Why Use a Financial Model?

摘要

Using a financial model and not just a budget is important to achieving consistent profitability. To show the difference between the two, let's consider a real world situation for a dealership. Suppose that in the fall of 2010 you built a budget for 2011, which, based on a good economy and increased customers demand, looked pretty good at the time. But now, several months into 2011, your budget and reality are not in sync. What should you do to correct this and better monitor and control your business?