Many local businesses unfortunately fail to devote the right amount of time and effort to formalise their plans into quantitative assessments, financial models and an all-embracing business plan. Given the evolving nature of business and the economy in which firms operate, the absence of a financial model and business plan can represent a risk. Regardless of size or lifecycle, any project should have a clear financial plan that helps guide its strategic focus, set out its mission and vision as well as provide the analytical context by which future performance and changes can be benchmarked and managed.  

A financial model and plan are ways of communicating ideas in a quantitative format, such as translating various situations into financial impacts. Additionally, users who are able to correctly interpret the salient features of a financial model prepared by others are also able to take more informed decisions. This applies to investing in such projects in the case of shareholders, and to lending in the case of banks. This is because they need to be able to ask the right questions when faced with a financial model prepared by others, as well as challenge it.

EY is organising an interactive workshop on financial modelling for investment decisions. It is targeted at all entrepreneurs and professionals who are involved in business planning, both to build such models or to review/ interpret them as is the case with providers of finance. It is also relevant for students and other individuals currently pursuing or interested in pursuing their own business venture.

This session will outline the various applications for such financial modelling and explain in detail the steps involved in model building. These will include, among others, market, demand and economic analysis, operational inputs, funding assumptions and the presentation of performance indicators. The objective is also to consider best practice examples and provide tips on approaches to be undertaken; and what should be avoided. The steps in reviewing a model will also be discussed.

For more information on this topic join EY Malta’s CPE Accredited training event on Financial Modelling for Investment Decisions on April 16, from 2.30pm to 6.15pm at EY’s Connect Centre, Msida. Send an e-mail to events@mt.ey.com to confirm your attendance. The admission fee for this session is €59, including VAT.

Chris Meilak is an economist and Certified Chartered Accountant and Maurice Cachia is a Chartered Accountant. They form part of EY’s Valuation, Modelling and Economics sub-service line in Malta, and have been involved in various private sector and public engagements in various sectors requiring financial modelling and analysis and business plans.