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Why Financial Modelling?

The process of building a financial model is a thorough examination of the structure of a business. What are the value drivers, what are the expense drivers, how do capacity and resources become utilized. What is the pricing strategy? What is the growth strategy? How is the balance sheet going to be financed through growth or periods of contraction?

Going through the process helps a business leader

1. Uncover performance issues

2. Gain understanding of capabilities

3. Plan for various scenarios

Whether the goal is to seek financing, increase the value of the business before a sale, or monitor and enhance day to day performance, there is no greater tool available for the owner operator to attach concrete, objective values to their activities.

12 Years Experience

Recommended by finance professionals

Quick Turnaround

Partner level support

Debt and Equity Transaction Modelling

Quantity of Debt and its timing are two critical pieces of information most companies have trouble with.

When seeking debt financing larger than $1M CAD, borrowers often find themselves going through rigorous risk assessment beyond the usual credit check and collateral requirement. A detailed understanding of core business drivers with a detailed financial projection are often needed to help the lender assess risk and pass through their Credit Department.

A firm seeking equity infusion often requires equal rigour with a focus on the timing and quantity of capital needed. Further, a detailed outline of the uses of funds and their expected returns, impacts on business performance are also needed. Lastly the value the equity enters the business at is often a hotly contested issue. Creating a free cash-flow forecast is often an objective way to build consensus around a number that works for both parties.

Modelling for Strategic Planning

A financial model is a powerful way to assess the viability of a strategic plan. The process of building the model and analyzing historic and future trends can help identify gaps in the current strategy and inform strategic planning efforts.

During the planning process, management is often faced with the challenge of selecting the best scenario to move forward with. Decision making criteria are often qualitative in nature, and geared towards lofty goals. This leaves them incomplete without a qualitative assessment of the financial impacts.

Through financial modelling, factors such as the quantity and timing of capital needed, interruptions in production, merger integration synergies can be modelled to forecast the financial results. The results will not only help bring a scenario to the forefront as the most financially viable, but will also give a clear roadmap for performance along the implementation journey.

Performance Improvement

You can not change what you do not measure. As many of our clients have seen, utilizing a completed model as a defect budget has proven to be a valuable performance measurement and management tool.

At the core of our performance management service:

1. Measuring Financial Performance vs. Model/Budget quickly identifies shortfall or surplus performance and allows a deeper dive into the factors driving the performance.

2. Updating the model with year to date actual results to illustrate the shift in financial trajectory and resulting changes in capital needs/timing. This process offers clarity of the road ahead.

3. Dash-boarding Activity Drivers allows management to see at a glance the operational activity vis a vis the finical performance. Correlation and causality are often mistaken for one another but with our finger not he pulls of both KPI’s and financial outcomes (Expected and actual) we provide management with keen guidance on where to investigate and improve.