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Services > Budgeting:
Valuation models are typically based on long-term
forecasts over several years. Budgeting, on the other hand,
usually will not go beyond one or two years and is often based
on monthly forecasts. Many of our valuation models integrate
budget models for the immediate future and expand on the budget
past the one or two year budget periods.
Because it has been our experience that many companies use
different account classifications across different divisions,
integrating budget models in valuation models can be a time
consuming task. Furthermore, integrating accounting systems
into a valuation forecast can add to the complexity. It is
important to understand that valuation models are not accounting
tools, as the main objective of a valuation model is to forecast
future cash flows. Accounting systems are based on past events
and historic information.
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