To make the Equity Valuation of a company, do you usually model only the FCFs (the Damodaran approach) or do you model the entire Financial Statements (IS/BS/CFS) as I saw in some modelling courses? What are the pros/cons in your opinion?
Best,
If I’m using a free cash flow to equity approach I will model all of the statements. If I’m using a free cash flow to the firm approach I will model only the specific items needed to arrive at free cash flow.