University of Kwazulu-Natal

Excel Financial Modeling Sensitivity Scenario Analysis

Bonisiwe Shabane
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excel financial modeling sensitivity scenario analysis

This course is ideal for finance professionals, analysts, and learners pursuing careers in investment banking, corporate finance, equity research, or financial planning and analysis (FP&A). Recommended courses to complete before taking this course. Recommended skills to have before taking this course. Why stop here? Expand your skills and show your expertise with the professional certifications, specializations, and CPE credits you’re already on your way to earning. Access and download collection of free Templates to help power your productivity and performance.

Finance teams make decisions under uncertainty every day. Every budget, forecast, and business model depends on assumptions that might change. Revenue could grow faster or slower than expected. Costs might spike. Interest rates fluctuate. A single change in any variable can transform a profitable plan into a costly mistake.

This guide walks you through sensitivity analysis in Excel—from basic one-variable data tables to complex scenario modeling. You’ll learn the exact steps to build models that test multiple assumptions, identify which variables matter most, and make better decisions when the future is unclear. Sensitivity analysis tests how different input values affect your outcomes. It answers a simple question: what happens to my results if my assumptions change? Think of it as stress-testing your financial models. You might build a budget assuming 10% revenue growth.

But what if growth hits 15%? Or drops to 5%? Sensitivity analysis shows you all these outcomes at once, so you can plan for multiple scenarios instead of betting everything on one prediction. Step-by-Step Guide to Understanding Sensitivity Analysis (“What If” Analysis) and Data Tables in Excel Sensitivity Analysis: “What if” Analysis A financial model is a great way to assess the performance of a business on both a historical and projected basis.

It provides a way for the analyst to organize a business’s operations and analyze the results in both a “time-series” format (measuring the company’s performance against itself over time) and a “cross-sectional” format (measuring... Typically, once an analyst inputs both historical financial results and assumptions about future performance, he/she can then calculate and interpret various ratio analyses, and other operational performance metrics such as profit margins, inventory turnover,... A scenario manager allows the analyst to “stress-test” the financial results because the reality is that expectations can and usually do change over time. These preparatory courses are optional, but we recommend you to complete the stated prep course(s) or possess the equivalent knowledge prior to enrolling in this course: This advanced financial modeling course will teach you how to perform Excel sensitivity analysis with a focus on practical applications for professionals working in investment banking, equity research, financial planning & analysis (FP&A), and... The tutorial goes step by step through all the formulas and functions required to perform the analysis in Excel from scratch.

This course is highly condensed and students will learn a lot in a short time. The agenda for this tutorial is: By the end of this course, you will have a thorough grasp of how to build a robust sensitivity analysis system into your Excel financial model. Form and function are both critical to ensuring you can handle quick changes and information requests when you’re working on a live transaction. This course is designed based on years of practical experience performing financial model sensitivity analysis. We use real-life templates and examples to teach you how to perform it step-by-step the way industry veterans do.

Scenario and sensitivity analysis course overview Scenario and sensitivity analysis are critical tools for financial professionals to evaluate uncertainty, model risks, and make informed decisions. This course teaches how to build dynamic Excel models that adapt to multiple business cases, test key assumptions, and identify the variables with the greatest impact on outcomes. You’ll learn to use data tables, scenario managers, and visual tools like charts to communicate financial implications clearly. Whether working in investment banking, FP&A, or valuation, this course equips you to deliver more insightful, decision-ready analysis. What will I learn about Excel sensitivity analysis?

By the end of this course, learners will be able to: Why take this Excel sensitivity analysis course? In this lesson, you’ll learn how to set up sensitivity tables in financial models, including the key requirements for inputs and outputs and the required steps, and you’ll get practice creating these tables in... All investing is probabilistic because you can’t predict exactly what will happen 5, 10, or 15 years into the future – but you can come up with a reasonable set of potential scenarios. For example, if a company you’re analyzing exceeds growth expectations and grows at 15% per year rather than 5-10%, that might be one scenario. If it grows in-line with expectations, that could be another scenario.

And if it declines or grows at a negative rate, that could be a third scenario. You can use sensitivity analysis to look at how this company’s valuation changes as you move from one scenario to the next. How to use an excel data table for sensitivity and scenario analysis for you financial model. This Best Practice includes 1 Excel sheet, 1 methodology Michael Shane offers you this Best Practice for free!

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