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Happy Thursday, future bankers!

Hope everyone is doing well! Today we’re covering depreciation, how you learn, and reports that Google is looking to acquire HubSpot.

🚀 Let’s get into it.

🔢 Technical Question

Where is depreciation found on the income statement?

Depreciation expense is found on the income statement, typically listed under operating expenses. Here's a breakdown of the concept and why it's positioned there:

Income Statement and Depreciation:

• The income statement summarizes a company's revenue and expenses over a specific period (month, quarter, or year). It essentially shows how much money a company brought in (revenue) and how much it spent (expenses) to generate that revenue.

• Depreciation expense reflects the portion of a tangible asset's cost that's considered "used up" during that same period. Imagine buying a factory machine for $10,000. Over its estimated 5-year lifespan, some portion of its value is used up each year as it helps produce goods. Depreciation expense spreads that $10,000 cost over those 5 years.

Intuition Behind It:

• Including depreciation ensures a more accurate picture of a company's profitability. Without it, the income statement would only reflect the initial cost of the asset, making the company appear more profitable than it truly is.

• It reflects the gradual wear and tear or obsolescence of the asset. Assets don't magically stay brand new forever, and depreciation acknowledges this decline in value.

• It's a non-cash expense. The company doesn't physically pay out cash for depreciation, but it reduces the reported profit, reflecting the asset's diminishing value.

🗣 Behavioral Question

How do you learn?

Here's a breakdown of best practices for answering this question:

1. Structure your Response

• Start with a concise statement: Begin with something like, "I learn best by [your primary learning method] and find success when I can supplement that with [other techniques]."

• Provide specific examples: Briefly describe 1-2 situations where you learned a difficult concept or skill and the approach you took.

• Connect to investment banking: Tie your learning style to the demands of the internship—adapting to fast-paced environments, mastering technical concepts, etc.

2. Emphasize Key Traits

• Proactive learning: Demonstrate that you take initiative in acquiring new information. Did you use additional resources, ask for guidance, or create your own study aids?

• Adaptability: Highlight how you handle different learning methods – lectures, hands-on experience, independent study, etc.

• Intellectual Curiosity: Express interest in learning about complex financial concepts and willingness to ask questions.

• Attention to Detail: Demonstrate carefulness in absorbing information and a drive for accuracy. This is crucial within investment banking.

🗞 Industry News

💰 Google Reportedly Looks To Acquire HubSpot

Google’s parent company, Alphabet, is considering a bid for HubSpot, an online marketing software company valued at $35 billion. This potential acquisition, which would be Alphabet’s largest to date, comes amid increased regulatory scrutiny of the tech sector. Alphabet has been in talks with Morgan Stanley about the possible offer and the implications it could have on antitrust regulations. However, no offer has been made yet, and HubSpot remains focused on serving its customers and building its business.

HubSpot, which went public in 2014, provides marketing software to companies with up to 2,000 employees. Despite posting a net loss of $176.3 million in 2023, the company’s growth prospects have excited investors, driving its shares up 50% over the past year. A deal with HubSpot could expand Google’s customer relationship management (CRM) software offerings and boost its cloud computing business. It could also help Google argue that the acquisition would enhance competition in the marketing and sales software sector, challenging the dominance of players like Salesforce and Microsoft.

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!