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Powerpoint and Video Guides

Resources for preparing for your investment banking interview.

Accounting

Advanced Question 1 - How does a $120 purchase of an annual subscription affect the 3 statements?

Follow along with a walkthrough of a common type of accounting question you may be asked in a investment banking interview.

FIC Comps

Question - What are multiples? Why use EV/EBITDA?

What are multiples? Why are they used? What are Equity Value Multiples? What are Enterprise Value Multiples?

This video explores some basic concepts of Comps.

FIC DCF

Question - Walk me through a DCF.

“Walk me through a DCF” is one of the most fundamental (and common) questions in an investment banking interview. Follow along with Finance Interview Coach Josh Jia while he walks through the 6 most common steps.

FIC Stock Pitch

Question - Pitch me a stock.

The stock pitch is one of the most common investment banking interview questions. Although verbally presenting without a deck is very different than how you would ultimately present the work in your firm, having a clear structure to your answer is extremely important.

Finance Articles & Blog

If Company A is 30% equity, 70% debt currently, but will have a capital structure of 50% equity, 50% debt in year 5, which capital structure do you use for your DCF?

The 50/50% capital structure would be used. When calculating WACC, we assume the target capital structure, which is the capital structure the company will have in the long term. This is because the value of a company is determined by its future cash flows, and not its current cash flows, so the long-term capital structure […]

What are some key debt metrics, and why are they important?

The leverage multiple, debt / EBITDA, is a common metric comparing debt and EBITDA. EBITDA is a proxy for cashflow that can be used to pay back the debt. It also remains neutral in terms of capital structure, tax jurisdiction, and accounting policies. The interest coverage ratio is another key debt metric, and is calculated […]

What type of multiples would you use for a company in real estate?

P / FFO Per ShareP / AFFO Per ShareP / NAV Per Share FFO = Funds from Operations, which adds D&A and subtracts capital gainsAFFO = FFO + capital expenditures + rent increasesInterest is core to business, so debt is consideredNAV = Net Asset Value (Assets – Liabilities) -> Note that this is a different […]

Do private equity companies add more value to portfolio companies through their ability to do financial engineering and take on more debt, or do they add more value to their portfolio companies by enhancing their strategy? (1 min)

Enhancing strategy adds more value as the impact is far more permanent than temporarily playing around with the capital structure. Strategic shifts may last a lifetime, while capital structure changes will only affect the company until the PE firm sells the company. This is often asked by mid-market PE funds, which are typically more involved […]

Would a company with a capital lease have a higher or lower EV / EBITDA multiple compared to an operating lease? (1 min)

A company with a capital lease would have a lower EBITDA multiple. A capital lease involves paying interest and principal repayments, which are both cash flows that happen below EBITDA. EBITDA would be higher as a result, and since EBITDA is in the denominator of EV / EBITDA, the multiple would be lower. An operating […]

How can a PE firm incentivize management to stay and perform? (1 min)

A PE firm can incentivize management to stay by getting management to put up some equity for the acquisition, such that management owns 5-10% of the company. Another common method to incentivize management is with options. Options give management a percentage of the upside. For example, if management is given 7.5% of the upside and […]

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