Model 10 year forecast based on growth assumptions, or similar to a budget with underlying items for all positions?
Hi all,
Got myself in a bit of a bind since moving from M&A to industry and I cannot decide if I should be modelling the group companies 10 year forecast same as M&A with assumptions for growth and margins and so on or should I do it a similar way as a budget showcasing all underlying items each expense position for example, each departments expenses as recently during audit we got ourselves in quite a bind as our forecast assumptions were only based on percentage growth and margins, taking into account organic projects and we had to share our underlying assumptions of positions and didn't have those available as my colleagues providing the forecasts, the CEOs of subsidiaries only provide their view what the results could be for the next 10 years without any of the assumptions, i.e. revenue in X year is A, EBITDA is B, CAPEX is C, etc.
Long story short, should a 10 year financial model be best to be based on detailed assumptions with all cost positions, or simply X position will grow by Y % p.a.?
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