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Original scientific paper

The art of company financial modelling

Zoran Lukić orcid id ; Investment Banking, Zagrebačka banka, Savska 60, 10000 Zagreb, Croatia

Full text: english pdf 794 Kb

page 409-427

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In corporate finance, the term financial modelling denotes a widely used technique of comprehensive customised quantification of a company’s entire operations. Even though not mathematically strict, such models exhibit descriptive, explanatory and predictive qualities. The paper elaborates on the main steps and principles for building financial models of companies. It also identifies required assumptions and certain statistical properties of well-constructed models. Furthermore, it describes the use of such models for decision support purposes, supplemented by an illustrative example. Finally, it discusses general characteristics and concerns associated with appropriate model construction and use.


financial modelling, corporate finance, decision support, business plan, fundamental analysis

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