To those of you have taken both, which one do you think was harder?
I took the Citadel one recently and have a Point72 model test (+ Wonderlic) coming up. I was not a fan of the Citadel model test being browser-based with such limited functionality. Does one test focus more on the a cash flow build, debt build, or PP&E, etc?
I can always pm you if you have intel on P72 and need intel on Citadel's test.
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With these tests, really focus on the revenue builds and how these assumptions filter down the statements. No one cares about your PP&E schedule if we're paying you to get the right EPS number.
P72 was an incomplete model that you had to fix up and calculate specific ratios.
Is a perfectly completed model what is required to get to the next round? For example, is a balance sheet that doesn't balance by a small amount, or if your ROIC is calculated incorrectly an automatic ding?
hardcode your goodwill and that fixes that! (JK... sorta)
I would get ROIC right though... I have never taken these but my impression from reading previous threads is that "income statement +" models are somewhat fine, where you may have the balance sheet drivers feeding through to a very basic BS (DIO, DSO, etc.), but run out of time on reconciling CF statement, and maybe just do some basic CF metrics as a bonus. The point seems to be that you should arrive at a place where you can talk about the range of earnings outcomes over the next few quarters (and your valuation ranges as a result) so that you can discuss the set up on the stock somewhat intelligently (ie: what key drivers and/or unit economics do we need to underwrite to make money here, why would this risk/reward be attractive or not)
del cos dox
Curious why you say you don't care about a good biz with expanding moats and cheap multiples?
.
When doing the in-person tests, I never get how one would have the time to do a good unit cost build. Topline, often you will get some company reported metrics by segment, or maybe included in the materials is something that will give you insight into this. ASP x volume - pretty easy to get there. Obviously depends on the biz, etc.
What you often don't see in these is granular cost builds. Is this sort of like general case studies where you come up with rough math to justify certain things - I expect certain % fixed vs variable? This is stuff that with all the time in the world, you can do a better job of ascertaining, but often times you never get there. Industrials you get incrementals/decrementals? Cost per xyz is rarely disclosed (energy? maybe if you have a subscriber count you can build this then?)
sell side models are typically trash here, and have simple QoQ changes to EBIT margins by xyz-bps. When you get detailed breakdowns from filings it can be more helpful, but this seems to be rarer.
Would it be possible if I could privately send you a writeup I have and get some feedback
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PM me - have been through P72 test and BD, would be interested to hear about Citadel
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