Are PE 3 Statements Really That Complex?
Hi Monkeys,
I've been on the interview grind recently and have been doing some 3-statement LBO practice. I found a bunch of old resources on this website and online of mock modeling questions. They range from simple and easy to very robust and complicated. My question is -- how technical do these 3 statement models get for IB -> PE recruiting? I've seen LBO models with multiple layers of debt with PIKs and varied amorts, along with deferred tax calculations and goodwill impairments. I know a couple people in my group who have got offers and just by working with them I know for a fact that they do not have the modeling experience nor skill to model such constructs (not hating, just benchmarking against something I see on a day to day).
I get that MF models will probably be very expansive, but what about MM, UMM shops?
Hey, I don't have the answer, however, I would be interested in seeing the old resources you found. Is it possible to link me to it please?
the 3 specific things you mentioned aren't particularly complex. PIK, multiple layers of debt structures, DTAs / DTLs, and goodwill impairments are not particularly difficult to model. this sounds to me like an accounting understanding issue. it's all about getting how the three statements flow.
If you can do the hard ones, then you will be over prepared, which is a good thing.
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