Anyone had a case interviewed with following topics? Precedent Transaction, Leverage Buyout,Comparable Company Analysis

corporatefinance Valuation
New answer on Dec 22, 2020
6 Answers
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Gurkan
Proficient
asked on Dec 21, 2020
Preparing for Bain interview

I am just wondering how much corporate finance-valuation knowledge we should be facing in the case interview. Valuation techniques (Cost of Capital, Comparable Company Analysis, Precedent Transaction Analysis, Discounted Cash Flow analysis, and Leverage Buyout analysis)

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Clara
Expert
Content Creator
replied on Dec 21, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

I would not worry to much about this. Indeed makes sense to have a look at valuation techniques, but more as an exercise inside a more conventional problem.

Particularly for MBB, it´s pretty clear where to focus:

1. Profitability cases- basic profitability framework.

2. Idea generation cases: for any specif issue

3. Growth cases: market penetration, new product launch, product mix change, etc.

4. Pricing cases

5. M&A cases

6. Valuation cases

7. Value chain cases

Hope it helps! Best,

Clara

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Francesco
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replied on Dec 22, 2020
#1 Expert for Coaching Sessions (3.600+) | 1.300+ Reviews with 100% Recommendation Rate | Ex BCG | 8+ Years of Coaching

Hi Gurkan,

It depends on the company, but normally for generalist roles:

  • You should know the three traditional valuation methods (DCF, comparables, sum of the parts)
  • You need to know that cost of capital impacts DCF and how
  • You don’t need to know LBO models

In most cases, the math part will be limited to a simple perpetuity formula, or to apply a multiple (eg EV/EBITDA or P/E) to the EBITDA or Earnings provided by the interviewer.

Things change if you apply for a specialist role related to corporate finance. In that case, you will normally be tested in-depth on valuation.

Hope this helps,

Francesco

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Ian
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replied on Dec 21, 2020
BCG | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep

Hi Gurkan,

While basic finance/accounting is required for casing, this level generally isn't. The concepts in general need to be understood, but the depth at which you're talking does not.

Of course, I'm speaking about a generalist role...if you're applying to a more finance/PE-based company/role AND you're applying as an experienced/expert hire you should absolutely understand how to use these concepts.

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Gaurav
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replied on Dec 21, 2020
Ex-Mckinsey|Certified Career Coach |Placed 500+ candidates at MBB & other consultancies
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Iman
Expert
replied on Dec 21, 2020
BCG | Strategy& |Roland Berger | Interviewed >100 candidates in formal hiring process

Hi,

It really depends on what firm / role your are applying.

If you are applying to strategy consulting firm then you just need to understand the concept and basic formula (e.g. perpetuity).

However, if you apply to a corporate finance advisory in a Big 4 firm than I guess you will need quite a detail understanding of the finance - valuation knowledge.

Best,

Iman

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Adi
CoachingPlus Expert
Content Creator
replied on Dec 21, 2020
Accenture, Deloitte | Precision Case Prep | Experienced Interviewer & Career Coach | 15 years professional experience

Hi Gurkan,

Generally speaking, with the cases, any deep functional/industry knowledge is not expected. Some understanding of topics you mentiond coupled with common sense & good structuring can do the job for you. But if you can afford to learn, the more the better :).

If you are applying to boutique firms or an experienced hire role in BIG4 things can change.

I recently coached someone for BIG4 Finance Transformation & another person for BIG4 Deals case interview- both at Senior Consultant positions. Both cases were long and specific to the finance/deals topics & required prior knowledge of these areas.

So, please check details with HR on what to expect and prep accordingly.

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Clara gave the best answer

Clara

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McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut
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