Introduction to Financial Modeling with @RISK: A Training CD
The World's Most Powerful Risk Analysis Tool!
The Need for Risk Analysis
 @RISK lets you see all possible outcomes in any situation! |
Have you ever seen a financial spreadsheet representing multimillion-dollar ventures containing only best case, worst case, and most likely scenarios? Or, have you worked in situations where marketing, R&D, engineering, and other key decisions were based on "best guess" estimates of factors like demand, market share, and effects of competition? Chances are if you work in pharmaceuticals, consumer products, financial planning, manufacturing, oil and gas, the military, energy, government, securities, insurance, or virtually any other industry, the answer to these questions is "Yes!" The fact is that the vast majority of Fortune 1000 companies, universities, and government agencies make multimillion-dollar decisions without taking more than three different possible outcomes into account! In reality, there are almost always dozens -- if not thousands -- of possible scenarios that could affect an organisation's bottom line. Recent high-profile debacles like Enron, Ford's $5 billion loss, Orange County California, and others have shown what can happen when companies ignore these various possibilities.
@RISK Shows You ALL Possible Outcomes
@RISK changes all that. @RISK lets you see all possible outcomes in your situation
- and tells you how likely they are to occur! What this means for you -- the decision
maker -- is that you finally have, if not perfect information, the most complete picture
possible. You will see what could happen, how likely it is to happen, and therefore
be able to judge accordingly which risks to take and which ones to avoid. While no
software package can predict the future, @RISK can enable you to choose the best
personal strategy based on the available information. That's not a bad guarantee!
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@RISK Works Where You Work - In Excel
@RISK is an add-in to Microsoft Excel. As an add-in, @RISK
becomes seamlessly integrated with your spreadsheet, adding risk analysis to your
existing models. Working with @RISK is as easy as working in your existing spreadsheets,
so there's almost no learning curve!
@RISK uses a technique known as Monte Carlo simulation to show you all possible outcomes. Running an analysis with @RISK involves three simple steps:
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1. Define Uncertainty
Start by replacing uncertain values in your spreadsheet model with @RISK
probability distribution functions. These @RISK functions simply represent a
range of different possible values that cell could take instead of limiting it to just
one value.
2. Pick Your Bottom Line
Next, select your output cells - the "bottom line" cells whose values you
are interested in. This could be potential profits for a new product launch, insurance
claims payout, disease recovery rate, anything at all.
3. Simulate
Then click the "Simulate" button and watch. It's that easy! @RISK
recalculates your spreadsheet model hundreds or thousands of times! There is
no limit to the number of different scenarios you can look at in your simulations.
Each time, @RISK samples random values from the @RISK functions you entered and records
the resulting outcome. The result: a look at a whole range of possible outcomes, including
the probabilities they will occur! Almost instantly, you will see what critical situations
to seek out - or avoid!
 Quick Reports give you all the information you need in a single click! |
The power of Monte Carlo simulation lies in the distributions of possible outcomes it creates. Simply by running a simulation, @RISK takes your spreadsheet model from representing just one possible outcome to representing thousands of possible outcomes. Try doing that with Excel alone! By using @RISK, the information you can glean from your spreadsheet models becomes tremendously more accurate, and infinitely more valuable. With @RISK, you can answer questions like, "What is the probability of profit exceeding $1,000,000?" or "What are the chances of losing money on this investment?"
Present Results with Stunning Graphs
@RISK provides a wide range of graphing options for interpreting and presenting your
results to others. Create histograms, cumulative curves, area
and line graphs - all without touching your keyboard! Right-click menus and
handy toolbars make navigation a snap. Use overlay graphs to
compare several results on one graph. You can even create summary graphs that display
risk over a range of time or across outputs! Sliding delimiter
bars make reading probabilities of different outcomes a breeze. Customise
your graphs by adjusting the scaling, axis labels, titles, colours, and more! All
graphs may be copied to the Windows clipboard or exported directly to Excel.
@RISK also gives you a full statistical report on your simulations, as well as access to all the data generated. Plus, you can generate a one-page, pre-formatted, ready-to-print Quick Report with a single mouse click. Quick Reports include cumulative graphs, Tornado charts for sensitivity analysis, histograms, and summary statistics.
 Choosing distributions is easy with @RISK's pop-up distribution viewer, RISKview. |
Define Uncertainty with Ease
Choosing which @RISK distribution function to use for a cell containing uncertain values
doesn't have to be complicated. @RISK comes with RISKview - a
built-in distribution viewer that less you preview various distributions before
selecting them. You can choose distributions from a gallery of thumbnail distribution
pictures, and then watch as @RISK builds a graph of the distribution for you while
you enter your parameters.
@RISK even lets you define parameters two ways - using standard parameters or percentiles. For example, if you have a cost that is usually around $50,000 but fluctuates between $40,000 and $60,000, you might pick a normal distribution with a mean of $50,000 and a standard deviation of $7,500. Or, you could set up your normal distribution defining the 10th percentile as $40,000 and the 90th percentile as $60,000, meaning 80 percent of the time it's between these two values.
What if you don't know which distribution to use, but you just want to draw a curve free-hand using your expert intuition? No problem! @RISK provides a Distribution Artist that lets you do just that!
 Use your data to determine the best distribution for your models using BestFit. |
Make Your Data Work for You!
Say you are building your spreadsheet model and you know what costs have historically
been for your product's materials. @RISK lets you use that data to accurately describe
what the material costs might be in your project! Just use BestFit -
@RISK's built-in distribution fitting tool (Professional and Industrial editions
only). Read your data into @RISK, and with the click of a button BestFit will find
the @RISK distribution function that best describes it. Another click, and the distribution
is written directly to your spreadsheet model!
