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Accounting Estimates: Recognizing Assets

In our previous articles, we discussed the impact that accounting estimates have on the income statement. However, it is not just the income statement that is subject to estimates, the balance sheet is as well. Balance sheet items will affect efficiency ratios (asset turnover), solvency ratios (debt to equity), and

What Group Should You Choose in Investment Banking?

We get asked a lot of questions about choosing a group when new to investment banking - usually in two streams. 1) I don't know what group I should go into 2) How do I get into Goldman Sachs TMT? So first thing is beggars can't be choosers. Without having an investment banking

Responsible Investing Primer

What is Responsible Investing? Responsible investing ("RI") integrates environmental, social and governance (ESG) factors into investment processes and decision making. Responsible investing is currently estimated at over $20 trillion in AUM or around a quarter of all professionally managed assets around the world (Forbes). In the social media age, stakeholders both shareholders

Correlation, Covariance and Linear Regression

Statistical inference helps us understand the data, and hypothesis testing helps us understand if the data is different from another set of data. These techniques are important when exploring data sets, as they help us guide our analysis. However, these techniques are not enough. Most times, we are looking to

Introduction to High Yield Bonds

What Are High Yield Bonds? What separates investment grade and sub-investment grade? The answer is a designated credit rating by the mainstream credit rating agencies - Moody's, S&P and Fitch. Moody's is widely accepted to be the gold standard for rating agencies. The rating agencies will assign scores for corporates based on

Accounting Estimates: Recognizing Expenses

In the last article, we discussed revenue recognition, and its implication on financial statement analysis. We will follow up that discussion by going over the other half of the income statement: expenses. We will go over what the accounting standards are and what discretion management has, and how they could

Accounting Estimates: Recognizing Revenue

We discussed financial statements and the importance of financial statement analysis in our previous articles.  We will follow those discussions with a more detailed look at each statement. Public financial statements are governed by accounting standards, usually under IFRS or US GAAP, and audited by an external firm for fairness.

How to Answer “Why Our Company”?

This is one of the most common questions in investment banking interviews, and it is more important than you think. Candidates may do great in the behavioral questions (you know what investment bankers do and are prepared to make sacrifices) and technical questions before being surprised that they do not pick

Interview with an Oil & Gas Investment Banker: Part III

Interview conducted with an oil and gas investment banking associate in the Global Energy and Power/Natural Resources Group of a major investment bank This interview ended up being excessive so we have cut it into 3 components to avoid reader exhaustion Read Part I Read Part II Do you need an oil and gas