Financial Modeling Definition

What Does Financial Modeling Mean?

Financial modeling means understanding how a business generates cash flow, what the key performance drivers are, and determining how much the business might be worth to a rational investor. Many careers involve financial modeling, such as investment banking, equity research, and corporate development. Building a financial model means having a strong knowledge of accounting, finance, and Excel. It requires a high degree of attention to detail.


Financial Modeling Definition

Additional Questions and Answers

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:

  • What are the types of financial models?
  • What is sensitivity analysis?
  • What is bookkeeping?
  • What are the most common valuation methods?

Example Excel Model

Below is a screenshot from one of CFI’s online analyst training and certification courses, offered 100% online.

To learn How to Build an Excel Model step-by-step, click on the image below.

financial modeling questions and answers

Analyst Certification Program

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