Goblins,
We’ve released GOBLINMODE, an algorithm-driven learning mode which will show you different types of questions based on your feedback —-
We’ve also release a tag mode you can search by topic.
And below we’ve prepared an exquisite article on deferred tax assets & liabilities - commonly fumbled question.
Warm-up questions
☞ A company has $5BN EV and raises $2BN in debt. How does this affect the company's EV and WACC? - Evercore
☞ Where/how does a tax rate change impact the DCF? - PWP
☞ A acquires B in an all-stock deal with no synergy. A has a P/E of 20x and B has a P/E of 25x. Is the deal accretive or dilutive? - Morgan Stanely
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Weekly Exploit: DTA & DTL
There are really two scoreboards for profit: the GAAP income statement and the tax return, and they don’t always put the same revenue and expenses in the same period.
Stuff like deferred revenue is a good example: GAAP lets you drip it in as you deliver, but the tax rules often make you pull more of that prepayment into taxable income when the cash hits or at least sooner than GAAP would. Anytime tax makes you recognize more income or fewer expenses earlier than GAAP, you’re effectively prepaying tax and building a deferred tax asset; anytime tax lets you push income out or accelerate deductions versus GAAP, you’re underpaying now and building a deferred tax liability.
DTAs and DTLs are just the running tally of how much earlier or later the IRS is getting paid compared with what the GAAP P&L would suggest.
This Week: DTA & DTL
Master the core rule—DTA means "I paid tax early or have a credit," DTL means "I paid tax late"—then lock down 2–3 scenarios for each so you can explain why the timing difference exists
Answer what's asked, then stop—don't explain Section 179 or AMT adjustments; walk the IS → CF → BS mechanics cleanly and let them pull you into reversals if they want depth
Thread the full loop: timing difference creates the asset/liability, cash flow shows the tax paid vs. booked, balance sheet unwinds when timing flips—show you don't just know DTA goes up, you see how cash and GAAP tax diverge across statements
The scenario doesn't need to be complex, it needs to be traceable—interviewers test whether you can walk NOL or accelerated depreciation through all three statements without breaking, not whether you memorized every book-tax difference
→ Read the full article here.
Last Week: 3-Statements
Visualize BS (left), IS (middle), CFS (right) as one continuous flow—IS measures value creation on accrual basis, CFS adjusts to cash reality, both feed the BS snapshot; master this mental map and you have a systematic checklist for any walkthrough
Work at the Pre-Tax Income line, not Revenue—ask "how much does this change Pre-Tax Income?" then apply taxes to get Net Income; don't waste time on Revenue → GP → EBIT unless they specifically ask for those subtotals
Use CFO as the bridge between accrual and cash—start with Net Income, add back non-cash charges (D&A, stock comp), then adjust for working capital timing differences (AR/Inventory increases are cash outflows, AP increases are inflows)
Lock in the three linkages that tie everything together—Net Income flows to Retained Earnings, Net Change in Cash flows to the Cash line, and Assets = Liabilities + Equity must always balance; missing any of these breaks your entire answer
→ Read the full article here.
I ain't never goin' back.
Ever yours,
The Offer Goblin