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What we mean by Sensitivity Analysis?

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Question ajoutée par Ahmed Abd Alwahab Awad Ibrahim , Chief Accounting , ICCDP
Date de publication: 2014/09/18
georgei assi
par georgei assi , مدير حسابات , المجموعة السورية

Sensitivity analysis: Sensitivity analysis shows how to change the net present value of the project as a result of a change in the value of variables that have entered into the process of the original calculations. Variables such as the volume of sales or the sale price of the unit or the unit cost .. And, the decline in sales volume by half, such as may lead to a decline in the net present value to a certain extent .. Such may lead to a decline in the net present value to a certain extent .. Therefore, since the net present value or net value added nationalism affected Bhz variable, it is said The project is sensitive to the conditions of uncertainty .. and of course it requires a sensitivity analysis to know the degree of disagreement and different variables associated with. And the work does not require allergy testing and the introduction of all the variables but enough work key variables that influenced the ruling a significant impact on the project increase or decrease. And of course it was not affected by the net present value or net value added, it does not become a national allergy testing is necessary in this case. And sensitivity analysis takes the conditions of uncertainty into account by calculating the index measuring the user using the best estimates of the variables that will be in conditions to make sure and then re-calculated estimates or pessimistic estimates are normal and work accounts on this basis and it is knowledge of the sensitivity of the project to the basic variables.

Utilisateur supprimé
par Utilisateur supprimé

I agree with everyone

Kamran Anjum
par Kamran Anjum , Head of Internal Audit , Rafhan Maize Products Company limited, Faisalabad, Pakistan, Ingredion Incorporated Gmbh

A technique used to determine how different values of an independent variable will impact a particular dependent variable under a given set of assumptions. This technique is used within specific boundaries that will depend on one or more input variables, such as the effect that changes in interest rates will have on a bond's price.Sensitivity analysis is a way to predict the outcome of a decision if a situation turns out to be different compared to the key prediction(s). 

 

Sensitivity analysis is very useful when attempting to determine the impact the actual outcome of a particular variable will have if it differs from what was previously assumed. By creating a given set of scenarios, the analyst can determine how changes in one variable(s) will impact the target variable. For example, an analyst might create a financial model that will value a company's equity (the dependent variable) given the amount of earnings per share (an independent variable) the company reports at the end of the year and the company's price-to-earnings multiple (another independent variable) at that time. The analyst can create a table of predicted price-to-earnings multiples and a corresponding value of the company's equity based on different values for each of the independent variables. 

Ahmed Abd Alwahab Awad Ibrahim
par Ahmed Abd Alwahab Awad Ibrahim , Chief Accounting , ICCDP

Thank you for all answers

I want to add small comment

The main uses for Sensitivity Analysis to make different scenarios at financial planning to get different results to choose.

So The Sensitivity Analysis called  "what if"