![]() ![]() Will be used in a specific pitch and circulated between just 1-3 deal team members. Not reusable without structural modifications. Entire analysis can fit on one worksheet < 300 rows) Ball-park valuation range is sufficient) / Small. Used in a buy side pitch book to provide a valuation range for one of several potential acquisition targets. Let’s consider the following 5 common financial models: Model There are two primary determinants of a model’s ideal structure: Understanding the purpose of the model is key to determining its optimal structure. Types of Financial Models: Common Examples On the other hand, a leveraged finance model used to make thousands of loan approval decisions for a variety of loan types under a variety of scenarios necessitates a great deal of complexity. The time required to build a super complex DCF model isn’t justified given the model’s purpose. ![]() For example, if your task was to build a discounted cash flow (DCF) model to be used in a preliminary pitch book as a valuation for one of 5 potential acquisition targets, it would likely be a waste of time to build a highly complex and feature-rich model. ![]() One reason is that models can vary widely in purpose. In fact, there is surprisingly little consistency across Wall Street around the structure of financial models. ![]() Like many computer programmers, people who build financial models can get quite opinionated about the “right way” to do it. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |