Who is a Financial Modeling Consultant?

  • Financial modeling consultants are individuals or firms that are hired by the businesses for performing certain financial modeling tasks such as budgeting & forecasting, mergers & acquisition, raising capital, and other important financial tasks. These consultants are majorly hired by small businesses since they don’t have separate finance planning and analysis teams that could otherwise develop the financial models and execute or analyze them for the business.

    Who Hires Financial Modeling Consultant?

    Top companies and business houses hire financial modeling consultants to handle their budgets & forecasts, mergers & acquisitions, capital raising, and other financial transactions. In comparison, some companies might be having internal employees in their financial planning and analysis team who act as a consultant for them. Other companies might hire the financial modeling consultants from outside the nature of their profession since they might not be having a separate financial planning and analysis team.

    Services

    Raising funds for different projects and deciding the source of fund, i.e. debt vs equity.
    Deciding the merger and acquisition deals
    Budgeting and forecasting
    Cost-benefit analysis for any new project or activity to be undertaken
    Valuation of stocks and other securities

    Financial Modeling Consulting Firms

    Financial modeling consulting firms are those organizations involved in providing services relating to financial modeling and necessary consultation. These firms build up Excel-based tools for their clients which helps in forecasting the future performance of the clients. In preparing such forecasts, the firms take into account the historical performance of the client, industry trends, and some assumptions. The firm prepares the forecasted balance sheet, income statement, and cash flow statement (commonly known as 3 statement model) ) for its client. Afterwards, a number of financial models are developed, such as the discounted cash flow model, leveraged-buyout model, mergers & acquisitions model, and so on. These financial models are beneficial for the clients in making key financial decisions.