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    Business Strategy

    Scenario Planning Model

    Models three financial scenarios (best case, base case, worst case) and calculates expected value by weighting each scenario's probability. Provides a range of outcomes to support decision-making under uncertainty.

    Business - Scenario Planning Model.xlsx

    Excel (.xlsx) — No macros — Works in Excel, Google Sheets, LibreOffice

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    What This Spreadsheet Solves

    • Making decisions based on a single forecast instead of a range of outcomes
    • No structured way to model optimistic, realistic, and pessimistic scenarios
    • Difficulty assigning probabilities to different outcomes
    • Inability to calculate expected value from weighted scenarios
    • Presenting only one number to stakeholders when uncertainty is high

    Who This Is For

    • CEOs making high-stakes strategic decisions
    • Financial planners building forecasts under uncertainty
    • Board members evaluating proposals with uncertain outcomes
    • Project managers presenting risk-adjusted business cases

    Inputs

    • $Base Case Revenue
    • $Base Case Costs
    • %Best Case Adjustment (%)
    • %Worst Case Adjustment (%)
    • %Probability Best Case
    • %Probability Worst Case

    Outputs

    • Best Case Profit
    • Base Case Profit
    • Worst Case Profit
    • Expected Value (weighted)
    • Profit Range (worst to best)
    • Downside Risk (expected vs. worst)

    How Calculations Work

    The base case uses your direct inputs. The best case applies the upside adjustment to revenue and a cost reduction factor. The worst case applies the downside adjustment to revenue and a cost increase factor. Each scenario's profit is weighted by its assigned probability, and the expected value is the sum of weighted profits. The base case receives the remaining probability (100% minus best and worst).

    Example Use Case

    Scenario: Base case: $1M revenue, $750K costs. Best case: +30% revenue, -5% costs (20% probability). Worst case: -25% revenue, +10% costs (25% probability). Base case: 55% probability.

    Result: Best case profit: $587.5K. Base case profit: $250K. Worst case profit: -$75K (loss). Expected value: $196.9K. Range: -$75K to $587.5K. Downside risk: $271.9K below expected value.

    What You Get — 5 Sheets

    READMEDescribes the three-scenario framework, how probabilities should be assigned, and how to interpret expected value.
    INPUTEnter base case financials, percentage adjustments for best and worst cases, and probability weights.
    LOGICCalculates revenue, costs, and profit for each scenario. Applies probability weights to derive expected value and downside risk.
    OUTPUTDisplays all three scenarios side by side, the expected value, profit range, and a tornado chart showing sensitivity of key inputs.
    CONFIGAdd additional scenarios beyond three, adjust cost sensitivity separately from revenue, and set probability constraints.

    Technical Details

    File Format:.xlsx (Open XML)
    Macros:None — pure formulas
    Compatibility:Excel 2016+, Google Sheets, LibreOffice
    Input Cells:Clearly marked with blue background
    Formulas:All outputs are live Excel formulas
    Protection:LOGIC sheet formulas protected, INPUT cells editable

    Frequently Asked Questions

    How do I assign probabilities to each scenario?

    Base it on historical variability, market conditions, and expert judgment. The three probabilities must sum to 100%. If unsure, a common default is 25% best, 50% base, 25% worst.

    Can I add more than three scenarios?

    Yes. Add additional scenarios in CONFIG. The LOGIC sheet will include them in the expected value calculation as long as all probabilities sum to 100%.

    What is expected value?

    The probability-weighted average of all scenario outcomes. It is the single number that accounts for both the size and likelihood of each outcome.

    How is this different from sensitivity analysis?

    Sensitivity analysis changes one variable at a time. Scenario planning changes multiple variables simultaneously to model coherent alternative futures.

    Should I present the expected value or the range to stakeholders?

    Present both. The expected value gives a central estimate. The range shows the spread of possible outcomes. Decision-makers need both to assess risk.

    Download Scenario Planning Model

    Ready to use immediately. Enter your data in the INPUT sheet, see results in OUTPUT.

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