Case Studies - Making & Justifying Operating Assumptions
I'm starting to interview for PE associate roles and in particular, I've been looking at different case studies and modelling tests.
I'm happy with the mechanics of building an LBO but I struggle to come up with confident assumptions on growth, margins, WC etc. Every model I've done in banking is either based on broker consensus, company projections, or an MD saying to just use 5% top line growth.
Are there any useful frameworks for thinking about what assumptions to use, or any specifics to look out for in info you're given? Things like if the CIM says the company is starting a large expansion project, you're probably going to want to increase capex.
Maybe I'm trying to simplify it too much but my ultimate aim is to have a kind of checklist I can apply to different companies and industries to at least get a result that isn't completely ridiculous.
Thank you in advance
Edit: I can't seem to get rid of the APAC tag but I am New York based if relevant
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