ACCOUNTING & FLOW
If a company increases revenue by $100 with a 20% tax rate and no cash is collected, what happens?
Net income increases by $80, A/R increases by $100, and cash flow decreases by $100 from the working capital adjustment.
Why do we use enterprise value instead of equity value when comparing companies?
Enterprise value reflects total firm value and allows comparison independent of capital structure.
Why does a higher buyer P/E make a deal more likely accretive?
The buyer can use higher-valued stock to acquire earnings more cheaply.
Why do we use unlevered free cash flow in a DCF?
It reflects cash flow available to all capital providers.
Tell me about a time you worked under pressure.
managed multiple deadlines at once, prioritized based on urgency, broke tasks into steps, and delivered everything on time without sacrificing accuracy.
If depreciation increases by $10, walk through all 3 statements.
Net income decreases, depreciation is added back on the cash flow statement, cash increases from the tax shield, and PP&E decreases.
Why might a company with lower growth trade at a higher multiple?
Lower risk, higher margins, stronger cash flow stability, or better management
What is earnings yield and why does it matter?
Earnings yield is E/P and is compared to cost of capital to assess deal attractiveness.
What happens to valuation if terminal growth increases?
Terminal value increases significantly, raising overall valuation.
Tell me about a mistake you made.
I made an error in an analysis, caught it during review, corrected it, and created a checklist system to prevent similar mistakes going forward.
f inventory increases by $50, what happens?
Cash decreases by $50 because money is tied up in inventory, reflected as a working capital outflow.
Why do we use EBITDA multiples instead of revenue or net income?
EBITDA normalizes for capital structure, taxes, and non-cash items, making companies more comparable.
Why are stock deals often dilutive?
Issuing new shares increases the denominator in EPS.
Why is WACC used as the discount rate?
Valuation decreases.
Tell me about a difficult teammate.
I addressed the issue directly, clarified expectations, and focused on the shared goal to improve collaboration and deliver results.
If a company issues $100 of debt, what happens?
Cash increases by $100, debt increases by $100, no impact on net income initially.
How do you calculate equity value from enterprise value?
Subtract net debt and adjust for minority interest and preferred stock.
How can synergies turn a dilutive deal accretive?
By increasing combined earnings through cost savings or revenue growth.
Two ways to calculate terminal value?
Perpetual growth and exit multiple.
Tell me about a time you took initiative.
I identified an inefficiency, proposed a solution, and implemented changes that improved the process and outcomes.
f deferred revenue decreases, what happens?
Revenue is recognized, net income increases, and it’s a cash outflow on the cash flow statement
When would a DCF be more appropriate than comps?
When a company has unique characteristics or lacks comparable peers
What are the key steps in a sell-side M&A process?
Prepare materials, contact buyers, manage bids, negotiate, and close.
Why is terminal value so large?
It captures all future cash flows beyond the forecast period.
Why investment banking?
I’m drawn to the combination of analytical rigor, fast-paced execution, and the opportunity to work on high-impact transactions with clients.