Financial modeling involves using mathematical equations to predict how financial changes might occur in the real world. Types of financial models include business financial models, qualitative models, and personal financial models. To choose the right financial modeling course, consider the type of financial modeling you need to do and look for classes that specialize in that type of financial modeling.
Courses in financial modeling of companies and securities are often found in colleges and universities.
If your personal finance is the subject of financial modeling, you can often take a personal financial modeling course at a community center or library in addition to taking them at higher education institutions.
In general, the idea of financial modeling is to create a financial plan. Whether it’s a plan for a person, an organization, or an investment portfolio, taking the right financial modeling course is extremely important in getting you on the right track for the type of financial modeling you need to do. Because each type of financial modeling is vastly different from the others, you need to take the right class to gain the insight you need to make the right financial decisions.
How you do financial modeling depends primarily on the needs and attributes of your organization :
- Corporate financial modeling focuses on forecasting cash flow for the organization, so a corporate financial modeling course would focus on analyzing, evaluating, and planning financial decisions for a company. More often than not, a company chief financial officer (CFO) is responsible for coordinating corporate financial modeling. If you’re looking for a course in corporate financial modeling, you’re most likely on your way to completing a master’s degree in financial modeling.
- An analyst who predicts market movements performs a process called qualitative financial modeling. A qualitative financial model focuses on techniques that predict financial risk or expected financial growth. Investors use this information to make portfolio decisions that can make them rich or cause big losses. This type of financial modeling involves complicated equations, and mistakes can cause serious financial losses for clients, so most people who do this job are highly educated. In this case, such a financial modeling course would most likely be part of a program to acquire an advanced degree in the field of qualitative finance.
Personal financial modeling is the type of modeling that affects most people. If you’re creating a plan based on your known expenses to form a reasonably stable picture of your financial future, that’s a type of financial modeling. Financial modeling for an individual or a household is almost entirely different from business and market financial modeling. When personal financial forecasting is the goal, take a financial modeling course for personal finance, not a business or market financial modeling course. The business-focused information contained in these professional courses is unlikely to help an individual on his or her personal journey to accurate financial forecasting.