Asking a basic question about what it is your job would entail at your interview could potentially destroy your application. It simply means that you came unprepared and all the good grades you have on your transcript will go unnoticed. There are a dozen more applications with equally good if not better grades so to really stand out, you’ll need to present yourself with short, crisp, answers that reflect your understanding of the industry.
For example, when an interviewer from Merrill Lynch asks, “Do you have any questions?” And you pose a query, “What is the job scope for analyst in corporate finance/sales/ trading/research/operations/technology?”
How do you think that reflects in the mind of the interviewer?
Now, you could pose that question to a friend who is in the industry, but it is not safe to pose this question to the interviewer because it potentially demonstrates your ignorance of the industry. Your friend is there to help you; the interviewer is there to chop candidates from the list.
Understanding the mindsets of people is the key to asking the right questions and success to life in general. Knowing why different questions attract different responses from different people is crucial. Don’t leave it to chance or the mood of the interviewer on that day to decide what to think of you. Take control of your own interview and be prepared.
You need to know what your role’s description is, what hours you will be working, what type of clients you would be working with (if applicable) and what the day-to-day activities and responsibilities will be as an analyst in your division.
This boils down to research, and here are some ways to do it.
Information Research #1: Go to the firm’s website. Make sure you read the profiles of people in your division at the firm. Learn about the division you are applying for IN DETAIL and what your job would involve.
Information Research #2: Go to similar firms’ websites and read their descriptions of the role. Some firms’ definitions or names of divisions can be different, but it will give you an understanding and jargon the industry uses.
For example, if you have a sales & trading interview at Merrill Lynch, go to Goldman Sachs website and learn how that division is described on their website.
By using some of the insider words use to describe a similar position, you’ll find yourself more natural and eloquent at your interview, leaving the impression that you UNDERSTAND the job. Also, you’ll have additional investment banking vocabulary that other interviewees would not have.
Information Research #3: Speak to friends, seniors who you know ALREADY work in your desired division and offer to buy them tea. Offer value before taking and in this case during the meetup, you’ll have a chance to ask about their day-to-day role. With this knowledge, you will be able to give your interviewer an impression that you know what you’re in for and importantly, ready to contribute.
And at your interview, mention that you spoke to this particular person and you were interested in what he/she told you.
Have an attitude that you’re there to contribute to the team. And you’ll jumpstart your investment banking career. Another good resource is this Investment Banking career guide
By: Sherman Choo
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Filed under Business by on Jul 28th, 2010. 
Firms may have to choose among profitable investment opportunities because of the limited financial resources. In this article we shall discuss the methods of solving the capital budgeting problems under capital rationing. We shall show that the net present value is the most valid section rule even under the capital rationing situations.
A firm should accept all investment projects with positive net present value in order to maximize the wealth of shareholders. The net present value rule tells us to spend funds in the projects until the net present value of the last project is zero.
Capital rationing refers to a situation where the firm is constrained for external, or self imposed, reasons to obtain necessary funds to invest in all investment projects with positive net present value. Under capital rationing, the management has not simply to determine the profitable investment opportunities, but it has also to decide to obtain that combination of the profitable projects which yields highest net present value within the available funds.
Why capital rationing?
Capital rationing may rise due to external factors or internal constraints imposed by the management. Thus there are two types.
• External rationing
• Internal rationing
External capital rationing
This mainly occurs on account of the imperfections in capital markets. Imperfections may be caused by deficiencies in market information, or by rigidities of attitude that hamper the free flow of capital. The net present value rule will not work if shareholders do not have access to the capital markets. Imperfections in capital markets alone do not invalidate use of the net present value rule. In reality, we will have very few situations where capital markets do not exist for shareholders.
Internal capital rationing
This is caused by self imposed restrictions by the management. Various types of constraints may be imposed. For example, it may be decide not to obtain additional funds by incurring debt. This may be a part of the firms conservative financial policy. Management may fix an arbitrary limit to the amount of funds to be invested by the divisional managers. Sometimes management may resort to capital rationing by requiring a minimum rate of return higher than the cost of capital. Whatever, may be the type of restrictions, the implication is that some of the profitable projects will have to be forgone because of the lack of funds. However, the net present value rule will work since shareholders can borrow or lend in the capital markets.
It is quite difficult sometimes justify the internal rationing. But generally it is used as a means of financial controls. In a divisional set up, the divisional managers may overstate their investment requirements. One way of forcing them to carefully assess their investment opportunities and set priorities is to put upper limits to their capital expenditures. Similarly, a company may put investment limits if it finds itself incapable of coping with the strains and organizational problems of a fast growth.
