Scenarios

 

It always a good idea to build a model knowing that some assumptions may change and/or that several scenarios will have to be tested.

The idea is too build the model such that it does not rely directly on the inputs but rather on cells that are the results of a choice between several scenarios, this way by changing the selected scenario the model will update itself instantly.

 

Excel modeling

 

1. Use of a combination of MATCH and eith INDEX or CHOOSE, see here for syntax and use

In the example above, the model is driven by the column "selected scenario" which itself depends on the selected by the use, this way the user can instantly switch from one scenario to the other without having to manually change the inputs one by one.

Financial Modeling Academy

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