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The “what if” dimension means that in case the new idea works out well, then the company might have significant value; otherwise, it will not.
For example, considering a mining company, in case explorations are successful, then the company will be valuable; if on the other hand explorations are not successful then the company might not even be surviving.
This is exactly how options work and we can use the same option pricing theory to value such real-world cases.
Dynamic Arrays in Microsoft Excel is a game changer. To make it simple Dynamic Arrays (“DA”) allow you to work with multiple values at the same time.
This major change is expected to change the design and construction of excel models.
Definition of financial modeling
A financial model is an excel spreadsheet that projects the 3 financial statements of a business into the future. The three financial statements are the income statement, balance sheet, cash flow statement which are based historical data and expected value drivers.