How to make great Financial Models - Best Practices in Financial Modeling

Описание: In this video, we discuss about some of the best practices in financial modeling

A financial model is a MEANS to help you analyze and evaluate a business. The model is a reflection of the company’s business. It should tell what is unique about the business. The flow should incorporate key sectoral assumptions, such as industry growth / market share / pricing dynamics etc.

Some common errors in financial models to be avoided are
1) Historical growth used to project future revenues
2) Too High terminal value - Short forecast period
3) Inconsistent Assumptions - eg. Sales growth without adding assets
4) No Balance Sheet projections
5) Cost of Debt greater than Cost of Equity
6) No Scenario Analysis

Additionally, models need to be neatly formatted!

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