Investment Banking & Private Equity Fundamentals
This course covers everything you need to know to nail the technical parts of the investment banking and private equity interview. But it's not geared just towards interview prep, this covers EVERYTHING you need to know to succeed on the job. Get a leg up on the competition here
Let Us Elevate Your Finance Game
Overwhelmed By Options
You want to land a job on Wall Street, but don’t know what job you even want or what is available.
A Job That Suits YOU
You will understand the different roles on Wall Street and be able to identify a path which is well suited to your skills, lifestyle, and personality.
Confused by Complexity
You find the material overwhelming and struggle to cut through and make sense of it in a simple way.
Simplified Understanding
You will have a strong understanding of finance jargon and concepts. We break down complex ideas into clear, manageable insights, making everything easier to understand and apply.
Bored and Disengaged
You are tired of online courses that are just a voice droning over a PowerPoint presentation.
Motivated to Learn
You will learn from two dynamic experts who actually worked on Wall Street. We teach these concepts in a way that keeps you engaged and excited - even when you're learning about accounting.
Self Doubting
You are unsure how to demonstrate or apply the knowledge you have in practical scenarios and feel stuck.
Self Assured
You are able to confidently demonstrate your knowledge and skills, to recruiters and on the job.
PART I
Accounting Essentials
We know “Accounting" might sound dry - but it is the foundation for all our “sexier” topics, like modeling, LBO analysis, and valuation.
4 hrs
of Content
Module
Accounting Introduction
Overview of what we will be covering in Part 1.
Module
Overview of Key Documents
We paint a picture of the two different situations you might find yourself in: working with and analyzing a private company or working with a public company, and we arm you with the information you will need in both situations.
Module
Public Company Documents
Get an overview of the 10K, 10Q, Earnings call transcripts, S1, S4, 8K and more.
Module
Navigating the 10K
When using a company’s filings like their 10K, you should absolutely not read starting from page 1 until the end. You should go in with a plan. In this video we dive into the strategy.
Module
Complications with Private Companies
Private companies present a unique set of challenges… namely they don’t always keep diligent records and the information is often just that… private. If however you are hired to advise on a private company you will have access to documents via a CIM and a data rooms… so what can you expect?
Module
Overview of the Financial Statements
The foundation to all banking analysis requires an understanding of these big three financial statements, the Income Statement, Cash Flow Statement and Balance Sheet. This video goes through how these three statements tie together in a diagram that will continue to pop up throughout the remainder of this course and into our financial modeling course.
Module
Income Statement 101
Learn the rules, conventions and analyses for the income statement as we walk from Sales down to Net Income in layman terms and go through the most important calculations for analysis and modeling as we map out the growth and margins formulas.
Module
Income Statement Mini Quiz
This exercise reinforces all the key take aways related to the income statement. There is an Excel file that can be downloaded you as the viewer can work through on your own before coming back and reviewing the solution.
Module
Cash Flow Statement 101
Learn the rules, conventions and analyses for the Cash Flow Statement including how it connects to the other statement, the overall structure, and what the cash flow statement can tell us about the financial health of a business.
Module
Cash Flow Statement Mini Quiz
This exercise reinforces all the key take aways related to the cash flow statement. There is an Excel file that can be downloaded you as the viewer can work through on your own before coming back and reviewing the solution.
Module
Balance Sheet 101
Learn the rules and basics of the Balance Sheet including how it connects to the other statement, the overall structure.
Module
The Golden Accounting Rule: A = L + E
Assets = Liabilities + Equity is one of the most important accounting concepts there is. Think of it like Newton’s First Law for accounting. In this video we walk through how to use it to logic your way through how how transactions impact cash, and each account, a skill that is the foundation for financial modeling.
Module
Balance Sheet Structure
Here we dive into current vs. long term assets and liabilities.
Module
TL;DR on the Balance Sheet
The Skinny on what you must know about the Balance Sheet
Module
The Matching Principle and Non Cash Expenses
The matching principal is the second essential law of accounting… let’s call it Newton’s Second Law of Accounting.
Module
How Depreciation Flows Through the 3 Financial Statements
Understanding how non cash expenses flow through the three financial statements is essential not only for understanding accounting, building financial models, calculating EBIT and EBITDA, it’s also one of the most common interview questions you should be prepared to get.
Module
Amortization Overview
Now that we understand depreciation, we tackle depreciation’s twin, amortization.
