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Stage 12 (2021) “Consultant’s Nightmare”

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Stage 12 (2021) "Consultant's Nightmare"

Consultant's Nightmare

Consultant’s Nightmare is an actual case from the Financial Modeling World Cup 2021, Stage 12 (December 17-20) competition. This case is a simplified version of daily tasks that can be expected from a Transaction Service consultant in a valuation project.

Case description:

The main goals are to perform a valuation of AirMother Inc.’s 100% equity value as of September 30, 2020, using income and market approaches; to create monthly Income Statement and Balance Sheet summaries for the 33 months period from January 2018 to September 2020 using provided General Ledger data, and to adjust historical results for the effects of the global pandemic and other adjustments before beginning valuation.

AirMother Inc.’s owner and CEO has approached the consultant to evaluate the potential buyout of the company and the delisting of the company’s shares. The consultant must estimate the fair value of AirMother Inc.’s equity as of September 30, 2020, using income and market approaches. There is a need to analyze 33 monthly general ledger data to create monthly Income Statement and Balance Sheet summaries. Adjustments are required before conducting the valuation such as eliminating the impact of Project X4 on the Company’s EBITDA and accounting for the effects of the global pandemic on the Company’s gross profit. Also, the market approach valuation requires the use of pandemic-unaffected earnings, which the consultant must calculate for the peer group companies.

The downloadable file consists of the following:
Task: PDF file with Case Materials; PDF file with Questions; 2 Excel files with case data and assumptions
Solution: Excel file with full Solution Model; PDF file with correct answers in bold

This model awarded 500 regular points + 150 Extra Points for the bonus questions, while the whole 2h Stage allowed to earn 1,200 points in total.

For your questions/suggestions/consideration please reach out to the Organizing Committee of the Financial Modeling World Cup at info@fmworldcup.com
You can also buy tickets to participate in the future FMWC Stages here.

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