Hi
I have a 4 hour financial modelling test for a company that does infrastructure deals and projects.
What should I expect? It’s nerve wrecking. DCF? LBO?
I cannot imagine either being 4 hours… My experience also doesn’t require me to do anything beyond simple DCF. Any help is strongly appreciated.
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For a 4-hour financial modeling test focused on infrastructure deals and projects, you can anticipate a comprehensive examination of your ability to construct and analyze financial models that are pertinent to the infrastructure sector. Based on the WSO Dataset, here's a breakdown of what you might expect:
Traditional LBO Modeling: Even though the focus is on infrastructure, some firms might still assess your skills through a traditional LBO model. This could involve building a 3-statement LBO model and possibly preparing a PowerPoint deck to present your findings. Given the time frame, this test would likely assess not only your technical skills but also your time management and prioritization abilities.
Infrastructure-Specific Modeling: More relevant to the sector, you might be tasked with creating a model that reflects the unique aspects of infrastructure investments. This could include:
DCF Modeling: While you mentioned your experience with simple DCF models, the test might require a more complex DCF analysis tailored to infrastructure projects. This could involve detailed projections of cash flows, considering the long-term nature and regulatory environment of infrastructure projects.
Preparation Tips: - Review Basic Concepts: Ensure you're comfortable with the basics of DCF and LBO modeling. Understanding the core principles will help you adapt to more complex or sector-specific models. - Practice with Sector-Specific Models: If possible, practice building or analyzing models that are specific to the infrastructure sector. Pay special attention to how these models handle long-term projects, government regulations, and funding structures. - Time Management: Given the 4-hour limit, practice managing your time effectively. Break down the test into manageable sections and allocate time accordingly. - Utilize Resources: Explore resources like Ed Bodmer's project finance exercises to familiarize yourself with infrastructure modeling. Additionally, reviewing guides and threads on WSO related to LBO and infrastructure modeling can provide insights and tips.
Remember, the goal of such a test is not only to assess your current modeling skills but also to gauge your ability to learn, adapt, and apply financial concepts to real-world scenarios in the infrastructure sector.
Sources: Interviewing For Infrastructure Investment Roles, Preparation for 2 hour LBO modelling test, Interviewing For Infrastructure Investment Roles, 2-hour Modeling Test for HF (Fundemental Equities) - What to expect?, How would you approach a 4 hour case study?
Probably three statement LBO with refi and waterfall would be my guess. Should be easy enough to also slap an DCF on top.
Assuming this is for an M&A role at bank - infra tests even at senior analyst level are extremely detailed and will require you to model most if not all of the following concepts:
Basically, if this is a for an M&A role, infra models are never just a simple 3-statement model with LBO/DCF
BIWS has a 3 hour LBO/DCF case studies something slightly more complex than those.
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