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Authors: Stepanenko N., Haritonov S. Published in № 1(67) 27 february 2017 year
Rubric: Mathematical models in economy

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Microsoft Excel application possibilities in modeling risks of investment projects

In the planning of investment activity of the individual or company has to deal with the risks. Risk means the possibility of investing planned shortfall of income, because of the influence on the parameters involved in the formation of extraordinary income, accidental or undetermined factors. The uncertainty of these factors comes from the fact that many of them relate to the future and change randomly. An investor can not influence them, and should assess the investment return based on forecasted or expected future values of these parameters. In modeling the firm should take into account the impact on the operations or processes of random variables. In this case, the most efficient to use a kind of simulation — statistical modeling (or Monte Carlo method).It is suitable for practical use, as the system under study is replaced by simulation, with which and experimental studies are made. During the implementation of a simulation model of the decisive role played by the use of computers. You must first create a table calculation indices containing about revenue data, profits, taxes, coefficient of efficiency, payback period of the investment project. Next, you need to determine the predicted performance. In our example in the future price of the product may be subject to adjustment. In addition, if the volume of sales can be predicted as random variables that are independent of our strategy, their random change should be included in the simulation model. With the help of instrumental capabilities of Excel calculated data corresponding model. According to the results of statistical modeling can determine the probability assessment quality criteria characterizing features of the functioning and effectiveness of the business. You can draw conclusions and make decisions about investing based on descriptive statistics.

Key words

investor income, modeling, economic efficiency, risk analysis data in MS Office Excel environment, Monte-Carlo method.

The author:

Stepanenko N.

Degree:

PhD in Sociology, Associate Professor, University Synergy

Location:

Moscow

All articles:

Application of analysis of hierarchies in the choice of a method of automation of a company

Microsoft Excel application possibilities in modeling risks of investment projects

The author:

Haritonov S.

Degree:

Cand. Sci. (Econ.), Associate Professor, Head of Training Department at InfoWatch JSC, Associate Professor: HSE Tikhonov Moscow Institute of Electronics and Mathematics (MIEM HSE) / Joint Department with InfoWatch, Associate Professor: Plekhanov Russian University of Economics / Basic Department of Digital Economy of the Institute of the Information Society