Sources advanced modelling skills.

In all honesty:

- as far as commonly used excel functionality, thats something you'll learn with experience. Someone can list offsets, match, choose, etc... but you wont really need it until you come to a point where you need to do something specific and figure it out on your own.

- IMO, there is nothing sophisticated about alternate scenarios. You've got your base case which is founded on a plethora of assumptions which are determined on a case by case situation. The downside case may just be EBITDA margins capped at historical levels as opposed to the very optimistic levels forecasted in the base case, or EBITDA margins/rev growth achieving historic levels at terminal year and trended between now and then. Or EBITDA margins taken down for X, Y, Z consideration, you get the hint.

An easy way to build a downside case is to take a basket of Wall Street analyst reports(which may or may not be hard to come by depending on the resources available to you) and have a mean EBITDA margin and Revenue growth for an industry, or even for your specific subject company if its well covered. In crude terms, you have your base case which you came up with in Oct 08, you take the mean analyst Rev and EBITDA margin from Oct analyst reports, and you take the mean from most recent analyst reports and proportionally adjust your forecasts downward for the appropriate periods depending on how Wall St analysts future expectations have changed. Thats a simple method for your purposes (I'm assuming you a college student trying to teach yourself).

- Deal structures can be very very made to order. I read a book when I was in college published by Harvard Business review, it was called.... HBS: Mergers & Acquisitions, a round table discussion... I think, I could be wrong. It was good for my purposes at that time.

- LBO models... Damadoran has a simple LBO model on his site, I took it apart while I was in college and didn't learn much from it, but thats me. A self-study or prep course may be best for this.

IMO, the absolute best way to learn this stuff is to look at SEC filings and press releases of actual deals that are going on and try to model them. That will teach you a lot, especially in terms of deal structure/stragey. And it will bring you to a point where you need to learn how to do certain things and learn how to be efficient in excel and otherwise.

Here's a pretty good one for free... obv missing the operating model, but you build that out on a case by case basis once you know the drivers..

www.exinfm.com/excel%20files/LBO%20Model%20Template.xls

The LBO model is the easy part. It's always the operating model that results in 20 tabs and all the work.

thx for the feedback so far guys.

excel functionality: I know what you mean, but thats exactly why when I come to that point where I need to look up on how to do a certain thing, I would like a decent book where it shows me how a corporate finance issue can be efficiently modelled making use function x (that function being one which I probably previously didnt even know existed)....I'm not interesseded in modelling portfolios, bonds, complex options, etc many Excel books discuss.

Downside scenario: thx for the insight...it adresses how you would directly adjust EBITDA margin sensibly in a downside case...however I was thinking more alongside the structural step by step development of a downside case...ideally you would want to arrive at EBITDA by adjusting top line, capex, etc. etc..

deal structure: do you mean this one?

http://www.amazon.com/Harvard-Business-Review-Mergers-Acquisitions/dp/15...

LBO models: could it really be that there is no proper material out there that covers LBO modelling in detail?? (i.e. for use in PE)

another issue I have:

all those introductory materials, such as dealmaven, WSPREP, etc...are ok for getting passed the interview stage i.e. superficially....but many blantly treat as an exapmle Net debt as: Debt-Cash. ....a highly simplistic approach...what about a text which goes into proper detail i.e. talking about debt like items to watch out for e.g. unfunded pension obligations...or informs the reader that cash positions need to be adjusted for trapped cash, etc...
So what I am more talking about is: developing the ability to intelligently discuss/apply financial Issues/structures with MDs, helping in not only executing but also making my own suggestions...there must be something which assists this process, can't be that you can only wait to till an issue comes along on the job...

Thx for your help guys!

Excel is made with a very broad range of applications. Outside of IRR, NPV, PV, and FV functions there isn't anything that address corporate finance.

Structurally making a downside case, anchor certain variables to the appropriate assumptions (WC as a % of sales etc...) You'd be surprised at how few adjustments (atleast I've seen) are made for a downside case. In a downside case you should slant revenues downward, squeeze margins, and reduce discretionary cash outflow(reduce CapEx, eliminate optional amortization, decrease minimum cash balance if possible), simplified: yes, adequate: yes.

The other stuff you're talking about, yes the only way to learn it is on the job. No one on this board can teach it to you in a thread, nor will you be able to make any suggestions that aren't vocally or silently laughable, having never worked on a deal in your life.

It seems like you have a good understanding so far, if you're trying to get a leg up in interviews, what you know seems to be adequate so long as your comfortable talking about it. You will NEVER be able to make any suggestions to an MD about how to deal with a facet of a deal in an interview having never worked in IBD. Most likely you'll end up in over your head and either the interviewer will feel like "ok, atleast you knew more than most" or you will really rub them the wrong way by acting like a know-it-all and not being able to back it up. None of this stuff is really sophisticated stuff, its just stuff you learn through experience.

If you're interviewing, knowing this stuff shows a higher level of interest and initiative. Once you know more than most, as it seems you already do, you already accomplished that and by attempting to discuss it in any further detail opens you up to get blown out of the water, like interviewers like to do when a candidate starts talking about stuff he/she marginally understands. Truth be told, until you've done a deal, you marginally understand it, no matter how many books you've read.