Why Financial Models are prepared?

Financial models helps in conducting historical analysis of a company, projecting a company’s financial performance used in various fields such as Project Finance, Real estate, Personal finances, Non-profit organizations, Banks, Oil and Gas projects, Financial institutions, Government, Investment banking, Equity research etc.

These professional models are predominantly used by the financial analyst and are constructed for many purposes, such as valuation of a company/security, determining the benefits/demerits of a takeover or merger, judging an Initial Public Offer (IPO), forecasting future raw materials needs for a corporation etc.