Kogdenko V.G.National Research Nuclear University MEPhI, Moscow, Russian Federation kogdenko7@mail.ru ORCID id: not available
Importance The article addresses the problems related to strategic financial modeling. Objectives The aim is to build a strategic profit model and, on its basis, evaluate company risks, using the Monte Carlo method. Methods The study rests on forecasting algorithms, financial modeling, and risk assessment techniques for the company as a whole. Results I developed methods for strategic financial modeling of profit under the Monte Carlo method. It includes five stages: creating data array; constructing a projection model of profit; substantiating the predictive algorithm for model's variables and determining their projected values; assessing the volatility of the model variables and defining the lower and upper limits of their variation on the basis of confidence intervals; generating the profit scenarios under the Monte Carlo method and assessing the profit at risk. The methodology has been tested on real public data of a Russian company. Conclusions The offered approach enables to assess the influence of volatility on business and its financial performance. The developed model helps analyze changes in the business portfolio structure, the contribution of business portfolio components to the overall company risk, and evaluate cost minimization measures. The article may be useful for specialists of financial services involved in risk-based decision-making.
Keywords: financial model, risk analysis, Monte Carlo method
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