For a small business, the practice of building a financial model is mostly for budgeting, forecasting, and planning purposes. A business owner or entrepreneur must create a model (usually in Excel) to determine how much money the company will generate, how much cash is required for capital expenditures, and whether or not the company needs to raise money. It may also be used in the event the company is sold.
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CFI is the official global provider of financial modeling and valuation analyst FMVA Designation. CFI's mission is to help anyone become a world-class financial analyst and has a wide range of resources to help you along the way. In order to become a great financial analyst, below are some additional questions and answers for you to explore further: