Financial Modelling can be briefly described as the financial representation of a business (usually in terms of a set of projected financial statements and/or key performance indicators) through the identification, logical expression and manipulation of the key drivers upon that business.

The Financial model allows business managers to explore the impact of different operational and financial options or scenarios for the business including for example: new investment appraisal; licensing deal; mergers and acquisitions; divestments; macro economic shocks (e.g. "what happens if oil prices double?"), etc.