This scenario analysis page includes files, videos and excerpts from my book that allow you to quickly add scenario analysis to any excel file. The scenario analysis discussion begins with a basic discussion of how to build data tables. After scenario analysis is addressed using the excel data table tool, a number of exercises and videos explain how to build scenario analysis with macros instead of data tables. I have also included discussion of how to use and build the scenario reporter. The scenario reporter is a file that you can add to any of your spreadsheets and then name and record scenarios. I have divided the files into three lesson sets. The first lesson set addresses data tables which you can probably find in thousands of other videos. The second video set moves to more advanced issues with use of macros that can dramatically improve data tables and use of various techniques to make the scenario analysis more flexible. The third video set explains how you can use and create a scenario reporter.
The first video provides and example of a finished file. Other exercises walk through how to start with a simple example and ultimately make a very flexible analysis and a nice summary page.
Scenario Lesson Set 1: Adding Master Scenario Page to Any Model
To make a master scenario page that has a base case, upside case and downside case, you can use the INDEX function combined with the DATA TABLE tool of excel. To do this, you should understand how a data table works and how the INDEX function can be used with a code number. The steps in this process include:
1. Set-up of a Separate Master Scenario page in Basic Model
Objective of Scenario Page
Understanding Data Tables for Scenario Analysis
Use of Code Number and INDEX or CHOOSE Functions
Presentation of Cash Flow Data with SUMIF
Putting together Scenario Analysis
Exercise Files for Construction of Basic Scenario Analysis
Exercise 7 – Data Tables and Auto_Open.xlsm
Exercise 1 – Data Tables without Macros.xlsm
Exercise 9 – Basic Scenario Analysis.xlsm
Exercise 8 – Data Tables and Save.xlsm
Exercise 9 – Basic Scenario Analysis.xlsm
Exercise 10 – Basic Sensitivity Analysis.xlsm
Exercise 11 – Basic Custom Scenario.xlsm
Files Associated with Videos
Scenario Reporter.xlsm
The above file is a template for adding scenario tabulations to any financial model
Kalitta Corporate Finance Model.xlsm
The above file includes a tornado diagram with the Offset function to accept flexible different series
CDO Exercise 2.xlsm
The above file has a waterfall chart with a sensitivity analysis
Scenario Lesson Set 2: Using Macros in Scenario Analysis
Alternative to Data Tables in Scenario Analysis
Problems with Copy and Paste Macros in Models
Use of Goal Seek in Models
Creating Data Tables with Macros
Power of FOR loops with CELLS function
Video Creating Data Tables and Scenario Analysis (If the music is too low, try headphones if you have them)
The above file shows how you can make effective graphs from data tables
The above file uses a macro to create a one way data table
The above file reviews data tables in the context of structured finance
The above file shows how to make a more flexible data table with macros
The above file shows how to speed up data tables with range names
The above file uses a macro with a goal seek and a macro table
Timing in Budget Model.xlsx
Subject | Excel Exercise File | Video | Chapter Reference | Page Reference | |||||
Two Way Data Table with Structured Finance Model | CDO Exercise 2 | https://www.youtube.com/watch?v=iGnjWYW-zIc | Chapter 16 | 193 | |||||
One Way Data Table with Structured Finance Model | CDO Exercise 2 | https://www.youtube.com/watch?v=Tip6i7pYEt4 | Chapter 16 | 201 | |||||
Basic One Way and Two Way Data Tables | Exercise 1: Data Tables without Macros | https://www.youtube.com/watch?v=7s2GiemfZdg | Chapter 16 | 193 | |||||
Data Table with Macro – No Range Name | Exercise 2: Data Tables with Macros | https://www.youtube.com/watch?v=xR-NwFZ2ANU | Chapter 16 | 201 | |||||
