Corporate Finance Overview
Snapshot of a Public Non-Financial Firm
Board of Directors
(NYSE: MTZ)
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President
Chief Executive
Officer
EVP Mergers &
Acquisitions
Chief Operations
Officer
Chief Financial
Officer
Controller
Director of
Corporate Finance
Director of
Corporate Finance
Director of
Accounting
Financial Planning
Budget vs. Actual
Public Guidance
Operations
Reviews
Asset
Management
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Corporate Strategy
Corporate Development /
Mergers & Acquisitions
Treasury
Corporate
Communications
Banking Relationships
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Financial Reporting
Internal Audit
Corporate Accounting
Tax
Corporate Strategy
• Develop Company Growth Strategy in Partnership with Business
Leaders
Typically staffed by former Management Consultants at the senior levels
(Bain, McKinsey, BCG)
o Analyst/Associate roles include attending meetings with executives,
researching the industry and internal performance, and developing
presentations to visualize the impact on Co.
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• Consulting-style work, without the Consulting-style travel
Meetings with executives, external consultants, industry experts, business
managers all conducted largely in house
o Develop in-depth understanding of the business and its industry
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• Exit Opportunities
Highly developed grasp of the business is valuable at middle management
levels within the company
o Consulting-type skills but unique experience could play well in business
school applications or when networking into management consulting roles
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Corporate Development / M & A
• Often paired with or part of Corporate Strategy Group
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Exposure to consulting thought process and knowledge of firm
High level of exposure to company executives
• Acquisitions, Divestiture of assets, Minority interests, and Capital
Investments
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Work with senior executives and strategy team to:
1. Define company needs and goals
2. Execute on those needs by acquiring or divesting the necessary assets / businesses
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Act as “the client” to M&A investment bankers, reviewing pitch books and company
screens
Watch the market on a daily basis, keeping senior management informed of new
transactions with instant analyses of newly announced deals
Participate in negotiations with management of target companies
Manage other internal department managers during divestiture process
(accounting, finance)
Capital Expenditures (Equipment Finance)
Project Finance
• Conduct Due Diligence
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Research, Site visits, Meetings with Management, Investment Bank
Communication
Corporate Development / M & A
• Financial Modeling
Discounted/Leveraged Cash Flow Model –> NPV, IRR, EPS and Balance Sheet
Impact
o Payment Structure (Cash/Debt/Equity, Contingent Consideration)
o Validate Target Co. Management Forecast (Sensitivity Analysis)
o Comparable Company/Transaction Analysis –> “Comps” (Usually received from
bankers)
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• Board Approval
Summarize financial model (i.e. highlight upside and downside risks for all
constituents)
o Prepare presentation with details of Target Co. and what New Co. will look like
o Integration procedures going forward
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Treasury
Equipment Debt
$115MM , 4.00% Convertible Notes
$100MM , 4.25% Convertible Notes
$150MM , 7.625% Senior Notes
• Capital Structure Analysis
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Determine Weighted Average Cost of Capital (“WACC”) and compare to peer
group
Optimal Capital Structure –> Relative to Peer Group, Mix of Debt and Equity
Share Buyback Analysis –> Best use of cash?
Funding for new projects/acquisitions –> Financing mix, hurdle rate, cash flows
to the firm
Investment Banking Communication
Treasury
• Forecast Modeling
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Five Year Forecast Model
 Collaborate with FP&A group to develop Balance Sheet and Cash Flow Model
 Develop assumptions based on public guidance
 Constant communication with CFO (forecast vs. actual, cash build/shortages)
 Submit forecast model to Board of Directors and provide ongoing updates
• Working Capital Management
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Cash is King
 Constant evaluation of working capital metrics (DSO vs. DPO, AR Aging, Top 10
customers)
 Negotiate with customers and suppliers to receive optimal payment terms
 Ensure trend of receivables vs. payables is on the right track (i.e. shouldn’t be
paying bills faster if your receivables are growing)
What do YOU want to do?
• Intangibles of Corporate Finance at a Non-Financial Firm
Constant exposure with Senior Management
Highly analytical– always learning, thinking and applying
Financial Modeling
Plenty of opportunity to position yourself well as a candidate with the knowledge
developed right here at BU
o Wear a lot of different hats
o I have a life
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• You should be….
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Performing well with your classes
Networking, networking, networking!!!
