What are the top 5 questions you would ask management if you were building a DCF?

Published On - February 20, 2023

Josh Corporate Banking / Commercial Banking / Private Debt, Corporate Development, Financial Modeling, FP&A, Investment Banking, Private Equity

1. How does your revenue model work, how do you segment revenue, what are your growth drivers for revenue and how does revenue growth look going forward?
2. What are your gross margins and do you expect that to change?
3. What line items do SG&A consist of? Do you expect these to grow with in-line with revenue or will there be economies of scale?
4. Who are your competitors and how are you positioned relative to them?
   – Knowing the competitive landscape and how the company is positioned will help you better forecast revenue and costs
   – This can also help with doing beta comps and finding an exit
   multiple for terminal value
5. How much capex are you planning to spend in the next 5 years?