Introduction to Simulation Models
Simulation models sets out to mimic real life company operations.
Balance sheet and P&L simulation
Corn and ethanol futures hedge ratios
We are here looking for hedge models and hedge ratio estimations techniques that are “good enough” and that can fit into valuation models using Monte Carlo simulation. The model have to be dynamic in the sense that as new data (contracts) becomes available it can read the data, perform the necessary statistical analysis, produce the hedging coefficients and do the simulations – in one go.
Plans based on average assumptions ……
Don’t worry about the average, worry about how large the variations are, how frequent they occur and why they exists.
Working Capital and the Balance Sheet
The conservation-of-value principle says that it doesn’t matter how you slice the financial pie, only improving cash flows will create value …
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.
Big Issues Needs Big Tools
We believe you know your business best and will in your capacity implement the necessary resources, competence, tools and methods for running a successful and efficient organization.
Still issues related to uncertainty …….