DOCSLIB.ORG

Copyrighted Material

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Copyrighted Material Index A general business overview, 153 Accounting, introduction to, 56–58 management’s discussion and financial, 56 analysis (MD&A), 153–154 generally accepted accounting Apple Inc. principles (GAAP), 57–58 Income statement example, 68 managerial, 57 balance sheet example, 81–83 tax, 56–57 statement of cash flows example, Accounts payable (AP), 73–74 86–87 days, 168–169 Asset managers, 106–107 Accounts receivable (AR), 70 Asset management, 7 days, 168 Asset purchase, 301–302 Accretion/dilution analysis, 311–319 Assets, 69–72 impact of P/E ratios on, 318–319 current, 70–71 Accrual basis of accounting, 59–60 accounts receivable (AR), 70 Accrued expenses, 74 cash and equivalents, 70 Acquisition comps, 211–214 inventories, 70 selecting, 211–212 prepaid expenses, 71 criteria for, 211–212 noncurrent (long-term), 71–72 sources for, 211 intangible, 72 spreading and normalizing, 212–214 property, plant, and equipment Activity ratios, 167–169 (PP&E), 71–72 accounts payable days, 168–169 Associates, 24–25, 39–40, 45 accounts receivable days, 168 compensation, 45 days sales of inventory, 168 exit opportunities for, 46–47 inventory turnover, 168 Amortization, 314–315 B Analysis at various prices (AVP), Balance sheet, 69–83, 90–99, 275–281, 320–321 336–340 Analysts, 23–24,COPYRIGHTED 39, 44 assets, MATERIAL 69–72 compensation, 44 current, 70–71 exit opportunities for, 46 noncurrent (long-term), 71–72 Annual report (SEC Schedule 10-K), consolidation and noncontrolling 149–150, 152–155 interest, 81 cover, 152–153 deferred tax assets and liabilities, exhibits, list of, 154–155 78–81 financial statements, 154 example, 79–81 footnotes to, 154 example (Apple Inc.), 81–83 411 bindex.indd 411 3/4/2013 7:21:27 PM 412 INDEX Balance sheet (continued ) valuing, 131–134 leases, 77–78 bond prices and interest rates, capital, 77–78 relationship between, 132 operating, 77 zero-coupon bonds, 132–134 liabilities, 72–74 yields, 136–138 current, 73–74 to call, 138 noncurrent, 74 current, 138 net working capital, 76 to maturity, 137–138 pro forma, 336–338 to worst, 138 balancing, 338 Borrowers, 103 cash, 337 Boutique investment banks, 17–20, 41 deferred financing fees, 337 and bulge bracket banks, differences example, 339–340 between, 41, 399–400 existing debt, 338 “bulge bracket lite,” 19–20 goodwill, 337–338 industry focus, 18–19 new debt, 338 middle market focus, 19 new equity, 338 product focus, 18 projecting in integrated cash flow Bulge bracket investment banks, 16–17, model, 275–281 40–41 shareholders’ equity, 74–75 and boutique banks, differences additional paid-in capital, 75 between, 41, 399–400 common or preferred stock, par differences among, 40 value of, 75 Buyer’s list, 305 retained earnings, 75 treasury stock, 75 C Bank of America Merrill Lynch, 17 Calendarization, 171–173 Bankruptcy, 10–11 Call options, valuing, 141–144 Banks and specialty finance companies, Black-Scholes formula, 143–144 104–105 Capital asset pricing model (CAPM), Barclays, 17 224–226 Bear Stearns, 17, 23 beta, 226–228 Beta, 226–228 estimating, 226–227 estimating, 226–227 relevering, 228 relevering, 228 unlevering, 227–228 unlevering, 227–228 equity risk premium (ERP), 225–226 Bids, in M&A risk-free rate, 225 closing the deal, 308–309 Capital raisings, 9–10 first round, 306–307 Capital structure, 126–128 second (final) round, 307–308 and the cost of capital in the real Black-Scholes formula, 143–144 world, 127–128 Bonds, valuing, 130–139 Modigliani-Miller theorem, 126 duration, 138–139 Cash basis of accounting, 58–59 interest rates, 134–136 Cash and equivalents, 70 default risk and credit ratings, Cash flows 135–136 forecasting, 115–116 term structure of, 134 present and future value of, 111–114 bindex.indd 412 3/4/2013 7:21:27 PM Index 413 future value, 113–114 investing, 115–126 perpetuity, present value of, capital structure, 126–128 112–113 cash flows, forecasting, 115–116 perpetuity with growth, present funds, sources of, 121–126 value of, 113 internal rate of return (IRR) present value, 112 analysis, 116–117, 118 statement of, 83–87, 90–99, net present value (NPV) analysis, 282–285 117, 119–121 example, 86 returning money to investors, from financing activities, 85–86 128–130 from investing activities, 85 Cost of capital, 