Types of Financial Models and Their Practical Uses
Types of Financial Models and Their Practical Uses By: Utkarsh Kaushik February 9, 2026 Share: In the last ten years, the position of financial models has experienced a paradigm shift. From being static spreadsheets designed to provide answers to very specific valuation or forecasting queries, types of financial model have transformed into decision engines, dynamically connected to strategy, risk management, execution, and optimization. With this paradigm shift, the concept of financial models itself has to be broadened. In addition to its mathematical formulation, the nature of different types of financial model is also determined by their integration with business processes. Notably, this transition from individual calculating aids to integrated decision-making tools is a result of the changing nature and needs of the markets in view. The evolving markets for financial services involve a condition characterised by a sense of increased uncer...