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By Rafaël LE SAUX, Director, Corporate Finance - Valuation Modeling, PwC Luxembourg
“All models are wrong, but some are useful” George Box, British statistician (1919-2013)
As described by Erica Thompson, in her recently published book “Escape from Model Land”, Model Land is a wonderful place. Indeed, some professionals can spend their whole careers in Model Land as, while there, all their assumptions are true. Yet, Model Land is not free of disasters.
Academic research (notably from Professor Ray Panko) suggests that 90% or more of the spreadsheets contain errors. This figure is impossible to confirm as most models are used for private and confidential purposes. Nevertheless, there is abundant evidence of...
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