How deep does the rabbit hole go?
I'm currently creating a DCF model for a stock pitch for Company X, which is a global defense corporation that driven by government contracts. While making the model, I realized that it would be more accurate do a sum-of-the parts analysis by region, adding up contract demand for each product and making assumptions for the future based on current geopolitical trends.
Now I'm starting to realize I've bitten off more than I can chew because now I gotta find the working capital, debt structure for WACC, etc. for each region and although I have access to some ER reports and Capital IQ, I'm not sure even those are enough. Its 2am and the brain fog is kicking in, but I don't actually dislike the work. However, I have no idea when to stop adding sensitivities.
I'm curious as to how granular the models can get on the actual job. Does the client actually care whether I factored in China taking over Thailand or a truck in Latvia breaking down, or is it more of a copy and paste into preexisting templates and then bullshit to the client? I understand that it varies sector as well as IB vs PE.
To put it this way, if China invades Taiwan, we'll have bigger issues than the accuracy of your SoTP
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