Deloitte 07 08 june 2012 - presentation material

© 2012 PT Deloitte Konsultan IndonesiaFinancial Modelling for Corporate Budgeting, Sensitivity & Scenario Analysis Using Excel & VBA

7 - 8 June 2012

Grand Hyatt, Jakarta

Financial Modellingfor Corporate Budgeting,Sensitivity & Scenario Analysis

Using Excel & VBA

© 2012 PT Deloitte Konsultan IndonesiaFinancial Modelling for Corporate Budgeting, Sensitivity & Scenario Analysis Using Excel & VBA2

Sessions

Day 1 - 1

Day 1 - 2

Day 1 - 3

Day 1 - 4

Day 2 - 1

Day 2 - 2

Day 2 - 3

Day 2 - 4

Cash Flows, Financial Ratios

Income Statement, Cash Budget, Balance Sheet

Operating Expenses, Capital Budget

Assumptions, Sales, Collection, COGS, Inventory, Purchases

Model Overview, Design Principles, Model Flow Charts

Contribution Margin, Variance Analysis

Automatic Number Formatting, Dynamic Chart

Sensitivity & Scenario Analysis Dashboard



Financial Modeling

Company Knowledge

Accounting

Attention to Details

Reading Financial Reports

E x c e l& V B A

Corporate Finance

Industry Knowledg

e

Building a good financial model requires a “combination of various skills”.

Day 1 - Session 1




Financial Modeling for Corporate Budgeting,Sensitivity & Scenario Analysis

Day 1 Session 1a:Overview of the Corporate Budget Model


Overview of the Corporate Budget Model

Definition of Budget

Cambridge Dictionary

Budget : a plan to show how much money a person or organization will earn and how much they will need or be able to spend.

Fact in the Business World

• Business use several different types of budgets to manage their operations.

• Whatever form various budgets may take, the primary goal of all budgets is to provide a tangible and quantifiable estimate of the receipt and allocation of resources.




Definition of Corporate Budget Model

Corporate Budget Model is a quantitative representation of a company’s plan to achieve its short-term goals and objectives.

• Goals may be long term (5 to 10 years), but to meet long-term goals, it is necessary to develop short-term strategies that are incorporated into annual budgets.

• A budget should not be seen simply as means of limiting expenditure or checking staff performance, but as a tool for planning, coordinating and controlling the effective and efficient use of resources so that the organization's daily operations are directed towards its long-term goals.


What some experts said about spreadsheet models

John Sterman (professor of management at the MIT)

“as a result of the spreadsheet errors the average quality offinancial models has plummeted (crashed down) and many modelsare not only useless but downright harmful to decision-makers”.

European Spreadsheet Risk Interest Group (EuSpRIG)

“in 2004 a large financial institution inaccurately presented itsfinancial report with US$ 1 billion discrepancy”.

Trans-Alta Corp

Trans-Alta Corp reported a loss of US$ 24 million due tospreadsheet errors when executing a hedging contract.




Aim of the workshop

• Have a firm understanding of the steps involved in buildingcorporate budget models,

• Know how to use Excel to put that understanding to work in theform of a working financial model,

• Know a proper methodology in planning, designing anddeveloping their own corporate budget models, faster, better andwith much fewer errors.

• Build a robust consolidated model

After attending this workshop, the participants are supposed to :



Focus of the Workshop

From a budgeting perspective, the workshop is focused on the :

“Master Budget”




Components of the Master Budget

Capital Budget Cash Budget Budgeted Balance Sheet

Budgeted Statement of Income

Cost-of-Goods Sold Budget

Sales and Collections Budget

Operating Expenses Budget

Inventory and Purchases Budget

Operating Budget

Financial Budget



Corporate Budget Model

[Display the excel format of corporate budget model]





Day 1 Session 1b:Financial Modelling Design Principles


Financial Modelling Design Principles

Assets This Year Last Year Cash Flows From

Cash 256,663$ 312,930$ Operating Activities

Sales Revenue 6,019,040$ Account Receivable 578,754$ 482,350$ Cost Of Goods Inventory 978,094$ 827,613$ Net Income 259,996$ Sold Expenses 3,912,376$ Prepaid Expenses 117,176$ 92,835$ Changes in Operating Cycle

