Working with Scenarios
Running scenario analysis in spreadsheets is a challenge because it often means creating multiple books with different names. Comparing the impacts across scenarios or combining scenarios together often requires creating (and managing) even more workbooks.
FinanceSeer addresses this problem through the use of their scenario dimension. Below are a few points to keep in mind:
- By default the scenario dimension has only one required member (Baseline).
- The baseline acts like the "excepted" scenario. All other scenarios are intended to be variants from the baseline.
- By default a new scenario has no unique inputs and therefore is exactly the same as the baseline
- Users enter ONLY the assumption or result overrides into the custom scenarios to evaluate the impact of the alternative input.
- If data is entered into the baseline and not overridden in another scenario, the impact of that input will impact the custom scenario as well.
- Assumptions are always active in a custom scenario regardless of whether or not it was input in the baseline or not (user may have anchored the result in the baseline).
- There is a hidden dimension that can be turned on to see the scenario "adjustment" or the "revised" answer. The adjustment shows the delta in either the result or assumption from the baseline.
- Users can enter directly into the "adjustment" if they want to hold the delta constant. For example, if the baseline growth was 6% and the user entered a "adjustment" of 2% then the "revised" growth would be 8%. If the user then changed the baseline growth to 10%, the revised growth would be 12% in the scenario.