127–128 from operating activities, 84–85 Cost of equity, 224–228 projecting in integrated cash flow beta, estimating, 226–228 model, 282–285 capital asset pricing model (CAPM), Chinese Wall, 6–7 224–226 Circularity, 258–261 Cost of goods sold (COGS), 61 Citigroup, 17 Cover letters, 367–368 Comparable company methodology, common mistakes, 368 194–210 Credit ratings, 135–136 analyzing and applying multiples, Credit ratios, 165–167 205–210 debt to capitalization, 167 key drivers, 206–209 debt to equity, 167 valuing subject company, interest coverage, 166 209–210 leverage, 165–166 calculating valuation multiples, Credit statistics, analyzing, 344–345 202–205 debt to capitalization ratio, 344 additional financial metrics, 205 interest coverage ratio, 344–345 fully diluted shares, 203–205 leverage ratios, 344 total enterprise value, 202–203 Credit Suisse, 17 normalizing the financials, 201 Current report (SEC Schedule 8-K), 150 selecting comps, 195–199 criteria for, 195–198 D number of, 198–199 Data room, 307–308 sources for, 198 Days sales of inventory, 168 spreading comps, 199–201 Deal comps, See Acquisition comps required information, 200 Deal teams, 28–29 tips for, 201 Debt, convertible, 204–205 Compensation, 44–45, 401–402 Debt, long-term, 73, 74 Confidential Information Memorandum Debt to capitalization ratio, 167, 344 (CIM), 306 Debt capital markets (DCM), 21 Consolidation and noncontrolling Debt to equity ratio, 167 interest, 81 Debt schedule, projecting in integrated Contribution analysis, 319–320 cash flow model, 285–289 Control premium, 216–217 Deferred tax assets and liabilities, Corporate finance, introduction to, 78–81 114–130 example, 79–81 bindex.indd 413 3/4/2013 7:21:27 PM 414 INDEX Depreciation and amortization expense, E 63–64, 315–317 Earnings before taxes (EBT) or pre-tax Deutsche Bank, 17 income, 66 Directors, See senior vice president Earnings per share, 67 (SVP)/director EBIT margin (operating income Discount rate and opportunity cost of margin), 162 capital, 110–111 EBITDA, 64, 162, 222–223 estimating 110–111 margin, 162 expected inflation rate, 111 Enterprise value, 182–189 real risk-free rate, 111 examples, 188–189 risk premium, 111 formula, 185–188 Discounted cash flow (DCF) analysis, cash, 187 219–238 debt, 186 conclusions, 237 market value of equity (MVE), probability weighted DCF, 186 237–238 preferred stock, 187 discounting cash flows and terminal Equity capital markets (ECM), 21 value, 232–235 Equity research, 5–7 combining stub period and Equity risk premium (ERP), 225–226 mid-year discounting, 234 Equity value, estimating, 240–241 discount factor, 234 per share price, 241 mid-year discounting, 233 Exit opportunities, 45–47 stub period, 233 summing to estimate enterprise F value, 235 Fairness opinion, 309 free cash flow, forecasting, 219–221 Finance, corporate. See Corporate unlevered, 220–221 finance sensitivity analysis, running, Finance, principles of, 107–114 235–237 cash flows, present and future value terminal value, forecasting, of, 111–114 221–223 future value, 113–114 perpetuity growth methodology, perpetuity, present value of, 221–222 112–113 terminal multiple methodology, perpetuity with growth, present 222–223 value of, 113 weighted average cost of capital present value, 112 (WACC), estimating, 223–232 discount rate and opportunity cost of capital structure, assuming, 231 capital, 110–111 cost of debt, 229–232 estimating 110–111 cost of equity, 224–228, 232 risk and reward, 109–110 cost of preferred, 230–231 time value of money, 108–109 Dividend discount model, 140–141 Financial accounting, 56 with constant growth, 140–141 Financial Accounting Standards Board Due diligence, 304–305 (FASB), 57 Duration, 138–139 Financial markets, 105 bindex.indd 414 3/4/2013 7:21:27 PM Index 415 Financial modeling, 247–292 Financial system, 102–107 integrated cash flow model, 248–292 borrowers, 103 building, 262–292 financial institutions, 103–107 circularity, 258–261 asset managers, 106–107 formatting the model, 256–258 banks and specialty finance modeling best practices, 249–258 companies, 104–105 Financial statement analysis, 147–178 financial markets, 105 financial information, sources of, insurance companies and pension 148–158 funds, 106 equity research reports, 157–158 investment banks, 107 miscellaneous, 158 savers, 102 SEC filings, 148–156 Football