Gross Margin 2,106,664$ Total Current Assets 1,930,687$ 1,715,728$ Assets and Liabilities

Operating Expenses 1,523,288$ Property, Plant & Equipment 1,986,450$ 1,597,050$ Accounts Receivable Increase (96,404)$ Operating Earnings Accumulated Depreciation (452,140)$ (339,348)$ Inventory Increase (150,481)$ Before Depreciation 583,376$ Total Assets 3,464,997$ 2,973,430$ Prepaid Expenses Increase (24,341)$

Depreciation Expense 112,792$ Accounts Payable Increase 58,318$

Operating Earnings 470,584$ Liabilities & Owners' Equity This Year Last Year Accrued Expenses Increase 40,283$

Interest Expense 76,650$ Accounts Payables: Income Tax Payable Increase 1,720$ (170,905)$

Earnings Before Inventory 300,952$ 268,300$ Operating Cash Flow Before Depreciation 89,091$

Income Tax 393,934$ Operating Expenses 87,882$ 62,216$ Depreciation Expense 112,792$

Income Tax Expense 133,938$ Total 388,834$ 330,516$ Cash Flows From Profit -Making Operation 201,883$

Net Income 259,996$

Accrued Expenses: Cash Flows From Investing Activities

Operations 175,764$ 137,900$ Purchases of Property, Plant & Equipment (389,400)$

Interest 12,775$ 10,356$

Total 188,539$ 148,256$ Cash Flows From Financing Activities

Net Incrase in Short-Term Debt 50,000$

Income Tax Payable 13,394$ 11,674$ Long Term Borrowings 75,000$

Short-Term Notes Payable 425,000$ 375,000$ Capital Stock Issue 100,000$

Total Current Liabilities 1,015,767$ 865,446$ Cash Dividends to Stockholders (93,750)$ 131,250$

Long-Term Notes Payable 550,000$ 475,000$ Increased (Decreased) in Cash During Year (56,267)$

Owners' Equity

Capital Stock 725,000$ 625,000$

Retained Earnings 1,174,230$ 1,007,984$

Total 1,899,230$ 1,632,984$

Total Liabilities

& Owners' Equity 3,464,997$ 2,973,430$

INCOME STATEMENT FOR YEAR

BALANCE SHEET AT END OF CASH FLOW STATEMENT FOR YEAR

Financial Statement Linkage

Financial Statement Interrelationship



Model Layout

• Benefit: create a highly flexible “engine” through which a set of data can be passed.

• May seem simple, but requires discipline to apply.

• Consist of minimum of 3 sheets to separate numerical inputs, workings and outputs for printing

Inputs(numbers)

Workings(formulas)

Outputs(results)

