Analyst Ebook

The Corporate Finance Institute The Analyst Trifecta
The Analyst Trifecta
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Table of contents
04 Introduction
08 Analyst Trifecta Section 1: Analytics
08 Financial Modeling
09 What is Financial Modeling
18 Types of Financial Models
23 Complete guide to financial modeling
32 Financial Modeling Skills
36 Valuation
37 Valuation Methods
41 DCF Analysis
44 Business Valuations
49 Excel
50 List of Excel shortcuts
55 Excel formulas cheat sheet
58 Advanced Excel Formulas
65 Analyst Trifecta Section 2: Presentation
65 Presentation
66 Investment Banking PitchBook
69 ECM Memo
73 Greensheet
75 Term Sheet
78 Letter of Intent
83 Teaser: The First Glance
Table of contents
86 Data Visualization
87 Overview of Dashboards and Data Visualization
94 Types of Graphs
100 Football Field Chart
103 Excel Waterfall Chart
106 Analyst Trifecta Section 3: Soft Skills
106 Preparing for an Analyst Role

107 Becoming a Financial Analyst
110 Guide to Getting a Job in Corporate Finance
114 Dealing with Industry Professionals

115 Personal Brand
120 Office Politics
126 Part 1: Networking and Building Relationships within the Company
139 Advance Your Career
Introduction
To learn more, please check To become a world-class financial analyst, we believe that one must
out our online courses develop a high level of proficiency in three crucial areas: Analytics,
Presentations & Documents, and Soft skills. The purpose of this e-book
is to help you achieve that, and to provide you with the proper guidance
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and general exposure to what analysts do on a day-to-day basis.
Regardless of what your occupational situation is (whether you are a

university or college student, a new analyst, an experienced analyst or
someone whos looking to change careers), our goal is to equip you with
the necessary knowledge and tools to help you succeed in your future
or current job in finance.
As an analyst, quantitative and analytical skills are mandatory

qualifications to have. However, to reach your maximum potential,
you also need to work on other skills, which are often overlooked, to
advance your career. Theres not enough emphasis on presentation-
making skills and social skills, which we think are all equally important
for your success. This is why we included these two other areas to
complete The Analyst Trifecta.
This e-book is divided into three sections:
1. Analytics
This section covers the fundamentals of financial modeling and
valuation. We will show you what they are, why they are performed in
finance and how to build one from scratch. We will also introduce Excel
shortcuts and formulas to improve your efficiency with spreadsheets.
When we think of an analysts role, we readily assume that its all about
reading financial statements and working on endless spreadsheets.
Theres no denying that an analysts job can become quite technical.

After all, they deal with numbers and perform computations on a
regular basis. Building financial models alone is a complex task that
requires deep understanding of both finance and accounting concepts
and theories.
This may explain why aspiring analysts tend to focus mostly on building
their analytical and quantitative skills prior to getting their dream jobs.
You do need to develop sincere interest and skills in financial analysis,
company and industry-specific research, and solving numeric-based
problems. These are the main components of the job, and this section
will help you get started on building the required skill set.
On the other hand, analysts also spend much of their time in creating
presentations and documents, which deserves equal attention and
practice.
2. Presentations & Documents

This section covers the most common presentation materials analysts
work on. It includes marketing slide decks or sales book, such as
Pitchbooks, which are widely used in investment banking to win new
businesses. Additionally, we will go over a few, common documents that
are internally produced by banks and other firms.
We often spend most our time on the technical side of things that
we forget about the important skill of creating visually-appealing
presentations and documents.
For instance, many first-year analysts in investment banks will spend

most of their time creating PowerPoint presentations. Depending on
your skill level, actually building a financial model from scratch will not
happen until later in the year or even after a year.
There are a lot of reading and writing involved in creating presentations.

Youll need to be able to articulate your ideas, gather relevant data and
information, and present them in an organized fashion, such as using
charts and graphs.
Therefore, its very important early on that you become familiar with
different presentations and documents. It takes skills and lots of time to
make them look good.
After covering the standard responsibilities of analysts, we then

move on to discuss the importance of your personal brand properly
networking, building relationships and being liked by other people.
3. Soft Skills
This section focuses on the social aspects of becoming a financial
analyst. It covers networking your way to a finance job, preparing
for rounds of interviews, taking care of your professional image and
building working relationships within any firm.
Soft skills are just as important as any hard skills mentioned earlier.
Speaking in public, expressing our ideas and opinions, collaborating and
being liked by the people around us will either have a huge, positive or
negative impact on our professional success. This all depends on where
we are with our soft skill level.
Youll be meeting and interacting with many employees within the

firm, as well as with its clients. Not only that, but youll also be working
alongside them on countless deals and projects. For these reasons, you
must have exceptional interpersonal skills to be a great analyst.
When networking for a job, you must be able to express your genuine
enthusiasm for finance. Moreover, you must be able to communicate
your personal and professional story to convince employers that youre
the ideal candidate for the job youre applying for. It takes skills to talk
your way up the corporate hierarchy.
If your career matters to you, then you must develop your soft skills.
Despite your personality type, you can always find your voice in
the company. And, having strong soft skills will give you an added
advantage and preference over someone who is less than polished in
speaking and getting along with colleagues and clients.
More Resources
The summary above briefly describes the concept of The Analyst
Trifecta and whats expected from this e-book. By following this
comprehensive guide, we are confident that youll stand out from the
crowd and will, in due course, reach the pinnacle of your career.
Through our vast resources in corporate finance training, primarily

financial modeling and valuation, youll learn exactly what analysts do
in their daily job. In addition, our courses are taught by professional
trainers with years of industry experience and delivering training
programs to top bulge bracket banks in the world.
By the end of this e-book and after going through our courses offered
on CFIs website, you will have the confidence and practical experience
to succeed in your chosen career in corporate finance.
Lets get started!
PART 01
Analytics:
Financial Modeling
01
02
03
A. What is Financial modeling?
To learn more, please check What is a financial model?

out our online courses A financial model is simply a tool thats built in Excel to forecast
a business financial performance into the future. The forecast is
typically based on the companys historical performance and requires
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preparing the income statement, balance sheet, cash flow statement
and supporting schedules. Below is an example of financial modeling in
Excel:
What is a financial model used for?

The output of a financial model is used for decision-making and
performing financial analysis, whether inside or outside of the company.
Inside a company, executives will use financial models to make decisions
about:
Raising capital (debt and/or equity)

Making acquisitions (businesses and/or assets)
Growing the business (i.e. opening new stores, entering new
markets, etc.)
Selling or divesting assets and business units
Budgeting and forecasting (planning for the years ahead)
Capital allocation (priority of which projects to invest in)
Valuing a business
Who builds financial models? (Jobs and career)

There are many different types of professionals who build financial
models. The most common types of career tracks are investment
banking, equity research, corporate development, FP&A, and
accounting (due diligence, transaction advisory, valuations, etc.).
To learn more about jobs and careers that require building financial
models, explore our interactive career map.
How can you learn financial modeling?

The best way to learn financial modeling is to practice. It takes years
of experience to become an expert at building a financial model, and
you really have to learn by doing. Reading equity research reports
can be a helpful way to practice, as it gives you something to compare
your results to. One of the best ways to practice is to take a mature
companys historical financials, build a flat-line model into the future,
and calculate the net present value per share. This should compare
closely to the current share price or the target prices of equity research
reports.
Its also important to establish a solid base understanding by taking

professional financial modeling training courses such as the ones we
offer at CFI in several locations across North America. In the meantime,
you may also be interested right away in building your own financial
models. Feel free to use our available free templates to get a jump start
before taking one of our courses.
What are financial modeling best practices?
1. Excel tips and tricks

Its very important to follow best practices in Excel when building a
financial model. For more details, you can take our free Excel course,
which outlines the following key themes:
Limit or eliminate the use of your mouse (keyboard shortcuts are

much faster)
Use a blue font for hard-codes and inputs (formulas can stay black)
Keep formulas simple and break down complex calculations into
steps
Ensure you know how to use the most important Excel formulas and
functions
Use INDEX and MATCH instead of VLOOKUP to query data
Use the CHOOSE function to build scenarios
2. Formatting
Its important to clearly distinguish between inputs (assumptions) in
a financial model and output (calculations). This is typically achieved
through formatting conventions, such as making inputs blue and
formulas black. You can also use other conventions like shading cells or
using borders.
3. Model layout and design

Its critical to structure a financial model in a logical, easy-to-follow
design. This typically means building the whole model on one
worksheet and using grouping to create different sections. This way, its
easy to expand or contract the model and move around it easily.
The main sections to include in a financial model (from top to bottom) are:
1. Assumptions and drivers

2. Income statement
3. Balance sheet
4. Cash flow statement
5. Supporting schedules
6. Valuation
7. Sensitivity analysis
8. Charts and graphs
Below is an example of the grouped sections of a well laid out financial

model:
How do you build a financial model? (10-step Guide)

Financial modeling is an iterative process. You have to chip away at
different sections until youre finally able to tie them all together.
Below is a step-by-step breakdown of where you should start and how

to eventually connect all the dots. For more detailed instructions and to
work through your own Excel model, check out our financial modeling
courses.
1. Historical results and assumptions

Every financial model starts with a companys historical results. You
begin building the financial model by pulling three years of financial
statements and inputting them into Excel. Next, you reverse engineer
the assumptions for the historical period by calculating items such as
revenue growth rate, gross margins, variable costs, fixed costs, AR days,
inventory days, and AP days, to name a few. From there you can fill in
the assumptions for the forecast period as hard-codes.
2. Start the income statement

With the forecast assumptions in place, you can calculate the top
of the income statement with revenue, COGS, gross profit, and
operating expenses down to EBITDA. You will have to wait to calculate
depreciation, amortization, interest, and taxes.
3. Start the balance sheet

With the top of the income statement in place, you can start to fill in the
balance sheet. Begin by calculating accounts receivable and inventory,
which are both functions of revenue and COGS, as well as the AR days
and inventory days assumptions. Next, fill in accounts payable which is
a function of COGS and AP days.
4. Build the supporting schedules

Before completing the income statement and the balance sheet, you
have to create a schedule for capital assets like PP&E, as well as for debt
and interest. The PP&E schedule will pull from the historical period and
add capital expenditures and subtract depreciation. As for the debt
schedule, it will also pull from the historical period and add increases
in debt and subtract repayments. Interest will be based on the average
debt balance.
5. Complete the income statement and balance sheet

The information from the supporting schedules completes the
income statement and balance sheet. On the income statement, link
depreciation to the PP&E schedule and interest to the debt schedule.
From there you can calculate earnings before tax, taxes and net income.
On the balance sheet, link the closing PP&E balance and closing debt
balance from the schedules. Shareholders equity can be completed
by pulling forward last years closing balance, adding net income and
capital raised and subtracting dividends or shares repurchased.
6. Build the cash flow statement

With the income statement and balance sheet complete, you can build
the cash flow statement with the reconciliation method. Start with net
income, add back depreciation and adjust for changes in non-cash
working capital, which results in cash from operations. Cash used in
investing is a function of capital expenditures in the PP&E schedule, and
cash from financing is a function of the assumptions that were laid out
about raising debt and equity.
7. Perform the DCF analysis

When the three statement model is completed, its time to calculate
free cash flow and perform the business valuation. The free cash flow
of the business is discounted back to today at the firms cost of capital
(its opportunity cost, or required rate of return). We offer a full suite of
courses that teach all of the above steps with examples, templates, and
step-by-step instruction. Read more about how to build a DCF model.
8. Add sensitivity analysis and scenarios

Once the DCF analysis and valuation sections are complete, its time to
incorporate sensitivity analysis and scenarios into the model. The point
of this analysis is to determine how much the value of the company
(or some other metric) will be impacted by changes in underlying
assumptions. This is very useful for assessing the risk of an investment

or for business planning purposes (i.e. does the company need to raise
money if sales volume drops by x percent?).
9. Build charts and graphs

Clear communication of results is something that really separates good
from great financial analysts. The most effective way to show the results
of a financial model is through charts and graphs, which we cover in
detail in our advanced Excel course as well as many of the individual
financial modeling courses. Most executives dont have the time or
patience to look at the inner workings of the model, so charts are much
more effective.
10. Stress test and audit the model

When the model is done, your work is not yet over. Next, its time to
start stress-testing extreme scenarios to see if the model behaves as
expected. Its also important to use the auditing tools covered in our
financial modeling fundamentals course to make sure its accurate and
the Excel formulas are all working properly.
Free financial modeling video lesson

Want to see all the above steps in action? Check our CFIs free webinar
video about how to build a three statement financial model in Excel.
This live demonstration will show steps 1 6 listed above.
Watch video
More about financial modeling

We hope this has been a helpful guide on what financial modelling is all
about and how to perform it.
If you want to learn more, weve got all the resources you need:
Types of financial models
DCF model guide
Valuation methods
Free Excel crash course
B. Types of Financial Models
To learn more, please check Top 10 types of financial models

out our online courses
Here is a list of the 10 most common types of financial models:
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1. Three Statement Model
2. Discounted Cash Flow (DCF) Model
3. Merger Model (M&A)
4. Initial Public Offering (IPO) Model
5. Leveraged Buyout (LBO) Model
6. Sum of the Parts Model
7. Consolidation Model
8. Budget Model
9. Forecasting Model
10. Option Pricing Model
More detail about each type of financial model

To learn more about other types of financial analysis, you may want to
check out:
Related links: Three Statement Model

This is the most basic setup for financial modeling. As the name implies,
Learn the basics here
the three statements (income statement, balance sheet and cash flow)
are all dynamically linked with formulas in this model.
Related links: Discounted Cash Flow (DCF) Model

This model builds on the three statement model to value the business
Equity research based on the net present value of the business future cash flow. These
types of financial models are used in equity research and other areas of
capital markets.
Related links: Merger Model (M&A)

This is a more advanced model used to evaluate the accretion /
Investment banking dilution pro forma of a merger or acquisition. Level of complexity can
vary widely, and most commonly used in investment banking and/or
Corporate development corporate development.
Related links: Initial Public Offering (IPO) Model

Bankers and corporate development professionals will also build IPO
Excel crash course models in Excel to value their business in advance of going public.
This includes an IPO discount to ensure the stock trades well in the
secondary market.
Related links: Leveraged Buyout (LBO) Model

A leveraged buyout typically requires modeling complicated debt
Leveraged buyout
schedules and is an advanced form of financial modeling.
Related links: Sum of the Parts Model

This type of model is based on several DCF models added together, as
Marketable Securities well as other components of the business that might not be suitable for
a DCF (i.e. marketable securities, which would be valued based on the
market).
Consolidation Model
Multiple business units added into one model. Typically, each business
unit is its own tab with consolidation tab that simply sums up the other
business units.
Related links: Budget Model

Used in financial planning & analysis to get the budget for the coming
FP&A Analyst year(s). Budget models are typically designed to be based on monthly
figures.
Related links: Forecasting Model

Also used in FP&A to build a forecast that compares to the budget
Forecast Modeling model. Sometimes the budget and forecast models are just one.
Option Pricing Model

The two main types are binomial tree and Black-Sholes. These models
are based purely on mathematical models rather than subjective
criteria.
Download our 3 statement Examples of financial models

financial model: Here are some screenshots of the various types of financial models
discussed above. If youd like to get the templates, you can always
Financial models download our financial models.
3 Statement Model
Download our DCF model: DCF Model
Financial models
More learning
To learn more about financial modeling and valuation you may want to
check out:
What is financial modeling
Financial modeling for dummies
Excel shortcuts
Why investment banking
How to get a job in investment banking
How to become a financial analyst
DCF model infographic
Comparing and Contrasting CFI Courses
Financial Modelling Companies
To find out more about finance careers out our interactive Career Map:
Interactive career map
C. Complete guide
to financial modeling
In this guide, we will build on what we know so far about financial

modeling by examining all of its most important aspects and provide
tips and tricks about industry-leading, best practices.

