We already covered the topic. But it looks like it needs to be revisited based on questions that have been coming in.
Some people are extremely interested in moving up the ranks in finance so as soon as they get a job they decide the best thing to do is buy an expensive $2,000 modelling course and pay up for training. Unfortunately these people are just stealing your money. In fact, in the future we may load up actual LBO, M&A and Accretion Dilution models if the questions keep repeating themselves.
Before we explain what you should do, lets sell you on why you shouldn’t be learning foreign tax laws and complex merger models. With an example.
Lets say you’re the Vice President of a prestigious Investment Bank, you have worked for well over half a decade to get where you are and you know what is important and what is not. A new class of Analysts and Associates roll in. You find out you just won an M&A deal, it was the first one you sourced and this is your new baby. Are you going to give this important work to a fresh face or at minimum a second year analyst who you’ve worked with before. That should pretty much answer the reason why you’re not going to spend $2,000 on “modelling and training” courses. In addition, this applies to research, hedge funds and any other high finance job. Finally, we already have templates for M&A models so why would we ask a fresh face to create the document? At minimum you ask a more senior analyst or low level associate who has bandwidth.
With that all said and done what should you do. The answer is practice extreme excel speed.
1. Go to SEC.gov and choose a Company. Create an income statement, balance sheet and cash flow statement from scratch and update for the latest earnings call (8-k document)
2. Repeat step 1 with for 6-7 historical quarters, however by the end you must be able to update the document with ALL new quarterly numbers in 45 minutes.
3. Create a forward looking 3 statement model, out 11 quarters.
4. Google excel short keys, memorize 10 of them and practice using them, repeat this process up to 100 keys. Start with “alt e s” functions then move onto using F5 religiously and training your hands to use home and end keys as well. Finally, practice navigating the internet without a mouse as well, backspace runs you to previous pages, tab to change web address etc.
5. If you’re extremely motivated go take an excel course.
6. Throw away all advanced accounting and advanced financial algorithm text books
7. Repeat steps 1-4 with graphs of Revenue, EPS, EBIT, EBITDA, EPS, incremental gross margins and any other metric you would like. Format these charts fast.
If you can do the above you’ll likely avoid rookie mistakes because you’ll be fast and efficient.
Once your excel work is much better than usual, you are going to spend the next 6 months getting into the best possible shape of your life. This is not a laughing matter. Lift extremely heavy, eat healthy, be in 100% tip top physical shape. You want to be well rested so you can be productive and happy at work and avoid the 30 lbs most people gain in year one. This is a key to being the most political person in the office which will net you more money than any course you have ever taken in your entire life. The keys to politics will be introduced relatively soon.