M&A Advisory Interviews
Practice Your Industrials Merger Model Online
Stop practicing with dead answer keys. Upload your Merger Model to SheetRank and our AI engine will instantly audit your math, catch disguised hardcodes, and trace your root-cause errors.
Why Industrials modeling is different
Backlog conversion, capacity utilization, and working-capital seasonality drive free cash flow — cyclicality demands stress cases on volume and pricing.
What a Merger Model actually tests
A merger model tests whether you can combine two companies' financials into a believable pro forma — allocating purchase price, layering in financing, and phasing in synergies realistically instead of just adding line items together. The hard part is usually the financing structure (how much of the deal is cash, stock, or new debt) and how that mix flows through to pro forma EPS.
Common Merger Model interview questions
What makes a deal accretive versus dilutive?
A deal is accretive when the acquirer's pro forma EPS is higher post-deal than its standalone EPS, and dilutive when it's lower. Roughly: it depends on the target's earnings yield versus the acquirer's cost of financing the deal (interest rate on new debt, or the acquirer's own P/E if paying with stock) — buying cheaper earnings than your financing cost tends to be accretive.
How do you treat goodwill in a merger model?
Goodwill = Purchase price − fair value of net identifiable assets acquired. It sits on the combined balance sheet as an indefinite-lived intangible (no amortization under US GAAP, but tested annually for impairment), while other identified intangibles typically do amortize and flow through the pro forma income statement.
Walk me through pro forma EPS.
Combine net income from both companies, add back any synergies (net of the cost to achieve them and their tax effect), subtract incremental interest expense on new acquisition debt (net of interest lost on any cash used), then divide by the pro forma share count — which only changes if part of the deal is stock-financed.
What you get on SheetRank
- Live spreadsheet IDE — build from a blank grid, not a template
- Hidden-scenario grading with ±$1 and 0.01% cap rate tolerance
- Hardcode firewall that catches disguised constants like =LOG10(10)*90
- Root-cause error tracing through your formula dependency graph
- Leaderboard rankings to benchmark speed and accuracy
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