Powerpoint and Video Guides
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 a company has negative enterprise value, what does that mean?
This means that the company must have more cash than the equity value, debt, and preferred equity combined together. Cash is subtracted from the enterprise value, so the larger cash is, the lower the enterprise value. The company also likely has a suppressed equity value due to negative investor sentiment. Investors are expecting the company […]
What is adjusted funds from operations (AFFO)?
Adjusted Funds From Operations (AFFO) is calculated as: AFFO = FFO + rent increases – capital expenditures – routine maintenance amounts For reference, the formula for Funds from Operations (FFO) is:FFO = net income + depreciation & amortization + property sales losses – property sales gains – interest income Compared to FFO, AFFO provides a […]
What is funds from operations (FFO)?
Funds From Operations (FFO) is calculated as: FFO = net income + depreciation & amortization + property sales losses – property sales gains – interest income FFO measures the cash flows generated from a real estate company’s core operations. Unlike net operating income, FFO is levered metric which is after the effects of debt, which […]
What is net operating income (NOI)?
Net operating income (NOI) measures the core profitability of real estate properties. It’s calculated as: NOI = revenue generated from property – operating expenses NOI is before any cost of financing (such as debt or mortgage interest expense) as well as income taxes. It focuses only on the core revenues and expenses directly related to […]
Why do we write-down existing goodwill in an LBO?
The write-down of existing goodwill on the balance sheet increases the excess purchase price. Sometimes, a % of the excess purchase price can be allocated to a PP&E and / or intangible asset write-up. In this scenario, it would be important to write-down existing goodwill since it would impact the amount of the write-up. Excess […]
If you do an LBO with $100M initial equity and exit at $400M equity in 6 years, what is your IRR?
Using rule of 72, we can find the approximate IRR to double an investment for a given # of years. $100M growing to $400M equity in year 6 is similar to $100M doubling to $200M equity in year 3, and then doubling again to $400M in year 6. So by finding out what IRR is […]