Modeling Exercise in Interview
I am going to a final round interview at an MM firm where I am told I can expect a "financial modeling exercise". Any suggestions on what to expect?
Background:
I am a senior finance/accounting major. Experience at a BB in trading. No banking experience though I have built models in school in various capacities.
I don't expect to be handed a 10-k and told to build a model, though in some ways that would not shock me. My skills are ok, but how much can they really expect me to know?
Input welcome, prepping now.
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if they give you the 3
if they give you the 3 financial statements, i think they would expect you to do a DCF on them. it's really not hard on excel, and make sure you state your assumptions and simplify things
what i really wanted to ask you was, are you still jobless? your post gets me worried because i chose to do a BB S&T gig this summer and rejected a solid BB IBD internship, with the thoughts that if i didn't like s&t i could always get a IBD job next fall. Was full time recruiting for IB terrible despite your BB S&T gig last summer?
Yeah probably just linking the statements or doing a DCF
Actually linking the statements to form an operating model is probably more likely... for a DCF you'd need lots of additional info. like comps, long-term plans, proper discount rates, etc. etc.
I wouldn't expect too much... definitely prepare and know how to link the 3 statements and the basic DCF and all but I'd be highly surprised if they asked someone with no banking experience to actually build an LBO or merger model (of course, they do do that in PE interviews but that's a different story).
http://www.mergersandinquisitions.com/
Mergers & Inquisitions
three statements
are pretty basic, though people definitely have a hard time with it. Why is it so difficult to find a basic chart of the 3 statements with interactions, I'm surprised I couldn't find a simple graphic on google.
Someone should sticky something, anyone have one available?
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When I interviewed for an
When I interviewed for an analyst position at an MM, I was given a company's previous FYE financial statements and P/L forecasts for the next year with the following scenario:
- The company expects to buy equipment for $XX to be financed with XX%cash and XX%new debt.
- Assume straight line depreciation on the new equipment with a life of XX years
With this infomation, prepare the pro forma income, balance sheet and cash flow statements for the following year.
Hope this helps.