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3 Ways You Can Use Microsoft Excel as an Investment Banker

Written by Fmi.Online

Investment bankers and financial analysts are known to crunch numbers, run analytics, be mathematics experts and so on. Yet, while these skills are not absolutely mandatory to work in the investment banking industry, they can certainly help you gain a leg up at your job. Although many courses and tools exist online to aid with becoming proficient at these skills, if there were one tool that encompasses everything else, it is Microsoft Excel.

Using Excel, you can extract, analyse and interpret key data with filters, pivot charts, data tools and a range of built in functions. You can also learn the trick to present your data in a more compelling manner, and ultimately with letting Excel do a majority of the groundwork, you can enhance your productivity. 

So, let’s understand the various benefits of Excel for an investment banker:

1. Save Time and Enhance Productivity

It’s no secret that investment banking is a high-pressure, all-consuming job. You will most likely be working at least 12 hours a day in the beginning. In such a situation, any tool that helps you save time can be highly useful. 

Excel can help you with solving complex calculations, deriving a formula for otherwise repetitive work, and filtering data to understand it better. With Excel taking care of these often mundane and time-consuming tasks, you will have the extra bandwidth and energy to focus on other key priorities. Increasing your proficiency and productivity will ultimately boost your career prospects and help you become more organised.

2. Build and Analyse Financial Models

As an investment banking professional, you can use Excel to build financial models around merger and acquisition deals, IPO pricing, and raising capital. This can aid in creating financial forecasts for any business. Excel can also further be used to make visual representations of financials through charts, pivot tables, scatterplots, and infographics. 

Next, you also also calculate any company’s valuation using Excel be it through the Discounted Cash Flow, Price to Earning Ratio methods. Financial reporting instruments such as the Profit and Loss statements can also be created fully using raw data extraction in Microsoft Excel. 

Once these models are created, as an investment banker and particularly as a financial analyst, Excel can significantly help you analyse and draw conclusions on the data present as well as explain it better to your clients.

3. Become Proficient at VBA

Visual Basic Applications or VBA is Excel’s programming language. Once you are able to use Excel swifty, learning VBA then can help automate nearly every task that needs to be done in finance and investment banking. Since it is an extremely fast programming language, it can take some time to get the hang of VBA. But once you start, it can be used to:

  • Connect to a database directly
  • Create highly sophisticated visuals 
  • Build pricers for security products such as options and bonds
  • Design VBA applications

You do not need any special training to gain proficiency in VBA. If you are a student or already a banker, a primer course in VBA can help you grow further in your career and stand out. 

How to Become a Pro at Microsoft Excel 

With this course, you will start from the bottom up such as how to leave comments, track your changes, apply formulae and then, steadily move on to building financial models, reports, and learning VBA. The only prerequisite for this course is to have access to Microsoft Excel. 

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