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See-Through Modelling: A technical blueprint for financial modelling using lessons learned from PFI by Dominic Robertson

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Chapter 1. Modelling theory

Definition of modelling

Business modelling includes a variety of different types of modelling. My interpretation of business models is that they are written in Excel with some use of Access and Visual Basic for Applications (VBA) and offer solutions to common business problems.

Models can belong to one or more of the following categories:

  • Financial modelling – the PFI model is a financial model and a financial model has a P&L (profit & loss), CF (cash flow) and BS (balance sheet) as main results
  • Econometric modelling – the results vary but the main content is of an econometric nature including any or all of:
  • elasticities to derive volume, supply or demand of goods or services
  • regression analysis or ...

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