MBA Placement Preparation for Finance

The Basic concepts you should be familiar with before going into the placements are: -

1. Time Value of Money: The terms “present value” and “future value” are essential to understand while discussing this issue. This forms base for the future financial concepts. This will aid you in capital budgeting decisions as well. As a result, interviewers will assume that you are familiar with the fundamentals.

2. TVM Multi-Period Model: A multi-period model of TVM is created when the past, present, and future worth of money are combined. Multiple cash flows result as a result of this. Annuities, Perpetuities, Growing Annuities and Perpetuities, and Irregular Cash Flows are the four types of cash flows you must understand. The general interviewer frequently are, “How are investment decisions made?” What are the factors that influence a manager’s decision to prioritise one project over another?

3. Capital Budgeting: It is a planning process that determines how much an organisation will spend on long-term investments like new machinery, replacement machinery, new facilities, new products, and research and development. A net percent value, internal rate of returns, benefit-cost ratio, and profitability index are four methodologies you should be familiar with.

4. Stock Marketing: Future venture capitalists and stock market lovers will be well-versed in all aspects of the stock market. However, understanding concepts such as an initial public offering (IPO), joint-stock, equity shares, and the primary and secondary markets will be beneficial for individuals who are new to this industry.

5. Derivative Concepts: These are financial contracts that determine the value of underlying assets. Stocks, indexes, commodities, currencies, exchange rates, and interest rates are all examples of assets. Futures and options (calls vs puts) are the two types of derivatives you should be familiar with.

6. Working Capital Management: Any company’s health depends on its ability to manage its working capital. It makes sure that the company can continue to operate while also paying down its short-term obligations and operating expenses. Current assets and liabilities, account receivables turnover, receivable period, payable period, inventory turnover, inventory turnover period, payable account turnover are all concepts you should learn.

Role Specific:

1. Treasury: In a banking setting, the Treasury manager is in charge of controlling and managing the bank’s money, ensuring that other parts of the bank have easy access to the cash they require for their business operations. Cash forecasting, working capital management, cash management, investment management, and fundraising are all important concepts to understand.

2. Credit Analysis and Rating: Credit Analysis and Rating is one of a bank’s most essential functions. The rigour of the process determines the bank’s long-term viability. Before making a loan, you should be aware of non-performing assets (NPAs) and analyse a company’s merits and risks. Accounting, valuation, capital building, forecasting, and risk management are all skills you’ll need to learn.

3. Transactional Banking: Transactional banking is a subset of corporate banking. To be a transactional banker, one must have a thorough understanding of how money moves. Read about the SWIFT model, the differences between NEFT, RTGs, IMPS, Cheque Payment, UPI, Wallet Payment, and other payment methods, as well as Trade Finance, Supplier’s Credit, Bank Overdraft, and Cash Credit for this profile.

4. Restructuring: Restructuring refers to the reorganisation of businesses that owe money. It is your role as a transaction consultant, investment banker, or member of the corporate finance team to assist them in overcoming their financial difficulties and avoiding bankruptcy. As a result, you’ll need to know everything there is to know about “business debt restructuring” for this job. As many restructuring cases as you can read and go over.

5. Due diligence: You should be aware of if you want to work as an investment advisor or in investment banking. You will be a member of the due-diligence team, which will check over documents, verify data, and so on. You should conduct research and make informed decisions after weighing the costs, rewards, and dangers. You’ll need to study more about mergers and acquisitions, privatisation, and other corporate ideas to do so. It would be helpful if you were skilled at shareholder analysis and knowledgeable about valuation principles.