New resource takes the ‘mystery’ out of Monte Carlo simulations

BVWireIssue #125-1
February 6, 2013

Finally, new guidance “removes the mystery surrounding Monte Carlo simulations,” writes Neil Beaton (Alvarez & Marsal) in his introduction to Monte Carlo Simulations—Advanced Techniques: A BVR Special Report.

“With this report,” authors Dave Dufendach (Grant Thornton) and Jason Andrews (Alvarez & Marsal) “have taken Monte Carlo simulations out of the laboratory and into the workplace,” Beaton says. In addition to a clear explanation on how to apply Monte Carlo techniques to a broad spectrum of valuation issues, the authors address “real-life valuation problems so that even the casual practitioner will be able to understand the underlying concepts,” Beaton says. They also expose “minefields” of the Monte Carlo technique and discuss current tools to design and interpret appropriate models, all tied to the appropriate accounting rules and valuation principles.

“In short, this report is invaluable for practitioners who wish to elevate their valuation analyses of complex assignments,” Beaton writes. “I highly recommend it.”

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