M&A is so fu*ckin hard
How did you go about studying for M&A. Im using the BIWS guides and i think it is by far the hardest compared to other topics. What did you guys do? Any help is appreciated.
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I guess hardness is relative and I don’t know your background. That said, I wouldn’t call spending 100 hours studying for a job that will immediately put you at 2x the US income really not that hard. You also don’t need to study 100 hours. In terms of the material, it’s over complicated by the way people study.
If you understand how the 3 statements work, then understand how to do an lbo, accretion dilution, dcf, then go through the questions/ guides and have chat gpt help you, it really shouldn’t be that hard. The material is overwhelming when you first look at it, but it’s pretty straightforward when you get down to it.
Adding too if you are studying question answers, you are going to have a bad time. You need to understand the background/ what things are referencing otherwise it’s chaos.
thank you for the help, but my question is why does everyone at my school feel as though the material is hard? Side note: I go to a target school on West Coast.
- how would you go about studying the M&A guide? I have done every guide up to that pretty well, but struggle with M&A
Thanks!
I don’t know the specific guides you are referencing. The world has changed much from when I was interviewing, but what hasn’t changed is learning and understanding the reasoning behind the questions goes a lot farther than the questions.
An example is the classic, “walk me through a $10 increase in depreciation and how it affects the statements” An approach is memorizing the answer and another approach is actually understanding financial statements and being able to mentally walk through each line item in an income statement or balance sheet and reconcile it with the statement of cash flows. It also is obvious when people conceptually understand things vs just memorized guides.
People say I give hard technical interviews because it generally involves a lot of “I don’t know” replies from interviewees. I’m not trying to quiz you, I’m trying to understand if I can teach you on the spot and you have business intuition. Like a dumb question I would ask in IB is what valuation method do you think we use most in our group?
common answers would be dcf or lbo and they would be wrong. I’d then say no, and why are you wrong? The answer I was looking for was many of the business my bank sold weren’t positive cash flow businesses. It’s really a pretty straightforward reason, but people that memorized guides would give me blank stares. People that walked through a dcf mentally in their head realized “wait, you can’t discount a business that has no positive cash flow”
To your point of why your peers say it is hard, I think it’s a few things:
You nailed it here. It’s not hard it’s just overwhelming with a ton of content. That’s all. Break it down into bits by bits and you’ll learn it more efficiently than cramming it two weeks before a process
Agreed.
Whats your background? To be honest out of all finance topics I personally would say corporate finance and in particular M&A is one of the most "easiest" and straight forward subject to study. Would you rather study black scholes formulas and / or some complex financial volatility models? Lmao.
Skill issue.
lol.
I know a FIFA ultimate team player when I see one.
Unless the BIWS guide covers scheduling dozens of calls with 5-20 hyper busy people in multiple timezones for 5 months, it doesn't even touch on the hardest part of M&A as a banker.
Holy shit this is accurate ahaha.
I'm in coverage but we manage all our own M&A - the organizing of calls and coordinating management presentations... I could kill myself.
I consider myself mentally retarded and it is not too hard and I managed to get an internship at a decent MM shop. I wouldn't recommend using BIWs 400 to understand the technicals it's more useful for testing yourself / learning mock answers or memorizing.
What I would do if I was you (I have done this, I hate reading and have ADHD and prefer videos for some reason):
1.) Watch Damodoran's accounting series, it's like 12 videos
2.) Go to Kenji Explains video on creating a Cash flow statement from a balance sheet and income statement. Create a dynamic model and play around with the technicals. Ie) when you change deprecation you will see how it affects the different parts of the statement. Until you do this properly don't move on
3.) Learn the 3 Valuation methods. Use videos - plenty out there. Watch RareLiquid's valuation video on comps and DCF and his valuations on Nvidia, Airbnb etc.
4.) Watch videos on M&A process. Understand the steps in a deal and the key documents such as IM etc
5.) Understand why a company would want an investment bank for M&A
6.) Why do companies merge and acquire each other? Read Vaults Guide to M&A if possible - it's like 10 pages on the "why do firms do M&A and the technicals behind it"
7.) Look at real world deals where M&A had been effective and why? Ie) What synergies were effective and made the acquisition or merger worth it. Strategic Buyers Vs Financial buyers etc
8.) Now look at accretive and dilutive analysis and the rest of the technicals. It should make much more sense with a story behind the numbers..
Can PM you if you need help.
All the best.
how do i PM lmao i rarely use wso
This is actually unusually good advice. People would be so much better rounded candidates if they took a multimedia approach.
God bless you sir 🫡
Do you any more tips ?!
Would love to dm buy u posted anonymous
Oh my bad. Feel free to shoot me a pm whenever. This should work hopefully lol
YouTube is your friend. BIWS guides are ass and give you no sense of the underlying concepts.
Title makes it seem like you are an M&A banker struggling to bring in fees... if you can't understand the basics of M&A on paper, I'd reconsider if this career is right for you
keep learning and push yourself, there would be a moment where you'll click and everything will make sense
when I was learning some topics I also kept reading and reading being a bit lost, until then, like magic, you wake up one day, you grab the book and you start understanding it
I’m sorry but m&a isn’t that hard. You want hard go take biochemistry, electrical engineering, multi variable calculus. Those all whooped my @ss. Finance isn’t that bad
Difficulty is relative but without any intention to devalue one's concerns / problems I think Corporate Finance is a fundamentally easy subject. High finance is unique in its ability to make the concepts sound super complex for those on the outside.
Create a buy report for a publicly listed company. Create financial forecasts and link up the three statements, make sure your balance sheet balances. Now create a company that this company will acquire, and use websites like this one, investopedia, and other fin websites to figure out how to do all of the M&A math and you get it.
Big thing is actually doing it vs studying terms because when you get asked a curveball question in an interview, you’ll likely remember your excel sheets faster than the answer you memorized. Good luck!!
Watch every video on Mike's channel: https://www.youtube.com/@FinanceableTraining
Mike & Financeable - GOATEDD
agree
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