CFIs mission is to help anyone in the world become a world-class
financial analyst. With that goal in mind, weve designed this guide to be
extremely practical with specific takeaways that can help you improve
your financial modeling skills.
Download our financial

View templates
modeling templates
What will this guide cover?

This financial modeling guide will cover several important topics
designed to sharpen your financial analysis skills. Topics in this guide
include:
Why build a financial model

Excel tips and tricks
Modeling best practices
Building the forecast
Linking the statements
Further analysis (DCF, sensitivity, M&A and more)
Presenting results
All of these topics are covered in more detail in our online financial
modeling courses.
View courses
Why build a financial model?

For anyone pursuing or advancing a career in corporate development,
investment banking, financial planning and analysis (FP&A), equity
research, commercial banking, or other areas of corporate finance,
building financial models is part of the daily routine.
Financial models are essential tools to help make decisions. These

decisions often include: whether or not to invest in a company, asset, or
security; whether or not to invest in a project (project finance); whether
or not to do a merger or acquisitions, and whether or not to raise
money; and other corporate finance transactions.

The financial model allows decisions makers to test scenarios, observe
potential outcomes, and hopefully make an informed decision. There is
a lot of talk about software programs that can be used, but the truth is
the vast majority of financial modeling takes place in Excel.
Excel tips and tricks

As mentioned earlier, Excel is the main tool used by banks,
corporations, and institutions to perform financial modeling. The main
reason for this is Excels remarkable versatility. Every company or
investment opportunity is unique, and Excel is a blank canvas that can
be totally customized and tailored to any financial situation. The flip side
of this is that there are no controls or rules in place to ensure the model
is accurate or error-free.
Here are some of the most important Excel tips for financial modeling:
1. Use as many keyboard short-cuts as possible.

2. Keep formulas and calculations simple break them down into
smaller steps.
3. Use the grouping function to organize sections of the financial model.
4. Use F5 (go to special) to quickly locate all hardcoded numbers or
formulas.
5. Use Trace Precedents and Trace Dependents to audit the model.
6. Use XNPV and XIRR to apply specific dates to cash flows.
7. Use INDEX MATCH over VLOOKUP for looking up information.
8. Use a combination of date functions (EOMONTH) and IF statements
to make dates dynamic.
9. Remove grid lines when presenting or sharing the financial model.
10. Memorize the most important Excel formulas for financial modeling.
For a refresher on basic Excel functions, check out our free Excel Crash
Course. When youre ready to take your skills to the next level, our
Advanced Excel Formulas course will help your financial modeling skills
stand out.
Excel crash course Advanced Excel Formulas
Modeling best practices

Over and above good Excel skills, analysts who really stand out
in financial modeling are great at structuring and organizing their
spreadsheets.
Here are our top 10 best practices for structuring a model:
1. Use color-coding to distinguish between inputs and formulas (i.e.

blue and black).
2. Build a standalone 3 statement model on one worksheet (dont
separate the statements onto different sheets).
3. Clearly separate the assumptions or drivers from the rest of the
model (one section at the top).
4. Use clear headers and subheads (with bold shading) to clearly
distinguish sections.
5. Use the cell comments function (shift + F2) to describe calculations
or assumptions that need explaining.
6. Build in error checks such as ensuring the balance sheet balances
(without a plug).
7. Pull forward (or repeat) information where it helps users follow
the logic of the model (i.e. pull forward EBITDA from the income
statement to the cash flow valuation section).
8. Avoid linking to other Excel workbooks unless absolutely
necessary (and if so, clearly indicate those links exist).
9. Avoid circular references unless necessary (and use iterative
calculation to solve them).
10. Use tables, charts and graphs to summarize important information.

modeling templates
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Building the forecast

The art of financial modeling mostly relates to making assumptions
about the future performance of the business being modeled. This is
the most subjective and important part in the valuation of a company.
This guide will outline various approaches to forecasting, which include:
Top down analysis. In this approach, you start with the total
addressable market (TAM) and then work down from there based
on market share and segments, such as geography, products,
customers, etc., until you arrive at revenues.
Bottom up analysis. In this method, you start with the most basic
drivers of the business such as website traffic, then conversion rate,
then order value, and finally revenue, in the case of an e-commerce
business.
Regression analysis. With this type of forecast, you analyze the
relationship between the revenue of the business and other
factors such as marketing spend and product price by performing a
regression analysis in Excel.
Year over year growth rate. This is the most basic form of
forecasting.
Linking the statements

Once the forecast assumptions are in place, its just a bunch of basic
mathematical operations to fill in the three financial statements in
the model. From a financial modeling perspective, this is the least
subjective part of the process. With the assumptions clearly stated, an
analyst more/less multiplies, divides, add or subtracts to produce the
statements.

Step #1
Begin by calculating revenue, based on the forecasting approach used
from the above section. From there, fill in cost of goods sold, gross
profit, operating expenses, and arrive at earnings before interest taxes
depreciation and amortization (EBITDA).

Step #2
Create supporting schedules for (i) capital assets (PP&E, depreciation,
and capital expenditures), (ii) working capital balances (accounts
receivable, accounts payable and inventory), and (iii) financing
schedules to equity capital, debt balances and interest expense.

Step #3
Finish the income statement (depreciation, interest, taxes, net income)
and fill in the balance sheet items except for cash, which will be the last
part of the financial model to be completed.

Step #4
Build the cash flow statement, consisting of cash from operating
activities, cash used in investing activities, and cash from financing
activities. Combining these three sections will determine the closing
cash balance, which links to the balance sheet to complete the financial
model.

This is a simplified overview of the financial modeling process, or linking
of the three statements, so please watch our video-based courses on
financial modeling if youd like more detailed instructions.

modeling templates
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Further analysis
With the baseline financial model in place, its time to layer on whatever
type of financial modeling exercise suits the situation.
Weve published an overview of the various types of financial models,

but to recap, the most common ones include:
DCF analysis Discounted cash flow analysis (DCF model) to value a

business.
M&A analysis Evaluate the attractiveness of a potential merger,
acquisition or divestiture.
Capital raising Analyze the proforma impact of raising debt or
equity, or other capital events.
LBO analysis Determining how much leverage (debt) can be used to
purchase the company.
Sensitivity analysis Layering on a section that evaluates
how sensitive the business or the investment is to changes in
assumptions or drivers (sensitivity analysis course).
Download all of our financial

modeling templates
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Presenting the results

When all of the above analysis is done, the work still not over. The last
step is to develop charts, graphs, and other outputs that can be used to
easily communicate the information from the model. This is where the
best analysts really get to shine.

Its one thing to build a complex model that only you understand, but
its another thing to effectively communicate the risks, rewards, and
critical factors to all audiences.

As the capstone for your financial modeling training, we recommend
either an advanced Excel course to learn how to build all the best charts
and graphs for a presentation, dashboard, or any other document
youre producing.
More financial modeling guides

We hope this has been a helpful guide to financial modeling in Excel, and
has helped you advance your career as a financial analyst. At CFI, we
pride ourselves in creating the best free guides to help you get an edge.
Please check out these other resources to continue developing your skills:
DCF modeling guide
3 statement model guide
How to link the financial statements
All financial modeling resources
D. Financial Modeling Skills
Overview of financial modeling skills
This guide will focus on the most important financial modeling skills
required to be a world-class financial analyst. These are:
1. A solid understanding of accounting

2. Strong Excel skills
3. Knowing how to link the 3 financial statements
4. Understanding how to build a forecast
5. A logical framework for problem solving
6. Attention to detail
7. Ability to distill large amounts of data into a simple format
8. An eye for design and esthetics
Each of these financial modelling skills will be broken down in further

detail below. As the image below shows, these skills can be divided into 3
categories: accounting/finance, Excel, and problem solving/logic/design.
Accounting skills
In order to build a financial model, its important to have a solid
understanding of accounting fundamentals. These include concepts
such as matching principle, accruals, revenue recognition, non-cash
items like depreciation, amortization, and more. You need to have
enough accounting skills to know how to read financial statements, how
to dissect them, and how to build them back up again.
Excel skills
Strong Excel skills are critical for financial modelling, and it can be more
of an art than a science. Youll need to know all the main keyboard
shortcuts to help save time and build models as quickly as possible.
Youll also need to know all the main formulas and functions to perform
calculations and financial analysis.
Check out our free Excel course to make sure you have the basics down!
Linking the 3 financial statements

As mentioned numerous times, another very important skill is being
able to link the 3 financial statements. This means taking historical
financial statements (income statement, balance sheet, and cash flow
statement) and dynamically linking them together in Excel. For example,
connecting net income on the income statement to retained earnings
on the balance sheet. This can be one of the trickiest skills.
Free step-by-step guide: how to link the 3 financial statements in Excel.
Problem solving skills

A good financial analyst has the ability to think logically and in a very
organized manner. When building a financial model, its important to follow
a logical flow of information, so that other users can easily understand
what youve done when its their turn to work on your Excel file.
Attention to detail
This is an absolutely essential skill for financial modeling. Given the vast
amount of information and intricate nature of a complex model, if you
dont have attention to detail, youll unfortunately have a difficult time
becoming a capable financial modeler.
Check out our financial modeling courses to see the level of detail
required.
Simplification of complex information

One of the hallmarks of a someone with great financial modelling skills
is their ability to distill large amounts of complex information into a
simple format. As Leonardo da Vinci said, Simplicity is the ultimate
sophistication.
Check out Advanced Excel Skills Course to help you simplify complex
information.
Design skills
One of the least discussed, yet most important financial modeling skills,
is having an eye for design and esthetics. A good model is easy to follow,
and easy on the eyes it should have clean formatting, beautiful charts
and graphs, and look professional. This is one of the 3 pillars of our
Analyst Trifecta method, which we outline in our guide on how to be a
great financial analyst.
Financial model example

Another way to get acquainted with the different types of financial
models is to purchase all our financial modeling templates and work
through them yourself.
More financial modeling resources

We hope you now have thorough understanding of the various financial
modeling skills required to be a world-class financial analyst. You may
want to check out some of our other popular resources, including:
Financial modeling best practices
DCF model training
3 statement model
Interactive Career Map
Excel courses
PART 01
Analytics:
Valuation
01
02
03
A. Valuation Methods
What are the main valuation methods?

When valuing a company as a going concern, there are three main
valuation methods used: DCF analysis, comparable companies, and
precedent transactions. These are the most common methods used
in investment banking, equity research, private equity, corporate
development, MBOs and most areas of finance.
Method 1: DCF Analysis

In the Discounted Cash Flow (DCF) approach, you forecast the business
unlevered free cash flow into the future and discount it back to today at
the firms WACC.
A DCF analysis is performed by building a financial model in Excel and

requires an extensive amount of detail and analysis. It is the most
detailed of the three approaches, requires the most assumptions
and often produces the highest value. However, the effort required
for preparing a DCF model will also often result in the most accurate
valuation. A DCF model allows the analyst to forecast value based on
different scenarios and to even perform a sensitivity analysis.
For larger businesses, the DCF value is commonly a sum-of-the-parts

analysis, where different business units are modeled individually and
added together. To learn more, see our DCF model infographic.
Method 2: Comparable Analysis (Comps)

Comparable company analysis (also called trading multiples or peer
group analysis or equity comps or public market multiples) is a
relative valuation method in which you compare the current value of
a business to other similar businesses by looking at trading multiples
like P/E, EV/EBITDA, or other ratios. Multiples of EBITDA are the most
common valuation method.
The comps valuation method provides an observable value for the

business, based on what companies are currently worth.
Method 3: Precedent Transactions

Precedent transactions analysis is a form of valuation where you
compare the company with other businesses that have recently
been sold or been acquired in that industry. These values include the
takeover premium for which they were acquired.
These values represent the en bloc value of a business. They are useful
for M&A transactions, but can easily become stale-dated and no longer
reflective of the current market.
Football field chart (summary)

Bankers will often put together a football field chart to summarize the
range of values for a business based on the different valuation methods
used. Below is an example of a football field graph, which is typically
included in an investment banking pitch book.
More valuation methods

Another valuation method for a company that is a going concern is
called ability to pay analysis. This approach looks at the maximum
price an acquirer can pay for a business while still hitting some target.
For example, if a private equity firm needs to hit a hurdle rate of 30%,
what is the maximum price it can pay for the business?
If the company will not continue to operate, then a liquidation value will
be estimated based on breaking up and selling the companys assets,
Finally, non-operating assets may be valued at either book value or

market value.
Additional valuation resources

To learn more about how to value a business, or to prepare for a career
in corporate finance, weve got all the resources you need! Here are
some of our most popular resources relate to valuation methods:
Valuation infographic How to value a business
Terminal value
Weighted Average Cost of Capital
Excel formulas for finance
B. DCF Analysis
Performing a DCF analysis

