Corporate financial models: a survey

This paper describes the background to the development of corporate financial models with reference to the need for analytical methods in the financial area and the contribution which control and systems engineers could make to satisfy part of this need. Modelling work in the financial planning area is discussed in the context of overall corporate planning of resource allocation to different elements of company activity. The concept of model building in economics is discussed and a number of different types of economic model are described, together with examples. The literature on computerised financial models is reviewed, mainly from the user´s point of view. Thereview includes discussions of commercially available models, models applied to specific companies, acquisitionanalysis models and comparisons of different growth models as aids in corporate planning. Mention is also made of work concerning the application of computers to accounting in general and of the use of input-output models for cost accounting problems.