Navigating Extremely Technical Interviews

Hi Fellow Monkeys,

I am a junior at a liberal arts school studying something very non-quanty but have an interview lined up next week with an elite boutique that is known to have extremely rigorous technical interviews. I spoke with an analyst beforehand and he said that even though my background is not one of finance/accounting/etc. I will be grilled just as heavily as candidates from target schools who are studying finance and that "none of the questions will look like anything you have seen in the guides."

I have had a few interviews before and only studied the guides thus far, but I am extremely worried, and wondering what I can do to prepare in the next week and for this situation in the future for these in-depth grueling technical interviews...

Determining Working Capital/Minimum Cash Levels

Can anyone shed any light on best practices for determining a reasonable estimate of a company's working capital requirements? - I'm mostly interested in this in a restructuring context for adjusting a company's working capital when it gets out of wack due to financial distress.

Also interested if anyone can shed any light on optimally determining the minimum cash level that a company should maintain for an lbo model. I know working capital requirements and minimum cash levels will vary across industries, so generally is the best method to calculate NWC and Cash as a percentage of assets for market comparables and the company's historical NWC/cash levels (pre-distress/pre-LBO) and use that?

Appreciate any insight and thanks in advance.



Non-Controlling Interest Question - Calculation of EV

So I learned today that NCI is added in the calculation of Enterprise Value (EV) for comparability measures. Because if you own over 50% of a company, you have to consolidate the financials with your existing company. If you didn't add NCI to EV then the EV/REV multiple would be messed up (REV would account for 100% of other company while EV would only include 70% stake).

Technical: Pre-tax WACC = unlevered cost of capital (APV)

I can derive the pre-tax wacc from an infinitely recursive cash flow stream, but why is this equivalent to using the "unlevered cost of capital"? Because this discount rate assumes a constant leverage ratio (i.e. fluctuating debt levels), how can it be that the PV of unlevered cash flows give the value of a firm with no debt?

Phone Interview with HR

I have a phone interview with HR later this week and was wondering if HR asks technical questions at all.

2 Technical Questions that I don't understand

1. Our company has a 12% WACC and a 10% IRR for a project. Should we pursue it?

I was told the answer is yes (since the 10% IRR is lower than the cost of capital) but I don't understand... if IRR is lower than WACC then aren't you making less?

Moelis SA IB Interview

Can anybody who's actually interviewed with them share some info about the process and what questions might be asked?

Everyone on this board screams when they hear Moelis "the most technical thing in your life" but most of the people on this forum are also college kids in fresh year who have wanted to be a banker since 15. I want to mainly hear from people who have either worked there or have gone through the interview process.

Quick technical questions for IB

1. Why would a PE fund NOT use WACC as the discount rate when valuing a potential target?

2. How does nol affect the 3 financial statements?

and could anyone help with the intuition behind a merger dilution model?
I don't really understand purchase price allocation...

Accounting technicals

Last week at work, someone shared this potential interview question as we discussed full-time recruiting for those trying to lateral. I would love to hear people's answer to this question: "Give 5 ways to increase cash without touching the income statement."

What do you think?