Rajul Raman

You have been accepted to your dream university in the UK and plan to move in the next few months from India. Even though you’re mostly afloat on cloud nine, a worry whirls in your mind-does this mean you’d be broke soon? To make matters worse, you see that the British currency – the Pound keeps rising against the Indian Rupee. If only you could stop that. If only, you could lock it at a lower price today so you get more Pounds for your INR when exchanging currency in the future. Enter derivatives!

A derivative is a financial contract – between two or more parties – which derives its value from an underlying asset. This asset could be a metal like gold, silver etc., an energy resource like crude oil, an agricultural commodity such as wheat, sugar, corn or a financial asset like shares, bonds, foreign exchange, etc.

What is the Point of Derivatives?

An obvious benefit of derivatives as visible from the example above is prevention against risks. If the British Pound continues its upward trajectory against the Rupee, at least, you planned in advance and won’t need to bear the brunt of this increase. You would pay the lower price you previously agreed to.

Second, derivatives are also a remarkable tool for those who have an appetite for risk. If an individual vendor agrees to buy a farmer’s produce at a mutually decided price but when the day comes, the yield’s price is much lower elsewhere due to excess supply etc., the vendor still has to buy from the farmer. If the price is higher in the market, on the other hand, the vendor stands to gain from the derivative. But it’s a risk that they have to be willing to take. Ultimately, derivatives have been around for centuries informally and with their ability to bring structure to a speculative trade, today, they are a key instrument in the modern fund manager’s toolkit.

What’s a Derivatives Market?

It is the platform or the market where derivatives are traded. These can be Exchanges, which are organized markets where the trade takes place or Over-the-Counter (OTC), where the trade is agreed directly between the contracting parties. Exchanges include real-time stock exchanges like the BSE and NSE whereas OTC markets include banks, financial institutions and other participants like hedge funds, corporations, etc. While exchanges are more standardized, the OTC derivative market is less regulated and allows the members, known as counterparties, to independently operate the contracts.

Types of Derivatives:

Forwards:
This is the most common type of derivative where the parties agree to buy/sell an underlying asset for a particular price at a specified future date that is already decided on the date of contract. Both parties involved are committed and obliged to honour the transaction regardless of the price of that asset at the time of delivery. These are exchanged on the OTC market.

Futures:
Futures are basically forwards traded in a regulated exchange market as opposed to the OTC market. Examples include stock index futures such as the S&P 500 Index or currency futures.

Options:
An option is a derivatives contract that gives the right, but does not create an obligation, to buy or sell the underlying asset on or before a previously agreed date and price.

Swaps:
A swap is a derivative that allows two parties to exchange cash flows in the future based on a pre-decided formula. The most commonly traded types of swaps are interest rate swaps, commodity swaps, and currency swaps.

How can you understand derivatives better:

Derivatives are a complex tool in the financial market. While we have covered the building blocks of what they are in this article, if you want to actively work in this industry or learn how to trade derivatives, you need a deeper understanding.

At FMI, we have a specialized course in derivatives to help you learn how to choose the appropriate derivative contract for a range of speculative, hedging, and arbitrage strategies. You can also learn how to compare the contract specifications of futures, forwards, swaps and options. It is the ideal solution for anyone looking for a practical primer on derivative markets and contracts.

You don’t need a background in finance or business or understand what an income statement is. As the name explains, this is a financial tool that records and shows a business’ income. To calculate income, one has to know the revenue and expenses, hence, an income statement clocks in all the revenue and expenses for a set period of time to ultimately calculate a company’s profit or loss.

An income statement’s typical elements include cost of goods sold, sales or revenue, expenses, gross profits, taxes, and earning before taxes.

While this is the income statement in a nutshell, in this article, we discuss this instrument in detail, highlighting 13 lesser known facts about them. These could be useful to you if you are a student looking to understand income statements, or an emerging business. This article can also serve as a primer on income statements if you are about to appear for a job interview that requires you to know financial statements in and out. So, here goes:

1. Income statement is also called the Profit and Loss statement:

Since an income statement tells you whether you’re making a profit or loss, it is also referred to as the Profit and Loss statement.

2. The math driving an income statement is simple:

Income statements are typically based on and calculated with this simple formula:

Net Income = (Revenue + Gains) – (Expenses + Losses).

Revenue is the money coming in from the business’ primary sales; gain is the net money made from other activities, like the sale of long-term assets; expenses are the costs of running the business and losses usually occur when an asset is sold for less than what’s originally shown in a company’s books.

3. Income statements can be Single-Step or Multi-Step:

The above formula is the building block of the single-step income statement, where each section is just a single line. Multi-step statements, on the other hand, divide each section into several categories to include all details. For example, expenses can be operating and non-operating.

4. If someone asks you a business’ bottom line, you look at the income statement:

Bottom line – which is probably something you have heard often during a company’s meetings or around the fiscal year closing or seen in movies about finance – is a cooler way of referring to the net income. It is the last line in an income statement.

