The main objectives of financial modeling are to (1) link a company’s historical financial statements, (2) create assumptions about how a business will perform in the future, (3) project a financial forecast, (4) value a business, (5) understand how sensitive the cash flow profile and business valuation are to changes in assumptions, (6) model different scenarios, and (7) evaluate transactions such as mergers and acquisitions. By building an abstract representation of a business in Excel, all of the objectives above are achievable.
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:
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To learn How to Build an Excel Model step-by-step, click on the image below.