Articles on Financial Modelling

What is Financial Modelling?

Planning is the cornerstone around which business empires are built. Businesses which survive and thrive in the long run are...

Objectives of Financial Modelling

Financial modeling enables key personnel to make better decisions. These models are used for various types of decision making. Hence,...

Steps to Create a Financial Model

Financial modeling is not a perfect science. In fact, it would be fair to say that financial modeling is part...

Financial Modelling Heuristics

A heuristic is a technological term for what is known as a “thumb rule” in common parlance. In the previous...

Financial Modelling: Advantages and Limitations

Financial models are used by corporations almost every day. These models help while making several key strategic decisions. For instance,...

Why is Financial Modelling so Complex?

Finance itself is a complicated field. It is difficult to understand the nature of relationships between various financial variables which...

The Future of Financial Modelling

Financial modeling is an intensive technology process. This means that at the present moment also, financial models use the latest...

Creating a Revenue Model

A financial model is often called a “model of models.” This is because there are several parameters which go through...

What is Cost Modelling?

In the previous article, we have discussed how important revenue modeling is and the techniques which are used by companies...

Important Decisions Influenced by Cost Modeling

In the previous article, we studied the cost modeling process. We understood the various steps which have to be undertaken...

Financial Modeling: Important Metrics

Financial modeling can be considered to be the science of making informed decisions regarding a company based on data simulations....

Scenario Analysis: A Primer

Scenario analysis is at the heart of financial modeling. In fact, in many cases, a financial model is created solely...

Risk Management in Financial Modeling

Financial models were widely used by corporations, even in 2008. However, the severity of the 2008 crash forced financial institutions...

Modeling Discounted Cash Flows

Discounted Cash Flow (DCF) analysis is the bedrock of modern-day financial analysis. It is for this reason that financial modelers...

Debt Schedule in Financial Modelling

The inability to manage debt is one of the biggest reasons behind the failure of many companies. Just in the...

Managing Assumptions During Financial Modelling

Making assumptions is an integral part of every financial calculation. It is a known fact that if the assumptions are...

Financial Modeling for Banks

Financial modeling generally does not differ very much from industry to industry. For instance, if a person creates a financial...

Financial Modelling for Insurance Companies

Financial strategy is at the heart of the business of any insurance company. This is because insurance companies need to...

The Merger Modeling

The Three statement financial models and discounted cash flow models are considered to be basic from a financial modeling point...

Merger Modelling: The Accretion/Dilution Analysis

Merger modeling requires creating many sub-models which enable decision making. The accretion/dilution analysis is one such sub-model. It is one...

Financial Modelling For Leveraged Buyouts (LBOs)

Just like mergers and acquisitions, modeling for leveraged buyouts (LBOs) also requires special skill and knowledge. In this article, we...

Circular References in Financial Modelling

A lot of financial modeling takes place in Microsoft Excel. One of the errors that financial modelers come across during...

Financial Modelling in Real Estate

Financial modeling has become an essential part of most real estate transactions today. This is because of the fact that...

Why is Excel Not the Best Tool for Financial Modelling?

Companies all across the world use financial modeling. As we have discussed in several articles in this module, financial modeling...

Testing the Financial Model

The creation of a financial model is like a project which has to be undertaken by the company. This means...

The Last Step: Handing Over the Financial Model

Financial models are complex projects which take months or even years to build. It also needs to be understood that...

How to Incorporate Ethical and Social Elements in Financial Modelling

What is Financial Modelling and how it is extremely critical for High Finance In the world of banking and high...

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Articles on Financial Modelling