buyside model
in undergrad and looking to get more accurate on the qtr, curious if anyone knows where to find an example of an old buyside L/S model, happy to DM too.
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You can make one yourself, there’s not going to be stuff in there that you can’t find in the presentations/fillings, unless the model contains a part for third-party data or like an input cost/fx matrix plug in from BBG. There isn’t really a secret sauce to get more detailed on the quarter.
sometimes seeing an example is easier to learn from, but ill just take stabs at this on my own and grind it out
Something I have never found on the internet is how to model quarterly and building EBIT/EBITDA bridges.
All courses out there seem to be focused on IB/PE modelling
What exactly is stopping you? Is it that you don’t know where to get the data? Or do you not know what to do with it?
My point was that there is no place to learn how to build bridges.
How is a student going to figure out that 100% of the price drops to EBITDA but only 50% of volume if he/she never saw that before?
On the other hand, there are hundreds of places that explain how to create a DCF, LBO etc
I mean to be honest drop throughs are pretty intuitive but it’s not like they’re a universal staple of all models anyway. It’s just something you’d pick up for the industry you’re covering on the job
Is there a specific company or industry you’re focusing on? Hard to be helpful when you’re asking for something so general.
Is something like this explanation what you’re looking for? https://medium.com/@rzacharia/how-to-build-and-use-ebitda-bridges-waterfalls-d71ea6662ba6
I want to be helpful here, but it’s not clear what you’re solving for specifically.
Sorry, maybe I was not clear enough. I am not asking for helping here, just mentioning a problem I found when I was recruiting. Lots of IB/PE models, no models for the HFs I was recruiting for.
But appreciate your willingness to help!
Because HF models are tailored to the company. Can't use a template.
Best way to learn to model is to replicate ER models for specific companies. Then try doing that with a new company.
Can't agree. I have tons of companies under my coverage for which buyside models EBIT/EBITDA bridges and sell side ER just uses the usual IB type of model
lol you're projecting growth as a % of y/y?
What?
Not sure we’re even on the same page
This goes back to the OPs question, which is if you've never worked at a shop, you've never seen a model with some of the more intricate revenue and cost builds (backing into a raw materials index for example on the cost side)
while conceptually, it makes sense to say "just figure out how to model the unit economics"
Having the context of seeing previous models and how they chose to integrate and develop different builds, can be very helpful.
Would love to see a thorough model with detailed builds that is considered buyside ready. Also interested in all of the valuation metrics / display stuff (basic enough but you never know when you see a display or illustration that you realize is much neater). Only have ever seen all the sell side stuff and my attempts at things
There’s no universal way to model names really, so there’s not really “HF model template”, some PMs use sellside templates, some have really intricate revenue builds and cost builds with GM bridges and price mix/volume/fx/scope segments and whatnot, whilst a handful of PMs don’t model at all
I have seen some LO and L/S equity HF's Excel financial models. They are not as sophisticated as you might think.
It feels great to build out a fully-fleshed model, but I doubt if there's any strong correlation between being able to build a great model and market-beating returns. I'm not saying model building is bad. I can build models myself, just find it not THAT useful when it comes to my personal investments. The names on which I make money are those that I read up on their business models and thought hard about it.
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