Finance & Moneyadvanced
Sensitivity Analysis
Definition
Testing how your forecast or valuation changes when you alter one key assumption at a time, such as price, growth rate or churn.
Why it matters
Sensitivity analysis shows which assumptions your plan really hinges on, so you know where a small mistake would hurt the most.
Example
You rerun your model with churn at 3%, 5% and 7% to see how badly higher churn dents your profit.
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