11 Financial Modeling Examples & Templates for 2025

Enterprises actively use financial modeling to guide their financial planning and strategic decision-making. Financial models offer data-driven, quantitative analysis that tells you where your company stands and where it’s heading.

That being said, one model can’t do it all. As a finance professional, you’ll need different types of financial analysis and modeling for different situations. This article will cover the basics of financial modeling and provide you with 11 financial modeling examples that you can use to evaluate corporate decisions from a financial perspective.

What Is Financial Modeling?

Financial modeling is the process of creating a numerical representation of a company’s financial performance, encompassing its past, present, and projected future operations. This analytical method is essential for informed decision-making across various business scenarios and involves combining key accounting, finance, and business metrics to build a model of a company’s financial situation. This exercise helps an organization visualize its current financial position and predict future financial performance.

But the most common use of a financial model is for making operational business decisions and performing financial analysis. Executives typically use financial models to make decisions regarding:

• Investment Evaluation: Assists in assessing the viability and potential returns of investment opportunities.
• Business Valuation: Determines a company’s worth for purposes such as mergers, acquisitions, or sales.
• Capital Raising: Supports strategies for securing funding through debt or equity channels.
• Budgeting and Forecasting: Facilitates the creation of detailed financial plans and future performance projections.
• Risk Management: Identifies and quantifies financial risks, enabling the development of mitigation strategies.
• Strategic Planning: Guides long-term business strategies by evaluating potential financial outcomes.
• Operational Decision-Making: Informs choices related to resource allocation, pricing, and cost management.
• Financial Reporting: Enhances the accuracy and depth of financial statements and disclosures (using tools like Wands for Oracle and SAP).
• Scenario Analysis: Examines the financial implications of various business scenarios and economic conditions.
• Performance Monitoring: Tracks financial metrics to assess and improve business performance over time.

Key features of financial modeling software include:

• Scenario Simulation: Allows businesses to evaluate the financial outcomes of different strategic choices or market conditions.
• Data Integration: Combines financial statements, market trends, and business metrics into a cohesive framework.
• Decision Support: Facilitates data-driven decisions by providing clear visualizations and projections.

By offering a structured way to analyze complex data, financial modeling helps businesses navigate uncertainties, optimize strategies, and ensure long-term success.

What Is Financial Modeling Used For?

Financial modeling is instrumental for decision-making in investment banking, corporate development, equity research, and project finance. It aids in valuing businesses, making investment decisions, budgeting, and forecasting financial performance, thereby supporting strategic planning and operational efficiency. It equips organizations with the ability to evaluate opportunities, mitigate risks, and make informed decisions. The diverse applications of financial modeling include:

• Investment Banking

1. 1. • Assessing mergers, acquisitions, and leveraged buyouts.
      • Valuing companies for initial public offerings (IPOs).

• Corporate Development

1. 1. • Planning for organic growth and expansion into new markets.
      • Evaluating partnerships and joint ventures.

• Budgeting and Forecasting

1. 1. • Preparing detailed financial plans for departments or projects.
      • Anticipating future performance under various economic conditions.

• Risk Management

1. 1. • Identifying potential risks to cash flow, revenue, and profitability.
      • Developing strategies to mitigate financial uncertainties.

• Equity Research

1. 1. • Valuing stocks and assessing their growth potential.
      • Creating reports to guide investor decisions.

• Project Finance

1. 1. • Evaluating the financial viability of large infrastructure projects.
      • Assessing return on investment (ROI) and funding requirements.

• Operational Efficiency

1. • Identifying cost-saving opportunities through detailed analysis.
   • Allocating resources effectively across business units.

Financial Modeling Makes You A More Strategic Analyst

Companies operating in the 21st century are faced with a new set of unique challenges. We now live in a global economy that’s shaped by accelerating innovations in technology. As a result, companies must be agile — poised to make quick, strategic decisions based on the latest incoming data — if they hope to succeed.

FP&As frequently visit with nearly every team within an organization, including the treasury and accounting, sales, marketing, operations, and executive management teams. In this sense, the FP&A team acts as a central hub within the company that connects and relays information between the executive and operational teams.

But to play your part (and play it well), financial modeling is absolutely essential. It’s likely the most important weapon in your arsenal. Financial modeling is what gives you the insights you need to make data-driven decisions for your company.

