Exhibit 01 · A real report
A score alone doesn't tell you what to change. Below is a complete, unedited report from a real 25 minute interview in July 2026: every question, what the candidate actually said, and three better ways it could have gone.
This is one of my own test runs, on one of our own cases. Nothing below has been edited, including the places where it marks me down.
Chang Liu, founder. Former McKinsey Engagement Manager and interviewer; received offers from McKinsey, BCG, Bain, and PwC Strategy&.
What a report contains
Case report
Mergers & acquisitions · 25 minutes · 6 questions · spoken, live · July 2026
6.7
out of 10
Solid
The four dimensions
You structured the opening into four clear buckets: the kombucha market, PureSip profitability, synergies, and deal economics, and each carried real sub structure (full P and L, revenue versus cost synergies, comps versus NPV, and financing mix). You prioritized sensibly, saying you would start with the market and then move toward whether the 112 million price works. The framework was comprehensive and tailored to an acquisition, though the market bucket stayed at size, growth, and competitors without reaching the durability of the health shift or category consolidation angle.
Went well
You built a genuinely MECE deal framework with the right top level buckets for an M and A case and populated them with concrete sub items rather than textbook headers, and you carried the thread that the whole evaluation resolves into whether 112 million is justified.
To improve
Push the market bucket past the obvious. Beyond size and growth, ask whether the health conscious shift is durable and whether the category is consolidating around a few scaled brands, since that changes what a regional player like Ridgeline can win. Naming those would have made the market analysis as rich as your synergy and deal economics work.
You drew the right so whats off the exhibits: you caught that 23 percent growth against a 27 percent category means PureSip is losing share, and you noted the margin climbed from 4 percent to 10 percent while flagging that 10 percent is still low. On synergies, though, you first framed distribution as a cost lever and only reframed it as a revenue driver after the interviewer nudged you toward what it does for PureSip's top line. That reframing is the sign you had sound, ordinary intuition rather than the differentiator level read.
Went well
You oriented to each exhibit before diving in and consistently landed a clean interpretation, most notably the share loss story, which is the strongest single argument against the price.
To improve
The insight to reach on your own is that Ridgeline's mainstream grocery and convenience distribution is the reason this deal is worth more to Ridgeline than to a financial buyer, which is a revenue lever above all. When you brainstorm synergies, ask for each one whether a plain investor could claim it too. If yes, it does not justify a premium. That test would have pointed you straight at distribution as the strategic centerpiece.
Your arithmetic was clean and correct throughout. You computed EBITDA of 3.2 million, a 3.5x revenue multiple, and a 35x EBITDA multiple, and you correctly flagged the EBITDA multiple as sitting above every comp.
Went well
You knew exactly what to calculate and when, executed every number cleanly, and interpreted each result in context rather than stopping at the figure, especially the margin conversion insight on the synergy exhibit.
To improve
Take the payback logic one step further by inverting it: at 7.4 million of EBITDA, the price that clears a 5 year payback is about 37 million, which sits below the entire comp range. Computing that would have shown that the gap is structural, not a negotiation, and would have anchored your recommendation in a hard number.
You consistently led with structure, opening with four buckets, labeling the synergies as two revenue and two cost, and stating your approach before calculating, which made you easy to follow. Your pace sat around 145 words per minute, right in the conversational range, and you stayed composed across the case. What holds this back from top marks is a recurring pull toward validation, closing many turns with questions like whether that sounds right, and shifting your synergy framing mid answer rather than committing first.
Went well
You signposted your structure clearly and were organized and articulate throughout, walking the interviewer through your logic in an orderly way.
To improve
Trade the validation checks for commitment. Instead of ending with does that sound right, state your read and move: for example, the price is rich on earnings, so next I want to size the synergies. If you want a sanity check, ask a directed question rather than an open one, which keeps you in the driver's seat and reads as more client ready.
The one thing to fix
State your read and your next move before inviting any check, so you drive the case rather than wait to be told you are right.
Watching for next time
Next time, when you brainstorm synergies, sort them into revenue and cost and then ask which ones only a strategic buyer could capture, and lead with that lever as the deal's rationale before touching any numbers.
Practice next
Practice more M and A and investment cases with a synergy exhibit, and drill the habit of asking, for every synergy, whether a pure financial buyer could claim it too. That single test will train you to surface the strategic rationale, here distribution, without being nudged.
