What is Financial Modeling and Valuation?
Financial modeling and valuation are essential tools in corporate finance and investment analysis. Financial modeling involves creating structured representations of a company’s financial performance using spreadsheets to forecast revenues, expenses, and cash flows. Valuation determines the present worth of a business or asset using methods like discounted cash flow (DCF), comparable company analysis, or precedent transactions. Together, they guide decision-making for mergers, acquisitions, fundraising, and strategic planning, helping stakeholders assess growth potential and financial health effectively.