On learning finance through the case method.
As I sit down to write, I am reminded of my initial wariness in proposing this topic – sending it in a day late, with the whizzing (close-to-past) deadline convincing me to go with it. Of how Tim politely warned me that it was best not to come off as “another PE person who’s really good at finance.” I laughed – a manic laugh which left me relieved in that this was an email I was receiving, not a call.
This article will now be to Tim’s liking either way. Either this article will be “a bit of self-deprecation without sounding too fancy” or it will be so uncomfortably true to his allegations it will be irrefutably satire. I blame this unflattering social blindness of mine on damage caused by “learning finance through the case method” – a phenomenon I have often heard classmates complain about, and exactly how I, an engineer, learned finance in private equity.
Picture this: a sepia-toned vignette (emotional distance from the scene is important). The subject – a scrawny 25-year-old (before two years of expensed dinners – you never see anyone you love at mealtimes, but hey, premium pizza!). Really put yourself in her shoes.
Sitting on your desk in the corridor, not even yet allocated a permanent desk; panicking as you try to update a consolidated model of three companies, when the matter of balancing the balance sheet was still a matter of religious conviction more than machinations of the cash flow. A mere two weeks ago, it was discovered mid-presentation that you had made a mistake in the formula for CAGR; you have made several more heinous mistakes since which make you yearn for the simplicity of that first mistake. Case #1 – Update your portfolio company’s model with historical data and tweak the future projections. Success Rate: 60%. I found a mistake in the model a quarter later, refused to ever update it and when I could put it off no longer, built a simplified model instead of writing business school apps.
It's 7 pm on a Wednesday. Your work for the day is wrapping up, but you bear no real conviction that you will go home; moments of silence rarely translate to peace, just a horror-movie-esque unease preceding a jump scare. True to form, your door (you have a door now! No more people peeping at your shameful Investopedia searches in the corridor) creaks open. You will in fact not be going home.
Case #2: What can we sell this company for given A, B, C assumptions? I need the answer in the next two hours.
The associate who handed this company over to me promised me it would be sold before he left, and hence left me with no real instructions for how to go about this task.
Success Rate: 75%. It was later discovered, by an internal audit team, that I had discounted all my cash flows slightly incorrectly using the NPV formula; leaving me with a deep-rooted distrust for all NPV formulae in Finance (Section F, do recall my unusual pallor at Prof. Desai’s follow-up on NPVs). All’s well that ends well - I had the pleasure of haggling for the FX rate for this sale, one day before my HBS interview.
Sunlight (fluorescent tubelight) streams through the window (glass partition separating the corridor from our windowless room). I am handing over my portfolio companies and all associated files to two fresh-faced new associates in preparation for my departure. Basking in self-satisfaction at my personal growth, I answer their doubts with the air of all-knowingness required to sell an investment to leadership. Ah, to be young and not know how to account for dividend payout!
Cold Call: How does one account for dividend payout? Success Rate: 0%. I passed dividends through the P&L as one puts a cooking pot with leftovers directly in the fridge. Why is there no storage box for leftovers, and how does your fridge have so much space?
Two weeks later, I left work and that associate never asked me a question again.
So what can I tell you about learning finance through the case method that a midterm’s worth of slogging can’t?
1. Make friends, lose a loved one: Ramping up in PE is exactly like the case method –if the peer-led learning model was implemented in complete captivity. You ask your fellow associates all your stupid doubts with no fear of judgment (good!), engage in long discussions about concepts (still good?) ALL THE TIME (bad) including at DINNER (terrible????), your only respite before a few more hours of work. Making friends in PE is exactly the opposite of business school networking – the trauma bond makes friendship mandatory, not a choice of company; you will know the name of the restaurant your VP went to for his anniversary dinner (Teams video) but not his wife’s name.
While shared delusion about accounting makes for a good friendship, I must caution you from bringing it into a relationship. If your partner is not a fan of finance, they will be deeply annoyed by you (sorry Prof. Desai, the reason I have no loved one to whom I can recount my FIN1 shenanigans is definitely recursive). Even if they are, they will still be deeply annoyed by you – one of my fellow associates confessed he would pick his ongoing deal over his admittedly-not-very serious girlfriend at the time. He got neither the deal nor the girl in the long run.
2. The hubris of finance is a real condition, see your local doctor today: Everyone is always wrong about the machinations of math defining corporations at some point, but the willingness to completely deny the possibility of error is what makes a real financier. The passing exam for any finance course should not be doing a test or even a case; it should be leaving the student in a room with someone who has a differing opinion on a relatively minor point. If the student can sustain a heated argument for longer than 15 minutes – congratulations, they’ve passed! Doesn’t even matter if they’re right – it is subjective, after all. Which brings me to…
3. “I would define … the Poetry of words numbers as The Rhythmical Creation of Beauty annual reports which WILL need an auditor.” – Edgar Allen Poe, on Accounting: My Achilles heel in accounting is the laying down of rules as objective fact. I’ve sat in on many meetings with a portfolio company in my investing days, us fixing the CFO with a baleful eye and asking him “What’s in your back pocket?” about the company’s EBITDA margin; in reference to the multiple provisions for various contingencies filed away in cost line items which would move up the margin by 0.2% when unwound. A lot of words for saying that our CFO liked delivering potential bad news up front and reserving a little bit as a fun positive surprise come closing the books – not something one would think can be indulged within the rigid structures of accounting.
And that’s that! Share your fun FIN1 and FRC related memories in the comments (not with your loved ones). Please note – videos of you crying will be taken down, as they violate our content policy.
Ramya Vijayram (MBA '26) is originally from Chennai, India. She graduated from the Indian Institute of Technology, Madras, with a Bachelor’s and Master’s in Biotechnology. Prior to the Harvard MBA, Ramya worked at Warburg Pincus in Mumbai, India, and McKinsey and Co. in India.
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