{ "docId": "019dd923-622c-750b-8b9b-15d71754f3a1", "docSlug": "2fca39b214c5", "documentTitle": "N/A", "authorId": "99_Other", "authorName": "10X EBITDA", "documentKindSlug": "other", "documentKindLabel": "Other", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2025-02-01 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 52, "pageCount": 82, "prevPage": 51, "nextPage": 53, "slideType": "other", "function": "other", "density": "overcrowded", "nDataPoints": 0, "notes": "This appears to be a page from a technical interview prep guide for investment banking.", "elementsJson": [ "paragraph" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9b-15d71754f3a1/52", "deckHref": "/decks/019dd923-622c-750b-8b9b-15d71754f3a1", "deckJsonHref": "/decks/019dd923-622c-750b-8b9b-15d71754f3a1.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9b-15d71754f3a1#slide-52", "components": [ { "bbox": null, "kind": "callout", "text": "This is the “reason” that sounds good and grounded in academic finance. The true reason is two-folds.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-70f7-7334-b21b-dddea56ad0ed", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.78, "x": 0.11, "y": 0.26 }, "kind": "list", "text": "209. Explain to me the difference between Mid-Year Convention and End-of-Year Convention. “Mid-Year Convention assumes that the company receives the cash flow evenly throughout the year. End-of-Year Convention assumes that the company receives the cash flow at the end of the year.” Financial Modeling Course References: Course 8, Lessons 16-17 (Discount Period)", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1c7bd2eb-1379-41df-b188-62a24514eabe", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.78, "x": 0.11, "y": 0.86 }, "kind": "list", "text": "212. Explain to me the concept of Terminal Value. “Terminal Value is the value of the business at the end of our UFCF forecast period.”", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4bf01150-bdd2-4ea4-a451-1ceb05f32567", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.78, "x": 0.11, "y": 0.18 }, "kind": "list", "text": "208. How does $10 increase in Revenue affect UFCF? “Assuming a 20% tax rate, $10 increase in Revenue increases UFCF by $8.”", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5e542463-add1-4ada-9a28-9b99031a39be", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.78, "x": 0.11, "y": 0.41 }, "kind": "list", "text": "210. Should we use Mid-Year Convention or End-of-Year Convention in a DCF? “For the projected Unlevered Free Cash Flow, we should discount using Mid-Year Convention. For the Terminal Value, it depends. If we use the Perpetuity Growth Method, we should discount using the Mid-Year Convention. However, if we use the Terminal Multiple Method, then we should discount using the End-of-Year Convention.” Financial Modeling Course References: Course 8, Lessons 16-17 (Discount Period) Course 8, Lessons 23-24 (Present Value of Terminal Value)", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "67c99a4f-b262-40e6-bb96-a9c7c6ee373e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.13, "w": 0.78, "x": 0.11, "y": 0.63 }, "kind": "list", "text": "211. Let’s say we’re building the DCF model to value a company as of March 31, 2022. Year 1 ends on December 31, 2022 and Year 2 ends on December 31, 2023. Using the Mid-Year Convention, what is the discount period for Year 1 & Year 2? “The discount period for Year 1 is 0.375. The discount period for Year 2 is 1.25.” Financial Modeling Course References: Course 8, Lessons 16-18 (Discount Period)", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c0746f3d-dfd7-4a6d-be0e-3244d0337f72", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.07, "w": 0.78, "x": 0.11, "y": 0.08 }, "kind": "paragraph", "text": "This is the “reason” that sounds good and grounded in academic finance. The true reason is two-folds. First, investment bankers use management forecasts or equity research reports for their forecasts. Their models are usually 5-7 years. Second, less than 5 is too short to be meaningful and more than 7 is too uncertain to forecast.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c85b8337-1c16-4feb-8b60-002012894133", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.15, "x": 0.11, "y": 0.83 }, "kind": "title", "text": "C. Terminal Value", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b772390a-dd51-4149-bd9f-c92fe732f680", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.25, "x": 0.64, "y": 0.02 }, "kind": "title", "text": "IV. Discounted Cash Flow (DCF) C. Terminal Value", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fb68a47b-c667-450a-85e1-6ab513922d75", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Valuation: DCF", "slug": "dcf", "agent": "architect", "layer": "slide", "matchId": "9edf2dff-6465-4fdf-9b19-43855377a570", "evidence": "The slide explains the concept of Terminal Value and different conventions used in DCF analysis.", "confidence": 0.9 } ], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }