Investment banking 101 Study guides, Class notes & Summaries

Functions of a commercial bank - Answer collect deposits Make loans to businesses and individuals Provide accounts and cash management services Functions of an investment bank - Answer Helps companies issue debt and equity provides advice to companies regarding mergers, acquisitions, and sale of businesses Helps arrange financing for acquisitions Provides advice to companies involved in bankruptcy Makes markets in stocks, bonds, loans, and other financial products Glass-Steagall Act ...

What is a bank? - Answer Banks serve as a financial intermediaries that receive funds from depositors & loan funds from borrowers Banks help - Answer lubricate the economy Banks provide - Answer security for depositors Banks earn a - Answer return for their stockholders Net interest income Non interest income Primary needs met by a bank - Answer conduct financial transactions provide access to credit facilitate investment of excess funds insure against loss Produ...

5 most important accounting concepts you need to know - Answer 1. The 3 financial statements and what each one means 2. How the 3 statements link together and how to walk through questions where one or multiple items change 3. Different methods of accounting - cash-based vs. accrual, and determining when revenue and expenses are recognized 4. When to expense something and when to capitalize it. Not all expenses are created equal 5. What individual items on the statements, like Goodwill, Othe...

US, UK, and EU Traditions in IB (history) - Answer US - banks offer underwriting services ('investment banks') UK - banks offer equity training services ('merchant banks') EU - banks offer universal services ('banks') Definition of Investment Banks - Answer A system of financial services produced by financial intermediaries - focus on big corporations, other financial intermediaries, other public authorities/administrations Essentially a system of different businesses Approach is ...

Investment Banks - Answer Raise debt and equity securities (IPOs, bond issues) Originate, underwrite, and place securities Give advice about M&A or restructuring Primary market Securities Firms - Answer Brokerage services or market making Secondary market What is a key difference between securities firms/investment banks and other financial institutions? - Answer They don't transform securities, they serve as brokers or intermediaries 8 Key activities of Investment Banks - Answer ...

What are the three main financial statements and what do each consist of? - Answer Income Statement, the Balance Sheet, and the Statement of Cash Flows Income Statement -a company's revenues, costs, and expenses = net income Balance Sheet -a company's assets, liabilities, and equity = a representation of the company's financial health/position on one particular day in time Cash Flow Statement -starts with net income from the income statements - adjustments for non-cash expenses (c...

functions: acting as an intermediary for capital raising, and as an advisor on M&A transactions and other major corporate actions. As an intermediary, it connects companies that need capital with investors who have capital to spend. It facilitates this through debt and equity offerings. As an advisor, an investment bank counsels companies on such corporate actions as mergers, acquisitions, spinoffs, and restructurings. Q: WHAT EXACTLY DO INVESTMENT BANKERS DO? - Answer investment banking is t...

what are the 2 main differences between investment and commercial banks? - Answer 1) there is no cheap financing for investment banks (client deposits) 2) investment banks work on large scale and sophisticated transactions banks that perform commercial and investment banking services are called __ - Answer universal banks Glass-Steagall Act 1933 - Answer Universal banks have more information about both sides (commercial and investment side), this creates a risky situation because banks ma...

What are the three financial statements? - Answer Income statement, cash flow statement, and balance sheet (in this order) Income Statement - Answer Shows the company's revenues and expenses over a period of time. Also known as the P&L statement or the statement of revenue and expenses Cash Flow Statement - Answer Shows the inflows and outflows of cash in a company. Two types: direct and indirect. How do we fund our assets? - Answer [Assets = Liabilities + Stockholder's Equity] Wha...

Foundations of Financial Management 17th Edition pdf. Brief Contents PART 1 | INTRODUCTION The Goals and Activities of Financial Management 2 PART 2 | FINANCIAL ANALYSIS AND PLANNING Review of Accounting 26 Financial Analysis 58 Financial Forecasting 96 Operating and Financial Leverage 125 PART 3 | WORKING CAPITAL MANAGEMENT Working Capital and the Financing Decision 158 Current Asset Management 191 Sources of Short-Term Financing 227 PART 4 | THE CAPITAL BUDGETING PROCESS The Time...