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Financial modeling is the practice of building spreadsheet-based representations of a company's financial performance to support decision-making. It encompasses DCF (discounted cash flow) analysis, LBO models, merger models, and operating forecasts. Investment banks, private equity firms, venture capital funds, and corporate finance teams all require financial modeling as a core skill.
Financial modeling expertise commands premium compensation in banking and finance. Senior financial analysts and associates in the US earn $100k-$180k (plus bonuses), while Bharat-based roles range from 8-25 LPA. The skill is built on advanced Excel proficiency and pairs with accounting knowledge and industry-specific expertise. Wall Street Prep, BIWS, and CFI certifications are common credentials that demonstrate modeling competence.
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