Raymond James IB Interview Final Quizlet

These flashcards cover essential concepts and strategies for excelling in the Raymond James investment banking interview.

What should I do if I don't know an answer?

Be honest. Say: "I'm not 100% certain on that, but let me walk through how I'd think about it..." Then give your best logical attempt. End with: "Is that the right framework?" Shows honesty, coachability, and critical thinking. NEVER bullshit.

What is my edge as an MBA student?

Ongoing education and strong work ethic.

What does the Income Statement show?

Profitability over a period of time.

What does the Balance Sheet show?

Snapshot of a company's assets, liabilities, and shareholders' equity.

What does the Cash Flow Statement show?

Actual cash movements over a period of time.

What are the three sections of the Cash Flow Statement?

Operating Activities, Investing Activities, Financing Activities.

How do the three financial statements connect?

Net Income flows between the statements and affects Retained Earnings.

Walk me through the three financial statements.

I/S shows profitability, B/S shows company value, and CFS shows cash flows.

What happens if depreciation increases by $10?

I/S down $6, CFS up $4, B/S shows asset changes.

If inventory increases by $10, what is the impact?

I/S: no change; CFS: cash down $10; B/S: asset swap.

What if Accounts Receivable increases by $10?

I/S: NI up $6; CFS: Cash down $4; B/S: AR up $10.

What happens when a company issues $100 in debt?

CFS: Cash up $100; B/S: Cash up $100, Debt up $100.

What if a company buys $50 of PP&E with cash?

CFS: Cash down $50; B/S: PP&E up $50, Cash down $50.

If Accounts Payable increases by $10, what is the impact?

I/S down $6; CFS up $4; B/S: Cash up $4, AP up $10.

How to approach an accounting scenario question?

Analyze I/S, then CFS, then B/S.

What is Equity Value?

Value of the company to equity shareholders.

What is Enterprise Value?

Value of the entire business to all capital providers.

What is the Enterprise Value formula?

EV = Equity Value + Debt - Cash.

Why do you add Debt in the EV formula?

You assume the company's debt obligations.

Why do you subtract Cash in the EV formula?

Cash offsets your purchase price.

When would Equity Value be greater than Enterprise Value?

When cash exceeds debt.

What multiples use Enterprise Value vs Equity Value?

EV multiples: EV/EBITDA; Equity multiples: P/E.

Explain the EV formula using a house analogy.

The total cost includes purchase price, debt, minus cash found.

What are the three main valuation methods?

Comparable Companies Analysis, Precedent Transactions, Discounted Cash Flow.

What is Comparable Companies Analysis?

Valuing based on trading multiples of similar public companies.

What are the pros and cons of Comps?

Pros: Market-based; Cons: No two companies identical.

What is Precedent Transactions Analysis?

Valuing based on prices paid in similar M&A deals.

What are the pros and cons of Precedents?

Pros: Based on actual prices; Cons: Outdated data.

Why does Precedent Transactions typically give the highest value?

Includes control premium.

What is Discounted Cash Flow Analysis?

Valuing based on present value of future cash flows.

What are the pros and cons of DCF?

Pros: Fundamental basis; Cons: Sensitive to assumptions.

Which valuation method typically gives the highest value?

Precedent Transactions.

Valuation methods ranked highest to lowest?

Precedent Transactions > DCF > Comps.

When would you NOT use a DCF?

Unpredictable cash flows, distressed companies.

What is the core concept of a DCF?

A company is worth the present value of its future cash flows.

What are the main steps of a DCF?

Project cash flows, calculate terminal value, discount to present.

What is the formula for Unlevered Free Cash Flow?

UFCF = EBIT × (1 - Tax Rate) + D&A - CapEx - ΔNWC.

Why do we use 'Unlevered' Free Cash Flow?

It's available to all capital providers.

What are the two methods to calculate Terminal Value?

Gordon Growth and Exit Multiple.

What is WACC?

Weighted Average Cost of Capital.

What is the WACC formula?

WACC = (E/V × Cost of Equity) + (D/V × Cost of Debt × (1 - Tax Rate)).

What is the Cost of Equity formula?

Cost of Equity = Risk-Free Rate + Beta × Market Risk Premium.

What is Beta?

A measure of volatility relative to the market.

Why is Cost of Equity higher than Cost of Debt?

Equity holders are riskier and have no guaranteed payments.

What inputs drive DCF value the most?

Discount Rate, Terminal Growth Rate, revenue growth assumptions.

What is the difference between a merger and an acquisition?

Merger: two equals combine; Acquisition: one company buys another.

What makes a deal accretive?

Acquirer's EPS increases after the deal.

What makes a deal dilutive?

Acquirer's EPS decreases after the deal.

Quick rule for accretion/dilution?

Compare acquirer's P/E to target's P/E.

What are synergies?

Benefits from combining two companies.

Where is Raymond James headquartered?

St. Petersburg, Florida.

What is Raymond James' investment banking focus?

Middle-market companies.

What are Raymond James' 8 industry coverage groups?

Consumer & Retail, Convenience Store & Fuel Distribution, Diversified Industrials, Energy, Financial Services, Healthcare, Real Estate, Technology & Services.

What services does Raymond James Investment Banking offer?

M&A Advisory, Capital Markets, Capital Structure Advisory, Private Capital Advisory.

Name a recent Raymond James deal or award.

Consumer Discretionary Deal of the Year, January 2025.

What is the current M&A market environment (2025)?

M&A deal value is up ~18% YoY. Large transactions ($1B+) growing fastest (~21%). Fed rate cuts (Sept/Oct 2025) encouraging activity. Private equity deal value up ~26%.

Why Raymond James?

More responsibility and client exposure, relationship-driven culture.

What are good reasons for 'Why investment banking?'

Exposure to strategic decisions at a high level. Steep learning curve matches how I work best. Understanding how businesses create and unlock value. Want to be in the room where major transactions happen.

What's a good answer for 'What's your weakness?'

Pick a manageable real weakness.

What questions should I ask them?

Ask about deal flow, staffing, and development.