Financial forecasts are the basis for Answer equity valuation based on and$/$or market multiples. An analyst begins with a review of the company and its environment, then identifies key revenue drivers and cost drivers, assessing the impact of relevant trends $$ forecasting numbers. For most companies, financial modeling begins with the $$ because most companies derive most of their value by generating future cash flows. $$ can be analyzed by business segment, product line, or geographical source. For instance, in Example $1$ of chapter $6,$ Novo Nordisk shows, in $2011,$ their diabetes care product line provided about

$$ percent of total sales while total biopharmaceuticals provided the other $$ percent. Within the diabetes care product line $($for $2011),$ human insulins represented about $$ percent of the total diabetes care revenue and about $$ percent of total revenue. About $$ percent of Novo Nordisk's $2011$ total sales came from North America and about $$ percent of total sales from China. For the three years shown, Novo Nordisk's total sales have a CAGR $($Compound Annual Growth Rate$)$ of about $$ percent, but their total sales in $2011$ rose only $$ Excel's TREND formula $$

income statement

:: Net Income $43$

vdots$76$

:$\text{'}57$

$24$

$12$

$$:$21$

$$:$52$

after

vdots$40$

$$:$29$

vdots$7\mathrm{.}5$

$10$

::$19$ ::$1\mathrm{.}139$

$$