Business Analysis with Microsoft Excel, Fifth Edition

13

Creating a Sensitivity Analysis for a Business Case

In This Chapter

Reviewing the Business Case

Managing Scenarios

Measuring Profit

Varying the Discount Rate Input

Using the Goal Seek Tool

A business case is a set of assumptions about a business activity that your company might undertake. You can make some of these assumptions confidently; others are little more than educated guesses. A well-prepared business case recognizes that at least some of its inputs are bound to be inaccurate.

The business case should document the logic behind the numbers and test how sensitive its results are to changes in its assumptions. Suppose a company thinks it can obtain a loan at 9%. According to the business case, the loan would enable the company to increase ...