Special Sits Model

To prepare for a special situations model test, here’s what you should focus on:

1. LBO Practice as a Foundation: Based on the most helpful WSO content, practicing regular LBO models is indeed a good starting point. LBO modeling tests often overlap with the skills required for special situations modeling, such as understanding debt structures, cash flow projections, and sensitivity analysis. However, special situations models may require additional nuances.

2. Focus on Debt and Restructuring Scenarios: Special situations often involve distressed companies, restructuring, or unique financing structures. You should familiarize yourself with:

   • Capital structure adjustments.
   • Modeling scenarios like debt-for-equity swaps, distressed M&A, or covenant breaches.
   • Understanding how to model and analyze downside cases.

3. Timed Practice: As with LBO tests, being able to complete a model under timed conditions is critical. Practice building models from scratch within a set timeframe to simulate real test conditions.

4. Use Precedent Models: If possible, obtain precedent models from colleagues or peers who have worked on special situations. Recreating these models from scratch will help you understand the specific adjustments and assumptions required.

5. Simplify Where Possible: As highlighted in WSO threads, keeping your models simple and intuitive is key. Avoid overcomplicating with unnecessary details unless explicitly required.

6. Leverage WSO PE Guide and Other Resources: The WSO PE guide includes LBO modeling tests and templates that can be adapted for special situations. While it may not cover every nuance of special situations, it provides a strong foundation for modeling skills.

By combining LBO practice with a focus on distressed scenarios and capital structure intricacies, you’ll be well-prepared for a special situations model test.

Sources: 7 Practical Buyside Recruiting Tips for IBD Analysts, Guide to Lateraling in 2021, https://www.wallstreetoasis.com/forum/private-equity/wso-pe-guide-full-lbo-practice-test?customgpt=1, 3 Things to keep in mind for case interview prep: Fall Interview Season is around the corner, NEW Financial Modeling Training Courses