Financial Modeling

Financial modeling is the process by which a firm constructs a financial representation of some, or all, aspects of the firm or given security. The model is usually characterized by performing calculations and makes recommendations based on that information. The model may also summarize particular events for the end user such as investment management returns or it may help estimate market direction. Financial models are used for many different reasons. The most common of which are business valuation, scenario preparation for strategic planning, cost of capital calculations for corporate finance projects, capital budgeting decisions and the allocation of corporate resources. Financial models are also used in the creation of projections and trends for forecasts and many other uses related to industry comparisons, ratio analysis and common size financial statements. Financial Modeling is a tool that can be used to forecast a picture of a security or a financial instrument or a company’s future financial performance based on the historical performance of the entity. Financial Modeling includes preparing of detailed company specific models which are then used for the purpose of decision making and performing financial analysis.

Excel features and functions for financial modeling
Combine knowledge of Accounting and Finance with Ms Excel, develop interlinked Financial Statements and carry out Financial Analysis
Create robust financial models that are easy to use, extend and present
Specifically build financial models for Project Finance and Valuation
Develop model assumptions on the basis of statistical analyses
Forecasting revenue and cost of goods segment by segment and using price-per-unit and #-units-sold drivers instead of aggregate forecasts
Forecasting financials across different business units as opposed to looking only at consolidated financials
Breaking out financing into various tranches with more realistic pricing

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