Explain Financial Model


1 Answer(s)


financial modeling is the task of building a financial model, or the process of using a financial model for financial decision making and analysis. I would agree that a financial model is an abstract representation of a financial decision making situation. By abstract representation, we really mean a mathematical model, and to be practical, a computer based mathematical model. The model usually represents an ongoing business, or a project that requires investment. Financial models are not limited to profit making entities. Non-profits, governments, personal finances – all can be represented by financial models.