P&L simulation
Stochastic Balance Simulation
We know that forecasts based on average values are on average wrong. In addition deterministic models will miss the important dimension of uncertainty – that gives both the different risks facing the company and the opportunities they produce.
2010 © | S@R | 0 comments | ContinuedThe Case of Enterprise Risk Management
Traditionally, when estimating costs, project value, equity value or budgeting, one number is generated – a single point estimate.
2010 © | S@R | 0 comments | ContinuedA short presentation of S@R
Most companies have some sort of model describing the company’s operations – but…
2010 © | S@R | 1 comment | Continued
The Probability of Bankruptcy
A good metric should have a low probability of rejecting a true hypothesis of bankruptcy (false positive) and a high probability of rejecting a false hypothesis of bankruptcy (false negative).
2009 © | S@R | 0 comments | Continued
Predicting Bankruptcy
The Z-score is not intended to predict when a firm will file a formal declaration of bankruptcy in a district court. It is instead a measure of how closely a firm resembles other firms that have filed for bankruptcy.
2009 © | S@R | 0 comments | Continued
The Risk of Bankruptcy
There are several models in use for predicting bankruptcy and we have in our balance simulation model implemented two; Altman’s Z-score model and the risk index Z developed by Hannan and Hanweck.
2009 © | S@R | 0 comments | Continued