PriceVolumeCostLoanInterest rate

RevenueCOGSOperating CostInterest Expense

Income StatementBalance SheetCash FlowsRatiosCharts



The Model Development Process

1. Set up output & input templates

2. Populate input templates with base / test data

3. Create workings pages for all main sections &

develop calculations

4. Transfer results to output pages

5. Test or debug

6. Conduct user testing




1. Model ownership

2. Version control

3. Development log

4. Retaining old versions of the model

5. Regularly saving the model

6. Maintaining quality when under pressure

The Basics of Quality Control



1. Keep it simple

2. Have a clear idea of what the model needs to do

3. Be clear about what the users want and expect

4. Maintain a logical arrangement of the parts

5. Make all calculations in the model visible

6. Be consistent in everything you do

7. Think modular

8. Make full use of Excel’s power

9. Provide ways to prevent errors

10.Test, test, test

Design Principles for Good Model Development





Day 1 Session 1c:Corporate Budget Model Flow Chart


Corporate Budget Model Flow Chart

Model Worksheets

INPUTSSheets

WORKINGSSheets

Sales & CollectionsCOGS

Inventory & PurchasesHeadcount Cost

Operating ExpensesCapital

DepreciationCash

Historical DataAssumptions

Balance SheetIncome Statement

Cash FlowsRatios

Contribution MarginVariance Report

Sensitivity & ScenariosDynamic Chart

OUTPUTSSheets



Step 7: Capital Budget

Step 8: Cash Budget

Step 9: Budgeted Balance Sheet

Step 6: Budgeted Statement of Income

Step 3: Cost-of-Goods Sold Budget

Step 2: Sales and Collections Budget

Step 5: Operating Expenses Budget

Step 4: Inventory and Purchases Budget

Operating Budget

Financial Budget

STEP 1: Assumptions



STEP 2: Sales and Collections Budget

2A: Unit Sales and Price Budget

2B: Sales Composition Budget

2C: Cash Collections from Customers Budget

2D: Accounts Receivable Budget




STEP 4: Inventory and Purchases Budget

4A: Inventory Budget

4B: Purchases Budget

4C: Disbursement for Purchases Budget

4D: Accounts Payable Budget

STEP 3: Cost-of-Goods-Sold Budget



STEP 5: Operating Expenses Budget

5A: Headcount Budget

5B: Operating Expenses Budget

5C: Disbursement for Operating Expenses Budget




STEP 7: Capital Budget

STEP 8: Cash BudgetSTEP 9: Budgeted

Balance Sheet

STEP 6: Budgeted Statement of Income

7A: Capital Expenditures Budget

7B: Disbursements of Capital Expenditures Budget

7C: Depreciation Budget



Sales and Collections Budget Related Sheets (Step 2)

INPUTS WORKINGS OUTPUTS

AssumptionsSales and

Collections

Income Statement

Balance Sheet

Cash Flows

Cash (Budget)

Consolidated Statements




Cost-of-Goods-Sold Budget Related Sheets (Step 3)


Assumptions

Inventory and Purchases

COGS Income Statement

Balance Sheet

Cash Flows

Cash (Budget)




Inventory & Purchases Budget Related Sheets (Step 4)

Assumptions

COGS


Balance Sheet

Cash Flows

Cash (Budget)






Operating Expenses Budget Related Sheets (Step 5)

Assumptions

Operating Expenses

Sales & Collections Headcount

Capital

Income Statement

Cash (Budget)

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Budgeted Statement of Income Related Sheets (Step 6)

Assumptions

Capital

Sales and Collections

COGS

Operating Expenses

Income Statement

Balance Sheet

Cash Flows

Cash (Budget)Headcount

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Capital Budget Related Sheets (Step 7)

Assumptions

Operating Expenses

CapitalIncome Statement

Balance Sheet

Cash Flows

Cash (Budget)

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Cash Budget Related Sheets (Step 8)

Assumptions

Income Statement

Balance Sheet

Cash Flows

Cash (Budget)Capital



Operating Expenses

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Budgeted Balance-Sheet Related Sheets (Step 9)

Assumptions

Income Statement

Balance Sheet

Cash Flows

Cash (Budget)

Capital



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Statement of Cash Flows Related Sheets(Cash Flows from Operating Activities)

Assumptions

Income Statement

Cash FlowsCapital



Changes in Balance Sheet Accts

Balance Sheet

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Statement of Cash Flows Related Sheets (continued) (Cash Flows from Investing Activities)

Assumptions

Capital

Cash Flows

Balance Sheet

Income Statement

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Statement of Cash Flows Related Sheets (continued) (Cash Flows from Financing Activities)

Cash Flows

Equity

Balance Sheet

Income Statement

Debt

Assumptions

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Day 1 - Session 2



Day 1 Session 2:Modelling Operating Budget:Assumptions, Sales & Collection



Assumptions, Sales & Collection Budget






STEP 1: Assumptions

Operating Budget

Financial Budget


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Assumptions

Why is separating Assumption worksheet so important?

• By centralizing all of the input variables into one singlelocation, users can easily test and evaluate the implicationsof changes in the values of input variables across allelements of a financial model.

• To avoid “hard coding” or entering specific input variablesdirectly into a worksheet.

Why is “hard coding” forbidden (“taboo”) in building a financial model?

The resulting calculation or simulation will most probablybe wrong, because the hard codes are hiddensomewhere in many worksheets that we cannot control.