How to Build a Financial Model

So, how do you build a financial model? Many finance professionals choose to build their own financial models from scratch using Excel. Building a financial model this way is no simple task. Not only will you need Excel keyboard shortcuts to increase efficiency, but also programming knowledge. For reference, Visual Basic for Applications (VBA) is the programming language typically used for Excel and other Microsoft Office programs.

However, building a useful financial model requires more than simply plugging and chugging data and equations. You’ll also need to think about the formatting, layout, and design of your model. For example, separating input (historical data and assumptions) from output (calculations) can help you prevent data entry mistakes and more easily scan for errors. A well-laid-out and intuitive design will help highlight the main message and key takeaways of your model.

Because of this, every situation and project will be different. Thankfully, there are some basic steps to follow for building your financial model:

1. Define the model’s objective and scope
2. Collect relevant historical data and assumptions
3. Design the model’s structure and layout
4. Build your worksheets for key components (e.g. revenue, expenses, cash flows, etc.)
5. Create formulas to project future financials based on assumptions
6. Perform scenario modeling to check how sensitive the model’s outputs are
7. Validate the model for errors
8. Review and refine the model to reflect performance and changing conditions

Financial Modeling Examples: 11 Different Types

Financial modeling is an important tool, but it’s not one size fits all. You should design your model with a specific question in mind. There are different types of models that FP&As can use depending on the problem they’re trying to solve. Let’s take a look at this curated list of financial modeling examples:

1. Three-Statement Financial Model

The three-statement financial model integrates and forecasts a company’s three financial statements (the income statement, balance sheet, and cash-flow statement) into the future. The three-statement model represents the real meat and potatoes when it comes to financial modeling. This model acts as a standard that gives a comprehensive overview of the company’s financial history, current standing, and future performance.

It also has predictive power. The three-statement financial model allows you to explore how your company will perform under multiple circumstances and visualize how different decisions can interact to impact the future of the company.

A Three-Statement Financial Model is a powerful financial tool that integrates three crucial financial statements of a company:

Income Statement

This statement reflects the company’s profitability over a specific period. It shows revenue earned, expenses incurred, and ultimately the net income (profit) or net loss.

Balance Sheet

This statement presents a snapshot of the company’s financial position at a specific point in time. It categorizes assets (what the company owns), liabilities (what the company owes), and shareholders’ equity (the company’s net worth).

Cash Flow Statement

This statement details the cash inflows and outflows of a company over a specific period. It categorizes these flows into operating activities (cash generated from core business), investing activities (cash used for investments), and financing activities (cash raised from debt or equity).

2. M&A Model

The merger and acquisition (M&A) model calculates the impact of a merger or acquisition on the earnings per share (EPS) of the newly formed company. This value can then be compared to the company’s current EPS. The M&A model is useful for helping a company decide whether a potential merger or acquisition will be beneficial to the company’s bottom line.

If the M&A model shows an increase in EPS, then the transaction is considered accretive, meaning it should result in growth. But if the M&A model shows a decrease in EPS, the transaction is considered dilutive, meaning it will reduce the company’s value. A sample M&A financial model for Excel can easily be found with a quick Google search.

Merger Model

A merger model is a complex financial tool used in the analysis of the financial viability of merging two companies. It involves the consolidation of the balance sheets, income statements, and cash flow statements of both companies into a single model. This model forecasts the financial outcomes of the merger, including synergies that may arise from cost savings or revenue enhancements. The primary goal is to assess whether the combined entity will create value for shareholders and to determine the impact on EPS, leverage ratios, and other key financial metrics.

Acquisition Model

The acquisition model analyzes the financial impact of merging two companies by consolidating their financial statements and forecasting the combined entity’s performance. By looking at the projected EPS, the model helps determine if the merger will be financially beneficial for the shareholders of the new company.

3. Forecasting Models

Forecasting is one of the most important tasks that the FP&A department takes care of on a regular basis. It is typically used to predict future revenues, expenses, and capital costs. Financial models used for forecasting are often compared to the actual budget to review performance in retrospect. Here are four financial model examples used for forecasting:

Straight-Line Model

This is the simplest forecasting model that exists. It makes use of historical data to estimate what will happen in the future. For example, if your company has experienced a 4% annual increase in revenue for the last three years, the straight-line model would forecast a 4% annual increase for the following year.

