⏱ Reading Time: 2 Minutes 21 Seconds

Hey, future bankers!

Hope everyone is doing well! Today we’re covering how to calculate retained earnings, why you chose to apply to a particular firm, and Exxon’s $60 billion M&A deal.

🚀 Let’s get into it.

🔢 Technical Question

How do you calculate retained earnings?

Retained earnings represent the portion of a company’s profits that are reinvested back into the business rather than distributed to shareholders as dividends.

Here’s a breakdown of the components involved:

1. Beginning Retained Earnings (BOP RE): This is the retained earnings balance at the beginning of the period you’re calculating. You can find this value on the company’s Balance Sheet under the shareholders’ equity section.

2. Net Income (or Loss) for the Current Period: Net income represents the total income left over after deducting business expenses from total revenue or sales. Essentially, it’s the profit generated during the period.

3. Cash Dividends: These are any cash payments made to shareholders as dividends. Subtract the total cash dividends paid during the period.

4. Stock Dividends: If the company issued additional shares of stock as dividends, subtract the value of these stock dividends.

🗣 Behavioral Question

Why did you choose to apply for at our firm?

Here are some best practices for responding to the question:

1. Research the Firm: Understand the firm’s values, culture, and recent deals. Highlight how these align with your career goals and personal values. For example, if the firm is known for its strong mentorship program, you could express your desire for professional growth and learning.

2. Specific Examples: Provide specific reasons why you chose the firm over others. This could be their industry reputation, the types of clients they work with, or the deals they’ve closed.

3. Personal Connection: If you have a personal connection to the firm, such as a positive interaction with an employee or an inspiring story about the firm, share it. This shows your genuine interest in the firm.

4. Career Goals Alignment: Explain how the firm can help you achieve your long-term career goals. For instance, if you aspire to work on cross-border M&A deals and the firm has a strong international presence, highlight this.

5. Enthusiasm: Show your enthusiasm for the opportunity to work at the firm. This can be done by expressing your admiration for the work they do and your eagerness to contribute.

The goal is to convince the interviewer that you’ve thoughtfully chosen their firm and are committed to contributing to its success. Be honest, specific, and enthusiastic in your response.

🗞 Industry News

🛢 Exxon’s $60 Billion M&A Deal

Exxon Mobil finalized its $60 billion acquisition of Pioneer Natural Resources this week. This deal will make Exxon the largest oil producer in the Permian Basin, with an output of about 1.3 million barrels per day. They expect to further increase production to 2 million barrels per day by 2027.

Exxon is looking to combine the best practices of both companies to improve efficiency and production. They plan to leverage Pioneer's expertise and acreage to drill longer and more productive wells. However, it will take 18 to 24 months to implement these new techniques and achieve their desired results. Exxon is confident that their combined technologies will allow them to do "more with less." They are also working to integrate the two companies smoothly and expect to offer positions to most of Pioneer's employees.

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!