Modelling for Growth or Increments

Castaway offers you a few ways to model growth or apply an incremental change to your forecast figures. The common way to do it is via the Forecast Data Template, where you can create an Excel formula to model those changes and then upload it back into your Project.

But if you're looking to quickly model these changes to a few or specific elements, using the Forecast Data Template may not be necessary. This article will guide you in two ways:

1. Using Castaway's in-built Grow Line function, OR
2. Using the Driver element

1. In-built Grow Line function

Castaway's Grow Line feature can only be applied within the element itself. This method is great for when you want to model a fixed monthly incremental change to the forecast of a single element for either the current financial period or for the entirety of your project. 

For example, you want to forecast that your Sales of $10,000 for July 24 will increase by 2% every month until the end of the current financial year before the next budget period. 

To do this:

1. In your Sales element, first, enter the $10,000 for Jul 24
2. Then right-click on the cell that has the $10,000 data entry
3. Select Grow Line
4. Select Grow by Percentage % 
5. Enter the value 2 to model the 2% incremental change (if it's a decrement, enter a negative value)
6. Select Current Year to model this change only for the current financial year
7. Select Fill to apply the changes
8. Review the calculated forecast 

You can use the Grow Line feature to also apply a negative change or to model a dollar value difference. The choice is yours.

Things to note for this method:

• The change applied is at a fixed percentage or a fixed dollar value
• The calculation is based on the prior cell, using the selected cell as the starting point
• You can override any data that Castaway has calculated for you

2. Using the Driver element

The Driver element method is more flexible than the above in the sense that the changes can vary from month to month. You can create a Driver to factor in the growth or increment and subsequently use it to drive one or more element calculations. This is a more dynamic method as you'll only need to update the values for that one Driver and it'll update the rest of your forecast if set up correctly.

For example, you're looking to model an inflation index of 2.5% on your Rent Expense of $15,000.

1. Create a Driver called Inflation
2. Enter the 1.025 as the decimal rate in Inflation in your first month e.g. 100% + increase of 2.5%
3. To quickly populate the rest of the cells, right-click on the first cell and select Fill Right - Current Year
4. Select Save and Close to Exit
5. Create a Cost element called Rent Expense
6. Change the Expense Method to Driver x Rate
7. Enter the base rent of $15,000 as the Rate and Fill Right to forecast for the remainder of the year
8. Select the drop-down menu under Element Selector and link your Rent Expense to the Inflation Driver element to form your calculation
9. Click OK to apply the changes
10. Review your Rent Expense calculation

If there are other expenses that will also be affected by Inflation, you can model the same thing. If the Inflation changes during the financial year, you can just adjust the Inflation Driver accordingly.

Tip

You can also use this technique to forecast using historical data or Actuals as the base value and adjust the forecast values using various percentage rates.

Other Resources

• Elements: Driver
• Uploading a Forecast
• Using Castaway to model scenarios