LBO-Modeling Case Interview - Completed Model but Fucked Up with Iterations?
Hi,
I recently had an LBO modeling test at the offices of a fund. The test was 2 hours long, requiring me to project the 3 statements etc.
I did Ok and managed to finish the model on time, but when it was time to check that BS figures, change in cash, etc match, it all went to hell. Same with the IRR and exit sponsor equity calculations.
The iterative calculations kept going crazy and all the figures jumped back and forth, making it impossible to get any sense of the output of the model.
How should I have approached this? When turning off the iterations, most figures just went to zero, so that didn't help either.
This didn't happen to me when preparing for tests, so I have no idea how to solve this.
Thanks!
I've only ever seen this happen when there's a mislink and a cell references itself directly (as opposed to a circular reference). When that happens, iterative calcs get messed up and every time you hit F9 it recalculates using the value previously in that cell, making it more and more wrong every time. So it's entirely possible that your model was "right" save for that one mistake.
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