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Using Financial Modelling Excel To Make The Right Choices

Businesses come, and businesses go in today's economy. Any individual that owns a business

knows how important it is to make the right decisions, especially when money is involved. Taking

financial risks can either lead to mass earnings or bankruptcy. A solution like financial modelling

excel, can help businesses make the right choices.

When one speaks of financial modeling, they are speaking of a complete program that helps

individuals come to a decision in regards to

investing in a company. It is a mathematical model

that helps determines the future progress of a

company, financial asset, or investment.

Sure, this can generally be done on paper if one

likes to spend time making countless changes and

has the time to do so. There is another option,

which is to do it in excel. Many have stated that it

offers the calculated speed and accuracy that they

need to come to the right decision.

The question often arises to who needs financial

modeling. Well it's quite simple. It is for the

individual deals with decision making in regards to

money.

Those that are involved in decision planning in the corporate arena will definitely need some type

of model. It is a definite for bankers, those that research equity, and those that are heavily

involved in investments.

There are some steps that are required to get started, with the main one being collecting data.

Information in regards to growth, revenue, and investments is a good place to start. Many people

in corporate America generally believe that their ideas are out of this world and is going to

generate massive amounts of money. However, if an individual was a banker, he would evaluate

the business to see if it would make sense.

One question would be if the projection of revenue is greater than the market size.

If everything makes sense and is reasonable, it's time to dig a little deeper. This is where the

model would come into play. One must think of a structure of analysis. If more cash is generated

from the operation of the business, the business will be better for it. The key concept is money

generated today, is always better than money that can be generated tomorrow.

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As an individual starts putting these

numbers into excel, one must determine

a layout for the financial model.

Individuals need to determine how much

information the model will have. If it's

too large, than multiple sheets may need

to be used. Looking at the assumptions

the model will make is also key. If

readability is important, separate

headers may want to be used for assumptions and calculations. Different fonts may also help with

readability as well.

The creation of logical modules for the model will also be helpful. Be sure to keep balance sheets,

P&L, and cash flow statements separate. It is also important to keep the revenue generation

separate from costs in P&L. It may also be helpful to learn a few shortcuts when dealing with tons

of information. It will keep the project exciting and cut down on boredom. Financial modelling

excel is definitely the first step in making the right choices when it comes to money.

Company Name : Access Analytic Solutions Pty Ltd

Address : Suite 143, Level 1, 580 Hay Street Perth, WA 6000 Australia

Phone Number : 08 6210 8500 (within Australia) or +61 8 6210 8500 (from overseas)

Website : http://www.accessanalytic.com.au/