Your recommendation
You gave a clear no at 112 million and supported it with the 15 year payback missing the 5 year bar by about three times, then honestly acknowledged the deal looks attractive on industry multiples and named the risk that a competitor could buy PureSip. It would have been stronger to carry the losing share finding into the verdict and to name the price that actually clears the bar, so the CEO hears not just that the deal fails but exactly where the numbers would need to land. Your next step of exploring building capability internally was reasonable, though a partnership or co packing route to capture distribution would have been a sharper alternative.
Strengths
What to work on
All six questions, in the order they were asked
01
Framework
“The CEO wants to know whether Ridgeline should acquire PureSip for $112 million. How would you structure your evaluation of this deal?”
What you said
You proposed four buckets: the kombucha market, profitability of PureSip, synergies, and deal economics. You added sub level detail under each, including revenue and cost synergies, and noted you would compare the $112M price to NPV of future margins or comparable deals. You closed by saying you would start with the kombucha market.
Went well
You correctly identified the deal economics bucket and named comparable transactions as a valuation tool, which is exactly the right instinct for an M&A case. You also separated revenue and cost synergies within the synergies bucket, which shows you understand that the two types of value creation are distinct. Naming production consolidation and shipping as cost synergy examples was appropriately specific.
To improve
Your four buckets are reasonable but stay at the generic M&A checklist level. The rubric separates great from decent answers on whether you engage the $112M price relative to $32M of revenue right in the opening, and whether you name Ridgeline's distribution network as the specific strategic lever that makes this deal worth more to a strategic buyer than to a financial one. Neither appeared unprompted. On the profitability bucket, you listed costs at a granular level (utilities, insurance, ingredients) that belongs in due diligence, not a top level framework for a CEO conversation. Tighten each bucket to the two or three questions that actually drive the acquisition decision. A stronger opening would have been: 'Three linked questions: is the kombucha category attractive enough to enter? Is PureSip the right asset at its standalone value? And does the deal work financially for Ridgeline, specifically testing whether $112M on $32M of revenue is justified by synergies Ridgeline alone can deliver?' That framing immediately tells the CEO what you are solving for and why distribution is the key lever.
Three better ways to have answered
Faster
Open with the price test immediately: $112M on $32M of revenue is 3.5x revenue, so the first question is whether Ridgeline specific synergies justify paying that multiple when a financial buyer could not.
More complete
Add a bucket for integration risk, specifically naming craft brand authenticity under a large CPG owner and fermentation as a production competence Ridgeline does not currently have.
Cleaner
Name all three top level buckets in one sentence before expanding any of them, so the CEO hears the full map before the detail.
02
Exhibit math
Strength
“Exhibit A shows PureSip's revenue and EBITDA trajectory over five years and Exhibit B shows comparable recent acquisitions. Work through what these exhibits tell you about PureSip's growth and whether $112M is a reasonable price.”
What you said
You correctly identified that PureSip's revenue grew every year but that its most recent growth rate of 23% lagged the category's 27%, signaling share loss. You computed EBITDA of $3.2M (10% margin on $32M), then calculated a revenue multiple of 3.5x and an EBITDA multiple of 35x. You compared both to the comp set, noted 3.5x sat at the middle of the revenue range but 35x exceeded every EBITDA comp, and identified Brightleaf Botanical as the closest comparable given its lower growth rate, concluding the price was too high.
Went well
You caught the share loss story independently, noting that PureSip's 23% growth trailed the category's 27%, which is the strongest qualitative argument for a lower offer price. You computed both the revenue and EBITDA multiples correctly and, critically, spotted that the EBITDA multiple of 35x exceeded the top of the entire comp range, not just the median. Anchoring to Brightleaf Botanical as the closest comp by growth rate showed you were using the comps as a ladder rather than just averaging them.
To improve
You stopped short of the most actionable insight: naming what the comps imply PureSip is actually worth. You said the price was 'too high' and that Brightleaf at 3.0x revenue was the closer comp, but you did not compute what 3.0x to 3.2x revenue implies in dollars (roughly $96M to $102M) and state that as the defensible range. That number is the negotiating lever. Also, you did not address what happens to the EBITDA multiple if Ridgeline's 14% margin is applied to PureSip's revenue: $112M divided by ($32M times 14%) equals roughly 25x, which falls back inside the comp range. That normalized multiple is the key question for whether the price is defensible at all, and noting it would have shown the interviewer you were thinking like an investor. The formula to add: take the asking price, divide by (PureSip revenue times Ridgeline margin), and compare to the comp EBITDA range.