This infographic will walk you through the step-by-step process of how
to build a discounted cash flow (DCF) model to value a business.
A discounted cash flow model takes into account all factors that could
affect a companys current and future performance. This performance
equates to certain inflows and outflows of cash, which are then
discounted back to the present value. The sum of the present value of
all future cash flows equals the net present value.
There are two categories of influence on the value of business:
Internal
External
The internal side consists of most of the data that a financial analyst
has to consider when generating models. This includes the historical
performance of the company, its current operations and its future
potential. The internal side also often has the most concrete or
solid data, since most of the raw information used in the models is
quantitative. A financial analyst, for example, will use a historical income
statement to forecast future net income. This forecast will eventually
flow down through other financial statements and supporting
schedules to generate an estimate of future free cash flow. This cash
flow is what is used in the discounted cash flow analysis.
It is important, however, to remember that the external side should be

considered, too. While the internal side of the DCF analysis is important
and key to the quantitative side of the analysis, external factors must
not be neglected when considering the future potential of a company.
External forces, such as market cycle and growth of competitors, will

indefinitely have an impact towards the performance of any company.
While these are harder to forecast, educated and informed estimates
must be made towards these factors, if one wishes to make a more
accurate DCF model.
Read about the different types of financial models.
Infographic
The infographic was designed to help you visualize the process of how
to actually think about a DCF analysis in your head before building a
DCF model.
Please read through the various steps described in the image above to
master the process step by step.
Career paths
There are many finance jobs that require building DCF modeling
for a living. To learn more about those various careers, explore our
interactive career map to find out which path is right for you.
Additional Resources
Valuation infographic
Valuation methods
What is financial modeling?
C. Business Valuation
Valuation Infographic
Business Valuation Framework

Over the years, weve spent a lot of time thinking about and working on
business valuations across a broad range of transactions. Given that
majority of us are visual learners, we thought it would be helpful to
illustrate our thoughts in a diagram.
Top Down vs. Bottom Up

As we look at the diagram, it logically flows from top to bottom,
however, when building a financial model to value a business, we
usually think about it bottom up, and in an iterative way. We start in the
bottom left corner of the diagram with historical financials, working our
way up to the top, then back down again to build the forecast financials
(and repeat the process again).
1. Historical Financials
The first place to start when valuing a business is usually with historical
financial statements. The past matters a lot when performing a
valuation as it give a view of the future and whats realistically possible.
The future, of course, is heavily influenced by what the companys
assets, management team, competition and markets will do going
forward.
2. Assets
Examining the asset base in conjunction with the historical income
statement will paint a picture of the business ability to generate a
return on assets (ROA net income divided by total assets), and most
importantly, generate free cash flow (operating cash flow less capital
expenditures). When evaluating a business assets, its important to look
at both tangible (property, plant, equipment, etc.) and intangible assets
(brands, customer lists, intellectual property, etc.).
3. Management Track Record

Assessing management can be quite challenging, especially if you dont
have the opportunity to meet them in person (which is the case for
most retail investors). An easy way to evaluate their performance is
to look back at historical guidance (if a public company) and measure
it against results achieved. Do you see a consistent trend of missing,

meeting, or beating guidance? Measuring the track record combined
with in-person meetings to assess integrity, honesty, work ethic, etc.
will be the best way to decide whether you assign a management
premium or management discount to the business.
4. Competition
What is the current state of competition in this industry? Are barriers to
entry high or low, and how much pricing power does the company have?
Answers to these types of questions (and others listed in the diagram
above) will help shape your view of risk and the companys ability to
protect profits (which will be reflected in the forecast financials).
5. Moat
Warren Buffett and Charlie Munger are notorious for buying businesses
that have wide moats around them, or more literally, have durable
competitive advantages. Examples of companies with big moats around
them include Google (Alphabet), railroad companies (infrastructure),
Coca Cola (its brand), and businesses with network effects like
Facebook and Amazon. The wider the moat, the longer the company
will be able to earn above average profits, and the lower the risk of the
investment. The inverse is true for companies with little to no moat.
6. Culture & Strategy

I group these two together because they are two of the main objectives
of the CEO. Culture is critical as it drives the Why of an organization
(see Simon Sinek) and motivates people to create a business that can
change the world (even if in some small way). Culture is also critical in
driving company behavior such as honesty and integrity, which lowers
the risk of the business. Next in importance is strategy (i.e. strategy
eats culture for breakfast?) as this will be critical in maintaining any
durable competitive advantage that a company has, or is attempting to
gain/increase.
7. Future Assets
Based on the strategy of the business, what will the assets look like in
the future? Will the company have to significantly invest to grow the
asset base, and if so, what types of ROA will they earn? Its important to
think carefully about how much capital is required to sustain and grow
the assets (based on the strategy) and how those assets will create
value in the form of free cash flow generation. The details/inputs behind
these assets will generate the principles or drivers of the financial
model.
8. Forecast Financials
With a deep understanding of the industry, management (culture &
strategy), and the business assets, its now possible to forecast future
financial statements. A good financial model will dis-aggregate the
various drivers of revenues, expenses, etc. and present them as inputs
that can easily be changed. Depending on the industry or maturity of
the business, you may forecast out anywhere from 5 years to the end of
an assets life.
9. Discount Rate
Once the financial forecast is in place, setting up the discounted
cash flow (DCF) model is just simple mechanics in Excel. The most
challenging and subjective part of the DCF model is determining what
discount rate to use. There are specific formulas you can use based on
interest rates and relative volatility, but the essence of the discount rate
is captured in most of the qualitative issues discussed above: stability
of assets, durability of a moat, competence of management, risk of
changes in competitive dynamics, and risk of changes in markets (i.e.
government regulation). Taking all of these into account will determine
what discount rate you think is appropriate to account for the riskiness
of the investment. To the extent, you have risk-adjusted the cash flows
directly in the model (for the risks discussed above). You dont need
to include those risks in the discount rate (i.e. a perfectly risk adjusted
cash flow forecast would be discounted at only the appropriate risk-free
government treasury rate).
10. Price
The net present value (NPV) of future cash flows gives you the value of
the business, but how much are you willing to pay for it? Value investors
will typically want to build in a margin of safety (say 20-30%) by paying
less than the intrinsic value. Other investors pay full value if they are
willing to accept the discount rate as their internal rate of return (IRR).
Investors typically look at comparable companies or past transactions
(acquisitions) to see what other people are willing to pay for similar
business (this adds an element of game theory or greater fool theory
and moves away from intrinsic value).
Conclusion
This is how we think about valuation when building a financial model,
and we hope you found it insightful. As visual learners, we find it useful
to organize mental models, like valuation, on paper. The key takeaway
for us is that valuation is an iterative process we really have to cycle
through things like markets, competition, management, and assets
multiple times with sensitivity and scenario analysis before we can build
a reliable financial forecast and discount it back to today.
Additional Resources
Valuation books
What is financial modeling?
PART 01
Analytics
Excel
01
02
03
A. List of Excel shortcuts
To be more productive, faster, and more efficient when building

financial models or performing financial analysis, its important to know
the main keyboard shortcuts in Excel. These are critical for careers in
investment banking, equity research, FP&A, finance, accounting, and
more.
The first thing youll do if youre hired as an investment banking analyst

is take a series of intense Excel training courses. Your mouse will be
taken away, and youll be expected to learn financial modeling with only
keyboard shortcuts. If you follow our tips and tricks below, youll be able
to master theses shortcuts on Windows or Mac operating systems.
It may seem slower at first if youre use to the mouse, but its worth the
investment to take the time and learn these important shortcuts. We
have provided the top, time-saving shortcuts for both PCs and Macs
below. To master these skills, check out our Free Excel Crash Course.
You may also want to check out our section on other Excel formulas or
the Excel formulas cheat sheet. Excel is quite robust, meaning there is
a lot of different tools that can be utilized within it, and therefore many
skills one can practice and hone.
Keyboard shortcuts
Editing shortcuts
F2 Edit active cell
F3 Paste name into a formula
F4 Toggle references
ALT + ENTER Start a new line within the same cell
SHIFT + F2 Insert or edit cell comment
SHIFT + F10 Display shortcut menu (i.e. same as right click)
SHIFT + F11 Insert worksheet
CTRL + F3 Define a name for a cell
CTRL + D Fill down (e.g. copy formula down in selected cells)
CTRL + R Fill right
CTRL + SHIFT + A Insert argument names and parentheses for a
function after typing a function name in a formula
SHIFT + SPACEBAR Select entire row
ALT + I + R Insert row
ALT + I + C Insert column
Formatting Shortcuts
CTRL + 1 Brings up format cells menu
CTRL + B Bold
CTRL + I Italic
CTRL + C Copy
CTRL + V Paste
ALT + S + E Paste special
CTRL + X Cut
CTRL + Z Undo
CTRL + Y Repeat last action
CTRL + A Select all used cells (select entire worksheet if command is
repeated)
Navigation shortcuts
F5 Goto
SHIFT + ARROW Select the adjacent cell
CTRL + SPACEBAR Select entire column
CTRL + SHIFT + HOME Select all to the start of the sheet
CTRL + SHIFT + END Select all to the last used cell of the sheet
CTRL + SHIFT + ARROW Select to the end of the last used cell in row/
column
CTRL + ARROW Select the last used cell in row/column
CTRL + PAGE UP/DOWN Move to the next or previous worksheet (Move
between tabs if you are in a menu window)
CTRL + TAB Move to next workbook (while in spreadsheet) Move to next
divider (when in menu options)
TAB Move to the next cell (Move between items within a menu window)
Other shortcuts
CTRL + ; Enter date
CTRL + : Enter time
CTRL + ` Show formula/show values (key to the left of 1)
CTRL + ] Select cells which refer to the active cell (useful before deleting
a cell in a worksheet)
ALT Drives menu bar
ALT + TAB Next open program
ALT + = Autosum
Mac shortcuts
Editing shortcuts
CTRL + U Edit active cell
Command + T Toggle references
CTRL + OPTION + ENTER Start a new line within the same cell
SHIFT + F2 Insert or edit cell comment
SHIFT + F10 Display short cut menu
SHIFT + F11 Insert worksheet
CTRL + F3 Define a name
CTRL + D Fill down (e.g. copy formula down in selected cells)
CTRL + R Fill right
CTRL + SHIFT + A Insert argument names and parentheses for a
function after typing a function name in a formula
Formatting Shortcuts
CMD + 1 Brings up format cells menu
Command + B Bold
Command + I Italic
Command + C Copy
Command + V Paste
Command + SHIFT + V Paste special
Command + X Cut
Command + Z Undo
Command + Y Repeat last action
Command + A Select all used cells (select entire worksheet if command
is repeated)
Navigation shortcuts
FF5 / CTRL + G Goto
SHIFT + ARROW Select the adjacent cell
CTRL + SPACEBAR Select entire column
CTRL + SHIFT + HOME Select all to the start of the sheet
CTRL + SHIFT + END Select all to the last used cell of the sheet
CTRL + SHIFT + ARROW Select to the end of the last used cell in row/
column
CTRL + ARROW Select the last used cell in row/column
CTRL + PAGE UP/DOWN Move to the next or previous worksheet (Move
between tabs if you are in a menu window)
CTRL + TAB Move to next workbook or window
TAB Move to the next cell (Move between items within a menu window)
Other shortcuts
CTRL + ; Enter date
CTRL + : Enter time
CTRL + ` Show formula / show values (key to the left of 1)
CTRL + ] Select cells which refer to the active cell (useful before deleting
a cell in a worksheet)
+ TAB Next open program
+ SHIFT + T Insert autosum formula
B. Excel formulas cheat sheet
If you want to become a master of Excel, financial analysis and building

financial models, then youve come to the right place. Weve built
a cheat sheet of the most important Excel formulas and functions
required to become a spreadsheet power user.
Below is a written overview of the main formulas for your own self-
study. However, if you want a video explanation of the formulas, check
out our Free Excel Crash Course.
If youre already a power user, check out our Advanced Excel Course and
learn the most powerful combinations of formulas and functions.
Dates and time

=EDATE add a specified number of months to a date in Excel
=EOMONTH convert a date to the last day of month (i.e. 7/18/2018 to
7/31/2018)
=TODAY insert and display todays date in a cell
=YEAR extract and display the year from a date (i.e. 7/18/2018 to 2018)
in Excel
=YEARFRAC expresses the fraction of a year between two dates (i.e.
1/1/2018 3/31/2018 = 0.25)
Convert time to seconds onvert an amount of time to seconds (i.e. 5
minutes to 300 seconds)
Navigation
Go To Special press F5 and find all cells that are hard-codes, formulas
and more. Great for auditing.
Find and Replace press Ctrl + F and you can changes parts of many
formulas at once
Lookup formulas
INDEX MATCH a combination of lookup functions that are more
powerful than VLOOKUP
=VLOOKUP a lookup function that searches vertically in a table
=HLOOKUP a lookup function that searches horizontally in a table
=INDEX a lookup function that searches vertically and horizontally in a
table
=MATCH returns the position of a value in a series
=OFFSET moves the reference of a cell by the number of rows and/or
columns specified
Math functions
=SUM add the total of a series of numbers
=AVERAGE calculates the average of a series of numbers
=MEDIAN returns the median number of a series
=SUMPRODUCT calculates the weighted average, very useful for
financial analysis
=ROUNDDOWN rounds a number to the specified number of digits
=ROUNDUP the formula rounds a number to the specific number of
digits
AutoSum a shortcut to quickly sum a series of numbers
Financial formulas
=NPV calculates the net present value (NPV) of cash flows based on a
discount rate
=XNPV calculate the NPV of cash flows based on a discount rate and
specific dates
=IRR this formula calculates the internal rate of return (discount rate
that sets the NPV to zero)
=XIRR calculates the internal rate of return (discount rate that sets the
NPV to zero) with dates
=YIELD returns the yield of a security based on maturity, face value,
and interest rate
=INTRATE the interest rate on a fully invested security
=IPMT this formula returns the interest payments on a debt security
=PMT this function returns the total payment (debt and interest) on a
debt security
=DB calculates depreciation based on the fixed-declining balance

method
=DDB calculates depreciation based on the double-declining balance
method
=SLN calculates depreciation based on the straight-line method
Conditional functions
=IF checks if a condition is met and returns a value if yes and if no
=OR checks if any conditions are met and returns only TRUE or
FALSE
=AND checks if all conditions are met and returns only TRUE or
FALSE
IF AND combine IF with AND to have multiple conditions
=IFERROR if a cell contains an error you can tell Excel to display an
alternative result
Other functions and formulas

Sheet Name Code a formula using MID, CELL and FIND functions to
display the worksheet name
Consolidate how to consolidate information between multiple Excel
workbooks
C. Advanced Excel Formulas
10 Advanced Excel Formulas You Must Know

