Asking for a friend interviewing in tech and I'm not in banking - What model should one build to "estimate" a business? It's should include 5 years of historical and 5 years of estimated forecasts.

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Sounds like it's just an operating model

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They'll wanna see some profitability as well, so just do a DCF

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Tech companies are never valued on the basis of a DCF. Otherwise they'd be worthless.

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Is it just a revenue forecast model?

It's for a business unit within the company so for example iPhones. Does she still need a DCF?

Do you mean: estimate a business's worth? Or wasn't this specified?

Are you valuing it or pricing a unit for like a divestiture. There's a big difference between the two. If pricing it take the EBITDA if the unit and throw a reasonable range of multiples on it. Valuing it precisely based on cash flows is difficult without the underlying financial info

@JPM 1 - it wasn't specified. In the end they want a summary on findings and any analysis/conclusions. It's super vague

@IB analyst 1 - no details on that but believe it's just a valuation

@IB analyst 2 - yeah, that's what she's going with. Thanks!

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