Hello fellow monkeys. Recently, I decided to give up on buyside recruiting and stay on as an Associate in IB. I realized I simply didn't want it enough and just ran out of energy to dedicate to the search. I've also frankly enjoyed my time in IB a lot and look forward to continuing my path here. A big shoutout and thank you to everyone on WSO that gave me advice and helped me throughout the process. Feel free to AMA. A few months ago, I said I would drop the technicals I got throughout my process, so I am keeping this promise. I've gathered a bunch from myself and fellow friendly analysts
11 Feb 2021
Hey fellow monkeys, Wanted to ask all the folks who are in software investing - I've been through several interview processes for buyout shops (non-software focus), where I've been tested the typical technical questions including... - what are key drivers in LBO - walk me through calculation to FCF - what is one financial metric that is most important when assessing business - walk me through credit metrics - etc. However, I have an interview coming up with a software-focused PE firm (think top 3 software investors), and have never been through an interview process with software-focused firms
03 Apr 2020
Got this question at an interview and still don't know the answer: Interviewer: Do asset write-ups and write-downs affect pre-tax income, or only asset write-downs? Me: Both write-ups and write-downs will affect the income statement by increasing or decreasing operating income and thus net income Interviewer: So how come asset write-ups in a merger model decrease pre-tax income? Me: Because depreciation from the write-up lowers pre-tax income Interviewer: But wouldn't the asset write-up be incorporated to increase pre-tax income? Me: .................
18 Apr 2020
I have a set of M&A interview questions I like to ask. Interview Questions for Mergers and Acquisitions In my career, I've only had two analyst / associate candidates answer all four levels correctly without coaching. Most people can get Level 1 and sometimes 2. Fewer get Level 3 or 4 even with coaching. Thought process is more important than answer. Company A acquires Company B. Assume all numbers below are inclusive of premium and synergies. Beginner Interview Questions - Basic Accretion / Dilution Question: Company A has PE of 10 and company B has PE of 8. In an equity-swap deal, is the
03 Apr 2018
I'm a post-MBA Associate at a BB bank. I've been recruiting for PE and Corp Dev (tough jump to PE, I know). I have a corp dev offer in hand. I've also had final rounds with four different PE funds - and no offers. For all but one, I received feedback along the lines of "we are looking for someone more technical" or "someone with more technical skills." On the one hand, this is good and helpful feedback from interviewers - it's straightforward to keep practicing models, technical questions, etc. It's all about reps. I've been trying to up my game. On the other hand, I don't think I'm a total
25 Jun 2018
A friend of mine who was interviewing for a investment banking summer analyst position with a top-tier bulge bracket investment bank (in Hong Kong) got completely shattered by this unexpected question, "How do you structure an M&A/IPO deal?" After days of discussions we still could not find a plausible answer to this question. Would really appreciate if anyone on the forum can share any idea on this one.
21 Dec 2017
Hey guys, I've recently been referred by a friend for an M&A analyst position and got an email by an associate asking for coffee along with another analyst. Since they have my CV already, should I see this as a formal interview and prepare my technicals and qualitatives or is it just a pre-screening in which I should have a good story, some good questions to ask and be attentive? Thanks in advance!
23 May 2018
I am an incoming sophomore at a target school in the UK (Accounting & Finance major). I am currently applying for SA positions at BB's in London, and I have been using the following resources to prepare for technical interviews: 1. Investment Banking (Rosenbaum) 2. BIWS modelling course 3. M&I 400q's guide Is there any other resource that could be useful, or would I be better off just focusing on these three (for technicals)? Thanks :)
28 Sep 2020
The question explains it all. Made a couple of dumb errors on a technical assessment two days ago. Went and looked them up immediately and caught my errors. One on valuation and two in the cell references I input for excel Index+Match+Match and Sumifs. What do you guys think about a very brief follow-up email, saying I caught my errors and learned from them immediately?
