Corporate Finance Risk Analysis

Duration: 3 days

Course overview

The course familiarizes you with risk analysis modeling environments (in this case @Risk or CrystalBall with Excel, but the lessons apply equally well to other modeling environments).

Course objective

The course will give you the ability to conduct, present and critique financial risk analysis that uses the latest methods. Concepts and topics covered in this course include the fundamentals of model building, probability theory, Monte Carlo simulation (using @Risk/CB or alternative modeling environments), using expert opinion, times-series modeling, including risk in NPV analysis and real option analysis.

Training material

We will provide lecture notes both in hardcopy and on CD. This CD also contains all model files produced for the course. Any extra models developed during the course are downloadable from a private course website.

Course format

The course runs from 9:00 am to 5:00 pm each day. Morning and afternoon coffee, and lunch are provided. Optional evening workshops on the first and second days allow extra time for running through example models and exercises.

Who should attend

The course covers the basics of financial risk modeling, and is ideally suited to corporate finance professionals, M&A analysts, risk managers, management consultants, and corporate strategy planners. Financial risk analysis tools can be applied in a very wide range of industries (from venture capital to the pharmaceutical industry, oil and gas, banking and retail) and to numerous capabilities such as new product and business development, corporate finance, strategy, marketing and mergers and acquisitions.

Prerequisites

Participants will be primarily using @Risk (version 5.0 or newer) or alternatively CrystalBall (v 7.0 or newer) with Microsoft Excel to solve the exercises. However, participants can also choose to use another Monte Carlo package of their choice. It is essential that all participants are reasonably proficient in Excel. Trial versions of @Risk can be found from Palisade's website herehere and trials of CrystalBall can be downloaded from Oracle's websiteOracle's website. As the trial licenses last 15 days, participants should install it only a few days before the course. In addition to @Risk/CB and MS Excel, participants are required to bring laptops with Microsoft Word and PowerPoint installed, and with a functional CD drive.

Free ModelAssist

ModelAssist is a comprehensive risk analysis training reference and is free of cost. This reference tool provides an in-depth explanation of all of the risk analysis concepts, techniques and methods introduced in this course and greatly complements the course material. ModelAssist can be downloaded directly from our website here.

Teaching philosophy

All of our courses aim to help the participants understand (rather than 'learn') risk analysis, which can only be achieved through a relaxed, informal and interactive environment, through plenty of examples and hands-on exercises where students apply and adapt what they have learned. We believe that:

"When you hear something, you forget it.
When you see something, you remember it.
But not until you do something will you understand it" too

Course content

Day 1

  • Introduction to Crystal Ball/Excel or @RISK/Excel and risk modeling
  • Introduction to probability theory and statistics
  • Building models and using the results - some simple finance examples
  • Presenting risk analysis results, sensitivity analysis, stress analysis, goal seek
  • Evening workshop: models and exercises

 

Day 2

  • Using data to determine probability distributions
  • Using expert opinions to determine distributions
  • Using Central Limit Theorem
  • An insurance problem
  • Portfolio optimisation problem
  • More involved finance problems
  • Evening workshop: models and exercises

 

Day 3

  • Modeling correlations
  • The most common modeling errors
  • Time series modeling and forecasting
  • Using simulation with discounted cashflow models
  • Real option evaluation

Projects

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Testimonials

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Brief History of EpiX Analytics

EpiX Analytics was founded in 2003 in Princeton, NJ under the Vose Consulting name, and among its offerings it included specialized software to perform Monte Carlo simulations. Read More >>