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Investment banking interview - rough!

hi all,
i had an interview yesterday with Deutsche Bank for a summer internship in Global Corporate Finance and it was pretty dirty...
just wondering if anyone can help me out with some decent answers to the questions they asked me in which i did crap in....

1. What valuation techniques are used to value a company within Mergers and Acquisitions (M&A)? - I blagged a bit about looking at financial accounts, fixed/current assets, goodwill blah blah but she didnt look too impressed.
2. What would you do within M&A as an analyst? - I answered this by saying what is M&A and what you do: however the interviewer dissed me for that cause what i said also included what an associate/VP would do, i.e approach the company x that maybe acquired. What i think an analyst would actually do is modelling and number crunching - but that would be a very broad answer, so what does an analyst actually do within corp finance/M&A - i.e wot sort of financial models will be modeled and what numbers will be crunched?
3. The interviewer asked me wot other banks i applied for, i said goldman, ubs etc and then she asked why do i want to work for DB and not any of the others! i had an answer prepared for why i want to work for DB but not why over the others cause i thought they wouldnt be that cruel!

those 3 questions are ones which im not sure of the answer even after the interview. they asked me other questions like, the stock value of stocks i been monitoring, causes of a company having a high Price Earnings ratio. but those questions aint that bad now that i got time to think about em.

If anyone has some advice on those first 3 questions cause i reckon they are pretty difficult and may come up again with a different IB.

cheers ppl

are you in uni now?

OP

yeah, 2nd yr economics at york...

Reply 3

sb1986

8

ok cool. Just asking......i dont ahve any advice but good luck.

Reply 4

Spider

You tried doctorjob mate? ( http://doctorjob.co.uk/forum/ )

It's full of people who are into the investment banking scene.

Reply 5

mahras

1

Okay for valuation these two are type that ibanks use the most in the Mergers department:

Comparable Multiples Valuation: Basically say a company is being sold/bought. You take comparable companies like say if a hardware company was bought you would take similar hardware companies and use their cash flow and Price to earnings multiples to determine the value of the company.

Discounted Cash Flow Valuation: Basically its for VERY new companies who arent making cash now. You make valuations, look at past histograms to determine exactly HOW much money the client company will make and value it in that way.

Sorry I cant be of much help but I am not a M&A guy. I suggest you get this book and start reading it: http://vault.com/store/book_preview.jsp?product_id=22349

I have never read it but it has all valuations etc. Its supposed to be very good.

The thing I suggest is this: each ibank has its personality. Now when you go to an interview you gotta use that personality and tell answers that match it for M&A. FOr the goldman interview I suggest you STRONGLY tell them that you are a team player and are very cooperating. For UBS I have no idea as it is new in the US. In the US people usually in UBS interviews say they like UBS because its new, and cutting edge, and has great potential. That is not the case in europe so I have no idea.

Good luck on the others. I also suggest you apply to some boutique ibanks. They are very good also.

-mahras

Reply 6

TheWolf

15

What are 'boutique ibanks'? Are they just the smaller ibanks?

Reply 7

mahras

1

Yep. Some pay a lot more and are VERY prestigious (up there with goldman and MS) like Lazard, Greenhill, and Blackstone. Others are also good like Rothschild, and HLHZ.

Reply 8

Falguni

15

Guillermo

hi all,
i had an interview yesterday with Deutsche Bank for a summer internship in Global Corporate Finance and it was pretty dirty...
just wondering if anyone can help me out with some decent answers to the questions they asked me in which i did crap in....

1. What valuation techniques are used to value a company within Mergers and Acquisitions (M&A)? - I blagged a bit about looking at financial accounts, fixed/current assets, goodwill blah blah but she didnt look too impressed.

Valuing a company - see this http://som.yale.edu/~ws69/teaching/mgt541/sessionII.pdf

in summary - firm value - book value of all assets (accounts etc)
- estimating the market value of asset/firm

Comparative Ratios – The following are two examples of the many comparative metrics on which acquirers may base their offers:

P/E (price-to-earnings) ratio – With the use of this ratio, an acquirer makes an offer as a multiple of the earnings the target company is producing. Looking at the P/E for all the stocks within the same industry group will give the acquirer good guidance for what the target's P/E multiple should be.

EV/Sales (price-to-sales) ratio – With this ratio, the acquiring company makes an offer as a multiple of the revenues, again, while being aware of the P/S ratio of other companies in the industry.

Discounted Cash Flow (DCF): A key valuation tool in M&A, discounted cash flow analysis determines a company's current value according to its estimated future cash flows. Forecasted free cash flows (operating profit + depreciation + amortization of goodwill – capital expenditures – cash taxes - change in working capital) are discounted to a present value using the company's weighted average costs of capital (WACC). Admittedly, DCF is tricky to get right, but few tools can rival this valuation method.

2. What would you do within M&A as an analyst? - I answered this by saying what is M&A and what you do: however the interviewer dissed me for that cause what i said also included what an associate/VP would do, i.e approach the company x that maybe acquired. What i think an analyst would actually do is modelling and number crunching - but that would be a very broad answer, so what does an analyst actually do within corp finance/M&A - i.e wot sort of financial models will be modeled and what numbers will be crunched?

Models such as CAPM and NPV analysis also look at ratios such as Price/Earnings etc.

3. The interviewer asked me wot other banks i applied for, i said goldman, ubs etc and then she asked why do i want to work for DB and not any of the others! i had an answer prepared for why i want to work for DB but not why over the others cause i thought they wouldnt be that cruel!

find what they emphasis on their website

Reply 9

confused?

1

these questions are more like accounting questions than economics ones. Were you not taught this at uni?

Reply 10

mahras

1

Falguni for ibanking thats not correct. It would be for a investment MANAGEMENT interview. Those are what value and growth investment houses use to make their decisions. However ibanks dont use them. Even at a management house you wouldnt use CAPM as most value investors nowadays rely on computerized models.

Reply 11

Couth

Have you tried www.IBtalk.com ? The guys there have good M&A and front-office knowledge as well as interivew and assessment centre experience. Just shoot away. I remember my M&A interviews...

Has anyone had Real Options come up in an M&A/Corp Fin interivew? That's pretty rough :smile:

Investment banking interview - rough!

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