As a publishing analyst, how long does it take you to build your initial Excel model prior to speaking with company management? Also, how many years do you typically go back? What takes you the most time?
In my case, I typically try to go back 5 years and it usually takes me:
3-4 hours - entering data from SEC filings / earnings releases
1-2 hours - ensuring calculations in the Excel are correct for historical periods and the model is ready to go for putting in my assumptions
1-5 hours - reading management's discussion and analysis of SEC filings to see if there are any additional metrics included in the text or any one-time events I should be asking management about
3+ hours - reviewing past earnings call transcripts, looking for other metrics to include not given in filings or press releases and other questions I should be asking of management
All told, it typically takes me 8-20 hours (assuming my junior isn't handling portions of it) to build out the initial model...
How about you? How many years do you input into a typical model and how long does each task take you?
Yes, i would say around that time also. But if my mind starts to go numb, i might continue the next day, but all in all i would agree that seems quite normal. And 5 years sounds about right from my experience at multiple firms. A company model will likely shift slightly every 3 years, adjusting to the ever changing economics so 5 is fine, annually i would do more, for the Q's for me its 5.
We have software what pulls all the data from SEC into Excel but still, i will do it manually, i get more of a feel for what is its core business and flow of money. Mostly the Income Statement is my focus, but 1st before a new idea i will do a quick balance sheet NAVPS and make sure they have enough assets to provide a safe zone before moving on to the income model.
I also listen to the call and the transcripts of the past few quarters, i mainly just jump to the Analysts questions, as most of the number talk i'm familiar with from the data Model building from SEC Q's. Management to me never really want to say anything bad as to spook people, but some Analysts are not shy. Although its worth noting quite a few get close to the company and enjoy the benefits of not asking too tough questions.
Yeah, I usually do it over multiple days as well either due to interruptions or mind numbness like you said...
I'm curious about the software that pulls data from the SEC filings into Excel - what's the software/plugin called and what's the cost? I'd probably still do it manually, but that's intriguing....
Yes, i would say around that time also. But if my mind starts to go numb, i might continue the next day, but all in all i would agree that seems quite normal. And 5 years sounds about right from my experience at multiple firms. A company model will likely shift slightly every 3 years, adjusting to the ever changing economics so 5 is fine, annually i would do more, for the Q's for me its 5.
We have software what pulls all the data from SEC into Excel but still, i will do it manually, i get more of a feel for what is its core business and flow of money. Mostly the Income Statement is my focus, but 1st before a new idea i will do a quick balance sheet NAVPS and make sure they have enough assets to provide a safe zone before moving on to the income model.
I also listen to the call and the transcripts of the past few quarters, i mainly just jump to the Analysts questions, as most of the number talk i'm familiar with from the data Model building from SEC Q's. Management to me never really want to say anything bad as to spook people, but some Analysts are not shy. Although its worth noting quite a few get close to the company and enjoy the benefits of not asking too tough questions.
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