Financial modeling for business planning and strategy development

Use professional financial modeling services to help you forecast results and make better business decisions.

Variables, factors and impact on performance of financial model


Financial modeling is the process of aggregating a company's expenses and revenues that can be used to calculate the impact of a future event or decision on a company’s performance. Before you can start coding, you need to carefully analyze main cash trends in the past, spot and fix (or at least to develop the plan of how to fix) problematic issues. That is why Financial modeling combines accounting, finance, and a range of business metrics to create a forecast of the potential future financial performance of a company by making relevant assumptions of how the entity or a specific project or a business unit / entity is expected to perform in the forthcoming periods. As a result, financial modeling creates a tool to estimate the financial performance of a project or business by taking into account all relevant factors, including growth and accompanying risk assumptions. In fact, a financial model is a basis for the interpretation of how those factors may have an impact on performance. It enables the user to acquire a concise knowledge of all the variables/factors involved in financial forecasting.

For instance, a financial model can predict how much cash flow a project is likely to produce within a definite number of periods from its initiation. Or, alternatively, how much cash you will need (to borrow, or unused) in a definite period of your business development plans, to stay in business and overcome hard times if =something= will happen.

Steps to follow when building a financial model

The process of financial model developing may be described in many different ways. The first variant is shown on a circle diagram. The next one – as a formal description of steps to be performed:



Professional financial modeling services that allow for accurate forecasts and optimization of financial decisions.

Forecasting and financial modeling

Anyway, financial model designer and a client work in a close cooperation to clearly define a purpose of the model, a list of factors (model arguments) influencing the business process which client wants to analyze, limits of variance for those factors etc. – before the actual coding for the model starts. 

As a rule, Financial model is based on at least three statements, which are critical components you need to ensure are in place before building a financial model. These components are a subject of Financial Analysis itself – just to understand what is the starting point of your modelling journey. These components are interrelated and must be consistent with each other:


  • Balance sheet;
  • Income statement;
  • Cash flow statement;

In case of startup modelling, of course, you’re limited to just a zero-point balance sheet, and a strategic vision of how you’re going to raise the capital and develop your business in the future. The range of a time you need to make you dream come true is known as a horizon of modelling. At the ultimate point of horizon, financial model gives you similar statements with the prefix “Proforma-”, which means this is a forecasting statement.


At the final stage of financial model developing, client will see to what extent factors chosen and implemented in the actual model may affect the future performance – which is a subject of sensitive analysis, or even a Scenario Analysis in case a set of interrelated factors is used for an assumption.

We offer a range of solutions from basic models to forecast the performance of simple businesses up to thoroughly customized models for multiproduct / multiservice international businesses with settlements in different currencies under a variety of specific T&Cs.
More detailed and updated information can be found in the relevant blog articles. Welcome.
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For your convenience, you can download the document "Financial Modeling Documents Checklist", required for financial modeling - based on a real-life example of a medium-sized FMCG company + investment in a logistics center - in the lower part of this page, under the "Fill in the fields | Download the file" button. After filling out the form, close the tab, then you can download the template. Enjoy!
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How financial modeling can help you

Anyway, financial model designer and a client work in a close cooperation to clearly define a purpose of the model, a list of factors (model arguments) influencing the business process which client wants to analyze, limits of variance for those factors etc. – before the actual coding for the model starts.