Gathering & Entering Assumptions

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Using Exl-Plan > Starting to Use Exl-Plan > Gathering & Entering Assumptions

Note that a user's assumptions are entered directly into assumption reports only. Output reports contain extensive formulae which generate the projections. The only exceptions are the prior-year income statement in the Income Statements and the opening balance sheet in Balance Sheets which must be entered directly into these reports.

When starting to prepare a new set of financial projections for a business, there are likely to be some significant gaps in the information needed to plan effectively.  It may be necessary to review historic accounts and budgets to derive basic cost or sales data; to conduct research and analyses of markets; to identify alternative strategies or scenarios; to make manpower projections; to consider funding issues etc.

Exl-Plan can assist this process by helping to pose the right questions and providing feedback on the financial implications of possible outcomes. However, bear in mind that, ultimately, Exl-Plan is only a high-powered calculating and printing system and that its output will only be as sound as the underlying assumptions. Refer to Pitfalls & Dangers for advice on preparing projections.


Tip:

On the first occasion that Exl-Plan is used to produce real projections for a business, curtail the detail of assumptions relating to sales, expenses etc. and concentrate initially on producing first-cut projections. For example, start by entering just single rows of assumptions for sales and use only a few rows for high-level direct and overhead expenses etc.  As all other sales, cost and overhead assumptions will have been previously set to zero, the range of assumptions will be manageable and it should be straightforward to follow these through the various formulae and reports. Review the initial results and then progressively add greater detail.


Tip:

A printout of all assumption reports with all assumptions erased can be a very useful aid to collecting assumption data.

 

See Also:

Erasing Existing Values

Structuring a Model

Summary of Procedure for Generating Projections

Setting Up Exl-Plan

Entering Assumptions

Entering Prior-Year Income Statement & Opening Balance Sheet

Completing Projections

Avoiding Calculation Errors

Doing Sensitivity Analyses

Guidance on Entering Assumptions

Changing Exl-Plan



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