The days of manually crunching numerical figures and spending hours preparing spreadsheets are gone. In today’s fast-paced data-driven world technological advancements & innovations are skyrocketing rapidly and connecting every department of organizations from sales to marketing and to finance. Finance play is one of the major parts contributing to organizational exponential growth. To support organizations in financial matters, finance software has become an efficient finance management tool that empowers you to build dynamic & complex financial models effortlessly while promoting time-saving, efforts and resources. In this article, we are going to learn comprehensive knowledge of financial modeling accompanying financial modeling software along short list of esteemed institutes providing financial modeling courses.
What is Financial Modeling?
Before exploring top financial modeling software first, we should understand the concept of financial modeling. The term Financial Modeling refers to the process of creating a comprehensive and extensive representation via numerical along with statistical methods of your business’s current or accurate financial situation.
Through financial modeling, business organizations can ascertain necessary details regarding the financial aspects of their business including operational or variable expenses, cash flow situations, debt, revenues, market trends and more.
Financial Modeling helps business organizations by providing authentic insights through in-depth analysis of the financial statements which directly assist business organizations in evaluating multiple investment opportunities, maintaining financial health, and contributing to informed decision-making.
Purpose of Financial Modeling
There are numerous purposes for financial modeling because it provides a streamlined and structured approach for analyzing or understanding the complexities of financial statements in business organizations.
It also works as one of the most powerful financial tools that help business organizations predict or manage multiple financial and investment opportunities along with risk associated by considering different scenarios and factors. Here are some of the key purposes of financial modeling.
Must check out these top-ranked:
- Financial Modeling Courses in Mumbai
- Financial Modeling Courses in Nagpur
- Financial Modeling Courses in Pune
- Financial Modeling Courses With Placements
- Financial Modeling Courses For Beginners
- Financial Modeling Courses With Internship
Determining Financial Position:
Financial modeling with the implementation of financial modeling software and modules helps business organizations in ascertaining the financial position of their business more efficiently.
With top-notch financial modeling techniques and through mathematical calculation and statistical analysis, financial models provide insights into a business’s current and future financial situation that help them predict and evaluate various favorable financial opportunities that contribute to achieving their desired business goals.
Informed Decision-Making:
Financial modeling also supports informed decision-making while determining the financial position of business organizations. Financial models carry or analyze all necessary and relevant details related to financial matters to provide accurate insights such as financial situation, the profitability of investment opportunities, and more which aid business organizations in the decision-making process.
Predicting and optimizing risk is an important aspect of every business organization. Financial modeling modules or techniques help in determining risk through multiple channels and help business organizations mitigate or optimize those risks.
Through financial modeling, business organizations can create hypothetical but realistic scenarios that assist them in ascertaining various kinds of possible risks associated with financial or investment matters by identifying areas of vulnerability that help them develop contingency plans and strategies to avoid risky situations.
Read here:
- How To Become a Financial Modeler
- Financial Modeling Books
- Financial Modeling Terms
- Financial Modeling Career Path
- Who Uses Financial Models
- Financial Modeling vs Financial Forecasting
- Financial Consultant Salary
Forecasting:
Apart from predicting risk, there are many significant details regarding the financial matters of business forecasted through financial modeling. With the implementation of financial modeling techniques and modules, business organizations can analyze historical financial data which helps in forecasting future circumstances related to financial affairs including ascertaining or projecting revenues, predicting expenses (fixed & variable) or cash flow, and other financial metrics.
These futuristic financial insights enable business organizations and industries to set realistic business objectives or anticipate financial challenges along with investment opportunities.
Mergers & Acquisitions Analysis:
One of the major purposes of Financial modeling is analyzing mergers and acquisitions deals. The techniques and models of financial modeling help in evaluating the financial aspects of potential mergers & acquisitions.
Today multiple business organizations whether small or large scale look forward to merger & acquisition opportunities to expand their business or to achieve their desired business goals.
Financial modeling helps decision-makers in business organizations by developing specific models or techniques that help in estimating the value of target companies in merger & acquisition deals along with determining the probable profits and risks associated with deals.
Monitoring & Analysis:
In every project, whether it is business or individual monitoring and analysis are important factors to track the progress of that specific project.
