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What Is Financial Modeling?

Financial modeling is the process of creating a summary of a company's expenses and earnings in the form of a spreadsheet that can be used to calculate the impact of a future event or decision.

Financial modeling is important for many different reasons – mostly related to business valuation, in cases of making decisions regarding mergers and acquisitions. 

A financial model has many uses. One of the uses is - Company Valuation.

In company valuation - one must predict the future income and profit of the company. These predictions are made using a financial model.

What are some examples of financial models?

Examples of financial models available include:
  • Project finance models.
  • Pricing models.
  • Integrated financial statement models.
  • Reporting models.
  • Three-Statement Model.
  • Discounted Cash Flow (DCF) Model.
  • Merger Model (M&A)
  • Initial Public Offering (IPO) Model.

 

How can Equitest help create a financial model?

Equitest has an excellent tool for creating a financial model with regard to the discounted cash flow model (DCF)

 

 

An explanation of How To Build A Financial Model For A Mobile Application