Case Interview PwC (Financial Services - Transaction Services)
Case Interviewcase studyCorporate FinanceFinancial ServicesM&APwCPwC InterviewTransaction Services
New answer on Feb 28, 2021
5 Answers
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Anonymous A asked on Jun 05, 2018
Hey all,
My name is Marco and I am currently appyling for an internship (6 months) at PwC in Financial Services (within Transaction Services). I already had an online assessment and I have now been invited for an interview (Frankfurt) in about a weeks time. On the phone the recruiter told me, that I had to expect a case study and a "regular" interview with partners/senior managers of the team I am applying to.
It's my first interview of this type and I wanted to ask you: What kind of case study could I expect? What could it be about and how do I approach (suggestions or links very much appreciated).
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School
Hi,
Corporate finance interviews are different from consulting and are usually much more technical and detailed in financial part. Usually, they give you much more time to prepare and do the model on paper.Depending on the company you'll need to:
Find the relevant information in P&L, Balance sheet, CF statement
Do the simplified valuation using NPV: calculate cash flows and make assumptions about growth rate and discount rate
Do the valuation using comps - you'll have to explain which comps you will use and why
Do the valuation of the synergies
Play with different scenarios (e.g. how the stock-price will change if the deal terms leak into media, or how should the companies behave in a bidding process)
There are two types of frameworks you may use:
Commercial due-diligence of the target company
Synergies calculation of two merging companies
Note also that it can be a mix of both.
1. For Due Diligence you can use the following structure:
Market
Size
Growth rates
Profitability
Segments
Distribution channels
Competition
Market shares of competitors and their segments (see the next point)
Concentration / fragmentation (Fragmented market with lots of small players is less mature and easier to enter from a scratch. Concentrated market is hard to enter but has potential acquisition targets)
Unit economics of the players (Margins, relative cost position)
Key capabilities of the players (e.g. suppliers, assets, IP, etc)
Company
Unit economics (Margins, costs) in current or target markets
Brand
Product mix
Key capabilities
Feasibility of exit (in case of a PE company):
Exit multiples
Exit time
Existence of buyers
Risks
2. For Synergies Calculation you can use the following structure:
Revenue synergies - here you calculate the synergies in price and quantity (depending on the case it may be new geographies, new products, new distribution channels, bigger share on shelves crosselling opportunities, etc.)
Cost synergies - typically you use a value chain structure tailored to the industry (e.g. supply-production-distribution-marketing-after sales support)
Financial synergies - working capital, capital structure, tax
Risks - major risks that can decrease the synergies (tip: don't underestimate the merging companies culture factor)
Total synergies potential in $, adjusted by risk (probability of failure)
While the basic consulting services have mainly classic cases (Market sizing, profitability, market situation, etc), financial consulting may have specialized cases as well. For example, Transaction has M&A cases (Basic accounting, Due diligence, calculating NPV on paper, calculating Stock basis and earnings & profits, etc).
The cases will be much more detailed in financial part. Depending on the company you'll need to:
Find the relevant information in P&L and Balance sheet
Do the simplified valuation using NPV: calculate cash flows and make assumptions about growth rate and discount rate
Do the valuation using comps - you'll have to explain which comps you will use and why
Calculate the share splits and price per share
I recommend finding someone from that practice and check the details of the interview in the particular department
Here are some good frameworks you may use:
1. For commercial DD you can use the following structure:
Market
Size
Growth rates
Profitability
Segments
Distribution channels
Competition
Market shares of competitors and their segments (see the next point)
Concentration / fragmentation (Fragmented market with lots of small players is less mature and easier to enter from a scratch. Concentrated market is hard to enter but has potential acquisition targets)
Unit economics of the players (Margins, relative cost position)
Key capabilities of the players (e.g. suppliers, assets, IP, etc)
Company
Unit economics (Margins, costs) in current or target markets
Brand
Product mix
Key capabilities
Feasibility of exit:
Exit multiples
Exit time
Existence of buyers
2. For Synergies Calculation you can use the following structure:
Revenue synergies - here you calculate the synergies in price and quantity (depending on the case it may be new geographies, new products, new distribution channels, bigger share on shelves crosselling opportunities, etc.)
Cost synergies - typically you use a value chain structure tailored to the industry (e.g. supply-production-distribution-marketing-after sales support)
Financial synergies - access to capital, restructuring, etc
Risks - major risks that can decrease the synergies (tip: don't underestimate the merging companies culture factor)
Total synergies potential in $, adjusted by risk (probability of failure)
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