Financial Modeling Is Not the Same As Forecasting

Financial Models are Not a Forecast

I suppose one of the benefits of being an old person is stepping back to reflect on the many CEOs’ and founders’ behaviors and thinking that I have served. For this older person, the sample size is more than 130.

Most had never heard of, let alone seen, a financial model before I met them. And when they are introduced to examples using their own operating data, their minds quickly shift to thinking the output is a forecast. No, no, no, and no. The financial model is not a forecast and never should be.

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