Financial Modeling
Financial modeling means using an organization’s financial records to predict future financial performance. It’s a way of forecasting how a business will grow, how particular assets will perform, and how impactful each business decision will be. Financial modeling uses a business’s historical as well as current financial performance records, such as records of costs, expenses, and profits. Businesses can also use financial modeling to compare actual results against forecast results, and investigate what may have caused any differences.
What Small and Midsize Businesses Need to Know About Financial Modeling
SMBs may benefit from a financial expert to create a financial model for forecasting performance and supporting business owners in creating effective goals. To get the most out of any financial model, SMBs should include all financial records and keep an accurate inventory of assets.
Related terms
- Tokenization
- ROIT (Return on Information Technology)
- SAC (Subscriber Acquisition Cost)
- Energy Trading and Risk Management (ETRM)
- Chief Revenue Officer (CRO)
- Core Banking System
- Record to Report (R2R)
- Fintech
- Financial Management System (FMS)
- Business Capability Modeling
- Capital Allocation
- Compound Annual Growth Rate (CAGR)
- Net Present Value
- Hedge Fund
- Gateway
- Selling General and Administrative (SG&A) Expenses
- ROE (Return on Equity)
- Financial Planning and Analysis (FP&A)
- Dollar-Cost Averaging (DCA)
- Procure-to-pay Solution
