In this course, we will be working on accounting fundamentals that you need to be comfortable with for the interviews. Accounting is almost always subject to many technical questions.
First, you have to know and understand the 3 financials statements, how they are built, how they work, each one individually:
- Income Statement (P&L)
- Cash Flow Statement
- Balance Sheet
You will also be asked about how these statements interact. What are the main links between them and how an accounting movement in one of them is reflected in the others. This part is the heart of the technical accounting questions you will be expected to know.
During the course of this chapter, we will also be working on several specific elements of the financial statements that are key for the interviews and therefore require a whole video:
- A specific focus on working capital
- A focus on Goodwill
- A focus on Earnings per Share (EPS)
Accounting is also a first step to lead to more technical valuation questions. You all need to be clear on these fundamentals!
- Walk me through a P&L, a Cash Flow statetment and a Balance Sheet
- How are financial statements linked?
- How does an increase of 10 in D&A impact the 3 financial statements?
- Why do we add D&A in the Operating Cash Flow? Why do we then remove the variations of Net Working Capital?
- If a company purchases an equipment for 100 in Year 1 with 50% debt, what is the impact on the financial statements in Year 1? In Year 2?
- Can shareholders' equity be negative? Why?
- Why choosing EBITDA over EBIT?
- And more than 100 questions asked in real interviews!
Course 1M&A TrainingFinancial Disclosure
Very often, you will be asked quick and easy questions on Financial disclosure, especially the difference between US and European disclosure. The course summarizes all you need to know on these financial documents for interviews.3 min
Course 2M&A TrainingIncome Statment
The purpose of this video is to understand the accounting principles that rule the P&L in order to better answer the technical questions in interviews with a special focus on: EBITDA, EBIT, D&A, COGS, OPEX...40 min
Course 3M&A TrainingCash-Flow Statment
« Cash is king »! The Cash-Flow Statement describes all the cash inflows and outflows over a given period of time. There is a special focus on the structure of this statement: operating, investing and financing.31 min
Course 4M&A TrainingBalance Sheet
This video explains what is a Balance sheet and how it works. We will go through each item of the assets and liabilities side and the questions often asked in interviews.46 min
Course 5M&A TrainingLinks between the financial statements
This video concentrates most of the accounting questions asked in interviews. We will study how the financial statements are linked together and what is the impact of a change in one of the 3 on the other 2.25 min
Course 6M&A TrainingWorking Capital
This course focuses on the concept of Working Capital, very frequent in interviews. We will study its variations and how to consider working capital on the Balance Sheet vs the Cash-Flow Statement.19 min
Course 7M&A TrainingGoodwill
Goodwill is often misunderstood by candidates and is a source of mistakes in interviews. This video reviews everything you really need to know about Goodwill.10 min
Course 8M&A TrainingEPS
Earnings per share (EPS) is a classic topic of M&A interviews. It is essential to understand this concept and know the differences between a theoretical EPS and an EPS in practice. We also work on the concept of diluted EPS.10 min