The 6 Weeks Investment Banking Training by The WallStreet School is designed to provide delegates with a comprehensive understanding of investment banking techniques, equity research, and capital markets. Designed by Investment bankers and industry experts, this programme plugs the gap between theoretical concepts learned during academic degrees/diplomas and on-the-job application of those concepts.
Basic to Intermediate Excel
The curriculum of the workshop is so designed to make delegates super proficient in Excel and they develop the skillsets which will put that in a good stead as a Finance Analyst in a consulting, equity research or an Investment Banking profile. For anybody to efficiently build financial and business models, one needs to take the excel bull by the horns by learning the basics content and then graduating to advanced level content. The basics of excel will ensure learning and applying fo relevant financial formulas, navigating in the model, scaling up speed and starting to creating, formulating and conceiving own formula in given situations. That is how we start
- Using keys instead of mouse in excel
- Sorting Data and using advanced filters to overcome the limitations of filters
- Cell Freeze, Row Freeze, Column Freeze
- Using conditional formatting in excel and making the data look more meaty
- Linkages used for Financial Modeling
- Simple excel formulas as sum, product, division, multiplications, paste special, oncatenate
- Vlook Up/H look up usage of data
- Match Function
- Combination of multiple functions in a problem as Vlook +Match, Index+Match, VlookUp and If
- CAGR Calculation
- Transpose function
- Usage of IF function
- Table functions
- Pivot Tables
- IRR Calculation
- Cell Referencing
- Interest functions as EMI calculator,
- Sum if, Count if, Sumifs
- SumProduct Functions
- Multiple usage of Vlook Function
Advanced Excel & PowerPoint
Once, the basic brushing is done with excel, now comes more complex formulas which help in coming out with meaty results from piles of voluminous data in a matter of seconds.
The focus is to effectively and efficiently utilize Microsoft Excel for data analysis. These include and are not limited to
- Combination of multiple functions in a problem as Vlook +Match, Index+Match, VlookUp and If
- Offset Function.
- Sensitivity Analysis using different ways.
- Scenario Manager and how to use that in a model
- Iterative calculations. How to Negate it
- Using Excel for Statistical Analysis like Correlation, Regression, Variance.
- How to summarize data from different sheets and collating them into a single sheet using Indirect function
For most of us, charting means making a bar chart or a pie chart for anything and everything. All the meaty results are most effective when they are presented with the right set of charts. What chart to use for a particular data,that is something we teach through charting workshops. And what more, since you have become comfortable with excel, you learn dynamic chart making. These include
- Rules of creating a bar chart
- Making pictures as linked objects in excel (eg, how to make flags dynamic)
- Making apt chart from the data provided
- Creating dynamic charts and no need to change the chart every time its prepared
- Using Name Manager to make charts dynamic
- Showing multiple charts at the same time in same location using filter
- Now and Then Analysis chart
- Waterfall Charts, Thermometer Charts
- How the charts change using sensitivity analysis
- Interactivity using Form Controls
- Practical Application of Formulas and Charting through Creation of Dashboards
- Delegates learn the gist of excel through creating of a dashboard by applying the excel formulas, making of charts and subsequently making a dashboard for them to present the piece of data in a professional, robust and meaningful manner. This will involves
- Advanced excel formulas
- Conditional formatting
- Developer tabs
- Charting including charting tricks using excel formulas
Power Point Training:
That we are very comfortable making a power Point, is sort of an illusion which most of us have because once in a lifetime whether in school or college or in MBA degree or for any presentation, we have dirtied our hands with PPTs. There is a alarming gap in terms of the skills which in an illusive state you feel you have in a ppt making and actual the standards which are required in corporate professional world outside. Candidates learn the art of following
- How every slide should pass a 20 second test
- How one has to make meaty slides with fact based representation, proper sourcing of data, effective charts and aesthetic and visual appeal of a ppt
- How the analysed data has to be presented in a structured and phased manner
- How the flow of a presentation should tell a story
Basic Finance Concepts
Before training you for the rigours of Financial modelling and Valuations, we make you conversant and comfortable with basic finance concepts. These concepts are absolutely critical to mastering any financial and valuation analysis. How to integrate the financial segments. We answer all the rarely answered “WHY” questions—”why do we do this, why do we do that”—instead of answering: “well, just because” or “that’s the way it’s always been done”, we actually clearly and easily explain the logic of why and how not just the what.
- Statement of Financial Position, Statement of Income & Expenses, Cash Flow Statement, different adjustments and their importance
- Defining inter linking and relationships between the three financial statements and how does the accounting flow amongst them
- Ratio Analysis of Financial Statements using major financial ratios including liquidity ratio, asset management ratio, debt management ratio and profitability ratio
- How to determine the financial health of a company using multiple ratios
- 3 Step and 5 Step DuPont Analysis
- Margin of Safety analysis, Break Even point analysis
- Present Discounted Value of Money (Time Value of Money).
Feasibility Study/Business Modelling
Any Big Project is started with knowing its economic feasibility. Financial Feasibility of Projects are based on capital budgeting techniques and help to solve the financial decisions problems faced by firms.
What you learn:
- Benefits of using Net Present Value (NPV) over Internal Rate of Return (IRR) to calculate the financial viability of a project
- Building Dynamic Business Models from scratch with Multiple Scenarios using XIRR, MIRR.
- How to build assumptions and the rational of taking them before starting your business model
- Using different approaches like lowest common denominator and annual equivalency cash flow for determining the value of projects that have different life spans.
- Using formulas for the after tax weighted average cost of capital (WACC) and capital asset pricing model (CAPM) and how they used to determine the cost of capital.