Every financial analyst spends more time in Excel than they may care to
admit. Based on years and years of experience, we have compiled the
most important and advanced Excel formulas that every world-class
financial analyst must know. Several formulas mentioned previously are
broken down here.
1. INDEX MATCH
Formula: =INDEX(C3:E9,MATCH(B13,C3:C9,0),MATCH(B14,C3:E3,0))
This is an advanced alternative to the VLOOKUP or HLOOKUP formulas

(which several drawbacks and limitations). Index Match is a powerful
combination of formulas that will take your financial analysis and
financial modeling to the next level.
INDEX returns the value of a cell in a table based on the column and row
number. MATCH returns the position of a cell in a row or column.
Here is an example of the INDEX and MATCH formulas combined

together. In this example, we look up and return a persons height based
on their name. Since name and height are both variables in the formula,
we can change both of them!
For a step-by-step explanation or how to use this formula, please see

our free guide on how to use INDEX MATCH MATCH in Excel.
2. IF combined with AND / OR
Formula: =IF(AND(C2>=C4,C2<=C5),C6,C7)
Anyone whos spent a great deal of time in various types of financial

models knows that nested IF formulas can be a nightmare. Combining IF
with the AND or the OR function can be a great way to keep or formulas
easier to audit and for other users to understand. In the example below,
you will see how we used the individual functions in combination to
create a more advanced formula.
For a detailed breakdown of how to perform this function in Excel,

please see our free guide on how to use IF with AND / OR.
3. OFFSET combined with SUM or AVERAGE

Formula: =SUM(D7:OFFSET(D6,D4,0))
The OFFSET function on its own in not particularly advanced, but when
we combine it with other functions like SUM or AVERAGE, we can create
a pretty sophisticated formula. Suppose you want to create a dynamic
function that can sum a variable number of cells. With the regular SUM
formula, you are limited to a static calculation, but by adding OFFSET,

you can have the cell reference move around.
To make this formula work, we substitute ending reference cell of

the SUM function with the OFFSET function. This makes the formula
dynamic and cell referenced, as D4 is where you can tell Excel how many
consecutive cells you want to add up. Now weve got some advanced
Excel formulas!
Learn how to build this formula step-by-step in our advanced Excel course.
4. CHOOSE
Formula: =CHOOSE(choice, option1, option2, option3)
The CHOOSE function is great for scenario analysis in financial

modeling. It allows you to pick between a specific number of options,
and return the choice that youve selected. For example, imagine you
have three different assumptions for revenue growth next year: 5%,
12% and 18%. Using the CHOOSE formula, you return 12% if we tell Excel
you want choice #2.
To see a video demonstration, check out our Advanced Excel Formulas

Course.
5. XNPV and XIRR

Formula: =XNPV(discount rate, cash flows, dates)
If youre an analyst working in investment banking, equity research,

or financial planning & analysis (FP&A), or any other area of corporate
finance that requires discounting cash flows, then these formulas are a
lifesaver!
Simply put, XNPV and XIRR allow you to apply specific dates to each
individual cash flow thats being discounted. The problem with Excels
basic NPV and IRR formulas is that it assumes the time periods between
cash flow are equal. Routinely, as an analyst, youll have situations when
cash flows are not timed evenly, and this formula is how you fix that.
For a more detailed breakdown, see our free IRR vs XIRR formulas guide.
6. SUMIF and COUNTIF

Formula: =COUNTIF(D5:D12,>=21)
These two advanced formulas are great uses of conditional functions.

SUMIF adds all cells that meet a certain criteria, and COUNTIF counts
all cells that meet a certain criteria. For example, imagine you want to
count all cells that are greater than or equal to 21 (the legal drinking age
in the U.S.) to find out how many bottles of champagne you need for a
client event. You can use COUNTIF as an advanced solution, as shows in
the screenshot below.
In our advanced Excel course,

we break these formulas
down in even more detail.
7. PMT and IPMT

Formula: =PMT(interest rate, # of periods, present value)
If you work in real estate, commercial banking, or any financial analyst

position that deals with debt schedules, youll want to understand these
two detailed formulas.
The PMT formula gives you the value of equal payments over the life
of a loan. You can use it in conjunction with IPMT (which tells you the
interest payments for the same type of loan) then separate principal
and interest payments.
8. LEN and TRIM

Formulas: =LEN(text) and =TRIM(text)
These are a little less common, but certainly very sophisticated

formulas. These applications are great for financial analysts that need
to organize and manipulate large amounts of data. Unfortunately, the
data we get is not always perfectly organized, and sometimes there can
be issues like extra spaces at the beginning or end of cells
In the example below, you can see how the TRIM formula cleans up the
Excel data.
9. CONCATENATE
Formula: =A1& more text
Concatenate is not really a function on its own. Its really just an

innovative way of joining information from different cells, and making
worksheets more dynamic. This is a very powerful tool for financial
analysis performing financial modeling (see our free financial modeling
guide to learn more).
In the example below, you can see how the text New York plus , is
joined with NY to create New York, NY.
10. CELL, LEFT, MID and RIGHT functions

These advanced Excel functions can be combined to create some very
advanced and complex formulas to use. The CELL function can return
a variety of information about the contents of a cell (its name, location,
row, column, and more). The LEFT function can return text from the
beginning of a cell (left to right), MID returns text from any start point
of the cell (left to right), and RIGHT returns text from the end of the cell
(right to left).
Below is an illustration of these three formulas in action.
To see how these can be combined in a powerful way with the CELL
function, we break it down for you in our Advanced Excel Formulas Course.
More Excel formulas training
We hope these top 10 advanced Excel formulas have been helpful for
you, and should go a long way to improving your financial analysis and
financial modeling skills.
Below are more resources to help you become an Excel power user:
Excel formulas cheat sheet
Excel keyboard shortcuts
Free Excel crash course
Advanced Excel course
Excel for financial modeling
PART 02
Presentation
Introduction
01
02
03
A. Investment Banking
Pitchbook
What is an investment banking pitchbook?

An investment banking pitchbook is a PowerPoint presentation
designed to win new business. The pitch is typically an explanation of
why the bank in question is best suited to lead the transaction, and why
they should be engaged by the client.

There are various types of pitches, and, depending on the relationship
with the client and the type of traction, they can vary widely.
Whats included in an investment banking pitchbook?

Here is an example outline for an investment banking pitchbook:
1. Title page Logos, date, and a title

2. Table of Contents All sections in the pitch book
3. Executive Summary / Situation Overview Explain why youre giving
the pitch and the call to action or recommendation in one page
4. Team & Bank Introduction Introduce the people at the meeting
(short biographies) and discuss the banks track record in the
clients space
5. Market Overview Charts and graphs as well as commentary
describing the current market environment and trends in the
clients sector
6. Valuation Valuation methods such as comparable company
analysis, precedent transactions and DCF analysis (if enough
information has been provided to perform one) will all be displayed
in a football field graph
7. Transaction Strategy Details around the banks strategy for the
transaction theyre pitching to the client to lead whether an IPO,
acquisition, or sale of the business
8. Summary Recap why the team and the bank are best suited to
lead the transaction, how the market environment is relevant, the

valuation you think is achievable, and the bands strategy if leading
the transaction
9. Appendix May contain a wide range of information depending on
the pitch, but mostly backup information the bank feels there may
be questions on, but doesnt belong in the main pitchbook (like
financial modeling assumptions / details)
How is the pitch book actually made?

The pitchbook is a collaboration between junior and senior bankers,
with most of the actual work being done by investment banking
analysts and associates.
Typically, a managing director (who has a relationship with the client)

will sit down with a director or VP to create an outline of the pitch book.
Then the VP or director will wireframe the structure of the pitch and
have the associate work with the analyst to crunch all the numbers and
create all the analysis used to populate the presentation.
The process can take anywhere from a couple of days to a few weeks,
depending on the clients timeline, and how busy the team is. The
process usually requires a high number of iterations with many drafts
or version of the pitch, often done until late at night and over the
weekend.
How is the pitch delivered?

In most cases, the pitch book is delivered in person to the banks or
corporate clients office by senior members of the investment banking
team. The managing director with a relationship with the client will
typically lead the meeting, and other bankers may have smaller roles
as well. If junior members of the team like the analysts or associates
attend, they usually dont say anything and just take notes or are
prepared to dig up any additional information thats required.
More investment banking resources

Whether youre looking to get hired, or move up the ladder, we got all
the resources you need for a successful career in investment banking or
other corporate finance roles.
Helpful resources include:
Career resources
Investment banking analyst interview
Investment banking salary
DCF model training
Investment banking training
Excel courses
B. ECM Memo
What is an ECM deals committee memo?

An Equity Capital Markets (ECM) Memo is generated internally at an
investment bank to approve a potential transaction (IPO, follow-on
offering, etc.). The ECM Memo is prepared by the investment banking
team and sent to the ECM team.
ECM Memo Example

Date: [insert date of memo]
To: [insert names of members of ECM Deals Committee]
From: [insert names of members of Investment Banking Team]
Cc: [insert appropriate names]
Re: ECM Deals Committee Meeting [insert name of issuer/details
of offering] Meeting [insert date, time and location of meeting and
conference call details] Details:
Situational Overview:
Why are we meeting?
What proposed resolutions do we want achieve?
Proposed Issue:
Is this a Prospectus Offering or a Private Placement?
Is this an IPO or a follow-on offering?
Is it a treasury offering or a secondary offering?
Size of issue and type of security (Long Form/Short Form eligible)
Geographic distribution objectives
Retail and Institutional distribution objectives
Syndicate structuring objectives
Use of Proceeds:
Rationale for the issue and how proceeds will be used.
Relationship:
Issuers history with our bank/other dealers
Business of the Company:

Brief description of issuers business
Recent Developments:
Brief summary of any recent material developments affecting the
issuer and its industry
Major Owners:
[owner] holds[]%
Institutional holdings list from Bloomberg
Pro Forma Dilution:

[number of shares in issue divided by the total outstanding after
issue]
Trading:
Listed on [ exchanges]
LTM volume of [number] of shares
Liquidity measure [LTM trading volume divided by number of shares
in issue]
Recent blocks: [major blocks in recent months]
[date] [number] @ [price] [dealer]
Relationships with our bank:

Trading summary for 3 months and 1 year
Is our bank a lender to the issuer? Is the credit agreement in good
standing?
Is our bank a shareholder of the issue? What was the price and
timing of the last investment?
Research Coverage Research Comments:

Firms providing Research coverage
Our banks research recommendation and target price
Our banks earnings estimates
Other analysts recommendations and target prices
IBES earnings estimates
Historical Financial Information:

Five year financial highlights (if not included in other attached
documents)
Leverage:
Amount of long term debt
Dividends:
Dividend amount
Frequency of payments (annual/semi-annual/quarterly)
Next ex-dividend date
Any recent changes in dividends or expected changes
Valuation:
Primary and secondary valuation criteria
Pricing relative to comparables
Issuers market cap and enterprise value
Share Price:
Recent share price: [price] [52-week high] [52-week low]
One year daily and five year weekly share price graph from
Bloomberg
Most Recent Issue:

Date:
Type of security:
Price:
Number of securities issued:
Size :
Commission:
Underwriters:
Discussion of actual market receptivity/success of offering
Risks and Risk Factors:

Industry
Operational
Financial
Environmental/Litigation
Technology
Market Receptivity/depth
Valuation benchmarks/comparables
Knowing how to build an ECM Memo is an important investment

banking skill-set.
C. Greensheet
What is a greensheet?
A Greensheet (or Green Sheet) is a summary of the key attributes of the
issuer of an offered security used by the sales force when they solicit
expressions of interest from prospective institutional investors and
brokers. It is an internal marketing document and cannot be shared
outside of the bank.
Greensheets are often produced by investment bankers when working

on a transaction for corporate issuers.
Whats included in a greensheet?

It is customary for a lead manager to prepare a greensheet in
connection with a public offering. Greensheets are provided to the
banks internal sales force once a preliminary prospectus has been filed
and are used by the sales force when they solicit expressions of interest
from prospective institutional investors and brokers.
Green sheets include a summary of the key attributes of the issuer

and the offered securities. They are intended for internal use only
and, because they constitute communication during the period of
distribution, should not be provided or made available to prospective
investors. All material information contained in the green sheet
(excluding the list of comparables and any summary of current
research ratings concerning the issuer) must be derived from the
contents of the preliminary prospectus and other publicly available
sources.
When preparing a green sheet, the following guidelines will help ensure
a high quality document is produced:
The green sheet must make a balanced presentation of the

prospectus contents and the information contained in the green
sheet must generally track the prospectus;
Green sheets may summarize the information in the preliminary
prospectus but care should be taken not to use a different language
that would change the meaning from the language used in the
prospectus;
In addition to the bold statement on the green sheet stating that it is
for internal use only or broker use only, all green sheets must have
the legend For Internal Use Only diagonally shadow written across
each page; and
All green sheets must contain appropriate legends, as approved by
Legal. In cases where the bank is acting as lead or co-lead manager,
investment bankers should ask the underwriters counsel.
Knowing how to build a greensheet is an important investment banking

skill-set.
Where to learn more
Investment banking careers

Explore our career map
Interviews:
IB interview guide
Courses:
CFI investment banking courses
D. Term Sheet
A term sheet outlines the basic terms and

conditions of an investment opportunity. A
term sheet is a non-binding agreement and
serves as a starting point to draft more detailed
agreements, such as a commitment letter,
definitive agreement, or subscription agreement.
Term sheets are often produced by investment
bankers on behalf of corporate issuers.
Term Sheet template example

Note: This term sheet is only for educational purposes and should not
be used for any other purpose...
Issuer: [Name] (the Corporation)
Nature of the Offering: [Brokered or non-brokered] [private placement] (the Offering) of [Common Shares]
Type of Security: [Common Shares]
Offering Size: [Up to $50 million]
$[10.00] per [Share] (the Issue Price).

Issue Price:
[6.0]%
Commission:
Capitalization: Approximately $[60,000,000]. Set forth as Exhibit [A].
Dividends: [Describe the dividend policy.]
Preferential Liquidation Rights: [Describe any liquidation preferences.]
Definition of Liquidation Event: [Include definition from legal counsel.]
Conversion Rights: [Describe, if applicable.]
[For example: The shares shall have certain customary anti-dilution

Anti-Dilution:
protection for any share issuances at prices less than the Issue Price based
on a weighted average formula, and subject to standard exceptions.]
Voting Rights: [Describe the voting rights.]
Use of Proceeds: [The proceeds from the Offering shall be primarily used for general
corporate and working capital purposes.]
Closing Conditions: [Closing of the Offering shall be conditional upon the completion
of satisfactory due diligence, the execution of requisite definitive
agreements for completion of the Offering, receipt of all requisite
corporate approvals and third party consents for the Offering. Etc.]
Agent: [Generic Capital Corp.]
[Date]
Closing date:
More resources
Knowing how to build a term sheet is an important investment banking
skill set.
In order to prepare for a career in investment banking, corporate

development or private equity, you may find these resources helpful:
What is Investment banking
Why Investment banking
Valuation techniques
To find out more check out our interactive Career Map.
E. Letter of Intent
What is a Letter of Intent?

