Importance and uses of financial modelling

Financial modeling involves creating a mathematical representation of a company's financial performance.

1. FINANCIAL
MODELING
Created by Manisha Jha

2. INTRODUCTION
FINANCIAL MODELING INVOLVES CREATING A MATHEMATICAL
REPRESENTATION OF A COMPANY'S FINANCIAL PERFORMANCE. THESE MODELS
ARE USED TO FORECAST FUTURE FINANCIAL OUTCOMES, ASSESS THE VALUE OF
INVESTMENTS, SUPPORT BUDGETING, AND MAKE STRATEGIC DECISIONS. BY
SIMULATING VARIOUS SCENARIOS, FINANCIAL MODELS HELP BUSINESSES
UNDERSTAND POTENTIAL RISKS AND OPPORTUNITIES, ENABLING INFORMED
DECISION-MAKING.

3. USES OF FINANCIAL
MODELING
Forecasting
Valuation
Budgeting
Strategic Planning

4. FORECASTING
Predict future financial
performance
Project revenue, expenses, and
cash flows
Aid in planning and decision-
making

5. VALUATION
Estimate the value of
businesses,
investments, or assets
Use projected earnings
or cash flows
Structured approach
for present value
estimation

6. BUDGETING
Create detailed budgets
for business operations
Analyze financial
performance against
budgets
Identify areas for cost
control and efficiency
improvements

7. STRATEGIC
PLANNING
Develop long-term
business strategies
Assess the financial
impact of strategic
decisions
Support mergers,
acquisitions, and other
corporate actions

8. THANK YOU
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