A financial modeling method that toggles deal terms, market returns, and spending to show whether an exit funds the owner's goals.
Scenario analysis models more than one future at once. In exit planning, the advisor toggles cash at close, earnout collection, rollover equity value, spending, charitable gifts, debt payoff, and market returns. Each mix produces a different path for investable assets over decades.
A common pair is a home-run case and a middle-road case. The home-run case assumes the owner collects the full earnout and the full projected rollover. The middle-road case assumes about half of each. The same goals that look affordable in the home-run case can deplete liquid assets in the middle-road case. That contrast is the point.
Owners who only look at the headline purchase price miss this. Scenario analysis shows whether the deal they are about to sign funds their number under realistic conditions, not only under the best case.