5. Income statement is always prepared for a period of time:

Whether monthly, quarterly, or annually, an income statement records net income over a period of time unlike a Balance Sheet, which is an accumulative statement prepared as on a particular date such as March 31st of the year.

6. Publicly-listed companies must submit income statements every quarter:

Public companies are required to furnish their financials including the income statement every quarter. Hence, they must do this four times a year. In the last quarter, companies file income statements for that quarter as well as for the year. Smaller, unlisted businesses, on the other hand, typically prepare annual income statements.

7. Income statements are useful to business owners:

Business owners can use the income statements to not only decipher their profit or loss for the reporting period but to also analyse the financial health of the business. This includes understanding where the business incurs most expenses, whether revenues are aligned to their expectations etc. Such interpretations can be used to make key business decisions such as expansion of the business, hiring more employees, increasing selling price, cutting losses etc.

8. Income statements are useful to investors:

Investors, too, can use income statements in tandem with other financial tools, to understand what might a business be doing right or wrong. Based on this financial analysis, they can decide whether or not to invest. For example, when comparing year-to-year income statements, if potential investors see that revenues are rising, they will be more tempted to invest. On the contrary, if a business is incurring heavy costs, it could raise doubts about its profitability. Income statements are often also used by investors and financial analysts to calculate the Earnings Per Share (EPS) ratio, which is Net Income after Tax / Total Number of Outstanding Shares.

9. Income statements are useful to regulators:

Since publicly-traded companies are required to present their financial statements to a regulatory authority such as the Securities and Exchange Commission in America, these can be of use to regulators as well. Authorities can use documents like income statements to spot any gaps in filing as well as to ensure that companies are abiding by all regulatory requirements.

10. Income statements are only part of the puzzle:

Income statements, alone, don’t paint the full picture of a company’s profitability and financial dexterity. As Dr. Patrick Bodalato, a senior lecturer in the accounting department at the McCombs School of Business, rightly explains in this article, “the Income Statement is only one piece in understanding the financial performance of a business. Using one financial statement without the others and other publicly available information – such as the footnotes in a financial filing – would be similar to betting before looking at one’s cards.”

11. You can use a template to create an Income statement:

Today, you can choose from among countless templates to quickly and accurately create an income statement. A common and credible template is this one by Microsoft.

12. Public income statements are readily available online:

If you want to check out, or dissect a public company’s income, you can find their income statement online. A simple Google search will reveal this statement to you in most cases. You can also find these on financial news websites such as the Wall Street Journal, Yahoo! Finance, etc. For example, here is Amazon’s income statement for the last few years. For Indian companies, you can find these on moneycontrol.com by going to the particular company’s “Financials” section.

13. You can learn how to analyse an income statement:

Lastly, an income statement will seem foreign to you if you don’t know how to read it. If you are particularly looking to work in accounting or finance, understanding and evaluating an income statement is an indispensable skill. At FMI.online, you can gain the knowledge you need to interpret financial accounts and to perform meaningful financial analysis on real companies, through this 5-hour course.

If you aspire to have a career in investment banking, chances are you’ve daydreamed about the big bucks, the power suits, the swanky lifestyle and more. At the same time, you’ve probably also mulled over the much spoken about long hours, a deficient work-life balance, a bumpy corporate ladder etc.

So, where exactly is the sweet spot? How will you decide whether you’re cut out for this profession and whether it, too, is an ideal fit for you? To know the answer to that question, you must be able to distinguish facts from hearsay. In this guide, we help you do that by discussing some key expectations and realities of working in investment banking:

Expectation: You will work ruthless hours

Reality: There’s no easy way to say this but your 9 to 5 will be stretched for sure. On average, as a new entrant in the industry, you will find yourself working 60-80 hours a week. This may fluctuate depending on the position, the firm you work for, the culture in the country where you work as well as on where your clients are. If you work for international clients, for example, you may need to start your days earlier than 9 am.

Yet, the good news is that there are many ways to manage such a demanding schedule and in fact, learn from it.

First, try and reflect on whether you struggle with time management. This exercise can help you identify the gaps and fill them early on. Also, think of wasteful activities. How much time do you spend scrolling social media or watching content that brings you negligible value? With such an analysis, you can foresee areas of improvement and be better prepared to devote the time your job demands. Second, think hard about how badly you want to work in this industry. The problem with long working hours is that you’re more likely to complain about your timings if you don’t enjoy what
you do. But if you are driven and keen to work as an investment banker, the longer hours won’t pinch you as much. Lastly, pledge to make time for an activity of your choice regardless of your work schedule. Most people are frustrated over working hours and burn out when they can’t do anything that they enjoy. So, unwaveringly carve out time (a reasonable 1-2 hours a week) for something that brings you joy and respite. In conclusion, remember that while the hours might be long, they don’t always need to be ruthless – that’s an outcome of your preparation and mindset.

