Monte Carlo Technique: How to perform Business Simulations & Assess Projects Profitability | Excel

[@RavindraMulye]

This small and lucid video is worth a big book on the subject. Thanks 🙏

[@krishnachiddarwar505]

Appreciate your comment @RavindraMulye

[@techtrooper7793]

Thanks a lot for this video I had my Financial Modelling exam the next day and I was able to understand and execute this, I understood the concept thanks to your simple and effective explanation

[@krishnachiddarwar505]

Glad to know that this helped you

[@robertbuckham1037]

Will be very helpful for showing operations management students how to set these up in Excel. Thank you for posting this video.

[@Kypezzz]

This is extremely helpful! Thank you for the great resource and sharing your knowledge! Gonna try it out tomorrow with out students in a sustainability university course to simulate some circular business models!

[@harrisonian9213]

Very helpful vedio to explain Mante Carlo Analysis. Great job you've done.

[@chrisforza3659]

Great Video, thanks. I'll be a loyal follower

[@josie-ey3v]

Very clearly explained 😊

[@MrHarpic]

Great video. Could you explain the logic behind 'Data Table' function @ 3:37 onwards?

[@duszan2]

Krishna, thank you so much for your comprehensive guide - this is perfectly explained, I appreciate you a lot!

[@krishnachiddarwar505]

Thanks!! I have few more Monte Carlo videos

[@duszan2]

@@krishnachiddarwar505 I'll be sure to check them:)

[@duszan2]

@@krishnachiddarwar505 one more thing - I realized there potentially should be added one final step, when calculating probability of net profit. We should eliminate outliers from simulated data to calculate probability more reliably. I'd use countifs function to exclude any data points beyond +3 and -3 standard deviations from the mean. :)

[@havvanurusta61]

Clear explanation, Thank you for this video!

[@krishnachiddarwar505]

You’re welcome!!

[@andreazosi4097]

Extremely helpful, thanks

[@Tommybotham]

Excellent video.

[@juanpabloarcos4597]

Thanks you so much, very helpful

[@krishnachiddarwar505]

Thanks

[@paulr6222]

Nice job, man!

[@krishnachiddarwar505]

Thanks

[@whitewolfstudios4727]

Awesome, I used this to calculate profitability simulation for a business plan for a CEO position. Thanks!

[@krishnachiddarwar505]

Wow, hope you get that job!! And let’s be in touch. Lol 😂😂

[@humbertosantos5946]

Hello, thanks for the vídeo. Very clear and objective explanation. Is it possible to hold these values and make them not to change ?

[@neetuchoudhary9888]

Thanks so so much...It is very helpful

[@krishnachiddarwar505]

Glad you liked it

[@AJ-et3vf]

Awesome video! Thank you!

[@krishnachiddarwar505]

Thanks

[@mohammedsobuh623]

Thank you so much wish you the best

[@krishnachiddarwar505]

Glad you found it useful

[@neilkanagaratnam7445]

Excellent thank you 🙏

[@krishnachiddarwar505]

You are very welcome

[@mdmamunsarder]

Simple and helpul; thanks

[@krishnachiddarwar505]

Thanks

[@sinandemirci1436]

Thanks for this video. I have learned very easy way to run this simulation on Excel. I used to handle too much cells with my weak Excel skill. I wonder if you could share the excel files you prepared as a template to utilize them for practices on.

[@krishnachiddarwar505]

Glad I could help you!

[@krishnachiddarwar505]

Let me see if I still have those excel files, share your email and I will send those over! 😊

[@sinandemirci1436]

@@krishnachiddarwar505 many thanks for your assistance. [e-mail] is my e-mail. Happy new year :-)

[@ahmadmaali492]

Many thanks for the valuable Video, but the problem is that the analysis like mean it keeps changing, How we can fix this and some times it release unbelievable values, How we can fix this

[@seshadrianantharaman7676]

this was wonderful... thanks much

[@krishnachiddarwar505]

Appreciate your comment!

[@vincenzoieva2714]

how did you compute the std deviation in line 3? or how would you do it in real life? btw, thanks for the video!

[@john.smith02]

Thank you sir, I am in urgent need of a M.C simulation video.

[@arshiyakharel8561]

great video sir, very informative, i wonder if you could share a template of this spreadsheet to me? thankyou

[@frustrategirl]

I just want to know, why crystal ball doesn't support double definition of assumption?

[@tanishkaachaturvedi2173]

hi, how did u get the outcome as blue at 2.33 mins?

[@whopperd]

sorry stupid question: how do you determine the standard deviation for the variable at the top

[@FRANKWHITE1996]

Great video.

[@thaufiksamdani9116]

thank you for share

[@krishnachiddarwar505]

Welcome!

[@aaronmiranda630]

the mean isnt resistant, so if the cost data is skewed, is the monte carlo simulation still viable or is there an alternative one?

[@kofidebrah]

Thanks for showing an easier way to conduct MC simulation

[@krishnachiddarwar505]

Glad I could help

[@Gracethedog101]

Can this be used to determine impact and likelihood of operational risk?

[@krishnachiddarwar505]

Yes

[@mexifrida]

How can you check if there is normal distribution?