By: Randika Lalith Abeysinghe
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Filed under Business by on Jul 23rd, 2010.
Besides being lucrative, Investment Banking is one of the most competitive areas for aspiring candidates to enter the banking industry. Mostly, investment banks seek to recruit candidates who come from top universities and business schools. In order to start a career in investment banking, you need to have excellent analytical abilities, communication skills and aptitude for numbers.
Career Options
Investment banking is one of best options for candidates who possess drive, confidence and stamina. It is not meant for the feint of heart, as investment banking requires very a strong personality. Stamina and drive are both important, as financial services industry employee work long hours, particularly when they have to deal with deadlines. Generally, the working hours of an employee in investment banking ranges between 60 to 70 hours. However, during busy times, working hours may extend through the weekend.
Investment banking is composed of different sectors within which you can choose a suitable career. Investment banks also have various divisions within different sectors. When applying to a bank, candidates should make up their mind about which area they would like to join. The choice of area depends on their abilities and interests. Some of the sectors in investment banking are as follows:
Corporate Finance: Corporate finance includes a range of areas such as debt and equity capital, appropriate capital structures and mergers and acquisitions. Advisory services include sector specialists, who are supported by several general service teams.
Sales And Trading: Sales and trading is considered to be one of the most popular areas of work in the field of investment banking. A number of employees are required to work within the sales and trading departments. The work calls for hard working people with the ability to think fast and make key decisions in just seconds. The basic role of a sales and trading employee is to inform clients about the opinion of the bank on certain assets and markets.
As sales and trading staff spend most of their working hours in talking to clients, it is important for employees to have strong communication skills. Additionally, employees working in the sales and trading department in investment bank need to have a complete understanding of the research produced by their company. They should also be able to present sophisticated arguments in a convincing manner to a very sophisticated client base.
Research: Employees working with the research department provide clients with up-to-date reports on certain areas of interest. Analysts in the research department specialize in a specific business sector or area, thereby developing reports that can be safely distributed to clients. Besides having effective analytical abilities, good analysts working with the research department in investment banking need to have effective communicative skills, ability to think clearly and present clear ideas with confidence to the clients.
If you have a great amount of drive, determination and stamina, a career in investment banking could prove to be very lucrative, exciting and rewarding.
By: Tony Jacowski
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Filed under Business by on Jul 18th, 2010.
In this tough business environment, many small businesses are cutting back on their marketing investment. This is not an easy decision because the goal of marketing is to increase sales. To be able to make the best decision on how much to spend on your marketing strategy, you must be able to measure the value generated for each dollar spent on marketing, or in other words, measure the Return on Marketing Investment (R.O.M.I.).
There are two ways to measure R.O.M.I. The first is the straight forward, short-term and direct method. Divide the profits generated by the marketing plan by the dollars spent on the marketing plan. This assumes that you are able to identify and link the sales to the marketing plan. For example, if a coupon is circulated, the redemption of each coupon can be credited to that marketing tactic. Then, you can calculate the profit from those transactions and divide it by the cost of running the coupon. But what if you can’t identify the source of a sale? Or, what if the goal of the marketing investment was to build brand recognition? This leads us to the second, less straight forward, long-term method of calculating R.O.M.I.
The long-term way to calculate R.O.M.I. requires you evaluate the sales situation more holistically. By looking at the overall value to the business that the marketing effort contributed, you can calculate a measurable ratio that includes non-monetary values. Following are a few examples;
· Increased Brand Awareness and Purchase Intent – In order to estimate the value of building your brand, you need to track measures such as recall, likeability, and awareness. These measures are indicators of purchase intent. Improving these measures will increase purchase intent. A simple survey, or customer response tool, can track these measures. By calculating a correlation with purchase intent, you can assign a dollar value to improving each measure and weigh it against the investment.
· Lead Generation or Shortened Sales Cycle – If you consider the time and effort to make a sale in your business model, a marketing program can be valued by the amount of time saved in making that sale. The value of time can be estimated in a number of ways. One way might be the hourly rate of a salesperson. If an effective marketing program cuts the time it takes to make a sale, the profit margin is increased and the R.O.M.I. increases.
· Cost per Lead or Profit per Sale – What does it cost your business to make a sale? How much time and effort does it take to create a lead? One way to measure this it to divide the number of sales by the total cost of sales and marketing. Once this is calculated, you can decide if the investment effort improved or worsened your current efforts.
