The Art and Science of Financial Modeling by Anurag Singal

Author:Anurag Singal
Language: eng
Format: epub
Publisher: Business Expert Press

CHAPTER 5

Scenario Analysis and Sensitivity

Common Uses of Scenarios

(a) Allow for sensitivities analysis.

(b) Able to better answer “What If” questions.

(c) Gain better confidence in projections.

(d) Varying levels of operating performance.

(e) Range of synergy realization.

(f) Multiple target analysis in M&A situations.

(g) Stress test for loan structuring and covenants.

Sources for Scenarios

• Management forecasts

• Internal budget or forecasts

• “Outlook section” in the MD&A

• Research expectations

• Based on historical performance

For example, sales historically in the 10–15 percent growth range 10 percent bear case; 15 percent bull case

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.