A Letter of Intent (LOI) is often a short non-binding contract that
precedes a binding agreement such as a definitive agreement. There
are some provisions, however, that are binding such as nondisclosure,
exclusivity, or governing law. The main points that are typically included
in a letter of intent include: transaction overview and structure,
timeline, due diligence, confidentiality, and exclusivity (in some cases).
Letters of intent are often produced by investment bankers on behalf of
corporate issuers.
Letter of Intent template example

Note: This Letter of Intent template is only for educational purposes and
should not be used for any other purpose.
CONFIDENTIAL
Date | BY ELECTRONIC MAIL | NAME | ADDRESS
Dear Name,
We are writing to provide a letter of intent from OUR NAME Inc.
(Shorter Name) in respect of a transaction (a Transaction) with
TARGET NAME Inc. (TARGET NAME or the Company). We appreciate
the time and energy you and your team have afforded us in discussing
this opportunity and the information that has been provided thus far.
As we continue to spend time evaluating TARGET NAME, we believe that

OUR NAME will bring unique value and capabilities to the Company,
accelerating the development and growth of TARGET NAME. We believe
we could drive TARGET NAMEs growth strategy, by doing X, Y and Z.
Transaction Overview and Structure

Based on our preliminary review of the information provided and
subject to the conditions set forth below, OUR NAME is pleased to
submit this non-binding letter of intent (the Proposal) for a transaction
with TARGET NAME. We propose purchasing 100% of the equity of the
Company, including all assets and liabilities, in such a way that TARGET
NAME still has significant exposure to future upside.
We believe that in order for this transaction to be successful, our

interests must be aligned. With that in mind, we have designed a
compensation structure that allows all parties to benefit from our
future success in an equitable way.
We offer a total purchase price of $XXX million consisting of:
$XXX of cash on closing

$XXX shares of OUR NAME, issued immediately upon closing and
not subject to any vesting period representing approximately XX% of
OUR NAME;
$XXX of performance upside performance shares of OUR NAME (an
additional XX%, approximately), issued upon achieving the following
targets / milestones:
Milestone #1 in year 20XX
Milestone #2 in year 20XX
The final purchase price will be adjusted for customary changes in
net working capital, which will be reflected in the cash component of
the purchase price.
Illustrative Timeline
Given the importance of timing for TARGET NAME in respect to this
transaction, we have proposed a high-level timeline as follows:
Date: Financial due diligence and valuation work

Date: Operational due diligence and OUR NAME visit to TARGET
NAMEs head office
Date onward: Drafting of Definitive Agreement
Due Diligence Process

This Transaction is of the highest priority for us, and we are prepared
to proceed as quickly as possible. It is important that you make that
same commitment to us before we expend additional time and
resources pursuing this opportunity. OUR NAME has developed an
investment thesis and an understanding of the business through our
initial due diligence, including several conversations with management,
as well as a preliminary data review. We envision our remaining due
diligence would include, but would not be limited to, commercial,
accounting and financial due diligence, as well as customary legal, tax
and regulatory work. With the Companys full cooperation, we believe
we can expeditiously complete our due diligence, and present TARGET
NAME with a definitive agreement within eight weeks from the date our
Proposal is accepted.
Exclusivity & Confidentiality

If the Company is interested in pursuing the proposed Transaction, we
would require 60 days of exclusivity (the Exclusivity Period) to finalize
our due diligence and negotiate definitive documentation, subject to a
60-day extension, if OUR NAME is working in good faith to consummate
the transaction at the initial expiration date.
In light of our Proposals premium valuation, we believe that

granting exclusivity at this stage will benefit the Project and its
Shareholders. In order to complete our due diligence and to secure
the additional requisite capital, we will need reasonable access to
Company information and the ability to share that information with
our prospective equity partners and debt financing sources in a
manner that protects the confidentiality of your information and our
discussions.
A draft form of the exclusivity and confidentiality agreement is enclosed

as Exhibit A for your consideration (the Exclusivity and Confidentiality
Agreement). We emphasize our desire to complete the proposed
Transaction in an expeditious and efficient manner and our readiness to
mobilize resources to move ahead quickly.
To that end, and assuming we sign this letter in advance, we would

suggest an organizational meeting as soon as possible to agree on the
work plan during the Exclusivity Period.
Non-Binding Commitment
This non-binding indication of interest is confidential and may not be
disclosed other than to you, the Company and its advisors on a strictly
need-to-know basis. It is not intended, and shall not be deemed, to
create any binding obligation on the part of OUR NAME, or any of its
affiliates, to engage in any transaction with the Company or to continue
its consideration of any such transaction.
Subject to the immediately following sentence, none of the parties shall

be bound in any way in connection with this letter unless and until the
parties execute a definitive agreement, and then shall be bound only
in accordance with the terms of such agreement. Notwithstanding
anything to the contrary in this letter, the Exclusivity and Confidentiality
Agreement, once executed by the parties thereto, shall constitute
binding obligations of the parties thereto.
We are very excited about the potential opportunity and hope that you
are equally interested in proceeding in a constructive and expeditious
dialogue. We look forward to working with you to complete this
transaction.
Very truly yours,
Name
Company Name
Note: This letter of intent template is only for educational purposes and
should not be used for any other purpose.
More resources
Drafting a letter of intent is an important skills for professionals in
investment banking, private equity, and corporate development.
To take your corporate finance career to the next level, you may find
these resources helpful:
Term sheet template
Beauty contest
Valuation techniques
To find out more check out our interactive Career Map.
F. Teaser: The First Glance
When a company decides to go for a sale process, the first and foremost
objective of the company is to get the maximum price from the sale
process. In order to achieve this, the company hires investment
bankers or M&A advisors. The objective of the banker is also to get the
maximum value, as their commission is dependent on the valuation
of the business. In order to get maximum valuation, it becomes
imperative for the bankers to market it well among the potential
acquirers. Hence, the bankers prepare a professional document known
as Teaser, wherein it highlights the companys business, financials,
projected growth, customers, etc. to attract potential buyers. At this
point, the company doesnt want to disclose its identity and wants to
be absolutely confidential. Hence, the teaser prepared is without the
companys name.
What is a teaser?
An investment teaser is a 1-2 slide summary about the complete sale
process without mentioning the name of the company so as to maintain
the confidentiality of the company. A teaser should be prepared to
mention the Unique Selling Points (USP) of the company while ensuring
that the value of the business is understood by a larger set of audience.
A wider search for buyers helps as one may never know what a buyer
may be interested in and may pay a hefty premium.
Contents of a Teaser
Industry Overview A very brief summary of the industry and the
competitive landscape in which the company operates in.
Business Description It contains the companys capabilities, the

nature and kind of products or services it offers to the customers.
One should ensure that it is simply not copied directly from the
companys website, otherwise the identity of the company will be

revealed just from free internet searches.
Location It is also important for the sellers to mention the

geographic presence of the companys headquarter location. This
may allow potential buyers to think from a synergy perspective or a
way of entering a new market.
Financial Summary This is something which is extremely important

as every investor invests in a company that has a certain financial
history. Some investors prefer to invest in small companies with
revenues of US$5 million to US$50 million, while others may like
to invest in big companies with revenues in the range of US$100
million to US$500 million. Financial summary also contains the future
projections of the company with EBITDA margins.
Investment Rationale It describes the USPs of the company and

the reason why investors should consider buying the company.
Some examples of investment rationale can be recurring
revenues, enterprise customers, concentrated customer base, latest
technology, proprietary platforms, patents, etc.
Customers Overview Few teasers also highlight several names of

their customers, especially if they are very big brands in their sector,
to build credibility for the company.
Transaction Structure It deals with the nature of the transaction

that the sellers are expecting. It may be a complete sale of the
business, carve-out, venture financing, etc.
Bankers Information The teaser also mentions whether the sale

process is taken up by an exclusive banker or it is a joint exercise by
2 bankers. The contact details of the bankers are also mentioned, so
that a potential buyer may easily get in touch with them for any kind
of information or clarification they may seek.
The Next Steps

The Teasers are sent to potential buyers both strategic investors (i.e.
the companies who are operating in a similar business) as well as the
financial investors like Private Equity (PE) firms. Bankers want to identify
these buyers interest in a potential deal.
As a next step, if the potential buyers feel interested in the business,

they would sign a Non-Disclosure Agreement (NDA) with the company.
NDA is signed to maintain the confidentiality of the company and to
ensure that information shared by the seller is not used by the potential
acquirer for its personal or competitive gain. Once an NDA is signed,
the seller discloses its identity with more information contained in
Confidential Information Memorandum (CIM).
PART 02
Presentation
Data Visualization
01
02
03
A. Overview of Dashboards and

Data Visualization
The Importance of Dashboards and Data Visualization

Financial analysts are required to present their findings in a neat,
clear and straightforward manner. They spend most of their time
with spreadsheets in excel, building financial models and crunching
numbers. These models and calculations can be pretty extensive
and complex, and they may only be understood by the analyst who
performed the work.
It is the job of the analyst, therefore, to effectively communicate the

outputs to the targeted audience such as the management team or
the companys external investors. This requires focusing on the main
points, facts, insights and recommendations that will prompt necessary
action from the audience. One of the challenges is to make an intricate
and elaborate work easy to absorb and comprehend through the help
and use of great visuals and dashboards. For example, tables, graphs
and charts are tools that an analyst can use to their advantage to unlock
the deeper meaning of a companys financial information. These tools
organize relevant numbers that are rather dull and dry and give life and
story to them.
Here are some key objectives to think about when performing financial
analysis:
1. Visual communication
2. Audience and context
3. Charts, graphs and images
4. Focus on important points
5. Design principles
6. Storytelling
7. Persuasiveness
8. Dashboards
For a further breakdown of each of these objectives, check out our

course, Excel Dashboards & Data Visualization, to help you become a
world-class financial analyst.
Charts and Graphs for Great Visuals

Charts and graphs make any financial analysis readable and easy to
follow. They are often included in the financial models output, which is
essential for key decision-makers in a company. These decision-makers
comprise executives and a team of managers who usually wont have
enough time to synthesize and interpret data on their own to make
sound business decisions. Hence, it is the job of the analyst to enhance
decision-making and help guide the executives and managers to create
value for the company.
When an analyst uses charts, it is necessary to be aware of what good

charts and bad charts look like and how to avoid the latter when telling
a story with data.
Examples of Good Charts

With great visuals, you can quickly see whats going on with the
data presentation, which will save you time for deciphering their
actual meaning. More importantly, great visuals facilitate business
decision-making, because their goal is to provide persuasive, clear and
unambiguous numeric communication. For a good reference, take a
look at the figure below that shows a dashboard, containing a gauge
chart for growth rates, bar chart for number of orders (i.e. a retailer),
area chart for company revenues and a line chart for EBITDA margins.
To learn the step-by-step process of creating these essential tools

in Excel, watch our video course titled Excel Dashboard & Data
Visualization. Aside from what is given in the example below, our
course will also teach you the purpose for using other tables and charts
to make your financial analysis stand out, professionally.
Example of Poorly Crafted Charts

A bad chart, as seen in the figure below, will give the reader a difficult
time to find the main takeaway of a whole report or presentation.
They often contain too many colors, labels, legends and thus, will
often look too busy. Also, it doesnt help much if a chart, such as a pie
chart, is displayed in 3D, as it skews the size and the perceived value
of the underlying data. Overall, a bad chart will be hard to follow and
understand.
Storytelling with Data, Visuals and Text

Aside from just understanding what the numbers mean, a financial
analyst must learn to combine numbers and language to craft a story.
Relying on data only for your presentation may make it difficult for your
audience to read, interpret and analyze your data. You have to do the
work for them. Having a story will act as a guide, as it will help you and
your audience arrive at the main points faster rather than just having a
presentation full of numbers only that only you can read.
The data to be organized can be in the form of revenues, expenses,

profits and cash flow. Even simply adding notes, comment and opinions
to each line item will add an extra layer of insight, angles and new
perspectives. Furthermore, by merging data, visuals and text together,
the resulting story will give a clear sense of what is happening with the
current situation, what happened in the past, and what conclusion and
recommendation can be made for the future.
Audiences for Data-Analysis Presentations

The simple diagram below shows the different categories of your
audience:
Internal Audience
An internal audience can either be the executives of the company or
every employee that works in that company.
For executives, the purpose of communicating a data-filled presentation

is to give an update about a certain business activity, such as a project
or an initiative. Another important purpose is to facilitate decision-
making, as mentioned earlier, with regards to managing the companys
operations, growing its core business, acquiring new markets and
customers, investing in R&D and many others. Knowing the relevant
data and information beforehand will guide the decision makers in
making the right choices that will best position the company to become
more successful.
External Audience
An external audience can either be the clients of the company, where
there are projects currently in progress, or new clients that the
company wants to build new relationships with to win new businesses.
The other external audience is the general public, such as the
companys external shareholders and prospective investors.
When it comes to winning a new business, the presentation made by

the analyst will be more promotional and sales-oriented, whereas a
project updated will contain more specific information for the client
with plenty of industry jargons.
Audiences for Live and Emailed Presentation

A live presentation contains more visuals, storytelling and connects with
the audience. It has to be more precise and should get to the point faster
while avoiding a long-winded speech or text because of limited time.
In contrast, with an emailed presentation, it is expected to be read, so it

will have more text. Just like a document or a book, it will include more
detailed information, because its context will not be explained with a
voice over just like a live presentation.
When it comes to details, acronyms and jargons in a presentation, these

things depend more on whether your audience are experts or non-
experts.
The Big Idea

