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Hey this is kind of last minute but I have a 3hr modeling exam very soon for a Equity Research position. What should I expect? What is the best way to prepare for this? Does anyone have a model template that resembles what the exam will look like? Thanks in advance to anyone who can help me -- it would be much appreciated.

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Comments (10)

  • Falcon's picture

    Major props to sxh.

    I might be working for an ER Analyst this summer, as an intern to his associates. As a freshman, do you have any ideas of what they may allow me to put my hands on, (ex: follow a few different sectors) or so?

    i know that was a pretty vague question, but I hope you get a sense of what I'm trying to say.

  • In reply to Falcon
    Human's picture

    Lotin:
    Major props to sxh.

    I might be working for an ER Analyst this summer, as an intern to his associates. As a freshman, do you have any ideas of what they may allow me to put my hands on, (ex: follow a few different sectors) or so?

    i know that was a pretty vague question, but I hope you get a sense of what I'm trying to say.

    It depends on whether your Analyst is going through the earning season or not.

    During earning season:
    Quarterly Earning Reports
    Relevant Industry Pieces (Industry Landscape, Themes, Trends)

    Off earning season:
    Putting together an initiation report for a new company
    Updating the models for the companies under coverage
    Releasing company updates (new products releases)

    Most of the time:
    Updating the existing financial model
    Arranging management meetings
    Interviewing industry experts
    Doing industry research
    Attending industry related conferences
    Accompanying your Analyst to see buy-side clients

    "I am the hero of the story. I don't need to be saved."

  • Oreos's picture

    To stop all this incessant PMing. ( sxh6321 if you're not cool with it being up here just say and it'll be taken down - so no one quote this message)

    SAMPLE MODEL TEST:

    Test File: http://www.box.com/s/0026a8f80c2f8fd51013

    Instructions:
    Please find attached our exercise model. Please perform the following tasks and return the model to me upon completion. For your reference, the tasks listed below shouldn't take more than 2-3 hours. In any event, I would like to receive your analysis no later than 3:00pm.

    * Add historical Cashflow Statement for the pre-2009 period. Make sure that the Cash Flow Statements are balanced (ending cash balances should equal those on each respective balance sheet). That said, if you cannot complete this stage by 1:00pm, please move on, as I would like to make sure you complete the rest of the project.

    * Project Balance Sheet, Income Statement and Cashflow Statement for 2009-2014, based on your own reasonable assumptions. Summarize the assumptions you make on the side of the spreadsheet.

    * Add a basic DCF analysis (no need to build-up WACC, just make an assumption)

    * Bonus (only if you are done with the rest in a timely manner): --assume a $5MM leveraged dividend in 2009 - amortize new debt over 5 years -- Assume that the Company sold PP&E in 2009 as following: -- Sale proceeds - $30K -- Original Cost - $50K -- Depreciated cost (at the time of the sale) - $10K

    .

  • Human's picture

    Oreos, no worries, I am fine with that. Please also add this:
    equity research guide book: http://www.box.com/s/95be1f229c51661b9cd9

    "I am the hero of the story. I don't need to be saved."

  • blueslord2910's picture

    Thanks a lot Sxh! Are you doing ER right now in NYC? I want to apply for ER in the fall, so this model is very helpful.

    About CFA lv1, did you pass it already?

  • In reply to blueslord2910
    Human's picture

    blueslord2910:
    Thanks a lot Sxh! Are you doing ER right now in NYC? I want to apply for ER in the fall, so this model is very helpful.

    About CFA lv1, did you pass it already?

    Yes, I am doing ER in NYC. Taking Level II in June, a major pain in the ass. Good luck with the recruiting season. If you have specific questions (i.e. interview related), do PM me. I would be more than happy to help out.

    "I am the hero of the story. I don't need to be saved."

  • np1128's picture

    I'd appreciate a copy as well.. thanks!!

  • Heyg's picture

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