Case study: ever do DCF, MA instead of LBO for interview?

Interviewing for small shop and will have a case study (5-7 days to prepare). I understand that an LBO analysis is the norm but the job description details DCF and M&A models and capital structure analysis. Should I be focusing my studies on these and not LBO? Thanks.

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Comments (6)

Jan 2, 2015

Given that amount of time, I would focus on 4 valuation methods: LBO, DCF, public comps and transaction comps. If you are familiar with the industry and there are industry-specific methods that may fit, feel free to use those too. Merger models won't be all that relevant in PE unless you're looking at something like an add-on acquisition to a portfolio company. Cap structure analysis will already be incorporated into the LBO and DCF, but you may want to have explanations for your assumptions.

Jan 2, 2015

Thanks for the reply! I meant after the interview I will have 5-7 days to complete the case study. As of now the first interview is not scheduled (recruiter setting it up). I have zero exposure to this stuff and want to spend my time studying for the possibilities. I will definately attack the 4 you mentioned, anything else you think?

Jan 2, 2015

Quality over quantity - it's not about the number of different methods you use; it's about knowing them well, making sure they make sense in the given case (for example, an LBO isn't going to work for valuing a start up), and knowing how to explain them and your assumptions.

Jan 3, 2015

nvm

Jan 3, 2015

An LBO is a much more useful DCF. Nobody uses a plain vanilla DCF.

Jan 2, 2015
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