Definition of Financial Modeling
Financial modeling is the process of building a projection of a company’s operating and financial performanceThree Financial StatementsThe three financial statements are the income statement, the balance sheet, and the statement of cash flows. These three core statements are into the future in the form of a ‘model’ using Excel. The model can then be used for budgetingBudgetingBudgeting is the tactical implementation of a business plan. To achieve the goals in a business’s strategic plan, we need some type of budget that finances the business plan and sets measures and indicators of performance., planning, operations, valuation, capital raising, mergers and acquisitions, and almost any other corporate activity. The models are built by financial analysts and require a strong understanding of accounting, financeFinanceCFI's Finance Articles are designed as self-study guides to learn important finance concepts online at your own pace. Browse hundreds of articles!, Excel, strategy, and logic.
![Financial Modeling Definition]()