RiskEase Software Introduction

The RiskEase Design

At the heart of our competitive edge over other similar software lies the core and superior design of RiskEase which enables the user to go beyond the constraints usually being imposed by such applications. The original software was called RiskMaster and was released in 1986 as a Lotus 1-2-3 add-on. The basic design since then has been enhanced and improved a great deal. However, underlying concept remained in place. The concept was to enable a professional analyst involved in the appraisal and assessment of risk in a capital investment project to link the risk variables (the most uncertain and sensitive inputs) of a financial model and the formulas that are of interest in the measurement of return and risk (such the Net Present Value, the Internal Rate of Return or even the year-by-year Debt Service Coverage ratios of a loan and so on).

By design, RiskEase does not change the user financial model. One is simply enabled very easily to provide the links to it necessary to run the simulation (and do the Sensitivity Analysis). There is no need therefore to keep different versions of the user financial model. Another key and by design difference is that the Probability distributions are not provided by mystic names that may make sense only to scientists or research practitioners. They are presented in 5 families of probability types which however can with great easy be adapted to approximate any other pre-defined probability distribution. There are three symmetrical types (Uninform/trapezoidal, Triangular and Normal). These can all be visually skewed, shifted or truncated to take practically any pattern that the user expects a particular risk variable to conform to. Similarly, there are two Custom Probability Distribution types (Step and Discrete). The user is enabled with great easy to define intervals and nodes respectively and attach probability weights. There is also a supplementary library of specific Probability Distributions and also the ability to save new patterns created by the user. It is also possible to create a Probability Distribution to user provided data. RiskEase reads the data and applies a goodness alternating and finding the best settings from the five family types of Probability Distributions provided.

Another unique feature of the RiskEase design is that it allows multiple inputs and outputs. The user assumptions (links, Inputs-Risk Variables defined and Formulas-Model Results and any correlations) are defined in a special template called the Risk Variables Table (RVT). It is thus possible to define any number of RVTs and even to combine them with weights in a simulation. Hence, a simulation creates a Simulation Runs Table (SRT) which is also available with all the scenarios in it to the user to scrutinise. This can be created or if one exists appended to. It can also be created as mentioned above by combining the inputs from several RVTs.

The same multi-input-output logic holds true when several SRTs are created. These can be analysed on their own or in combination. The Analyse Results module can also Merge and Compare the results from a number of simulations (putting together several SRTs). The “Analyse Results” module can create a table from a host of available user-selected statistics. It is also equipped with a very powerful Charting which enables one to analyse in-depth the wisdom that is contained in the Simulation data. Over and above the usual Frequency and Cumulative probability distributions produced by all such software, RiskEase has a set of additional analysis that the user can undertake through special charting capabilities. Such as the Confidence Range plot which can plot a series of model results and show where these could deviate to at pre-set standard deviations from the mean. It also includes a Segmentation Analysis capability (for both Frequency and Cumulative Probability Distributions) which enable the sophisticated user to extract and present the essence of risk from the simulations. One can therefore dissect and estimate at the click of a button the Expected Value, Expected Loss, and Expected Gain of a probability distribution emerging form a simulation. It also shows the area and the probability of segments in the tails of the probability distribution reviewed. And it creates Excel charts which one can use easily in a report.

The Report module is also designed with Ease of use and for providing the data one needs to include in a professional report. It creates a Risk Variables Profile and Model Results Profile which clearly and graphically present the assumptions used in the simulation. Furthermore, the Custom Report module enables one to select all outputs of a simulation process and export at the click of a button to Word, PowerPoint, and Excel.

RiskEase is a complete state-of-the-art software product which evolves and changes according to the needs of professionals on the field of credit risk assessment and project finance. Its purpose is to enhance the competence of such professional with the utmost ease. There are two versions of the RiskEase software. The RiskEase Master Edition and the RiskEase Total Edition. The latter adds to the Master Edition a fully customisable Integrated Financial Model (IFM). It was designed and created to incorporate the correct Cost-Benefit Analysis methodology and to allow the user to easily prepare cashflow projections which are comprehensive and include all aspects of Capital Investment Appraisal. The RiskEase Total Edition is mainly aimed for use by institutions and companies and as desired and requested by the client, RiskEase Ltd can customise the IFM to their specific needs and tax regime of the countries it is intended to be applied. There is also book published by Savvakis C. Savvides which illustrates the methodology and the application of the software. The book is available from the publisher’s website and Amazon. One can also download a Sample extract from the book at the publisher’s website at:

Risk Analysis in Project Appraisal – Cambridge Scholars Publishing