Financial modelling is the process of building abstract models to represent a real world situation. Financial modelling can be used in just about any business that needs to make a pertinent business decisions or transactions.
When can Financial Modelling Services be used?
In our previous article What is Financial Modelling? we briefly touched on the various scenarios where financial models can be used. Here we take a more in-depth look. A financial modeller or financial modelling service can be used in the following scenarios:
- To find out whether an organisation is in need of additional funds or not. Solutions such as refinancing or equity raising may be looked at if this is the case.
- To find out how a business will perform in different financial conditions or situations. Financial modelling will allow business owners to understand whether it is viable to open up in a new market for example.
- To provide a comparative analysis as to whether an investment should be made to garner better returns.
- For analysing and deciding on the risk factor for any business decision. Financial modelling can provide information on decisions such as business restructuring, post deal integration analysis and business performance tracking.
- For identifying certain strengths and weaknesses within a business that can be used for strategic decision making. Financial modelling can ascertain where there are gaps in the business.
Apart from the above various scenarios, financial modelling can also be used in specific projects such as projecting a company’s financial performance, real estate investments, oil and gas projects, personal finances, Non-profit projects, investment banking and equity research.
If you are a Financial Analyst and are looking at using financial modelling for a certain business decision, the following situations are particularly valid for using a financial model:
- Forecasting future raw material needed
- Benefits of a Merger
- Valuation of a Security
- Certain portfolio performance
- Calculating and predicting risk
- Checking an investment prerequisite
Financial Modelling is an incredibly useful tool and is used in businesses throughout the world. If you are looking at financial modelling services for your business or perhaps to study a financial modelling course yourself, it is well worth the time.
Established in 1998 Goalfix Financial Modellers has grown into a highly specialized firm of financial modellers and model trainers. We offer a number of financial modelling courses for aspiring modellers as well as advanced financial modelling experts. To learn more about financial modelling services or financial modelling courses offered contact Goalfix today.