Modeling is the Key to Life

The two exercises that helped me the most this summer was creating a projection and a leverage buyout model. The projection model was my first real test at applying historical data in order to predict a company’s future financial statements. I found this challenging because no longer was I given simple assumptions from my superior, but instead had to research GDP growth rates/inflation in addition to historical data to come up with my own accurate assumptions. After using these values to create my model, I built out a discounted cash flow analysis. Having taken Corporate Finance, I was interested to see how much of the information would translate to the real world. I found that what I was taught in the classroom was much more in-depth and technical than the method used by investment bankers. Instead of performing long calculations to find Betas and a WACC value, majority of these units are simply assumed based on the type of firm.

The leveraged buyout model on the other hand looked like a foreign language when I first gazed upon the excel template. In this model I was looking at the company from the perspective of a Private Equity firm. Although it took me nearly half a week to put together, I can say that I found the work very interesting and could definitely see myself in the future working on the buy side. These two exercises were not only the most challenging, but also helped me better understand if this was the career I wanted to pursue. Majority of an investment banking analyst’s day is spent working through models similar to these. I now know that I have abilities to become a good investment banker and even more importantly I enjoyed the work. Although the job can be challenging and hours sometimes long, I can definitely see myself working at an investment bank next year.

Because of the limited amount of information I am allowed to share, I have attached a couple photos below that help shape the office environment.

My Cubicle

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Board Room (All of the research and sales and trading analysts meet in this room before the market opens every day. This was possibly the most important meeting and hour of the day because it allowed the research analysts the opportunity to transfer any relevant/new information to their clients)

wolfe boardroom

 

Written by James Kissell, BC Class of 2017

 

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Banking 101

wolfe

After working for only two weeks at Wolfe Research Securities, I can definitely say that the Summer Catalyst Program has given me an ‘edge’ in the world of work. I have already directly applied information and skills taken from the summer management courses. So far, I have been asked to research, spread financial statements, and create valuation multiples for both private and public companies. Because of Financial Accounting, I already understood how to dissect a 10K or annual report. The skills I learned in Computers in Management has then allowed to me transfer this knowledge I have extracted from these financial reports and lay them out clearly in a dynamic excel worksheet. Although my excel skills still need a lot of work, without this course I would have struggled to navigate this essential business application. The Catalyst program also provided me with knowledge I didn’t realize would be so beneficial. Last summer, a specialist taught us about business etiquette and the so called business “dress code.” I had no idea how much my appearance and clothing would say about my personality and work ethic.

Over the next two weeks, I will be learning how to create a discounted cash flow model and transaction comparable valuations. Having taken Corporate Finance this past semester, I have practiced creating DCF models through case studies. In addition, I have prior experience, spreading transaction comparables on numerous public companies. It will be interesting to see how much of this knowledge is compatible with Wolfe’s practices.

I was really unsure what to include as a hyperlink because of the limited information I am allowed to share. If I could give one piece of advice for anyone going into the finance industry it would be to get a PC not a MAC. I understand that I have only been working for two weeks, but it is essential to memorize the excel keyboard short cuts for a PC. It amazes me how the analyst above myself can work for hours without ever touching the mouse. Below I have linked a list of excel short cuts that I am currently trying to learn that can save you a ton of time at work.

The 54 Excel shortcuts you really should know

Keyboard Shortcuts in Excel

Written by James Kissell, BC Class of 2017