Moving Average Model

This is another simple forecasting model that can easily be created in Excel. However, its strength lies in its ability to smooth out data. Typically, companies use the moving average model to evaluate performance on a monthly basis and make use of three-month and five-month moving averages.

Linear Regression Model

If you were to calculate a linear regression line by hand, it would take quite a bit of your time and not be worth the effort. Luckily, Excel can do linear regression for you. This forecasting method is best used to compare the relationship between two different variables. A common example is advertising budget and revenue. If your advertising budget increases, you can expect your revenue to increase. A linear regression model will help you determine exactly how advertising and revenue correlate with each other, which can be used for forecasting.

Time Series Model

This is probably the most complicated method of forecasting on our list. Time series modeling attempts to identify patterns in historical data and uses these patterns for forecasting. Most modern approaches to time series forecasting make use of machine learning or specialized software like Longview Plan.

4. DCF Model

A financial analyst may turn to the discounted cash flow (DCF) model when they need a way of determining valuation. One of the key attributes of the DCF model is that it calculates the current value while taking into account predictions for how much money something will make in the future. The DCF model can be used to value an entire company, but you can also use this model to value:

• Shares of a company
• A project or investment within a company
• A cost-saving initiative within a company
• Anything that has an impact on cash flow

It should be noted that while the DCF financial model can be used as a standalone tool for valuations, it can also be used in conjunction with other valuation metrics in more comprehensive models. For example, the capital budgeting model that we talk about later in this post will make use of the DCF model for some of its metrics.

5. CCA Model

The comparable company analysis (CCA) model is another way for a business to calculate its value. It’s a more basic valuation method than the DCF model. The CCA financial model is based on the assumption that similar companies will have similar valuation multiples. It uses metrics from other businesses with similar sizes and operations in the same industry. Some of the most commonly used valuation multiples include:

• EV/S – Enterprise Value to Sales
• P/E – Price to Earnings
• P/B – Price to Book
• P/S – Price to Sales

You can also download a free CCA sample financial model for Excel here.

While this financial modeling method is able to give you a ballpark estimation for the value of your company, it is not almighty. There are often instances in which a company’s valuation cannot be extracted purely from its financial data. However, it is a very good starting place to build a base case valuation.

If you are looking for more sample financial models in Excel, insightsoftware has a large number of sample reports that you can download to help with your CCA modeling.

6. Asset and Liability Management (ALM)

Asset and liability financial models are primarily used by financial institutions (banks and insurance companies) and pension funds (corporate or public) to manage their financial objectives. For example, pension funds must be able to pay pensioners during any economic conditions, including a crisis like the 2008 recession. This is achieved via thorough risk management strategies that are continually reviewed. Most pension funds conduct a comprehensive review every three to five years. During this process, they use financial analysis and modeling to adjust their asset and liability management strategies to reduce portfolio sensitivity to economic conditions, interest rate changes, and foreign exchange rates.

ALM strategies are also employed by the FP&A departments of large corporations and conglomerates. These financial planning models are used to ensure the company remains solvent in the direst of economic situations.

7. Sum-of-the-Parts Model

The sum-of-the-parts financial model allows large conglomerate organizations with many divisions to simplify their valuation. As the name suggests, the sum-of-the-parts model values each business unit, division, or subsidiary separately and then adds them all together.

This can sometimes make it difficult for the FP&A department because they have to gather financial data from multiple entities and compile it into a single model. This is where standardized financial modeling, Excel templates, or specialized financial reporting software (like Wands for SAP or Oracle EBS) really help.

In most large organizations, the benefits of using the sum-of-the-parts models strongly outweigh the extra effort required. This financial model is a useful tool for determining the value of a company’s divisions in the event that one is sold off or spun off into a separate company.

8. Capital Budgeting Model

Every year, the FP&A department is tasked with helping create the annual budget. Some people view this as an extremely painful process due to all the fine-tuning involved. However, a proper annual financial planning model that makes use of quarterly figures and forecasting can greatly expedite the process. Because so many companies go through this process every year, insightsoftware has developed budgeting software solutions to streamline the process.

Most large companies will have a financial planning model in Excel or a budgeting software solution (like our Wands platforms) that they will use to evaluate prospective projects before they choose to pursue them. This financial analysis and modeling will vary by company but will almost always make use of the net present value (NPV), internal rate of return (IRR), and payback period calculations. These three financial performance metrics are best used when a company has several potential projects but can only pick one or two of them.

