Final answer:
The most common financial model for planning and analysis in businesses is the forecast model. It is used for various financial assessments and to ensure adequacy of financial capital through different means of funding.
Step-by-step explanation:
The most common type of financial model used for financial planning, capital adequacy testing, credit analysis, mergers and acquisitions review, and business valuations is the forecast model. This model is integral in helping firms make decisions when spending money in the present while expecting to earn profits in the future, such as purchasing machines or starting new projects. It is through these financial models that firms can strategically plan their budgets, assess their cash flows, and evaluate various scenarios to ensure enough financial capital is raised, whether it be from early-stage investors, reinvesting profits, by borrowing, or by selling stock.