Sensitivity and Simulation Analysis in Excel Without Programming
11 Pages Posted: 2 Jul 2020
Date Written: June 9, 2020
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: Suggested Citation