Every great presentation with dashboards and data visualization requires
a big idea. It is the main purpose of the presentation and should be
addressed clearly, remembered well, its significance highlighted and
should cause the target audience to bring action to the matter.
An example of a serious and profound idea is given below:
Despite significant growth in our

companys top line and improving
EBITDA margins, we require a significant
capital investment next year or we will
run out of money.
To communicate this big idea, we have to come up with appropriate

and effective visual displays to show both the good and bad things
surrounding it, but placing a huge emphasis and attention on the
more important part, which is the critical cash balance and the capital
investment situations for next year.
Storyboarding
Storyboarding, found in the figure below, is how an analyst would build
the presentation based on this big idea as mentioned earlier. Once
the issue or the main idea has been introduced, it will be followed by a
demonstration of the positive aspects of the companys performance,
as well as the negative aspects, which are more important and will
likely require more attention. Various ideas will then be suggested to
solve the negative issues. However, before choosing the best option, a
comparison of the different outcomes of the several, suggested ideas
will be performed. Finally, a recommendation will be made that centers
around the optimal choice to tackle the imminent problem highlighted
in the big idea.
To get to the final point (recommendation), a great deal of analysis have

been performed, which includes the necessary charts and graphs to
make the whole presentation easy to follow, convincing and compelling
for your audience.
B. Types of Graphs
Top 10 Types of Graphs

Any financial analyst knows the importance of effectively
communicating results, which largely comes down to knowing the
different types of charts and graphs, and when to use them. In this
guide, we outline the top 10 types of graphs in Excel, and what situation
each kind is best for. Learn how to deliver powerful presentations and
clear takeaways with these effective chart types.
#1 Line Graphs
The most common, simplest, and classic graph is the Line Graph. Its the
perfect solution for showing multiple series of closely related series of
data. Since line graphs are very lightweight (they only consist of lines, as
opposed to thicker chart types, as shown further below), they are great
for a minimalistic look.
Tips:
Remove all gridlines

Remove any shading or
borders
Highlight a single series
with a different color
#2 Bar Graphs
Bars (or columns) are the best types of graphs for presenting a single
data series. Bar charts have a much heavier weight to them than line
graphs, so they really emphasize a point and stand out on the page
Tips:
Remove all gridlines

Reduce gap width
Source: Dashboards and Data Presentation course
#3 Combo Chart
The two types of graphs above can be combined to create a combo
chart with bars and lines. This is very useful when presenting two data
services that have a very different scale and might be expressed in
different units. The most common example is dollars on one axis and
percentage on the other axis.
Tips:
Delete borders and gridlines

Add a legend
Reduce gap width for the bars
Adjust the axis
Source: Dashboards course
#4 Scatterplot
The scatterplot is excellent for showing the relationship between two
data series and determining their correlation. The scatterplot is great
for showing what the distribution of data points looks like and drawing
a line of best fit for regression analysis.
Tips:
Clearly label each axis

Add a trendline
Highlight clusters of data
#5 Waterfall Chart
In Excel 2016, Microsoft finally introduced the waterfall chart. In older
versions of Excel, analysts had to create a custom workaround using
stacked column charts. If you use a version of Excel prior to 2016, please
see our free guide and waterfall chart template here. The waterfall
chart is excellent for variance analysis and explaining how an actual
result was different than a budget, or how something has changed
relative to an original data point.
Tips:
Set the start and end points

to be totals
Format positive and
negatives
Clear away gridlines
#6 Pie Graph
Pie charts have a bad reputation and are known for being messy and
hard to read. If youre trying to illustrate the percentage breakdown of a
small number of data point, they can be very effective. For example, the
diagram below shows the percentage of people who prefer bananas,
pineapple, and grapes.
Tips:
Keep it 2-D only

Dont graph more than 5
items in one pie
Use infrequently
#7 Histogram
Histograms are the types of charts that show the distribution of a
dataset. They graph the percentage or the number of instances of
different categories. For example, in a distribution of age categories
(0-10, 11-20, 21-30, etc.), we can clearly see which categories are the
biggest, and how many people fall into each.
Tips:
Set gap width to zero

Add subtle border between bars
Add data labels
#8 Gauge Chart
The gauge chart is perfect for graphing a single data point and showing
where that result fits on a scale from bad to good. Gauges are an
advanced type of graph as Excel doesnt have a standard template for
making them. To build one, you have to combine a pie and a doughnut.
Learn how in our data visualization course.
Tips:
Best for a single data point

Shows performance on a
scale (i.e. bad to good)
Learn via video instruction
Source: Advanced Excel Course
#9 Area Chart
An area chart graphs a solid area and can be effective when showing
a stocked, cumulative data series, e.g. showing the cumulative sales
revenue from different products. This allows the reader to easily
visualize the area (or weight) of each series relative to each other.
Tips:
Use stacked area

Graph data that is
cumulative
Use colors carefully
#10 Spider Chart / Radar Graph

A spider or radar graph is very useful for showing qualitative data or the
overall score or comparison of multiple series. For example, a spider/
radar can be easily used to compare 3 different types of phones based
on 5 criteria (speed, screen size, camera quality, memory, apps).
Tips:
Keep it simple
Only graph a few series/items
Format to be minimalistic
Remove markers
Additional resources
This has been a guide to the top 10 different types of graphs that
analysts need to perform top-notch analysis. To keep learning and
developing your career, you will find these additional resources helpful:
Advanced Excel formulas guide
Dashboard creation in Excel
How to make a pitch book
Data visualization course
C. Football Field Chart
What is a football field chart?

A football field chart is used to summarize a range of values for a
business, based on different valuation methods.
The purpose of the chart is to show how much someone might be

willing to pay for a business, whether acquiring all of it, part of it, or
even a single share (depending on the audience).
Why is it called a football field?

The bars look like yard lines on a football field, and hence the name.
Also, the graph is commonly used in investment banking, and bankers
like sports analogies.
Why use a football field chart?

A football field chart is used to visually show what the range of values
for a business are and see where an average target valuation lies
compared to several alternatives. Its common to see these charts in
investment banking pitchbooks or equity research reports.
How do you make a football field chart?

Football fields are easy to make in Excel using the stock chart option.
Here are the steps of how to make a football field chart in Excel:
1. Create a table in Excel with the range of values.

2. Insert a stock chart type called Open-Low-High-Close.
3. Set the Open and Low values as being the same.
4. Set the High and Close values as being the same.
Download our free football field chart template here.
More corporate finance resources

At CFI, our mission is to help you advance your career. With that in mind,
weve created a vast library of resources to help you along your journey.
Here are some useful topics we think you will find valuable:
Investment banking interview questions
Valuation methods
Excel formulas and functions
Lists of investment banks
For more guidance with career development, check out our interactive
Career Map.
D. Excel Waterfall Chart

How to create a Waterfall chart in Excel
Excel Waterfall Chart

If youre working in Excel 2013 or earlier versions, please follow the
instructions below as a workaround to build your own waterfall chart
using the stacked column chart feature.
Step 1 Organize the Data

In order to build your own waterfall chart, you first have to organize
your data as follows:
1. Start Column enter beginning value

2. Base Column formula calculated for you (nothing required)
3. Increase Column enter any increases
4. Decrease Column enter any decreases
5. End Column formula calculated for you (nothing required)
Step 2 Insert a Stacked Column Chart

In the Insert ribbon across the top, select a 2-D Stacked Column Chart.
Then enter the 5 series listed above as shown in the image below.
Step 3 Format the Chart

Format the chart so that the base column fill color is no fill, which
has the effect of making it invisible. Since older versions of Excel are
not designed to make waterfall charts, we have to insert invisible data
series to make it work. If you click within the column area, you will
notice that the invisible section is just a column stacked under the
colored column.
Additionally, you may want to decease the series gap width and remove
the grid lines.
Step 4 View your Final Product
Step 5 Download the Template for Free
Start creating your own chart in our Free Excel Crash Course!
More Excel Resources

Check out more of our resources to take you Excel skills to the next level:
List of Excel formulas and functions
Free Excel course
Advanced Excel formulas course
Excel shortcuts
All Excel resources
PART 03
Soft Skills
Preparing for an Analyst Role
01
02
03
A. Becoming a Financial Analyst
How to become a financial analyst 5 Steps

Weve seen thousands of people become financial analysts over the
years and know precisely what it takes. In this career guide, we will
outline exactly how to become a financial analyst by networking,
perfecting your resume, preparing for interview questions, telling
your personal story, and mastering the art of financial modeling and
business valuation.
Step #1 Match your personality with a career map

Before jumping in head first, its important to know how financial
analyst roles differ across the corporate finance universe. Theres a big
difference between a buy side analyst, a commercial banking analyst,
and an equity research analyst (just to name a few).
In our Career Map, we outline what type of personality is best suited for
each type of analyst position. Whether youre introverted, extroverted,
competitive, analytical or sales oriented, it will have a big impact on
which role you go for.
Step #2 Start networking (a lot)

The key to getting a job in most areas of finance is networking. Like it or
not, its the truth.
We have several specific ideas and tips around networking that will help
you out:
1. Join an investment club Whether youre in university or a working

professional, there are many types of investment clubs that you can
join. By joining a club, youll be able to network with other financial
analysts, learn more about finance/investing, and hear about job
opportunities.
2. Start a group on MeetUp.com This goes one step further than

joining a club. By starting your own group, you can be in control of
the topics covered, types of people wholl join, etc. and youll have
a perfect reason to reach out to working professionals you want to
meet to ask them to be a guest speaker at your meetup event!
3. Use your alumni network Ask your university for a list of all
finance professionals working as analysts who are willing to
be contacted for mentorships and networking. Its an easy
introduction if someone is from your alma mater. Just remember
not to ask them for a job and keep the discussion more about
understanding what they do in their job.
Step #3 Tailor your resume and cover letter

This part is fairly straightforward. We have developed extensive
resources to help you build a Wall Street quality resume and ace
multiple rounds of interviews.
For more on resumes and cover letters, please refer to:

Cover letter template (and tips)
Resume template (and tips)
When building your cover letter and resume (resources above), its
important to weave a compelling personal story. The story has to clearly
explain: (i) where you are coming from, (ii) where you are now, (iii) and
where do you want to be in the future. If you can connect these dots in
a logical way and also demonstrate youre a good culture fit, thats more
than half the battle.
Step #4 Use interview guides to ace the interview

Like most other things in life, being great at interviews takes practice.
The best ways to practice are through (1) networking (as discussed
above) and (2) using professional interview guides.
Weve provided below four professional interview guides that use REAL
questions from REAL corporate finance interviews. These are used
thousands of times over at global banks.
Please review our interview Q&A guides on how to be ready for any
question:
Investment banking analyst interview
Equity research associate interview
Credit analyst interview
FP&A analyst / manager interview
Step #5 Master the technical skill

This is listed last, but its actually spread out over all of the four steps
above.
CFI courses are specifically designed to give you the hands-on training
you need to master financial modeling and become a financial analyst.
By taking our courses, youll be sure to learn industry best practices
and all the most important tips and tricks. Our classes are based on real
financial analyst training programs at Wall Streets major banks.
Our courses are organized into several groups, with the most critical being:
Accounting
Excel
Finance
Financial modeling
Advanced topics
If you want all of the above, the best value is our Full Access Bundle.
B. Guide to Getting a Job

in Corporate Finance
How to get a job in corporate finance
After spending several years in investment banking, weve seen hundreds
of resumes and conducted countless interviews with new analysts and
associates. The advice below is a guide based on our firsthand experience
of what is the most effective way to get a job in corporate finance.
Step 1: Networking and resume

The first step on your path to a corporate finance career is to get an
interview. Finance careers are extremely competitive with way more
applicants than new hires each year. You will often be up against
students from Ivy League universities, a high GPA, and multiple
internships under their belts.
How can I use networking to get an interview?

Networking is a great way to help your chances of getting an interview. If
you are at a target school (a school that investment banks recruit directly
from), you dont have to worry as much about networking as opposed to
someone from a non-target school. Below are four easy approaches:
1. An easy way to start networking is to talk to your career center and

ask to be introduced to any alumni working at investment banks
you want to target.
2. Another approach is to use LinkedIn and find any connections who
can introduce you to bankers you want to network with. Be sure to
frame the request around learning more about the industry, and
not about getting a job or an interview.
3. A third approach is to join the local CFA society in your city and
network with local professionals who may know investment
bankers and who can introduce you to them.
4. Attend the National Investment Banking Competition (NIBC), where
hundreds of schools from around the world compete in a live
investment banking case competition.
Resume Guide & Template How do I write a corporate finance resume?
View templates Step 2: Understanding the interview process.

The corporate finance interview process is highly structured. The banks
move quickly to screen resumes, conduct first round interviews, hold
on-site interviews in their offices, and extend job offers.
What should I expect in the first round interview?

The first round interview will either be on the phone or on campus (if
youre at a target school). You will be asked three types of questions:
problem-solving, technical, and behavioural. The first round interview
will have all three types of questions; however, they will be more
focused on the technical ones. The objective of the first round is to
quickly screen candidates between those who live up to their resume
and those who dont.
What should I expect in the final round interview?

The final round (often called Super Day) will be held on-site with
everyone being flown into the office from their respective school
or hometown. The final round will typically include interviews with
different people, ranging in seniority. Generally speaking, the more
junior the person interviewing you, the more technical their questions
will be, and the more senior the person, the more behavioural their
questions will be.
Its important to dress right for the interview, which typically means
wearing a suit thats black/blue/gray and nothing too bold. Its less
about trying to impress them and more about trying not to come across
negatively.
Some banks will make decisions immediately following Super Day (i.e.
the same or following day) with most getting back to you within a week.
Step 3: Knowing how to answer the interview questions.
What questions will I be asked in the interviews?

As mentioned above, there are three types of interview questions:
problem-solving, technical, and behavioral. The link below contains
specific examples of each type.
We have prepared a full example of a real investment banking interview

for you to practice with. It uses real questions used by investment
bankers to hire analysts and associates in large global banks.
Real Interview Questions & Examples
Step 4: Mastering technical skills

The main technical skills to master are valuation, financial modeling,
accounting, and Excel.
Enroll in our online courses to help you become fully prepared for how
to get a job in corporate finance.
Summary of how to get a job in corporate finance

The finance hiring process is very formulaic. The key is to understand
the process and tick all the boxes without making any fatal mistakes.
This means limiting your resume on one page, having a good GPA,
gaining relevant work experience, and demonstrating you can gracefully
answer both technical and behavioral questions.
Following the steps in this guide on how to get a job in finance will
provide a great framework for your preparation. At the end of the day,
there are no real shortcuts, and you still have to put in the hard work to
become well prepared.
Additional career resources

We hope this has been a useful guide to help you advance your career.
Please check out our other helpful guides and resources:
Financial modeling guide
How to link the financial statements
Interview guides
Financial modeling resources
Corporate finance training
PART 03
Soft Skills
Dealing with Industry
Professionals
01
02
03
A. Personal Brand
What is Personal Brand?

