1. Introduction Financial modelling is defined by Charnes (2012) as the tool

1. Introduction Financial modelling is defined by Charnes (2012) as the tool

Financial modelling is defined by Charnes (2012) as the tool or program for making important investment decisions by analysing the company’s past, present and future outcomes. The financial modelling has now become the most widely used stochastic model for generating the forecasts for the business. Business can no longer afford to involve in the time consuming and manual forecasting of the financial decisions. They now rely on the use of Excel and other computerised programs for making the stochastic financial models. The financial modelling assists businesses in making the important decisions like where to invest, how much to invest and how much risky would be the investment.

1. Introduction Financial modelling is defined by Charnes (2012) as the tool

 

McGoun and Zielonka (2006) asserted that financial modelling provides extensive information about the business operations. It has a direct impact on the important strategic decisions and investment decisions of the business to support further growth. The huge reliance of businesses on financial modelling is due to the accuracy it generates in analysing and anticipating the present and future trends with the help of historic and recent data. McGoun (2003) explained that the mathematical technology also underlies the financial modelling that helps in making some useful insights about the capital budgeting, risk management, cash flow forecasting, feasibility analysis, product innovation and business valuation. Thus, financial modelling provides a road map for an effective business financial and business management.

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