Flexible Two Way Data Tables with Macros and Range Names | Exercise 3: Flexible Data Tables with Macros | https://www.youtube.com/watch?v=UIeSTdiPNik | Chapter 16 | 203 | |||||
Creating Graphs from Data Tables | Exercise 4: Graphs from Data Tables | https://www.youtube.com/watch?v=0StOCE_yjNc | Chapter 15 | 174 | |||||
Flexible One Way Data Tables with Macros and Range Names | Exercise 5: Flexible One Way Data Tables with Macros | https://www.youtube.com/watch?v=GfhlYG5rxRc | Chapter 16 | 203 | |||||
Goal Seek, Macros and Data Table Macros | Exercise 6: Goal Seek Macros and Data Table Macros | https://www.youtube.com/watch?v=jroLGvUXj40 | Chapter 42 | 541 | |||||
Auto Open Macro to Set Calculation Method | Exercise 7: Data Tables and Auto_Open Macro | https://www.youtube.com/watch?v=RhXFHCp7Pic | Chapter 16 | 193 | |||||
Use of Calculatebeforesave = False to Save Fast | Exercise 8: Data Tables and Save | https://www.youtube.com/watch?v=acW9Fo0KSFQ | Chapter 16 | 198 | |||||
Basic Scenario Analysis with INDEX and Data Table | Exercise 9: Basic Scenario Analyisis | https://www.youtube.com/watch?v=fX5yUl-2uj4 | Chapter 17 | 212 | |||||
Sensitvity Analysis with INDEX and Data Table | Exercise 10: Basic Sensitivity Analysis | https://www.youtube.com/watch?v=MKFx1g5vlKA | Chapter 18 | 234 | |||||
Creating a Custom Scenario without Macros | Exercise 11: Basic Custom Scenario Case | https://www.youtube.com/watch?v=4npJiOPGop4 | Chapter 17 | 223 | |||||
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Exercies that Demonstrate How to Create Scenario, Spider Diagrams and Tornado Diagrams
This page contains exercises and explanations for adding tornado diagrams and spider diagrams to your models. Once you get used to just a couple funcitions in excel, I am convinced that you can very easily add the scenario and other types of analyses to any of your models. All of the exercise in one way or another use a combination of the INDEX and DATA TABLE functions in excel. It is fairly easy to program the INDEX fucntion and DATA TABLES in excel; the key is to know how to creatively use the commands in combination.
Due to the importance of this risk analysis, the tools below include video explanations as well as the exerciese and also documentation in power point slides.
Subject | Excel Exercise File | Video | Chapter Reference | Page Reference | ||||
Basic Tornado Diagram | Scenario and Tornado Exercise | https://www.youtube.com/watch?v=0x1sx5YKpr8 | Chapter 16 | 193 | ||||
Sorting a Tornado Diagram | Scenario and Tornado Exercise Finished | https://www.youtube.com/watch?v=kH41VDGakqM | ||||||
Tornado Diagram with Two Way Table | Scenario and Tornado Exercise Two Way Table | https://www.youtube.com/watch?v=fdO6p22ngow | ||||||
Showing Low and High Case Values in Tornado Diagram | ||||||||
Tornado Diagram in Project Finance Model | ||||||||
Tornado Diagram with Alternative Base Case | ||||||||
Spider Diagram with Constant Increments | ||||||||
Spider Diagram with Variable Increments | ||||||||
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Exercies for Creating Tornado Diagrams
Note: the template for creating tornado diagrams is in the risk analysis templates
Combination of Scenario and Sensitivity
This file contains an example of how to combine scenario and sensitivity analysis whereby you can create a base case and then perform sensititivy analysis on different varaibles in the base case. Alternatively you can create a downside case and then perform sensitivity analysis on variables in the downside case etc. This approach allows you to retain base case variables and also analyse downside cases on individual items. To create the scenario analysis, you can use data tables, index functions and some simple VBA code. An example of the approach is shown in the file below.
Video Instructions for Scenario Manager
Power point slides for Scenario Manager
Scenario Analysis using Data Table and Index
Power point slides that explain the risk analysis models
Exercise for Creating Spider Diagrams
Exercise for creating data tables with VBA
Exercise for Creating a one-way and two way data table