FINANCIAL MODELLING GUIDE
How to Build a Financial Model Sensitivity Analysis
Sensitivity analysis shows how outputs change when one or two important assumptions move.
In this guideWhat the analysis measuresCalculation frameworkUnderwriting reviewHow to use the result
What the analysis measures
Choose assumptions with genuine decision impact, such as sale price, cost, occupancy, interest rate or exit cap, and one clear output for each table.
Calculation framework
Recalculate the underlying model for every combination. Do not apply a cosmetic percentage change directly to IRR or value unless that is the actual formula.
Underwriting review
Keep the base combination equal to the main model and label units and direction. Investigate any discontinuity or non-monotonic result.
How to use the result
Use sensitivity to identify decision thresholds and due-diligence priorities. It is not a substitute for a coherent downside scenario.