A financial model is simply a tool that’s built in Excel to forecast a business’ financial performance into the future. The forecast is typically based on the company’s historical performance, assumptions about the future, and requires preparing an income statement, balance sheet, cash flow statement and supporting schedules (known as a 3 statement model).

Objectives

  • Valuing a business
  • Raising capital
  • Growing the business
  • Making acquisitions
  • Selling or divesting assets and business units
  • Capital allocation
  • Budgeting and forecasting
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