In business organizations, this analysis is done with the assistance of financial modeling because it enables certain techniques and models to track & monitor financial performance through analysis by comparing actual financial outcomes with pre-decided or predicted financial figures.
Through analysis of financial statements with the help of financial modeling facilitates business organizations in evaluating their financial performance, identifying key areas of improvement, predicting and optimizing risks, and more.
Types of Financial Modeling
Various types of financial modeling assist business organizations while serving their specific purpose while producing a variety of results depending upon the input. Here mentioned fice common types of financial modeling.
Here is a guide to:
- Why Use Financial Models
- Financial Modeling Self-Study
- Business Advisory Services
- Is Financial Modeling Difficult
- Can Financial Modeling Be Automated
- Financial Assets Overview
Discounted Cash Flow (DCF) Modelling:
This module of financial modeling helps business organizations by estimating the present value of cash flow in business organizations to time the exact & accurate value of an investment or company.
This model is leveraged to calculate the net present value (NVP) of a business organization by analyzing or by making assumptions of current and future cash flow, discount rate, growth rate, and terminal value.
The discounted cash flow model is utilized in the valuation and analysis of investment opportunities, capital budgeting, and more to ascertain the probability of future cash flow in business organizations and industries.
Financial Statement Modelling:
Financial statement modeling refers to creating models that carry & project information regarding financial statements such as balance sheets, trading & profit/loss transactions, income statements, the company’s assets and liabilities, cash flow statements, and more.
This model helps business organizations in determining or predicting assumptions about events of future performance, financial growth, and factors affecting business financial operations by comparing present facts with historical information.
Financial statement modeling also contributes or provides assistance to business organizations and industries in planning, budgeting, and informed decision-making.
Mergers & Acquisitions (M&A) Modelling:
The next type of financial modeling is mergers & acquisitions modeling also known as the merger model. M&A modeling focuses on evaluating the financial aspects of merger and acquisition deals.
In simple terms, this model helps business organizations in determining the financial sense of the M&A deals including cash flow along with the exact valuation of the both acquiring and the target company, the financial impact of the transaction, prediction of possible returns, and risk associated with specific deals.
Project Finance Modeling:
This type of financial modeling helps business organizations facilitate large-scale projects such as mergers & acquisitions, infrastructure development, real estate investment, and more by analyzing their financial capabilities along with profitability.
This model provides assistance to business organizations and industries by assessing cash flow in the project, financial structure, and options or channels of financing through incorporating variable factors of specific long-term projects.
Option Pricing Modeling:
Option pricing modeling helps investors and traders determine the fair value of an option in options trading. This model implements mathematical approaches and modeling techniques to calculate the fair price of options along with assets’ price, interest rate, volatility, depreciation, and more which gives the holder the right to buy or sell an asset.
This model assists investors and traders in estimating the accurate value of options while evaluating potential risks and rewards associated with each option that help them make informed trading decisions in reaching desired goals.
Components of Financial Modelling
There are certain significant components are required before building a financial model. The components of financial models are interrelated to each other. Here list of some major components that are essential for creating accurate financial models.
- Opening Balance sheet
- Income statement
- Revenue & Expenses
- Working capital
- Fixed assets
- Debt schedule
- Cash flow statements
Must Check out:
- Scope of Financial Modeling
- Is Financial Modeling a Good Career
- Financial Modeling Interview Questions
- Basics of Financial Modeling
- Financial Modeling Tools
Introduction to Financial Modeling Software
Financial modeling software is a significant and specialized financial tool that supports the functioning of financial modeling efficiently and straightforwardly. The tool is specifically designed to create or facilitate the analysis and manipulation of financial models.
There are many famous financial modeling software we will learn about them later in this article. These types of financial modeling software are responsible for building complex financial models that contain necessary and relevant information regarding the financial data of business organizations or individuals.
These modeling tools provide a user-friendly interface and multiple features such as built-in templates and formulas which serve as a starting point for common financial calculations, data visualization, scenario analysis, and sensitivity testing along with a wide range of features to support the financial modeling process and diminishes the possibility of errors that could happen in manual computation.
Overall, financial modeling software promotes the accuracy and efficiency of the financial modeling process, enabling business organizations or decision-makers to make informed decisions based on insights obtained from robust financial analysis.
