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Happy Tuesday, future bankers!

Hope everyone is doing well! Today we’re covering some of the components of operating cash flow, how you like the city you’re interviewing in, and Apple’s decision to cancel their electric car project.

🚀 Let’s get into it.

🔢 Technical Question

“Does Operating Cash Flow account for interest payments that a company has made?”

Yes, Operating Cash Flow (OCF) does account for interest payments that a company has made.

Operating Cash Flow is a measure of the amount of cash generated by a company's normal business operations. It indicates whether a company can generate sufficient positive cash flow to maintain and grow its operations.

There are two methods for depicting operating cash flow on a cash flow statement—the indirect method and the direct method.

1. The indirect method begins with net income from the income statement then adds back non-cash items to arrive at a cash basis figure. Since most companies use the indirect method of preparing the cash flow statement, the company's interest expense will be contained within the company's net income, which is the first amount presented in the cash flows from operating activities. The interest expense contained in the net income will be changed from the accrual amount to the cash amount by the change in the current liability Interest Payable.

2. The direct method tracks all transactions in a period on a cash basis and uses actual cash inflows and outflows on the cash flow statement.

In both methods, interest paid is considered a part of operating activities on the statement of cash flow. It is the amount of cash that a company paid to the creditor. It may be higher or lower than the interest expense on the balance sheet. Only interest paid has an effect on the cash movement, not interest expense.

So, in conclusion, Operating Cash Flow does account for the interest payments that a company has made. It's important to note that the interest paid could be classified as a financing activity if the loan is not used as an integral part of the cash management function of the business. However, it is normally considered a cash flow from operating activities.

🗣 Behavioral Question

"How do you like [insert city office is in]?"

It’s essential to provide a thoughtful and positive response. Here’s a structured approach to answering this question:

1. Research and Preparation:

   • Before the Interview: Gather information about the city where the office is situated. Look into its culture, lifestyle, economic significance, and any unique features. Speak with alumni living in the city about their experience. If at all possible, visit the city beforehand.

2. Start with Positivity:

   • Begin your answer on a positive note. Express genuine interest and enthusiasm.

   • It can be difficult for a bank to extend an offer to someone that clearly isn’t interested in staying in the city for the longer term.

3. Highlight Specific Aspects:

   • Mention specific aspects of the city that appeal to you. Consider factors like safety, culture, history, or entertainment.

4. Connect to Your Goals:

   • Tie your response back to your career aspirations. Explain how the city aligns with your professional goals.

   • Example: “Given my interest in finance and technology, being in [city name] would provide me with exposure to the best opportunities.”

5. Be Authentic:

   • Be genuine in your response. Avoid generic statements; instead, share personal experiences or anecdotes.

Remember, the goal is to convey that you’ve done your homework, appreciate the city’s offerings, and see it as a positive environment for your career growth. Keep your answer concise, confident, and tailored to the bank and city in question.

🗞 Industry News

Apple Cancels Their Secret Electric Car 🚘

Apple has decided to abandon its "Project Titan" – a decade-long effort to develop an electric car. The decision shocked thousands of employees working on the project. Apple's leadership determined that the potential risks and costs of the car project outweighed the potential rewards. In a change of direction, Apple will shift many of the project employees to its generative AI division, which has become an increasingly high priority for the company. This decision comes at a time when the EV market is experiencing slowing growth and mainstream buyers are hesitant to make the switch.

Apple's electric car project was an ambitious undertaking that spanned several years and involved significant investment. However, the company struggled with challenges such as shifting leadership, design changes, and difficulties with developing self-driving technology. Despite its long history, Apple has scrapped large-scale projects before. While the company is moving away from car development, it continues to invest heavily in other technologies, such as its Vision Pro headset and CarPlay software, and is now prioritizing AI advancements.

Read more about this story below.

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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!