My group never does 3 statement models (US BB), is this normal?
At a US BB, all the LBOs and merger models we build are absent a full 3 statement model. We usually just project out PnL drivers and do D&A, Capex, and NWC as either a % of revenue or in line with a research report. Occasionally there is depreciation or capex schedule that gets built thats a little more complicated but nothing like a 3 statement model.
Merger models maybe 50% of the time will I build in a dedicated debt payoff schedule.
For operating models for sellsides / usually we just get one from the company and work with them to adjust inputs and sometime help project out the PnL independently (never really care about the BS).
I have never once had to worry about a model "balancing"
I don't even know how to build an LBO with a 3 statement model to be honest. Is this normal? Feel like this will kill me for recruiting....I have a million reps doing it our groups way...but none the "proper way".
Same here. Industrials group. BB. I only got 3 statement modeling test during my interviews, but never on the job. What group are you in?
I’m also at a US BB and we never touch operating models, we just get sent them by the companies mgmt team or accountant and then we project out the specific line items we need for a DCF or LBO.
Hardest part of the DCF for us is just deciding on the WACC lol, or choosing with line items to adjust for.
Same at a top EB, we usually dont model the BS but it should be easy to balance it
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