What is a financial model?

1. A monthly look-back and forecast of your revenues, costs and key business metrics, with the ability to change the key drivers of the forecasts and see different results.

2. It shows what’s actually happened in your business in the past (actuals), and the things you think will happen in the future (forecasts), if you execute on your plan.

3. It’s also a key decision-making tool, i.e. you can see what will happen under different assumptions, and your assumptions are your instruction manual for running the business.