tomevault-io Financial Scenario Planner
Frameworks for building multi-scenario financial models, stress testing assumptions, sensitivity analysis, and probability-weighted financial planning.
Scenario Analysis Framework
Three-Scenario Model
SCENARIO PLANNING TEMPLATE:
BEAR CASE BASE CASE BULL CASE
(Pessimistic) (Expected) (Optimistic)
Probability: 20-25% 50-60% 20-25%
REVENUE ASSUMPTIONS:
Growth rate: [X%] [X%] [X%]
New customers: [N] [N] [N]
Churn rate: [X%] [X%] [X%]
ARPU change: [X%] [X%] [X%]
Market size: [$ ] [$ ] [$ ]
COST ASSUMPTIONS:
COGS margin: [X%] [X%] [X%]
Headcount growth: [N] [N] [N]
Salary inflation: [X%] [X%] [X%]
Marketing spend: [$ ] [$ ] [$ ]
Capex: [$ ] [$ ] [$ ]
EXTERNAL FACTORS:
Interest rates: [X%] [X%] [X%]
Inflation: [X%] [X%] [X%]
FX rates: [X ] [X ] [X ]
Regulatory: [Impact] [Impact] [Impact]
PROJECTED OUTCOMES:
Revenue: [$ ] [$ ] [$ ]
EBITDA: [$ ] [$ ] [$ ]
Net income: [$ ] [$ ] [$ ]
Cash position: [$ ] [$ ] [$ ]
Runway (months): [N] [N] [N]
EXPECTED VALUE:
E[Revenue] = P(bear) x Rev(bear) + P(base) x Rev(base) + P(bull) x Rev(bull)
Scenario Trigger Events
| Scenario Driver | Bear Trigger | Base Assumption | Bull Trigger |
|---|---|---|---|
| Market demand | Recession, -15% | Steady growth, +5% | Market expansion, +20% |
| Competition | New entrant takes 20% share | Stable competition | Competitor exits market |
| Regulation | Restrictive new regulation | Status quo | Deregulation/favorable policy |
| Technology | Disruption makes product obsolete | Incremental improvement | Breakthrough advantage |
| Funding | Cannot raise next round | Raise at expected terms | Oversubscribed round |
| Key personnel | Lose critical team members | Normal retention | Key strategic hires |
Sensitivity Analysis
One-Variable Sensitivity Table
REVENUE SENSITIVITY TO PRICE CHANGE:
Price Change: -20% -10% Base +10% +20%
Volume Impact: +10% +5% Base -3% -8%
Revenue: [$ ] [$ ] [$ ] [$ ] [$ ]
Gross Profit: [$ ] [$ ] [$ ] [$ ] [$ ]
Net Income: [$ ] [$ ] [$ ] [$ ] [$ ]
Two-Variable Sensitivity (Tornado Chart Data)
TORNADO CHART DATA — NET INCOME SENSITIVITY:
Variable | Low Value | High Value | Low Impact | High Impact
Revenue growth | 5% | 25% | -$500K | +$800K
Customer churn | 8% | 2% | -$400K | +$300K
COGS margin | 45% | 35% | -$350K | +$350K
Headcount | +15 | +5 | -$300K | +$200K
Interest rates | 7% | 4% | -$150K | +$100K
FX rates | -10% | +5% | -$120K | +$60K
INTERPRETATION:
- Revenue growth has the highest impact on outcomes
- Focus risk mitigation on top 3 variables
- Variables below $100K impact are noise
Break-Even Analysis
BREAK-EVEN CALCULATOR:
FIXED COSTS (Monthly):
Salaries: $______
Rent/facilities: $______
SaaS/tools: $______
Insurance: $______
Other fixed: $______
TOTAL FIXED: $______
VARIABLE COSTS (per unit):
COGS: $______
Commission: $______
Payment processing: $______
Support cost: $______
TOTAL VARIABLE: $______
PRICING:
Average selling price: $______
Contribution margin: $______ (price - variable cost)
Contribution %: _____%
BREAK-EVEN:
Units: Fixed costs / Contribution margin = _____ units
Revenue: Fixed costs / Contribution % = $______
MONTHS TO BREAK-EVEN:
At current growth rate: _____ months
At optimistic rate: _____ months
At pessimistic rate: _____ months
Monte Carlo Simulation Design
Simulation Framework
MONTE CARLO SETUP:
STEP 1: IDENTIFY VARIABLES
List all uncertain inputs that affect the outcome.
For each variable, define:
- Distribution type (normal, uniform, triangular, lognormal)
- Parameters (mean, std dev, min, max)
STEP 2: DEFINE DISTRIBUTIONS
Revenue growth: Normal(mean=15%, std=5%)
Customer churn: Triangular(min=2%, mode=5%, max=12%)
COGS margin: Uniform(min=30%, max=45%)
Headcount growth: Discrete([5, 8, 10, 12, 15], probs=[0.1, 0.2, 0.4, 0.2, 0.1])
STEP 3: RUN SIMULATIONS
Iterations: 10,000 (minimum for stable results)
For each iteration:
1. Sample random value from each distribution
2. Calculate outcome (revenue, profit, cash flow)
3. Store result
STEP 4: ANALYZE RESULTS
Mean outcome: $______
Median outcome: $______
Standard deviation: $______
5th percentile (VaR): $______ (worst 5% of outcomes)
95th percentile: $______ (best 5% of outcomes)
Probability of loss: _____%
Probability of target: _____%
STEP 5: INTERPRET
"There is a 90% probability that net income will fall between
$______ and $______, with an expected value of $______."
