revfactory Sensitivity Analysis — Sensitivity Analysis Methodology
A specialized skill that enhances the scenario analysis capabilities of the scenario-planner agent.
Target Agent
- scenario-planner — Bear/Base/Bull scenarios, sensitivity table construction
1-Way Sensitivity Analysis
Vary one variable while holding all others constant and observe changes in the result.
Tornado Chart Construction Method
- Select 5-8 key assumption variables
- Vary each variable by +/-20% (or a reasonable range)
- Calculate the variation in the result metric (enterprise value, IRR, etc.)
- Arrange horizontal bars in descending order of variation magnitude
Enterprise Value Change
Revenue Growth ████████████████████████ Most Sensitive
Operating Margin ██████████████████
WACC ████████████████
Perpetual Growth █████████████
CAPEX/Revenue ███████████
NWC/Revenue ████████ Least Sensitive
Key Variable Selection Guide
| Financial Model Type | 1st Priority | 2nd Priority | 3rd Priority |
|---|---|---|---|
| SaaS | Revenue Growth Rate | NRR/Churn | CAC |
| Manufacturing | Utilization Rate | Raw Material Price | FX Rate |
| Retail | GMV Growth Rate | Take Rate | Shipping Cost |
| Biotech | Clinical Success Rate | Market Size | Drug Price |
2-Way Sensitivity Analysis (Data Table)
Matrix varying two variables simultaneously:
### Enterprise Value ($M) — Revenue Growth vs WACC
| | WACC 8% | WACC 9% | WACC 10% | WACC 11% | WACC 12% |
|-------------|---------|---------|----------|----------|----------|
| Growth 10% | 52 | 46 | 41 | 37 | 34 |
| Growth 15% | 68 | 59 | 52 | 46 | 41 |
| Growth 20% | 87 | 74 | 64 | 56 | 49 |
| Growth 25% | 109 | 91 | 78 | 67 | 59 |
| Growth 30% | 135 | 111 | 93 | 80 | 70 |
Color Coding Rules:
- Above current enterprise value = Green (Investment attractive)
- 80-100% of current enterprise value = Yellow (Watch)
- Below 80% of current enterprise value = Red (Warning)
3-Scenario Analysis (Bear/Base/Bull)
Scenario Definition Framework
| Category | Bear (Pessimistic) | Base | Bull (Optimistic) |
|---|---|---|---|
| Probability Weight | 20-25% | 50-60% | 20-25% |
| Revenue Growth | Bottom 25% benchmark | Median | Top 25% benchmark |
| Margin | Maintain or decline | Gradual improvement | Target achieved |
| Market Environment | Economic slowdown, intensified competition | Status quo | Boom, market expansion |
Per-Scenario Key Assumptions Table
| Assumption | Bear | Base | Bull | Basis |
|-----------|------|------|------|-------|
| Revenue Growth Y1 | 10% | 25% | 40% | Industry distribution |
| Revenue Growth Y3 | 5% | 15% | 30% | Convergence assumption |
| Operating Margin Y5 | 8% | 15% | 22% | Benchmark |
| Customer Churn | 5% | 3% | 1.5% | Peer data |
| CAPEX/Revenue | 12% | 8% | 6% | Economies of scale |
Probability-Weighted Value
Weighted Enterprise Value = P(Bear) x V(Bear) + P(Base) x V(Base) + P(Bull) x V(Bull)
Break-Even Analysis
Key Questions
"At what level must an assumption deteriorate for the investment to fail?"
| Analysis Item | Formula | Meaning |
|---|---|---|
| Revenue BEP | Fixed Costs / Contribution Margin Ratio | Minimum required revenue |
| Customer BEP | Fixed Costs / (ARPU x Margin) | Minimum required customers |
| Growth Rate BEP | Growth rate where NPV = 0 | Minimum required growth |
| IRR BEP | Discount rate where NPV = 0 | Internal rate of return |
Output Format Requirements
Required Deliverables
- Tornado Chart — Variable sensitivity ranking
- 2-Way Tables — Cross-analysis of top 2 variables (minimum 2)
- 3-Scenario Summary — Bear/Base/Bull key assumptions + results
- Probability-Weighted Value — Final estimate
- Break-Even Points — Per key variable break-even
- Implications — Risk management recommendations for the most sensitive variables