How long should it take a good analyst to...
Develop a comp set?
Develop a model?
Generally, get "up to speed" on a company?
After reading Monkey Business, I have the feeling that I will be expected to crank out a model the same day my MD/VP asks me to develop one. That book also skewed my perception on the time it should take me to do the other tasks mentioned above.
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in the early stages it will all take hours... With time, you'll be flying through it all.
it will always take many hours you will just become more efficient over time
especially after you learn the hot keys and stuff on excel. but it's also one of those things that you need to keep up with. i haven't done a model in awhile and i definitely need to brush up on my skills.
Thanks for the feedback so far. so initially, it should take
4-5 hrs for the comp set?
6-8 hrs for the full model?
3-4 hrs to get comfortable talking about a company's operations?
I know that the time to complete each of these varies based on experience, the size of the company, the availability of information, etc.
its a case by case basis you really cant set a time frame
Yes, it really is a case by case basis. A quick and dirty lbo model using blanket assumptions for simple IRR purposes can take 2-4 hours to build from scratch (the kind you build for modeling interviews). More complex models will take days, or up to a week with multiple iterations as you learn more about the company and create revenue build-ups and different scenerios.
I recently built a model that started as a quick and dirty LBO model that over the course of the week blew up into a halfway full-blown model (about 30 pages printed) with 20 scenerios (different synergy/cannibalization cases, rollover equity between another sponsor backed entity we were acquiring - e.g. multiple discounts, and store build-up). That took me about 3 or 4 days (and about 8 hours out of my vacation time).
The quickest and dirtiest of LBO template models may take no longer than an hour (this is particularly true when an hour is all the time you're given).
As Gametheory pointed out, however, more complex modeling work can take much longer. Although since gaining more work experience I've learned to push back, and would push quite hard if asked to do 20 scenarios, since this kind of work generally leads to a false sense of precision anyway.
I recall having to put together a model with a ton of sensitivities, and ended up with 144 different IRRs showing on a single returns page. It was ridiculous, nobody can make a logical investment decision based off of reviewing 144 varying outcomes.
Yes, the output was pretty ridiculous. The main problem was that when you changed the multiple discount paid vis a vis our company, it would change all the returns for each scenerio (i.e. standalone, 5mm synergies, 10mm synergies, 20mm synergies), so you had to rerun them - no way around it. I eventually just created an output with some self-referencing if's and creating a macro to run through the scenerios in the toggle.
It's the kind of "war story" I like to tell the girls at the bars.
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