A good model is one that is thought through with great detail and logic. Any model that deals with intrinsic valuation such a DCF is based off numerous assumptions and the modeler must be able to back up their assumptions and logic when asked. A good model is one that can be explained with sound logic and is relatively conservative with assumptions and drivers. If the modeler were to make a certain driver more aggressive, it would be crucial that they would be able to relate it back to macroeconomic trends or other factors to explain that logic or assumption.
What makes a good model?
Published On - June 30, 2020
