FinanceSheep | Free Financial CalculatorsWhat Happens to My Investment If Things Go Wrong? | Free Calculator | FinanceSheep
๐
FinanceSheep
Valuation Mechanics๐ข Beginner
What Happens to My Investment If Things Go Wrong?
How Sensitive Is Your Valuation to Key Assumptions?
No assumption in a DCF is certain. Scenario analysis tests bull/base/bear cases. Sensitivity tables show which inputs drive value most โ and where you should focus due diligence.
Sensitivity AnalysisScenario AnalysisBull/Bear/BaseMonte Carlo
Live Result
$2,100
ฦ: CF * (1 + g) / (r - g)raw: 2100.00
Advertisement (dev โ set VITE_ADSENSE_CLIENT in .env.local)
[ below-result ]
ฦ(x)
Use variable names from the panel above (e.g. FV, r, n) โ or type numbers directly: 10000 / (1 + 0.08)^10
CF$
$
Base case free cash flow
CF = 100
g% as decimal
Growth rate assumption
g = 0.05
r% as decimal
Discount rate (WACC or ke)
r = 0.10
bull_g% as decimal
Bull case growth rate
bull_g = 0.08
bear_g% as decimal
Bear case growth rate
bear_g = 0.02
๐ก You can also enter values directly in the formula: 10000 / (1 + 0.08)^10
Advertisement (dev โ set VITE_ADSENSE_CLIENT in .env.local)
[ between-tabs ]
โฌ Export Calculation
Exports a plain .txt file with your expression, formula, all variable values, result, and educational notes โ ready to paste into any report, Word doc, Notion, or Google Docs.
The exported file includes the formula in standard mathematical notation โ you can paste it directly into Excel, Google Sheets, or back into FinanceSheep.
๐
Learn: How Sensitive Is Your Valuation to Key Assumptions?
Valuation Mechanics ยท Educational Guide
The Core Idea
Your DCF says this company is worth $1,000M. But that assumes 8% growth for 5 years. What if growth is 12%? Or 4%? Scenario analysis answers this โ and shows you how much your confidence in the valuation should vary.
How It Works
Scenario analysis replaces single-point estimates with a range: bull, base, bear. Each scenario reflects a coherent story about the future. The weighted average of all scenarios is often more reliable than a single "best estimate" DCF.
๐ก
Real-World Example: Base case (50% weight): value = $1,000M. Bull case (25%): strong execution, value = $1,800M. Bear case (25%): margin pressure, value = $600M. Probability-weighted value = 0.25ร$1,800 + 0.50ร$1,000 + 0.25ร$600 = $450 + $500 + $150 = $1,100M.
Advertisement (dev โ set VITE_ADSENSE_CLIENT in .env.local)