Distribution Selection Guide
| Variable Type | Recommended Distribution | Parameters | When to Use |
|---|---|---|---|
| Growth rate | Normal | Mean, Std Dev | Symmetric uncertainty |
| Market size | Lognormal | Mean, Std Dev | Right-skewed, can't be negative |
| Project cost | Triangular | Min, Mode, Max | Expert estimates with bounds |
| Binary events | Bernoulli | Probability | Will/won't happen (regulation, deal) |
| Time to event | Exponential | Rate | Customer lifetime, time to churn |
| Counts | Poisson | Rate | Number of events in a period |
Cash Flow Stress Testing
Runway Calculator
CASH RUNWAY ANALYSIS:
Current cash: $______
Monthly burn rate: $______
Monthly revenue: $______
Net monthly cash flow: $______ (revenue - burn)
SCENARIO RUNWAYS:
Current trajectory: ______ months
If revenue drops 20%: ______ months
If revenue drops 50%: ______ months
If revenue goes to 0: ______ months (pure burn runway)
TRIGGER POINTS:
6-month runway remaining: Begin fundraise / cut costs
3-month runway remaining: Emergency cost reduction
1-month runway remaining: Wind-down planning
COST REDUCTION LEVERS (by impact):
Lever | Monthly Savings | Feasibility
Freeze hiring | $______ | High
Reduce marketing 50% | $______ | Medium
Renegotiate vendor terms | $______ | Medium
Reduce headcount 10% | $______ | Low (last resort)
Eliminate office space | $______ | Medium
Personal Finance Stress Test
PERSONAL FINANCIAL STRESS TEST:
INCOME SCENARIOS:
Current income: $______/month
Reduced income (-20%): $______/month
Job loss (0 income): $______/month
Disability (partial): $______/month
FIXED OBLIGATIONS:
Housing (mortgage/rent): $______
Insurance premiums: $______
Debt payments: $______
Utilities: $______
TOTAL FIXED: $______
EMERGENCY RESERVES:
Liquid savings: $______
Investment (accessible): $______
Credit available: $______
TOTAL RESERVES: $______
SURVIVAL METRICS:
Months covered (fixed only): ______
Months covered (full spending): ______
Months if income drops 20%: ______
Target: 6+ months of full spending coverage
WHAT-IF ANALYSIS:
"If [EVENT] happens, I can sustain for [N] months
by cutting [EXPENSES] and drawing on [RESERVES]."
Scenario Planning Process
Workshop Format
SCENARIO PLANNING WORKSHOP:
PHASE 1: IDENTIFY UNCERTAINTIES (30 min)
- List all factors that could impact the plan
- Rate each: Impact (1-5) x Uncertainty (1-5)
- Select top 2 with highest combined score
- These become the axes of your scenario matrix
PHASE 2: BUILD SCENARIOS (45 min)
Using the 2x2 matrix:
Factor A: Low Factor A: High
Factor B:
High Scenario 1: Scenario 2:
[Name and narrative] [Name and narrative]
Factor B:
Low Scenario 3: Scenario 4:
[Name and narrative] [Name and narrative]
PHASE 3: MODEL FINANCIALS (60 min)
For each scenario:
- Revenue projection (12-36 months)
- Cost structure changes
- Cash flow impact
- Key metrics (CAC, LTV, margins)
PHASE 4: DEVELOP STRATEGIES (45 min)
For each scenario:
- What would we do differently?
- What early warning signals would we see?
- What decisions should we make now?
- What options should we preserve?
PHASE 5: ACTION PLAN (30 min)
- "No regret" moves (good in all scenarios)
- Contingency triggers and responses
- Monitoring dashboard design
- Review cadence (quarterly recommended)
Reporting Templates
Scenario Summary for Stakeholders
FINANCIAL SCENARIO SUMMARY
Period: [Timeframe]
Prepared: [Date]
Author: [Name]
EXECUTIVE SUMMARY:
[2-3 sentences: key finding and recommended action]
SCENARIO OUTCOMES:
Bear Base Bull
Revenue: $____ $____ $____
EBITDA: $____ $____ $____
Cash (end): $____ $____ $____
Probability: ____% ____% ____%
Expected Value: $____ (probability-weighted)
KEY RISKS:
1. [Risk] — Impact: $____ — Mitigation: [Action]
2. [Risk] — Impact: $____ — Mitigation: [Action]
3. [Risk] — Impact: $____ — Mitigation: [Action]
RECOMMENDED ACTIONS:
1. [No-regret move that's good in all scenarios]
2. [Contingency to prepare now]
3. [Decision to make by specific date]
MONITORING:
KPI | Current | Trigger (Action Needed)
Monthly revenue | $____ | Below $____
Cash runway | ___ mo | Below 6 months
Customer churn | ____% | Above ____%
See Also
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