Spreadsheet models are a valuable tool for understanding Answer and forecasting Answer Modeling requires the analyst to Answer numerous items in financial statements. In general, financial models should be in a format that Answer the company's Answer of its financial results. Otherwise, there will be no natural Answer when the company issues its financial results and the analyst will not be able to Answer his or her estimates with actual reported results. Forecasts may Answer because of the sheer complexity of the model. There is a risk of errors in Answer made, or in formulas in the model. Errors can compound, leading to Answer If an analyst cannot Answer in a few points what factors are realistically expected to Answer income from year to year and is not Answer that these assumptions are Answer , then he or she does not really understand the output of the comput modeling efforts. Testing for reasonableness can be done by identifying the few most Answer in income statement items from last year to this year and the next year ("swing factors"), then quantifying the effects of these changes on the Answer