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April 30, 2024
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Not sure if this helps since you already did the "Case" interview.
Though I can speak for Canada.
First Interview: preliminary call, walk through resume....etc. Second Round: Meet the team, probably an Analyst/Associate and one of the Managers or Partners Third Round: Case study ( see details )
I think it was 1.5 hours
Page 1. Short little P&L which gives you line items to go through and know what generally goes on a P&L. Gross profit, interest expense, SBC, Capex (which you'll derive depreciation), WC (which you won't include)
Page 2. Multiples, though they may break it down as multiples as a % of EBITDA, (EBITDA/Total shares) etc.. Just learn permutations on how to reconstruct a company on multiples.
Page 3. DCF, Basically remember what Turns/DSO/DPO and all that is and how to convert it to % of COGS and Revenue.
As for a different case: Not personally with Deloitte, though often since it's 99% sell side M&A and accounting focused, speaking from other accounting groups. A lot of reading through CIM's and putting together a teaser or making notes of what are "points of interest"
Generally focus on: Recurring Revenue, Margins, Profitability, "the story", Back of envelope valuation, and ALWAYS check EBITDA adjustments, since typically Big four do Mid-Market deals ($20-$150/$200) and all firms will likely be entrepreneur owned and operated.
If you have any specific questions let me know.
Best,
Thanks for the great tips.
Where you describe the 3 pages is for the case with Deloitte, right? Did you practise with material beforehand? I reread Damodaran on Valuation but I think corporate finance by Berk & DeMarzo might be better to retrieve knowledge. Or any other books/websites/cases you can recommend?
I have a question regarding the DCF model. Do you use CAPM to compute the discount rate for the FCFEs? I also recall hearing something about WACC and this leaves me wondering as you are an equity investor and do not value the entire firm (in this case it would be FCFF). Is FCFF used at all in M&A? I am unsure whether to use FCFE with CAPM discount rate or FCFF with WACC discount rate.
So far I have attended the inhouse day and had an interview with recruiter and analyst. Next final interview will be with two consultants and making the case (total time will be 2 hours), so no I did not make it yet.
Once again thank you for your time.
Kind regards,
bump
Hey,
For the cases yes, that was Deloitte. I guess you can call it 3 cases, though it's really just 1,5/2 hours to solve what they throw at you.
Damodaran is useful, though the cases you typically get during interviews are more brick and motor. Nothing fancy, but you need to think quick, expect maybe 1 or two tax type questions (50% of D&A is tax deductible, disposal of assets (not subject to cap gain tax up to 50%)).
I'd say Wall Street Prep would suffice, know how to do a financial statement model and practice your shortcuts and copy formatting since you'll likely modify what they give you. I'd say take small case studies you can find online even if it's an LBO and just practice that. check a site named (Ivey) or you might find things on this message board.
DCF's sure you can use FCFE, though generally you'll do it un-levered. reason being is you'll want to have your EV, its just simpler to go from there and comparable on your multiples as a sanity check.
DFC WACC, which means EBT + D&A - WC - CAPEX -/+ non recurring items. (yes you may get add backs on Stock based comps though I doubt they'll be dicks and it's arguable to be left in anyways). [No one call me out on the formula it's case by case.. i'm aware i'm just putting generalities]
Odd's are they'll give you the following (based on 3 accounting firm M&A case interviews) Un-levered beta, tax rate, cost of debt risk free (maybe a nominal and real) and beta. You'll basically be expected to lever or un-lever and re lever the firms beta. Just learn your formula's and you'll be fine.
** Quick note, they generally don't expect you to finish it, but they do expect 100% accuracy. You'll be competing about 2nd year audits who have basic understanding of excel but 100% certainty in the line items they insert.**
TLTR; case, know how to construc a P&L, model and project based on FSM, know a tax item or two, use un-levered and know how to lever and un-lever a beta. be quick, they don't expect you to finish it.
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