How 2 git gud at techs (re: Ardea skilltest)

Got absolutely smoked in Ardea technical assessment. Realized that I actually do not understand technicals at all - have been going through the guides and have been doing not too bad in mock interviews so far, but this test was insane.

For someone who works at Ardea and/or who thought the skillset test was easy, can you please write a detailed breakdown on how you studied/prepared for IB interviews? People on this forum say “just do the guides” but clearly that isn’t enough, and if it was, how did you *do* the guides?

7 Comments
 

I also just took the Ardea skills test and got crushed. But that was a ridiculous test and most of the questions (at least on mine) were super advanced PE/M&A questions that will never get asked in an IB interview. Hope this helps

 
  1. How much do people in NYC spend eating out each week?
  2. Company F has revenue of $100M and a 30% EBITDA margin. Company G has revenue of $20M and 25% EBITDA margin. If Company F is acquiring Company G for 12x EBITDA and using 3x leverage on Company G, what is the pro-forma net income assuming 15% Company G expense synergies, 10% interest expense and 40% tax
  3. Company Z is acquiring Company W in an all-stock deal. Company Z has 10 million shares outstanding, $275 price per share and $115M of net income, and Company W has 10 million shares outstanding, $150 price per share and $80M of net income. How much in annual pre-tax (assume 40% tax rate) (dis)synergies must Company Z achieve for the deal to become EPS-neutral?
  4. Company X is acquiring Company Y for total consideration of $1 billion. Company X plans to finance the transaction with 50% debt and 50% stock. The cost of debt is 8%, and the interest is tax-deductible at a 40% tax rate. Company X's P/E ratio is 18x, and Company Y's P/E ratio is 14x. Assuming no synergies, will the transaction be accretive or dilutive to Company X's EPS?
  5. If Company X purchases 90% of Company Y for $900M of consideration, if Company Y's book value is $600M, what is the total goodwill, assuming no allocation to goodwill or intangibles?
  6. Company F has revenue of $100M and a 30% EBITDA margin. Company G has revenue of $20M and 25% EBITDA margin. If Company F is acquiring Company G for 12x EBITDA and using 3x leverage on Company G, what is the pro-forma net income assuming 15% Company G expense synergies, 10% interest expense and 40% tax rate
  7. Company G has a net income of S10, a share price of S10 and 10 shares oustanding. Company H has a net income of $5 a share price of $8 and 5 shares outstanding. What is the maximum premium Company G could pay for Company H without being dilutive? Assume an all-stock deal
  8. Private Equity Firm ABC is taking Company X private for a total consideration of $1.3B. Company X has two founders who want to keep their $200M combined stake in the company. Company X has $100M of EBITDA, a 40% tax rate and a 6% cost of debt. If ABC wants to use 4x leverage in their acquisition, how much equity would ABC have to invest in Company X?
  9. Using the data from the prior question, assuming a 7-year hold period, what would the company's ending debt balance be assuming 10% annual amortization and no voluntary repayment?
  10. Which typically returns a higher valuation, DCF or LBO?
  11. Using the previous question, what is the impact to the year 1 financial statements, assuming 10-year straight line depreciation and 8% interest?
  12. If you purchase $100 of PP&E in Year 0 using debt, how does this flow through the income statement and balance sheet, assuming a 40% tax rate?

Nothing particularly terrible, the time pressure just made it stressful. I have no finance background and could do all but two in the timeframe required. Not seriously considering Ardea so it was just practice for me

 

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