Our personal brand is what people see from us. It reveals who we are,
what we offer and what we value. When we work in a company, our
colleagues will have a perception about us based on how we present
ourselves to them. This can either be good or bad, depending on how
our unique image comes across. So, its important to take care of it,
because we always want others to think positively of us.
Personality, Skills and Values

Personal brand can be broken down into three things: personality, skills
and values. They are expressed when we share our thoughts and opinions
to others during a conversation. Also, working with our colleagues on a
regular basis gives them the opportunity to learn things about us, including
how productive we are in the workplace. Overall, the goal is to have a
positive personal brand that others will admire and respect.
Examples of positive personality traits are:
Intelligent Reliable Trusting Confident
Driven Hard-working Charismatic Friendly
Examples of favorable skills are:
Analytical Presentation Attention to detail Problem-solving
Research Communication Writing Tech-Savvy
Examples of important values to have:
Integrity Loyalty Growth Discipline
Excellence Boldness Performance Humility
Lifetime of Making Good Decision

Creating a personal brand thats well received by everyone takes years
to accomplish. First of all, it takes time to get to know everyone well
meet and work with in our professional careers. To get to know who
we are, our colleagues have to be around and interact with us on a
consistent basis. Once we develop some type of working relationship
with others, we have to consistently make optimal decisions at work.
Whether it is sharing the best ideas we have, sending high-quality
analysis and financial modeling work to our team or finishing a project
before the due date, were building a reputation of excellence that will
be commended by our peers.
Start with a Positive Attitude

For starters, lets maintain a positive attitude about our work. It leads
to success and happiness. By doing so, it will be easier to attract other
people to work alongside us, help us with anything or to just chat with
us during our break. Having this attitude will allow us to keep going in
terms of getting things done and reaching our long-term goals. On the
other hand, its easy to be derailed from our progress with negative
thinking.
Nobody really wants to work with anyone who always has a negative
outlook about work and life in general. This type of people often dislike
their job and working closely with their coworkers. They will likely
encounter more setbacks in their careers, because their approach to
virtually anything is cynical and pessimistic. They rarely see the good in
others and lack the belief that success will come if we keep trying and
learning from our mistakes.
Aside from having a positive attitude, it also helps our personal brand if we
constantly aim to put forth our best efforts in every significant task we do.
Become a High Achiever

In any financial, accounting or consulting firm we work in, well be
judged based on our work ethic. The person who works the hardest
receives reward and recognition, especially from a company that
values merit. Every team in an organization values a member who is a
high achiever. These are the individuals who are willing to go beyond
their assigned tasks and responsibilities. Not only are they good at
performing their standard roles, but they take initiative to complete
extra tasks and help others who need it.
Being a high achiever will get us far in our careers. We draw the
attention of others, especially our senior-level coworkers. We are
definitely an exceptional asset to the team, and the company will do
their best to keep us through salary increase or promotion to name
a few. Once we have a decent personal brand, we can attract great
opportunities to advance our career.
Finding New Opportunities will be Easier

If others know that we are smart, hard-working, humble, act in a
professional demeanor and persistent in pursuing our dreams, other
people will believe in us. For instance, if we decide to switch careers
and look to grow in a new company, well need a list of references to
prove that everything we say about ourselves is true. This list contains
individuals, mostly past employers and coworkers, who have plenty
of nice things to say about us. Their permission is needed first. If they
agree to be our reference, then theyre convinced and confident that we
are the right candidate for any firm, because we have proven to have
favorable skills, values and great personality to them.
We cant fake our personal brand. Other people can see right through
us. When networking with industry professionals, they will ask
questions about our academic performance and work experience
among other things. If we happen to be sitting in front of someone
with the power to make hiring decision, they could ask for our list of
references. This is the part when having an established personal brand
will work in our favor.
Our Actions Speak Volume

Action speaks louder than words. Below are some examples of actions
that, if not done correctly, can ruin our personal brand.
Be on time
Making it to work on time or even earlier than anybody else shows that
were hard-working and committed to doing our very best work. It also
means that we value everyones time, because being tardy with our
work schedule will leave a bad impression on our colleagues and our
clients, especially when we have a meeting with them.
Following Through on What We Promise to Do

Lets be a man of our words. Many people will say all the things theyll
do for a person, a group or a company, even going as far as making a
sincere promise to get those things done. However, not every person
actually follows through on their promises. Once we build expectation
from others after saying that were going to complete something, make
sure we do them. Our capability and reliability are being put to the
test here. The more we cant keep our words and promises, the more
people question our credibility.
Give Undivided Attention

Not giving eye contact and full attention to someone, when he or she
is speaking to us, can be interpreted as being disinterested in the
presence of that person. Having a bad habit like this will definitely
prevent us from interacting with the other person again.
Dont Create Drama

Avoid partaking in petty gossips about other people in the workplace.
It will hurt our personal brand, because we will be forced to say
something bad about other people when we entertain gossips for
too long. If we dont like a person, a treatment or a particular task, we
always have to handle these situations with class and dignity.
Operate with the Highest Level of Integrity

Having strong ethics and morals in place are very important in
business and finance. They help us distinguish between good and bad,
and between right and wrong in our daily actions. Ethics are concerned
about the shared, practical principles of right conduct, whereas morals
are concerned more with our own personal judgement of right and
wrong. We must be honest in everything that we do in the workplace
and always do the right thing for all involved stakeholders.
B. Office Politics
What is Office Politics?

Politics exists in organizations. They are activities performed by individuals
to improve their status and to advance their personal agenda at the
expense of others. These self-serving actions are informal or unofficial
and could be the reason why politics in the workplace has a negative
connotation. However, there are good office politics, and these are more
identified as networking and strengthening stakeholder relationships.
The truth is we must develop political know-how. We often dont like

to talk about them, but in reality, workplace politics do exist. Doing so
can prevent anybody from taking advantage of us. If we fail to develop
these skills, we get left behind in terms of career advancement. The
suggestion here is not to become a highly political person but to be
aware of the politics in our organization.
What causes Office Politics?

The motives for a person to engage in workplace politics are to sell
their ideas, achieve a targeted objective, influence an organization
or increase their power. To achieve all of them, politically-motivated
individuals will form alliances, bargain and negotiate to get what
they want for themselves and/or for their group. Furthermore, these
individuals will lobby their bosses before the bosses make a promotion.
Also, they will bypass the existing chain of command to get approvals
for certain decisions or projects.
Whats more is people or groups within an organization have different

interests. These interests are not always aligned with others. Therefore,
in order to be successful, some individuals will have to engage in
politics.
Politics and Competition

If there are scarce resources in an organization, this will breed
competition, and surely, there will be politics in place. For instance,
because of the limited positions within a firm, such as an investment
bank, individuals will find various ways to get promoted. Furthermore,
when a person wants to control a project and make a difficult decision,
they will want to get the approval of others, usually from their senior
coworkers, even when others are against them.
Virtually all organizations have a pyramid hierarchy. This means there

are fewer positions to be filled as one climbs up the ranks. Not everyone
gets the promotion theyre after, as only a handful of executive
positions are available.
Example: Hierarchy in Investment Banking
Analysts
In investing banking, for example, you start your career as an analyst.
This is when you will spend most of your time learning the ropes. Your
main tasks will involve around analysis, creating presentation materials
and even doing mundane, administrative tasks. If youre considered a
top performing analyst, you may receive an offer to stay for more years.
Associates
After two or three years, youll be promoted to the associate level. If
you did really well as an analyst, some banks will offer you a direct
promotion. However, other banks will require you to get your MBA
first before going back to work as an associate. The work will be similar
for the associate and the analysts with the former having added
responsibilities of managing the analysts work and acting as the liaison
between junior and senior bankers.
VPs and MDs

Reaching the VP role requires about three and a half more years of
investment banking experience as an associate. But not everybody can
become a VP in the same bank, unless theres a need for another one.
It becomes even narrower when trying to reach director status. That
will require about three to five years spent as a VP before a successful
transition, but only if theres an opportunity. In trying to achieve those
roles, you have to assess your situation as to whether its a good idea to
stay in the bank or look elsewhere for a promotion.
For the roles of senior bankers (VPs and MDs), they build and maintain
business relationships with current or new clients. They continuously
source new deals and have deep expertise in their industry landscape.
Not everyone is good at doing this, as you need to have exceptional
interpersonal skills. The whole process is very selective.
Limited Recognition, Reward and New Role to Advance Career

As we can see, it takes years to climb up the investment banking
hierarchy. The chances of an analyst making it to MD level someday is
small, considering there are much more analysts than MDs working at
any major bank. The higher the role youre trying to reach, the fiercer
the competition becomes. On average, it takes about 16+ years from
analyst to managing director at most major investment banks.
Aside from the limited availability of investment banking jobs,

competition also emerges for what comes as a package from the senior
roles, which are respect, lifestyle and prestige. This is why we must
know the politics in our organization. Theres a possibility that some
of our coworkers will have strategies to gain unfair advantage over us,
even if our skills on the job are more superior than theirs.
The culture in most investment banks, Big Four accounting firms and
major consulting firms is intense. Generally, they have a reputation
for their cutthroat meritocracy, unless the head of a group creates a
partial and nepotistic environment. It definitely attracts the best and
brightest business students from top universities, and frankly, everyone
is replaceable, so we have to work hard. Even on the weekends, we are
expected to work long hours. For a major investment bank, the number
of hours spent on a weekly basis are somewhere between 80-110 hours.
We may feel resentment or even jealousy towards the person

whos politicking to achieve what they want. The reason for this is
not everyone engages in politics. Instead, the rest rely on proper
procedures, thereby making it unfair for us and our coworkers when
we get taken advantage of without knowing it. This is true, especially,
when rewards and recognition, which are scarce, are given to those
individuals who use politics to attain them.
Changing Bad Politics

Here are some things we can do when we experience bad politics in the
workplace:
Make Many Friends

To change bad politics in the workplace, we need to get involved. A very
common thing that can happen in the workplace is a coworker using
their power to intimidate and oppress others. One thing we can do is to
make friends with our colleagues and share anything that we may find
wrong in the workplace. Its a good idea to point out negative behavior
that affects the performance of everyone. Forming a group against the
person doing the negative politicking will isolate that person, contain
their behavior and expose them for what they do.
Keep Record of Your Work

If we find someone taking credit for our work, we shouldnt just
directly expose that person in the open at the office. Instead, the
most professional thing to do is to thoroughly document our work. We
should regularly update our bosses superiors and coworkers about
our progress and work output. This protects us from anybody that
challenges our contribution to the company, or even questions our
skills. More importantly, it protects our reputation, because we can
easily prove our level of productivity to anyone.
Dont Retaliate the Same Way

When theres a coworker who tries to underestimates us or make us
look bad, we may harbor animosity towards that person and even
try to retaliate. But we must be careful of losing our temper and
professionalism. Attempting to do something can also backfire. We
wont be able to change the persons behavior this way. What we can do
is to talk privately with that person and ask them why they acted in that
manner. This is a far better approach, because it will make that person
reflect on their negative actions.
So, when we start our finance work in a company, lets determine

whether or not its overly driven by politics. We must be aware of the
destructive aspects of office politics in order for us to minimize their
negative effects. Letting it happen can provide the grounds for others to
take advantage of us. We must learn how to navigate our way through
it to prevent ourselves from having a lower job satisfaction, less
commitment to the organization, job anxiety and poor performance on
the job.
In Summary
Being good at politics in the workplace is knowing who the right people
to speak to, handling public put-downs well, how to make your work
relevant and yourself more visible, and how to move projects along.
At the end of the day, we have to make sure that (1) we understand
the politics in our organization, (2) we devise a strategy on how to
successfully navigate them, and (3) we constantly check in with ourselves.
C. Part 1: Networking and

Building Relationships within
the Company
Analysts Work in Teams
When we work as analysts, we are expected to work with a team of
professionals who have different personalities, work ethic, knowledge,
skills and experiences. We may end up working with a group of people
who have some similarities to us or who are the complete opposite of
who we are. Regardless, we should learn early on, especially while were
still in college or university, to quickly adapt to our surroundings and to
work with a diverse group of people to achieve a common goal.
An analyst interacts daily with his or her colleagues to share ideas,

ask questions, tackle a problem, work on a project or update each
other about the progress of their own tasks. Moreover, meetings
are very common in the workplace and often occur on a weekly or
monthly basis. As we can see, there are plenty of opportunities to work
alongside our colleagues.
Ideally, we want to get along with everyone. However, we may find

ourselves in a situation where we just dont agree with our coworkers.
Depending on how vocal we are with our thoughts, comments and
opinions, we probably have the urge to criticize and condemn that
person for not thinking like us and not producing the same level of work
as we do. Its easy to fall into this trap without knowing consciously that
were doing it. This is an unwise move to make, especially if were trying
to build long-lasting and meaningful connections within the company
we work in.
Avoid Destructive Criticism

Too much criticism against someone can hurt our chances of building
a professional relationship with that person. In fact, they may bear
resentment towards us and will find us unpleasant to work with. This
will ruin our chances of working with others again in the future.
If we try to focus more on acknowledging and congratulating the

good behavior of people, while politely pointing out any areas for
improvement, they will treat us with respect instead of avoidance and
repudiation of our ideas. They will think positively of us.
A person is willing to learn at a faster rate and retain more of what

theyve learned if they have been commended for the good things
theyve done as opposed to criticizing them for bad things. Remember
that criticism, especially a destructive one, can hurt a persons pride and
would make a person feel less important. Instead of quickly criticizing a
person, we should understand why people are as they are.
Give Appreciation to Co-Workers

Learn to appreciate every person we meet within the company. As
mentioned earlier, we will have a chance to come in contact with them
or even work alongside them on a regular basis. Sometimes, we dont
take the time to appreciate other peoples work, even when theres a lot
to be learned from them. Within the first several months, as an analyst,
we will often have mentors or senior analysts who will guide and train
us to get the most out of our job. These people are taking their time to
share their knowledge and experiences with us, so that we can perform
well and eventually, advance in our career.
An honest and sincere appreciation for others can really go a long way.
For those who have helped us, the least we can do is highlight their
strengths and let them know they have been valuable in making us
become better analysts. By giving genuine appreciation, we, too, are
helping others become more successful, because we are giving them a
positive perception of themselves. This brings out greater enthusiasm
for their work and even improves their motivation to succeed.
We must be specific with our praise and encouragement. The more

details we provide, the better, because it really shows that were not
making a shallow and insincere statement. Since theyre aware of the
beneficial impact they have on our work performance, our colleagues
are more likely to help us again the next time around.
Align Your Wants with the Other Persons Wants

