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Sensitivity and Scenario Analysis

The document discusses sensitivity and scenario analysis for a financial model. It provides a scenario analysis manager to analyze the impact of changing revenues to $55 and costs to $40 on the net present value (NPV) of equity distributions. The analysis assumes no taxes and that all profits are distributed to equity holders with no debt. The scenario analysis shows the projected revenues, costs, distributions to equity, and NPV of equity distributions from 2012 to 2022 under the different revenue and cost assumptions.

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Sohail Ajmal
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167 views3 pages

Sensitivity and Scenario Analysis

The document discusses sensitivity and scenario analysis for a financial model. It provides a scenario analysis manager to analyze the impact of changing revenues to $55 and costs to $40 on the net present value (NPV) of equity distributions. The analysis assumes no taxes and that all profits are distributed to equity holders with no debt. The scenario analysis shows the projected revenues, costs, distributions to equity, and NPV of equity distributions from 2012 to 2022 under the different revenue and cost assumptions.

Uploaded by

Sohail Ajmal
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Financial Modelling Sensitivity and Scenario Analysis

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Sensitivity and Scenario Analysis

Question: Put in a scenario analysis manager to find what happens to the NPV of equity distributions when the below r to 55 and 40 respectively. Assume no tax and all profits are distributed to equity holders. i.e. no debt Start Date End Date Revenue (real p.a.) Costs (real p.a.) Inflation Cost of Capital Answer: 31-Dec-12 31-Dec-22 50 30 3.00% 15%

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ty distributions when the below revenues and costs are changed ers. i.e. no debt

Financial Modelling Sensitivity and Scenario Analysis

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www.videofinancialmodelling.com Sensitivity and Scenario Analysis Question: Put in a scenario analysis manager to find what happens to the NPV of equity distributions when the below revenues and costs are changed to 55 and 40 respectively. Assume no tax and all profits are distributed to equity holders. i.e. no debt Scenario Selector Scenario Description Start Date End Date Revenue (real p.a) Costs (real p.a) Inflation Cost of Capital Answer: Year End Inflation Index Revenue Costs Distributions to Equity NPV of Equity Distributions 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 100.00% 103.00% 106.09% 109.27% 112.55% 115.93% 50 52 53 55 56 58 (30) (31) (32) (33) (34) (35) 20 21 21 22 23 23 135 31-Dec-18 31-Dec-19 119.41% 122.99% 60 61 (36) (37) 24 25 31-Dec-20 31-Dec-21 31-Dec-22 126.68% 130.48% 134.39% 63 65 67 (38) (39) (40) 25 26 27 1 1 2 3 Rev = 55, Costs =40 Inf=2.5% 4 5

31-Dec-12 31-Dec-22 50 30 3.00% 15.00%

50 30 3.00%

55 40 2.50%

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