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Assumptions

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Other Assumptions

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STEP 2 : Sales and Collections Budget

Operating Budget

Financial Budget

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Sales and Collections Budget Related Sheets (Step 2)


Assumptionsand

Dashboard


Income Statement

Balance Sheet

Cash Flows

Cash (Budget)

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STEP 2: Sales and Collections Budget

2A: Unit Sales and Price Budget

2B: Sales Composition Budget

2C: Cash Collections from Customers Budget

2D: Accounts Receivable Budget

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Step 2A: Unit Sales & Price • The first step is to project total sales level on a per unit basis. Service-oriented

companies could use other metric such as “hours billed. Then define the average “sales price” per unit.

Sales & Collection Budget

Step 2B: Sales Composition • Calculate relative percentage of each types of sales in the financial model.

• A central component many other elements are often based on it, such as: inventory levels, operating expenses, purchase levels, ect.

Step 2C: Cash Collections from Customer• Calculates and tracks sales on cash basis. Cash collections are calculated as

cash sales for a given time period + credit sales collected from the same period + credit sales collected from the previous period

Step 2D: Accounts Receivable• Keeps tracks of the outstanding credit sales. Defined as days receivable

metric, and calculated using the OFFSET function.

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Day 1 Session 2:Modelling Operating Budget:COGS, Inventory & Purchases



COGS, Inventory & Purchases







Operating Budget

Financial Budget

MASTER BUDGET

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Cost-of-Goods-Sold Budget Related Sheets (Step 3)


Assumptionsand

Dashboard


COGS Income Statement

Balance Sheet

Cash Flows

Cash (Budget)

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Overview of COGS Budget Module

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STEP 4: Inventory and Purchases Budget

4A: Inventory Budget

4B: Purchases Budget

4C: Disbursement for Purchases Budget

4D: Accounts Payable Budget

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Inventory & Purchases Budget Related Sheets (Step 4)


Assumptionsand

Dashboard

COGS


Balance Sheet

Cash Flows

Cash (Budget)

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Inventory & Purchases Budget Module

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Day 1 - Session 3



Day 1 Session 3:Modelling Operating Expenses& Capital Budget



Operating Expenses & Capital Budget







Operating Budget

Financial Budget

MASTER BUDGET

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STEP 5: Operating Expenses Budget

5A: Headcount Budget

5B: Operating Expenses Budget

5C: Disbursement for Operating Expenses Budget

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Operating Expenses Budget Related Sheets (Step 5)


AssumptionsOperating Expenses

Sales & Collections Headcount

Capital

Income Statement

Cash (Budget)

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Headcount Budget

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Operating Expenses Budget Module

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Capital Budget Cash Budget Budgeted Balance

Sheet






Operating Budget

Financial Budget

MASTER BUDGET

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Balance Sheet



7B: Disbursement of Capital Expenditures Budget


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Capital Budget Related Sheets (Step 7)


Assumptions

Operating Expenses

CapitalIncome Statement

Balance Sheet

Cash Flows

Cash (Budget)

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Depreciation Sheet

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Capital Budget Module

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Day 1 - Session 4



Day 1 Session 4:Modelling Cash Budget, Income Statement& Balance Sheet



Cash, Income & Balance Sheet Budget

Capital Budget Cash BudgetBalance Sheet

Budget

Income Budget





Operating Budget

Financial Budget

MASTER BUDGET

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STEP 8:Cash Budget

STEP 9: Balance Sheet Budget





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Cash Budget Related Sheets (Step 7)


Assumptions

Income Statement

Balance Sheet

Cash Flows

Cash (Budget)

Capital



Operating Expenses

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Cash Budget Module

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Operating Budget

Financial Budget

MASTER BUDGET

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Balance Sheet





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Income Statement

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Operating Budget

Financial Budget

MASTER BUDGET

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Balance Sheet





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Budgeted Balance-Sheet Related Sheets (Step 7)


Assumptions

Income Statement

Balance Sheet

Cash Flows

Cash (Budget)

Capital



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Balance Sheet

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Day 2 - Session 1




Day 2 Session 1:Modelling Cash Flow Statement &Financial Ratios


Modelling Cash Flow Statement

Statement of Cash Flows Related Sheets(Cash Flows from Operating Activities)


Assumptions

Income Statement

Cash FlowsCapital



Changes in Balance Sheet Accts

Balance Sheet

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Statement of Cash Flows Related Sheets (continued) (Cash Flows from Investing Activities)