22 Apr 2021
Hey everyone, I'm a sophomore comp sci and econ double major at a LAC, up till now I've been mainly networking and getting exposure to the industry so my technicals aren't even halfway there. My question is how much grind did it take from being clueless about running a dcf and answering every question about the three statements to being able to master them to a decent level? I prioritized 1)networking 2)behaviorals 3)technicals. Technicals are obviously important but I feel like if I don't have the first 2. I won't even have a shot to discuss the last one. Thank you!
22 Sep 2018
I recently encountered the following question and was a bit stumped. If any of you monkey's are able to lend a hand it would be much appreciated. Assume that the Sources & Uses is for the purchase of a company in which 100% of the shares are acquired and 100% of the existing debt is retired. Contingent Notes refer to a contingent obligation based on the performance of the company after the acquisition and are part of the acquisition consideration. Sources * Debt: 125 * Target Company Cash: 20 * Equity: 91 * Contingent Notes: 19 Total Sources: 255 Uses * Purchase Shares: 85 * Retire
27 Oct 2019
We all know the most dreaded part of an investment banking interview is the technical questions. Sure, you might be terrified of faking your way through the cultural fit stuff when you secretly hate the place, and yeah, you might be afraid of getting a question with no good answer, like, "If this is your dream job, then what happens if another firm gives you a better offer in five years?" Those are rough. But if you don't know what to say when some hard competency questions come your way, then you're dead in the water. Certain technical questions are relatively easy to prepare for, like "Walk
27 Aug 2015
I know bank debt is floating rate with maintenance covenants and principal + interest payments while high yield is interest only with higher fixed rate and lower in capital stack. In terms of returns, would bank debt or high yield debt provide a higher return for PE firm? Also, I got a question in an interview that I believe asked me what are the pros and cons of using loans vs. bonds to finance a company. Had no idea what he meant... is this just bank debt vs. high yield.
11 Aug 2019
For an insurance company that provides Property and Casualty specialty insurance through an external network of insurance brokers. Would greatly appreciate your insights on: technical interview prep lucrative career paths in insurance exit opps
23 Sep 2014
Really simple one that I've gotten a couple different places: two firms otherwise identical, one has more leverage, is its P/E higher or lower? (Yes, I've searched every WSO thread about this, and Here are my competing thoughts on this: Denominator: EBITDA is the same, levered firm has tax-effected interest expense so overall net income and EPS are lower. This seems to be pretty clear. Numerator: Here is where I get my head all jumbled up. Some different perspectives I've taken are: --if proceeds from debt are used to repurchase shares, then EV is the same, equity value is cut, but so are FDSO
10 Aug 2015
Seeing as many sophomores will only now start taking dedicated finance courses (or have taken very introductory coursework), how do technicals for sophomore SA positions differ from their junior-level counterparts? Are they usually much more basic?
19 Aug 2018
Hey Everyone, I have an upcoming phone interview with Qatalyst, this is my first phone interview and I want to be well prepared. I know my story, answers to "why tech" and technical knowledge is a given, however, I am not sure about which tech specific technicals I should prepare for and/or how deep. I know that I want to know how to value companies that have no revenue/no profit & what motives are behind M&A transactions in the tech sector (especially if the target isn't profitable). What other tech-specific technical questions should I prepare for? Thanks in advance, for your time.
17 Jun 2017
I'm looking at the WSO PE Interview Prep Course technical questions and #3 asks: "Tell me why each of the financial statements by itself is inadequate for evaluating a company?" One of the two reasons the guide states for the CFS: "The cash flow statement won't tell you whether the company's ongoing operations are actually profitable because cash flows in any given period could look strong or weak due to timing rather than the underlying strength of the company's business." I understand that the cash flow statement would not reflect the profitability margins of the company, but this has
15 Jul 2019
I know this question is very basic, but it would clear up a bunch of smaller misconceptions for me. Let's say Company A wanted to buy an 80% stake in Company B. Would the price of this 80% stake be derived from the Company B's Market Cap or Company B's Enterprise Value. Furthermore, would the price of this stake be as simple as .8(Company B market cap) or .8(Company B Enterprise Value). Thanks for the help!
