Question

Hye again, maybe i can shorten my question. Where to begin statistical methods such as normal distribution, covariance, confidence interval etc in financial statements and investment analysis (DCF) besides calculating cost of capital?

Answer 1

You begin with the data. To use all of these methods, you need to make estimates. If you have access to richer datasets (longer time periods, data across companies), you can start employing statistical methods. If you do not, it is really not worth the effort. It is "garbage in, garbage out"...

Answer 2

Hi Prof, What is the minimum period should i have, is 5 years historical revenue or costs enough?