Expectation: You will take home the big bucks

Reality: Investment banking is one of the highest-paid professions in the world. Right after school, you can expect to make $100,000 a year. I-bankers also receive a sizable chunk of their income in bonuses, which only inflate as you climb to more senior positions. So yes, if you’re in it for the money, you won’t be disappointed but do ensure that you’re motivated by factors more than just the money.

Expectation: You will work a boring job

Reality: While this can be subjective, we’d argue that reality is quite the opposite. Bankers are often painted with a broad brush when it comes to the nature of their job. It is assumed that the profession is cushy but boring with hardcore number-crunching from behind the screen. But that’s not the case at all.

As an investment banker, you get the opportunity to engage and work with a diverse client portfolio. Further, you will be working in a fast-paced environment, which can be thrilling. An investment banker also needs communication skills of the highest order considering that the job requires you to be a persuasive salesperson responsible for raising capital for firms, and working with senior executives. So, if you have a sharp acumen for communicating and networking, your job as an investment banker will be far from boring. The job’s analytical nature also requires one to think innovatively, solve problems, and have a curious attitude towards challenging tasks. This advances your intellect and your ability to act swiftly in difficult situations, which also does not equate to boring. Hence, you can toss this expectation out the window.

Expectation: The industry is impenetrable if you’re starting out

Reality: Yes, investment bankers are usually MBAs from top colleges with superior numerical and analytical skills. Broadly speaking, it is a competitive industry to get into. But, with the right amount of knowledge, training, practice, and a winning growth mindset, you can crack this process. First, to ace the technical skills for investment banking, you can learn all major tricks of the trade through a program designed by real-time experts such as this one by FMI exclusively on investment banking. You can also refer to our practical guide on answering the technical interview questions. Lastly, while the requirements for the perfect investment banking candidate may be boxed such as your school or GPA, you can always navigate them with a mix of high determination and effort. Here are some tips on how to do that.

In the end, you can read countless articles online about myth-busting the investment banking sector. Yet, if this is a field you’re passionate about, your focus and will to succeed can eclipse any roadblocks you encounter along the way!

An asset is something of value which is owned by a company. For companies, assets can be classified in different ways. For example, assets owned by a company can be current assets or non-current assets. Another way to classify assets are as tangible assets and intangible assets. This second way of classifying assets is the topic of today’s blog post.

Difference Between Tangible and Intangible Assets

Tangible assets are assets available in physical form. You can see and touch them. For example, commercial property or computer equipment owned by a company are tangible assets. Companies typically use tangible assets to produce their services and products. For instance, Tesla uses its manufacturing factories and equipment to build battery powered cars.
Intangible assets on the other hand are assets not present in physical form, yet they have an economic value to the company. For instance, an intangible asset could be intellectual property such as movie copyrights. The movie studio which holds the copyrights will be paid a royalty each time the movie is played, thus generating steady revenue.
As tangible and intangible assets are owned by the company, they are recorded on the company’s balance sheet.

Examples of Tangible and Intangible Assets

Tangible assets can be found in any physical asset that is owned by the organization, such as

● Furniture
● Land
● Office supplies and stationery
● Vehicles
● Equipment, and
● Machinery
Additionally, tangible assets can be further divided into two types. A current asset is expected to be used or sold for cash within this next 12 months. Examples of current assets include cash and inventory. Current assets are usually very liquid, meaning they can be sold easily. Noncurrent assets on the other hand are assets which are expected to be held by the company for more than 12 months. These assets realize their value over the longer term, and include assets such as plant, machinery and property. Noncurrent assets are illiquid, meaning it takes longer to sell them and
convert them to cash.

On the other hand, some significant examples of intangible assets include

● Copyrights
● Stocks and shares
● NFTs
● Digital assets
● Patents
● Trademarks, and
● Franchises

Accounting Tangible and Intangible Assets

Lastly, it is important to know how tangible and intangible assets are accounted for in an company’s balance sheet.
Typically tangible assets are the easiest to account for as they arrive with a fixed life span and finite value. Initially, tangible assets are recorded in the company’s balance sheet; however, as they are used up, they are recorded in the company’s income statement.
For example, when inventory is first purchased, it is recorded in the company’s balance sheet; however, as it is progressively sold off, the gains are recorded in the company’s income statement.
On the other hand, intangible assets are typically harder to account for. While some intangible assets such as patents or trademarks might have an initial purchase price that is recorded in the company’s balance sheet as a long term asset, others can be difficult to quantify.
In most cases, the cost of intangible assets is spread over a period of time as it generates revenue for the long term.

In Conclusion

For many company’s, tangible assets, intangible assets, or a combination of both are crucial for their survival and success. It is important for you to develop the skill set to accurately account for both of them.

As a student with a passion for business and/or finance, a career in either management consulting or investment banking can be alluring options. Each represents the opportunity to earn a significant salary right out of college, even with just a bachelor’s degree. Unlike other industries, like medicine and law, which require extensive academic training and considerable years of experience, a fresh graduate can choose either of these career opportunities as frequently hiring firms to decide on
their own norms and candidate requirements.

That being said, both management consulting and investment banking involve fierce competition for hiring the brightest talent. That being said, what are the pros and cons of each career opportunity, and what are the exact steps you should take to establish a career in either domain?

Management Consulting

A management consultant is a professional tasked with analyzing a company’s operations and identifying inefficiencies, followed by advice as to streamlining them to increase efficiency. A career as a management consultant requires excellent people and negotiation skills with an
inherent understanding of how various processes function.
In most cases, a fresh management consultant can earn anywhere from $65,000 and $100,000 in the first year, and having an MBA degree can push this upwards of $165,000 per year.
Management consultants typically work fewer hours per week to earn their big salaries compared to investment bankers. However, the prospect of their work-life balance is often eroded due to their frequent travels, as in most cases, few management consultants are lucky enough to exclusively
service local clients.

Investment Banking

On the other hand, investment banking as a career option represents a broader array of roles, such as capital market analysts, research associates, and valuation analysts. In addition, a finance, economics, mathematics, or accounting degree is often a prerequisite.
A career in investment banking is comparatively more demanding than management consulting, although it requires the same skills in communication, people management, negotiation, and analysis.
Most professionals who fall under the umbrella of investment banking need to typically clock in 75 to 100 hours per week as most of their tasks are fueled by in-depth research.
While the salary of these professionals tends to vary between institutions and designations, in most cases, they are north of $100,000 per year. While work-life balance is a rare commodity in the lives of investment bankers, the sizable year-end bonuses do make up for it to a great extent.

Skills Needed

Irrespective of the career you choose, whether its in investment banking or management consulting, you will need to develop strong people and management skills.
For instance, in management consulting, you will often be required to understand the complex management structures of the client, analyze them in-depth and underline the inefficiencies that plague it. While there are robust software solutions that will assist you in your role, you will need to
have accurate and decisive thinking skills to assist you in analyzing and solving the problem most effectively.
On the other hand, across most roles in investment banking, you will be regularly tasked with managing vast sums of money as well as data. Thus an intrinsic sense of discipline and quantitative skills will prove to be invaluable. Along with this, veterans know that a flair for diplomacy will take you a long way in your investment banking career.

In Conclusion

Both investment banking and management consulting are incredible career opportunities, to say the least. However, you need to work on a wider catalogue of skills if you want to establish a sustainable career in either of these fields.

As a future investment banker, you will essentially perform two functions for clients, the first is M&A advisory, and the second is underwriting. Many of you will be familiar with the concept of underwriting in the insurance industry context. However, underwriting from an investor’s perspective, the subject of today’s blog post, is an entirely different process.

What Is Underwriting?

Critically, we need to understand the term underwriting from an investment banking perspective.
In simple terms, underwriting is the process where an investment bank raises capital for an organization, either in the form of equity or debt. The organization may be a corporation, a government or government agency, or any other institution which needs funding. An investment bank will issue and sell stocks or bonds on behalf of the organization to investors, either in an Initial Public Offering (IPO) or follow-up listings. In return, the investment bank will earn a fee.

Phases of Underwriting

Now that you have an essential understanding of the underwriting process at a very high level let’s explore the various phases it involves.
Underwriting at its core is a three-phase process, with the first being planning, followed shortly by assessing the timing and demand of the issue and lastly establishing the structure of the issue.

1. Planning:
At this stage, it is crucial for the investment banker to correctly assess both the themes investors are currently investing their money in, followed by understanding the sentiment behind the same. By equipping yourself with these two crucial pieces of information, you can easily judge both the demand and the interest of the offering amongst investors.

2. Demand and Timing:
Once the planning is complete, it is critical to assess the demand and timing issues of the planned offering. Since both of these are crucial factors determining the success of the planned underwriting activity, it is essential to question;
a. current market and investor appetite for investments in the organization
b. what does the ideal investor look like
c. what is the precedent for similar deals

3. Issue Structure:
At the last stage of the process, once the planning and market research is complete, the investment bank needs to define the structure of the issue. In this regard, it will need to determine whether to position the issue domestically or internationally, whether investors represent institutions, will there be participation from retail investors, what will the final price of the issue be, and how will the sale actually occur?

Types of Underwriting

Now, as you might have rightly guessed, there are several different types of underwriting commitments an investment bank can enter into with its client based on mutual benefit. The most important and commonly used are:

1. Firm Commitment:
In this type of commitment, the investment bank guarantees the sale of the entire issue. However, if the condition is not met under any circumstances, the investment bank will take full responsibility and buy the unsold proportion of the issue.

2. Best Effort:
Best effort is the most common commitment entered into by an investment bank. Here the underwriter agrees to put their best efforts under good faith to sell the agreed-upon issue; however, they take no financial responsibility for any unsold component.

