Investment Banking Nerd

I'm learning this from youtube videos. Two methods of taking forecast :  1. Through Formula  In this we use =forecast(Xs,knownYs,knowYs) Eg : In this we will already had data till 2024, we had put in the formula =forecast(2025,Revenue (2019:2024), Year (2019:2024)) 2. Forecast on the Data Tab ! We have taken the same data as the 1st formula ! These are for one line data and provide very accurate answers, but for more and better data one need to understand the technicality of growth and it's rate. 

Let's take the assumption as :  Forecast period: 5 years YoY Revenue Growth: 10% COGS % Revenue: starting at 77%, assume declining margin to 76% SG&A % Revenue: starting at 16.5%, assume declining margin to 16% Depreciation: $787 million for 2022 and then held constant at 1.5% of revenue in each subsequent year Amortization: $82 million for 2022 and then held constant at $100 million in each subsequent year Interest exp: $25 million for 2022 and held constant over projection period Tax rate: 20% This exercise will be really simple and I'm writing this blog for my own reference as a well defined Financial Model summary helps a lot to comeback and understand the formulas and step. So that you can identify mistakes in the new forecast model you are making.  I hope it helps you all in the same way it is helping me. Based on the assumptions we will make a Income Statement Driver portion.  Revenue growth rate is already given at 10% so we will take that for constant for eac...