PE Prep - Must Know Concepts
Dear WSO community,
As buyside recruiting kicked off / will kick off soon depending on regions, I thought it would be good to have a thread where everyone can provide a list of must know technical concepts to know before going into interviews / case studies. Once we gather some comments, I will extend the post in article format.
This will allow each person to discover their weakness areas and hence maximise their chances in the recruiting process.
Will add concepts I find important once I finish my day on the desk.
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Balance sheet stuff is so important and where I would spend most of my time (if you had to choose from the 3).
I think understanding the broad concepts of what’s happening in a deal is really important especially when talking through a case study. It’s great if you can model something out but when someone asks “what happens to the extra 100mm you spent on the business that isn’t included in assets on the balance sheet before you bought it”. Obviously it’s goodwill, but if you hadn’t thought about it so plainly before because you’ve only ever seen it in the context of a model - it could trip you up.
This goodwill example was one of the first questions I got asked in my process and there are countless other ones all in a similar vein.
What do you mean it kicked off? It hasn’t kicked off.
Concepts to know, feel free to add / comment as you see fit:
Accounting: basic & advanced, make sure you understand links between statements, how each items impact other stuff, capex, leases, working cap
Finance: LBO (with full 3 statements, goodwill, many different tranches or debt, management roll over, div recaps)
Commercial: prepare like MBB interview + stuffs relevant for pe
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