3. All or None:
Lastly is the all or none commitment wherein an investment bank will not be paid any fee unless all the issue are sold at the agreed-upon price.

In Conclusion

Underwriting is an integral part of any investment bank’s business model. Therefore, understanding this process is essential to anyone looking to forge a career in the industry.

It’s no secret that it’s critical to be fully prepared for your investment banking interview. Interviews are incredibly competitive, and the people interviewing you will be assessing you to see if you are the best fit for their organization.

Before the interview, you need to understand the job role clearly. You will be asked about your understanding of what the role entails, and being unable to answer with certainty and clarity will mean your interview is over before it begins.

You also need a deep understanding of mergers & acquisitions, accounting standards, investments, valuation, and banking. Finally, you should be clear with the fundamentals of investment banking, the roles, and the KPIs – the Fmi Investment Banking pathway is an excellent resource.

Our experts at Fmi have put together what we believe are the five most asked technical questions asked during an interview for Investment Banking interns and graduate positions. In addition, we have included a suggested method to help with your response. Before the interview, you should practice answering these questions, but don’t learn the answer word-for-word. It would be best if you come across naturally and passionate.

Answering these questions clearly and confidently will help sell yourself to the interviewer, demonstrating that you have prepared well in advance and are very motivated to learn and work.

1. How do you value a company?

Response:
Step 1 – Start your response by stating the two primary methods of valuation, which are absolute valuation (discounted cash flow valuation) and relative valuation (comparables /multiples valuation) approaches
Step 2 – Explain each method briefly by covering all the critical aspects of the methods
Step 3 – End by talking about how important it is to use these methods in conjunction with one another to evaluate a company’s actual value.

2. Please walk me through the three financial statements.

Response:
Step 1 – State all the three financial statements by explaining each with a one-liner
Step 2 – For each statement, explain what it includes, how the statement links with other
statements, and what the statement tells an analyst about the Company
Step 3 – Conclude by briefly discussing how the three financial statements are used when valuing a Company.

3. When should a company consider issuing debt instead of equity?

Response:
Step 1 – Start by explaining some crucial reasons a Company may require funding (e.g., investment
for organic growth or growth via acquisition)
Step 2 – Explain the difference between debt and equity and how they relate to the lifecycle of a
Company
Step 3 – List the advantages of issuing debt instead of equity (e.g., it is a cheaper source of funding)
Step 4 – Conclude by mentioning how too much leverage could hurt a Company

4. What makes a good financial model?

Response:
Step 1 – Start by explaining what a financial model is and what it isn’t
Step 2 – Give a couple of examples of financial models and mention the advantages of building
models. Highlighting areas that demonstrate a deep understanding of financial models such as sensitivity analysis)
Step 3 – Conclude by explaining how a financial model would be used to value a Company

5. “A company has learned that due to a new accounting rule, it can start capitalizing R&D costs instead of expensing them. “

a) What is the impact on EBITDA?
b) What is the impact on Net Income?
c) What is the impact on cash flow?
d) What is the impact on valuation?
Response:
Step 1 – Explain what R&D costs are and why are they recorded as an expense
Step 2 – Individually answer each of the sub-questions asked by giving a clear response
Step 3 – (optional) mention what the effects on the sub-questions would be without the change
Step 4 – Conclude by mentioning the advantage for a Company to continue using the same method;
it is easier to evaluate and compare current and historical figures.

Conclusion:

The key to successfully answering these technical questions is to apply the concepts you’ve learned in your studies or job experiences and test yourself.
Don’t give too much background information in the interview. Investment bankers care greatly about efficiency, and they have many people to interview. You will demonstrate a deeper understanding than speaking for too long by answering concisely.
Finally, be confident and let your passion shine through.

Investment banks are one of the most competitive places to break into in the world. Getting into Goldman Sachs is even harder than getting into an Elite University: the acceptance rate is only 4%, compared to 5.2% at Harvard University and around 20% at Cambridge.

However, with determination and the right skills you’ll be able to break into the field and jump-start your career. Here are some key steps you’ll have to follow:

STEP 1: CREATE A BANKER FRIENDLY RESUME

According to research, it takes 6 seconds for recruiters to slide through a resume before they select or reject a resume. So take your time to build a resume that will help you stand out in the crowd.

Ensure that you answer this question in your resume – “Why are you the best person for a position in investment banking?”
Your resume needs to be tailor made for bankers. Here are some tips to follow:

Double check spelling and grammar. Grammatical errors and spelling mistakes will end your part in the process with 100% certainty.
Get at least one other person to thoroughly proofread it.
Use a professional font like Times New Roman, Arial, etc. and nothing too fancy.
Ensure your CV is not too long (no more than two pages and even 1 page if you are in the US) and use bullet points to make your CV easy to scan.
Your CV is there to advertise and promote what you have achieved personally. It’s not there to describe the achievements of team’s you’ve been a part of. Mention your personal and not your team achievements.
Highlight any scholarships, awards, or academic prizes – banks like to know you are a hard worker.
Highlight any investment banking related experience very prominently. Focus on highlighting transferrable skills and anything in your career that might align with your application.
If you don’t have relevant work experience, add extracurriculars that involve relevant skills like financial modelling, investing, case competitions, etc.
And, whatever you do, do not bluff!

