“Numbers don’t lie, but without the right model, they don’t tell the full story either.”
In India today, money stories are everywhere—startups getting crores from investors, big infra projects changing cities, and IPOs becoming as common as cricket news. Behind all this action is one key tool: financial models. They’re not just Excel sheets anymore—they’re survival tools.
But many finance students and freshers still ask: “What types of financial models really matter in 2025?”
This guide makes it super simple. You’ll learn both the classic global models and the desi ones that Indian professionals actually use to raise money, win investor trust, and grow fast.
Why Financial Models Matter in India Today
Think of a financial model as a story told with numbers. It’s what convinces investors to back a startup, helps banks decide on loans, and guides companies through big moves like expansions or mergers.
By 2025, in India, financial models are everywhere, whether it’s funding rounds, renewable energy projects, IPO valuations, or even routine tasks like budgeting and GST-linked working capital. Without them, no major financial decision takes shape.
Classic Global Models You Must Know
Even in India, global financial models set the foundation. Here’s a simple take on the most important ones:
- Three-Statement Model – Links income statement, balance sheet, and cash flow into one big picture. Example: Forecasting Infosys’ profits and cash flow.
- Discounted Cash Flow (DCF) – Predicts future cash flows and brings them to today’s value. Example: Paytm’s pre-IPO valuation.
- M&A (Merger) Model – Checks how two companies fit together financially. Example: HDFC–HDFC Bank merger.
- IPO Model – Calculates share price before going public. Example: Zomato IPO.
- Leveraged Buyout (LBO) – Uses borrowed money to buy companies for higher returns. Example: Debt-heavy NBFC acquisitions.
- Sum of the Parts (SOTP) – Values each business unit separately, then adds them up. Example: Tata Group’s steel + auto + telecom divisions.
These are the bread-and-butter answers to what types of financial models are there—the ones you’ll find across the world.
Financial Models in India You’ll Actually Use
Now let’s get local—these are the models Indian professionals work on almost every single day:
- Working Capital Model – Keeps MSMEs’ cash flow in check by tracking inventory, receivables, and payables.
- Project Finance Model – A must for big infra and renewable projects.
- SaaS / Startup Cohort Model – Popular with India’s booming startup scene. Tracks customer churn, acquisition costs, and recurring revenue.
- Retail Unit Economics Model – Used in retail and e-commerce to plan pricing and expansion. Helps decide store rollout or SKU pricing.
Example: Nykaa’s store rollout.
- Bank/NBFC Credit Model – Measure loan risk, repayment ability, and regulatory compliance.
These aren’t just fancy Excel sheets—they’re lifelines for Indian businesses. Without them, you can’t raise funds, manage risk, or convince investors.
Quick Comparison at a Glance
| Model | Best Use Case | Indian Example |
| Three-Statement | Routine planning | Infosys forecasts |
| DCF | Equity valuation | Delhivery IPO |
| M&A | Mergers/acquisitions | HDFC–HDFC Bank |
| IPO | Public listings | Zomato IPO |
| LBO | Debt acquisitions | Shriram Finance |
| SOTP | Conglomerates | Tata breakup |
| Working Capital | MSME/GST cash cycle | U GRO Capital |
| Project Finance | Infra/renewables | Adani Green |
| SaaS/Cohort | Startups/subscriptions | Freshworks |
| Retail Unit Economics | Pricing/store rollout | Nykaa |
| Credit Model | Loan underwriting | Lendingkart |
What Finance Professionals Can Take Away
So, what types of financial models are there in 2025? From global standards like DCF to local essentials like Working Capital and Project Finance, the range is huge but the message is simple:
📌 If you’re in finance, you can’t ignore them.
📌 If you’re in business, you depend on them.
📌 If you’re building a career, mastering them means survival.
The truth is, financial modeling is no longer optional. Whether you’re a fresher stepping into corporate finance or a startup founder pitching investors, these models decide your credibility.
This is where the principle of “Learn to Earn” fits best. The more models you know, the more opportunities you unlock.
Final Word: Models Are Your Career Currency
Financial models may sound complicated, but at the core, they’re just a way to answer big business questions using numbers in a structured way. In 2025, the professionals who understand the types of financial models and can build them quickly will stand out, whether in India’s startup scene or in big corporate boardrooms.
If you want to build this skill, structured learning helps. The WallStreet School offers practical training in Financial Modeling and Valuations that prepares you for real roles, without overwhelming theory.
Because at the end of the day, finance careers follow one rule: Learn to Earn. The better you master these models, the more opportunities open up for your future.
And if you want to know how to make those models better, read our guide How to Build Better Financial Models in 2025 (Mistakes & Career Tips)
Frequently Asked Questions
1. What are the different types of financial models?
Ans. The main types include three-statement model, DCF, M&A, IPO, LBO, SOTP, project finance, and working capital models. Each helps answer big money decisions in business.
2. What is a 5 year financial model?
Ans. A 5-year financial model forecasts a company’s revenues, expenses, cash flow, and profits over five years. It’s used for planning, fundraising, and showing investors future growth potential.
3. What is the future of financial modeling?
Ans. The future is AI-driven, faster, and more visual with dashboards. Financial modeling skills will stay in demand because businesses still need smart humans to interpret numbers and decisions.
4. What are 3 types of finance?
Ans. The 3 types are personal finance (individual money), corporate finance (business money), and public finance (government money). Together, they cover how money is managed across all sectors.
5. What are the 4 types of financial accounting?
Ans. The 4 types are accrual accounting, cash accounting, managerial accounting, and tax accounting. Each focuses on recording, reporting, and analyzing money differently for business needs.
If you are interested in knowing more about financial modeling then definitely watch this video:👇
