Sensitivity Analysis

Consider different scenarios and assess the risk continuum of your investments with our sensitivity analysis feature.

Valuation -> Sensitivity Analysis

What is Sensitivity Analysis?

According to Investopedia, "Sensitivity analysis determines how different values of an independent variable affect a particular dependent variable under a given set of assumptions." (Source)

Investors use sensitivity analysis to gauge the band of potential possibilities for any given scenario. By doing so, capital allocators can better discover the potential risks associated with their assumptions, which in turn can lead to better decision making.

Sensitivity Analysis in Countercyclical

After creating a valuation in Countercyclical and generating the results, you can see what the sensitivity analysis for your particular scenario looks like by clicking on the following button:

After clicking the button, you're greeted with a popup that shows you the sensitivity analysis for your particular valuation.

Rows & Columns

Assumptions from your valuation are visible here and you can dynamically see the continuum of potential intrinsic value for your investment, along with the three core variables that power the valuation's outcome (discount rate, terminal rate, and growth rate).

Number of Rows & Columns

In the Sensitivity Analysis fields, you can change the number of rows and columns that you will generate each time you run a valuation. The minimum is 3 and the maximum is 9 for both rows and columns.

Row & Column Values

Valuation -> Sensitivity Analysis - > Row & Column Values

There are 3 different values that you can use for either your row or column values when using the Sensitivity Analysis feature on Countercyclical:

• Discount Rate

• Terminal Rate

• Growth Rate

For more information on each of these 3 assumption values, we recommend reading Assumptions.

Deviations

Valuation -> Sensitivity Analysis - > Deviations

The editable deviation field allows you to set the variance of each value at both the row and column level. Allows for whole numbers up to 100 with the level of granularity reaching 2 decimal places (e.g. 0.01).

Additional Functionality

Valuation -> Sensitivity Analysis - > Additional Functionality

Lock Table

Locking the table is only available to owners and editors of the investment (see Invitations and Sharing for more information), and it turns the table into a read-only view where none of the fields are editable.

Save Table as CSV, JPG, or PNG

After performing sensitivity analysis, you can export the table to either CSV or image formats (JPG or PNG).

Have any questions or feedback? Feel free to reach out at [email protected].