Risk analysis

Risk analysis or risk management are concepts usually associated with financial institutions or large corporations. But risk is something that also small businesses encounter on a regular basis. They may however shy away from performing risk analysis since this concept may seem so “big enterprise”. But it’s not. Risk analysis is simply the identification and [...]

(Almost) crystal ball: Monte Carlo simulation

Although net present value (NPV) rocks, it is hard to believe that any financial metric representing the future outcome of an investment correctly describes what will REALLY happen. After all, cash flows that are inputs into the NPV analysis are forecasts and forecasts are never accurate. In lieu of a good crystal ball, you can [...]