Monte Carlo simulation can be used in financial modeling as a form of risk analysis. Though it’s not commonly performed, software such as @Risk, Palisade, and others can be used to analyze how the value of a business (in a DCF model) is impacted by over thousands of changes to assumptions in the model that follow a certain type of distribution.
CFI is the official global provider of financial modeling and valuation analyst FMVA Designation. CFI’s mission is to help anyone become a world-class financial analyst and has a wide range of resources to help you along the way.
In order to become a great financial analyst, below are some additional questions and answers for you to explore further:
Below is a screenshot from one of CFI’s online analyst training and certification courses, offered 100% online.
To learn How to Build an Excel Model step-by-step, click on the image below.