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Financial Modeling Steps

List of Financial Modeling Steps

Here is a list of the most important financial modeling steps: (1) enter 3-5 years of historical financial information into Excel, (2) calculate the historical ratios, trends, and analysis for the company, (3) make assumptions about how the business will perform in the future, (4) forecast the income statement, balance sheet, and cash flow statement, (5) calculate free cash flow to the firm, (6) perform discounted cash flow (DCF) analysis to value the company, (7) conduct sensitivity and scenario analysis, (8) perform error checking and stress-test the model, (9) create charts, graphs and tables, and (10) present the results of your analysis and recommendations.

 

Financial Modeling Steps

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 is 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

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