Assumptions

Capital

Cash Flows

Balance Sheet

Income Statement

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Statement of Cash Flows Related Sheets (continued) (Cash Flows from Financing Activities)


Assumptions

Cash Flows

Equity

Balance Sheet

Income Statement

Debt

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Indirect Cash Flow

85



Direct Cash Flow

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Day 2 - Session 2



Day 2 Session 2:Modelling Contribution Margin &Variance Analysis


© 2012 PT Deloitte Konsultan IndonesiaFinancial Modelling for Corporate Budgeting, Sensitivity & Scenario Analysis Using Excel & VBA89 89

Modelling Contribution Margin


Contribution Margin

Definition:

Contribution Margin is Sales Revenue minus Variable Cost

Unit Contribution Margin is Unit Sales Revenue minus Unit Variable Cost

90




Operating Leverage

Definition:

Operating Leverage is Fixed Cost divided by Total Cost (Fixed Cost + Variable Cost)

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Breakeven Point in Units

Definition:

Breakeven Point in Units is Fixed Cost divided by Unit Contribution Margin

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Breakeven Point in Dollars

Definition:

Breakeven Point in Dollars is Breakeven Point in Units times Price per Unit.

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Variance Analysis

Sales - Budget: =INDEX(FinancialStatements!$A$132:$M$151,MATCH(VarianceReport!B6,FinancialStatements!$A$132:$A$151,0),VarianceReport!$H$17+1)

Sales - Actual: =INDEX(HistoricalFS!$A$66:$M$85,MATCH(VarianceReport!B6,HistoricalFS!$A$66:$A$85,0),VarianceReport!$H$17+1)



Variance Analysis

Budget figures are derived from saved approved budget in the FinancialStatementssheet and actual figures are derived from historical data in the HistoricalFS sheet, both using INDEX and MATCH functions.

The budget and actual figures above the chart are derived from the Variance Report table using OFFSET function.

Day 2 - Session 3




Day 2 Session 3:Automatic Number Formatting &Dynamic Chart


Automatic Number Formatting

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When we have a list of number series using different formats, e.g. round number, percentage, decimal, and we want to present them one by one in different cells, we will want to see that when we select, e.g. EBITDA, it should be in round number format, ROE in percentage, Current Ratio in decimal, etc. How do we automate the number formatting for the cells where those series are displayed?

There are 2 ways to do it: 1) by using formula (a combination of IF, OR, TEXT and

OFFSET functions) 2) by using VBA / macro. The 2nd way is easier.

In this training, we will learn to use both ways.




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Automatic Number Formatting with Formula

=IF(OR($B$15=$B$4,$B$15=$B$5),TEXT(OFFSET(D3,$A$11,0),"0.00%"),IF(OR($B$15=$B$6,$B$15=$B$7),TEXT(OFFSET(D3,$A$11,0),"#,###0"),TEXT(OFFSET(D3,$A$11,0),"#0.##0")))



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Automatic Number Formatting with VBA

Sub FormatChart()

Application.ScreenUpdating = False

If Range("B4") = "Return on Equity" _Or Range("B4") = "Gross Profit Margin" _Then Range("C4:N4").NumberFormat = "0.00%;[Red](0.00%)"

If Range("B4") = "Gross Profit" _Or Range("B4") = "EBITDA" _Then Range("C4:N4").NumberFormat = "#,###0;[Red](#,###0)"

If Range("B4") = " Current Ratio " _Or Range("B4") = "Leverage" _Then Range("C4:N4").NumberFormat = "#0.##0;[Red](#0.##0)"

End Sub



Dynamic Chart

101


Dynamic Chart

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Have you ever asked yourself how many charts you should make for 50 ratios each for a period of 10 years? 50? Or just 1? If you know how to make a dynamic chart, then you should only make 1 chart that can dynamically represent 50 ratios. How?

In order to create a dynamic chart, we should use OFFSET function and a combo-box. We should also use OFFSET function to replace the static range used in the chart with a dynamic one that can expand and retract.



Dynamic Chart

103

SyntaxOFFSET(reference, rows, cols, [height], [width])

The OFFSET function syntax has the following arguments:• Reference (Required). The reference from which you want to base the offset.

