Scorecard
The highest and best use of any model is to track performance post capital deployment. Accurate prognostication requires tight feedback loops and will undergo continual revisions as assumptions face reality.
Pro-forma financial statements are necessary to any business and carry with them the advantages of helping with business planning as well as the absurdities of near-certain inaccuracy in prognostication. Large gaps between assumption and accomplishment are often caused by the fundamental conflict between the purpose of the model and the nature of reality. We tend to value that which we can measure most accurately, leading us to being precisely wrong more often than it does to us being approximately right.
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