Developing financial models is the process of creating a representation of a business or other organization to forecast their future performance. Models consider both historical and current data, as well as expected future conditions, to develop projections about income, expenses, investments, and growth over time. Financial models are often used to determine the viability of investing in a business, forecasting its potential success, and understanding how it will fare in different conditions. By analyzing a range of scenarios and being able to adjust assumptions around them, financial models help businesses accurately identify opportunities and risks.