Reference must refer to a cell or range of adjacent cells; otherwise, OFFSET returns the #VALUE! error value.

• Rows (Required). The number of rows, up or down, that you want the upper-left cell to refer to. Using 5 as the rows argument specifies that the upper-left cell in the reference is five rows below reference. Rows can be positive (which means below the starting reference) or negative (which means above the starting reference).

• Cols (Required). The number of columns, to the left or right, that you want the upper-left cell of the result to refer to. Using 5 as the cols argument specifies that the upper-left cell in the reference is five columns to the right of reference. Cols can be positive (which means to the right of the starting reference) or negative (which means to the left of the starting reference).

• Height (Optional). The height, in number of rows, that you want the returned reference to be. Height must be a positive number.

• Width (Optional). The width, in number of columns, that you want the returned reference to be. Width must be a positive number.


Dynamic Chart

104

Above is the table of financial ratios for which we will make a dynamic chart for presenting the ratios that we select from 2 list boxes whose cell links are located in cell C77 and cell D77. These 2 cell links will be used in the formulas using OFFSET functions in a table located in range B3:N5, which displays 2 ratios that we select from the list boxes.



Dynamic Chart

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Step 1 : Highlight the range B3:N5, select Insert, Column, and 2-D Column.


Dynamic Chart

106

Step 2 : Select the legend, and then select Layout, Legend, and Show Legend at Bottom.



Dynamic Chart

107

Step 3 : Right click on the red Column chart and change it into a Line chart.


Dynamic Chart

108

Now we have a Column chart and a Line chart.



Dynamic Chart

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Step 4 : As we have 3 number formats to display, i.e. round number, percentage, and decimal, we should make a secondary axis. Right click on the Line chart, select Format Data Series and Secondary Axis.


Dynamic Chart

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Step 4a : With dual axes, now we can see 2 series with different number formats.



Dynamic Chart

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Step 5 : Now let’s make 3 dynamic ranges to replace the static ranges used in the charts by using OFFSET functions.


Dynamic Chart

112

Step 5a : Using Name Manager, make dynamic ranges with named formulas as follows:

chart_one: =OFFSET(Chart!$C$4,0,Chart!$A$26-1,1,Chart!$A$28-Chart!$A$26+1)

chart_two:=OFFSET(Chart!$C$5,0,Chart!$A$26-1,1,Chart!$A$28-Chart!$A$26+1)

timeline:=OFFSET(Chart!$C$3,0,Chart!$A$26-1,1,Chart!$A$28-Chart!$A$26+1)

These dynamic ranges will replace static ranges used in the charts:- chart_two will replace range C4:N4- chart_two will replace range C5:N5- timeline will replace range C3:N3



Dynamic Chart

113

Step 6 : Right click on the Column chart and select SelectData. From the dialog box that appears, select the series representing the Column chart, and click the Edit button.


Dynamic Chart

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Step 7 : Erase the static range $C$4:$N$4, press F3, select chart_one, and click OK to replace it. Repeat Step 6 and 7 on the Line chart.



Dynamic Chart

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Step 8 : Repeat Step 6 and 7 on the axis label (month) and replace the static range $C$3:$N$3 with timeline.


Dynamic Chart

116

Step 9 : Now the chart is dynamic – it can represent all the ratios available in the table located in the range B50:N76. Simply select the ratios and period, and the chart will update itself.



Dynamic Chart

117

Step 10 : Now we need to add a chart title, a dynamic one, that represent the ratios and period that we select. Click on the chart, select Layout, Chart Title, Above Chart, and we will see a chart title above the chart.

Make the following formula somewhere below the ratio table:=B4&" & "&B5&" for the period of "&TEXT(B26,"mmm-yy")&" through "&TEXT(B28,"mmm-yy")which will display, e.g. “Current Ratio & Debt to Equity Ratio for the period of Mar-2011 through Oct-2011”.

Now click on the chart title, type “=“, and put the cursor on the cell where we the formula for the title. Now the dynamic chart has a dynamic chart title! As we change the ratios and period, the chart title will update itself.


Dynamic Chart

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Day 2 - Session 4



Day 2 Session 4:Sensitivity & Scenario Analysis Dashboard




Sensitivity Analysis:Analysis of the impact of change of “one variable” on one of its outputs.