- Calculation of free cash flows to firm and free cash flows to equity and how they are used to determine the profitability of a project
How to take a decision for a project using different techniques like Data Tables, Scenario Manager, Solver etc
Comparable Company Analysis
Trading Comps is a pricing technique. It is one of the most widely valuation techniques by investment bankers and finance professionals. Under this we would learn how to build a detailed trading comps right from the selection of peers to the analysis of final output. We would also understand how to compare and use these multiples as a valuation technique, what could the possible reason for differences in the multiples and how to tackle those differences etc.
- Learn the steps required to construct a meaningful trading comps analyses (enterprise value, latest twelve months numbers, cleaning reported financials, calculate & benchmark multiple)
- Impact of convertible securities – options, warrants, RSUs, convertible bonds, convertible preference shares
- Treatment of leases (operating and capital), R&D expenses etc.
- Possible reasons for why different companies in the same sector are trading at different multiples and how to analyze those differences before jumping on the conclusion that particular stock is undervalued/overvalued
- Role of multiples in IPO valuation
- Running regression analysis on multiples
- How relevance of multiples changes as per industry (i.e. Which multiple is driving price of the peers in the industry)
- Why sometime, a high growth company is trading at low multiple compared to less growth company
- Why there is difference between multiples of different industries and what drives that difference
- How to select peers in case of non-availability of other listed companies in the same space
Precedent Transaction Analysis
Precedent transaction/ deal comps is a variant of trading comps. It is one of three major valuation techniques used by the investment bankers (other than trading comps and DCF valuation). The basic premises of this technique is deal value (i.e. what multiples were offered for other transactions in the past under similar purchasing conditions). Under this technique, we would learn how to calculate transaction multiples, how these multiples are different from one we calculated under trading comps, under what situation this valuation technique is appropriate to apply etc.
- Learn the steps required to construct a meaningful transaction comps analyses (enterprise value, latest twelve months numbers at transaction date, cleaning reported financials, calculate & benchmark multiple)
- Basic difference between transaction comps and trading comps
- Impact of controlling premium on multiples and what is the basis of size of controlling premium
- Under what valuation situation transaction comp multiples are appropriate to use
Discounted Cashflow Valuation
Under DCF valuation technique, we try to attach value to the business/asset based upon its fundamentals. This technique is entirely different from relative comps technique as in case of DCF valuation we attempt to find value of asset whereas in relative valuation we try to find price of the asset (driven by demand and supply) which may be substantially different from its fundamental value found under DCF valuation. Under this packet of valuation, we would try to find value of the asset based upon its fundamentals; cash flows, risk, growth, etc.
- Projection of detailed free cash flows of the company
- What should be the ideal projection period for the target company
- How to factor various risks in projections and cash flows
- How to switch between currency of projection and its corresponding impact on discount rate
- How to calculate WACC if required information is not available
- What could be the possible inconsistency in our assumptions while projection cash flows and discount rate and how to fix them
- Different ways of calculation of terminal value and their implications on DCF value (EBITDA multiple and perpetual growth methods and their inherent limitations)
- Different ways of calculating beta and their implication on WACC and DCF value
Treatment of options differently in DCF valuation from how we treated them in trading comps and why?
Dividend Discount Model
DDM is a variant of DCF valuation with only difference is which cash flows we are discounting. I DDM we discount dividend as a proxy of free cash flows to equity whereas in DCF we calculate free cash flows of the business based upon its earning and reinvestment requirements. Due to some its inherent limitations over DCF valuation, DDM is not used as commonly as DCF valuation technique is used. However there are few industries where calculation of free cash flows (an important ingredient of DCF valuation) is almost impossible, then DDM is the only option left to find intrinsic value of the business/asset. Under this we would learn:
- How to build a fully integrated and dynamic dividend discount model
- How this model is different and similar to DCF valuation
- In which particular industries, DDM is the only possible technique to find intrinsic value of the company
- Inherent limitations of this model
- What could be the possible inconsistency in our assumptions about return on capital, reinvestment rate and TV and how to fix them
- How to treat cash used for stock buyback in DDM
Merger model is prepared to find the impact of transaction (merger/acquisition) on the future earnings of the remaining shareholders in the new company after the transaction. Under this we try to find the short term and long term impact of transaction on the future earnings of shareholders (i.e. whether the future earnings of the shareholders would increase or decrease due to this acquisition). Under this we would learn:
- How to build a fully integrated merger model to calculate whether the transaction is accretive or dilutive to the shareholders
- Impact of stock deal or cash deal on the future earnings of the shareholders of the company
- How to factor synergies in the pro forma earnings of new company after acquisition
- Refinancing adjustment of existing debt in the target company
All the valuations techniques undertaken above culminate into preparation of a pitch book. A pitch book consists of a careful arrangement and analysis of the investment considerations of a potential or current client. Candidates are given an overview of the entire pitch book for them to understand on a broad level about the Valuations and subsequent use of the same in a Pitch. Some key takeaways the candidates get are:
- Purpose of various models prepared in previous classes.
- Flow of transactions
- Investment banker’s role in executing transactions.
Mock Interviews and Resume Edits
An integral and important part of the curriculum is taking mock interview of the candidates and giving them an experience and exposure of the situations he/she might face in real interviews. Stress interviews as they are help candidates and the faculty judge and evaluate and give a clear picture of where the candidate stands and the further action plan required for the candidate to become a refined resource.
TWSS also helps candidates edit their CVs and make it more appealing and professional. A crisp resume goes a long way in creating the first impression in the mind of interviewer about the candidate.