Financial Model Validation

Financial model validation is the process of checking that a financial model accurately represents a company's financial situation. It involves reviewing the assumptions, calculations, and data inputs to ensure they are correct and reasonable. This helps identify errors or inconsistencies, increasing confidence in the model’s predictions. Validation ensures the model is reliable for decision-making, planning, or assessing risks. Essentially, it’s a thorough quality check to confirm the model’s integrity before its results are used to guide important business or investment decisions.