Sensitivity Table

Financial models depend on assumptions that are uncertain. A sensitivity table makes this uncertainty visible by recalculating the result for a range of input combinations and displaying the answers in rows and columns.

For example, a valuation might place different discount rates, such as 8%, 9% and 10%, across the top of the table, and different long-term growth rates, such as 2%, 2.5% and 3%, down the side. Each cell shows the resulting value per share for that combination. A reader can quickly see that the value ranges from, say, 32 in the most cautious case to 55 in the most optimistic.

Sensitivity tables help analysts and decision-makers understand which assumptions matter most and how much confidence to place in a single estimate. They are widely used in investment banking, equity research, corporate finance and project appraisal.

In spreadsheets, sensitivity tables are often built with a data table function that recalculates the model automatically. They test one or two variables at a time. For broader questions, such as how a recession would affect several inputs at once, analysts use scenario analysis instead.