Developing analytical skill set
Reading The Wall Street Journal
Alternative Careers at Banks
Alternative Careers at Banks
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If you don’t want to work 120 hours a week as a banker or chained to your
desk for 8 hours with no bathroom breaks as a trader, here are some
alternative career options:
o Risk Management
 Market Risk Management
 Credit Risk Management
Business Line (BL) Finance
Treasury
Corporate Audit
Controllers
These positions will give you exposures to a variety of finance functions at a
bank that will prepare you eventually for a senior position such as Chief
Financial Office, Chief Risk Officer or Treasurer.
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Alternative Careers at Banks – Risk
Management
• Market Risk Management
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Market Risk Management (MRM) manages the potential impact of fluctuations in interest
rates, exchange rates, equity and commodity prices, credit spreads and other systematic
risks on the firm’s portfolio. MRM ensures that risk taking is within the firm’s risk appetite
and trades achieve the appropriate reward and returns.
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Potential Responsibilities of an Analyst
 Assist with calculating sensitivities and key risk metrics of firm’s current portfolio
 Research, develop and / or produce reports summarizing business’s risk profile in
particular product areas such as Equities, Commodities, Interest Rates etc.
 Assist in producing risk reports and summaries for senior management
 Perform gap analyses and resolve data integrity issues at both low and high levels
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Credit Risk Management
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Credit Risk Management assess the creditworthiness of existing and potential individual
clients, institutional counterparties and issuers and determines firm-wide credit risk. The
group reviews and monitors specific transactions as well as portfolio and other credit risk
concentrations. It’s also responsible for ongoing credit quality and limit compliance and the
group works with the business units to manage and mitigate credit risk.
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Potential Responsibilities of an Analyst
 Assist with analyzing the credit worthiness of firm’s counterparties and clients
 Analyze data to identify areas of unrealized risk mitigation and drive improvements in
risk mitigation metrics
 Support senior analysts with company write-ups, limit setting, risk exposure and
overage reconciliations
 Prepare portfolio review presentations for senior management
Source: ML CFO Analyst Program 2008
Alternative Careers at Banks – BL Finance
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BL Finance (Equities, Fixed Income, Commodities etc.):
BL Finance provides financial control, accounting, reporting and analysis for a firm’s
internal lines of businesses. Finance ensures the financial integrity of these businesses,
providing P&L and balance sheet reporting and analysis, inventory position analysis, and
advises business management on matters such as funding efficiencies, accounting and
regulatory implications and cost-control or revenue enhancement opportunities.
o Potential Responsibilities of an Analyst
 Responsible for a number of P&L functions, involving a liaison function with traders
and finance staff on a daily basis.
 Individuals will gain a great deal of knowledge of the workings of a trading desk, a
brokerage firm, accounting services, with regards to financial products such as cash
equities, bonds, loans, commodities, CDOs, swaps, credit default products, treasuries
and futures etc.
 Responsibilities may include financial reporting and forecasting product performance
analysis and balance sheet analysis forecast and projections, product performance
sheet analysis, and balance sheet analysis.
 Communication of issues to management within a team effort as well as interaction
with traders.
 Analyze daily P&L on various trading desks and providing explan
 Assist with trade support to ensure timely trade capture and processing
 Assist with accurate reconciliation and recording of trading activity to the General
Ledger
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Alternative Careers at Banks – Treasury
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Treasury:
Manages the firm’s global liabilities and capital and acts as a "central bank" for the various
business groups. In addition to all short- and long-term funding, Treasury is responsible for
bank relations, cash management, capital planning, strategic analysis, insurance and risk
finance, and other corporate finance functions. Treasury is also responsible for raising
capital for the bank via debt or equity offering as well as managing the liquidity portfolio of
the firm.
o Potential Responsibilities of an Analyst
 Working with internal models to project the firm’s funding needs
 Assist with developing long term capital plans based on current and future interest rate
environments
 Assist with forecasting the bank’s liquidity needs and adjusting liquidity portfolio
accordingly
 Manage the bank’s internal investment and FX portfolio
 Gain an understanding of the Firm's balance sheet, Unsecured Funding and Capital
Structure
 Produce daily, weekly and/or monthly Balance Sheet reports for the entire Firm
 Provide on-going and ad hoc analytic support as part of the presentation of financial as
well as other business metrics information to executive management
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Alternative Careers at Banks – Corporate
Audit
• Corporate Audit:
Corporate Audit examines, evaluates, and reports on the adequacy of internal controls
within the bank in order to contribute to the proper, efficient and effective use of resources.
