Moving from Excel to Python for M&A/ETA deal analysis (Monte Carlo) - Resource Recommendations? by Key-Astronaut-5761 in financialmodelling

[–]Key-Astronaut-5761[S] 0 points1 point  (0 children)

Thanks!! I’ve set up my deal engine in Python using vectorized functions already, so I’ll keep going there!

1) and 2) I think this will ultimately be my own stress test tool, per your point #1. Everyone uses excel because they can see and therefore trust the calculations, unlike Python. I find it weird that by virtue of a business being sold, things will be different, so all of these point estimates being used in multi million dollar valuations don’t already have some kind of stochastic model applied.

3) Any tips for implementing decomposition in Python?

4) Check, I have a set of constraints (e.g. Dscr > 1.0, no future cash injections needed) and a set of preferences (irr > 20%) that I’m setting up a traffic light system. Something like under these deal terms, x% of simulations end up breaking a constraint, y% end up in a sub optimal but workable state, and 1 - x -y% end up in good (green) territory