field valuation summary, subscription-based data sources, 238–239 156–157 Fundraising, 9–10 “normalizing” the financials, Funds 174–177 sources of, in corporate investing, adjustments, sources for finding, 121–126 175–176 common stock, 124–125 income statement, adjusting, debt, 121–124 176–177 preferred stock, 125–126 non-recurring items, 174 sources of, in LBOs, 335–336 ratio analysis, 159–169 cash from balance sheet, 33 activity ratios, 167–169 new debt, 335–336 credit ratios, 165–167 equity contribution from PE fund growth statistics, 160–161 (sponsor’s equity), 336 profitability ratios (margins), uses of, in LBOs, 334–335 161–163 existing debt to be refinanced, return ratios, 163–165 334–335 time periods, analyzing, 169–173 purchase price, 334 calendarization, 171–173 transaction fees, 334 fiscal quarter, 169–170 fiscal year, 169 G last twelve months (LTM) Generally accepted accounting 170–171 principles (GAAP), 57–58 year-to-date (YTD), 170 Goldman Sachs, 17, 23, 40 Financial statements Grade point average (GPA), 351, 364 integrating, 88–99 Gross profit, 61–62, 161–162 examples, 89–99 margin, 161–162 impacts on, 88 Growth statistics, 160–161 projecting in integrated cash flow compound annual growth rate model, 270–289 (CAGR), 161 balance sheet, 275–281 one-period growth rate, 160 cash flow statement, 282–285 debt schedule, 285–289 H income statement, 271–275 Headhunters, 374–375 bindex.indd 415 3/4/2013 7:21:27 PM 416 INDEX I manual vs.
Load more

Recommended publications
  • Business Strategy
    Corporate Summary Executive Messages Business Strategy Summary of the Daiwa Securities Group’s Medium-Term Management Plan Business “Passion for the Best” 2014 14 Strategy Interview with the CEO 16 Message from the COO 20 Management Systems At a Glance 22 Retail Division 24 Wholesale Division 26 Asset Management Division 28 Investment Division 30 IT/Think Tank Division 31 Financial Section Other Information Daiwa Securities Group Annual Report 2013 13 Summary of the Daiwa Securities Group’s Medium-Term Management Plan “Passion for the Best” 2014 Daiwa Securities Group Management Vision • To become Asia’s leading financial services firm possessing and leveraging a solid business platform in Japan • Establish a robust business structure capable of securing profit even under stressful economic conditions Daiwa Securities Group Basic Management Policy • Achieve sustainable growth by linking Japan and the growth of Asia Outline of Medium-Term Management Plan • Establish a robust business structure immune to the external environment and aspire to achieve sound growth based on a new growth strategy “Passion for the Best” 2014 Milestones FY2012 Turnaround FY2013 Growth Management Targets Consolidated Ordinary Income [Initial FY] Return to Profitability Basic Policy I: Return to profitability by pursuing management efficiencies (Focus of execution in the first fiscal year) R Steadily implement the plan to reduce SG&A R Realize greater organizational efficiencies by shifting personnel from the middle and back offices to the front divisions Basic
    [Show full text]
  • The Technical Interview Guide to Investment Banking
    k Trim Size: 7in x 10in Pignataro ffirs.tex V1 - 01/10/2017 5:21pm Pagei The Technical Interview Guide to Investment Banking k k k k Trim Size: 7in x 10in Pignataro ffirs.tex V1 - 01/10/2017 5:21pm Page ii The Wiley Finance series contains books written specifically for finance and investment professionals as well as sophisticated individual investors and their financial advisors. Book topics range from portfolio management to e-commerce, risk management, finan- cial engineering, valuation and financial instrument analysis, as well as much more. For a list of available titles, visit our Web site at www.WileyFinance.com. Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Australia and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers’ professional and personal knowledge and understanding. k k k k Trim Size: 7in x 10in Pignataro ffirs.tex V1 - 01/10/2017 5:21pm Page iii The Technical Interview Guide to Investment Banking PAUL PIGNATARO k k k k Trim Size: 7in x 10in Pignataro ffirs.tex V1 - 01/10/2017 5:21pm Page iv Copyright © 2017 by Paul Pignataro. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750–8400, fax (978) 646–8600, or on the Web at www.copyright.com.
