Finantsmodellimiseni

Finantsmodellimiseni, often translated as financial modeling, is the process of creating a representation of a company's or an asset's financial situation in a spreadsheet or specialized software. This model is used to forecast future financial performance, analyze different scenarios, and support decision-making. The core of a financial model is typically a set of assumptions about future business operations, such as revenue growth rates, operating expenses, capital expenditures, and financing.

Financial models are built using various techniques, with the most common being a three-statement model which links the income statement, balance sheet, and cash flow statement. This interconnectedness ensures that changes in one statement are reflected in the others, providing a cohesive view of the company's financial health. Other types of models include discounted cash flow (DCF) models for valuation, merger models for analyzing acquisitions, and LBO models for leveraged buyouts.

The purpose of financial modeling can range from internal management reporting and strategic planning to external purposes like fundraising, mergers and acquisitions, and investor relations. Professionals in finance, such as investment bankers, equity analysts, and corporate finance managers, rely heavily on financial modeling to assess value, identify risks, and project outcomes under various market conditions. The accuracy and usefulness of a financial model depend significantly on the quality of the input data and the validity of the underlying assumptions.