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Bowl Leader
Dang, sorry I meant to comment on the post!
Conversation Starter
Additional Posts in Private Equity and the Buy Side
Anonymous User
Coach
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YouTube and a lot of it from different perspectives
WallStreetPrep has some good resources. What part are you getting hung up on?
Models are only as accurate as their assumptions - “garbage in, garbage out”. The best we can do is making informed decisions about assumptions from comps or sources from the business itself like contracts. There’s no way to be 100% accurate in a DCF since it’s based on future events / cash flows and we don’t have a crystal ball. So it’s all about honing in on assumptions as close as possible and then running scenarios / sensitivities to stress test outputs based on assumptions that are least certain. To your point though, OP, yes lots of valuations are fully tailored to fit a story. It’s up to the receiver of that information to assess the assumptions and decide if they believe it
Coach
Maybe time to try something else dog
Running away from difficult things isn’t a good long term solution
It’s just a valuation methodology that values a business’s future cash flows. The only inputs are: 1) cash flow projections, 2) discount factor.
Now the tricky part is the cash flow projections since so many different factors go into that projection and you could get as granular as you wanted. Hence why in reality, DCF is not directly utilized much in private equity, but the multiple we apply to a business in a LBO has the principle of a DCF intrinsically built in
Sure? Any model leans on the business context behind its assumptions. Are you sure investing is a field you’re a good fit for?Your tone makes it seem like it Amy not be
Have you been paired with a mentor at your firm?