How exactly do I actually prepare for modeling interviews? "Practice" is incredibly vague
As someone looking to make a move, I feel like I should do some additional prep for any incoming modeling interviews (obviously). My modeling skills are ok; not great, but ok. Problem is...I have no idea how to go about this.
I have a BIWS login, so there's that, but there's also hundreds of hours of videos to go through. Do I just...follow along with the videos? They don't really seem to be for practice, they just tell you what exactly to do. Where is the portion where I'd use those videos to actually have to think for myself?
I'm not even sure what it is I need exactly to practice. My accounting, for instance, is ok, but how do I put it to the test in a mock interview setting by myself? Do I just watch 50+ hours of BIWS on accounting, most of which I already know?
People always say "practice", which, ok, yes, I get that. But how ~exactly~ do I practice? I haven't come across any resources that seem to actually have room for thought, and are more just "let us tell you exactly how it's done". Advice? Any example of interview cases out there?
Go into the office on a weekend. Take any IM or FDD from a recent deal, sit down and do a quick and dirty lbo model in one hour. Once you've that down cold, do a fully functioning LBO model with bells and whistles in 3 hours. You're overthinking this, it's really not that hard.
After you practice this several times, you'll be able to build your S&U and debt schedules with ease. The rest of the model is easy to throw together. Practice = repetition. By the time modelling tests come round, you'll have your generic template baked in.
Well, that's kinda the trouble. My bank - a very small industry specific one - doesn't really use IMs all that often, and when they are, they are comparably limited, containing few pieces of financial data. So I don't know what kind of use that would be, unfortunately. This is why I feel my modeling needs shaping up in the first place - I feel [ie, I know] that my team doesn't really go for the financial/modeling side as much, since a lot of our clients tend to be smaller and/or have next to no financial information. As such, we focus more on a strategic sell than a financial angle, and then tend to use comps as a benchmark for coming up with a valuation range. So while I can, for instance, do a DCF easily enough in theory, I don't know if I'd be able to make a 3 statement from scratch, or if I could actually make a dedicated model in a time sensitive setting.
Well that's what you need to learn then, no?
Do you have an income statement and both a beginning and ending balance sheet? That's all you need to build a three-statement model, a DCF, and an LBO. It will be assumption-heavy and probably not very accurate, but we're going for practice here.
Use the 10k of a public company
No clue about the BIWS videos, but you might find it helpful just to start with youtube...this might sound stupid, but a lot of resources on there (e.g.
) are super useful, go into the right amount of detail (not too much, not too little), a broken down into easy-to-comprehend 5-15 minute videos and explain the concepts so well that my mom would be able to understand these within a couple of days.Furthermore, work through this http://www.streetofwalls.com/finance-training-courses/private-equity-tr… , especially the paper LBO and excel LBO parts.
When it comes to practice, you have to literally open a blank excel spreadsheet and re-built the stuff from scratch, eat, sleep, repeat.
If you do not know where to take financials from then just download the annual report of some blue chip corporate from their website (please do not use the filings from Snap(chat), otherwise your valuation skills are doomed forever...)
It's really not too complicated, I assume you are just overwhelmed by the vast majority of information that appears to be included in the BIWS materials. 3-4 hour modelling tests are really more an 80/20 kind of thing.
Don't ask Allen Iverson.
Go to SEC website, open up ANY COMPANY 10k. Use this as beginning of the model. Make functioning model. In the interview, they will tell you what they want, but the trick should not be actually making the model.
WSO makes some great guides....
I purchased the WSO PE guide. It's great and has everything you need - including modeling test and templates.
So it sounds like you need practice from the ground up so here's what I'd recommend. 1) Buy the book "investment banking " by pearl and Rosenbaum. Read the DCF and LBO section. 2) those sections show you step by step how to build an lbo model and DCF valuation. Do it. 3) once you've built said models download the 10k for a public company and run through the models. 4) practice with other company 10ks.
If you already have the macabacus guide then you know how an LBO / DCF model should look like.
Just take a public company's statements and try to replicate the above within a 1.5h timeframe. Assumptions are usually given to you so you can simply use historical averages for all the pół, capex and nwc parameters which are all that really influence the outcome of a model.
As you crank these you'll soon see what can actually be done within this timeframe (not a lot) and where you can cut corners. BIWS has excellent LBO and merger assessment center case study exercises you can also consult. It's really simple.
Of course the above is applicable to IBD modelling tests, PE ones are much more assumption focused as that's the core of the job.
Also, hit me up on PM if you have further questions. Went through something similar recently so happy to help.
Practice.
How exactly do I prepare for modeling? BIWS isn't very helpful (Originally Posted: 11/23/2017)
So I'm interviewing for experienced analyst positions, and suspect that they'll be giving me modeling tests. Now, the bank I'm at does some modeling, but not as much as I'm thinking they'll ask me about. Trouble is - I've never had any luck with trying to practice. I can get filings easily enough, and I've watched I don't know how many dozens of hours of BIWS videos, but I have 3 issues:
1) None of the BIWS stuff seems relevant for a 2-3 hour test, unless I'm very much underestimating the speed they're expecting me to go at during the test.
2) The BIWS is actually awful. Its all just a lot of "link cell B125 to cell H65", lots and lots of needless repetition, and it's just a mess. What do I even do, just... follow along step by step? I tried that, and I didn't feel like I was learning anything. I felt like I was just being told what to do. After all these hours, I don't feel like I remember any of it.
3)As comprehensive as it is, it still doesn't cover everything - I've come across filing items which don't appear to be brought up in the videos I've seen. It's either something which seems so simple when he explains it and then I instantly forget what to do, or something which he doesn't cover at all.
So as much as I'd like to "just model", as I've seen people advise here countless times, I don't know where to start there, I don't know how to handle speedbumps, and I don't know how to check my work in the end. Does anyone have any 2-3 hour modeling test actual examples they could point me to? I would really appreciate that.
If you link cells in column B to cells in column H you most certainly get all kindsa fuckups in yer model son!
FWIW I learned how to model on BIWS and found it to be very very helpful. If you understand the important concepts (i.e. projecting an income statement; adding back or subtracting non-cash impacts from the B/S), it shouldn't be difficult to simplify things for a 2-3 hour modelling test. In a 2-3 hour test, nobody cares about things like building out a full capex/depreciation schedule, or complicated purchase price allocations and PP&E writeups or writedowns.
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