15 May 2019
I received this question and just wanted to run it by everyone. What is the impact on a company's P/E, EV/EBITDA and P/BV multiples after the stock goes ex-dividend? P/E and EV/EBITDA are straightforward. P/E goes down and EV/EBITDA stays the same (if I'm correct). What is the answer for P/BV though? My answer was: - Price goes down by dividend amount - BV goes down by dividend amount - Therefore, no impact to P/BV Does the P/BV multiple that the company is currently trading at impact the result?
17 Apr 2015
Hey guys, hope everyone's staying safe with everything that's going on right now! With some of my extra time I've decided to brush up on techs with some questions a friend sent me. Below are some real questions from interviews that I hope will be useful for others who are also prepping. I'm not sure if all of these are right (especially 1,4,5,& 7), so I would appreciate if you guys could point out any mistakes/explain things in a clearer way for others if you think I overcomplicated something. Thanks! 1. You have a target with an EV of $100 million and a debt/total cap of 60%, a 50% premium on
30 Mar 2020
A DCF model values a company based on it's cash flows. A 3-statement model (AKA, an Operating model), gives a projection of a company's financial statements. How do a 3-statement model and a DCF model relate? Is it such that you use a 3-statement model to get a projection of a company's cash flows, and then plug those projected cash flows into a DCF to get a valuation?
01 Jul 2015
Hi everyone, Hope all is well with the coronavirus situation. I was having a difficult time wrapping my head around this concept: stock-based compensation/M&A deals with stock as a form of consideration both represent true costs to existing equity investors because the new shares will "dilute" their percentage ownership. I do recognize that their percentage ownerships will go down, as the number of shares will have increased. However, my concern lies in the fact that equity value has presumably increased as well at the same time when new shares come in (which represents cash flows going up)
16 Mar 2020
1) Would you use a ten year or a 20 year projection period for a DCF for a commodity company? *I was thinking since commodity companies can be cyclical industries, a longer forecast period could make sense... but I've never heard of a 20 year DCF before. and 2) Would you use debt from the balance sheet or from the cash flow from financing section to calculate EV? Would the cash flow statement debt provide more time sensitivity? Thank you in advance.
16 Nov 2019
Hey everyone, I have a a "30-45 minute math/finance phone interview" with a top tier prop trading firm. I'm planning on rereading Hull's book, but what kind of math should I expect for the most part? Thanks,
05 Oct 2013
I got a second round interview for a REIB team that specializes in JV Equity recapitalizations, Portfolio Sales, Asset Level Transactions, taking REITs private, and refinancing. I know that's a mouthful hahaha. I'm a senior graduating in May and I know they won't expect me to know everything, but I'm told that this interview will test my technical knowledge. Besides the basic metrics (NOI, cap rates, cash on cash), what should I prep for and what kinds of questions would you ask a kid if you were the Associate conducting the interview? Thanks brothas.
18 Mar 2019
Hey guys, anyone have perspective on technical assessment for post-MBA Associate (A2, A3) lateral hires - particularly interested in BB, likes of JPM, Morgan Stanley, Goldman and boutiques such as Moelis, Greenhill, etc.? Separately, are you hearing about expectation of considerable lateral movement in NY at the Associate level? I know bonuses were announced last Friday, presumably shuffling will start March 1st onwards. Not sure how movement will comp y-o-y.
10 Feb 2016
I have a first round (video call) with an EB for SA coming up, and I have heard it will be technical, but more "case" based and not straight out of the interview guides. What does this mean? Perhaps they will ask questions that could be applied to companies (i.e., "why would working capital be negative?")? Appreciate your help.
28 Apr 2018