Goldman Sachs Interview Prep

Walk me through a dcf

1. Calculate Stage 1 Free Cash Flows

   • Project revenue, expenses, and working capital to get to EBIT.

2. Calculate Terminal Value (TV) (Exit Multiple Method or Perpetual Growth Method)

   • This represents the value of the company beyond the forecast period.

3. Discount Cash Flows & Terminal Value

   • Find the Weighted Average Cost of Capital (WACC) as your discount rate, reflecting the firm's risk.

4. Calculate the Enterprise Value (EV) & Equity Value

5. Find the Implied Share Price

   • Divide the Equity Value by the fully diluted shares outstanding to get the intrinsic value per share

We start by forecasting our stage 1 free cash flows, then we calculate the value beyond that, which would be the terminal value, then take the discount rate and discount back both our stage 1 and stage 2 cash flows, and our terminal value, then we subtract debt from enterprise value and add back cash to get equity value, then divide equity value by the number of shares to get price per share

what are the three financial statements

Income statement, cash flow statement, and balance sheet

Why Guggenheim? and why PCA

Well, Guggenheim is a leading investment bank that has defined the industry. I know Guggenheim carries the qualities of Tenacity, endurance, and exceptional execution. All qualities that I embellish. Additionally, Guggenheim’s 2025 performance has also caught my interest, as the year was defined by technology, globalization, and ambition. Now, when it comes to my interest in PCA, it really sparked my interest when I was working on my internship at Welsh Carson Anderson & Stowe. Working with valuation methods, investment theses, and being on the buy side of deals was so fascinating to me. and thats what really sparked my interest into PCA, I want to work as the intermediary between PE firms and the businesses they are looking to acquire. I feel I am well-equipped to tackle any of the challenges that may come to private capital advisors because of this.

Why this sector?

Yeah, another great question. During my internship this past summer at WCAS, I was placed in their healthcare sector and was introduced to so many different aspects of the branch, whether it was building an investment pitch for payor/ provider services or analyzing the risk factors in HCIT. It was all fascinating to me, and I’m positive I can take what I’ve learned there and apply similar ideas to the work done here at Goldman Sachs.

Why IB?

What draws me to investment banking is the combination of rigorous financial problem-solving, high-stakes decision-making, and direct exposure to how strategic transactions actually shape businesses.

Explain what enterprise value is in plain english

Enterprise value is how much an individual or firm would pay to acquire the entire asset, versus just one particular component of the asset (enterprise value = equity value + debt - cash)

Explain what equity value is in plain english

The value that sits beyond the debt once the debt is paid off plus the cash from business operations (equity value = enterprise value - debt + cash)

Walk me through the 3 financial statements.

“The 3 major financial statements are the Income Statement, Balance Sheet and Cash

Flow Statement.

The Income Statement presents the company’s revenue and expenses, culminating in Net Income, the final line on the statement.

The Balance Sheet shows the company’s Assets – its resources – such as Cash, Inventory, and PP&E, as well as its Liabilities – such as Debt and Accounts Payable – and Shareholders’ Equity. Assets must equal Liabilities plus Shareholders’ Equity.

The Cash Flow Statement begins with Net Income, adjusts for non-cash expenses and working capital changes, and then lists cash flow from investing and financing activities. At the end, you see the company’s net change in cash.”

Can you give examples of major line items on each of the financial statements?

For the income statement, Revenue, Cost of Goods Sold, SG&A (Selling, General & Administrative Expenses), Operating Income, Pretax Income, and Net Income.

For the Balance Sheet: Cash; Accounts Receivable; Inventory; Plants, Property & Equipment (PP&E); Accounts Payable; Accrued Expenses; Debt; Shareholders’ Equity.

For the Cash Flow Statement: Net Income; Depreciation & Amortization; Stock-Based Compensation; Changes in Operating Assets & Liabilities; Cash Flow From Operations; Capital Expenditures; Cash Flow From Investing; Sale/Purchase of Securities; Dividends Issued: Cash Flow From Financing.

How do the 3 statements link together?

“To tie the statements together, Net Income from the Income Statement flows into Shareholders’ Equity on the Balance Sheet, and into the top line of the Cash Flow Statement.

Tell me about a trend or event you learned and still follow from your experiences and internships.

One trend I was exposed to during my internship at Welsh Carson was the growing importance of liquidity management in private markets, especially as interest rates increased and exit timelines extended. While working on healthcare-focused private equity projects, I saw how strong underlying portfolio companies didn’t always translate into near-term liquidity because distributions slowed and exits became less predictable.

That experience made me start paying closer attention to the growth of the private capital secondaries market as a structural solution to liquidity constraints. I’ve continued following how LPs are using secondaries to rebalance portfolios and manage the denominator effect, and how GPs are increasingly turning to continuation vehicles to hold high-quality assets longer while still providing liquidity.

What I find particularly interesting is how secondaries have evolved from being seen as distressed sales to a more normalized portfolio management tool, even among top-tier sponsors. I still follow this trend by tracking GP-led transaction volumes and reading commentary on how secondaries pricing shifts with changes in interest rates and exit activity.

That intersection between private market fundamentals, liquidity dynamics, and bespoke deal structuring is ultimately what draws me to Private Capital Advisory at Guggenheim.

walk me through a LBO

first we buy a business and we pay a multiple of EBITDA to buy, then we fund the business with a combination of debt and equity, after that we get the cash flows of the business as the owner which we can use to pya dow debt, then we sell the business at a multiple of EBITDA, then pay off the lender and and keep the remainder, then finally we assess the returns