Introduction
The Logic
of the Model page discussion refers to this use as "reconciling
a forecast.” In this mode CAPACITY will replicate the financial
projections produced by an association's own business planning model,
and input via a standardised format, to facilitate a) full analysis of
financial performance and borrowing capacity and b) sensitivity flexing
of the forecast.
From the input data the model exactly replicates the association's own
(unflexed) financial projections via a detailed set of "reconciliation
factors". The model can then be used to flex key assumptions and,
hence, the financial projections, independent of the association's own
business planning model. In fact this is the main reason for building
a “reconciliation” model. The flexed forecasts will not be
as "accurate" as those produced by the association's own model
because the capacity model is built around a simplified, "one-size-fits-all"
logic.
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