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BENEFITS OF FINANCIAL MODELING

by | Jun 2, 2017

Over the years, Financial Modeling has become a tool of high importance for any company which wants to manage its finance in a very informed and systematic way. It is relevant for new as well as existing companies who seek to control their expenses, manage risk, raise finance, acquire new companies, and plan their future growth.

Starting from the creation of a business plan to managing their operations, Financial Modeling has a very important role to play in the operations of companies across various industries.   Financial Modeling helps the companies to sharpen their strategies and visualize the future in a way which had never been possible before the discipline had become so widely available and recognized as a critical business tool.

Why Companies Need Financial Modeling

Financial Modeling helps the companies to:

  1. Manage their cash flows by predicting demand and supply and schedule their production accordingly.
  2. Identify, estimate and manage financial risk
  3. Formulate corporate strategy
  4. Analyze financial statements to identify growth areas
  5. Determine and analyze profitability
  6. Estimate the future economic performance of the company
  7. Determine the requirement of for the funds, and determine whether to release the funds through debt or equity.
  8. Evaluate targets for mergers and acquisitions and identify the best candidates.

Benefits Of Doing A Course On Financial Modeling

Financial Modeling is widely used in various companies like:

  • Investment Banks
  • Mutual Funds
  • Credit Rating Agencies
  • Project Finance Companies.
  • Equity Research Companies
  • Financial KPOs
  • Stock Brokers

There is a high demand for Financial Modeling certified professionals in these companies. By doing a course on Financial Modeling, you can get a lucrative career with attractive salaries and steady career growth.

Areas of work:

Qualitative analysis

Ratio analysis

DCF modeling

Merger and acquisition

Project finance

Venture capital

Intellectual property valuation

Asset allocation

Sensitivity analysis

Some of the designations that they can get are:

  • Financial analyst
  • Assistant Finance Manager
  • Finance Manager
  • Senior Finance Manager
  • Business analyst
  • Equity Research analyst
  • Market research analyst
  • Associate analyst

Salary Potential

As per payscale.com, on an average, the median salary of a Financial Modeling certified professional ranges from 4 – 16 lakhs. The salaries that the freshers and experienced Financial Modeling certified professionals earn are as follows:

YEARS EXPERIENCE MEDIAN SALARY
Less than 1 year Rs 425,613
1-4 years Rs 613,183
5-9 years Rs 1,177,475
10-19 years Rs 1,618,335
20 years or more Rs 1,913,401

Designation-wise salaries that they can expect are:

DESIGNATION MEDIAN SALARY
Equity research associate Rs 4,37,556
Financial analyst Rs 5,09,618
Research analyst Rs 5,89,581
Assistant finance manager Rs 7,66,497
Senior financial analyst Rs 7,77,235
Finance manager Rs 10,54,756
Senior finance manager Rs 15,54,631

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