Discussions with management

This is where you determine or confirm the scope and target of your model. Management is also the primary source of information about future plans and trends.

Usually, it's not possible to get all of the details at the first time of asking. You should, therefore, be prepared to go back to the section heads and ask the same, or similar, questions from a position of better understanding.

The following paragraphs describe the steps to take to ensure that you get the most out of your discussions with management, as well as where to concentrate your attention.

Gauging management expectations

While discussing with management, you need to get a clear understanding of their expectations from the assignment and what they hope will be achieved.

If all that is required is a projected cash flow, then a full-blown valuation model would be a waste of time and resources, and you probably wouldn't get paid for the extra work. We will take a detailed...