[@krishnachiddarwar505]

You would see it in the histogram, if you are or aren’t getting the bell shape curve

[@desilvakts2071]

Also how do you show the trend over a period of time like a monthly trend or annual trend using a chart

[@desilvakts2071]

i think I got the answer for this, so ur simulations are considered based on monthly performance

[@cricketlads8771]

What is difference between STD deviation sample & population

[@desilvakts2071]

How did you decide the standard deviation ?

[@krishnachiddarwar505]

As I said in the video, you would have to gather a large sample set and see the pattern for yourself, then select that in your projection

[@markosiridzanski2181]

simple truth is that the mean is equal to net profit since std deviations does not have an impact as number of iteration increases

[@krishnachiddarwar505]

Ye

[@anuragchand11]

2:32 WHY MY FORMULA IS NOT WORKING? IT IS SHOWING (NAME?)

[@Shamansdurx]

Good one!

[@noordinkiggwe8082]

Thank you so much, found this so helpful in learning the technic itself, Qtn, can we use the technic on other distribution other than the normal distribution? Two please explain the excel part differently from the technic part?

[@krishnachiddarwar505]

Answer to Question 1: yes we can analyze any type of curve. Answer to Question 2: I will try that in a different video

[@LokeshPathak-i8c]

SIR COUNTIF FORMULA CELL & FIRST SIMULATION CAN"T BE SELECTED TOGETHER SO HOW O.OO % COME ?

[@krishnachiddarwar505]

Will get back to you

[@neetuchoudhary9888]

How do we interpret the results as the random values keep changing???

[@krishnachiddarwar505]

You focus on the mean values or the average values

[@mohammedelfizzanii9286]

Thanks a lot for this nice explanation ...How can we determine the type of statistical distribution i.e uniform, normal, triangle ..etc

[@krishnachiddarwar505]

That needs another video, basically, we collect a large data sample speard over time and see the pattern (short version)

[@mohammedelfizzanii9286]

@@krishnachiddarwar505 We are waiting for this important video

[@damianplanet5484]

Hi @Krishna Chiddarwar, is there a way to predict using Monte Carlo simulations, using the historic data from either fuel prices or exchange rate values?

[@krishnachiddarwar505]

You can definitely do that, the result will be dependent on two things. 1) Accuracy of your historical data. 2) Your input for the standard deviation.

[@damianplanet5484]

@@krishnachiddarwar505 Much appreciated! In terms of the Standard Deviation, would it be a straight calculation using the sample selected into the Std Deviation formula?|

[@krishnachiddarwar505]

@@damianplanet5484 It would be same as I showed in this video. Sorry if I didn't answer it right, didn't get your question

[@budiutomo4348]

thank for explanation based on excel instead of minitab, would you please share the excel files? I 'll inform to you back comparing with minitab , best rgdds

[@krishnachiddarwar505]

You’re welcome

[@DeepikaNekhelesh1709]

What is the input for 2nd simulation output?

[@shrutibhogal8196]

Hi any other dates available for this class?

[@krishnachiddarwar505]

Sorry, there’s no class. You can ask me any questions though. I’ll be glad to answer

[@marmomichailidou7647]

great video, but i was wondering how could we transfer this in crystal ball?

[@krishnachiddarwar505]

Hey, not sure if I understand your question correctly, could you elaborate?

[@karunadhingra6031]

Sir, can you please share this excel sheet to me.

[@rpkto161]

is it possible to do monte carlo simulation , with only sales and fixed cost given for a business , calculating profitability for 60%-70% ?

[@krishnachiddarwar505]

Yes, it is

[@juliefalcon6027]

my countif (outcome) formula doesn't work. Was there some pre-work to create what "Outcome" references?

[@juliefalcon6027]

Never mind :), I figured it out, created a range! Great video!!!

[@krishnachiddarwar505]

Thanks Julie!

[@Enthcreations]

👍👍👍

[@nirmalsurendranmenon7049]

What are the other distributions other than normal?

[@krishnachiddarwar505]

There are many, back loaded, front loaded, linear, uniform linear. It could be anything curve.

[@hsf2047]

I have come across a research paper in which they have developed regression models using past data (uptil 2016). The pdfs of variables were already known from literature review. For 2017 onwards, they utilized the forecasted values as the mean of the distribution and took 10% of that mean as standard deviation for each year, and performed MCS to calculate annual uncertainty. Is there any relation or basis for taking 10% of mean as SD for future uncertainty analysis? I have analyzed the past data as well SD is nowhere near 10% of the mean value.

[@andysurvival346]

Thank you, nice! Interesting: I get 8,6% Profit while you get 86, something...

[@sccrgolee]

This is a great video, thank you! Would you have any interest in helping me run a simulation on returns for a real estate investment?

[@krishnachiddarwar505]

Sure, let me know! Might not be able to help you right away. But will try

[@yousif.316]

How i get this exel sheet

[@krishnachiddarwar505]

Share you contact details, I can see if I still have the excel file.

[@aliffmuniff4469]

@@krishnachiddarwar505 Hi can you share it to me too? Thanks!

[@kikokingofigo]

Could you please share this excel file please. thanks