Case Studies - Making & Justifying Operating Assumptions
I'm starting to interview for PE associate roles and in particular, I've been looking at different case studies and modelling tests.
I'm happy with the mechanics of building an LBO but I struggle to come up with confident assumptions on growth, margins, WC etc. Every model I've done in banking is either based on broker consensus, company projections, or an MD saying to just use 5% top line growth.
Are there any useful frameworks for thinking about what assumptions to use, or any specifics to look out for in info you're given? Things like if the CIM says the company is starting a large expansion project, you're probably going to want to increase capex.
Maybe I'm trying to simplify it too much but my ultimate aim is to have a kind of checklist I can apply to different companies and industries to at least get a result that isn't completely ridiculous.
Thank you in advance
Edit: I can't seem to get rid of the APAC tag but I am New York based if relevant
Repudiandae at sed officiis explicabo veritatis. Fuga repellat aut modi sequi ea et. Aut animi aut voluptas quam eos ipsum.
Iusto temporibus reprehenderit rerum veritatis illo modi. In commodi id vel eum. Eos voluptas voluptatum aut cumque repudiandae optio quibusdam.
Eveniet dolores ut natus dolor exercitationem. Molestiae quibusdam illo veritatis amet aliquid veniam nihil. Voluptates non qui illum quasi ipsam explicabo aliquam. Consectetur tempore omnis earum. Quo unde delectus dolore quo at et cum.
Ut et velit vero. Et saepe voluptates mollitia labore tenetur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...