Accounting
What are the three financial statements?
Balance Sheet, Income Statement, Cash Flow Statement
Jerome Powell
What does DCF stand for?
Discounted Cash Flows
What is valuation, in simple terms?
Trying to find a monetary value for a company
What's the difference between a merger and an acquistion?
Mergers usually occur with companies of similar size in the same or similar industry. Acquisitions are one company buying another smaller one.
Name three line items on the balance Sheet
Answers vary - Cash, AR, AP, Short and Long-Term Loans, RE, etc.
Who recently acquired Twitter? Bonus: For what amount, using what?
Elon Musk (and other investors), $44 B all-cash
WACC
What are 2 major types of valuation, not including the DCF?
Comps and Precedent Transactions
What is EPS and which financial statement would you find it on?
Earnings per share, income statement
If you could only use 2 financial statements to evaluate a company, which 2 would you choose and why?
Income Statement and Balance Sheet b/c you can construct a Cash Flow Statement from those.
What are the two methods of obtaining a terminal value in a DCF?
What does LBO stand for? BONUS: What industry uses LBOs most frequently?
Leveraged Buyout, usually used by PE companies
Deliver your tell me about yourself.
Answers vary, obviously
Why is depreciation an expense on the income statement but added back on the Cash Flow statement?
What is the name of Credit Suisse's new spinoff?
Credit Suisse First Boston
What are the components of WACC?
Cost of equity, cost of debt, capital structure (% equity and % debt), and (1 - tax rate)
Why would a company with similar growth and profitability to its Comparable Companies be valued at a premium?
Inflated stock price, competitive advantage (IP), market leader in a niche industry. Answers can vary
What's the difference between the IBD and Sales & Trading Desks in a bank?
IBD works on deals and advising companies during IPOs. S&T deals with stocks, bonds, and derivatives and work with clients to get them the best returns.
Income Statement: Depreciation up by $10 so EBIT down $10, with 20% tax net income is down $8.
CFS: Net income down $8, but $10 added back because depreciation is non-cash. Overall cash balance up by $2.
BS: Cash is up $2 from CFS, PP&E down $10. Net income down $8 and sheet balances.
Pitch me a stock.
Answers vary
Walk me through a DCF
Project out financial statement assumptions, get FCF for each year, sum and discount using WACC, determine terminal value and discount using WACC, add together to get EV
How do you calculate equity value in simple terms?
Market Cap; Stock Price x Number of Shares Outstanding
What did Chargepoint's stock price close at today?
Will take anything between $10-$18; Closed around $14