Be careful when calculating R.O.M.I. to include the entire value realized from the investment. It is difficult to put a value on the word of mouth benefit you get when your advertising generates discussion. Or it may be difficult to put a value on brand recognition or purchase intent. But if these key performance indicators to sales are ignored, you may be under-valuing your marketing investment.
By: Todd Dittman
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Filed under Business by on Jul 7th, 2010.
When people have a problem involving raising capital, who would they consult? Yes, they would go and check with their investment banking analyst. People who are highly fascinated with the investment banking world would be at an advantage if they would actually prepare themselves for a career as possible analysts. Investment banking analysts are normally Bachelor-degree holders or undergraduates, who are planning to obtain their MBAs in order to move up in the company ladder. In reality, these undergraduates typically work for a length of around two or maybe even three years before they do this. Before one could even think of becoming an investment banking analyst, they should first finish their Bachelor’s degree studies and also experience a summer internship prior to their senior year in college. The primary reason for this suggestion is due to the fact that a lot of recruiters employ investment banking analysts who once interned for their organization.
Those who want to become an investment banking analyst should be someone who actually takes pleasure in using a computer. This is because it is usual for these analysts to spend most of their hours at the said technology. What they actually do is they have cordial relationships with traditional and non-traditional financial sources that would be able to help their clients determine which one is ideal for the clients’ situation as well as their needs. These investment bankers could also assist people with raising equity, deal structure, and negotiations.
These analysts also often work at their homes and they even pull all-nighters when it is absolutely necessary. Some of their duties involve creating comps, editing pitchbooks, and building models. The more experienced analysts could even put together pitchbooks and still, there are others who could work their way into those exciting responsibilities like a live transaction type meeting. The analysts’ job details could definitely differ but one thing is guaranteed, their hours are normally long as well as tiring. One’s day might start at 9 in the morning and it could very well end way past midnight, although there are some days that could be considered slow.
Investment banking analysts should be highly proficient with Excel spreadsheets, Bloomberg, Word and PowerPoint as well as be familiar with writing VBA macros. They should also know how to make prospectuses, generate as well as track regular newsletters (or weeklies), get pitch books, run errands, keep schedules, and answer client phone calls, among others. Analysts should be hardworking, thorough, reliable and flexible. Some great tips to become a good analyst is to learn about the market and the finance industry, keep abreast of the business and financial news, start early, and always love the job.
After the analysts have worked for either two or three years, they might now want to pursue their MBA degrees and might or might not even return to the investment banking industry. Those former analysts that have gotten MBA degrees would have the clear-cut edge over others who have not actually worked in this particular field. Simply put, being a true-blue investment banking analyst is similar to proudly earning one’s stripes in the financial industry.
By: John Janson
About the Author:
John Janson writes on a part time basis, exploring learnings in business opportunities, current trends, technologies and home improvements.
Filed under Business by on Jun 28th, 2010.
Entrepreneurs look at factors like the ease of recruitment, and as a result – have looked into the central states of the US, such as Colorado, where the workforce is well educated, quality of life is good, and cost of living is a big step lower than on the coasts.
With hopes up about stabilisation of the economy, this is a great opportunity for aspiring entrepreneurs and small business start ups alike to take things to the next level. Over the last few years, several angel groups and individual investors have started to set up shop in cities like St. Louis (such as the Arch Angel Investor Network), again bucking the general trends.
On the Central Investment Network – entrepreneurs in the Central states of the US get another chance to connect with angel investors. Members can get their business ideas and plans out to hundreds of local investors – and since Central Investment Network is part of the Angel Investment Network, members can connect with thousands of other investors from around the world. In fact the network grows continuously, with branches in over 40 countries and investments occurring both on a local and international basis.
Of course, the plans have to be well thought out and organised, as while entrepreneurs may have less competition, the investors are also more choosy. Still, there are signs that more successful angel investment strategies such as venture capital investments are occurring within the central states. While some venture capital backed companies have gone bankrupt this year in the U.S, almost all of them are California based, and none of them are in the states that the Central Investment Network covers – which includes Colorado, Kansas, Missouri, Montana, Utah & Wyoming.
Find out more, by visiting http://www.centralinvestmentnetwork.com
By: Angel Investment
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Read more on Angel Investment Opportunities for Entrepreneurs in Denver, St. Louis and Kansas City…
Filed under Business by on Jan 24th, 2010.
A paper in Philadelphia (Philadelphia Inquirer & Daily News) recently did a story in which a start-up CEO almost seemed to feel like securing angel investment was easier in this market than before. And it makes sense, since less competition combined with more places to look for funding make this a good time for companies to secure investment.
