From the course: Excel for Finance: Building a Three-Statement Operating Model
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Stress testing the model - Microsoft Excel Tutorial
From the course: Excel for Finance: Building a Three-Statement Operating Model
Stress testing the model
- [Instructor] So now that we've completed the communication tool, now we need to think about the story, right? And that gets back to the CFO's original question. Are we in covenant compliance if we take on this capital project? And what does that look like, right? Here's the big capital project that we modeled out and as it stands, it looks like we would be in compliance, we're good on leverage, we're good on fixed charge. And so now we just need to do some light stress testing of the model to see where some of the pain points are. Now in reality, what you would do is you would go through all of these in each kind of in painstaking detail and see what had the biggest impacts on the model. But let's just start with the high points. Let's just tweak revenue a little bit. So the CFO came out with an opening or stock assumption of 20% growth. So let's just put it to 10, see what happens, hit enter. I don't see any bugs on the…
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