FT Analyst Investment Banking Modeling Case Study

I have recently been selected to a attend a super day at a middle-market investment bank shop and they told me to be prepared for a modeling case study. The entire Super Day is only supposed to be 5 hours with two meals included and 5 interviews so I am confused as to how much time I would have to build an actual model from base assumptions. Is anyone familiar with what this could entail?

 

They didn't say. Just said in the email to be prepared for a modeling case study and 5 30 min interviews. I did a banking internship and am prepared for ordinary technical questions but I have not done a modeling case before and would appreciate some tips/advice on what to expect since I have never had to do one yet. 1-1.5 hours does not seem like long enough to build and present a complete model.

 

Tips: -stay calm during, and remember that everyone else has the same amount of time as you do -do not get caught up on the small things (happens to me every time I take an addie) -for example, rather than projecting each working capital item on the BS to derive change in WC for DCF, estimate WC as a percentage of revenue (unless they specifically ask you to develop a three-statement projection model) -focus on showing that you understand modeling/valuation conceptually

 

In this case, probably make the assumption that D&A=Capex (which is normally the case for a mature firm, but in the absence of other clues would be the best guess).

As for the second part, not so sure without looking at the assignment. Probably look at how different D/E ratios affect your WACC (cost of debt determined by interest coverage ratio and corresponding credit rating).

Hope that helps.

 

You said you are using EBITDA - Capex - NwC as a proxy for FCF, why do you need standalone D&A. Also if you’re given EBITDA and op income, guess what you can solve for.

Is this a private company? Assume so since you were given a CIM and not public filings. Just get to Enterprise Value and don’t make any assumptions on capital structure.

 

bottom line is that you need more than 3 statements to do a real WACC calculation Either they are giving you more than you realize, or you aren't expected to do a full WACC calc.

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mebbe they give you comps ? in general u can just use the cost of cash/cost of debt/cost of equity structure (so costs are increasing w/ cash being cheapest) and tier them accordingly - obv u have the cost of debt so u can use that as benchmark for cost of equity comparing with dividend growth/dividends per share lol gud ?

speed boost blaze
 

I would think someone like Quickbooks/intuit makes a great deal of sense for this sort of thing. So do turbo tax, H&R block. TLDR: this is about understanding there are any number of tax/accounting software makers out there and something this specific makes sense as a add-on acquisition to complement their existing suite of products

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Best Response

A quick screen returned the following 30 companies that provide either accounting or financial software applications with TEV > $200 MM

• Intuit Inc. (NasdaqGS:INTU) • Sage Group plc (LSE:SGE) • Oracle Financial Services Software Limited (BSE:532466) • Misys Limited • Temenos Group AG (SWX:TEMN) • Longtop Financial Technologies Limited • Financial Technologies (India) Limited (BSE:526881) • Fair Isaac Corporation (NYSE:FICO) • Hundsun Technologies Inc. (SHSE:600570) • Advent Software, Inc. (NasdaqGS:ADVS) • SimCorp A/S (CPSE:SIM) • Tyler Technologies, Inc. (NYSE:TYL) • Net 1 Ueps Technologies Inc. (NasdaqGS:UEPS) • Fidessa group plc (LSE:FDSA) • Kingdee International Software Group Co. Ltd. (SEHK:268) • Bottomline Technologies (de), Inc. (NasdaqGS:EPAY) • s1 Corporation • Orc Group AB • Reckon Ltd. (ASX:RKN) • Silverlake Axis Ltd (SGX:5CP)

Would start with these

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Hey Westboundanddown, I'm the WSO Monkey Bot and I am sad to say, but this thread is lonely, so thought I'd post in here to try and help out. Some potential topics that might help:

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