What is Financial Modeling?
Financial modeling is the practice of building a structured spreadsheet (or system-based) representation of a company’s operations, finances, and forecasts to support decisions like valuation, budgeting, or financing.
How It Works
- Lay out historical financials and assumptions.
- Project P&L, balance sheet, and cash flow.
- Build outputs: valuation, returns, covenant tests.
Saudi Context
Saudi banks, advisory firms, and PIF portfolio companies use IFRS-aligned three-statement models in SAR, with separate modules for Zakat and corporate income tax.
Example
An analyst builds a 5-year model for a Saudi logistics firm with assumptions on volume growth, fuel cost, and lease accounting under IFRS 16.