New finance apps with Monte Carlo simulation

FinanceIsland has just launched three new finance apps with Monte Carlo simulation. Ten years after the idea was born, three years after the technology became available, two years after first proof of concept, and one year after the development and testing cycle, we are ready. These three new tools represent the first implementation phase of our vision to offer sophisticated online finance applications to manage uncertainty.

The first new tool, ROI analysis with Monte Carlo simulation, is divided into two parts: standard ROI analysis and Monte Carlo simulation. This tool allows you to calculate the return on investment (ROI) that you can expect from a R&D, marketing, or capital investment project. The tool will tell you also how likely it is that the investment will have positive return. The tool will perform discounted cash flow analysis, it will calculate key ROI metrics such as net present value, and it will allow you to model uncertain projections using Monte Carlo simulation.

The second tool, cash flow forecast, can help you to predict future cash flows expected in your business and can help you to determine the likelihoods of these cash flows. The tool will calculate income and cash flow projections, it will help you to identify most relevant drivers of cash flows using the sensitivity chart, and it will allow you to model uncertainties in financial flows using Monte Carlo simulation.

The third new tool is the optimal supply estimator. If you need to order or produce fixed number of products well in advance of the time when these products will be sold, this tool will help you to identify the optimal order or production quantity. It will help you to maximize margin based on the uncertain demand by calculating contribution margin for several supply options and by modeling uncertain demand (and price) with Monte Carlo simulation.

In addition to the new apps, we have also slightly redesigned the existing lease-or-buy calculator. This tool can help you in deciding between leasing and buying capital equipment, and if buying between cash and financed purchase. The tool will calculate the total cost of leasing and buying where you will be able to choose the least expensive lease-buy option based on discounted cash flow analysis and net present value.

All these tools are ready to use. They are supported through guided and simplified analysis processes. And they are delivered to you online as a service, so you can instantly benefit from new features we add on a regular basis. The only technical requirement is a newer internet browser with Flash version 10 or higher installed.

All tools are offered on a subscription basis. For more information please check the pricing page or subscribe directly.

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