Summers Prep: Demystifying each finance role

(Note: This article picks up the thread from an earlier post on Finance roles. The objective here is to drill down into the main types of finance roles and provide an overview of the responsibilities and of the specific preparation that is required for interviews/processes.)

1) Equity Research

Being thorough with all terms and ratios associated with Financial Statement Analysis, including some common accounting treatments.

Preparing one or two industries in some detail- knowing the drivers, growth prospects, existing/future competition.

After getting a hang of the industry, one could move on to studying a few specific companies in that industry. Forming a view of why one likes an industry and why a particular company in that industry is better/worse than others would be an edge. Try to back up all opinions/thoughts with facts. For example, saying “I like HUL because it is the biggest player in FMCG industry” vs “I like HUL because it has x% market share, boosted by z% market share in rural India”
Combining above two points can really make one sound smart- like knowing which ratios are important for which industry… For example, why HUL has a record of negative working capital, which industries typically have a high D/E ratio etc..

2) Asset Management

Preparation would be similar to Equity Research on most fronts

VERY IMPORTANT to know the difference between buy side and sell side, in an AM interview this is a sure shot question.
Also its good to know what all specific roles AM entails, like equity analysis, credit analysis etc. However, this would differ from company to company.

3) Investment Banking

In addition to 1) and 2) above, in i-banking, soft skills play a major role in interviews.

Since it’s a job that involves client-interaction, it is important to look presentable and sound polished.

Knowledge of how the i-banking industry functions and the various departments it has would be a plus here. Again it would differ from company to company, but the common functions are Equity Capital Markets (ex when a company wants to do an IPO, this department of an i-bank would underwrite the deal), Debt Capital markets (when some company is looking to raise debt), M&A (advisory for potential acquirers or targets), and Trading.

The industry generally works as follows. I-banks look for potential clients. Once that identification has been done, the next step is to look for potential deals that could be done. For ex, identifying a potential target for the company to take over. Then the i-bank puts together a pitch book which contains reasons as to why the client should go for the target identified by the bank and more importantly, why the client should choose the bank for going through with the deal. A deeper analysis of the deal is done only after the client agrees to the idea and gives the mandate of carrying it out to the i-bank.

4) Markets

Typically involves roles such as trading, structuring (like designing a product to match client requirements) and sales (selling certain proprietary/standard structured products). Clients are typically large institutions that need to hedge their currency/commodity/country exposures.

Preparation is similar to I-Banking (esp for summers) but it will help to have some idea about options, futures and the like.

Ability to think creatively on your feet is pretty important here.
Some companies might offer this role under I-Banking too, and some of them have a separate markets division.

5) Corporate Finance

Probably the most generically used term in fin companies and defined quite differently across companies.
One definition encompasses looking after the finances of the company, ex in FMCG’s corporate finance is mainly about studying the product lines and their individual P&L’s to determine what cost cutting can be done, which products are doing well vs which are lagging behind competitors, determining how to price product as to gain maximum returns, how to respond to moves by competitors such as price reductions, where to set up a new factory etc. Requires knowledge of main revenue ad cost heads (such as SG&A, COGS etc) and an ability to logically figure out which cost head would matter to the company, also requires good knowledge of ratios which would matter to the company (ex current ratio for FMCGs)

Sometimes, this department is also called Treasury. For ex, if a steel company wants to hedge its input costs, then the treasury department would buy iron ore futures for the required duration. Treasury would look at hedging variable interest rates, currency differences etc. This would require decent knowledge of derivatives, both terminology and application.

Sometimes, corporate finance vertical is present in a bank/financial institution and includes investment banking department.

Hence, it is very important to find out what the company defines as corporate finance and prepare accordingly.

6) Consumer Banking

Involves catering to retail customers, making decisions like whom to give credit cards to, how much should the credit limit be, whom to give loans to and based on what criteria, and how much to lend.

But generally, it ends up as a sales kind of job, wherein the aim is to achieve some pre-set targets.

Interviews would tend to focus more on how much you know about the profile and the bank, so read up the bank’s website in detail.

7) Corporate Banking

Usually, the role is titled ‘Relationship Manager’.

An RM is entrusted with a set of companies and he has to cater to the finance-related needs of those companies.
Involves looking after working capital financing needs and loan-raising needs of companies. Eg. If a company has placed an order for importing some goods, then one of the services it would require is a letter of credit from the bank. Another example would be when a company is looking to finance a short term working capital loan.

Basic understanding of accounting and financial statements would do.

8) Project Finance

Company comes to the bank seeking loan for executing a particular project such as opening a new factory, making an acquisition, upgrading its infrastructure etc.

Bank evaluates the project through a process called due diligence and decides whether the loan should be granted and if so, at what interest rate that would adequately compensate for risk of the project.

Important to know what all parameters one would look at while evaluating a project, including some qualitative indicators such as experience of management, how much money the promoter is himself putting into the project etc.
This kind of a role might be offered within a corporate finance domain as well.

9) Private Equity

Preparation similar to 1) and 2) but in a lot more detail / granularity. The more number of facts you have to support your logic, the better it is.


– Sowmya Srinivasan (with inputs from Meet Kachhy)


The author currently works with Goldman Sachs Asset Management and is an alumnus of XLRI Jamshedpur (Class of 2011) and completed her engineering from NIT Trichy (Class of 2009).  She has also worked with ICICI Bank in the past.

You may also be interested in :

Finance Career Guide with Kala

The CFA Conundrum

Summer Placements Prep – Finance Roles

Summer Placements – Prep – Part 1

Summer Placements – Prep – Part 2

Summer Placements Prep – Consulting




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