Financial Research & Analysis

Abstract

A financial model is basically a tool that’s built-in spreadsheet software such as MS Excel to forecast a business’ financial performance. The forecast is normally based on the historical performance, assumptions about the future, and requires preparing an income statement, balance sheet, cash flow statement and supporting schedules (known as a 3-statement model) of the company. Advanced types of models can be built such as discounted cash flow analysis (DCF model), leveraged-buyout (LBO), mergers and acquisitions, and sensitivity analysis. Discounted cash flow (DCF) is a valuation method that uses predicted future cash flows to determine the value of an investment. DCF analysis aims to determine the current value of an investment based on future forecasts of how much money it will generate. GST (Goods and Services Tax) is an indirect tax (sometimes known as a consumption tax) imposed on the supply of goods and services in India. It is a multi-staged tax, imposed at each stage of the production process, but it is intended to be refunded to all parties involved in the various stages of production except the final consumer, destination-based tax, collected from the point of consumption. The three categories of supplies that are exempt are as follows: Supplies taxable at a ‘NIL’ rate of tax (0% tax); Supplies that are wholly or partially exempted from CGST or IGST, by way of a notification amending Section 11 of CGST Act or Section 6 of IGST Act; Non-taxable supplies as defined under Section 2(78) – supplies that are not taxable under the Act. Section 2(108) of CGST Act 2017 defines “taxable supply” means a supply of goods or services or both which is leviable to tax under this Act For a supply to attract GST, the supply must be taxable supply. Taxable Supply can be either Inter State Supply or Intra State Supply.