Sensitivity Analysis is a way to see how your results change when you adjust the numbers you’re assuming.Why it's useful:Helps you identify which variables have the most impact.Assesses risk and uncertainty in a decision.Supports better planning by testing best-case, worst-case, and most-likely scenarios.In practice, sensitivity analysis is often done in Excel using the What-If Analysis > Data Table tool.The output cell is the result you're analyzing—like Enterprise Value, NPV, or IRR.The row input cell corresponds to the variable changing across the rows (e.g., WACC).The column input cell corresponds to the variable changing across the columns (e.g., terminal growth rate).
Learn Sensitivity Analysis with interactive examples and practice exercises in our Valuation module.
This interactive learning module helps you understand Sensitivity Analysis through hands-on practice and real-world examples.