IB An 1 Lateral: Most likely modeling test?
Interested in lateraling as an analyst 1. Expecting a model test but not sure what (dcf, lbo, m&A, is there a way to test three statement modeling(idk if that makes sense).
In any case, just wondering what is the most likely model test for someone at my level for such a role. Starting from scratch for dcf and m&a so i dont have much time to prep and I assume they wont let me know ahead of time what the model tests would be. Trying to prep for all possibilities, but just want to know what might be most likely.
Based on the most helpful WSO content, for a lateral Analyst 1 role, the most common modeling tests you might encounter include:
DCF (Discounted Cash Flow): This is a staple in most modeling tests. You should focus on understanding the mechanics of projecting free cash flows, calculating terminal value, and discounting them back to present value using WACC.
M&A (Merger and Acquisition): Often, this involves an Accretion/Dilution model, where you analyze the impact of a transaction on EPS. Be prepared to work with assumptions like purchase price, synergies, and financing mix.
Three-Statement Modeling: While less common as a standalone test, it could be integrated into other models. This involves linking the income statement, balance sheet, and cash flow statement. Logical assumptions and clean formatting are key.
LBO (Leveraged Buyout): While more common for private equity roles, some banks might test this. Focus on Sources & Uses, debt schedules, and IRR calculations.
To prepare efficiently: - Use WSO's Free Financial Modeling Lessons (url: https://www.wallstreetoasis.com/forum/job-search/guide-to-lateraling-in…) for templates and guides. - Practice with Accretion/Dilution models and DCF training guides available in the WSO resources. - If time is limited, prioritize DCF and M&A models, as they are the most likely for your level.
Lastly, keep your models simple and intuitive, as most tests are time-constrained (often 1-2 hours). Good luck!
Sources: please help Invited to Lateral On-Site Modeling Test. How To Prep for Op. Model/M&A/DCF?, Guide to Lateraling in 2021, Analyst lateral hiring MS - modeling test, Guide to Lateraling in 2021, Q&A: Corporate Banking to FAANG CD
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