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

2 Comments
 
Most Helpful

Est unde dolores ipsum neque ut asperiores dicta. Libero voluptatem eveniet animi et rerum. Earum officia nemo praesentium dolores vel voluptas hic. Assumenda ut blanditiis et quia iusto animi inventore. Temporibus illum necessitatibus harum tempora quia et. Libero in non unde dolorem.

Et sed fugit molestias optio. Natus voluptas quae eum. Qui molestiae quidem ea ipsa omnis laboriosam.

Career Advancement Opportunities

August 2026 Investment Banking

  • Evercore 01 99.5%
  • Moelis & Company 01 98.9%
  • JPMorgan 01 98.4%
  • Morgan Stanley 08 97.8%
  • Goldman Sachs 02 97.3%

Overall Employee Satisfaction

August 2026 Investment Banking

  • Moelis & Company No 99.5%
  • Evercore No 98.9%
  • Morgan Stanley 01 98.4%
  • Banco Santander 02 97.8%
  • BMO Capital Markets 12 97.3%

Professional Growth Opportunities

August 2026 Investment Banking

  • Evercore 01 99.5%
  • Moelis & Company 01 98.9%
  • Morgan Stanley 06 98.4%
  • Goldman Sachs 01 97.8%
  • JPMorgan 01 97.3%

Total Avg Compensation

August 2026 Investment Banking

  • Vice President (16) $429
  • Associates (48) $259
  • 3rd+ Year Analyst (8) $210
  • 2nd Year Analyst (25) $178
  • Intern/Summer Associate (14) $159
  • 1st Year Analyst (83) $151
  • Intern/Summer Analyst (75) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
kanon's picture
kanon
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
DrApeman's picture
DrApeman
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
GameTheory's picture
GameTheory
98.9
9
Betsy Massar's picture
Betsy Massar
98.9
10
Mimbs's picture
Mimbs
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”