| name | scenario-analysis |
| description | Build scenario and sensitivity analysis - bull/base/bear cases and sensitivity tables on key drivers. Use to stress-test a model, valuation, or forecast and show the range of outcomes. |
scenario-analysis
One number is a guess; a range with drivers is analysis. Show what swings the outcome.
Process
- Identify the key drivers that move the result most (growth, margin, WACC, multiple, churn).
- Sensitivity: vary one (or two, as a table) and show the output's response - e.g. value per share across a
WACC x terminal-growth grid. This exposes how fragile the answer is.
- Scenarios: coherent bull / base / bear - each a consistent set of assumptions (not just +/- 10%),
with a brief story for why.
- Probability-weight (optional): rough odds on each scenario for an expected value - clearly subjective.
- Takeaway: the range of outcomes, what you'd need to believe for each, and the asymmetry (up vs. down).
Output
- A sensitivity table + bull/base/bear scenarios (assumptions + outputs) + the key swing factors and the
risk/reward asymmetry. All labeled as estimates.
Guardrails
- Scenarios are estimates with stated assumptions (
projections-assumptions).
- Don't present the base case as "the answer" - the point is the range and what drives it.