Corporate Audit furnishes business and support areas with analyses, appraisals,
recommendations, counsel, and information concerning the various activities reviewed. As
part of the audit team, the analyst will have the opportunity to increase his / her knowledge
of business, increase technical skills, and establish key business relationships.
o Potential Responsibilities of an Analyst
 Perform various analyses, audit sample test-work and documentation of test-work
 Identify internal control issues, create reports, and present issues to senior
management
 Assist in the execution of a risk based audit plan based on a comprehensive review of
the audit universe/business components, corresponding risk assessment and business
input
 Participate in all phases of the audit process, participate in the presentations to
business/support management and the opportunity to develop and maintain strong
relationships with business unit management
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Alternative Careers at Banks – Controllers
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Controllers Group:
Controllers Group (Controllers) is the principal financial reporting group within the bank.
Among other things, this group is responsible for reporting the operating results of the bank
to its shareholders and clients. Financial reporting requirements include reporting in
accordance with GAAP; complying SEC requirements as both a public company and a
regulated broker-dealer; income tax reporting; risk reporting; and providing reporting
guidance to accommodate international regulators.
o Potential Responsibilities of an Analyst
 Obtain an understanding of the Firm’s earnings release process and how information
is developed from its raw state to disclosures made to the public
 Assist month end close by completing journal entries and reconciliations between
spreadsheets and the general ledger
 Exposure to Firm-wide management reporting process including monthly forecasting,
budgeting and variance reporting
 Prepare capital computations and operational capital charges
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Alternative Careers at Banks – Analyst
Programs
• Here are some analyst programs that you can apply for:
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Bank of America Merrill Lynch:
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Corporate Audit Management Program
Corporate Treasury Analyst Program
Finance Management Associate Program
Global Banking and Markets Credit Risk Analyst Program
Global Risk Management Program
Markets Risk Analyst Program
http://careers.bankofamerica.com/campus-Americas-analyst-programs.aspx
General Electric:
 Financial Management Program (FMP)
 http://www.ge.com/careers/students/fmp/index.html
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JP Morgan
 IB Risk Analyst Program
 Treasury & Securities Services Program
 http://careers.jpmorgan.com/student/jpmorgan/careers/us/programs/ftug
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Morgan Stanley
 A variety of analyst programs in all divisions mentioned
 http://www.morganstanley.com/about/careers/programs/analyst.html
Alternative Careers – Consumer Retail
Consumer Retail Industry
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Industry Landscape
o Department Stores
 Macy’s, Bloomingdales, Saks, Neiman Marcus, JCPenney
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Off Price / Discount Retail
 T.J. Maxx, Marshalls, Ross, Steinmart
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Big Box / Off-Mall Retailers
 Wal-Mart, Kohl’s, Target, Bed Bath & Beyond
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Types of Finance-Related Jobs
o Buyer
o Planner
o Gross Margin Planner
o Inventory Management
o Private Label Management
o Corporate Finance Cost Analyst
Consumer Retail - Career Track
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Typical Career Path in Consumer Retail is Dynamic
o Corporate Training Programs:
 TJX*, Macy’s, Target, Bed Bath & Beyond, Nordstrom
 Retail Math, Sales Turn, Margin, Sell-off
 Pricing, Marketing
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Buying
 Assistant Buyer – Sets national price for merchandise, create store signs
 Associate Buyer – Manages a vendor or a department (sales and margin)
 Buyer – Manages entire country department (team, price, sales, margin, advertising)
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Planning
 Inventory Planner – Allocates merchandise to stores based on sales
 Associate Planner – Forecast inventory needed based on the sales, ensure inventory
levels for ads
 Planner – Manages department inventory needs and gross receipts
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Divisional and Group Management
 Divisional Merchandise Manager – Responsible for a division (Housewares or Textiles)
 Group Vice President – Responsible for managing multiple divisions (Home or Readyto-Wear)
Macy’s - My Responsibilities
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Currently Buyer for Moderate Cookware and Bakeware at Macy’s Home
o Moderate Cookware: Martha Stewart, Belgique, Basics, Cookright
o Bakeware: Calphalon, Anolon, Martha Stewart, Pyrex, Corningware
 Sales & Assortment – Plan assortment for stores and execute seasonal sales goals
(currently planning for Fall 2012)
 Vendor Management – Build relationships with key vendors
 Marketing & Advertising – Create all advertisements for stores (direct mail, preprints,
TV, and radio)
 Gross Margin – Achieve profitability goals through promotion strategy and negotiations
with vendors
 Leadership – Manage team which includes assistant and associate buyers
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Career Track
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BU SMG Grad 2004
TJX Merchandise Training Program
TJX Various Planning Roles (3 years)
Macy’s Assistant Buyer – Kitchen Electrics
Macy’s Associate Buyer – Gourmet Cookware & Kitchen Electrics
Macy’s Buyer – Moderate Cookware & Bakeware