Publication number: ELQ-86400-1
View all versions & Certificate
Monte Carlo Simulation Excel Model
Monte Carlo Model generated in excel with explanatory article included to guide you block-by-block through the code.
The Monte Carlo method is taking a pile of estimates for your inputs and then seeing what the results come out like.
Nearly all of the inputs into models are just estimates, however there is an amount of uncertainty around the estimates. If we draw values from every one of the distributions many times we can work out the probable outcomes.
The important bit is that you should run the model multiple times with new draws for the variables. 'Multiple' in this case means up to millions of times.
To make things the least complicated possible, the model demonstrating these techniques is really straightforward. From a normal distribution, 2 numbers are drawn and these are our inputs. The output is their product. The rand () function is used to return a random number as the probability and it is fed into the inverse normal probability function so that a value can be generated.
Pressing the F9 button to generate a recalculation for the workbook (giving new random numbers) never seems to give a feel for how the numbers are generating output and interacting. The other option is to write VBA code so that we can draw lots of values and then overview the whole set of outcomes.
*Originally shared on theexcelninja.wordpress.com*
This Best Practice includes
1 Downloadable Monte Carlo Model, 1 Code Explanation in PDF
Frank Gary offers you this Best Practice for free!
download for free
Add to bookmarks
4.8 / 5 (14 votes)
- Rate this Downloadable Tool
Write a review
- Zübeyr Yüksel(last updated: 29/10/2019 12:50)
- Angus Nichols(last updated: 15/10/2019 01:14)
- 友妍 李(last updated: 06/10/2019 07:25)
- Amminergy(last updated: 13/08/2019 19:52)
- Martin Kraynov(last updated: 29/03/2019 07:38)
- Michael Maung(last updated: 04/02/2019 07:47)
- achmat affandi(last updated: 25/12/2018 14:17)
- Syed Nayab Haider(last updated: 24/11/2018 17:44)
- Kingsley Valentine Uzogor(last updated: 08/11/2018 02:44)
- Вячеслав Казачук(last updated: 27/09/2018 14:58)
- Mehdi SAYYOU(last updated: 10/09/2018 09:32)
- Steven Thomas(last updated: 09/09/2018 12:49)
- Alex Tay(last updated: 07/08/2018 03:29)
- Pavani Rao(last updated: 13/06/2018 10:16)
People using this Best Practice also downloaded
Investment Return Monte Carlo Simulation Excel Model TemplateModel to calculate the expected value and return of an investment over an investment period using Monte Carlo simulationprojectionexcelsimulationfinancial returnmonte carlo950add_shopping_cart$15.00by Projectify
Monte Carlo Simulation in ExcelThe model presents an example of a Monte Carlo Simulation using excel to estimate an investment's Net Present Value.investmentfinancemodelnet present valueexcel54add_shopping_cart$30.00by Big4WallStreet
2017 Finals: Word PlayExcel training/competition model from the 2017 Financial Modeling World Championshipscompetitionmodelingexcelwordpermutation234add_shopping_cartfreeby ModelOff
Real Estate Excel Financial Model TemplateA detailed Real Estate Financial Model brought to you by CFI to help you successfully model your development project.investmentprojectreal estatemodelingfinancial model1,170add_shopping_cart$100.00by CFI
How to Make Your Financial Model Look ProfessionalThis tool provides Before and After examples to show you how you can make your models look professional.modelinginvestorsfundraisingfinancial modelingexcel548add_shopping_cartfreeby Alexander Jarvis
Monte Carlo EBITDA Excel SimulatorEBITDA & PD Simulator - Monte Carlo - in Microsoft Excel for you to usemodelebitdasimulationmonte carlosimulator629add_shopping_cart$90.00by Dimitris K
Commodity Price Risk and Monte Carlo Simulation - Project Finance Excel ModelA commodity price risk model with Monte Carlo simulation within a project finance excel model.modelexcelspreadsheetexcel modelmonte carlo845add_shopping_cartfreeby Prof. Ed Bodmer
Monte Carlo Analysis (without macros) Excel ModelThis post explains how to run full Monte Carlo analysis in Excel without macrosexcelcorrelationfinancialmodelingstatisticssimulation2,549add_shopping_cartfreeby Andrei Okhlopkov
DCF (Discounted Cash Flow) Excel Monte Carlo Simulation ModelA simplified DCF (Discounted Cash Flow) Monte Carlo Simulation model in Excelvaluationdcfsensitivity analysisdiscounted cash flowsimulation3,517add_shopping_cartfreeby Hans Ensing
Basic Simulator in Excel - Piston EngineThis is the most basic simulator model of a piston engine built on Excel VBA Framework.excelsimulationvbaengineeringsimulator321add_shopping_cartfreeby Kamal C Bharakhda
Any questions on Monte Carlo Simulation Excel Model?
The user community and author are here to help. Go ahead!