Welcome to Investment Banking Institute

Become a professional in Investment Banking with our Live Investment Banking weekend course

Learn how to make Financial Models from scratch

Financial Modeling Valuations" skills are required in all kinds of Finance Profiles.

This course covers Advanced Excel Training

VBA (Macro), Basic Advanced Financial Modelling using Excel, Company Valuation and Merger Acquisition.

Become a professional in Financial Modelling with our Live Financial Modelling weekend course

Financial Modelling Company Valuation Training which you don’t learn in academics.

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Investment Banking Courses

The IB Institute is recognized as the financial education and training leader, offering an accelerated career path for Finance professionals and all individuals specially those seeking to enter the finance industry and expecting an interview call from Equity Research or Investment Banking Firm.

Investment Banking Institute (IB Institute) is Microsoft’s "Authorized Testing Center" for all the applications of Microsoft.

IB Institute provides instructor-led (Live) training and e-learning (Online) courses on Excel 2010, Visual Basic of Application (VBA) , Charts, Dashboards, Financial Modeling, Company Valuation, Project appraisal, Merger and acquisition which develops the competitive profiles of the students for the interview and the working professionals on the job.

Investment Banking Courses in Delhi

Investment Banking Courses includes training on Financial Modelling & Valuation using Excel. Financial Modelling refers to the process of creating an excel based model which projects financial statements based on assumptions. All kinds of Finance Profiles like Investment Banking, Equity Research and Credit Research etc. requires practical knowledge of Financial Modeling & Valuations.

High quality trainers:

Highly qualified and experienced trainers help the participants to shape their career in the main stream Finance jobs. They have gone a milestone in the field of Corporate Finance, Equity Research and Investment banking which helps them to discuss the real world issues and provide real solutions.

Courses Highlights :

  • Certificate of Excel 2013 Expert from Microsoft
  • Complete Excel 2013, VBA Macro
  • Financial Statement Analysis
  • Financial modelling for Telecome and Oil & Ga Sectors
  • DCF, trading and transaction combs modelling and analysis
  • Merger & Acquisition accretion and Dilution analysis
  • Real Estate based Project Financing Modeling from scratch
  • Investment Banking Interview Kit with study material
  • 300 FAQs of Finance interviews with answers
  • 70 hours of videos free with Live Training
  • Mock interviews, resume preparation and placement assistance.

Friday, 9 March 2018

Top Investment Banking Question And Answer

1) What is another term for Investment Banking division?

Investment Banking is also called Corporate Finance.

2) Why are you interested in Investment Banking?

This question is asked to check the candidate’s interest to know his understanding of the Investment Banking.
Therefore, you should be aware of the positive key skills and attributes required for this job. You should also define why you think you are a best candidate for this position.

3) What is a formula to calculate working capital?

The formula is
Working capital = Current assets – Current liabilities.

4) What is typically higher the cost of debt or the cost of equity?

The cost of equity is always greater than the cost of debt because the cost link with financing debt is tax confirmable. Moreover, the cost of fair is higher because unlike lenders, equity investors are not guaranteed to get fixed payments.
Debt is less costly because its Interest payment is considered an expense. Debt is also given preference in a firm’s capital structure.  So, in the situation of liquidation or Bankruptcy, the debt holders get paid their fund first before the equity holders.

5) What does WACC mean?

WACC stands for Weighted Average Cost of Capital. It is a calculation of a firm capital that is weighted proportionally. It add every source of capital, and it takes into account factors like depreciation, tax rates, debt, and equity.

6) What are the essential qualities to become Investment Bankers?

The skill sets required to become Investment Bankers are:
  • Strong significant/analytical skills
  • Superior attention to detail
  • Should have good work ethic
  • Excellent spoken, verbal and written communication skills
  • Able to manage multiple project deadlines
  • Positive and never give up attitude
  • Drive and determination
  • Efficient time management
  • Communication ability
  • Complete attention to detail
  • Ability to learn quickly
  • Able to think out of box

7) What are your long-term career goals as an Investment Banker?

This question is requested to know whether you are serious about your career and ready to work in this filed. It is a financial job, so it is vital for the Bank to hire a candidate  who are ready to work with the same Bank for a longer time.

8) Discuss risks that you have taken if your life?

