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Financial Modelling - Book Report/Review Example

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Spreadsheets are now an integral part of almost all major business decision making. It enables quick logic and mathematics on large number of data in a simple and easy to understand format. It also presents its analysis in numerical and graphical formats for ease of comparison and understanding…
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Financial Modelling
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Download file to see previous pages Computer models are developed through different repetitive steps. Spreadsheet packages are used to implement these computer models.
Read & Batson (1999) presented the six steps of modeling life cycle. The first stage is the scope stage which accesses the nature, scale and complexity of the model. This stage filters the information and level of detail to be included in the model. The second stage is the specify stage which specifies the logic of computing the results of the model in detail. The third stage is the design stage which decides the most effective structure of the model. The following stage is the build stage which involves the coding of the model. Testing of the developed model is executed in the test stage which routs out errors and provides confidence of the model. The final stage is the use stage which shows the usefulness of the model. Read & Batson (1999) summarized that model development should be easy to use, understand, reliable and focused on main issues of the financial scenario.
On the other hand, Bewig, P.L. (2005) presented the modeling process briefly and stressed on the building stage stating the different methods of coding the model such as: databases, statistical analysis, mathematical and conventional programming languages. Read & Batson (1999) ...Download file to see next pagesRead More
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