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Tag Archives: scenario analysis

FP&A Trends: How FP&A Teams Must Harness Scenario Planning To Aid Decision Making

“The need for short-term, dynamic Scenario-Based Planning becomes evident. However, many organisations remain stuck in the traditional planning process, which takes months to prepare and becomes outdated the moment they are finalised.”

Read More at FP&A Trends >

CFO Dive: IMA CFO Says Scenario Planning is Constant ‘Balancing Act’

“Yet it is also important for CFOs to avoid inflation tunnel vision —“time-traveling” CFOs also have the advantage of being able to think about “what’s going on six months, a year, two years and five or 10 years into the future,” Porter said.”

Read More at CFO Dive >

FP&A Trends: Drivers of Inflation in 2022, and How FP&A Can Prepare for It

“Whether or not you think you know which macroeconomic model is the right one for the global economy, you only need to know which one is the most relevant for your business. Each business lives in a different part of the overall supply chain, so some will be highly impacted by supply-side commodities prices or energy prices. In contrast, some will be impacted more significantly by the general purchasing power of currency reducing and have more relevant impacts from monetary policy.”

Read More FP&A Trends >

Harvard Business Review: Setting Your Annual Budget Amid Economic Uncertainty

“What would a mild, moderate, and severe downturn do to your business as a whole and to each part? Get specific. Where are you most vulnerable to inflation? A drop in demand? A supply-chain snarl? What actions would you take in each case? Who should take them?”

Read More at Harvard Business Review >

CFO Journal: 3 Dynamic Finance Scenarios for CFOs

“The principles of Dynamic Finance can help finance transform from business function to dynamic capability—while still performing its steward and operator duties—for adapting to external forces with speed, strength, stability, and flexibility.”

Read More at The Wall Street Journal >

CFO Insights: Provoking the Future: How CFOs Can Take Action to Illuminate Uncertainty

Build scenario-planning muscles. In a linear world, it was customary to consider a dominant version of the future and construct possible variations around it. Now, with so much about the future up for grabs, CFOs need to have sufficient humility to acknowledge that nobody knows how things are going to turn out and to consider multiple, equally plausible futures. As they explain that future using numbers and models, the gaps will enable them to identify uncertainties. As the actual future develops, they may adjust those scenarios dynamically. Every five years, they may even have to start over.”

Read More at Deloitte >

CFO Insights: Future scenarios: Are CFOs Too Worried About Inflation—or Not Worried Enough?

“As CFOs watch inflation numbers rise month after month, so may the intensity of their concerns. Now that it has climbed to an altitude unseen for 40 years, they may be tempted to assume that it is bound to go even higher.

But what if the picture we have today isn’t a reliable guide to what’s ahead? What if by next year inflation is trending down? Or maybe even has dropped into disinflation, with the Consumer Price Index hovering between 0% and 1% as a result of a faster-than-expected resolution of supply chain disruptions combined with diminished consumer demand.”

Read More at Deloitte >

FP&A Trends: How FP&A Evolved and Optimized Through the Pandemic

“Finance professionals are empowered to present data to cross teams on the best case, worst case, and most likely scenarios that could arise. This helps cross-teams understand how their decisions affect the rest of the organisation and make FP&A a strategic resource helping them navigate business objectives.”

Read More at FP&A Trends >

CFO Dive: 3 Ways CFOs Can Help Tackle Supply Chain Disruptions

“CFOs can use scenario planning to help identify, evaluate and compare the alternatives from a comprehensive financial, operational and tax perspective when facing complex decisions.”

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