    [Show full text]
  • FINANCIAL MODELING, INTERVIEW PREP, and TECHNICAL SKILLS DEVELOPMENT 1 Bridging the Gap: Financial Modeling, Interview Prep, and Technical Skills Development
    BRIDGING THE GAP: FINANCIAL MODELING, INTERVIEW PREP, AND TECHNICAL SKILLS DEVELOPMENT 1 Bridging the Gap: Financial Modeling, Interview Prep, and Technical Skills Development Training programs for post-secondary students seeking roles in business and corporate finance EXPERTS IN FINANCIAL MODELING TRAINING [email protected] · +1 416 583 1802 WWW.MARQUEEGROUP.CA BRIDGING THE GAP: FINANCIAL MODELING, INTERVIEW PREP, AND TECHNICAL SKILLS DEVELOPMENT 2 About The Marquee Group Our Clients We believe that spreadsheet- based financial models are For several years, Marquee has led the annual the most important tools in training programs at numerous investment modern finance. Using our banks, pension funds and commercial banks. framework and discipline We have taught thousands of professionals all to develop best-in-class, across Canada, the United States, the United user-friendly models, we Kingdom, Mexico, Australia and China. help students and finance The following table highlights some of our professionals turn their models major clients: into powerful communication tools that lead to better, more UNIVERSITIES effective decisions. Acadia University Saint Mary’s University Brandeis University U of T - Rotman The Marquee Group is the only Dalhousie - Rowe UBC dedicated financial modeling firm HEC Waterloo in Canada. For over a decade, our McGill - Desautels Western - Ivey business has delivered what has McMaster - DeGroote York - Schulich become the industry standard Queen’s - Smith in financial modeling, training, SOCIETIES FINANCIAL consulting
    [Show full text]
  • Equities Business Overview PRESENTATION to HYPERLEDGER CAPITAL MARKETS SIG JUNE 17TH 2020
    Equities Business Overview PRESENTATION TO HYPERLEDGER CAPITAL MARKETS SIG JUNE 17TH 2020 Presented by: Junji Katto Sateesh Vidhyanadhan 1 Agenda 1. Holistic View of Capital Markets 2. What are equities 3. Equities Trade Lifecycle 4. Current Equities Trading and Settlement Process 5. Challenges in Capital Markets 6. Key problems to solve 7. Blockchain Potential Benefits 8. Sample implementations 2 Holistic view of Capital Markets A capital market is a financial market in which long-term debt or equity-backed securities are bought and sold. Capital market refers to a broad spectrum of tradeable assets that includes the stock market as well as other venues for trading different financial products. The stock market allows investors and banking institutions to trade stocks, either publicly or privately. Stocks are financial instruments that represent partial ownership of a company. These documents are used extensively by companies as a means of raising capital. Within the stock market itself are primary and secondary markets that trade among banks underwriting stock and public investors trading stock, respectively. The Sales & Trading Division of the Investment Bank connects Investment Banks are intermediaries between buyers and sellers of stocks, bonds, commodities and other the providers of funding (investors-in the form of assets. Salespeople and traders sit on a trading floor. both debt and equities investors) and the users The trading floor is split out by asset class. Any large of funding (corporates, financial institutions, investment banks has following roles hedge funds, supranational, municipals and Front office Sales & Trading : governments). When talking about investment 1. Sales Traders – Client orders and contract management banking, it is important to know the difference 2.