Use our Free IB Resume Template (insert link)

STEP 2: NETWORK, NETWORK, NETWORK

A lot of people say they want to get into investment banking but don’t put in the effort for it. Don’t just go through LinkedIn or Indeed and click a bunch of random job applications.

When you apply online, you’re only being defined by one piece of paper. And that’s why you need to network. It will help you make connections that will benefit you in the long run.

Tips to network:

Find the right people to network with in the field of Finance. This could be your family friend or an Alumni.
Network with senior employees using e-mail and have a dedicated, professional e-mail to use when you reach out to these people.
Keep your message/e-mail short and sweet. People working in Investment Banking, Asset Management etc. are busy so it’s necessary to value their time as well.
Never ever blatantly ask for an internship or a job. This would only reduce your chance of receiving help from them. So get on a phone call or a meeting, and focus on them first.
Never attach your resume in an email while networking with someone, unless they ask you for it.
While networking, be sure that you don’t keep talking. Instead, be a good listener. If you ask good questions, they’ll be all the more interested to answer them, which makes them feel good and like you better.
Always remember to say thank you, for taking their time to talk to you. And then, ask them if all is well with their job.
Some questions that you can ask the person during a conversation :

– What’s one of the best deals you’ve ever worked on?

– Who are some of the most interesting people you’ve met on the job?

– What type of training did you need for this position?

– If you had to give one piece of advice for a college freshman, what would it be?

STEP 3: UNDERSTAND THE RECRUITMENT PROCESS

The recruitment process varies slightly between institutions but for graduate jobs, it consists of these stages:

1. Initial aptitude testing: Banks have always been big on psychometric tests. Our advice? Simply practice, practice and practice. You can look up free samples of these tests online.
2. Video Interview (marked by AI, not a real person): While recording these, make sure to look straight at the webcam and don’t forget to mention the company’s name. Talk about its competitors and work culture as well.
3. Phone interview (with a real person): Do a huge amount of research on the company, its clients, etc. Have a real conversation with the person and don’t try to look desperate for a job.
4. Assessment center (with other candidates): You engage in group work, presentations etc. This can be overwhelming for some, but if you are prepared and get along well with others, you will find it enjoyable.
5. Final interview: Don’t think of it as an uphill battle where you need to actively convince someone. Think of it as a conversation you’re having with someone you’d be working with. Tell your stories, relate to them and be confident!

STEP 4: PREPARE FOR YOUR INTERVIEW BEFORE YOUR ‘SUPER DAY’

You can’t leave interviews to luck or expect to “handle it” on the day. Most bankers ask tough questions and expect perfect answers.

Learn everything you need to know and even more, practice mock interviews and read everything financial related you can get your hands on.

Tips to ace your interviews:

1. Know about the company

Go through highlights of its history and founding.
Know how it fares against competitors, and what distinguishes it amongst the others.

2. Know yourself

Know your resume backwards, forwards, in, out, upside down, right side up. Don’t even dare to stumble on this part.
Figure out something unique for the following:
– Why do you want to work for this company?
– Why do you want to be in investment banking?
Know your strengths and weaknesses. Try to come up with good answers for where you want to be in a year, 5 years, 10 years, 20 years.

3. Study

Start getting in the habit of reading financial news—Wall Street Journal and Financial Times are great places to start.
Know the basic macro-economic theories. Learn the financial statements, how they connect, and how X changes when Y changes.
Read and practice brain teasers and analytical questions.

Add link to IB interview questions

STEP 5: MASTER TECHNICAL SKILLS

The good news is that you don’t need to be an expert in technical skills from Day 1. Everything you need will be taught or learnt on the job. But you should know the basics and essentials.

However, exhibiting these skills will always give you an added advantage:

Financial Statement Analysis – Try to be knowledgeable in vertical analysis, horizontal analysis, ratio analysis, ROCE, etc.
Become awesome in Excel – Investment Banking Analysts spend hours on Excel working on financial models, valuations, making pitch books, and financial statement analysis. Make sure to become an Excel Jedi over time.

STEP 6: ACADEMICS

Getting a college degree from a top school, with a major in finance, economics, or business related is preferable at an Investment Bank.

Moreover, you could have all the Extra curriculars in the world but no bank will be interested if you miss the cut off. So you need to have a GPA minimum of 3.3 and in some banks, above 3.5.

And then, try to become an expert in investment banking. Make it a habit to read the Wall Street Journal at least once a week, the Vault Guide to Investment Banking and browse a handful of banking blogs, especially this one. (insert link to blogs)

But most of all, don’t forget the basics. Wikepedia is always there to help you!