Three better ways to have answered
Faster
After computing 35x EBITDA, immediately divide $112M by ($32M times 14%) to get 25x and ask whether margin expansion to Ridgeline's level is realistic before accepting the price.
More complete
State the implied fair value range explicitly: at the growth adjusted comp multiple of roughly 3.0x to 3.2x revenue, PureSip is worth approximately $96M to $102M, making the ask $10M to $16M rich on trajectory alone.
Cleaner
Orient to both exhibits in one sentence before calculating: 'Exhibit A gives me PureSip's standalone earnings to build the EBITDA multiple; Exhibit B gives me the range to test it against.'
03
Brainstorm
“Beyond what PureSip earns on its own today, where else could value come from if Ridgeline owns it?”
What you said
Under existing products you walked the supply chain from raw ingredients through production, bottling, logistics, and distribution as cost levers. You added SGA and R and D consolidation as a third area and said cost related synergies felt largest.
Went well
You structured the answer into buckets rather than a list, which is the right instinct. Walking the supply chain as a cost synergy framework is a legitimate organizing device and surfaces real levers like procurement and bottling consolidation. Prioritizing cost synergies at the end showed some judgment about where the dollars are most reliable.
To improve
The biggest gap is that you initially framed distribution as a cost item rather than the primary revenue synergy. When the interviewer asked what Ridgeline specifically brings to PureSip that PureSip cannot replicate alone, you had to be walked to the revenue angle. In an M&A brainstorm, the single most important question is: why is this deal worth more to THIS strategic buyer than to a financial buyer? For Ridgeline, the answer is shelf access across mainstream grocery and convenience channels in the Pacific Northwest and beyond, which PureSip cannot build alone. That should have been the first revenue synergy named, not something reached after a prompt. A stronger structure would have been: revenue synergies (distribution reach into Ridgeline's grocery and convenience network, cross portfolio placement, retailer relationship leverage) and cost synergies (procurement scale on ingredients, overhead consolidation, spare bottling capacity). Then flag that a dollar of cost saving is worth more to EBITDA than a dollar of revenue synergy, because revenue flows through at PureSip's thin 10% margin while cost savings are dollar for dollar.
Three better ways to have answered
Faster
Lead with the single biggest lever: Ridgeline's mainstream distribution network is what PureSip cannot buy or build, and that is the reason a strategic acquirer pays more than a financial one.
More complete
Name the integration risks that could erode each synergy: craft brand authenticity may weaken under a large CPG owner, and fermentation is a production competence Ridgeline does not currently have.
Cleaner
State the two buckets (revenue synergies and cost synergies) in one sentence, then enumerate each with a one sentence explanation of why it is specific to this combination, before prioritizing.
04
Synergy sizing
Strength
“Here is what Ridgeline's M&A team has identified. Work out what these synergies are actually worth to Ridgeline in annual EBITDA.”
What you said
You identified five synergy lines, correctly separated revenue from cost, applied PureSip's 10% margin to convert revenue synergies to EBITDA, applied your own confidence discounts (100% for high, 60% for medium, 25% for low), and summed to approximately $4.2M. You then added PureSip's standalone EBITDA of $3.2M to reach $7.4M total, and computed new revenue and EBITDA multiples to check against the comps.
Went well
You caught the most important methodological point in this exhibit without prompting: revenue synergies must be converted at the margin before adding to cost synergies, which are dollar for dollar. That is exactly the insight that separates a strong answer from one that simply adds the column and reaches $15.2M. Your confidence discounting was reasonable and you stated your assumptions before applying them. Reaching $7.4M of total EBITDA and immediately connecting it to the $112M price was the right next move.
To improve
After computing the $4.2M, you shifted to recalculating post synergy revenue and EBITDA multiples against the comp set rather than asking what $7.4M implies for the board's payback requirement. The more powerful 'so what' was: the biggest line on the page ($8.5M distribution expansion) is also the one that contributes the least EBITDA (roughly $0.85M), while the smallest cost lines are dollar for dollar. That reversal, the biggest numbers are the smallest in value, is the insight the interviewer was looking for and it sets up the payback test directly. Also, you did not flag the timeline column: overhead savings arrive in months 3 to 6, but distribution takes 12 to 18 months, so the Year 1 run rate is materially lower than the steady state $4.2M. Noting that would have strengthened your answer before the payback question was even asked.
Three better ways to have answered
Faster
After converting revenue synergies at 10%, immediately state the punchline: the two largest revenue lines contribute under $1M of EBITDA combined, so the real value in this deal is the $3.7M cost side, not the distribution narrative.
More complete
Flag the timeline column: only overhead savings are available in Year 1, so the near term EBITDA available to service the deal is well below the $4.2M steady state figure.
Cleaner
State the conversion logic in one sentence before plugging in any numbers: 'Revenue synergies flow through at PureSip's 10% margin, so I will convert those first and keep cost synergies dollar for dollar.'
05
Payback
Strength
“Ridgeline's board has set a hurdle: they will not approve any acquisition that takes more than 5 years to pay back. Using the $7.4M of total annual EBITDA you just worked out, does this deal clear that bar?”
What you said
You divided $112M by $7.4M and reached approximately 15 years, correctly concluded the deal does not meet the 5 year requirement, and noted the gap is roughly three times the board's limit. You then questioned whether the 5 year payback was the right constraint given that the deal looked attractive on a multiples basis.
Went well
The arithmetic was clean and immediate: $112M divided by $7.4M equals approximately 15 years, and you stated plainly that this misses by roughly rather than hedging. Naming the magnitude of the miss (three times, not a rounding difference) is exactly the right framing for a CEO conversation. Questioning the board's constraint showed intellectual engagement rather than passive acceptance.
To improve
After establishing the 15 year payback, the strongest next move is to invert the question: what price WOULD clear the 5 year bar? $7.4M times 5 years equals $37M, which is roughly 1.15x revenue. That number tells the CEO immediately that the board's test and this asset are incompatible at any price a seller would accept, because $37M is far below the entire comp range. You raised a fair point about the board's constraint, but framing it as 'maybe the board should reconsider' softened a conclusion the numbers make very clear. The recommendation should be: the deal fails the test by three times, and the price that would pass the test is one no seller would accept, so the answer is no at $112M.
Three better ways to have answered
Faster
Invert immediately: $7.4M times 5 years equals $37M, which is what Ridgeline can actually pay under the board's rule, and that is the number to put in front of the CEO.
More complete
Note that even if synergies were fully realized at steady state (which takes 24 to 36 months for the largest lines), the payback still exceeds 15 years, so no reasonable synergy scenario closes the gap.
Cleaner
State the setup before dividing: 'Payback equals price divided by annual EBITDA, so $112M divided by $7.4M,' then give the result and the verdict in one sentence.
06
Recommendation
“Given that it misses by roughly three times, what is your recommendation to the CEO?”
What you said
You recommended against the deal at $112M on the grounds that the 15 year payback fails the board's 5 year requirement. You acknowledged the deal looks attractive on a multiples basis, suggested Ridgeline consider developing kombucha products internally, flagged the risk that a competitor could acquire PureSip, and proposed a conversation with the board about alternative paths into functional beverages.
Went well
You opened with a clear verdict, which is the most important thing: you said no. You correctly grounded the recommendation in the payback finding rather than retreating to vague strategic concerns. Naming the competitor acquisition risk showed you were thinking about the downside of walking away, not just the downside of proceeding.
To improve
The recommendation was softened in two ways that weaken it for a CEO audience. The deal is not a good deal at $112M; it is rich. Leading with that framing undermines the no. Second, the next step recommendation (develop kombucha internally) was offered without any acknowledgment of the time and capability gap that creates, which the case prompt already flagged: Ridgeline has no fermented beverage capability. A stronger close would have been: 'No at $112M. The price is rich on both a multiples and a payback basis. The strategic logic is real, so the next step is to test whether the distribution synergy can be captured through a partnership or licensing arrangement rather than an acquisition, or to look at earlier stage kombucha brands where the entry price supports the board's return requirement.' That keeps the strategic door open without endorsing a deal the numbers do not support.
Three better ways to have answered
Faster
Open with: 'No. $112M implies a 15 year payback against a 5 year limit, and the EBITDA multiple exceeds the top of the comp range. Walk away.'
More complete
Name the price that would clear the board's bar ($37M, roughly 1.15x revenue) to show the CEO exactly how far apart the ask and the constraint are, and note that no seller in the comp set accepted a price that low.
Cleaner
Structure the recommendation as: verdict, two supporting reasons from the analysis, one honest risk of walking, and one concrete next step, delivered in under 90 seconds.
In food and beverage M and A, the language of distribution economics separates a generic deal read from a sharp one: shelf space, slotting fees, trade spend, and velocity per store show you understand how a beverage brand actually scales through retail. Pair that with the strategic versus financial buyer lens to explain why any premium is justified.
You used
You should have
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