It is true that angel investors are becoming more cautious, and one will need a strong, convincing business plan (or some already existing activity) in order to secure such funding, but this has always been the case. However, sites such as the Mid-Atlantic Investment Network help potential entrepreneurs and existing start-ups alike find more channels in which to reach these investors.
Many companies will look to raise “Seed Capital” from a wide variety of courses, including friends and family. But the Mid-Atlantic Investment Network allows members to look beyond that, with the ability to broadcast your plans to other potential investors online.
While technology remains one of the top niches in angel investment (such as the recent development by an entrepreneur in Maryland to develop software that uses ****** recognition technology to determine who can see the content on-screen), other fields are also attracting entrepreneurs and angel investors these days. Our network has active investors and entrepreneurs in fields such as Real Estate, Retail, Business Services, Transportation, Health Care, Entertainment, Agriculture and more.
A wide range of investors are members, including various angel investors from within Mid-Atlantic regions such as Delaware, Maryland (including Baltimore), Pennsylvania (Philadelphia, Pittsburgh, etc), Virginia, West Virginia and Washington D.C, but also features investors located across the country and internationally.
Join the Mid-Atlantic branch of the Angel Investment Network today and find someone to help get your business off of the ground.
By: Angel Investment
About the Author:
Filed under Business by on Jan 24th, 2010.
A paper in Philadelphia (Philadelphia Inquirer & Daily News) recently did a story in which a start-up CEO almost seemed to feel like securing angel investment was easier in this market than before. And it makes sense, since less competition combined with more places to look for funding make this a good time for companies to secure investment.
It is true that angel investors are becoming more cautious, and one will need a strong, convincing business plan (or some already existing activity) in order to secure such funding, but this has always been the case. However, sites such as the Mid-Atlantic Investment Network help potential entrepreneurs and existing start-ups alike find more channels in which to reach these investors.
Many companies will look to raise “Seed Capital” from a wide variety of courses, including friends and family. But the Mid-Atlantic Investment Network allows members to look beyond that, with the ability to broadcast your plans to other potential investors online.
While technology remains one of the top niches in angel investment (such as the recent development by an entrepreneur in Maryland to develop software that uses ****** recognition technology to determine who can see the content on-screen), other fields are also attracting entrepreneurs and angel investors these days. Our network has active investors and entrepreneurs in fields such as Real Estate, Retail, Business Services, Transportation, Health Care, Entertainment, Agriculture and more.
A wide range of investors are members, including various angel investors from within Mid-Atlantic regions such as Delaware, Maryland (including Baltimore), Pennsylvania (Philadelphia, Pittsburgh, etc), Virginia, West Virginia and Washington D.C, but also features investors located across the country and internationally.
Join the Mid-Atlantic branch of the Angel Investment Network today and find someone to help get your business off of the ground.
By: Angel Investment
About the Author:
Filed under Business by on Jan 24th, 2010.
Entrepreneurs look at factors like the ease of recruitment, and as a result – have looked into the central states of the US, such as Colorado, where the workforce is well educated, quality of life is good, and cost of living is a big step lower than on the coasts.
With hopes up about stabilisation of the economy, this is a great opportunity for aspiring entrepreneurs and small business start ups alike to take things to the next level. Over the last few years, several angel groups and individual investors have started to set up shop in cities like St. Louis (such as the Arch Angel Investor Network), again bucking the general trends.
On the Central Investment Network – entrepreneurs in the Central states of the US get another chance to connect with angel investors. Members can get their business ideas and plans out to hundreds of local investors – and since Central Investment Network is part of the Angel Investment Network, members can connect with thousands of other investors from around the world. In fact the network grows continuously, with branches in over 40 countries and investments occurring both on a local and international basis.
Of course, the plans have to be well thought out and organised, as while entrepreneurs may have less competition, the investors are also more choosy. Still, there are signs that more successful angel investment strategies such as venture capital investments are occurring within the central states. While some venture capital backed companies have gone bankrupt this year in the U.S, almost all of them are California based, and none of them are in the states that the Central Investment Network covers – which includes Colorado, Kansas, Missouri, Montana, Utah & Wyoming.
Find out more, by visiting http://www.centralinvestmentnetwork.com
By: Angel Investment
About the Author:
Read more on Angel Investment Opportunities for Entrepreneurs in Denver, St. Louis and Kansas City…
Filed under Business by on Jan 24th, 2010.