Let’s skip my normal drama-filled introduction and cut to the chase:
And if you’ve already signed up for the courses here, you should look at all the bonus case studies now available on the BIWS site, based on these short(er) YouTube videos.
Oh, you wanted actual reasons why you should do all of this?
OK, sure – read on…
What’s In It for You?
Whenever I conduct mock interviews, I am constantly amazed at how under-prepared most candidates are – especially on the technical questions.
But there are a ton of resources available for interview prep… unlike in, say, 2005, when it was the Vault Guide or nothing (ugh).
So the problem is not a lack of information.
The problem is that there’s too much information!
Who has time to read a huge finance textbook, or time to complete an 80-hour long course?
True, you should have started studying months in advance…
But when you just found out about an interview that starts 6 hours from now, “long-term planning” is no longer an option.
That’s what these YouTube videos are designed for.
Most of them are short(er), standalone lessons, and they address specific questions that often come up in interviews:
- How do Equity Value and Enterprise Value change when a company raises equity or debt?
- Walk me through how to calculate Unlevered Free Cash Flow in a DCF and explain what it means.
- Why and how do you use Working Capital in a DCF?
- What are the trade-offs of EBITDA vs. EBIT vs. Net Income as valuation metrics and multiples?
Some of these are around 20 minutes long, but most are closer to 10 minutes and you can easily skip around via the Table of Contents in each YouTube description.
So even if you have ADD AND it’s the last minute AND you just had a family emergency AND your pet dragon just passed away, you still have no excuse.
Put simply: these free lessons give you the most efficient way to learn and review key technical concepts right before interviews, so you get better results (job offers) in a fraction of the time.
Examples, Please
Here are my top 3 favorite lessons, based on viewer feedback and the “Likes / Views” ratio.
As always, I strongly recommend full-screening all these lessons in 720p because it is really hard to view Excel models in a tiny window.
Equity Value vs. Enterprise Value and Valuation Multiples
Equity Value and Enterprise Value are critical to understand if you want to do anything in finance, but most people – even working bankers – do not really “get” the concept.
We break it down in this lesson and go through an example of how Coca-Cola’s Enterprise Value and Equity Value change when it issues debt, repays debt, issues stock, and repurchases stock – and how the valuation multiples change as a result.
This one was inspired by the approximately 145,381,797 questions I received from students asking about similar questions in interviews.
Follow-Up Lesson: How to Decide What to Add and Subtract in Enterprise Value
LBO Model Concept: Leveraged Buyout and Buying a House
“Buying a house” is a common analogy used to explain leveraged buyouts, but it’s also a flawed analogy that doesn’t quite capture what happens.
We take a look at a much better analogy in this lesson: buying a house with the intent to rent it out to someone else and then sell it in the future – and show you how that matches up to an LBO, as well as the math behind both of them.
Apparently it’s “much better than the Investopedia one” (take that, $42 million company! You’ve been beaten by a guy working from a coffee shop).
What Working Capital Means in Valuation and Financial Modeling
Do you know what consistently causes the most confusion in the DCF tutorials we have?
Working Capital.
No one seems to understand WTF it means, and finance textbooks give explanations that make you want to rip off your own face while jumping into an acid-filled shark tank that sporadically catches fire.
This is one topic where the explanation is simple – but also one where no online sources (except for our videos) clearly explain what’s going on or how a company’s business model impacts its Working Capital… and in turn impacts its valuation in a DCF.
The Future
We add a new lesson every week or two, depending on how productive my army of leprechauns is.
So after you subscribe, you’ll get notifications for each new video we add – including those on more advanced and industry-specific topics.
Or you could not subscribe and be at a disadvantage in your next interview when you’re up against someone who has been through all the material.
Your call.
What If You’re a BIWS Member?
Even better: you get not only all the videos, but also all the Excel files and PDFs you need to complete the exercises on your own.
If you have signed up for the Fundamentals or Advanced courses (or some combination thereof), you can get everything inside the Bonus Case Studies section of the site.
NOTE: We tend to add videos in batches, so there may be a few YouTube lessons that aren’t there yet.
A lot of these bonus videos are “patches” for the lessons in those courses, and they address questions that came up afterward or points that I hadn’t thought about the first time around.
So as you’re going through those courses now, you’ll see notes and links to the relevant bonus case study lessons that expand on the topic in some way.
I highly recommend following those links because the videos and Excel exercises have gotten better and better over time – just ask anyone who joined the site in 2009 and has been using it over the past 5 years.
And One More Thing…
One other quick announcement for you…
We are releasing a brand new version of the Financial Modeling Fundamentals course by the end of this year that will blow away everything else in the market.
The videos above are a “preview” of some of the material in this new course.
A lot of textbooks, guides, and courses give you the formulas or teach you the mechanics of financial modeling…
But that’s the easy part.
The hard part is understanding why you’re doing any of it in the first place and how to use the output in real life.
Existing modeling courses come up short when it comes to understanding a company’s operations and the business itself.
That’s probably because most bankers’ knowledge of “operations” is limited to entering “Revenue = Prior_Year_Revenue * (1 + Growth_Rate)” in Excel.
This new course will bridge the gap between the mechanics you can learn in any course and the “real life” aspects that everyone else overlooks.
You’ll understand, for example:
- If a growth equity firm is investing in a high-growth start-up, what does the customer count need to reach by Year 5 for the firm to realize a 20% IRR? What does that imply about the company’s sales & marketing spending? Are the numbers achievable, given its business model?
- If a budget airline wants to increase its ROIC from 15% to 25%, what does that imply about the total number of flights it must offer? Is that assumption even plausible, given competitors in the market and projected passenger growth?
- If a pharmaceutical company spends more to advertise its new specialty drug to one customer segment and gains more patients, what impact does that make on its share price? Can you long/short it to make money? Is it ethical to do so, given the state of the broken healthcare market?
We even use financial modeling to delve into socioeconomic issues, such as the death of the middle class in America.
And did I mention that around half the case studies are based on non-US companies?
We go to Australia, the UK, France, Japan, China, and yes, my personal favorite: Korea.
Where Can You Sign Up?
OK, so that’s the one negative: it’s not available yet.
It will be done by the end of 2014, if not before that.
If you’re a BIWS member, you’ll start seeing the new additions very soon…
…starting with 60 new Accounting and Financial Statement Analysis lessons later this week (look for the “New” Fundamentals course inside the site).
After that, more lessons will be added each month until it’s done.
If you sign up anytime between now and the completion date, you’ll get the entire new course for free.
If you’re still not convinced, you can take a look at 2 of the new case studies below:
- Atlassian Case Study (Growth Equity / Venture Capital case on 3-Statement Modeling)
- EasyJet Case Study (Hedge Fund / Asset Management case on Financial Statement Projections)
No answer keys yet, but bonus points if you build those models and answer everything flawlessly yourself.
Oh, and make sure you subscribe to that YouTube channel for more previews of everything coming up.
Any questions?
The post How to Gain an Unfair Advantage Over Everyone Else in Interviews… for Free appeared first on Mergers & Inquisitions.
