Why use an Excel Financial Model Template?

A Financial model is a critical part of a business plan. Hence, financial modeling became an essential skill which is highly valued in Finance. Basically, it is the combination of accounting, finance, and business metrics to create a framework of a company in Excel, forecasted into the future.

The following are just the simple use cases that financial models are used for:

• Determining financial profitability, liquidity, and feasibility
• Evaluate investments
• Pricing securities
• Corporate transactions such as mergers, acquisitions, divestiture or capital raise
• Fundraising
• Budgeting
• Valuation
• Personal Financing

Creating a financial model can be really complex as every business is unique and require specific set of assumptions and calculations, which can be categorized in different industries. Usually, using Excel is the best customizable tool due to it being flexible and manageable as well as offering transparency to users.

There are many steps for building a financial model, such as:

• Historical data – at least 3 years of the business’s previous financial information
• Ratios and Metrics – consists of margins, growth rates, asset turnover, inventory changes, etc.
• Assumptions – making assumptions about the future ratios and metrics
• Forecast – Forecasting the 3 statements (Income statement, Balance Sheet, & Cash Flow)
• Valuation – Using a valuation method to see the value of the business

You can follow the steps and create a financial model yourself, but you will need to have the know-how of financial modeling to be able to complete one. Hiring a professional will do but nowadays, it is more convenient to download an Excel financial model template that is easy to edit coupled with instructions and charts, removing the hassle of the complicated calculations and analyzation.

Downloading an Excel financial model template doesn’t just help you save time from creating a model from scratch, but it will also not require you to have extensive knowledge and skills to complete a financial model for your plan. eFinancialModels is a platform offering financial model templates hired financial modeling experts and applied what they know and experienced from building financial models and conducting financial modeling tasks to different businesses in different industries, which give the people who are in need of financial models a wide variety of choices. It is indeed a heaven sent that these Excel financial model templates exist for those who are in need of financial models for their businesses and potential investments.