Case study: ever do DCF, MA instead of LBO for interview?

Interviewing for small shop and will have a case study (5-7 days to prepare). I understand that an LBO analysis is the norm but the job description details DCF and M&A models and capital structure analysis. Should I be focusing my studies on these and not LBO? Thanks.

 
Best Response

Given that amount of time, I would focus on 4 valuation methods: LBO, DCF, public comps and transaction comps. If you are familiar with the industry and there are industry-specific methods that may fit, feel free to use those too. Merger models won't be all that relevant in PE unless you're looking at something like an add-on acquisition to a portfolio company. Cap structure analysis will already be incorporated into the LBO and DCF, but you may want to have explanations for your assumptions.

 

Thanks for the reply! I meant after the interview I will have 5-7 days to complete the case study. As of now the first interview is not scheduled (recruiter setting it up). I have zero exposure to this stuff and want to spend my time studying for the possibilities. I will definately attack the 4 you mentioned, anything else you think?

 

Quality over quantity - it's not about the number of different methods you use; it's about knowing them well, making sure they make sense in the given case (for example, an LBO isn't going to work for valuing a start up), and knowing how to explain them and your assumptions.

 

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