    [Show full text]
  • The Wall Street Program
    THE VALUATION TRAINING PROGRAM Corporate Finance M&A Private Equity Sales and Trading Hedge Funds Equity Research Asset Management The definitive Job Search Strategy and Training Program for careers in Investment Banking, Corporate Finance, Public Finance, M&A, Private Equity, Equity Research, Sales & Trading, Hedge Funds, Asset Management, Corporate Law and anywhere else on Wall Street! THE WALL STREET PROGRAM The Wall Street Program’s Valuation Training Program will give you the skills and knowledge to build financial models in Excel to value a company. The purpose of the Valuation Training Program is to help you understand the bigger picture behind valuation and also all of the ins and outs of actually doing valuation modeling in Excel. The Training Program takes you step-by-step through the process of building a Comparable Company Analysis, Precedent Transactions Analysis, Discounted Cash Flow (DCF) Analysis, Leveraged Buy-Out Analysis and a M&A Accretion/Dilution Analysis. Our goal is to teach you valuation as if you were working at a Wall Street firm. We want you to learn everything and gain as much experience as you would gain if you worked on Wall Street. With this type of experience, you will be better prepared to successfully go through any interview process and receive job offers. Congratulations on taking the vital first step for landing a dream job on Wall Street. At The Wall Street Program, our team is committed to helping you achieve your personal best, whether it is in the area of job search strategy, cover letter and resume preparation, interviewing or financial modeling knowledge.
    [Show full text]
  • Why Are Ipos in the ICU?
    Why are IPOs in the ICU? By David Weild and Edward Kim Why are IPOs in the ICU? 1 Contents Page Introduction 2 History of the IPO market 3 Decline of the IPO market 7 Effect on capital markets 12 Conclusion 15 The Perfect Storm 16 About the authors 19 About Grant Thornton LLP 20 Grant Thornton offices 21 © Grant Thornton LLP. All rights reserved. Why are IPOs in the ICU? 2 Introduction Over the last several years, the IPO market in the United States has practically disappeared. While conventional wisdom may say the U.S. IPO market is going through a cyclical downturn, exacerbated by the recent credit crisis, many are beginning to share a view of a new and much darker reality: The market for underwritten IPOs, given its current structure, is closed to most (80 percent) of the companies that need it. In this white paper, Grant Thornton LLP explores the history of the IPO market, what led us to this crisis, and our ideas for a new, opt-in stock market capable of reinvigorating the U.S. IPO market. © Grant Thornton LLP. All rights reserved. Why are IPOs in the ICU? 3 History of the IPO market Let’s take a look at the IPO market that preceded the Dot Com Bubble of 1996 (see Exhibit 1). The “By killing the IPO goose Pre-Bubble period traded about the same number of IPOs as the Dot Com Bubble period.1 Yet, the that laid the golden egg of U.S. economic growth, Pre-Bubble period had over three times more IPOs than the Post-Bubble period.
    [Show full text]
  • Global Corporate and Investment Banking: an Agenda for Change
    Global Corporate & Investment Banking Practice Global Corporate and Investment Banking: An Agenda for Change Global Corporate and Investment Banking: An Agenda for Change Foreword 1 Day of Reckoning? New Regulation and Its Impact 3 On Capital Markets Businesses Europe: Beyond the Crisis, New Challenges 31 And Opportunities Asia: The Future of Corporate and 37 Investment Banking Out of the Shadows: Central Clearing of 56 Repurchase Agreements Winning in Flow: Scale Is Everything 83 Foreword 1 Foreword our years after the financial crisis, the agenda for change within the F global corporate and investment banking (CIB) industry remains signifi- cant. In this compendium, we bring together five articles published over the past year that serve as a ready reckoner for the CIB agenda—not just for capital markets and banking, but also for critical components of the bank- ing infrastructure that supports funding. Day of Reckoning explores the impact of new regulation on capital markets businesses. After-tax return on equity for these businesses is likely to fall from 20 percent pre-regulation to 7 percent, absent any mitigating actions by banks. We suggest strategies that banks can pursue to manage the impact of regulation on their capital markets businesses and to maintain an accept- able level of profitability. We examine portfolio optimization, model and data quality improvements, financial efficiency and operational enhancements. In Europe: Beyond the Crisis, New Challenges and Opportunities, we review the impact of new regulation on corporate banking businesses. De- spite significant reductions in credit costs, profits remain well below 2007 peaks in these businesses. Many of the mitigation strategies for capital markets businesses are relevant to restoring profitability to corporate bank- ing.
