Financial Modeling is one of the most useful and valuable skills in finance. There are many careers in finance that require financial modeling knowledge and technical skills. The ability to forecast a company’s financial position is useful in a wide variety of scenarios, whether it’s assessing a company for investment purposes, advising a company on capital raising, or understanding a company’s performance and identifying areas where a company’s operations can be enhanced.

1. Investment Banking

In investment banking, financial models are used during the advisory process to guide companies on capital raising activities, including IPOs, mergers, and acquisitions.

2. Financial Planning and Analysis (FP&A)

Financial Planning & Analysis (FP&A) involves planning, forecasting, budgeting, and analyzing a company’s financial performance to support decision-making and strategy.

3. Corporate Banking, Commercial Banking, Private Debt

Financial models are used during the advisory process when banks assist companies with capital raising, such as IPOs, mergers, and acquisitions.

4. Private Equity

In private equity, a leveraged buyout (LBO) model is used to analyze the free cash flow generated by a company, utilizing a 3-statement model to evaluate the feasibility and returns of the acquisition.

5. Corporate Development

Corporate development teams help companies acquire other businesses for strategic reasons, using financial models to assess the financial implications and potential outcomes of the acquisition.

6. Venture Capital

Venture capital funds invest in growing companies, using financial models to evaluate various scenarios for future revenues, expenses, and cash flow.

7. Hedge Funds

Hedge funds manage pools of money on behalf of investors, using financial models to analyze and understand the quantitative aspects of their investments.

8. Equity Research (Sell-Side) 

Equity research (sell-side) teams analyze stock markets and produce equity research reports that provide opinions to public investors, typically supported by detailed financial models.

9. Accounting

Accounting professionals require strong technical knowledge of financial statements, including how different line items interact with each other and can use financial models to support building forecasts.

10. Consulting

Consultants use financial models to deliver data-driven insights in areas like market expansion, cost reduction, and operational restructuring that help clients make informed decisions.

11. Buy-Side Investment Management

Buy-side professionals use financial models to evaluate investments, forecast returns, and optimize portfolios.

12. Regulatory Analysis

Regulatory professionals use financial models to assess compliance impacts, evaluate risks, and analyze policy changes.