Training Programs for Investment Bankers

>> Associate Training

Topic 1: Financial Statement Integretion
Review: Financial Statements and the purpose of:

1. Balance Sheet = Statement of Financial Position
2. Income Statement = Statement of Operations
3. Statement of Cash Flows
4. Statement of Stockholders' Equity

Topic 2: Detailed Income Statement and Adjustments to EBIT,
EBITDA and Net Income
Emphasizing understanding the effect of and adjustments for:

5. Unusual Items, Pre-tax - e.g., Restructuring charges, Merger charges
6. Non-recurring items
7. Other income and expenses
8. Discontinued operations
9. Extraordinary items
10. Cumulative effects of accounting changes
11. Impact of Purchase and pooling on Income statement revenues and expenses - general characteristics
12. Operating revenues and expenses - Margins & Adjustments
13. EBIT & EBITDA — adjustments to be made for analysis

Topic 3: Capital Structure: Debt Versus Equity Recording - Financial Reorganizations

1. Capital Structure: Debt & Equity Recording
2. Financial Reorganization and the WACC
3. Transaction Expenses Debt Issuances
4. Transaction Expenses - Equity issuances
5. Transaction Expenses - Equity issuances
6. Financial alternatives - Balance sheet and income statement effects
7. Accounting for recapitalizations
8. Financial Reorganization — Lowering WACC
9. Liquidity ratios
10. Debt/Equity ratios

Topic 4: Cash Flow Statement

14. Review statement of cash flows
15. Analyze and interpret cash flows
16. Cash Flows and Acquisitions

Topic 5: Earnings vs. Cash Flows

17. EBIT & EBITDA & Operating Cash Flows
18. Quality of Earnings - Deception in the earnings numbers

Topic 6: Using basic ratios for trend analysis (e.g., level of receivables needed to support an increase in sales)

1. Sustainable Growth
2. Performance Measures: Return on Invested Capital, Return on Net Assets, Residual Income, Return on Common equity, Operating ROA
3. Days of receivables, Days of inventory, Days of Payables, Cash Flow/Debt
4. Integrated Ratio Analysis: Review link between operating assets and liabilities and income
5. Operating Return on Net Assets
6. Profit Margins
7. Asset Turnover
8. Effect of operating performance
9. Financial Leverage and Tax
10. Capital structure leverage — level of debt v. equity
11. Percentage of Sales
12. Trend Analysis — use of % of Sales and Ratios

Topic 7: Footnote topics

1. Revenue Recognition
2. Capitalization Vs. Expensing — Conceptual Issues
3. Software Development Costs SFAS # 86
4. Off Balance Sheet Financing
   1. Transfer Of Receivables With Recourse
   2. Product financing arrangements
   3. Throughput Contracts
   4. R&D Partnership
   5. Hotel Financing
   6. R&D Partnerships
   7. Classification of Accounting Liabilities by Degree of Certainty
5. Tax Accounting — reading the tax footnote
6. Deferred Taxes
7. Permanent differences
8. Net Operating Losses
9. Lease Accounting
10. Pension Accounting

Topic 8: Earnings per share

1. Basic
2. Diluted
3. Stock Options
4. Treasury Stock method
5. Convertible Securities

Topic 9. Leverage Buyouts

Topic 10: Accounting For Ownership In Other Companies

1. Mark To Market: Less Then 20% Ownership
2. Comprehensive Income
3. Merger & Acquisition Accounting - New Rules
4. Purchase Method
5. Pooling Method
6. Minority Interest
7. Equity Method - Joint Ventures
8. Acquisition Expenses
9. International Accounting Standards
10. Push Down Accounting