    [Show full text]
  • Investment Banking Compliance
    © Practising Law Institute Chapter 49 Investment Banking Compliance Russell D. Sacks* Partner, Shearman & Sterling LLP Richard B. Alsop Partner, Shearman & Sterling LLP [Chapter 49 is current as of June 15, 2018.] § 49:1 Information § 49:1.1 Insider Trading [A] Generally [B] Legal Framework [B][1] Securities Exchange Act § 10(b) [B][2] Insider Trading and Securities Fraud Enforcement Act § 49:1.2 Information Barriers [A] Generally [B] Effective Information Barriers: Minimum Elements [B][1] Written Policies and Procedures [B][2] Wall-Crossing Procedures [B][3] Restricted List and Watch List [B][4] Surveillance of Trading Activity * The authors gratefully acknowledge the contributions to this chapter of former co-author and former partner Robert Evans III, and the contribu- tions of Shearman & Sterling LLP associate Steven R. Blau for his work coordinating the chapter. (Broker-Dealer Reg., Rel. #14, 9/18) 49–1 © Practising Law Institute BROKER-DEALER REGULATION [B][5] Physical and Electronic Separation [B][6] Training and Education Programs [B][7] Employee Attestation § 49:1.3 Sales Practices; Testing-the-Waters and Gun-Jumping § 49:1.4 2012 OCIE Report on the Use of Material Nonpublic Information by Broker-Dealers [A] Sources of MNPI [B] Control Structure [B][1] Issues Identified [B][2] Control Room [B][3] “Above the Wall” Designations [B][4] Materiality Determinations [B][5] Oversight of Non-Transactional Sources of MNPI [B][6] Compliance with Oral Confidentiality Agreements [B][7] Personal Trading Problems [C] Access Controls [C][1]
    [Show full text]
  • Regulatory Notice 15-31 Attachment A
    Page 1 of 31 Regulatory Notice 15-31 New and Amended Rule Text New language is underlined; deletions are in brackets. * * * * * Text of New FINRA Rule * * * * * 2242. Debt Research Analysts and Debt Research Reports (a) Definitions For purposes of this Rule, the following terms shall be defined as provided. (1) “Debt research analyst” means an associated person who is primarily responsible for, and any associated person who reports directly or indirectly to a debt research analyst in connection with, the preparation of the substance of a debt research report, whether or not any such person has the job title of “research analyst.” (2) “Debt research analyst account” means any account in which a debt research analyst or member of the debt research analyst’s household has a financial interest, or over which such analyst has discretion or control. This term shall not include an investment company registered under the Investment Company Act over which the debt research analyst or a member of the debt research analyst’s household has discretion or control, provided that the debt research analyst or member of a debt research analyst’s household has no financial interest in such investment company, other than a performance or Page 2 of 31 management fee. The term also shall not include a “blind trust” account that is controlled by a person other than the debt research analyst or member of the debt research analyst’s household where neither the debt research analyst nor a member of the debt research analyst’s household knows of the account’s investments or investment transactions.
