Perusal Global

Frequently Asked Questions

DCF derives intrinsic value by discounting future free cash flows at a rate reflecting the risk of generating them, it answers what a business is fundamentally worth. LBO modeling evaluates whether a leveraged acquisition generates the required IRR and exit multiples for a financial buyer at a given entry price, debt structure, and holding period, it answers whether a specific deal works at a specific price. In private equity, both are used on the same transaction: DCF establishes what the business is worth, LBO tests whether the deal generates the required return at that valuation.

WACC is derived from the actual capital structure of the business being valued. For cross-border mandates, we apply Country Risk Premium adjustments to the equity risk premium, Inflation Differential normalization when comparing businesses across high and low-inflation markets, and Unlevered Beta frameworks when benchmarking Indian or GCC companies against US or European listed peers. The result is a cost of capital that reflects the specific risk profile of the business in its market, one the investor can verify against the specific market context.

A model audit starts with the structural checks, does the balance sheet actually balance from movements rather than by plug, does the cash flow statement derive from the balance sheet, are the three statements genuinely linked. From there, the audit examines the assumptions, whether revenue drivers are grounded in market data or carried forward from a management case, whether WACC reflects the actual capital structure, and whether scenario analysis runs live through the model or is a static sensitivity table. The audit produces a specific list of what needs to be rebuilt and what can stay.

A VDR-ready model needs to be clean for external audit before the data room opens. That means bridge charts between management accounts and audited financials are documented, revenue recognition policies and unit economics assumptions are explicit rather than embedded in formula logic, and the model structure anticipates the specific questions a buy-side analyst will ask when they open it. The objective is that nothing requires explanation after the fact, the model answers the questions before they are asked.

Sector complexity changes the model architecture itself, the revenue recognition logic, the cost drivers, and the capital structure. Biotech requires epidemiology-based revenue models and clinical-stage probability-weighted valuation. Cleantech requires project finance structures with capacity, offtake, and debt service coverage analysis. SaaS requires cohort-based revenue modeling with churn, expansion, and LTV/CAC analysis. Manufacturing requires working capital modeling specific to inventory turns and supply chain dynamics. In each case, we build the model architecture around the sector's actual value drivers rather than adapting a generic template.