STEP 7: INTERNSHIPS

Any internship in finance will help, even if it’s not in the investment banking department, especially from a brand name company.

But you’ll have to beef up your resume so you can write about what you achieved and put yourself in a good position to impress.

These experiences will make you stand out only if you describe them meaningfully in your resume, so make sure you learn as much as possible in whatever internship you join.

So now, you got an internship? Perfect. If not, offer to work for free. Seek out unpaid internships if you must. Most bulge bracket banks will still think it’s precious!

Finally, strategize your action plan. Work out what you are going to ‘do’ now, tomorrow and throughout your internship period to break into an investment bank.

There’s no need to resort to complicated GANT charts but get your plan sorted sooner rather than later. Internships can be a great gateway to get into Investment Banks!

THE BOTTOM LINE

The above steps are not a formula for landing a prestigious position, but a guideline of sorts to help you break into Investment Banking. Opportunity only knocks on the door of those who are prepared, and preparation takes hard work. Best of luck!

1. FINDING YOUR PURPOSE IS OVERRATED

“Find your purpose” is one of the stupid pieces of advice anyone can give. Just picture this:

At different points in life, you thought your purpose was to be a doctor, a pilot, a singer, a pianist, a director, an entrepreneur and so much more.

But in reality, there is no one single purpose in life. Nobody is born to do “one single thing”. Purposes are created, explored, and built and not hard-wired to your DNA.

When you do something good, something that interests you and drives you, it becomes your purpose. And, do you know what? After 5 years, your desires, wants, and needs change.

So, don’t stress about finding your purpose or finding your passion!

Purpose is your approach to the journey of life – It’s your ability to change, adapt, learn and grow through the process.

Your purpose, as a being, is to go through the beautiful process of life over and over and over again.

2. FIND WHAT YOU’RE UNIQUELY BEST AT

Introspect & uncover your motivations – This is where you’re able to really get to know yourself and find what you are uniquely best at.

This may be a hard thing to think about in a short stint of time, but think about this:

Would you rather end up in a career that you hate or be doing something that you’re good at for the rest of your life?

Don’t limit yourself to a narrow set of job titles, dig a bit deeper and explore new and emerging roles that match your skills.

Allow your curiosity to direct options. It will help you to explore possibilities beyond what you would’ve imagined.
Write your dream job position description and explore opportunities that will give you the chance to thrive and shine.
Take time to analyze your unique and positive qualities. This will help you identify the job/industry that’ll be both fulfilling and rewarding for you. Think about the skills and traits you’ve been most complimented on, the times you’ve stood out in school or workplace, and the situations in which you’ve been seen as a leader.
Commit to discovering what energizes and drives you. Understanding what lights up your interests and what doesn’t will help to align with a successful career path that highlights your potential.

3. BUILD YOUR CAREER SKILLS

Career Skills are skills other than the technical skills you need to perform a job.

It is the sum of your knowledge, talents, and experience.

It determines your success in decision making, influencing others, and getting the job done effectively.

1. Your communication skill is your ability to:

Choose your words
Be heard
Write well
Speak with your actions
Ask questions
Listen, engage and adapt

2. Your operating style is your ability to:

Be seen
Meet successfully
Work in teams
Negotiate
Resolve conflict
Leadership

3. Your career development skills include:

Planning your career
Self-awareness
Networking
Recognise opportunities when they arise
Realize when change is ahead to be prepared
Earning what you’re worth!

We know this is an overwhelming number of skills to be successful in your career.

But like the old saying goes “There is only one way to eat an elephant: a bite at a time”;

The best way to develop your career skills is one idea, one area at a time.

Gather ideas, analyze how they can work for you, and try them out. And when they work, integrate them into what you do!

4. FOCUS ON SOLVING PROBLEMS

True fulfilment from work comes from knowing what you do is useful to other people.

Every career can feel mundane and repetitive. But even those tasks bring fulfilment if you know that they’re needed and appreciated.

Find a work that you’re best at and is meaningful to you – A work that impacts the world in some way.

What change would you want to see in your community, or the world?

Do you want to cure a disease? Invent a new technology that saves energy? Or write a novel that inspires people?

For example, a person with a career in engineering finds it useful, fulfilling, and liberating. Knowing he will never be unemployed – precisely because what he thinks what he does is valuable and always in demand.

On the other hand, Elon Musk created SpaceX and Tesla, two companies ambitious about the big problems of space exploration and transportation.

Now, the real question is – How much effort are you willing to put?

The bigger the problem you want to solve, the more commitment you’ll need to make.

Finding a work that impacts the world sounds different to different people, identify what suits you best and work on solving that.

Ask yourself this question, “How can I use my voice, skills, or expertise to help other people?”

5. THE PARADOX OF AMBITION

First of all, what is Ambition?

a strong desire to do or achieve something
desire and determination to achieve success

Achieve something? Achieve success? In what?

So here’s the paradox: Ambition is the strong desire to be successful at something in the future. It makes you picture a tomorrow that is imaginative and is all about the result.

It brings about a vertical approach to life which forces you to live in the future, thereby, neglecting the present.

It is a forward-thinking approach that is obsessed with climbing the ladder and becoming what you’ve imagined.

Instead, try adopting the horizontal approach. It means to master the one thing that you’re doing today and grow horizontally. When you maximize the approach, you’ll eventually move to the next levels, guaranteeing a successful future.

To put it simply, instead of focusing your effort on how to reach your ambition, focus on how to best acquire the current skill level and maximize it.

Remember that success will be guaranteed as a result of mastering your abilities.

So again, what is Ambition? It’s nothing but an inspiration.

It’s great to have dreams and a vision of your future self, but don’t let it be a hurdle to your growth process. Enrich your talents every day, enjoy them, and excel at them day by day without obsessing about the future.

Micheal Jordan said “I play to win, whether during practice or a real game”

~ Today is practice day, game day is yet to come. Make today count.
Tomorrow will shape itself ~

The primary goal of an interview is to show the hiring manager what sets you apart from all the other candidates.

And that you are the right person for the job who has the right skills, a great personality, and the enthusiasm to accomplish things in your new role.

So, it’s fair enough to assume that a good interview is the determining factor in securing the position. The more you are prepared, the more confident you will be during the interview.

To help yourself out, avoid these 10 Don’ts. This will ensure that your amazing abilities and qualifications are what your interviewer remembers.

Here’s 10 things that you should never do in an Interview:

1. Don’t arrive too late or too early

It’s so simple, yet so easy to mess up, and very detrimental to your chances of landing a job. Unfortunately, however great your time management skills may be, you could always end up at a traffic, a subway breakdown or have car troubles. Therefore, you should manage your time accordingly and show up 5-10 minutes in advance. On the other hand, arriving too early, for instance 1 hour early, shows that you have too much time on your hands and may also appear desperate.

2. Don’t forget to bring copies of your Résumé

Regardless of how many times you have sent your résumé and to whom, you should always remember to bring copies of it to the interview. This is because you are likely to meet new people who have never met you or gone through your résumé. It would be better to not give the interviewer a hard time of going through the email applications to filter out your résumé again.

3. Don’t be clueless about the company

When job hunting, we often send out résumé to as many vaguely relevant job openings in hopes that something will stick. That’s fine for stage one but it’s both disrespectful and stupid to go in for an interview not knowing about the company. Make sure you’ve gone through the mission and vision statement of the organization. Companies want enthusiastic workers, so whether you’re genuinely passionate about the business or not, if you want the job, it’s worth educating yourself and showing interest.

4. Don’t speak ill of your present or former employers

No matter how bad the job was, do not badmouth a former/present employer in the interview. The interviewer will question your professionalism and assume you would do this to them if you leave the Company. Focus on what you’ve learned from your past experience instead of talking about the negatives.

5. Don’t provide false information

Explain and describe things about yourself that relate to the position you’re offered, and truly reflect your past experience. You need to present the very best version of yourself, but not a fabricated one. If you’re questioned about something that’s not your strength, be honest and let your interviewer know you are willing to learn and up skill in that area. Answer questions to the point and truthfully as possible.

6. Don’t speak over the interviewer

It is important to be a good listener as it shows that you are respectful and have strong interpersonal skills. If you are interviewing via a video platform remember that there can be slight time delay and technical glitch, so avoid rushing to answer a question in case your interviewer hasn’t finished speaking.

7. Don’t let any past rejections compromise your future opportunities

Finding a new job can be exhausting, but make sure you approach every interview as a new opportunity and learn from your past interview mistakes. If you have several interviews to attend, try taking a break between them to ensure you are at your best.

8. Don’t talk too soon about money

Avoid bringing up the issue of money too early in the discussion. This is because oftentimes if a candidate shows interest in what he’ll earn as opposed to whether he would be a good fit for the role, they’re most likely not interested in learning and helping in the growth of the company. Companies want to know what you can do for them and not someone who asks, “What’s in it for me?”

9. Don’t assume that it’s not an interview

You may be meeting a recruiter over coffee or have a casual meeting labelled as a final chat, no matter what interview stage you’re at or who you’re meeting, it is still used as a chance to assess your suitability for the potential role. So show up at your best, just as how you would for a formal interview.

10. Don’t forget to ask questions

Asking questions shows your enthusiasm and interest in the position and that you’ve been paying attention. Never say ‘No’ when asked if you have any questions, you might come off as someone who doesn’t fully understand what the company does. Prepare at least 3–4 questions that you’d like to ask the interviewer.

Finally, don’t forget to put a smile on your face while appearing for an interview- be it virtual or face-to-face.

We hope these simple but important practices help you perform your best during your next interview. Best of luck!