Module
Separating Depreciation from Amortization
On the cash flow statement depreciation and amortization are often combined. Therefore, if we want to find depreciation separate from amortization, how do we do it?
Module
What is Stock Based Compensation ("SBC”)?
Module
How Does SBC Impact the Financial Statements?
We go through how stock based compensation flows through the three financial statements.
Module
EBIT 101
EBIT, which stands for Earnings Before Interest and Taxes, is one of the most important financial metrics used in finance. In this video we walk through what EBIT is and how it’s used.
Module
EBITDA 101
EBITDA is probably THE most important financial metric used for everything from raising debt to valuing businesses. In this video we walk through how EBITDA is calculated and used by bankers.
Module
EBITDA Mini Quiz
This exercise reinforces all the key concepts covered related to EBIT and EBITDA.
Module
Net Working Capital (”NWC”) vs. Operating Working Capital (”OWC”)
The distinction between Net Working Capital and Operating Working Capital is one that is a bit tricky due to the language used by bankers. We set the record straight here.
Module
Cash Conversion Cycle (”CCC”)
The cash conversion cycle is a way to calculate metric bankers and CEOs use to measure how quickly a company converts a cash outlay for resources to a cash inflow from a sale. This video dives into how it’s calculated as well as diagrams out how to think about it in an intuitive way.
Module
Calculating Activity Ratios
In order to actually calculate the cash conversion cycle we use activity ratios, but where do they come from? In this video we walk through the calculation and again the intuition for these important metrics.
Module
Timing Conventions: LTM, TTM, NTM, FY, CY, etc.
When we talk about financial metrics on the income statement or cash flow statement - so, EBIT, EBITDA, sales etc. - the timing matters. Are we talking last twelve months (LTM)? Last fiscal year (FY)? Projected calendar year (CY)? And by the way how the heck do we calculate LTM when our 10K and 10Q don’t provide it? In this video we get into all of that.
Module
Balance Sheet Mini Quiz
This exercise reinforces all the key concepts from the balance sheet.
Module
Fair Market Value vs. Book Value
Dive into the rules that govern when we see on the balance sheet are book value or fair market value so that we can understand where we need to take the time to approximate the market value for various line items and where we can get away with using the book value.
Module
Debt, Cash and “Net Debt”
Learn the nuances of what “cash” means to a banker. (Spoiler it’s more than just the cash and cash equivalents” line item on the Balance Sheet) as well as what is considered “debt” and finally how to calculate and why bankers use “net debt”
Module
Non Controlling Interest, Preferred and Equity Investments
This might be the concepts that junior bankers struggle with the most. We break it all so you will walk away feeling confident in what these mean and how they impact a company’s value.
Module
Conclusion of Accounting
Here we wrap up the section and get you ready for what is coming next.
Interested in the course? Pre-Order Now
PART II
Valuation Essentials
This deep dive covers: public comps, deal comps and the discounted cash flow analysis ("DCF"). Create a Football Field (an Investment Banker's valuation summary) for WayStar to help understand whether GoJo’s $192 offer price from Season 4 of Succession is "fair”. You'll get hands-on practice spreading both public comps for a real company, AND a precedent transition for an actual deal. You'll then build out an actual DCF for Waystar before completing the football field.
4 hrs
of Content
Module
Setting the Stage
Here we set the stage and give you background information necessary to understand our case study we’ll be using throughout the rest of this module.
Module
Valuation Overview
Here we preview everything we will cover in this module, walking through the football field for our valuation of WayStar giving you an overview of public comps, precedent transactions and the DCF.
Module
Comps Intro
Here we introduce the first two valuation methodologies: public comps and precedent transactions, our “relative” valuation analyses.
Module
Equity vs. Enterprise Value Intuition
In this video we recap the difference between Equity Value and Enterprise Value, two concepts we introduced in the Accounting module before diving into actually how to practically calculate these two numbers.
Module
Calculating Diluted Shares
In this lesson we walk through the calculation of “diluted share” walking through how to handle different types of dilutive securities including options, restricted stock and restricted stock. We also get into how the term “Option” differs in the Sales and Trading context vs. the Investment Banking or Corporate Advisory world.
Module
Calculating Equity Value
In this lesson we walk through how to calculate Equity, we discuss why we can’t use the “diluted shares” provided on the Income Statement to calculate equity value and why we have to go through the actual calculation ourselves and finally we wrap up explaining how to handle companies like Fox and WayStar who have two classes of shares.
