Decision Impact Simulator
Quantifies the expected financial outcome of a business decision by modeling best-case, base-case, and worst-case scenarios. Calculates expected value, risk-adjusted returns, and produces a data-backed recommendation.
Executive - Decision Impact Simulator.xlsx
Excel (.xlsx) — No macros — Works in Excel, Google Sheets, LibreOffice
What This Spreadsheet Solves
- Major decisions are made on intuition without financial modeling
- Best-case bias dominates decision framing without downside analysis
- No standard framework for comparing decision alternatives
- Risk-adjusted returns are not calculated for strategic options
- Post-decision analysis cannot compare actual results to pre-decision projections
Who This Is For
- CEOs and executives evaluating strategic options
- VP-level leaders presenting business cases to the board
- Strategy teams analyzing investment or expansion decisions
- Finance teams supporting go/no-go decisions with quantitative analysis
Inputs
- textDecision Description
- $Investment Required
- $Best Case Revenue Impact
- $Base Case Revenue Impact
- $Worst Case Revenue Impact
- %Probability Weights (Best/Base/Worst)
Outputs
- Expected value (probability-weighted outcome)
- Risk-adjusted return on investment
- Downside exposure (worst case minus investment)
- Payback period per scenario
- Go/no-go recommendation based on configurable criteria
How Calculations Work
Each scenario (best, base, worst) has a revenue impact and a probability weight. Expected value is the sum of each scenario's impact multiplied by its probability. Risk-adjusted return divides expected value by the investment. Downside exposure is the worst-case outcome minus the investment cost. Payback period for each scenario divides the investment by the annualized net benefit. The recommendation engine compares expected value, downside exposure, and risk-adjusted return against configurable thresholds.
Example Use Case
Scenario: Decision: launch a new product line. Investment: $180,000. Best case: $420,000 revenue (25% probability). Base case: $240,000 (55% probability). Worst case: $60,000 (20% probability). All values are first-year impact.
Result: Expected value: $249,000 (25%*420K + 55%*240K + 20%*60K). Net expected gain: $69,000 (expected value minus investment). Risk-adjusted ROI: 38.3%. Downside exposure: -$120,000 (worst case minus investment). Payback: 5.1 months (best), 9 months (base), 36 months (worst). Recommendation: proceed — expected ROI exceeds 20% threshold and downside is recoverable within 12 months.
What You Get — 5 Sheets
Technical Details
Frequently Asked Questions
How do I assign probability weights?
Use historical data if available. Otherwise, gather estimates from 3-5 stakeholders and average them. Probabilities must sum to 100%. If uncertain, start with 25/50/25 (optimistic/realistic/pessimistic) and adjust.
Can I compare two decisions side by side?
Yes. Enter both decisions in the INPUT sheet. The OUTPUT sheet displays a comparison view showing expected value, ROI, and downside for each option.
What if the decision has multi-year impacts?
Enter the net present value of multi-year impacts in each scenario. Use the discount rate in CONFIG to convert future cash flows to present value.
How does the recommendation engine work?
It applies three configurable rules: 1) expected ROI must exceed minimum threshold, 2) downside exposure must be below maximum acceptable loss, 3) expected value must be positive. All three must pass for a 'proceed' recommendation.
Should I include non-financial impacts?
The model focuses on financial quantification. Note qualitative factors (brand impact, team morale, strategic positioning) alongside the recommendation. The numbers inform but should not solely determine the decision.
Download Decision Impact Simulator
Ready to use immediately. Enter your data in the INPUT sheet, see results in OUTPUT.