A company’s financial model is a comprehensive plan on how to develop a business. The model contains a summary of the company’s performance, covering all aspects of its operations, thereby helping to shape and predict its future financial performance. In other words, the financial model is the economics of the entire business, helping a company foresee the likely financial results of a decision in quantitative terms.
Benefits of financial modelling
A financial model helps companies to create effective business development strategies in view of the internal and external factors that can affect it and reduce the risks that inevitably arise in the course of business. In addition, this model is required to determine the possible costs of opening and initial growth of a company, as well as the expected profits, based on the expected sources of income.
A financial model is vital for entrepreneurs who are planning to establish their own business. But it is also useful for anyone who wants to sell a company and attract investors. The seller of a company can use a financial model to demonstrate to a potential buyer or investor the prospects for company growth and justify its value.
A financial model is an effective tool for planning the development of a company, increasing its profitability and demonstrating its value to investors. The VALEN team can provide a full range of services related to the development of a financial model for your company.