Financial Modeling Insights

Real-world analysis methods, practical forecasting techniques, and what actually works when building models that inform business decisions. We've learned most of this through trial and error—here's what stuck.

Financial analyst working on scenario modeling framework

Modeling Techniques March 14, 2025

Scenario Modeling That Actually Helps with Decisions

Most scenario models end up being theoretical exercises that sit in folders somewhere. The difference between useful scenarios and academic ones comes down to how you frame assumptions. We spent years building elaborate five-scenario models before realizing that three well-considered scenarios—with clearly articulated triggers—serve decision-makers better than comprehensive frameworks that nobody consults.

Modeling Approach Differences

Three areas where our methodology diverges from standard approaches—not because we're contrarian, but because these adjustments consistently produce more actionable outputs.

Assumption Documentation

We document reasoning behind assumptions rather than just the numbers themselves. Six months later, when someone questions a projection, you need context more than formulas. The "why" matters as much as the "what" when models get revisited during reviews.

Sensitivity Testing Focus

Instead of sensitivity tables that test every variable, we identify the three assumptions that actually drive outcomes and focus testing there. Comprehensive sensitivity analysis looks thorough but rarely influences decisions—targeted sensitivity on key drivers does.

Model Complexity Limits

We deliberately build simpler models than we could. Complex models break in subtle ways and become black boxes that nobody trusts. A model someone can audit in 30 minutes gets used more than one that requires three hours to understand, even if the complex version is theoretically better.

Industry Perspective

Learning from Modeling Failures

Freya Lindström has built forecasting models for mining operations, retail expansions, and manufacturing investments across Queensland and New South Wales. She's seen models fail for interesting reasons—usually not because of calculation errors, but because the model answered a different question than stakeholders were actually asking. Her workshop on stakeholder alignment before model design runs in Brisbane this October.

About Our Team