2025-02-16 08:44:14 +02:00
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#+title: Section 11 | Lesson 58 - How to Build a Financial Model for a Public Company
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#+HTML_HEAD: <link rel="stylesheet" type="text/css" href="../_share/media/css/org-media-sass/categories/business.css" />
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2025-02-23 04:08:50 +02:00
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#+OPTIONS: H:6
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2025-02-16 08:44:14 +02:00
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* Links
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- [[./../mba-main.org][TOC | Business]]
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- [[https://www.udemy.com/course/an-entire-mba-in-1-courseaward-winning-business-school-prof/learn/lecture/4315002#overview][S11:L58 course video]]
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* Notes
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2025-02-23 04:08:50 +02:00
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- how analysts
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- assess
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- get access to information
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- goto sec.gov and find the 10k
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** investor relations
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- help you understand their company
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- anybody can talk to microsoft investor relations
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- their job to help you
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- small companies that are publicly traded might outsource it
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- go to web site and find contact info
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** model valuation
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*** sources
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- sec.gov
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- investor relations of the company
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*** publicly traded companies
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- you have the info and sources
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- first source is investor relations
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- e.g. search for 'microsoft investor relations'
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**** investor relations website
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- events
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- past earnings releases
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- earnings and financials
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- download an excel spreadsheet
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**** sec.gov
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- put in the ticker e.g. "MSFT" for Micrasoft
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- download the 10-K
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2025-02-23 23:41:19 +02:00
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- business of the company
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- risk factors
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- legal proceedings
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- etc
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2025-02-23 04:08:50 +02:00
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***** other forms:
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- 8-K is press release
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- S-1 all companies must file which tells you everything you need to know about the company
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2025-02-23 23:41:19 +02:00
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** basics
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*** rule
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- everything is a % of revenue
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- look for trends in the historical data
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- make assumptions about future
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- cash flow and earnings are effectively the same in the long run
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- debt is only relevant if it's huge
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- balance sheet, cash flow, irrelevant in the long run
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*** layering
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1. revenue
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1. cost of revenue
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2. gross profit (margin)
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3. add % of revenue to
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- cost of revenu
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- gross profit
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2. operating expenses
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1. research and development
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2. sales and marketing
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3. general and administrative
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4. operating income (same as EBIT)
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5. add % of revenue to the above
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3. below the bottom line
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1. taxes
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2. net income
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3. shares
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4. diluted shares
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4. add YOY
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- revenue
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- research and development
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- sales and marketing
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- general and administrative
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5. on taxes add % of EBIT
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*** result
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**** revenue
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- revenue
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- % YOY
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- cost of revenue
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- % of revenue
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- gross profit
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- % of revenue
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**** operating expenses
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- research and development
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- % YOY
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- % of revenue
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- sales and marketing
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- % YOY
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- % of revenue
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- general and administrative
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- % YOY
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- % of revenue
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- operating income (same as EBIT)
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- % of revenue
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**** below the line items
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- taxes
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- % of EBIT
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- net income
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- shares
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- diluted earnings per share
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** forecasting
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- add the years you want to the model
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- then add columns for the projecting years with each column name having an 'e' for estimate after the year name. ie. FY2027e
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- look for patterns
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- try to determine why revenue grew or contracted
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