- Financial modeling is the process of creating integrated business models of a company in the form of spreadsheet that can be used for analysis, diagnosis, identifying solutions, conducting simulation, forecasting and delegating purposes.
- Financial models are used to estimate the valuation of a business or to compare its performance within the industry.
- The financial models can be used to measure performance, formulate strategies, measure the impact of change and predict total end results.
- In summary, it is a management tool for planning and decision making, mandatory for all executives and managers.