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Veritas Financial Group. Introduction to the Financial Universe Week 7 – Interview Prep. How to Get the Job. Know your stuff Foundational finance knowledge Submit a respectable resume Both in appearance and substance Present yourself well in the interview Both in appearance and substance.
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Veritas Financial Group Introduction to the Financial Universe Week 7 – Interview Prep
How to Get the Job • Know your stuff • Foundational finance knowledge • Submit a respectable resume • Both in appearance and substance • Present yourself well in the interview • Both in appearance and substance
The Resume • Generally the first thing employers look at • Sometimes the only thing they look at in making a decision about whether to invite for interviews • Three important areas on a student resume • 1) Education & GPA • 2) Prior work/professional experience • 3) Leadership experience • Skills/Interests/Languages sections are also great ways for making conversation with interviewers
The Resume • The first and most important rule: • If you can’t talk about it, don’t put it on your resume. Period. • The only thing worse than an empty resume is a padded resume for a candidate who can’t talk about half of the items listed. • Do include any relevant experiences, skills, or classes • Don’t exaggerate (think language skills) • Recruiters will be making decisions on most resumes within 1-2 minutes!
Resume Best Practices • Think S.T.A.R.: Situation, Task, Action, Result • Use action verbs for all of your points • “Awarded X prize for outstanding academic performance and community leadership” • “Developed a presentation for X non-profit organization which was presented to the leadership team” • “Analyzed empirical data on congressional voting patterns for an academic research project” • Clearly identify the name, location, and dates for every entry • Variety of styles are OK, but clarity is key
“I don’t have anything to put on my resume. What do I do?!” • You’ve done more than you think. • High school activities/events are generally fine for freshmen/sophomores • Education should include relevant coursework, independent studies, thesis work. GPA and SAT/GMAT/etc. optional if they are strong. • Leadership includes on-campus orgs., summer programs, finance organizations (hint, hint) • “Member” entries are OK, but not ideal.
Interviews & the Recruiting Process • Typical recruiting cycle: • Resume Drop (Round 0) • On-Campus Interviews (Round 1) • Callback Interviews (Round 2) • Different firms have different-sized “funnels” when it comes to hiring. • i.e. Some firms give lots of Round 1 interviews and cut for Round 2; Some firms are more selective in Round 1 interviews • Two types of interviews: fit vs. technical
Round 1 – The Fit Interview • On-Campus interviews are generally “fit” interviews for the firm as a whole. • Interviewer(s) will probably not be from your specific division/office/group/etc. • Generally a single, 20 to 30 minute, 1-on-1 or 2-on-1 interview at the Charles Hotel or Harvard offices in BofA building • Questions focus on you as a person and how you “mesh” with the firm. Are you a “fit”?
Round 1 – Sample Questions • Walk me through your resume. • Why do you want to do investment banking/investment management/whatever career you plan to pursue? • Why do you want to work for <firm>? • Why did you go to Harvard? • Why did you major in <subject>? • Why are you involved with <activity>? • What’s your greatest strength / weakness? • Tell me about a time when you failed. • Tell me about a time you led a team. • Give me an example of a project that you’ve done that involved heavy analytical thinking.
Round 1 – Sample Technical Questions • How do you value a company? • What is the formula for the capital asset pricing model (CAPM)? • What are the different multiples that can be used to value a company? • What is beta? • What is the difference between a balance sheet and income statement? How are they related? • What is EBITDA? • What is Free Cash Flow? How is it calculated? • What happens to each of the three primary financial statements when you change a) gross margin, b) capital expenditures, c) any other change? • Don’t worry, these are questions you’ll answer as a junior, possibly sophomore.
So…how do you value a company? • There are three primary ways to value a company: (1) Discounted Cash Flow (“DCF”) • Forecast Free Cash Flows for 5-10 years • FCF = EBIT * (1-t) + Depreciation & Amortization - Capital Expenditures - Net increase in working capital + Other cash items • Calculate Terminal Value • TV = FCFYr5 * (1+g) (r-g) • Discount future cash flows and terminal value by the WACC • WACC = Weighted Average Cost of Capital • WACC = Kd * (D/D+E)*(1-t) + Ke * (E/D+E) • Kd = Cost of Debt • Ke (CAPM) = Rf + β*(Rm – Rf)
So…how do you value a company? (2) Trading multiples of comparable companies • Find comparable publicly traded companies: “comps” • Determine relevant trading multiples (e.g. EV/EBITDA, P/E, EV/Revenue, etc) • Apply multiple to target’s metric (3) Precedent transaction multiples • Find comparable publicly traded companies: “comps” • Determine relevant transaction multiples (e.g. EV/EBITDA, P/E, EV/Revenue, EV/Reserves, etc) • Apply multiple to target’s metric • Note: precedent transactions include a premium for control (~20-30%)
Round 2 – The Callback • Be prepared for a “Superday” of four to eight interviews with all sorts of professionals. • A few junior people, a few senior people, and a few in-between. • Many of these will be people in the group you’re interviewing for. They will be working with you throughout the summer. • Are you the kind of person who they’d want to be around 14+ hours a day? • Do you have some idea of what you’re doing, and are you willing to learn as you go?
Interview Appearance Tips • Wear a suit. Period. (goes for ladies and gents) • Gents: light, neutral-colored shirt. White, light blue are always ok. Maybe light green. • Ladies: light-colored blouse. White or any light color should do. • Avoid perfume/cologne and flashy jewelry (watch and college ring are generally fine) • Goal: your outfit should be “polished but forgettable.” Stand out for your dialogue and skills, not your attire. • You’re always on. Even at lunch. Remember to breathe, and it will be over before you know it.
Do you have any questions for me? Saying “No” is never a good idea. • Ask questions that show you’ve researched: • Good: I’ve read that your firm has a formal mentoring program for summer associates. Can you talk about how associates are assigned to mentors? • Bad: Tell me about your summer program. • Good: What does the career track look like for a new analyst? How do formal evaluations affect my level of responsibility at the firm? • Bad: So, what’s the bonus situation like here?
Additional Sample Questions Finance • What did the Dow close at today? • Are there any stocks you follow? • What is oil trading at? • How would you invest $100,000 for a client? • How many degrees are there between the minute and hour hand when a clock says 3:15? Consulting • How long does it take that Starbucks to sell enough coffee to fill the gas tank of a Hummer? • There’s a client with a shrinking profit margin who called us in to help. Where do we start?
Additional Sample Questions Law School • Why do you want to go to law school? • Why do you want to go to this law school? • What areas of law are you particular excited about? Why? Business School (2+2) • Why do you want to go to business school? • Are you ready for business school? • Why should we admit someone on the younger side when we have applicants with more work experience?
