Summary
In this chapter, we have learned how to build a number of tests and procedures into a model, in order to improve the accuracy of the model. We have learned some basic procedures to follow in order to troubleshoot where errors are revealed in a model. We have understood the meaning of sensitivity analysis and learned how to use direct and indirect methods. We have also learned how to display our results on a chart and to interpret them meaningfully. Finally, we learned about scenario analysis, how it differs from sensitivity analysis, and how to use it, as well as creating a simple Monte Carlo simulation model.
In the next chapter, you will learn how to integrate a trial balance into a 3-statement model of balance sheet, profit and loss account, and cash flow statement.