how to prepare for lateral model tests

To prepare for lateral modeling tests for an M&A group in investment banking, here’s what you should focus on:

1. Core Financial Modeling Skills:

   • Ensure you're proficient in 3-statement modeling, DCF (Discounted Cash Flow), M&A modeling, and LBO modeling. These are commonly tested in lateral hire processes.
   • Practice building models from scratch under time constraints to simulate the test environment.

2. Specific M&A Modeling Preparation:

   • Focus on merger models, including accretion/dilution analysis, synergies, and purchase price allocation.
   • Be comfortable with transaction adjustments like goodwill calculation, pro forma balance sheets, and EPS impact.

3. Resources to Use:

   • The WSO Elite Modeling Package offers comprehensive courses on M&A, DCF, and other financial modeling topics. It’s a great way to refine your skills.
   • Utilize financial modeling templates available in the WSO library to practice and benchmark your work.
   • If you’ve already worked on LBO models, leverage that experience but adapt it to the nuances of M&A-focused tests.

4. Excel Proficiency:

   • Brush up on Excel shortcuts and ensure you can navigate and build models efficiently without relying on the mouse.

5. Mock Tests:

   • Simulate the test environment by timing yourself and working on case studies or templates that mimic real-world scenarios.
   • Consider WSO Mock Interviews or similar services to get feedback on your technical and modeling skills.

6. Additional Practice:

   • If you have access to lateral modeling tests from previous interviews or peers, use those as practice material.
   • Review valuation techniques like trading comps and precedent transactions, as these are often integrated into M&A models.

By focusing on these areas and leveraging resources like the WSO Elite Modeling Package and templates, you’ll be well-prepared for your lateral modeling test.

Sources: How to Navigate FT Recruiting: Learn from My Successes/Failures, Would you rather be in a TMT group or M&A group? Why?, please help Invited to Lateral On-Site Modeling Test. How To Prep for Op. Model/M&A/DCF?, Q&A: Corporate Banking to FAANG CD, https://www.wallstreetoasis.com/forum/investment-banking/how-to-prepare-for-restructuring-technical-questions?customgpt=1