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Are you confident of the risks you face in
your financial analysis and strategic planning?
To ignore the effects of uncertainty in your financial and business analyses means to potentially expose your organization to unnecessary risk and potential failure. Yet that is exactly what professionals do when they use Microsoft® Excel® without additional analytical support. In traditional financial spreadsheets, you are forced to rely on best-guess or average values even when you know that inputs such as market size, units sold and royalty rate are uncertain and uncontrollable.
Whether you're creating a business case, calculating NPV, assessing credit risk, determining bank capital adequacy, valuing assets, or forecasting financial returns, you need to account for the uncertainty in your models. Your knowledge
and your toolset will make the difference between whether
your work succeeds or fails. No matter what risks you face, Crystal Ball software
can help you find the specific solution for your needs.
Crystal Ball is a Microsoft® Excel®-based suite of analytical tools that includes Monte Carlo simulation, optimization, and forecasting. With little effort, you can apply these advanced analytical techniques to your new or existing spreadsheets to create more accurate cost and financial predictions and better informed business decisions.
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With Crystal Ball tools, you can:
- Mitigate risk in ROI and NPV calculations
- Gain immediate insight on the spreadsheet model inputs that most drive value
- Replace min/max estimates with more accurate range of all possible outcomes
Provide decision-makers with factual data that shows the risk associated with each choice
- Consider multiple aspects of problem such as constraints, goals, and requirements,
- Replace costly “what if” iterations with automated procedures,
- Optimize processes, products, or portfolios,
- Perform efficient asset allocation given budgetary constraints and other requirements
 Key
features of interest to your industry include sensitivity
analysis, historical data fitting and optimization. The sensitivity
analysis helps you to understand which of the uncertain input variables
are most critical and drive the uncertainty of your cost
model. Correlation lets you link uncertain inputs and account
for their positive or negative dependencies. If historical data
does exist, the data fitting feature will compare the data to
the distribution algorithms and calculate the best possible fit
and parameters for your data. Optimization allows you to account for uncertainty and risk in simulations but still select the best possible settings (e.g., staffing levels, investment amounts, product prices) to achieve success.
LEARN MORE ABOUT CRYSTAL BALL FOR VALUATION
This page offers links to a growing number of resources, including recorded Web seminars, articles, white papers, case studies, and example models. Additionally, you can view a list of common uses and examples reported directly from customers using Crystal Ball. You can also download a free trial version of Crystal Ball to see how it can help improve your business forecasts and decisions!
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RECORDED WEB SEMINARS
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Business Value Simulations on Basel II Business Case
Discusses data quality and the important role it plays in the framework of Basel II-auditing, as well as building better business cases for Capital Review Committees.
Presented by Julia Stumpenhagen from just.dot and Johannes Ritter from Solution Matrix
Recorded March 15, 2007
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View recording
 Download files
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Riesgo Operacional: El reto contemporáneo de la banca internacional
Al finalizar el seminario, habrás entendido:
- La importancia de la aplicación del método de simulación de Monter Carlo para manejar los fenómenos continuos y discretos que se presentan en la gestión del Riesgo Operacional;
- Los compromisos de la industria financiera frente al ACUERDO DE BASILLEA II;
- La invaluable ayuda que nos ofrece Crystal Ball en la creación de modelos de simulación para el análisis del Riesgo Operacional.
Presented by Camilo Romero, Experto internacional y entrenador certificado en Crystal Ball y Real Options Analysis Toolkit
Recorded 25 de Mayo de 2006
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View recording
Download files |
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WHITE PAPERS & ARTICLES
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CASE STUDIES
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Assessing
Risks of Commercial Loans
SunTrust "Banks" On Crystal Ball For Assessing
The Risk Of Commercial Loans |
Download |
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Financial Services
Consulting
Banker's Trust uses Crystal Ball in Developing Award-winning
Risk Management Group |
Download |
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EXAMPLE MODELS
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Bank Capital Adequacy Simulation
I
From: Jeffrey R. Stokes, Pennsylvania State University and Penn
Analytics, jstokes@psu.edu
Detail: Banks hold capital in excess of reserve requirements
to provide a buffer against future, unexpected losses. Such losses
are brought about by the credit, market, and operational risks inherent
in the business of lending money. Problems created by an insolvent
bank are important enough that bank regulators enforce minimum capital
standards on banks in an effort to safeguard depositors and ensure
the ongoing viability of the financial system.
However, from a bank’s perspective, holding idle capital is
an expensive safeguard against risk because the bank’s shareholders
demand a return on their investment and idle capital provides no
such return. For this reason, bankers and regulators can have divergent
opinions about the amount of capital a bank should hold making the
problem of determining a bank’s risk-based capital a complex
and important question.
This model uses simulation to determine a distribution of losses
facing the bank. The model download file includes a PDF file that
explains how the model works and what the results mean. |
Download
For:
Crystal Ball
Level: Simple-moderate |
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Bank Capital Adequacy Simulation
II
From: Jeffrey R. Stokes, Pennsylvania State University
and Penn Analytics, jstokes@psu.edu
Detail: This is a continuation and advancement of the problem
described above. This model uses correlation to improve the accuracy
of the risk assessment. The model also contains decision variables
for the three risk-based capital variables. OptQuest is used to
determine how best to adjust the Crystal Ball Decisions (the yellow
cells representing Last National’s risk-based capital) to:
(1) minimize the cost of capital, and (2) insure the probability
of solvency is no less than 99.7%.
This model download includes a PDF file that explains how the models
works and an .OPT file that contains the OptQuest setup information. |
Download
For:
Crystal Ball & OptQuest
Level:
Simple-moderate |
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Granting Credit
From: Jeffrey R. Stokes, Pennsylvania State University and Penn Analytics, jstokes@psu.edu
Detail: In this model, the firm's credit granting decision is cast as a sequential decision problem as in J. Stowe's "An Integer Programming Solution for the Optimal Credit Investigation/Credit Granting Sequence", Financial Management, Summer 1985:66-76. The model includes a decision tree view of possible options. The model also uses OptQuest to maximize the expected NPV of the firm's credit policy while requiring a solution with a specified maximum standard deviation. A .opt file is included in the download. |
Download
For:
Crystal Ball & OptQuest
Level: Moderate |
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TEXTBOOKS
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COMMON USES & EXAMPLES
The following examples were provided by our customers and represent
only some of the potential banking applications for Crystal Ball.
- Asset / liability matching
- Credit risk management
- Forecasting expected returns
- Fundamental credit analysis (scenario-based Monte Carlo) & Real Options analysis
- Generate financial investment alternatives
- Monte Carlo simulations, probability of return analysis, optimisation of asset allocations
risk analysis
- Operational Risk Capital Modelling
- Operations Management and Supply Chain Management (inventory management/EOQ)
- Simulation of interest rates
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