Last updated on June 7th, 2024 at 12:53 pm
The latest technological development has opened new horizons for the banking and financial services industries. Gaining financial modeling skills has been one such development that relies on using complex data sets to obtain valuable insights for businesses that boost their financial prospects.
What is Financial Modeling
Financial modeling can be broadly explained as creating a representation of real-world financial situations by factoring in all important variables that might influence the numbers.
What is a Financial Model Used For
Finance Modeling usually entails mathematical models that depict the performance of financial assets and projects. It helps to make a more informed investment decision and choose the most profitable investment avenues.
How Can You Learn Financial Modeling
One can easily opt for financial modeling certification from reputed institutions like Imarticus Learning and learn all about the field as it also provides you with a job assurance.
Most Important Financial Modeling Skills
Now that we have a clear understanding of what is financial modeling all about, let’s delve deeper into the prominent financial modeling skills required to succeed in this field.
Accounting
One of the first and foremost financial modeling skills that you need to hone if you want to excel in this job role is accounting skills. Your accounting fundamentals should be very clear, and you should be well versed in all necessary financial statements so that you can figure out any discrepancies and make necessary adjustments.
Forecasting
Your job as a financial modeller also involves making predictions based on data that you have gathered and analysed. You need to be able to forecast based on the historical and present data of the business after factoring in the necessary assumptions. It also involves taking into consideration the qualitative factors, such as the management team and culture, that might have an impact over the outcome.
Solution-Oriented
Another important type of financial modeling skills that you should add to your arsenal is being solution-oriented. You need to have a problem-solving mindset if you want to succeed in this industry. You should learn to think logically and organise your thoughts while finding solutions to problems. You should also be mindful of the flow of information in your presentation so that it is easily understandable.
Simplification
Being a financial modeller, you need to present a simple and easy to grasp picture to your superiors after analysing the complex data sets that might not make much sense to many in their raw form. Simplification of complex information is also a very important skill that will help you succeed in this domain.
Attention to details
You just can’t succeed without honing this skill. Attention to details is one of the most essential skill-set that you need to have if your role involves conducting complex analysis. You need to be mindful of each and every factor that might affect the final outcome and how it changes the equation.
Analytical skills
This one is an absolute no-brainer, working as a financial modeller, you will have to analyse huge volumes of data that are relevant to your organisation. This requires you to have impeccable analytical skills.
Presentation skills
Your role as a financial modeller doesn’t just involve gathering and analysing information. You are also responsible for simplifying complex information and presenting it in such a way that it is easy to comprehend and make sense.
Connecting financial statements
This is also one of the essential financial modeling skills that you will require in your career. You have to process all relevant financial statements, including balance sheet, income statement, and cash flow statement. You need to be able to connect the dots between these three while conducting your research.
Strategic thinking
You need to be a strategic thinker to make better predictions based on your findings using the company’s financial data. It is not a necessity, but it will surely help you climb up the ladder faster.
Proficient in Excel
This is undoubtedly the most vital skill that every financial model professional should hone. It’s a prerequisite for all financial modeling related roles, and the better you master using Excel, the more efficient your results will be.