BestFit ranks dozens of distributions against your data, provides graphs that compare your data against the fits, and more! You can even "hot link" your data so that your distribution automatically updates when the source data changes.
Identify the Factors That Cause Risk
@RISK provides you with Sensitivity and Scenario Analyses to determine
the critical factors in your spreadsheet models. Use Sensitivity Analysis to
rank the uncertain factors in your model according to the impact they have on your
bottom-line output cells. See the results clearly with an easy-to-interpret Tornado
diagram!
 Easy-to-interpret Tornado diagrams identify your risk factors at a glance. |
Scenario Analysis identifies which scenarios - or combinations of inputs - lead to particular outcomes. Find out which situations to strive for or avoid. For example, you may need to know what your production costs, shipping time, and price points all are when profits are highest.
Both analyses let you gain insight into your situation that your competition won't have, and learn how to increase profits and avoid pitfalls!
@RISK Professional
@RISK 4.5 is available in three editions to meet your risk analysis needs: Standard,
Professional, and Industrial. @RISK Professional adds a host of analytical power
features to your arsenal:
Integrated BestFit: Fits distribution functions to your data (see above).
@RISK Goal Seek: Finds the value of an input that leads to a desired simulation result. You set the target value - or goal - and tell @RISK which input to adjust to achieve your goal. @RISK uses multiple simulations to find the input that achieves that goal.
Stress Analysis: Lets you control the range that is sampled within an input distribution. By specifying extreme ranges of a given input, you can see how different scenarios would affect your bottom line without changing your model around.
 Box-Whisker Plots from a Stress Analysis are one of many different reports available with @RISK's Advanced Analyses. |
Advanced Sensitivity Analysis: See how changes in any input values - distribution functions or regular cells - affect your simulation results. Using a wide variety of options, you can control how inputs are varied. @RISK runs any number of simulations - one at each possible input value - and tracks how outputs change. Result graphs such as Box-Whisker plots, spider graphs, and comparison graphs show you critical factors at a glance.
@RISK Industrial
@RISK 4.5 Industrial is well-suited to the power risk analyst. @RISK Industrial builds
upon @RISK Professional by adding:
Integrated @RISKAccelerator: Speed up large simulations by using all CPUs in a multi-CPU machine. If your PC has two processors, your simulations will run nearly twice as fast! Also available separately, @RISKAccelerator can be configured to utilise available CPUs over a network (see Related Products).
RISKOptimizer: Optimise the results of your @RISK simulations with this unique tool. Combining the power of Monte Carlo simulation with genetic algorithm-based optimisation techniques, RISKOptimizer finds the best combination of inputs that maximise or minimise simulation results. Also available separately.
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Ignoring Risk is Costly; @RISK is Not!
We have seen how not taking risk into account can bring down even the mightiest corporate
giants. Considering the impact of the decisions you make every day using Excel, you
can't afford not to perform risk analysis. @RISK puts risk analysis within reach
of almost any budget. Just one smart decision made using insight
gained from @RISK will pay for the cost of the software many times over. So
join the growing list of savvy companies who have made @RISK a key part of their
decision-making processes! Order today!
Click here to download a free trial version of @RISK. A detailed fact sheet is also available, and there are free trial versions and multimedia tours that will help you learn more!
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Related Products
The power of @RISK can be enhanced and expanded beyond Excel using these other tools
from Palisade:
@RISKAccelerator
@RISKAccelerator uses the multiple CPUs found in a single computer or over a network
to dramatically increase the speed of @RISK simulations. Simulation speed increases
almost linearly with the number of CPUs used. If you have large models spanning many
worksheets or workbooks, or you need to run simulations frequently for on-the-spot
decision making, @RISKAccelerator is for you! Click
here for more information.
@RISK Developer's Kit
Apply @RISK's Monte Carlo simulation engine, incredible charting, and all other features
to any custom Windows application! Run simulation models over the web or your corporate
intranet! Included ActiveX interface and BestFit Developer's Kit make programming
easy. Click here for more information.
@RISK for Project
Account for uncertainty in your Microsoft Project models! Replace factors such as task
duration, costs, and resources with @RISK distribution functions and run a simulation
to see all possible project outcomes. Answer questions such as "What are the
chances of this project finishing under budget and by the deadline?" Click
here for more information.
가격에는
부가세를 제외한 1년간의 Maintenance를
비롯한 모든 제반 비용이 포함되어 있습니다. 필요하시면 반품
및 환불에 관한 규정 과 배송
방법 및 기간 를 참고 바랍니다.
For UPGRADES to the current version of @RISK, click here.
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Software Recommendations
Minimum
Platform: IBM PC compatible Pentium-equivalent or higher, 16MB RAM, Windows
98, NT 4.0, Windows 2000, Windows XP
Recommended
Platform: 32 MB RAM, or greater
Spreadsheet: Windows
Excel 97 or higher
Technical
Support: Available through maintenance plan
Other
Versions Available: @RISK Developer's
Kit, @RISKAccelerator, @RISK
for Microsoft Project
Demo: Web
download and free demo CD with trial version
available.
Training: Available
through Palisade's Software Training Courses.
Recommended
Books: Financial Models Using Simulation
and Optimization I and II; Simulation
Modeling Using @RISK; Risk Analysis:
A Quantitative Guide; Simulation Modeling & Analysis; Practical
Management Science; Decisions Involving
Uncertainty: An @RISK Guide for the Petroleum Industry; Statistical
Distributions; Business Modelling
and Simulation; and more!
Also
Available: Introduction to Financial
Modeling with @RISK: A Training CD by Wayne Winston
Other
Licensing Options: Corporate
Licenses, Network Licenses, and Academic Licenses are
available. Contact our Sales Department for details (see contact information below),
or click here for more information about Corporate
Licenses.