By nature, I am very traditional and don’t like to take too much risk. However, that surely does not mean that I never take my chances. So, when I do take chances, it is always based on the normal analysis. It allows me to ensure success and also understand the risks involved before taking the plunge.
As an Investment Banker most of the time you should take hard decisions. Before taking decision you need to account political changes and the market trends. Therefore, you need to show your ability to take estimated risks and demonstrate decent analytical skills.
Here, you also need to focus the logical guess made by you while taking any risky decision. Investment Banking is more about “roughly right” instead of “absolutely accurate.”

9) What is the monetary policy?

Financial policy is a method by which the government, Central Bank, of a country controls the supply of money. It is the availability of money, and cost of money or rate of  activity, to meet a set of objectives oriented towards the growth and stability of the economy.


10) What is Money laundering?

Money laundering is the process of creating the appearance that large block of money obtained from criminal activity, like terrorist activity, drug trafficking begun from a certain source.

11) As an Investment Banker what you think an analyst does on a typical day?

As an Investment Banker, I think my working hours to be long. I need to act financial modeling, making pitch books, doing due-diligence, and meet with clients as required.

12) What is the difference between Commercial and Investment Banking?

Here is some major difference between the two:
Commercial Bank:
  • It accepts deposits from customers and gives Commercial loans using this money.
  • Most of the loans made by Commercial Banks are held as equity on the Bank’s balance sheet.
Investment Bank:
  • It acts as an intermediary between companies and investors.
  • It does not accept deposits, but rather sells Investments, advises on M&A, hold loans debt/equity which is originated by the Bank.
13) What is a deferred tax asset?

A negotiated tax asset is created when any business pays more tax to the IRS than that is reported on their income statement.  It is created from net operating losses and differences in revenue acceptance.

14) What is a fairness opinion?

A fairness opinion is an seprate assessment. It is issued by an Investment Bank.  It mainly includes price offered in a tie-up or gain. It provides a fixed fee, typically by an institution which is not involved in the transaction.

15) What is Beta?

Beta is a measure of the riskiness of specific stock. It is calculated as the clearance between stock’s return and the total honesty market return divided by the change of the return given by market. By default, beta is 1.0.
  • Stock with beta > 1 is considered riskier compare to market.
  • A stock with beta < 1 is considered less risky. 

16) When should need to value a company using a revenue multiple vs. EBITDA?

A firm with negative profit and EBITDA will be likely to have meaningless EBITDA multiples. That is because revenue multiples are more insightful in EBITA.

17)  Why would two companies merge?

Some Important reasons behind the merger of two companies are:
  1. Increasing capabilities
  2. Gain a competitive advantage over larger market share
  3. Diversifying products or services
  4. Significant cost cutting of merged entity.

18) What is CAPM?

CAPM is the Capital Asset Pricing Model. It is designed to find the expected return on Investment. It allows estimating discount rate for a company’s cash flows.

19) How to calculate beta for a specific company?

Calculating betas for historical returns is a calculation of future beta because of estimation errors. The betas of comparable companies are inaccurate because of different rates of leverage.
For that you lever the betas of these comparable companies as such:
β Unlevered = β(Levered) / [1+ (Debt/Equity) (1-T)]
Then, you need to average unlevered beta is calculated, deliverd this beta at the target firm’s capital structure:
β Levered = β(Unlevered) x [1+(Debt/Equity) (1-T)]

20) What makes a good financial model?

Building a financial require lots of practices. The finest financial model is one that identifies all the important drivers of the business. It is always carefull and precise. The model should able to handle dynamic scenarios of built-in analysis and error checking.

21) What is the main difference between cash-based and accomadation accounting?

Cash-based is known as revenue and expenses when cash is received or paid out. On the other end, Build Up accounting recognizes revenue when collection is reasonably certain and recognizes expenses when they are incurred instead of when they are paid out in cash

22) What is the formula to calculate Enterprise Value?

The formula to calculate Enterprise value is:
Market value of equity + debt + preferred stock + minority interest cash.

23) What is the difference between enterprise value and equity value?
Enterprise Value:

It is the value of the operations of a company attributable to all providers of capital. It is also important to think of Enterprise value as the incorporation value. The main need for enterprise value is to create valuation ratios/metrics.

Equity Value: a component of enterprise value which represents only the proportion of value attributable to shareholders.

24) What is the meaning of goodwill? How is it calculated?

