Waterbury Financial Strategies Inc CEO / Founder Rahim Thawer post this week “American Businesses: Failure to Apply Sensitivity Analysis?”
As we are experiencing volatility in the global markets and the US Economy is constantly deteriorating we need to apply appropriate models and re-educate ourselves and our employees and have an elegant top notch management program.
One of the critical models that needs to be utilized by all businesses is Sensitivity Analysis. Sensitivity Analysis can be a rather complex model that incorporates a number of various factors to give you a precise output. This is simply a tool that will give you a clear indication of how an investment is going to perform and the effects on the Net Present Worth (NPW). Some of the key elements this tool will have an effect on are such as revenues, disposable value and operating cost.
Sensitivity Analysis does not stop there but can get very convoluted and it even addresses the purchase or sale of commercial real estate property with proper probability models utilizing external factors such as the market conditions. These models have been adapted by many of the powerhouses, yet not many small investors are aware of it.
As we see the wealth of many Americans diminish due to recession and negative changes in the economy, not only will this model position you to forecast your future worth but also it will flag any activities that need to be revisited, or even eliminated. A thorough Sensitivity Analysis will incorporate a number of factors and models and a simply simulation may take as long as 10 working days and can yield over 500 pages of data that needs to be addressed accordingly.
My Thoughts: Invest some time and money in learning about simply contemporary economics and have a professional firm evaluate your business before you make any considerable decisions.
Rahim Thawer /
CEO of Waterbury Financial Strategies Inc
http://www.waterburyfs.com
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