Financial modelling, budgeting and forecasting
Financial modeling is the development of a detailed model (spread sheet) of a financial decision making situation, for example:
- Business valuation – perhaps for sale or acquisition purposes
- ‘What if?’ scenario planning: What if I increased or decreased my sales force? What if I introduced a new product? What if I set up subsidiary in the US? What if I increased or reduced my prices?
- Project Finance
- Financial analysis – understanding the risk and profitability of a business
- Capital budgeting or investment appraisal
- Cash-flow forecasting
Financial models can be simple or very complex, but in all cases are unique to each company and each situation. Isosceles harnesses both its commercial experience and extensive financial modelling expertise to help our clients produce the right solution. Click her for a few of our Recent Financial Modelling Projects.
There are two key aspects to a successful financial model.
- A thorough understanding of the business to enable the identification and and modeling of tghe key revenue, profit and cost drivers?
- Ensuring the model has sufficient sophistication to allow the modeling of each of the drivers and the effect they have on the business, and then produce a set of relevant measurable key performance indicators (KPIs)
One without the other makes the model useless.