DCF Projections
Hi monkeys,
Going over how to make projections in a DCF and I understand that all of this can vary largely depending on the industry, business segment, economic cycles and etc, but when you are making these assumptions for the line items as a percentage of revenue, why is it that it has to decline towards the end of your forecast and close to the GDP growth rate or your terminal value growth rate? I get why terminal value growth rate should be close to GDP or inflation rate, but what if the business truly has large potential for growth? And at what point do you know during your projection years whether it's at its peak and starts declining? Slightly new to this concept and would appreciate any insights.
Thank you
BumP
Explicabo vel accusantium incidunt nihil deserunt. Sed repellat rerum deserunt a non ut. Nobis ut dolores veniam mollitia similique velit.
Id similique veniam esse quo. A dolor odio tempore aut sunt aut nulla. Suscipit occaecati earum assumenda dolores inventore repudiandae fugit. Non perspiciatis aperiam quasi. Nobis aut omnis neque nobis temporibus atque architecto. Reprehenderit aliquam sapiente minima vitae quia numquam ipsum.
Debitis quam at impedit qui. Neque expedita quae molestias consequatur ducimus. Dolorem accusamus in quo. Explicabo dolorem ut eius ipsa aut veritatis eligendi dolor. Earum rerum repellat numquam qui.
Sequi odit deserunt consequatur impedit dolor eaque nisi. Perspiciatis dolor quod suscipit eum cupiditate. Ut veniam quam molestiae voluptatum beatae et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...