Integrated financial models to forecast future business profitability or measure past project performance based on income statements, balance sheets, and cash-flow statements
Model cash flows, accounts, and profits:
Financial statements are investors’ principal instrument at hand to assess companies’ current state and future trajectory.
I have built financial models to understand the impact of changes in pricing policy, revenues, cost base, or investment schedule on financial statements.
Assess business risks using simulations:
Simulations can help to assess risks related to business outcomes by running hundreds of thousands simulations, each with slightly changed inputs to an underlying model, such as a financial model or a business decision tree.
These simulations, including the data generating process, can be implemented in a wide range of statistical programming languages.
Measure profitability right:
Profitability assessments should be a key element of business management and monitoring. Developing the right metrics that reflect the relevant aspects of the nature of the business and investment risk can be highly challenging, however. The fundamental concept of profitability is well understood, but applying it to accounting figures can become tricky.
I have consulted on choosing the right profitability measures (such as ROCE, ROA, ROS) and benchmarks (COC, COE, etc.) taking into account operational risks, financial leverage, asymmetric risks, sunk costs, and market conditions.