Top 6 Financial Modeling Software
To support and assist the financial modeling process in business organizations there are numerous software are utilized at their full capacity. Let us explore different types of financial modeling software in depth.
1. CUBE
CUBE is one of the most famous and efficient financial modeling software which allows individuals and business organizations to organize, manage, control, and track financial data with the just click of a button.
This software provides dynamic solutions to do more by expending limited time. CUBE can easily be incorporated into the current business model that helps business organizations access real-time financial data and promote faster or more accurate financial analysis.
Features of CUBE:
- Help users save time, reduce errors, and provide accurate insights
- Offer feature of Multi-Scenario analysis
- Provide a user-friendly interface
- Integrate Excel sheets and promote flexibility
- Allow feature of multi-currency support
- Provide building of customizable dashboard
- Custom Templates
- User-friendly support & control
- Centralized formula
- Promote collaboration, data visualization, scenario planning, and more
Highlights of CUBE:
- Flexibility and compatibility in reporting financial data
- Templates are organised which saves time and efforts
- Professionals can create their possible financial scenarios and forecast
- Adapt with a current spreadsheet of the business model
- Provide seamless integration with spreadsheets including Excel & Google sheet
- Demo facility of software also available
- Starting at $1250 per month for a lean financial team
- Starting at $2450 per month for companies
2. Forecastr
The next popular software for financial modeling is Forecast. This software provides a user-friendly interface that allows business organizations to save time and promote the accuracy of their financial statements by working with a team of financial experts or professionals to create a custom financial model that projects all necessary details regarding finance such as cash flow statements, income statements, balance sheet and other crucial reports.
Features of Forecastr:
- Forecasting of revenue & expenses
- Promoting Data-integration
- Facilitating Investor reporting
- Budgeting of expenses (fixed & variable)
- What-if scenario
- Runway management
- Tracking KPIs & goals
Highlights of Forecastr:
- It focuses on building & selling financial modules
- With the help of analysis, business organizations can predict or understand growth
- Live online support
- The assistance of dedicated expert analysts/ 30-day white-glove onboarding
- Quarterly updates
- Option to create & analyze unlimited scenarios
Pricing of Forecastr:
Provide an annual subscription plan according to the order.
3. Anaplan
Anaplan is one of the famous and reputed cloud-based platforms that enable business organizations and industries to observe, plan, or manage business outcomes.
The software contributes to building complex financial models, scenario planning, budgeting, intelligent forecasting, and faster decision-making.
The software also focuses on creating dynamic, flexible, and collaborative financial models that can hold various data sources and promote complex financial calculations along with allowing finance experts to build a team of professional analysts to streamline the financial modeling and planning process, improving accuracy and making informed decisions.
Features of Anaplan:
- Promote planning budgeting & forecasting
- Data integration & modeling environment
- Pricing Optimization
- Scenario-based planning, reporting, and visualization
- Promote collaborative workspace
- Prioritizing data security and user control
- Customization & Mobility
Highlights of Anaplan:
- Help business organizations in a 12-month planning cycle.
- The real-time analysis of external-internal data to measure accurate performance
- Allow business organizations to adjust their financial model according to their needs & requirements
- Allowing multiple users to work together on a financial model
- Professionals & experts can create multiple scenarios or evaluate the result of each scenario by analyzing them.
The price of Anaplan software can vary according to the needs and requirements of organizations. However, the entry-level cost ranges from $30,000 to $50,000.
4. Jirav
Jirav is also a cloud-based financial planning software offering “all in one” financial modeling and analysis services with purpose-built solutions that reduce the complexities of the financial modeling process by shifting the manual workload to technology and innovation.
The software promotes accurate and faster financial planning, forecasting, budgeting, reporting & analysis that enables organizations to streamline their financial process and generate insights to contribute to better financial decision-making.
Features of Jirav:
- Promote integrated & centralized financial planning
- Data modeling & Workforce planning
- Facilitate automated forecasting and driver-based planning
- Revenue growth & business modeling
- Tracking budget and actual performance
- Provide report templates
- Standard & custom analytics
- Cash-flow projection
- Provide vivid data visualization
- Historical data tracking
- Data security & exchange
- What-if scenario analysis
Highlights of Jirav:
- Provide pre-built formulas and templates to support organizations in the financial modeling process.
