Model from Income Statement Only?
Hi guys,
I am currently studying for a private equity interview and I am stuck on a practice problem.
The example case gives me 5 years of historical P&L statements and asks to create a "financial model" for the next 5 years.
With only the P&L to work from, what model can reasonably be created without a massive amount of assumptions? I am hoping to model free cash flows, but modeling working capital might be tricky with only a P&L.
My current theory is that this case was created to focus on assumptions and inputs and the corresponding reasoning. I wanted to ask you all in case I am missing anything obvious.
Thanks!
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