Sensitivity and Simulation Analysis in Excel Without Programming

11 Pages Posted: 2 Jul 2020

See all articles by Peter J. DaDalt

Peter J. DaDalt

Susquehanna University

Jack G. Wolf

Clemson University - Department of Finance

Date Written: June 9, 2020

Abstract

Most finance textbooks talk about the benefits of conducting sensitivity and/or Monte Carlo simulation analyses in financial modeling, but mostly limit coverage to commenting on these techniques in passing. This is particularly true when it comes to simulation analysis, which typically requires the use of a third-party add-in or a significant level of programming expertise in VBA. We provide an extensive, step-by-step guide demonstrating how data tables in Excel can be used to easily implement sensitivity and simulation analyses. This approach requires only minor modifications to the base-case model; without the need for any programming experience.

Keywords: Sensitivity analysis, Simulation analysis, Excel, Capital budgeting

JEL Classification: A2, C63, G31

Suggested Citation

DaDalt, Peter J. and Wolf, Jack G., Sensitivity and Simulation Analysis in Excel Without Programming (June 9, 2020). Available at SSRN: https://ssrn.com/abstract=3623496

Peter J. DaDalt (Contact Author)

Susquehanna University ( email )

Selinsgrove, PA 17870
United States
5703724524 (Phone)

Jack G. Wolf

Clemson University - Department of Finance ( email )

324-A Sirrine Hall
Clemson, SC 29634
United States
864-656-3954 (Phone)
864-656-3748 (Fax)

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