We won’t go into the details of these metrics or how they are modeled, but you ideally want the NPV to be greater than zero, IRR to be as large as possible, and the payback period to be as short as possible. If you want to learn more about these financial evaluation metrics, check out our financial metrics and KPIs article. It will provide you with the equations necessary for each calculation. You can also find a simple NPV and IRR financial model example here.

9. IPO Model

This might not be a financial model that your FP&A department needs to be familiar with, but they should be aware of its existence. Typically, investment bankers on Wall Street have access to financial model templates that are built specifically for pricing IPOs. The IPO pricing model has several different components that it incorporates.

For example, it will make use of the comparable company analysis, looking at their P/E relative to industry peers. For up-and-coming companies that have yet to turn a profit, investment bankers will look at prospective annual growth estimates. This model also takes into account previous funding round valuations and what share price would be attractive to institutional investors that are subscribing to the IPO.

10. LBO Model

The leveraged buyout (LBO) model is used to analyze an acquisition that finances the cost mostly with debt. How much debt? Typically, a leveraged buyout is 90% debt and 10% equity. Due to this incredibly high debt-to-equity ratio, the bonds being issued are not investment grade – in other words, junk bonds. Some people consider LBOs to be an incredibly aggressive and risky move, but with great risk comes great reward.

The LBO model allows the buying company to properly evaluate the transaction so it can earn the highest possible risk-adjusted internal rate of return (IRR). As a rule of thumb, most companies will only consider an LBO when the IRR is in excess of 30% as this is the point at which the risk-to-reward becomes attractive.

11. Option Pricing Model

Most FP&A departments won’t be looking at the option pricing model unless they are somehow involved with a company that specifically trades/holds derivatives. Option pricing models are typically used by market makers and securities traders looking to turn a profit or hedge risk. These financial models are used to assign a price (premium) for the options contract based on statistics and probability (e.g. how likely the option will be in-the-money at expiration).

There are several different financial models that can be used to price options contracts. The most commonly used models are Black-Scholes, binomial tree, and Monte-Carlo simulations. Creating financial model templates for these is not difficult if you have a good understanding of mathematics and some Excel knowledge. In fact, you can find most of these financial model examples for Excel with a quick Google search.

Financial Modeling FAQs

What Information Should Be Included in a Financial Model?

A robust financial model includes historical financial data, assumptions about the future, projections of the income statement, balance sheet, cash flow statement, and supporting schedules like depreciation and amortization. It may also incorporate scenario modeling and sensitivity analyses to explore different outcomes.

What Software is Best for Financial Modeling?

Excel remains the gold standard for financial modeling due to its flexibility, widespread availability, and strong features. However, specialized software like Longview Plan and financial reporting tools like Wands can help with building more advanced or automated financial models.

What Types of Businesses Use Financial Modeling?

Financial modeling is used across various industries, including banking, real estate, technology, manufacturing, and healthcare. Any business engaged in financial planning, investment analysis, or seeking to evaluate strategic decisions can benefit from financial modeling.

How Is a Financial Model Validated?

Validating a financial model involves ensuring the accuracy of its inputs and logic. This can be done through back-testing against historical data, sensitivity analysis to understand the impact of assumptions, and peer or third-party review to identify any errors or oversights.

Upgrade Your Financial Modeling Tools

Financial modeling represents a key tool for your company’s FP&A team. A good financial model allows you to see the bigger picture and make strategic decisions based on the most up-to-date data. However, different situations call for different types of models. Because of this, you often see FP&A teams with folders full of Excel workbooks, with each one representing a different financial modeling tool for a specific application. This leads to shortcomings with using Excel for financial modeling, such as:

• Are all of these workbooks user-friendly?
• Did one person create all the financial modeling Excel templates?
• What happens if they leave the company?

Don’t get us wrong – we love Excel, but we also love robust financial models that you don’t have to spend days creating. This is where financial modeling software comes into play. Advanced financial planning modeling software like Longview Plan, Tidemark, or Wands for Oracle and SAP can help you take the grunt work out of model building. insightsoftware tools bring speed, agility, and accuracy to your strategic financial planning. That way, you can spend less time fiddling with formulas in Excel and more time thinking strategically about your company’s next step.

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