Sensitivity analysis

Sensitivity analysis measures how changes in key assumptions impact the output of a valuation or financial model — enterprise value, IRR, DSCR. In DCF models, standard sensitivities cover WACC (±0.5–1.0%), terminal growth rate (±0.5%), EBITDA margin (±1–2 percentage points) and revenue growth (±5–10%). In LBO models, sensitivities cover EBITDA performance, exit multiple and leverage ratio. Presenting a sensitivity matrix rather than a single-point valuation provides a more honest and defensible range — essential in expert reports submitted to courts, tax authorities or boards.

‍

Example: a Swiss DCF model produces a base-case enterprise value of CHF 22.0 million. The sensitivity matrix across WACC (8.5%–10.5%) and terminal growth (1.0%–3.0%) generates a value range of CHF 17.5–28.0 million. The central quartile (CHF 19.5–25.0 million) is presented as the defensible valuation range, with the base case at CHF 22.0 million.

‍

Hectelion systematically presents sensitivity matrices in every valuation report, providing boards, auditors and courts with a transparent range rather than a false single-point precision.