Building a financial model involves several steps:
Define Objectives: Clearly outline the purpose and scope of the model. Gather Data: Collect historical financial data and relevant market information. Build the Structure: Set up the model's framework, including the income statement, balance sheet, and cash flow statement. Input Assumptions: Enter assumptions and variables that will drive the model. Run Scenarios: Test different scenarios to see how changes in assumptions affect the outcomes. Validate and Review: Check for accuracy and consistency, and review the model with stakeholders.