What are Financial Modeling Objectives?
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.
