5 questions reported in Rothschild interviews, organised by the group that asks them. Every question carries a model answer and graded feedback on your own attempt.
Questions
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Model builds
Built in the spreadsheet grid
Merger models, accretion/dilution, purchase accounting and deal judgement. 5 questions
Common in restructuring, credit and corporate banking interviews.
Define the cash conversion cycle and its components. A company's CCC moves from 45 days to 70 days year over year, what would you investigate?
Tests whether you can think like an advisor rather than a modeler.
An acquirer can fund a deal with cash, new debt, or stock. Compare the three from both the buyer's and the seller's perspective, and explain what signal each sends to the market.
Follows directly from the DCF walkthrough. Terminal value is where the value actually sits.
What are the two methods for calculating terminal value? Compare them, and explain how you'd sanity check one against the other.
Tests whether you can reason about debt-like items rather than recite a formula.
Beyond debt and cash, what other items belong in the enterprise value bridge? Explain the principle you'd use to decide whether something is a debt-like item.
Separates candidates who understand the enterprise value bridge from those who memorised it.
A company owns 70% of Subsidiary A and 30% of Company B. How does each appear in the financials, and what does that mean for enterprise value?
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
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