Sensitivity Analysis

Posts: 5
Joined: Mon Jul 30, 2012 2:59 pm

Re: Sensitivity Analysis

Postby searyv123 » Mon Jul 30, 2012 4:37 pm

Hi Ashish

For Sensitivity Analysis follow the following steps

First LINK the output you want to check sensitivity of? (IN FMCG case link the share Price or EV)

Next decide the variable you want to check the sensitivity of (eg WACC; Terminal Grwoth rate; tax rate etc)

Lets say we selected WACC and Termianal Growth which originally n the model is 10.7% and 5%. Now take the range for two variable which will be 8.7; 9.7; 10.7;11.7 and 12.7% for WACC and lets say 3; 4; 5; 6; 7% for T. Growth. place these numbers on the cell next to your linked cell in step one above. So if you have linked EV in the cell G30 Wacc will come in the cell from H30 - L30 and T Grwoth will come in cell G31 to G35

Now select the cell from G30 to L35 and go to data tab - "What if Analysis" - "Data table"

Now in the window which pops up in the "row input" select the cell where you have originally calculated your WACC and in Column selsect cell where you have originally calculated T Growth Rate and press enter

Job done

Hope this helps


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