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The art of company financial modelling. (English) Zbl 1392.90072
Summary: In corporate finance, the term financial modelling denotes a widely used technique of comprehensive customised quantification of a company’s entire operations. Even though not mathematically strict, such models exhibit descriptive, explanatory and predictive qualities. The paper elaborates on the main steps and principles for building financial models of companies. It also identifies required assumptions and certain statistical properties of well-constructed models. Furthermore, it describes the use of such models for decision support purposes, supplemented by an illustrative example. Finally, it discusses general characteristics and concerns associated with appropriate model construction and use.
90B50 Management decision making, including multiple objectives
90C08 Special problems of linear programming (transportation, multi-index, data envelopment analysis, etc.)
91G80 Financial applications of other theories
91B38 Production theory, theory of the firm
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