What is the purpose of an Actuals Overlay in financial modeling?

The purpose of an Actuals Overlay in financial modeling is to compare budget versus actuals. This functionality allows finance teams to overlay actual financial data onto budget figures, thereby facilitating an analysis of variances between what was planned and what has actually occurred. By visualizing the deviations from the budget, organizations can better understand their financial performance, identify trends, and make informed decisions based on real-time data. This capability is essential for effective financial management and forecasting as it helps in assessing how well the organization is adhering to its financial plans and where adjustments may be necessary.

In contrast, the other options focus on different aspects of financial modeling, such as conducting simulations for future budgets, consolidating reports, or inputting raw data, which do not directly pertain to the specific function of comparing actual performance to budgeted expectations.