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Scenario Analysis:Analysis of the impact of change of “a set of variables” on one or more of its outputs.

Sensitivity & Scenario Analysis Dashboard:Dashboard for performing sensitivity & scenario analysis.



2-Way SSA Dashboard : 2 variables (inputs) & 1 output

122




1-Way SSA Dashboard : 1 variable (input) & more than 1 output

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In order for a data table to function, its input cells must be on the same sheet. As the inputs / assumptions and dashboard are located on different sheets, those assumptions that will be used for scenarios (presumably those of which changes generates the largest impacts on their outputs) must be cut and pasted below the dashboard. As a result, all formulas that contain their cell references will refer to the sheet where the dashboard is located.

As we will not type in these assumptions for scenarios in the dashboard sheet, we need to have a separate sheet in which we have the same list of assumptions and link those input cells in the dashboard sheet to their corresponding cells in this new separate sheet. We will have the assumptions filled in this new assumption sheet.

For scenario analysis, we need to make 3 copies of the list of assumptions for scenarios and pasted them below it. Name these 3 lists as Base Case, Best Case and Worst Case. Use macros to automate the copy and paste of each of these 3 lists to the original location of the list.



Inputs for 1-way and 2-Way SSA Dashboards

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The Dashboard to be Developed in this Training

This dashboard is based on one-way data table where only one variable is used to generate 5 outputs. As using more than one data table to perform sensitivity analyses for more than one variable will slow down the calculation speed of the financial model, it is better to use a VBA-driven data table where various variables can be used.



128

The Dashboard to be Developed in this Training (continued)

To build the dashboard, we need 7 combo-boxes, 2 macro buttons, 1 spin button, 3 option buttons, one-way data table, INDEX function, MATCH function, VLOOKUP function, MAX function, and some VBA modules to automate the data table.




129

The Dashboard to be Developed in this Training (continued)

To perform a sensitivity analysis, select the variable, ratios (outputs) and month, and see the results on the grey range. To change the variables values in the yellow range, use the spin button by clicking it up or down. Once we change the values of the variables, the values of the ratios will automatically change. To perform a scenario analysis, simply select one of the option buttons that represent 3 scenarios.



130

Spin button: It is used for varying the values of the variables.

Macro button: It is used for assigning VBA modules (macros) that we use for auto-zoom-to-fit-screen and auto-clearing of the data table.

Option button: It is used for selecting a scenario.




131

Combo-Box: It is used in the dashboard for selecting the variable and its corresponding outputs. To fill in the combo-box with the list of variables or outputs, select and right click on it to display the format control dialog box. Fill in the input range and cell link boxes and click OK. The input range represents the list of variables or outputs.



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Step 1 : Fill in the combo-box as follows.




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Step 1a : Assign the following macro to the combo-box.



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146

Step 8 : Fill in Cell F3 with the following formula.




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Step 9 : Fill in Cell F10 with the following formula.



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Step 10 : Fill in Cell D5 with the following formula.




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Step 11 : : Fill in Cell D6 with the following formula.



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Step 15 : Fill in Cell K4 with the following formula.



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Step 16 : Fill in Cell L4 with the following formula.




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Step 17 : Fill in Cell J4 with the following formula.



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Step 18 : Fill in Cell E5 with the following formula.




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Step 23 : Right click on the spin button, select Format Control, and set the maximum value at 10.



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Step 24 : Right click on the macro button, select Assign Macro and select ZoomToFitScreen2.




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Step 25 : Right click on the macro button, select Assign Macro and select ClearDataTable2.



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Step 26 : Right click on the option button for Base Case, select Assign Macro and select BaseCase. Do the same step for the other 2 option buttons (Best Case and Worst Case).




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Now our dashboard is ready to be used for performing a sensitivity and scenario analysis.

Sensitivity:• Select the variable• Select the outputs (Ratio 1 thru 5)• Select the date• And see the results!

Scenario:• Select any one of the 3 scenarios and see the results.

Any questions?

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Deloitte 07 08 june 2012 - presentation material

Business

Transcript of Deloitte 07 08 june 2012 - presentation material