A Day in the Life of an Investment Banking Analyst by rt3463df

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									CONFIDENTIAL




Investment Banking Analyst




Western Investment Club (WIC)
November 8, 2007

Ali Nensi & Harish Venkatesh
I. Functional Overview
Financial Modeling

                                            Easy
   Example: Comparable Company Analysis




   Example: Merger Consequences Analysis




       Example: LBO Valuation Model
                                           Difficult
Formatting, Formatting, Formatting…
Comparable Company Analysis

Company                                                         Market Cap
                               Price (Mar 1, 05) Shares Outstanding             LTM Net Debt LTM TEV       LTM Revenue LTM EBITDA
Imperial Oil Ltd.                          89.7      349320145      31334.01701           164  31498.01701         21153        3899
Petro-Canada                             69.55       260237506      18099.51854          2410  20509.51854         14442        4777
Suncor Energy Inc.                       46.71       454293646       21220.0562          2159   23379.0562          8699        1890
Shell Canada Ltd.                          86.6      275118462      23825.25881             45 23870.25881         11288        2633
Talisman Energy Inc.                     42.27       371378490      15698.16877          2419  18117.16877          6479        2844
Canadian Natural Res. Ltd.               68.85       268180123      18464.20147          3704  22168.20147          7179        3928

Husky Energy Inc.                        36.6    423673264    15506.44146           1874   17380.44146           8540          2623
**indicates millions of CDN$




                                                     Appearance Matters
Formatting, Formatting, Formatting…
Comparable Company Analysis

Company                                                                      Market Cap
                                            Price (Mar 1, 05) Shares Outstanding             LTM Net Debt LTM TEV       LTM Revenue LTM EBITDA
Imperial Oil Ltd.                                       89.7      349320145      31334.01701           164  31498.01701         21153        3899
Petro-Canada                                          69.55       260237506      18099.51854          2410  20509.51854         14442        4777
Suncor Energy Inc.                                    46.71       454293646       21220.0562          2159   23379.0562          8699        1890
Shell Canada Ltd.                                       86.6      275118462      23825.25881             45 23870.25881         11288        2633
Talisman Energy Inc.                                  42.27       371378490      15698.16877          2419  18117.16877          6479        2844
Canadian Natural Res. Ltd.                            68.85       268180123      18464.20147          3704  22168.20147          7179        3928

Husky Energy Inc.                                     36.6       423673264        15506.44146                1874       17380.44146               8540              2623
**indicates millions of CDN$




Comparable Company Analysis

($ in millions, except per share amounts)


Company                              Price (Mar 1, 05)       Shares O/S         Market Cap         LTM Net Debt         LTM TEV           LTM Revenue        LTM EBITDA
Imperial Oil Ltd.                    $            89.70       349,320,145   $         31,334   $             164    $       31,498    $         21,153   $          3,899
Petro-Canada                                      69.55       260,237,506             18,100               2,410            20,510              14,442              4,777
Suncor Energy Inc.                                46.71       454,293,646             21,220               2,159            23,379               8,699              1,890
Shell Canada Ltd.                                 86.60       275,118,462             23,825                  45            23,870              11,288              2,633
Talisman Energy Inc.                              42.27       371,378,490             15,698               2,419            18,117               6,479              2,844
Canadian Natural Res. Ltd.                        68.85       268,180,123             18,464               3,704            22,168               7,179              3,928




                                                                     Appearance Matters
And the rest…




                All part of the job
II. A Day in the Life
  A Day in the Life…
8:00 a.m.: This is a good time to start for first-year analysts; everyone else comes in a half an hour or an
hour later.

8:03 a.m.: Upon entering cube/office, check to see if voice mail light is on. If it's Monday, pray to God it's
not on, because that means you didn't check it over the weekend and someone might have had work for
you to do and wants it in an hour from now (or worse, wanted it yesterday).

8:05 a.m.: Get hot coffee or tea; you'll need it to wake up. Also, out of camaraderie, get one for other
analyst guy who didn’t go home in the first place. He'll thank you for it, though he probably won't know
your name in his current state.

8:30 a.m.: Look nervously around the corner to see if associate or director has arrived, so nobody
catches you surfing the web for yesterday’s football game highlights (that you missed…). Keep a
random spreadsheet open you can alt-tab between just in case.

9:15 a.m.: After waiting for five minutes for slow network to load, find your files and continue on
research/model? Whatever you didn’t finish the night before because you knew you still had this
morning.

9:17 a.m.: Phone rings. Director/associate calls you for status on the one thing you haven't finished yet.
Hold him off until you can finish it and curse yourself for not finishing up last night.

9:30 a.m.: Phone rings again. You know what director/associate is going to say so right off the bat you
say, "I’m almost done." Then in between a lot of "okays" you curse your computer for being so slow.
  A Day in the Life…
10:00 a.m.: Conference call with deal team, which may include people from other product and industry
groups who work in conjunction on a project with you. Managing director is likely to read over material
that you were 90 percent responsible for? But only your associate and director know this. Pray nothing’s
wrong with numbers and grammar.

11:10 a.m.: Too early for lunch but you're already hungry.

11:15 a.m.: Call up any other analyst buddy in some other group or office and make small talk. He won't
have time to talk to you anyway, but it beats having to look at the model again.

12:45 p.m.: Lunch across the street or, if you feel rich, pick up food from some fancy sandwich place a
few miles away as a sign of your protest to the cafeteria's overpriced salads. Always take cell phone with
you.

3:00 p.m.: New business coming in through another managing director. Your task, should you accept
(and you will), is to fill out the first in a long series of forms that will be submitted to one committee after
another for review. You will agonize over the outline and dig through countless sources to extract
information and dump it, re-formatted, into your growing file. This will take the rest of the week if your
managing director planned ahead. Otherwise, the loan commitment is due in two days and you will not
sleep.
  A Day in the Life…
4:30 p.m.: Managing director calls and asks you something you could not possibly know. Sound as
smart as possible and then defer question to your associate.

6:00 p.m.: Order dinner. Any dinner ordered before this time is not eligible for refund. Adjust stomach
and eating habits accordingly from day one. Everyone asks you to put it on your corporate Amex card.
Make sure you have enough on your personal bank balance to pay the full amount when the bill is due
later, since your refund through the expense system will take a month to process. Run around with list of
who wants what, don't make suggestions, don't write down the wrong thing, and get on with it.

6:35 p.m.: Wait for dinner. (An alternative to waiting might be: A managing director/executive director
gives a director a call. The director calls an associate. The associate calls you, and you’re
evening/week/weekend is ruined because a client wants presentation and model X by the end of next
week.)

7:45 p.m.: Eat dinner, chat with other analysts about what's up. Take great interest in rumors, gossip and
all kinds of BS that would get you fired if you spoke about it outside the conference room you’re all
huddled in.

8:35 p.m.: Return to work. Call up internal library for some research you don't have access to and hope
someone's still there, or it will be a tight morning tomorrow.

10:00 p.m.: Associate leaves, giving you a couple more things to do on way out. "Take your time, no
rush," he assures and thanks you for the good job you've been doing in advance. You appreciate his
gratitude but would also like to go home at some point.
  A Day in the Life.
11:00 p.m.: Discounted cash flow model inputs take very long and the model still doesn’t balance. It will
be a long night.

2:00 a.m.: You check your e-mail one more time (in fact, you never close it in the first place, as this is the
first rule of survival for anyone in investment banking), then you make sure everything is saved, and log
out the computer. Call a car or and get some sleep.

								
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