Management’s ability to make effective strategic decisions is largely dependent on the quality of information at its disposal. A financial model, capable of estimating the forecast financial performance of a business, can represent a useful tool to assist management in making these decisions.
The process involved in creating a financial model involves breaking down the financial and operational metrics of a business into a set of assumptions. These assumptions represent the inputs to the model which are processed to produce an output. The output generally takes the form of a report which is tailored to meet the information requirements of the intended user.
Financial models can be used for a number of purposes, including:
- Analysis of the financial impact of strategic decisions
- Assessment of investment opportunities
- Assessment of working capital management/requirements
- Assessment of capital structure requirements
- Determining the price for a tender
- Submission of forecast financial information to regulatory authorities or financiers.
How William Buck can help
Our corporate advisory team has extensive experience in the review, design and construction of financial models, having provided these services to organisations in various industries and for a number of different purposes.
We understand that each business is unique and therefore take the time to understand which elements are of primary importance. Meeting with you regularly throughout the process in order to understand your business and needs is critical to developing our financial models. This enables us to design a financial model which is tailored to meet your specific requirements.
The financial modelling services provided include the following:
- Review of financial models
- Design and construction of customised integrated three-way financial models that meet your specific needs
- Development of management reports that compare actual versus forecast results in a format that best meets the needs of management
- Conducting sensitivity analyses
- Analysis of investment opportunities