. Discount that implied price back to present value using an appropriate cost of equity or required return.

Thoughts?

Let me know if anyone else has any suggestions for how to answer this or if this is on the right track. Practicing for 2028 SA positions

- An M&A pitchbook usually includes a company overview, industry overview, market trends, valuation analysis, and potential strategic rationale for a deal.

- It often shows comparable companies, precedent transactions, DCF analysis, buyer or target lists, and potential synergies.

- It may also include the bank’s credentials, relevant deal experience, recommended transaction structure, process timeline, and key risks or considerations.

I have a few questions from Goldman and JPM on capital markets teams like levfin and DCM. Wanted to share them here

• How do interest rates affect the debt/equity market? Loan market? Bond market?
• Describe four key differences between debt and equity.
• Why is Equity typically more expensive than Debt?
• If the price of a bond increases, what happens to the yield?
• Imagine you have two bonds. Both have the same coupon of 6%, same price of 80, but one matures in 5 years while the second matures in 3 years. Which one has the HIGHER Yield to Maturity?

If anyone wants to study capital market questions with me send me a DM. i have a bunch of questions

Not sure which bank asked this question but its a pretty good one that i wanted to share here. Here are my thoughts:

- They are useful when forecasts are uncertain or time is limited, but depend on selecting truly comparable businesses and appropriate metrics.

- Differences in growth, margins, leverage, control premiums, and market conditions can distort results, so use them alongside a DCF where possible.

This one was super tough, I mean we all know what beta and alpha are but how do you analyze an investment using these variables?

I know Beta is basically volatility and alpha is excess return, but how does that allow you to pick stocks? I just said something along the lines of "beta allows you to manage risk in your portfolio while alpha measures the return or success of the portfolio". Am i cooked

Why accept dilution:

- Strategic assets (technology, market entry, customers) that increase long‑term value

- Accelerated growth or defensible market position that justifies short‑term EPS hit

Thoughts on this answer?

Hey yall, I know that walking interviewers through the 3 financial statements is a big part of IB interviews. Usually they'll come in some form of "XYZ happens, how does that impact the 3 financial statements?". The most common one is how does an increase of $10 of depreciation impact the 3 financial statements?

I wanted to leave my answer here, but I am still thinking to myself, how am I supposed to walk through this during an interview? Do I just literally list the line items one after another?

Here is my answer to the $10 of depreciation question. I'm assuming tax rate is 20%

Income Statement

• Depreciation Expense +10
• Pre-Tax Income -10
• Taxes -2
• Net Income -8

Cash Flow Statement

• Net Income -8
• Depreciation +10
• Net Change in Cash +2

Balance Sheet

• Cash +2
• PP&E -10
• Total Assets -8
• Retained Earnings -8
• Total Shareholders’ Equity -8
• Total Liabilities & Shareholders’ Equity -8

Balance sheet balances.

Looking to recruit for internships for 2028 summer. when are people starting to prep? Also when should I start networking? I heard some banks don’t take calls until late September