Worst Case Scenario Simulator
Models the simultaneous occurrence of multiple adverse events to determine minimum viable revenue, cash survival metrics, and the contingency actions required to keep the business operational under extreme conditions.
Risk - Worst Case Scenario Simulator.xlsx
Excel (.xlsx) — No macros — Works in Excel, Google Sheets, LibreOffice
What This Spreadsheet Solves
- Worst-case planning does not exist beyond verbal hypotheticals
- Simultaneous risks are not modeled together (only individually)
- Minimum revenue needed for bare survival is unknown
- Contingency plans lack quantified triggers and actions
- Stakeholders underestimate the compounding effect of multiple adverse events
Who This Is For
- Executive teams preparing crisis contingency plans
- CFOs sizing emergency reserves
- Risk committees evaluating organizational survivability
- Board members reviewing stress scenarios for governance reporting
Inputs
- $Current Annual Revenue
- $Total Fixed Costs
- $Total Variable Costs
- $Cash Reserves
- #Number of Simultaneous Adverse Events
- %Revenue Impact per Event (%)
Outputs
- Minimum revenue for survival (covers fixed costs only)
- Cash survival months under worst case
- Total revenue decline from compounded events
- Contingency action triggers and recommended actions
- Recovery path: months to return to break-even post-crisis
How Calculations Work
The simulator compounds the revenue impact of multiple simultaneous events. If each event reduces revenue by a given percentage, the compounded decline is 1 minus (1 minus impact)^N where N is the number of events. The reduced revenue is compared against fixed costs to determine if the business remains viable. Cash burn rate under the worst case determines survival months. Minimum viable revenue is the level that just covers fixed costs with zero variable margin. Contingency triggers are defined at 25%, 50%, and 75% cash depletion levels with pre-mapped actions.
Example Use Case
Scenario: Annual revenue: $3.6M. Fixed costs: $1.8M. Variable costs: $1.2M. Cash reserves: $420,000. Three simultaneous events, each reducing revenue by 20%.
Result: Compounded revenue decline: 48.8% (revenue drops to $1.84M). Variable costs scale to $614K. Net cash flow: -$574K/year (-$47,800/month). Cash survival: 8.8 months. Minimum revenue for survival: $1.8M (current worst case of $1.84M barely covers it). Contingency trigger at 50% cash depletion ($210K remaining) hits in month 4.4.
What You Get — 5 Sheets
Technical Details
Frequently Asked Questions
Is compounding the right way to model simultaneous events?
Compounding assumes events are partially independent. If events are fully correlated (one causes the others), use a single event with a larger impact percentage instead of multiple smaller ones.
What contingency actions should I pre-plan?
Common actions by trigger level: 25% depletion (hiring freeze, discretionary spending cut), 50% (headcount reduction, non-essential contract termination), 75% (minimum viable operations, emergency financing). Customize in CONFIG.
How realistic is a worst-case scenario?
Individual events may have 5-15% probability each. The joint probability of all occurring simultaneously is very low but not zero. The value is preparedness, not prediction.
Should I share worst-case results with the team?
Yes, selectively. Leadership should know the survival metrics and contingency triggers. The goal is preparedness without causing unnecessary alarm. Frame it as prudent planning.
How often should I update the simulation?
Update inputs quarterly and re-run after any significant financial change (new funding, major client loss, cost structure change). The scenario itself should be reviewed annually for relevance.
Download Worst Case Scenario Simulator
Ready to use immediately. Enter your data in the INPUT sheet, see results in OUTPUT.