The What-if or sensitivity analysis tools in Excel are often overlooked by financial modelling professionals. The tools represent immense analytical value during a financial modelling exercise, no matter if it is for corporate valuation, strategic planning or management accounting/reporting purposes.
The annual strategic planning “season” in a company ushers in an extensive focus on crafting and crystal balling a company’s future financial direction. However the Plan’s intrinsic value and application for a company can be destroyed if the underlying assumptions are totally incorrect.
A company’s preparedness to deal with such future uncertainty is a very valuable and powerful sales pitch in favour of a best-practice financial model, strategic plan. It could mean the difference in a company stealing the march on its competitors in future years.
Following on from the earlier insights shared in the first part; this blog will explore further angles of how the strategic plan can be of value to your Company. The importance for complete stakeholder buy-in during the life cycle of the Strategic Plan is vital. Whilst a discounted cash flow (DCF) analysis is a further value-adding tool, which can further help to demystify your Company’s future uncertainty.