Financial Modeling is about Excel templates??
Often a lot of people think that Financial Modeling is about Excel templates
However , our experience has taught us that if you modeling a business, your business understanding is far more critical than just interlinking Excel sheets
When we had to prepare the Valuation model for the YouTube channel of this Bollywood musician duo, we got into the intricacies of their digitial business, showcased the comparsion between Customer Lifetime Value (CLV) (basis a % of DAUs, MAUs, subscribed but never visit again…) and Customer Acqusition Cost (CAC) — this helped them refine the strategy
Sometimes validation is required for the promoter’s optimism — how can you claim that you will earn 25% EBITDA while the industry peers are earning 13–14% max
An epic point was when the promoter of this company asked “what is the Tumbler Index of the iron-ore pellets” and have you considered the export prices accordingly -
The Financial Model must answer questions like what if the churn rate for customers moves from 20% to 40% — how will the valuation of this SaaS venture change?
So the limited point is that Fnancial Modeling is not just MS Excel or any other software that people think it to be
What’s your view on it
#business #valuation #financialmodeling #strategy
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