    [Show full text]
  • Overview of the Banking and Investment Industry a Document Created by Maddie Judge, Mbiol Biology, Pembroke College, University of Oxford
    Overview of the Banking and Investment Industry A document created by Maddie Judge, MBiol Biology, Pembroke College, University of Oxford I have recently completed the first year of my undergraduate degree in Biology at Pembroke College. I cannot claim to have any experience in finance or investment, but I was eager to find out about the sector and explore opportunities for learning. This document is aimed at people considering a career in financial services. Its purpose is to demystify the industry, to explain the different areas within it and the skills required, to clarify some of the terminology and to recommend resources for further research. Investment banks and other providers of financial services providers vary in their structures and the services they offer. The attached diagram gives an overview of the key areas and their functions. It explains the differences between front office (revenue generating), middle office (supporting front office, often with regulatory roles) and back office (general functions common to all firms). Most Oxford graduates tend to work in front office, although some end up in middle and back office, often in IT or in legal and accounting roles. Throughout the document I have highlighted complex financial terms in blue and in the Key Terms section below, I explain this financial jargon used in banking in plain English. For terms that are not included use the online financial dictionary, Investopedia’s dictionary is a useful tool. 1 Front Office - Customer-facing function, responsible for revenue generation Investment Banking/Corporate Finance - Markets - SECURITIES Fund/Asset/Investment Management - INVESTING ADVISORY Sales and Trading Fund managers design and implement investment strategies (choosing markets, combining equities, bonds Clients are mainly companies and private equity Clients are mainly institutional investors (i.e.
    [Show full text]
  • NYSE IPO Guide Third Edition
    NYSE IPO Guide NYSE IPO Guide Third Edition www.nyse.com/ipo Publisher Timothy Dempsey Project Manager Chloe Tuck NYSE Editorial William Kantrowitz and Zachary Harvey Printing and Binding AGS NYSE IPO Guide, Third Edition, is published by Caxton Business & Legal, Inc. 27 North Wacker Drive, Suite 601 Chicago, IL 60606 Phone: +1 312 361 0821 Email: [email protected] Web: www.caxtoninc.com ISBN: 978-0-9964982-5-8 Copyright in individual sections rests with the co- publishers. No photocopying: copyright licenses do not apply. DISCLAIMER The NYSE IPO Guide, Third Edition (the “Guide”), contains summary information about legal and regulatory aspects of the IPO process and is current as of the date of its initial publication (April 2021). The Guide should not be relied upon as a substitute for specific legal or financial advice from a professional. Although efforts have been made to ensure that the information herein is correct, the Guide may contain errors or omissions, and the NYSE, the publishers, and the contributing authors disclaim any responsibility for, or duty to update or correct, any such errors or omissions. The views expressed in the Guide are those of the authors alone. Published by NYSE IPO Guide Third Edition www.nyse.com/ipo Preface 5 2.8 Anti-takeover protections 18 6.6 Market perception feedback 62 Simpson Thacher & Bartlett IHS Markit Stacey Cunningham President, NYSE Group 2.9 Incentive compensation 6.7 Investment community arrangements 19 database and CRM 62 Simpson Thacher & Bartlett IHS Markit Introduction: Advantages of listing on the NYSE 7 2.10 ​Managing third-party risk 22 6.8 ESG and the newly public IHS Markit company 64 IHS Markit NYSE 3.
    [Show full text]
  • 2020 Careers Guide
    2020 CAREERS GUIDE QUANTITATIVE FINANCE AND FINANCIAL ENGINEERING TOP CAREERS IN FINANCIAL WHERE THE QUANTS GO Graduates from Carnegie Mellon’s Master ENGINEERING of Science in Computational Finance (MSCF) program are taking different career paths since the 2008 financial crisis. An inside look at the industry demand, rewarding challenges and unique benefits of a career in financial engineering 2008 2018 GRADUATING CLASS GRADUATING CLASS “Financial engineering”, also known as “quantitative finance”, is the application 39% 42% 2% 13% 0% 16% 52% 10% 12% 7% of math, statistics and coding to meet the challenges of today’s financial markets. Before diving into the different jobs, required skill sets and impressive salaries in this field, it’s important to understand the state of the financial industry and the vital role played by “financial engineers.” Over the last 25 years, the finance industry has undergone a fundamental transformation. Sales & Trading Beginning in the 1990s, deregulation and Financial Modeling/Strategies/Research technological advancements resulted in a proliferation of competing markets and Quantitative Portfolio Management reduced execution costs while extensive Risk Management regulation implemented after the 2008 financial crisis now requires firms to better measure Data Science and control risk in their portfolios. In addition, the increased granularity and volume of data 2008 does not include Other career paths (4%) available for financial decision-making has 2018 does not include Consulting and Other career paths
    [Show full text]