Module
Calculating Enterprise Value
In this video we actually calculate the enterprise value, going through where to get all the numbers necessary.
Module
Overview of the Key Valuation Multiples
In this lesson we cover the the key valuation multiples and how to ensure your multiples are on an apples to apples basis.
Module
Calculating the Multiples
In this lesson we actually go through and calculate what the implied fair share price is for WayStar using its public comps.
Module
Public Comps Exercise
In this video we walk through what it looks like to SPREAD a public comp. We take a look at Fox’s 2023 fillings, using their 10K and 10Q. We talk about when you need which filing, the complexities with its dual class shares, and ultimately go through how to use this real comp and the multiples from the other comps in the comps universe to calculate a fair share price for WayStar. We wrap up by looking at how that actually translates to the football field.
Module
Deal Comps Overview
This lesson lays the groundwork for the deal comps discussion explaining how deal comps differ from public comps, the importance of understanding the STORY behind the transaction, why consideration matters (so whether a deal was all cash, all stock or a combination) and sets us up to get a preview of some of the specific deal comps analyses we’ll need to do that are different from public comps.
Module
Calculating Offer Value and Transaction Value
In this module we walk through calculating offer value using the Option Spread method and Netting Option Proceeds method as well as get into the difference you need to be aware of when determining the correct option count and strike price for precedent transactions.
Module
Deal Comps Specific Analyses
Learn how to deal with companies that use their own stock as acquisition currency. We dive into exchange ratios (actual and theoretical) as well as touch on synergies, deal comps specific multiples including transaction value to adjusted EBITDA multiples and finally the premiums paid analysis.
Module
Deal Comps Exercise
In this lesson we get practical and actually spread the deal comp for the Disney acquisition of Twentieth First Century Fox. Because Disney only purchased 80% of the company we discuss complications including how to “gross up” the multiples. We then use this multiple along with other multiples to calculate what a fair implied offer price would be to purchase WayStar.
Module
Overview of the Discounted Cash Flow Analysis
This lesson lays the groundwork for the third and final valuation methodology we are going to cover: the DCF.
Module
The Weighted Average Cost of Capital ("WACC") Overview
This lesson lays the groundwork for the third and final valuation methodology we are going to cover: the DCF.
Module
Cost of Equity and CAPM Overview
This lesson gets into the basics of calculating the cost of equity and using the Capital Asset Pricing Model also called “CAPM”.
Module
Cost of Equity Deep Dive: Risk Free Rate and Betas
We now niche down into the various components of CAPM starting first with how to determine the “risk free rate” (a term that fixed income investors would take issue with) as well as how to handle coming up with the risk free rate in countries outside of the United States. We then get into a deep dive into what the beta represents, how to find it including how to deal with private companies where you need to unlever and relever betas before going through an actual example.
Module
Cost of Equity: Choosing the Right Beta
Between predicted betas, past betas, industry average… what do we choose!? In this video we go through how and why institutions pick the betas they do and how it compares to academia.
Module
Cost of Equity: Deep Dive: Market Risk Premium
The final part to CAPM is finding the market risk premium.
Module
Optimal Capital Structure
In this video we walk through a standard interview question which is “how does increasing debt impact the WACC”. The reality is the answer to this isn’t straight-forward as it depends on what theory of capital structure you are using: Traditional Theory, Pecking order theory, Modigliani and Miller etc.
Module
Calculating Unlevered Free Cash Flows
In this lesson we walk through how to go from Sales or EBITDA on the income statement to Unlevered Free Cash Flows.
Module
Discounting Mechanics
In this video we walk through the basics of time value of money including how to calculate the NPV of a series of cash flows in Excel covering the PV function, NPV and XNPV.
Module
Mid Period Convention and Discounting to a Discount Date
Learn the rationale behind mid period convention as well as mechanically how to calculate the NPV of a stream of cash flows using mid period cash flows. We also discuss how to discount to a specific valuation date and how to calculate the stub period.
Module
Terminal Values and Putting It All Together
Learn the two ways you can calculate the terminal values (perpetuity growth method and EBITDA multiple method) as well as put the whole thing together and calculate the value of the entire firm, the value of the equity and finally the share price.
Module
Discounted Cash Flow Analysis Exercise
This final module puts everything together walking through building a DCF for WayStar in Excel. We cover basic concepts including how to set up a simple model, how to calculate our historical analysis, how to use historical analysis to come up with projections, how to calculate the implied fair TEV, equity value and share price in the DCF and finally how to run a data table, and then finally how the output from the DCF ties to the football field.
