Citadel (Surveyor) Case Study/Modeling Test

ebitduh69's picture
Rank: Chimp | 8

Hey everyone,

I have a 4 hour in-house modeling/case study for Surveyor coming up. I was wondering if anyone has been through this process and knows what to expect? I am told that you only get to reference public filings and earnings transcripts. After the actual model is built you have to come up with a recommendation and then defend your findings.
-What exactly are you expected to build out aside from operating model and DCF?
-Do you build everything from scratch or are simple historical financials already inputted for you?
-How granular do you need to get with drivers? (e.g. do i need to build out depreciation and amort. schedules based on actual PP&E and intangible balances or can i just assumed % of revenue?)
-Are you allowed to access the internet? What type of research are you allowed to pull? Do they let you read equities research reports?
-Will I get access to databases (like CapIQ) to pull comp data?
-What type of questions to expect at the end?

Also not to think ahead too much here, but any ideas of what comp is like for analyst and associate roles?

Thanks for your help!

Comments (11)

Oct 23, 2018

Interested on this one too

Oct 27, 2018

-What exactly are you expected to build out aside from operating model and DCF?

Build the model but don't do DCF unless it's a specific case that requires DCF (e.g. tech company with no earnings currently, maybe some biotech with probabilities). Cost/benefit of doing a blown out DCF vs multiples isn't worth it.

-Do you build everything from scratch or are simple historical financials already inputted for you?

Not sure here. I'd guess the latter.

-How granular do you need to get with drivers? (e.g. do i need to build out depreciation and amort. schedules based on actual PP&E and intangible balances or can i just assumed % of revenue?)

Not that granular. Use % of sales unless mgmt tells you in the PR or transcript what to model for D&A.

-Are you allowed to access the internet? What type of research are you allowed to pull? Do they let you read equities research reports?

no, no, no. No internet, no outside influences.

-Will I get access to databases (like CapIQ) to pull comp data?

They may just give you a sheet with peers and you select which peers and which multiples to use.

-What type of questions to expect at the end?

Defend your thesis like there ain't no tomorrow, but be flexible and able to admit mistakes.

Also not to think ahead too much here, but any ideas of what comp is like for analyst and associate roles?

Depends on your performance and team performance. But higher than market.

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Oct 27, 2018

Sounds extremely intense, but pls keep us posted on how it goes. Good luck.

Oct 27, 2018

The thing I'd add is that there's no right or wrong answer. There never is in this line of work, as over a certain time you may be wrong with a recommendation, but over another horizon you make a good return.

What they're trying to do is see how well you can use various sources of input (filings, transcripts, press releases, etc.) to understand a company and build a thesis on a company. Dont be afraid to say "no recommendation" i.e. not sure what to do here. Just don't try to BS, they can smell it from a mile away.

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Most Helpful
Nov 1, 2018

I've done a few of these with different teams there and they were all quite different. You get a big binder with Ks, Qs, transcripts decks, and maybe peers. I ran out of time on every one, but passed about half and got an offer for a couple. Not having the PDFs to copy the historical is a really a time killer. I did much better, always passed, when I did NOT finish the 3 statement model but rather had a full income statement with thoughtful revenue and builds and cost builds, P/E multiple. You don't have time to build a beautiful 3 statement model and be able to discuss the model. They want to know if you can model technically and if you can understand a business and quickly identify key issues, risks, upside/downside drivers. My thinking was I could only prove one or the other given the time limit - if you build a good earnings model they'll be probably willing to assume you could build a 3 statement with more time. If you can build robust model but are at a total loss when they ask you to discuss - I'm sure anyone who gets there can do that and you'll spend the whole discussion saying "I didn't read that part". That was my thinking but depending on what the team is looking for it could certainly be dead wrong.

Other thoughts. Don't format. Read the transcript questions. Model each segment. Try to have a unit/price build and an incremental edit margin at least or better, cost lines tied to units/employees/store count/etc

Do not build a PPE schedule etc. balance sheet working capital items - just forecast as same % of sales as last year. Add some seasonality and comps fluctuations in your quarterlies. Just use adjusted numbers, don't waste time typing in the whole reconciliation. If FX matters, include a dummy line where you would put BBG FX if you had it. I've had an offshore drilling company (modeled monthly activity), retail store (beginning/opened/closed/ending store same store sales/opening and closing costs/per store cost items) and , media conglomerate (dunno, depends), diversified industrial company (backlog build, incremental margins, FX, SotP), pharma (mkt size, penetration, probabilities, patent expirys)

There will probably be some big "thing" they want you to pickup on (big risk or big opp) - I don't think they usually pick a name they're lukewarm/neutral on.

Fastest 4 hours of your life, stick to a schedule. 30 mins read 1qs/investor day deck, identify segments, drivers, issues. 1hr input historicals, 1 hr full income statement and multiple build and rev drivers with dummy assumptions, 15 minutes change drivers to guidance and make sure it's not fucked up. 30 minutes tweaking drivers and making a bullet list of why you picked assumptions and other things you noticed and addl research or data you would do. If you feel comfortable after that build a quick balance sheet (cash,ar,inv... then type in total current assets and back into the the plug for everything else. Repeat for lt assets with PPE and other; repeat for cl, lt liabilities. Shareholder equity as one line. Cf includes builds for
capex, buybacks, total debt pay down/raise, abc, dividend. Run everything off the is/bs and enter total cfo/cfinv/cfin for the hostricals, plug for "other". Obviously the particular company has important issues that require more detail. Don't build a DCF. Go in knowing a reasonable multiple range for each subsector, hopefully you'll get a comp sheet.

For you discussion copy all tabs and so you can tweak assumptions real time as you go through it with them but you'll still have your original assumptions so it's not like you're covering up errors or anything.

This was my approach, I don't doubt people will disagree with all or parts, but hopefully it's helpful. Good luck. It is not fun.

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Jun 15, 2019

How did the interview turn out? Also anything to add on the feedback from Anchor and Sonibubu? I have a similar interview coming up and I'm a 1st timer.

Are you expected to format your findings into a powerpoint/deck? or 1-pager?

Jun 19, 2019

Do they recruit undergrads or from IB?

Jun 20, 2019

They do.

Jul 1, 2019

Straight out of undergrad? Are you sure this is for their Equities HF/Surveyor and not for quant/trading. I know quant/trading definitely has undergrad pipeline but for fundamentals I was told they wanted MBA/post IB or PE, at minimum. If you know more info please share.

Jun 20, 2019

I meant out of IB. Not UGs though.

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Jul 2, 2019
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