Once we start working, our colleagues are expecting that we put in our
best effort. We have been chosen for the role, because they believe we
meet all the qualifications, and that we are, truly, a value added to the
company. What they want is for us to make their job less difficult by
making sure we deliver on our responsibilities. They expect that we can
manage to produce our work on time while maintaining high standards
and quality. As we do so, we make our team, especially our boss (the
VPs and MDs) look good.
We have to put ourselves in our coworkers shoes to see their point

of view. They want to succeed in their jobs just as much as we do.
Senior roles such as the VPs or MDs, for example, are more client-
facing, and therefore, they want to establish great business with their
corporate clients. To make long-lasting, beneficial relationships, our
company must provide exceptional service. This includes finishing the
project on time, providing ptimal advice through trusted expertise and
helping clients achieve greater profitability in various ways. These are
achievable if we do our role well. Doing well in our job not only makes
us look successful, but also makes your supervisors successful, because
you show that you are reliable, capable and industrious.
Each individual in our team will have different desires and wants
for their career. The head of our group will certainly want to bring
new clients to the company. We make his job easier by doing our
part exceptionally well, whether it consist of building pitch books
and financial models in investment banking, for example. If we give
them what they want, then we will certainly get what we want out of
our career in the future, such as a promotion, salary raise or more
important and bigger responsibilities for a new project. Our own wants
as well as those from the people we work with should be aligned.
Therefore, each party will gain from working together.
We are showing our colleagues, through our work ethic, that they can
reach their fundamental desires. It is essentially helping them get what
they want. As a result, we have an influence on the success of our team
members. In return, we, too, will get what were looking for out of our
job, such as business relationships, referrals, advancement in our career
or bonuses to name a few.
D. Part 2: Networking and

the Company
Be Interested in Other People
Focus more on being genuinely interested in other people rather than
trying really hard to get other people interested in us. It makes a huge
difference when people actually enjoy being around us, especially if its
our first few days in the office. The team operates best when everyone
around us knows each other. Knowing the strengths and weaknesses of
our coworkers can make the whole team work effectively and efficiently,
since the team can take advantage of each members unique abilities.
Knowing who to speak to for guidance and assistance in certain aspects
of our job will help us get through our tasks smoothly. So lets get to
know as many people in our company as we can and start building
genuine, professional relationships with them.
Showing interest and taking the time to get to know other people leads
to making new friends and building camaraderie in the workplace. The
outcome is a team that works well and has all members communicating
in an open, honest and respectful manner. Moreover, team members
will feel a strong sense of belonging to the group, which further leads to
a deep commitment to the groups actions and decisions.
Every day is an opportunity to get to meet new people, so always greet

our co-workers with vigor and enthusiasm.
Make a Good Impression

Personal appearance matters when were interacting with our new or
current colleagues. Its the first thing that they notice about us. How we
carry ourselves through our attitude, posture and body language is very
important, because its the first point of contact. Always remember that
action speaks louder than words.
Before we greet others, lets remind ourselves to smile. Avoid negative

thinking that will affect our attitude towards talking to others. People
can detect a negative attitude just by looking at a persons facial
expression and even hearing the tone of their voice. If this is the case,
we could potentially have a negative effect toward their mood, which
could ruin their day. That is why smiling when conversing is very
important, when were trying to make a good impression to someone in
the company.
Smiling communicates that we are glad to see that person. In fact,

action and feelings go together, so even if were not in the mood to
smile, doing so anyway will tend to make us happy. Others will thank
us for that, as a simple smile can be contagious. It makes other people
happy as well, and gives them a pleasant time meeting and talking to us.
Be an Active Listener
One of the most important skills to have is the ability to listen. Often
times, we become very concerned about what we want to say next that
we dont take the time to truly listen to the speaker. A bad listener will
have a difficult time building relationships with his or her colleagues.

So be a good listener, particularly when we are a new recruit to the
company. We will spend a lot of time learning everything about our
roles from others.
Along the way, we will be introduced to many employees working

in various departments of the firm, including ours. If we are new to
virtually all of the processes and procedures, one of the best ways to
learn is to listen to and watch our senior colleagues train us. They come
from years of experience, so its best to listen intently and carefully. Our
first few weeks will include new instructions and information. The last
thing we want to happen is miss any crucial details that can potentially
sabotage our performance in the company.
When we show sincere interest in what the other person is saying,

they, too, will find us interesting. Encourage them to talk more about
themselves, especially their accomplishments, and they will find us
great conversationalists. Everyone has much to say about themselves,
but often, there arent too many people out there, who are patient and
sympathetic listeners. So be the person to make the other person feel
heard and they will thank us for it.
Active listening requires giving our full attention to the speaker. It

involves genuine and obvious signs like making eye contact, nodding
our head in agreement and asking questions for further clarification.
We really have to concentrate on, engage in, and absorb what the other
person is saying to us. Having this valuable skill will help us reap the
benefits as stated below:
Respect and Trust

We earn the respect and trust of our colleagues, because we show that
we are supportive and understanding. If there are any kinds of personal
or work-related issues, they will be mitigated as each member becomes
self-assured and comfortable in working out a solution with each other.
Understand Issues Clearly and Formulate the Best Solutions

With a better understanding of the issues in the company or from our
peers, we can formulate an accurate and optimal solution. In a meeting,
its easy for anyone to miss out on information when they let their mind
wander. When were asked to come up with a solution, we may offer a
wrong or useless solution, because we have gaps in our knowledge. A
situation like this can endanger our professional image and ability. We
wont come across as someone who works efficiently and one with a
sharp intellect.
Make Other People Aware of their Importance and Value

One of the best ways to develop professional relationship within
the company is making others feel that they belong in the group.
Specifically, make them feel important by giving them approval and
recognition for their work.
Always find something nice to say about a person. By doing so, we are
essentially highlighting their best qualities. Even though there are plenty
of good things to say about a person, sadly, we dont do it quite enough.
Saying good things about a person helps motivate them to continue
doing what theyre good at. It will even encourage them to improve on
their weaknesses. This is because they know that good work and sincere
effort are being recognized.
Our colleagues sometimes can have a bad day, when they think that the
boss is not aware of their hard work. But someone who works beside
them every day clearly knows how much effort and time are being
invested into a given task or project. We can be that person to instantly
cheer up our coworker, who currently has low morale, by giving him or
her an honest appreciation.
Everyone we work with can potentially have an impact on our career.

They can help advance us forward to become more knowledgeable
and skillful in our job. Just being surrounded by intelligent and diligent
people is both inspiring and influential. They will surely have an
influence on the way we act and think. Our company believes in us
after all; thats why they gave us the opportunity to work there. So be
thankful, and, when the right time comes, let the people we know how
important they are to us.
E. Part 3: Networking and

the Company
Respect the Opinions of Others
When we disagree with someone, its easier to tell that person theyre
flat out wrong than try to hear out their entire point of view and explain
why we think that person may be wrong.
We often dont take the time to examine why the other person thinks
differently from us, because we firmly assume, early on, that we are
always right. If we are adamant about our ideas and opinions, chances
are we wont be open-minded for a challenge and consideration of
opposing viewpoints.
If we truly know the other person is wrong, try to avoid saying it directly.
Doing so can make matters worse, as he or she may take it as an insult
to his or her knowledge and intelligence. Being insensitive about the
other persons feelings can hurt our chances of building a professional
relationship with that person. Remember that if we constantly tell a
person theyre flat out wrong, we can hurt that persons pride and make
them feel inferior. Whats even worse is they will begin to resent us.
A decent way to approach a situation is asking a follow-up question

instead of making a firm, dismissive statement. For instance, try saying,
Why do you think thats the best financing option to pursue for our
client? I thought otherwise. Though, I could be wrong. But if I am, I want
to know why. Lets look at the details. The poor approach would be
to say, No, youre absolutely wrong. Thats not how you deal with the
clients problem.
As we can see, theres a big difference with how we say things when
we are in disagreement with someone. The first example is the better
approach, since were presenting ourselves as open-minded and
fair. Rather than being contentious, our statement is disarming and
still allows the other person to make their point. They will be more
reasonable with our opposing view, because we can demonstrate that
were willing to listen.
So, next time we find ourselves in a similar situation, remember to

not threaten a persons self-esteem. Lets not directly attack their
statements, because were only provoking them to strike back. Adjust
our response, so that our ideas and opinions are welcomed and
considered.
Be Honest When Youre Wrong and Admit It Directly

When we collaborate with our team members to share our findings,
opinions and ideas, other people may either agree or disagree with us.
As mentioned earlier, we always have this intrinsic feeling where we
want to be right for most of the time. It gets us praise for our work and
admiration from others. More specifically, when were right, we look
smart and very capable in front of our colleagues.
The problem with this is sometimes we are afraid to make mistakes or

just generally be wrong with anything. The perceived repercussion is
that we would look incompetent and unintelligent. Even if we eventually
believe that we are wrong and people have proven us wrong, we can
still have the urge to mask our wrongness or mistakes, because our
egos are being bruised. Rather than directly admit that we are wrong,
we go into defensive mode to protect ourselves from embarrassment
and rebuke.
Not immediately admitting we are wrong can only worsen the situation.
We only hurt our work relationship with others. Furthermore, it
prolongs solving the actual problem, since we now become focused on
proving others wrong and try to dance around the situation. This often
leads to nothing.
The best thing to do is to quickly admit our mistakes. As long as we

are sincere and humble about it, make an effort to learn from it and
avoid doing it again in the future. Most of the time, people will have a
forgiving attitude, because we are saying the things they intend or want
to say about why we are wrong in the first place.
Next time we find ourselves mishandling a particular task or activity

at work, immediately point it out to our boss. Our boss and coworkers
are more likely to trust us, since were showing that we are honest,
responsible and diligent. We are willing to get things right the second
time around.
Always Be Friendly in Your Approach

Approaching coworkers in a friendly manner is the best way to interact
with them and achieve our objective with their help, instead of being
upset, angry, aggressive or even arrogant. A peaceful dialogue will likely
occur, when we arent harboring any negative feelings toward a person.
In particular, if our objective is for the other person to agree with our
way of thinking, then we must prevent ourselves from provoking the
other person to fight back.
A coworker may have upset us in the past. It could be that the person
was too critical of our work or simply did not treat us with respect like
everyone else. How we talk to or work with that person will surely be
cold and antagonistic. Simply put, we just dont like that person at all.
However, maintaining an attitude like this for a long time will not be
beneficial for the progress of our work and advancement of our career.
As much as possible, we want to be in good terms with everyone.

What we should do is sit down with that person and discuss the issues
through to have a better understanding of where we disagree. Dont
avoid any issues that can be fixed, as most are fixable. Theres a huge
chance that the other person agrees more on many things with us and
differs only on a few ones. So dont avoid a person just because we
dont like them. Lets get rid of our anger or frustration and replace it
with a friendly, gentle and calm manner. This way, well be able to shift
the persons perspective of us into a good light and convince them of
the points were trying to make.
Just like how we would approach any of our friends, we also should
greet our coworkers cheerfully. Start by exchanging pleasantries. Lets
ask about how the persons day is going so far. Talk about recent current
events thatll trigger continuous conversation. Learn about the other
persons interest or hobbies and try to build up on that. The purpose
of this is to make the person comfortable in chatting and listening to
us. The more we spend time with them, the more we get to truly know
them and vice versa. So, once they feel positively about us, we can
then introduce the more serious issues we want to go over with them.
By being friendly in the beginning, well have much more influence in
convincing the person to agree with us.
Advance Your Career
Corporate Finance Institute (CFI) is a leading global provider of online

financial modeling and valuation courses for financial analysts.
Our programs and certifications have been delivered to thousands of

individuals at top universities, investment banks, accounting firms and
operating companies around the world.
Our courses give you the practical skills, templates and tools to advance
your career. We pick up where business school leaves off to teach you
on-the-job aspects of corporate finance, investment banking, corporate
development, FP&A, treasury, and accounting.
To further improve your technical skills and to access hundreds

more of corporate finance resources, visit our website at
www.corporatefinanceinstitute.com
The Corporate Finance Institute The Analyst
Analyst Trifecta
Trifecta
For more information or

to register for our courses
please contact us at:
learning@corporatefinanceinstitute.com
www.corporatefinanceinstitute.com
For more eBooks please visit:

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The Corporate Finance Institute The Analyst Trifecta

The Analyst Trifecta

For more eBooks please visit:

08 Analyst Trifecta Section 1: Analytics

65 Analyst Trifecta Section 2: Presentation

106 Analyst Trifecta Section 3: Soft Skills

106 Preparing for an Analyst Role

114 Dealing with Industry Professionals

139 Advance Your Career

Regardless of what your occupational situation is (whether you are a

As an analyst, quantitative and analytical skills are mandatory

This e-book is divided into three sections:

Theres no denying that an analysts job can become quite technical.

2. Presentations & Documents

For instance, many first-year analysts in investment banks will spend

There are a lot of reading and writing involved in creating presentations.

After covering the standard responsibilities of analysts, we then

Youll be meeting and interacting with many employees within the

Through our vast resources in corporate finance training, primarily

Lets get started!

A. What is Financial modeling?

To learn more, please check What is a financial model?

What is a financial model used for?

Raising capital (debt and/or equity)

Who builds financial models? (Jobs and career)

How can you learn financial modeling?

Its also important to establish a solid base understanding by taking

What are financial modeling best practices?

1. Excel tips and tricks

Limit or eliminate the use of your mouse (keyboard shortcuts are

3. Model layout and design

1. Assumptions and drivers

Below is an example of the grouped sections of a well laid out financial

How do you build a financial model? (10-step Guide)

Below is a step-by-step breakdown of where you should start and how

1. Historical results and assumptions

2. Start the income statement

3. Start the balance sheet

4. Build the supporting schedules

5. Complete the income statement and balance sheet

6. Build the cash flow statement

7. Perform the DCF analysis

8. Add sensitivity analysis and scenarios

assumptions. This is very useful for assessing the risk of an investment

9. Build charts and graphs

10. Stress test and audit the model

Free financial modeling video lesson

More about financial modeling

Types of financial models

DCF model guide

Free Excel crash course

B. Types of Financial Models

To learn more, please check Top 10 types of financial models

More detail about each type of financial model

Related links: Three Statement Model

Related links: Discounted Cash Flow (DCF) Model

Related links: Merger Model (M&A)

Related links: Initial Public Offering (IPO) Model

Related links: Leveraged Buyout (LBO) Model

Related links: Sum of the Parts Model

Related links: Budget Model

Related links: Forecasting Model

Option Pricing Model