- Promote real-time dashboard & KPIs tracking
- Enhances financial reporting including customizable templates and financial statement generation.
- Help organizations in variance analysis and forecast comparisons
- Provide full-access control over the software
- Providing a facility for demo
Pricing of Jirav:
- For business – starting at $10,000/year & Pro package starting at $15,000/year
- For accounting firms – ranges from $30/month to $225/month
- Organizations can contact you for pricing quotes according to their requirements.
5. Finmark
Finmark is a financial modeling and planning software for small and midsize business organizations along with startups.
This software helps business organizations by building accurate financial models and also provides guidance to startups in organizing financial data, hiring plans, and obtaining useful insights for informed decision-making, fundraising goals, and scenario planning.
Finmark promotes saving time with a data automation approach while analyzing historical data.
Features of Finmark:
- Facilitate real-time data & analysis
- Enable model customization with multiple scenarios
- Collaboration and sharing of modeling plans
- Centralized budgeting and fundraising
- Forecasting revenue & prediction of cash flow
- Analysing KPI metrics
- Market analysis
- Promote automotive hiring planning
Highlights of Finmark:
- Help business organizations in financial planning and forecasting
- Supporting small business organizations and startups
- User-friendly interface
- Easy to use and understand
- Turning significant insights into the informed-based decision.
Pricing of Finmark:
Provides custom-tailored pricing according to business requirements. Prices range start from $100/month
6. Quantrix
One of the leading software in the realm of financial modeling, headquartered in Portland, Maine USA. Quantrix hires professional experts who are dedicating their knowledge and skills to building world-class powerful business or financial modeling software with a user-friendly interface.
The software also promotes increasing efficiency and tracking of critical financial data along with enabling organizations in informed and better decision-making.
Features of Quantrix:
- Multidimensional Modelling
- Dynamic formulas make calculation easy
- Promoting collaboration and sharing
- Financial Scenario & what-if analysis
- Interactive dashboards
- Focus-based visual dependency inspector
- Linking with the current business model
- Alert system for potential errors & miscalculations
- Interactive cloud modeling system
- Correlation & statistical analysis
- Graphical Presentation of financial data
- Provide templates for drafting models
Highlights of Qyantrix:
- Help organizations in error-free and accurate financial calculation
- Customer support
- Deployment of software through multiple hosts including cloud hosting, hybrid hosting, and premises
- Facilitate a multi-user environment within a financial model
- Promote unlimited data integration with spreadsheets, databases, and multiple other sources
- Flexibility to support industries and organizations according to their requirements
- Allow organizations to perform multiple scenario-based analysis
Pricing:
For pricing, organizations & individuals have to contact directly with Quantrix.
Top 5 Institutes Offering Financial Modelling Courses
Today the demand for professionals who are experts in building and implementing financial modelling is increasing rapidly. Business organizations, multinational companies, financial institutions, industries, corporations, and governments hire professionals to build and manage complex financial models.
Individuals who are interested in developing or building their career in this sector of finance require specialized knowledge & skills. Here are listed the top 5 financial modeling courses offered by prestigious institutes.
- IIM SKILLS
- Corporate Finance Institute
- The Wall Street School
- Finladder
- Kredent Academy
Frequently Asked Questions
Question: Is financial modeling software hard to learn?
Answer: Financial modeling software are complex financial tool so the difficulty of learning depends upon specific software and an individual’s prior knowledge or experience. Some software has user-friendly interfaces and provides tutorials that make it easier to learn and understand while some have complex features that require learning and months of training to get started.
Question: Are free financial modeling software available?
Answer: Yes, there are some free financial modeling software available including Excel or Google Sheets along with open-source software like R and Python that offer numerous financial modeling capabilities. However, they may have certain limitations in terms of features in comparison to paid software.
Question: Who builds and uses Financial Modeling Software?
Answer: Financial modeling tools and software are developed and used by professionals depending upon needs and requirements within the organizations. These professionals can be investment bankers, equity research analysts, CFOs, management consultants, accountants, and financial planners.
