sensitivity analysis

sensitivity analysis A method of analysing the sensitivity of a decision to a change in one or more of the assumptions used in making it. For instance, a company might analyse how its future performance might be affected by changing its level of advertising or by lowering the price of a product, to enable it to estimate the likely impact on sales and profitability. Similarly, in considering an investment decision, it could investigate the impact of changing assumptions regarding the life of an asset, the cost of borrowing, and the end value of the asset. Apart from suggesting a range of possible outcomes, a sensitivity analysis will indicate the degree of risk associated with a decision or course of action.

• ABI
• ability to pay
• abnormal loss
• abnormal return
• above par
• above-the-fold
• above-the-line
• absence culture
• absenteeism
• absolute cost advantage
• absolute performance standard
• absorption
• absorption costing
• absorption rate
• abstract of title
• abuse of a dominant position
• ACA
• ACAS
• ACCA
• accelerated depreciation
• acceptable use policy
• acceptance
• acceptance number
• acceptance sampling
• acceptance supra protest