What Is Financial Modeling and Valuation and Why Does It Mat

Financial modeling and valuation are essential tools for businesses and investors seeking to make informed decisions. But what is financial modeling and valuation? Financial modeling is the process of creating a structured representation of a company’s financial performance, typically using spreadsheets, to forecast future outcomes. Valuation, on the other hand, determines the economic worth of a business or asset using methods like discounted cash flow (DCF) or comparable company analysis. Together, they provide insights into profitability, growth potential, and risk management. These tools empower decision-makers to plan strategically, attract investment, and drive sustainable business success with confidence.