Most Important Financial Modeling Questions
There are many important financial modelingWhat is Financial ModelingFinancial modeling is performed in Excel to forecast a company's financial performance. Overview of what is financial modeling, how & why to build a model. A 3 statement model links income statement, balance sheet, and cash flow statement. More advanced types of financial models are built for valuation, plannnig, and questions an analyst should ask when building a model. The main questions are: (1) how are the key drivers of this business, (2) how does this company generate revenueSales RevenueSales revenue is the income received by a company from its sales of goods or the provision of services. In accounting, the terms "sales" and "revenue" can be, and often are, used interchangeably, to mean the same thing. Revenue does not necessarily mean cash received., (3) what are the margins like, (4) what is the growth profile going forward, (5) how much capital investment is required, (6) how sensitive is it to changes in assumptions, (7) what is the net present value (NPV)Net Present Value (NPV)Net Present Value (NPV) is the value of all future cash flows (positive and negative) over the entire life of an investment discounted to the present. NPV analysis is a form of intrinsic valuation and is used extensively across finance and accounting for determining the value of a business, investment security,, (8) what is the internal rate of return (IRR)?
