Can someone please, please explain to me why we make insanely detailed operating models?
Who the hell is looking at this thing anyways? Why am I on v412 of this model if the both the buyer and seller are using a QofE group and not even downloading the model from the VDR?
I have worked on 3 buy-side advisories now and we have NEVER looked at the sell-side projections, just the historicals.
Pls someone give me a rationale for what my associate is making me spend every waking hour working on, thx.
What group? Industrials?
Healthcare
To get reps for PE
Am in Tech at a BB and we only use sell-side projections with some sensitivity analysis thrown in the mix because no one has any fucking idea of what financials are going to look like in the future apart from the company that is responsible for generating that revenue
even management has no fucking idea. it's all one huge crapshoot
My favorite is when you have to use an insanely complicated build to back into the revenue projections that the head of sales pulled out of his ass and wrote down on a cocktail napkin and the CFO just says to keep costs flat while revenue grows 20%
Most forecasts really are literally this. Drives me nuts. At least in consumer, there are surprisingly few people even at larger companies that can lay out real logic behind their forecasting methodology. Totally get that it's hard to forecast, but doing what you mentioned seems to be the disturbing norm lol
Even better is when you have a complex bottom-up revenue calculation and someone asks for sensitivity table with revenue CAGR increasing by increments of 1%.
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