Inscrivez-vous ou connectez-vous pour rejoindre votre communauté professionnelle.
In an uncertain economy, CFOs (or any Financial Planning and Analysis professionals) don't know how the economy will affect their business models. So it is not useful to create just one financial model to forecast profits and cash into the future.
Scenario Planning allows the firm to test its financial models in different states. e.g. if the firm creates a financial model to forecast it's Costs, Revenues, and Profits, then scenario planning allows the firm to forecast it's costs, revenues, and profits if the economy booms, stagnates, or goes into a recession.
However, one must be careful when using Scenario planning. The "scenarios" are predicted as well, and can turn out to be incorrect i.e. some other event can can take place, e.g. a depression, a price shock, or a financial crisis.
