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Financial Modeling

With all that it takes to operate a business, there can be little time for looking to the future and planning ahead. Fortunately, at TFO Solutions, we are excited to meet you where you are and help bring order, structure, and even forecasting to your financials through a financial modeling process. Located in the DFW metroplex, it is our privilege to bring our bookkeeping solutions to businesses in Dallas, Fort Worth, and the surrounding areas.

What is Financial Modeling? 

You may be wondering what financial modeling is and how exactly it can impact your business. First, it is a tool that is used to predict a company’s future financial performance. This modeling is done using Excel and is based upon past performance data, while making assumptions about what is to come.

This tool incorporates income and cash flow statements, a balance sheet, and schedules that support these assumptions. From this, advanced models can be created, including:

  • Leveraged buyout (LBO)
  • Mergers and acquisitions (M&A)
  • Discounted cash flow analysis (DCF model)
  • Sensitivity analysis

How is it Used? 

Data collected from this modeling process can be used for making decisions and evaluating financials both inside and outside the company. From inside, financial modeling can provide guidance on things like:

  • Growing the business
  • Raising debt or equity capital
  • Making business or asset acquisitions
  • Valuing a business
  • Allocating capital
  • Budgeting for years to come
  • Selling business units and/or assets

How Can TFO Help?

At TFO Solutions, we are here to reduce your workload while helping your business succeed. We do this best by helping our clients create a clear financial picture of their company through modeling. Let us help you prepare for the future by using these best practices and taking on a large part of your financial workload. 

The following steps are just a glimpse at how we turn your current financials into an instrument that can be used for the future:

  • Incorporating historical results. We pull several years of statements and calculate revenue growth rate, variable costs, gross margins, fixed costs, AP and AR days and inventory days, then provide assumptions for the period of time predicted.
  • Determining the top of the income statement with gross profit, revenue, COGS, operating expenses, and earnings before interest, tax, depreciation, and amortization (EBITDA).
  • Completing a balance sheet through calculating accounts receivable, payable, and inventory.
  • Building schedules for assets like property, plant, and equipment (PP&E), interest, and debt.
  • Finishing the income statement by linking depreciation to the PP&E schedule and interest to debt.
  • Creating a cash flow statement.
  • Running a discounted cash flow (DCF) analysis and adding sensitivity analysis. 
  • Creating charts and graphs from the model and testing it to ensure accuracy. 

Call Now for Financial Modeling Assistance!

When it comes to running a business, it’s not only okay to enlist the help of others, it’s extremely beneficial. At TFO Solutions, a simple phone call will provide you with a team that is ready and eager to help with your financial modeling needs. We are confident that through our service, you will be able to plan and better prepare for the future of your company.

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