Sensitivity Analysis
Reference model
Sensitivity analysis shows how sensitive outcomes are to changes in input variables.
About this model
A method used to predict the outcome of a decision given a certain range of variables. It helps in understanding the risk associated with a decision.
Originator not stated.
How to read it
- Focus on the variables with the highest sensitivity to understand key risks.
- Look for thresholds where small changes lead to large impacts.
What this does
Evaluates how different values of an independent variable impact a particular dependent variable under a given set of assumptions.
When to use it
Use it when you need to understand how changes in input variables affect outcomes in financial models or forecasts.
Not when: Do not use it when the relationships between variables are not linear or when inputs are not quantifiable.
What happens next
Consider using scenario analysis for broader context.
Golden thread
Builds on ←
- Financial model or forecast
- Key assumptions
- Variable ranges
Feeds into →
- Scenario analysis
- Risk register
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Drafted with AI and reviewed by Eccellere on 04/11/2026. Guidance, not advice: apply your own judgement.