Why Use A Financial Model Template?

A Financial model is a critical part of a business plan. Hence, financial modeling became an essential skill which is highly valued in Finance. Basically, it is the combination of accounting, finance and business metrics to create a framework of a company is Excel, forecasted into the future. 

• Making business decisions at a company

• Making investments in private or public company

• Pricing securities

• Corporate transactions such as mergers, acquisitions, divestiture or capital raise.

Creating a financial model can be really complex as every business is unique and requires specific set of assumptions and calculations, which can be categorized in different industries. Usually using Excel is the best customizable tool due to being flexible and manageable.

• Historical data – at least 3 years of the business’s previous financial information

• Ratios and Metrics – consists of margins, growth rates, asset turnover, inventory changes, etc.

• Assumptions – making assumptions about the future ratios and metrics

• Forecast – Forecasting the 3 statements (Income statement, Balance Sheet, & Cash Flow)

• Valuation – Using a valuation method to see the value of the business

You can follow the steps and create a financial model yourself, but you will need to have the know-how of financial modeling to be able to complete one. Hiring a professional will do but nowadays, it is more convenient to download a financial model template that is easy to edit coupled with instructions and charts, removing the hassle of the complicated calculations and analyzation.

Downloading a financial model template doesn’t just help you save time from creating a model from scratch, but it will also not require you to have extensive knowledge and skills to complete a financial model for your plan. Most of the platforms offering financial model templates hired financial modeling experts and applied what they know and experienced from different businesses in different industries, which gives the people who are in need of financial models a wide variety of choices.

It is indeed a heaven sent, that these financial model templates exist for those who are in need of financial models for their businesses and potential investments.

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