Financial Modeling

	Financial Modeling Financial modeling is the task of building an abstract representation (a model) of a real world financial situation. This is a mathematical model designed to represent (a simplified version of) the performance of a financial asset or portfolio of a business, project, or any other investment. Typically, then, financial modeling is understood to mean an exercise in either asset pricing or corporate finance, of a quantitative nature. It is about translating a set of hypotheses about the behavior of markets or agents into numerical predictions. At the same time, "financial modeling" is a general term that means different things to different users; the reference usually relates either to accounting and corporate finance applications or to quantitative finance applications. While there has been some debate in the industry as to the nature of financial modeling—whether it is a tradecraft, such as welding, or a science—the task of financial modeling has been gaining acceptance ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
picture info	Finance Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of financial economics bridges the two). Finance activities take place in financial systems at various scopes, thus the field can be roughly divided into personal, corporate, and public finance. In a financial system, assets are bought, sold, or traded as financial instruments, such as currencies, loans, bonds, shares, stocks, options, futures, etc. Assets can also be banked, invested, and insured to maximize value and minimize loss. In practice, risks are always present in any financial action and entities. A broad range of subfields within finance exist due to its wide scope. Asset, money, risk and investment management aim to maximize value and minimize volatility. Financial analysis is viability, stability, and profitabili ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
picture info	Abstraction Abstraction in its main sense is a conceptual process wherein general rules and concepts are derived from the usage and classification of specific examples, literal ("real" or " concrete") signifiers, first principles, or other methods. "An abstraction" is the outcome of this process—a concept that acts as a common noun for all subordinate concepts and connects any related concepts as a ''group'', ''field'', or ''category''.Suzanne K. Langer (1953), ''Feeling and Form: a theory of art developed from Philosophy in a New Key'' p. 90: " Sculptural form is a powerful abstraction from actual objects and the three-dimensional space which we construe ... through touch and sight." Conceptual abstractions may be formed by filtering the information content of a concept or an observable phenomenon, selecting only those aspects which are relevant for a particular purpose. For example, abstracting a leather soccer ball to the more general idea of a ball selects only the information o ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Capital Budgeting Capital budgeting in corporate finance is the planning process used to determine whether an organization's long term capital investments such as new machinery, replacement of machinery, new plants, new products, and research development projects are worth the funding of cash through the firm's capitalization structures (debt, equity or retained earnings). It is the process of allocating resources for major capital, or investment, expenditures. An underlying goal, consistent with the overall approach in corporate finance, is to increase the value of the firm to the shareholders. Capital budgeting is typically considered a non-core business activity as it is not part of the revenue model or models of most types of firms, or even a part of daily operations. It holds a strategic financial function within a business. One example of a firm type where capital budgeting is plausibly a part of the core business activities is with investment banks, as their revenue model or models rely ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Consumer Credit Risk ''The following article is based on UK market, other countries may differ.'' Consumer credit risk (also retail credit risk) is the risk of loss due to a consumer's failure or inability to repay (default) on a consumer credit product, such as a mortgage, unsecured personal loan, credit card, overdraft etc. (the latter two options being forms of unsecured banking credit). Consumer credit risk management Most companies involved in lending to consumers have departments dedicated to the measurement, prediction and control of losses due to credit risk. This field is loosely referred to consumer/retail credit risk management, however, the word ''management'' is commonly dropped. Scorecards A common method for predicting credit risk is through the credit scorecard. The scorecard is a statistically based model for attributing a number (''score'') to a customer (or an account) which indicates the predicted probability that the customer will exhibit a certain behaviour. In calculating the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Credit Analysis Credit analysis is the method by which one calculates the creditworthiness of a business or organization. In other words, It is the evaluation of the ability of a company to honor its financial obligations. The audited financial statements of a large company might be analyzed when it issues or has issued Bond (finance), bonds. Or, a bank may analyze the financial statements of a small business before making or renewing a commercial loan. The term refers to either case, whether the business is large or small. A credit analyst is the financial analyst, finance professional undertaking this role. Role One objective of credit analysis is to look at both the borrower and the lending facility being proposed and to assign a Credit rating, risk rating. The risk rating is derived by estimating the probability of default by the borrower at a given confidence level over the life of the facility, and by estimating the loss given default, amount of loss that the lender would suffer in the even ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Cash Flow Forecasting Cash flow forecasting is the process of obtaining an estimate or forecast of a company's future financial position; the cash flow forecast is typically based on anticipated payments and receivables. See Financial forecast for general discussion re methodology. Function Cash flow forecasting is an important element of financial management generally; Cash flow is the "life-blood" of all businesses — particularly start-ups and small enterprises — and if the business runs out of cash and is not able to obtain new finance, it will become insolvent. As a result, it is essential that management forecast (predict) cash levels. How often, will depend on the financial security of the business: if the business is "struggling", management may assess, if not forecast, cash flow on a daily basis; if the finances are more stable, then this process may be weekly or monthly. Key dependencies re the forecast: * Identify potential sho