ER Interview - Help a brah out, brahs.
Hello Gents,
I've been lurking around these for some years now, but it was not until earlier today I decided to create an account. Brah is here to ask for your guidance/help.
Little about myself...
Junior in top 30 Unis, Ukrainian, OK grades. Previous experiences include PWM and Market Risk. Just recently I was given the opportunity to interview for an intern position with a small ER shop in NYC. It went well round 1) Walk me through your resume; 2) Speak with MD.. goals, why us, how do dese financial statement flow together etc.. but now after the 2nd round I was forwarded a project to work on. I have not done much work in excel up to this day, and have been rather stressed.
Project Cliffs:
- Analysis on a company, complete a model and create estimate for income statement for Qx.
-Evaluate acquisition of X and impact on financials for next year.
How do I go about ? I researched, but failed to find anything that could help me out.
Any input will be greatly appreciated.
Well to begin with, I would grab past three years financials and create a working three statement model. Depending on how detailed this project is to be, you may be able to get away with just the income statement. Then create operating and other relevant assumptions that will drive projected revenues, COGS, operating costs, etc. Then you should get your net income number. Then with the count of shares, you'll be able to derive potential share prices on a forward basis.
As for the acquisition, simply do an accretion/dillution analysis. Get the statesments of both companies and create a pro forma. With the pro forma income statement you will get the pro forma net income and total share count. With that you can get the implied share price after the acquisition. This will tell you if the acquisition was Accretive or dillutive. If the acquistion target is non-public and acts more as an asset, then simply get the EBITDA from the target and add it into your buyer's EBITDA and derive ending cash flows to do you analysis.
Since this is just for an internship, I would advise that you keep things simple and not a full blown detailed model.
Good Luck!
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