18.5. Conclusion
Budgeting and financial models comprise a functional branch of a general corporate planning model. They are essentially used to generate pro forma financial statements and financial ratios. These are the basic tools for budgeting and profit planning. The financial model is a technique for risk analysis and "what-if" experiments. The model is also needed for day-to-day operational and tactical decisions for immediate planning problems.
Spreadsheet software and computer-based financial modeling software are being widely utilized for budgeting and planning in an effort to speed up the budgeting process and allow budget planners and nonfinancial managers to investigate the effects of changes in budget assumptions and scenarios.
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