Investment Banking For Dummies (For Dummies Series)

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Pignataro uses Walmart as a case study to teach readers how to perform an in-depth analysis by walking them through all the steps to develop a sophisticated financial model. Each chapter ends with review questions, case studies, and other helpful material. Keep in mind that this book, like all the books in the For Dummies series, doesn’t have to be read cover-to-cover (although we’ll be flattered if you read it all). Each of the topics is broken down into easy-to-digest parts and chapters. Feel free to skip around the book to areas that interest you most, and save the parts that seem irrelevant until you’re curious about them later. Investment banking isn’t just a theory or subject. Investment banking isn’t just an economic function, either. Investment banking is a profession that requires the efforts and expertise of armies of trained financial experts. You may have studied English in college, for instance, but you don’t do English. But you can practice investment banking (which is something you find out about in Chapter 6). At this point in the book, you go from understanding what investment banking is to how it’s applied in the business world. Finding the financial statements

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After the tumultuous changes in the investment banking business following the financial crisis of 2007 through 2009, the entire landscape changed. Following the banking crisis, investment banks needed capital. Some of the most storied investment banks, unable to raise money, merged with other banks or became commercial banks themselves. Suddenly, the financial system was comprised of behemoth banks that have the deposit-taking abilities of banks but also engage in investment banking. The result is the formation of several mega-institutions that many people fear are “too big to fail,” including the ones shown in the table. One of the most lucrative fields in business, investment banking frequently perplexes even banking professionals working within its complex laws. Investment Banking For Dummies remedies common misconceptions with a straightforward assessment of banking fundamentals.Also, personal and strategic skills are vital to an investment banker because he is a client strategist. He helps them develop their financial plans as well as implement them. Technical stuff Investment banking can be complicated stuff. And it’s a shame that the complexity of investment banking can be a turnoff for some. When we talk about subjects that are especially gnarly, we mark the info with a Technical Stuff icon, so you can breeze on by. Beyond the Book The sell side: Investment banks are best known for the part of their business that sells securities, or the sell side. This function of the investment bank is responsible for finding investors to buy the securities being sold, which raises the money needed by businesses and governments to grow and prosper. Matt Krantz is the personal finance and management editor at Investor's Business Daily. Matt's recent books include Online Investing For Dummies and Fundamental Analysis For Dummies.

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This is especially true for investment banking, where complex concepts and trends continuously evolve. So to succeed in this highly lucrative but competitive industry, you must learn from the best thinkers. Remember: It’s important to note that Goldman, too, found itself in a world of hurt during the financial crisis, and it had to turn to famed investor Warren Buffett to invest billions to help the company avoid a liquidity crisis. Goldman also borrowed billions from taxpayers, too. Nonetheless, those hoping to learn about investment banking, what it is, and how it works, are well served to look at the way Goldman Sachs structures its business and the size of those pieces, including the following:In this book, Columbia Business School professor Jonathan A. Knee demystifies and explains the success behind the biggest tech companies. Professor Knee goes into their sources of strength, vulnerabilities, and what makes these tech giants work. Investment banks may seem like financial behemoths that have their hands in just about any matter that involves large sums of money. And to a large degree, that’s true. Investment banks are usually involved in some fashion when it comes to financing major projects, conducting trading in financial instruments, or developing new ways to generate capital.

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It’s easy to write off investment banking as something a bunch of people in suits can worry about, but that’s a mistake. Increasingly, more Americans are being handed the keys to managing their financial futures. It’s up to consumers to find ways not just to save their money but to invest in assets that will grow in the future. And more times than not, this process requires interfacing with investment bankers and their products. Investment banking is one of those disciplines that you can delve into for decades and still not master. There are corners of investment banking that go well beyond the understanding of the capital markets and even the mechanics of gathering information about companies and their needs for investment to continue to grow. Investment bankers raise money from investors, by selling securities, and then transfer that money to people who need cash to start businesses, build buildings, run cities, or bring other costly projects to reality. We wrote this book not only to help you understand what’s done on Wall Street, but also to show you how to use some of the financial tools that help measure financial performance. After reading this book, you’ll know how Wall Street works, and how to put its secrets to work for you. About This Book

CFI’s investment banking book is divided into three chapters: accounting, valuation, and financial modeling. Below is a detailed breakdown of what’s included in each chapter. Boutique: Boutique investment firms are smaller investment banks and traditional banks that choose to focus on one or a select few areas of the business. Some firms, for instance, focus on selling securities for smaller companies. To draw your attention to certain kinds of information, we use a series of icons. Here’s what the icons mean: Remember This book is a reference, which means you can turn to it again and again, to look up the information you need. However, occasionally, we tell you something that’s so important, you’ll want to commit it to memory, and when we do, we use the Remember icon.

Investment Banking for Dummies | Bank Organizational Structure Investment Banking for Dummies | Bank Organizational Structure

Debt capital: Some investors have no interest in owning a piece of the company, but they’re more than willing to lend money to it, for a price. That’s the role of debt capital. Investment banks help companies borrow money by issuing bonds, or IOUs, that are sold to investors. The company must pay the prearranged rate of interest, but it doesn’t give up any ownership of the company. If a company falls onto hard times, though, the owners of the debt have a higher claim to assets than do the equity owners if a liquidation of the company is necessary. Given the great role investment banking plays in the financial system, it has taken on a larger-than-life mystique with the masses. Many people suspect that investment banks are pulling the strings of the economy, but they may not know enough to realize exactly what investment banks do. Asset management fees: Some investment banks help their clients make decisions on how to invest their money. Investment banks generate asset management fees when they help clients decide which securities they should buy or sell.It captures the actual work that associates and vice presidents do, providing readers with templates for real transactions. Human progress takes money and ideas. But more times than not, the people with the money aren’t the same ones with the ideas. Having a mound of cash and no creative ideas only creates a mound of money. Meanwhile, an entrepreneur with all kinds of dreams can’t even break ground if there’s no cash to break ground with. But investment banking is so much a part of the financial system that, whether you realize it or not, you fall into its shadow. The fact of the matter is, if you’re like most people, managing your money is falling increasingly on your shoulders. Gone are the days when you could work at a company for 40 years and expect to have a fat pension waiting for you in retirement. Investment bankers are involved in the very onset of a company going public, and they’re the keys to making the deal happen. When investment bankers assume the role of selling securities, especially in an IPO, they’re often called the underwriters. There may be options for companies not ready for an IPO to raise money. But at some point, the companies with the best prospects outgrow the venture capitalists, don’t want to pay the onerous terms of bank loans, or need more capital than can be raised casually. When these things happen, it’s time for the company to go public. Going public is a relatively long and costly process that requires preparing statements for regulators and investors, getting the company’s story out, and actually selling the shares.