Hey guys,
For anyone that did the case study. How was it? What did you need to present a valuation view, or just do a P&L & CF statement and they explain the business? Its like 4h and then 1h to present it, and it seems you need to hardcode the financials, so don’t think there is a lot of time to build a full model (excl Bs) and different case scenarios and a DCF/ peers.
Any thoughts?
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Didn't do this specific case study, but with 4 hours typically you are expected to do an entire 3 statement model from scratch with sensitivities, scenarios, your own assumptions etc. along with a 5 to 10 slide ppt investment memo in terms of output (doesn't need to be sexy at all, some slides will just be pasting excel tables with commentary or bullet points). Sometimes all you get is a ticker name and within this timeframe you should be able to do it all from scratch, 4h is plenty of time.
Not in this case study. And disagree, there is not plenty of time.
They don’t ask for any PPT, and as a matter of fact, you only have a word and excel. Appreciate your comment, but would love to get somebody who actually did any similar case study. This is not a PE CS where you don’t think. In here it actually matters what you put as assumptions.
Quite condescending answer to someone who actually did similar case studies, I wish you best of luck though
Are you sure it's a case study and not a modelling test?
Alongside the model, you should have some 10Ks and recent conference call transcripts to help you make estimates assumptions.
You should check "citadel case study" on this forum, they likely use the same test structure.
This is what they said its going to be:
You will need to block off a total of 5.5/6 hours. Schedule will go as follows:
Work on case (4 hours)
Take a break & prep for presentation (30 min)
Present case in a conference room with a Q&A from the team after (1 hour)
Once you begin the case, you will be given the name of the company, financials, and consumer and sell-side reports, as well as access to Microsoft Word and Excel. You will have to load the company’s historical financials into the model yourself – previous candidates have just done a few years back.
Past strategies from other candidates:
Produce an income statement and cash flow statement, then present a business overview and discuss how that drives their assumptions.
If they're saying past candidates have done IS/CFS, they don't want a B/S. They want IS/CFS 5y projection (at least in my experience interviewing at SMs) + basic DCF (should take 10 minutes) + quick write up in word explaining main business levers, which ones drive business performance, what you think valuation should be, and overall summary of investment opportunity. Paste your model outputs into word, try to keep the discussion from ever moving to Excel.
Got it, very helpful. Would you do different case scenarios? I feel like I’d not have time.
And also, should I do quarters? I was thinking of doing years, and highlight that if I had more time, I’d do it quarterly.
Conscious I’ll will have to harcode a bunch of numbers one by one…
How do you get to CFS without balance sheet? Or are you saying they just don't want to see it? If its going to be a very back of the envelope CFS without showing the full BS, why do they even want it? Or am I missing something here?
I think its more of trying to reach a good EPS estimate, and for capex and change in WC, you do it as per % of sales, as you will do for most of the items, and then from there, if you have time, you build a full BS.
Any update for this interview? What does the case study look like?
Still have to do it… august and finding a time with PMs is tough
You'll have the chance to spend some hours in the most beautiful hedge fund office. It's already a win !
Is this for ELEVATE?
Yes
feel free to DM, am in the process for a different office
One aspect we value highly and shows a decent degree of differentiation is the topline build-up in the operating model / case.
Does not need to be rocket science, but it shows that you understand the key drivers of the business and provides more basis for discussion than an SG&A line inflated at 2%.
-Price vs volume (eg CPG company - could be anything from high volume / low price growth at an indie brand to negative volume / high price growth in a structurally
declining category such as Margarine
-Capacity vs Utilisation (eg EV charging, steel factory) driving volume assumptions; also touches on ROCE
-LFL store performance vs store Roll-outs (mid-year openings, vintage waterfall, …)
-Product vs Service
-Recurring vs non-recurring
-Organic vs bolt-on M&A
-Product categories
Plenty of those elements are then linked to other P&L and cash flow metrics, eg
-capacity addition, store roll-outs & bolt-on M&A requiring capex
-Price having 100% gross profit drop-through while marginal profit of additional volume depends on operating leverage
Any chance you could send except of a model or two with these builds - most sell sides models suck, and in my current seat our models / my models never get super granular. I have done simple with stuff like units X price, penetration rates, utilization rates, boe + costs/boe, store growth, etc. but looking to get a sense of 1) formatting on buyside models at HFs and 2) more dynamic builds that also tie nicely with the costs side. If you had any old excerpts you would be willing to share it would be very helpful!
If you are looking for a very granular/complicated model, I suggest you to check Barclays's model for Vivendi.
Even a bit too much for buy-sider, but interesting.
Thanks for the nice insights. Out of curiosity, are you working there as you referred to "we".
Has anyone completed their accounting test? Just curious to know how much preparation I might need for it and how it is structured?
Same question here - did you or anyone else take it??
Anyone done the case study yet? / how did you find it?
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