Validating the Model
William Preinitz · 2012
This chapter discusses the validation techniques and testing of the visual basic application (VBA) model. It is always a good idea to test the model before putting its output in front of everyone. The validation process discussed is directed against the three main functions of the model: (1) the collateral selection process, (2) the cash flow generation process, and (3) the performance of the waterfall structure. In the first phase, it is checked that the selection criteria entered into the model are being accepted, transferred into VBA variables, and being applied in the selection process subroutines correctly. The second phase of the validation effort involves some straightforward tests of the amortization logic. The last phase of the validation effort examines the function of the Excel cash flow waterfall spreadsheet. This demonstrates that the structure is functioning as expected against a Range of scenarios.