Big 4 TAS/Deal Advisory Job Responsibilities
Hey everyone! I just got a job offer as an associate in a big 4 firm in their TAS/deal advisory department, and I am not sure what to expect. One major aspect of the job is Transaction Due Diligence/FDD. I was just wondering what are some of the job responsibilities in this role and what can I do now to get up to speed when I join in a month, as I have no DD background at all and I am kinda worried. Any technical advice on how to prepare beforehand would be appreciated!
I work in corp dev for a f500 industrial company and we use a big 4 firm to do FDD on our larger acquisitions and divestitures so my insights below are from that perspective as opposed to someone who works in TAS / FDD.
Some concepts that would be good to learn / brush up on would be: 3 financial statements and how they link together, revenue recognition concepts, general ledger and trial balances, accrual accounting / reserve accounting for inventory and AR, non cash expenses.
My guess is your role will focus on QoE, NWC analysis / target setting, analyzing debt and debt like items.
QoE focuses on calculating a normalized / adjusted EBITDA figure to be used to apply a multiple to in order to value a target company. This process will consist of looking for non-recurring income / expenses, identifying inappropriate accounting policy or changes to accounting policy or accrual / timing issues, and also will look to identify non cash transactions. If you do a google search of 'Quality of earning EBITDA adjustments' or something like that i am sure you can find some good info there.
NWC analysis involves identifying a normalized / target level of working capital and understanding any seasonality of NWC levels for a company. If you google 'net working capital targets in an acquisition' you should find some helpful info there.
Debt and debt like items analysis consists of analyzing a target's balance sheet / trial balances to identify items that could be considered as debt and could potentially reduce the equity purchase price. If you google 'rsm debt free acquisition' the first or second link is a good whitepaper on this debt like concept.
If you learn all of the above concepts even at a basic level, i think you will be well positioned to hit the ground running.
Thank you so much, you are such a lifesaver! By the way, is all this done on excel meaning should I be well versed in that as well? Thank you once again!
No problem at all. Usually when we hire a firm to do FDD for us they provide us with a large data pack in excel covering everything i mentioned above, so i would say it is a good idea to learn the fundamentals of excel, some common shortcuts (especially for formatting and navigation throughout a workbook) and some formulas like lookups and different 'if' formulas would probably be the most useful that i can think of off the top of my head.
Consequuntur reiciendis sequi atque. Ullam quaerat delectus delectus odit.
Fugit sed at culpa distinctio nostrum itaque. Voluptas explicabo cumque id in consequuntur iusto.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...