Investment banking modeling
In IB is there like a prebuilt set up when building dcf,comparable, or precedent transaction models? Like is it mostly entering in number to a format that is already constructed by your firm?Or does a analyst build it from absolute scratch like a blank excel sheet?
Should never make the models from scratch. Use models from past deals by updating the historicals, assumptions, etc.
Besides not being time efficient, why not? Wouldn't the model be more accurate if it was done from scratch? Or do things move too fast for a junior banker to make one from scratch?
By building from template, you can choose to build from scratch while having it generally pre-formatted.
Not being time efficient is the big one but there’s also sufficient room for error when building a model from scratch (formulas, references, etc.). Would take a long time to build and a long time to “proofread”. When using an existing model you can rest assured that the model will be correct as long as you don’t mess with the formulas
Once you work in banking you’ll understand why building a new model/template every time is a very silly idea
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