How fancy does modeling get?
Hi guys,
For M&A/PE, how complex does the modeling you do get? I know there are comps, DCF, and LBO but are there other models you work with besides that?
Thanks!
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Obviously, it depends if you're a boy or a girl. But assuming you're a guy, the fanciest it would get would be white tie. It's typically just a smoking jacket and a pair of Tod's though.
Drexelalum, you're an idiot.
I've not once worn a white tie while modeling.
Check your pic over on the right Marcus... ha!
and this is why i keep coming back to wso day after day
The types of models will also vary based on the industry. For instance for financial institutions (FIG) the modeling is notoriously known to be more complex, as a lot of the finance terminology is not as applicable (some times they don't use EBITDA, etc).
There are also variations within the four main models. Accretion / Dilution, Purchase Price, among others. you'll learn these on the job and won't be asked that many technical questions during interviews, unless you study finance and/or had an internship.
Breaking Bankers
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...600 page models of companies undergoing bankruptcy/restructuring. various pieces of debt and equity-like securities, intercompany disbursements, etc.
depends on the companies involved. if you're modeling out a mid market tech company being sold to a slightly bigger tech company, then models won't get too complex or "fancy"
but if you're working through a restructuring model for a company LBO'd during 2006 involving dozens of private equity funds, unsecured bondholders, equity holders...
even "sponsor created" leveraged buyout models go out to 90 pages.
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