Tag: "Stochastic simulation"
Introduction to Simulation Models
Simulation models sets out to mimic real life company operations.
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Uncertainty modeling
We know that forecasts based on average values are on average wrong. In addition will deterministic models miss the important uncertainty dimension that gives both the different risks facing the company and the opportunities they bring forth.
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Corporate Risk Analysis
Strategy @Risk has developed a radical and new approach to the way risk is assessed and measured when considering current and future investment.
The weighted average cost of capital
The weighted cost of capital (WACC) and the return on invested capital (ROIC) are the most important elements in company valuation, and the basis for most strategy and performance evaluation methods.
Risk, price and value
Having arrived at the probability distribution for the value of equity (see full story) we are able to calculate expected gain, loss and their probability when investing in a company where the capitalized value (price) is known.
