Financial simulation and scenario modelling to manage crisis successfully
The shock of the Corona crisis is a major economic challenge on a global scale. Sales revenues and order backlogs are declining significantly at short notice. Plants and supply chains are coming to a stillstand. Budget and forecast values are no longer reliable, and immediate measures need to be taken to minimize negative impacts and secure the financial survival of the company.
Quick and effective simulations and scenario modelling becomes even more important in times of crises as circumstances change continuously and action plans need to be updated accordingly.
The Horváth & Partner measure-based financial simulation model is a ready-to-use solution, providing a powerful basis for quick and transparent decision-making, enabling companies to define a suitable action plan.
Our best-practice approach to manage a crisis like Corona is ideally supported by a simulation framework building on four key elements:
- Reasonable macro scenarios as general drivers
- Simulation of liquidity impact as a short-term forecast of financial solvency
- Simulation of overall financial result to reflect mid-term impact on business models
- Definition of measures to derive short- and mid-term action plans
Together, these four key elements enable companies to simulate different action plans and their corresponding effect on the business.
Our ready-to-use solution helps to ensure financial viability in times of crisis on an interim basis. Please contact us for further Information.
Emler, M. / Klehr, D. / Palmer, D. / Schlösser, F.
Published in: White Paper, 2020