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Financial Modeling Objectives

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.

 

Financial Modeling Objectives

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:

Analyst Certification Program

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