Hi there!
I've been invited for a last round case interview in a position in a large corporation. The position is as investmend manager and deals with a very broad spectra of finance and business related areas.
The key responsibilties of the role is listed as (among others):
Developing business cases, modelling investments, project due diligence, setting standards, developing best practices as well as preparing decision material for executive management.
Ultimately ensuring a holistic view on profit, cost, revenue, commercial and strategic fit from a company perspective
I can see that current employees in the role lists these as their responsibilties:
- Financial evaluation of investments and divestments
- Risk evaluations and hedging analusis
- Valuation and modelling on sell side and buy side M&A deals
- Developing best prctice business cases and modelling tools
- Invesment case development
- Strategic business case development for commercial and operational projects
I will get a case that is 30 min prep and 45 min Q&A. What would be resonable to assume would be the case type from the above listed, how could a potential framework for solving look like and how to prepare for this?
Thanks a lot in advance!
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Type of cases in a somewhat hybrid role - preparation tips
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Top answer
Vlad
on Feb 28, 2019
Coach
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School
Hi,
I would prepare for the following:
- Due-diligence of the target company
- Synergies calculation of two merging companies
1. For 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
- Financial analysis (Profits, Revenues, growth rates, etc)
- Unit economics (Margins, costs) in current or target markets
- Brand
- Product mix
- Key capabilities
- Valuation
Feasibility of exit (If a PE fund):
- 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)
- 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)
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
Good luck!
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