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Happy Friday, future bankers!

Hope everyone is doing well! Today we’re covering contribution analysis, a time you put someone else’s best interest ahead of your own, and a recent M&A deal.

🚀 Let’s get into it.

🔢 Technical Question

What is contribution analysis? When do you use it?

Contribution analysis is a method that measures how much an individual product or the company as a whole contributes to the coverage of fixed costs and then profits. It assesses the impact of direct and variable costs on net income.

This analysis is used to determine how changes in sales revenues and variable costs impact a company’s net income. It measures the profitability of individual products or product lines within a company, allowing for the comparison of the direct impact of each product.

Contribution analysis can be used in several ways, including:

• Developing statements on a unitary basis rather than comparing overall figures.

• Comparing products or product lines by breaking down the contribution towards the coverage of fixed costs.

• Setting selling prices with an ideal contribution.

• Making pricing decisions with certain target profits in consideration.

In the context of investment banking, contribution analysis can be used to compare how much revenue, EBITDA, Pre-Tax Income, cash, and possibly other items the buyer and seller are “contributing” to estimate what the ownership of the combined company should be. This can be particularly useful in merger and acquisition scenarios.

In summary, contribution analysis is a valuable tool in investment banking for assessing the financial impact of products on fixed costs and profitability, making pricing decisions, and determining target profits while considering cost breakdowns and cost allocations.

🗣 Behavioral Question

Tell me about a time that you put someone else’s best interest ahead of your own.

When responding to this question, consider the following principles:

1. Choose a Relevant Example: Select a situation that demonstrates your ability to prioritize others’ needs and shows your team-oriented mindset. This could be from a previous job, a group project at school, or even a personal situation.

2. Use the STAR Method: Structure your response using the STAR method:

   • Situation: Describe the context or setting of the situation.

   • Task: Explain the task or challenge you were faced with.

   • Action: Detail the actions you took to address the task or challenge.

   • Result: Share the outcome of your actions, emphasizing the positive impact on the other person or group.

3. Highlight Your Skills: Use this opportunity to highlight relevant skills such as empathy, teamwork, leadership, and problem-solving.

4. Be Honest and Authentic: Authenticity is key. Choose a real example and be honest about your actions and motivations.

5. Keep It Professional: While it’s okay to draw on personal experiences, try to keep the focus on professional or academic examples as they are more relevant to the job.

6. Be Concise: While it’s important to provide enough detail to paint a full picture, try to keep your response concise and to the point.

Remember, the interviewer is looking to understand your values, your decision-making process, and your ability to put the team or project before your personal interests. They want to see that you’re someone who can collaborate effectively and contribute positively to their team culture.

🗞 Industry News

🚨 $839 Million M&A Deal

Blue Yonder, a supply chain solutions provider, is all set to acquire One Network Enterprises, a company known for its AI platforms that offer comprehensive supply chain visibility and management tools. The deal, worth approximately $839 million, is expected to close in the second or third quarter of this year. This acquisition will allow Blue Yonder’s customers to share data with over 150,000 trading partners in One Network’s ecosystem, enhancing their ability to mitigate potential disruptions and risks.

The acquisition is part of Blue Yonder’s strategic focus on the supply chain technology space, following its acquisition by Panasonic in 2021. The company has been making significant investments in this area. With these acquisitions, Blue Yonder aims to establish itself as a leading supply chain solutions company, offering a unified, end-to-end supply chain ecosystem.

Read more about this story below.

Thanks for tuning in today! Best of luck to everyone working through recruiting right now. If you sign an offer, reply to this email and let us know about it! Like seriously, do it—we’d love to hear about it!