Interested in the course? Pre-Order Now
PART III
Private Equity Essentials
Gain an in-depth understanding of the various types of private equity ("PE") strategies and learn how PE firms make money. Learn the basics of leveraged buyout ("LBO") math, and then build your own full blown circular LBO model in Excel. We wrap up with a paper LBO, diving into the tips and tricks necessary to ace a key part of your IBD and / or PE interview.
3 hrs
of Content
Module
Deal Basics: The Two Types of Buyers
In this video we discuss the two types of buyers: strategic buyers and financial buyers. We get into the motivation of each to do acquisitions, discuss financial metrics and analyses each focus on when determining whether an acquisition is “affordable” and the differences between the typical considerations and balance sheet constraints.
Module
The Private Equity Landscape
Here we dive into the private equity landscape covering the differences between venture capital, growth equity and traditional buyout.
Module
What Makes a Good Leveraged Buyout ("LBO")
In this video we dive into the key characteristics of a “good” leveraged buyout candidate.
Module
Private Equity Firm Basics
In this video we dive into the nuances of how private equity firms and funds work. We define key terms including GP, LP, LPA, co-invest, capital call, dry powder, etc. We talk about the LPs, who they are and why / how they invest both in general and with PE firms.
Module
Basics of a Leveraged Buyout
Here we dive into the basics of how a leveraged buyout works including the three ways they create value.
Module
How PE Firms Make Money
Here we dive into “2 and 20” the fee structure used by private equity firms (including venture capital, growth equity and traditional buyout”). We get into hurdle rates, catch ups, and the math so we can see in an example how much a PE firm would earn on a generic deal.
Module
The LBO: Overview of 5 Simple Steps
In this video we walk though the five simple steps you can run through to analyze any leveraged buyout model.
Module
Step 1: Calculate Transaction Value
Overview of what we will be covering in Part 1.
Module
Overview of Various Types of Debt
Overview of what we will be covering in Part 1.
Module
Step 2: Setting Up the Sources & Uses Table
In this video we walk though a sources and uses table both for a private company doing a cash free debt free transaction as well as a public company who is buying out pubicly traded shareholders. We discuss various fees, minimum cash, and prove that the debt raised and sponsor equity are basically the same regardless of whether the company bought is public or private.
Module
Step 3 Overview
Here we go through a very high level overview of the operating model in the LBO.
Module
The Leveraged Buyout Model: Steps 1 - 3 in Excel
In this video we dive into Excel and start building steps 1 - 3. We go through how to project out our sources and uses table for a cash free debt free transaction, review the income statement, cash flow statement and debt schedule, discussing how to build a revolver, how to model a debt tranche with good faith amortization and a free cash flow sweeps and review how it compares to modeling a high yield bond. We then project and link interest which gets us into basics of circular models including how to trouble shoot and what to do if the model blows up. And we do all this learning some must know Excel shortcuts along the way.
Module
Step 4 - 5 Overview and Building it in Excel
In this video we both go through the final steps of calculating transaction value and equity value at the sale and finish up by running a data table to sensitize the IRRs for various exit multiples.
Module
Paper LBO: The Prompt
We now get into the paper LBO. We discuss why banks and PE firms like using this as a way to test a bunch of valuation and accounting concepts while also seeing how you think on your feet. We then set up the sample paper LBO exercise that we walk through over the remaining videos.
Module
Paper LBO: Reviewing the Steps
Here we review the steps focusing on what is unique to the paper LBO vs. an actual LBO model in Excel. We introduce a download / framework to approach paper LBOs in general so that you can mentally always fall back on this set up in any scenario.
Module
Paper LBO: Operating Assumptions
Overview of what we will be covering in Part 1.
Module
Paper LBO: Mental Math Tricks
In this video we get into how to simplify operating assumptions. We go through what constant growth tables are and how to apply them, when we can use them and when we can’t and some important considerations for combining margin assumptions. We also discuss some tricks you can use to do mental math in your head.
Module
Paper LBO: Finishing the Income Statement
In this video we finish going from EBITDA to Net Income, again discussing tricks we can use to simplify the math. We also discuss how to project Debt and the assumptions we make in paper LBOs to drastically simplify this projection.
