DCF sensitivity table
What a DCF sensitivity table reveals
A DCF sensitivity table visualizes how sensitive a valuation is to changes in key assumptions. Most commonly, it maps the effect of shifting discount rates and terminal value growth rates on the final valuation. The result is a matrix that shows how fragile—or resilient—a business case really is.
Even when a model feels robust, the table quickly reveals its weak spots. One small tweak in the discount rate and the valuation drops dramatically. That visual impact forces teams to confront uncertainty. It turns abstract risk into tangible impact.
This tool doesn’t improve the model itself. But it improves the conversation. It forces alignment around how much confidence the team actually has in the numbers.
How operators use a DCF sensitivity table
Imagine a team building a DCF model for a Series C SaaS company. The initial model assumes a 10% discount rate and 3% terminal growth. The DCF sensitivity table shows how the valuation changes if those inputs shift slightly. At 9% and 4%, the valuation jumps. At 11% and 2%, it crashes.
That table becomes a map. It doesn’t predict the future, but it shows where the cliffs are. Investors and operators use it to ask better questions: “What would have to be true for this scenario to hold?” or “What risk premium are we really accepting?”
The table supports risk literacy. It shifts the focus from perfect forecasts to structural resilience.
What a DCF sensitivity table is not
It’s not a prediction tool. It doesn’t tell you what will happen. It tells you how sensitive the result is to small shocks in your logic. That’s a critical distinction.
It’s also not just for financial analysts. Strategic operators should engage with it, because assumptions drive decisions—and decisions drive value.
When used well, it helps teams build models that are not only technically sound but also narratively honest.
Sensitivity tables force clear thinking
A DCF sensitivity table turns vague risk into visible tradeoffs. It shows how quickly optimism can break—and how cautious planning can protect value. In strategic environments, clarity about fragility is a competitive edge.
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