It is the type of intangible asset. It is created in an gain and reflects the value of a company which is not accepted from its other belonging and other bond. Goodwill is calculated by subtracting the book value from the equity purchase price paid for the share of the company.
However, the rules of accounting clearly state that that goodwill should be compensated in each period. Goodwill also depends on company’s balance sheet.

25) When should a company issue equity, rather than debt, to fund its operations?
In following situations company issue equity instead of Debt.
  • If the company feels that stock price is bloated, It may raise a large amount of capital relative to the percent of ownership sold.
  • If the company plan on investing in new projects it may not produce immediate or dependable cash flows to make interest payments.
  • In the situation, when a company wants to adjust its capital structure or pay down debt.
  • In the case, where company’s owners want to sell off a portion of their ownership.

26) What is ‘Mergers and Acquisitions?

Mergers and acquisitions is a term that refers to the merger of companies or assets. It includes a number of different transactions, such as mergers, acquisitions, unification, tender offers, purchase of assets and management acquisitions.

27) What is a swap?

Swap is a difference in interest rates on loans between two currencies. It is deposited or charged to the account when client rollovers a deal position for the next day. Swap can be both positive as well as negative.

28) Why do you need to subtract cash from the enterprise value formula?

Cash gets subtracted when calculating the value of the firm as it is considered a non-operating asset. Further, cash is always included in equity value.

29) What is DCF?

A discounted cash flow is short known as DCF.  It is a valuation method used to estimate genius of an Investment opportunity. It can be performed by using free cash flow projections and discounts them to get present value. It is also used to evaluate the potential for the specific Investment. If the value arrived using DCF analysis. Generally, it is higher than the current cost of the Investment.

30) What is a leveraged buyout?

Leverage buyout is a term, which refers to the use of borrowed money to buy or invest in another firm. In some cases, the ratio of debt to equity can be as high as 90-10.

31) Explain a fixed interest Investment

Fixed interest Investments is a long-term debt security. It promises a return of all Investments at their ability date.

32) What are things that affect the health of a stock portfolio?

The health of a stock portfolio always depends on its constituents and the parallel between them. For example, investors can search for stock that is negatively tie-in to protect their market portfolio.

33) What are main valuation methodologies?

There are three widely used valuation methods.
  1. Comparable company analysis
  2. Precedent transaction analysis and
  3. Discounted cash flow analysis.

Friday, 2 February 2018

What is Financial Modelling?

Financial Modelling is an exercise wherein an analyst prepares a detailed company specific financial statement forecast for some decision making purposes like valuation, financial statement analysis, M&A and project financing.

In other words, Financial Modelling is the process to make Financial Statement projections with the help of assumptions. Any model which does not include the projections of Income statement, Balance sheet and cash flow statement is not a financial model. A financial model must include the projections of three financial statements.

A standard financial model will include Historical financial statements, Historical analysis, assumptions, working schedule for projection of Revenue, expense, basic & diluted EPS, working capital, capital expense, depreciation & amortization, shares & equity, debt & cash flow statement.

Steps in financial modelling:

  1. Understand the objective of Financial Model.
  2. Understand the business of company, revenue drives and projection parameters
  3. Collect 3 to 5 years historical financial statements from Annual report of company
  4. Clean the historical financial statements from non-recurring items and prepare a non-GAAP or pro forma financial statement before you do the historical analysis
  5. Based on company specific drivers and projection parameters, perform historical analysis for each item of Income statement, Balance sheet and cash flow statement.
  6. Based on management guidelines, historical analysis, research reports, market consensus and your objective and knowledge about the business take your assumptions for all items of IS, BS, CFS and SOCE.
  7. Based on assumptions & schedules, prepare a robust dynamic integrated Financial statement model of the company.
  8. Perform ratio analysis to test the strength and weakness of company health
  9. Financial model will take its final shape after scenario analysis. We have to test the changes in the results if our assumptions goes wrong.
The accuracy of Financial model will depend on the accuracy of assumptions. If assumptions are wrong then financial model will also give you incorrect cash flows, profits and asset & liabilities. So accuracy of assumptions will depend on your knowledge of Business and availability of information and source of those information like research reports and databases and software like Thomson research and Bloomberg.

Financial model can be prepared in just 2 hours or it can take several weeks. It will depend on the scale of business and availability of information about the company.