Module
Paper LBO: Projecting Debt Paydown and Equity
We finish up the operating model of the paper LBO by now working through the cash flow projections. This leads us to being able to calculate cumulative cash flows and ultimately our ending debt balance. We then review how to calculate TEV and Equity value at exit.
Module
Paper LBO: Rule of 72 / 114 / 144
In this video we walk through the back of the envelope tricks you can use to take a multiple of invested capital (”MOIC”) aka multiple of money (”MOM”) into an IRR.
Module
Conclusion and Additional Resources
In this video we wrap up and provide our resources to learn more deeply about the private equity recruiting cycle, distressed debt, PE secondaries, the lifestyle at various funds and so much more.
Interested in the course? Pre-Order Now
And one more thing...
To celebrate the launch of our first course, we are including our standalone course, "The Industry": Understanding the World of Wall Street, as a bonus module to Investment Banking and Private Equity Fundamentals
Courses Coming Soon
Exciting updates are always in the works! Stay tuned for fresh content coming your way.
THE SKINNY ON
Fixed Income Sales, Trading, & Investing
Explore the strategies, instruments, and market dynamics involved in the buying, selling, and investing of bonds and other fixed-income securities.
THE SKINNY ON
M&A: Mergers & Acquisitions
Learn the key processes, valuation techniques, and strategic considerations behind corporate mergers, acquisitions, and takeovers.
THE SKINNY ON
Financial Modeling
Master the skills to build financial models for forecasting, valuation, and decision-making in various investment scenarios.
Finance Education for the Next Generation
Led by The Wall Street Skinny, this course offers insider insights and expert strategies to help you stand out in a competitive job market.
WHO WE ARE
FRIENDSHIP. FINANCE. FUN.
The Wall Street Skinny was created to empower individuals to navigate the complexities of high finance with confidence and clarity. By educating through entertainment, we've done what no one else has: make Wall Street fun.
We cut through the noise and jargon to provide you with clear, relatable insights that enable you to master challenging concepts and make informed decisions about your career future.
What people are saying
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Who is this course for?
This course is for anyone who is either interviewing for an investment banking or private equity role, or for anyone who landed an IBD or PE offer and wants to get a leg up on the competition.
Is this a financial modeling course?
While it isn’t our official financial modeling course, you will get quite a significant amount of hands on modeling experience, building your own DCF and Leveraged Buyout models, complete with debt schedules and free cash flow sweeps. You also will learn all the accounting concepts necessary to build a three statement model.
Can I use a Mac?
For this course your computer isn’t that important as the core concepts are taught at a high level using pen and paper exercises. However, there are a few exercises where we do get into Excel and build models. As a general rule, almost all banks and PE firms use Windows based software so Windows Excel, PowerPoint etc. The keyboard shortcuts on a PC are different from a Mac so it tends to be helpful to get familiar with the Windows based shortcuts. If you have a Mac, you still can run Windows Excel using software like Parallels, however, it does require you purchase Windows and Excel for Windows so can get pricey. Therefore if you want to use plain old Mac Excel that is fine. Just be aware when you get on the desk you will be using a PC and if you are preparing for a PE interview where a live modeling test is part of the interview, you will be on a Windows based system and familiarity with Windows Excel shortcuts will benefit you tremendously.
What makes your courses different from your competitors?
Quite a lot actually. First, Kristen here taught these concepts on site at banks all over Wall Street. She has iterated and refined her explanation of concepts over the course of 15 years. She has an OCD level of detail when it comes to making sure the visuals and examples are fun and engaging. Jen’s is a natural born story teller and teacher, a skill that is quite rare among those on Wall Street. The two of us were VERY focused on creating engaging videos that goes way beyond droning over a PowerPoint presentation. Additionally, through our podcast, we have conversations all the time with thought leaders in the industry, and through our community on social media which is made up of 300k people and counting, we are constantly hearing from YOU about what questions you are being asked in real time. In fact, the exact content of this course was tailored to all of YOU who shared the questions you were asked. To us, this course is our masterpiece, something that is the culmination of literally 25 years of learning and teaching.
I’ve never seen Succession or The Industry. Will I find the course boring?
Not at all! The stories are there as just that: stories. Now yes, you might be a bit more excited about the material if you’ve seen the shows but it is absolutely not essential. However, if you want the cliff notes version, you can listen to our podcast series (start with our episode on Succession season 1 here) that gets into the finance of these shows :)
No BS, Just Bullish.
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