What-If Analysis

What Is What-If Analysis?

What-if analysis is a process of exploring the potential outcomes of different choices or scenarios. This can be done by altering the input data in a financial model to see the resulting impact on the output. What-if analysis can help to identify the risks and opportunities associated with different choices, and can help to make more informed decisions.

How Do You Perform What-If Analysis?

What-if analysis is a technique used to explore the effects of different scenarios on a financial model. This can be done by changing the values of input variables in the model and observing the resulting changes in the output variables. By doing this, you can get an idea of how sensitive the model is to different inputs and make better decisions about the future of your business.

Who Uses What-If Analysis?

What-if analysis is used by companies to model different scenarios in order to make better business decisions. The analysis allows companies to explore the possible outcomes of a given situation and to determine the effects of different decisions. It can be used to project future revenue and expenses, to evaluate the financial impact of a proposed investment, or to assess the risks and potential rewards of a business venture.

What Do You Have to Watch out for When You're Performing What-If Analysis?

When you're performing what-if analysis, you have to be careful to consider all of the potential outcomes of your scenario. You need to make sure that you're not just looking at one possible scenario and assuming that it will happen. You also need to be careful to consider the potential impact of your scenario on your financial statements. You need to make sure that you're not overstating or understating the potential impact of your scenario.