Palisade’s @RISK software is used for countless tasks all around the world and in many different industries from research institutions to oil and gas companies. While the possibilities are endless, Solis Financial Forensics LLC has found their niche in applying @RISK to a wide variety of complex legal cases and modeling economic damages such as lost earnings, lost profits and the diminishment of value.
Solis Financial Forensics LLC, founded by David Solis, undertakes financial investigations and analyses, forensic economic services, and business valuations. Much of their work is in the form of consulting, litigation support, expert testimony, and analysis of other expert reports in lawsuits of all kinds, including personal injury , wrongful death, wrongful termination, malpractice, business interruption/lost profits, fraud, breach of contract, construction claims, and partnership/shareholder disputes.
Where @RISK and Monte Carlo simulation typically come into play is when Solis is looking to the future. He’s not only trying to forecast what will actually happen, but what would have if there had been no problems and business had proceeded as usual. To do so, he looks at a variety of factors like historical trends and management forecasts in sales and expenses, and economic factors like the demand for the manufacturer’s products and inflation, for example.
“Using @RISK allows for a range or distribution in regards to the inputs,” Solis says. “For example, with the inflation rate I can say I believe it will not exceed X, it will not be less than Y, and I believe it will be Z in the future. @RISK allows me to say that I looked at a range of possible outcomes in regard to unknown variables, and based on my analysis incorporating those ranges, I believe lost profits to be X with a reasonable degree of certainty.”