What happens if it doesn’t balance?
Currently interviewing at diffrent PE/Growth shops and was wondering how much of a problem it is if my balance sheet doesnt balance on the model test?
Thanks
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Whole firm gets fired, don’t be the first one to fuck this up.
Lol, meant that if flow is generally good but you forgot to include an item or two (selected wrong yrs etc)
Mine didn’t balance and I still got the job. I did explain exactly where I screwed up, was humble about my mistakes, and did well everywhere else. It’s not the end of the world
If you knew why it didnt balance, why didn’t you fix it before submitting? I feel it’s like forensic work to get to balance if it doesn’t at origin
It was a time crunch situation and I messed up on the goodwill situation (see comments below). I figured out the exact issue ~10min after the end of pencils down
I think it depends to what degree it didn't balance. When I'm reviewing and I can trace the error to 1 or 2 root causes that are understandable during a time crunch, then that's generally okay. But if it doesn't balance because it seemed like you had no idea what you were doing, then that's obviously a very different issue.
You're going to jail
Assuming you're already somewhat prepared, the only reason why your BS wouldn't balance should be because you fucked up the Purchase Price calcs / goodwill and/or debt OID. Both of which are understandable in a time crunch, and I personally wouldn't really ding anyone for it (honestly just make goodwill the plug if you can't get it to work).
But if it's stuff total fucking up other basic shit...then that's just tough. If you're in a total time crunch, you also don't have to drive off AR/inventory days, etc, and just do % of Rev / COGS. Not ideal, but that way you won't fuck something up and not be able to fix it in time.
Maybe a stupid question but assuming a 100% cash sweep and interest is calculated as interest rate times average of year-start debt balance and year-end debt balance, Excel tells me that this is a circular calculation (what it is). How can I solve this (just enabling circular calculations seems wrong to me…)?
You’re asking why excel thinks an inherently circular calculation is circular? Circular calc option exists for a reason. If you don’t like it, drive interest off beginning balance to eliminate it…
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