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Objectives

Objectives overview

Objectives are goals which the user wants to achieve.

Examples of objectives In financial modeling could be like:

  • Achieve maximal profit over the next five years;
  • Achieve maximal profit on fifth year from current year;
  • Maximize company value at the end of the next three years;
  • Maximize free cash flow at the end of one year period from now;
  • Minimize total investments in the next two years on the way to achieving certain profit over the same time.

Some objectives are more or less synergetic while others are more or less conflicting. Synergetic ones usually move in the same direction. They grow together and decrease together.

Examples of synergetic objectives could be: EBITDA & Revenue.

Conflicting objectives tend to influence each other in the opposite direction. Examples of conflicting objectives could be: Investment & Profit in case you do not use credits. All of your own money you invest will not be included in the profit you get.

Each objective has several properties:

  • Target parameter, for example: EBITDA, Revenue, Free Cash Flow, etc.
  • Period: beginning date and ending date. For which time period should this objective be achieved?
  • Desired objective goal: should this parameter be maximized or minimized. Maybe its average should be minimized or maximized.
  • Objective priority. If we set up several objectives we need to declare which of them are more important. For example if we want to achieve maximal EBITDA and revenue then we can declare that we give 60% of relative importance (or weight or priority) to EBITDA and 40% to revenue.

For details on objective priorities see the “Objective priorities” section (link pending).

Add objective

Prerequisite to create objectives. Objectives could be created only for a valid model. AIMES software considers a model valid if a scenario of the model could be calculated without errors. Simply speaking the sequence of users actions should be:

  • Create your model design and fill it with data;
  • Go to Scenarios view and create at least one scenario;
  • Calculate this scenario by clicking on the triangle located to the right of scenario name;
  • In the pop-up menu there will be a “Calculation success” message.
  • Only now AIMES software “knows” that model contains no errors and allows users to set up objectives.

To set up objectives:

  • Go to the Optimization view.
  • In the scenarios menu on the left there will be a list of successfully calculated scenarios. Left click on one of them to select it for the optimization process.
  • At the main area named Add objectives an option to Add formula or python nodes will appear.
  • Left click on the field with the + sign.
  • A drop-down list of all formula and python nodes of your project will appear.
  • Click on the name of the node which contains the data which will be optimized. If the drop-down list is too long just start typing the name of the desired node in the field with a + sign. The drop-down list will be filtered for the node names containing letters you type.
  • A blank table from the selected node will appear in the main area.
  • Hover the mouse pointer over the blank cell in the table and click on the cell.
  • A notice Select objective will appear in the cell. Right click on it and a pop-up menu will appear. Another way to summon this pop-up menu is to click on the pictogram of a drop-down list to the right of the Select objective notice in the cell.
  • There are two options in the Select optimization objective pop-up menu: Min and Max. Left click on one of them.
  • To set up the duration of the objective period, hover the mouse pointer over the objective. Two vertical bars will appear at the left and right edge of the objective bar. Hover the mouse pointer over one of those bars, left click and drag the objective border to the right or left to the desired time period.
  • Additional aggregation options become available when objective duration covers more than one time period. Right click on the objective bar that covers more than one time period and a pop-up menu will appear. There you can not only select options to minimize or maximize the desired parameter but also to choose if you want to do it over the minimum, maximum, average, total value of this parameter or not to use the aggregation. To submit your choice use the radio buttons. By default No aggregation option is selected.

Edit objective

To change an objective duration, hover the mouse pointer over the objective bar. Vertical “handle”-bars will appear at both ends of the objective bar. Drag those handles to the desired time period to change the objective duration. To edit an objective function (min, max) and aggregation options right click on the objective bar. Then change the desired options in the summoned pop-up menu. For details of options see the Create objective section.

Delete objective

To delete an objective right click on it. Then click on the Delete objective menu item in the summoned pop-up menu. Another way to delete an objective is to select it (left click on objective bar and it will get a blue frame) and then press the Delete button on your keyboard.