EY S&T valuation interview help!!
I recently had an interview for S&T valuation position at Ernst & Young and looking for what advice on what I can expect to encounter in the following interviews. Will I be asked technical questions? Behavioral? If presented with a case study, is there a way to practice? Is there anything I should focus on studying? They asked me how I would value a private firm and I answered in the first interview. So how much more in depth can it get? Please let me know I could use the help!
I interviewed for Summer 2021 and received the offer. They do three interviews in the Superday, the first being purely behavioral with the partner. The second is purely technical, know you’re basic valuation stuff for this, know the three income statements and how they work, they ask all the most basic technical questions, purely memorization. Finally, the third interview is situational, they’ll ask you about things going on in the market and how that may affect their clients or how you may go about valuing a certain asset of a company.
Honestly a pretty easy interview, I messed up in the technicals and I wasn’t at my best in the situational and I still received the offer. Just make sure you understand what the role is and what you’re getting into.
EY Strategy & Transactions is the rebrand of TAS and they make the Valuation group sound like M&A work but really it’s just audit work. They have extremely high turnover due to low pay, little-to-no bonus, and terrible culture. I will say, during my interview, the people I interviewed with were great and extremely nice.
I spoke to multiple analysts and they advised me to turn down the offer due to these reasons. However, those analysts told me, and as you can probably find multiple threads on this, people can use TAS to lateral into IBD roles and there was one analyst who was able to break into a PE shop from EY TAS so take what you will from that.
Thank you for your detailed response. Were the technical questions the same as IB technical questions? Im just thinking of the basics: WACC, ROE, ROIC, IRR? I cant really think of anything complex. For the final interview, if their clients are privately owned businesses do you think I should expect more questions on NAV or on market related issues. Moreover, define little pay?
Not even that complex. Here’s a list of all the topics they asked me about and it was very surface level:
-Three financial statements and how they link together
-Equity Value versus Enterprise Value. Other valuation multiples such as EV/Revenue, EV/EBITDA, EV/EBIT, and P/E (same as Market Cal / Net Income). Was literally asked to just list these lol.
-Know the three valuation methodologies (Comparable Company a.k.a. “Public Comps” or “Trading Comps”, Precedent Transactions a.k.a. “M&A Comps” or “Transaction Comps”, and DCF). They asked me when I’d use a comparable company versus when I’d use precedent transactions and they asked me to walk them through a DCF which is super basic
-Three ways to increase IRR for a PE firm are:
1) How much the PE firm pays: buying at a lower entry multiple, or selling at a higher exit multiple
2) How the PE firm pays: what’s the max debt load without going bankrupt? More debt = higher IRR
3) How the company performs: the more free cash flow it generates, the more debt gets paid down, which means more equity upon exit for the PE firm
I received no questions about NAV. Just one question about the market which was “Tell me about a story you’ve been following related to the market. This could a specific stock, company performance, or anything that has to do with the market.” I think I talked about how a specific retail store that was struggling prior to the pandemic had turned their performance around by not just pivoting to an online model, but also transforming their supply chain and improving brick-and-mortar sales.
So the analysts I spoke to said starting salary was $70K and they received a bonus in 2019 for $2K but that was it. No bonus 2020 and they said they had been told not to expect one for 2021 either. Now I know this isn’t like super low but compared to other finance jobs, it’s not that great. Especially because they still work on average 70-80 hours a week. It’s basically accountant comp.
They had us all in the main room but there were over 50 people in the zoom call and they put us into our own breakout rooms and the interviewers would rotate. So I saw the other candidates but I have no idea who I was up against because I didn’t know what groups everyone was interviewing for. We didn’t interact with the other candidates.
Got your PM. Will respond.
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