This has been discussed a few times but I wanted to get some updated consensus here when it comes to in person modeling exams (they will either give me a sell side model and ask me to project + come up with a view or build a model from scratch to test my technical competency).
On one hand, it sounds like really nailing income statement is the most important and having a thoughtful build here in some way, and that not getting around to CF + BS is no big deal (I guess you use average/last quarter for interest income/expense?). Some posts in the past have said this. On the other hand, this post seems to argue the opposite:
https://www.wallstreetoasis.com/forum/hedge-fund/…
Other threads with somewhat different advice here:
https://www.wallstreetoasis.com/forum/hedge-fund/…
https://www.wallstreetoasis.com/forum/hedge-fund/…
So which one is it? As someone coming with no IB experience I feel like focusing on a super fleshed out 3 statement is better than just a good IS (as they are probably doubting my technicals anyways)? As someone who will probably not get as many interview shots as others, I may be paranoid here but want to make sure I can pass this round.
Key Questions:
1) How do you really differentiate yourself with a thoughtful IS statement build? Just not sure how to make this more thoughtful if all you get are segment / geographic breakdown w/mgmt. guidance and commentary. I have access to GS and MS sell side models so if you guys could call out a company that you think is done well that would be interesting. Rarely see a fixed + variable costs build and have been wanting to find examples to really think this through and see it in practice in a model (my biggest question)
- Was thinking incremental/decremental margins could be a nice thing to add and something to easily solve for
- how do you solve for units x price when there is no previous disclosure?
2) One person mentioned not refrencing Qs in their trial - how the hell did they build the model? Just 2 annual historicals and then started projecting out quarters but no way to reference seasonality or YoY growth on quarterly basis?
3) Seems like the middle ground is to build a very very simplified BS and CF with mostly catch all items (lumping things into other assets/liabilities, only one line for equity - any advice on simplifying cash flow statement (maybe my inability to conceptualize that is not good then)?
Others feel free to chime in, but in a limited time frame, I don't think a detailed revenue and cost build is key. They are probably doing that to test your modeling competency, and a balanced 3-statement should do the trick, Simplify revenue build to a single price X quantity formula, or even just an annual growth rate.
Models are there to understand value drivers and help you see the interconnections more clearly than on paper.
Your post is quite long, TLDR, are you talking about the typical Citadel 4+1 or other processes? If Citadel I can help you.
Yea that got too long, my bad! TLDR - could be the Citadel 4+1 or other processes. I have an in person modeling case with another firm, but am also in earlier rounds with pod shops so any advice here is great.
bump
Modi labore qui tempora dignissimos. Quasi corporis qui totam aliquid iste. Vero qui enim itaque qui. Debitis aspernatur maxime recusandae aut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...