This article explains the concept of financial modeling. It also explains the two different approaches to financial modeling. The pros and cons of both the approaches have also been explained in detail in this article.
Articles on Financial Modelling
This article explains the different objectives of financial modeling. It lists down the various types of financial models and also explains how they enable different types of decision making.
This article explains the steps which need to be undertaken in order to create a financial model. The details of each step have also been provided to enable a better understanding of the process.
This article lists some of the financial modeling heuristics which need to be taken into account while creating a financial model. The relevance of each of the above-mentioned heuristic has been explained in this article.
This article provides a list of the pros and cons of financial modeling. Some of the important points have also been explained in detail in this article.
This article explains why financial modeling is considered to be one of the most complex tasks in the entire financial domain. It also lists down some of the points which add to this complexity and explains them in detail.
This article explains how technological advancements are likely to affect the financial models of the future. The various possible advancements in financial modeling techniques have been listed down and explained in this article.
This article explains the concept of revenue modeling. It also explains the challenges commonly faced in revenue modeling as well as the techniques which are used by firms to mitigate these challenges.
This article explains how cost modelling is done. The process which is followed while creating a functional cost model has been listed down in this article. The various variables which need to be taken into account have been explained in detail.
This article provides information about the important decisions which are made with the help of a cost model. The thought process used by decision-makers to make these decisions has also been explained in this article.
This article explains some of the key metrics which need to be taken into account while creating a financial model. These metrics have been listed down, and their importance has been explained in this article.
This article explains the concept of scenario analysis. It explains the various advantages of using scenario analysis. A couple of shortcomings of using scenario analysis have been listed down as well.
This article explains the basic process of financial risk modeling. It explains how risk is defined for the purpose of risk modeling. It also explains the various approaches which can be used to model risk.
This article explains how financial modeling can be used to create a discounted cash flow analysis. The components of the DCF model, as well as the techniques used to reach the valuation of the individual components, have been explained in detail.
This article explains the concept of a debt schedule. It explains why it is important to segregate debt. It also explains the process which can be used to derive important information about the debt policy of a company using data which is available in the public domain.
This article explains how the assumptions being made while creating a financial model need to be managed. The best practices related to assumptions management have been explained in detail in this article.
This article explains the process of the creation of a banking financial model. The special characteristics of a banking financial model have been explained in detail in this article. They have been contrasted with regular financial models to provide more clarity to the reader.
The above-mentioned process is a very small snippet of the complicated world of financial modeling for insurance companies. It explains how finances flow in an insurance company. Lastly, it also explains the difference between financial modeling for regular companies and insurance companies.
This article explains the details of merger modeling. The steps involved in merger modeling as well as how they differ from regular financial models have been explained in this article.
This article explains what an accretion/dilution analysis is. It explains how this analysis helps in the merger. It also explains how changes in the source of funding impact the accretion/dilution model.
This article explains the process of financial modeling for leveraged buyouts transactions. It also explains how the process differs from the usual financial modeling and what different skills are required to create an LBO model.
This article explains the concept of a circular reference in Excel. It explains how circular reference may not always be an error. Genuine situations where circular references are correct to have been given as an example. Lastly, the Excel hacks to manage the circular reference error have also been listed down.
This article explains the concept of real estate financial modeling. It also lists down some of the unique parameters and assumptions which the financial modeler will have to deal with while creating a real estate model.
This article explains why Microsoft Excel is not the best tool for financial modeling. Some of the biggest limitations of Excel have been listed down in this article. The story of JP Morgan's $6 billion loss, which resulted from an Excel error, has also been shared in this article.
This article explains why financial models need to be tested. It also explains the various ways in which the models should be tested. The why, when and by whom of the testing phase has been explained in detail.
This article explains the concept of the handover of financial models. The step by step process to be followed during financial modeling has been explained in detail.
This article explains what Financial Modelling is and how it helps bankers and financiers make better investment decisions. We discuss the ethical aspects as well as how technology helps improve forecasting. In addition, we also caution against excessive reliance on models as there have been instances where models have failed spectacularly. We argue that there is a better way to understand how the past, present, and future intersect.
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