Sensitivity analysis within a chosen manufacturing company

Authors

  • Marek Vochozka Institute of Technology and Business in Ceske Budejovice

Keywords:

sensitivity analysis, risk, small and medium enterprises, financial management, enterprises development

Abstract

Purpose of the article The aim of sensitivity analysis is to determine the effect of the selected financial criteria for firms to possible changes in the values of risk factors that influence the criterion in the selected company. Therefore, it represents an important tool for risk assessment and a decision-making aid for financial management.

Methodology/methods The methods used in this case study are the economic analysis, econometric, statistical and mathematical methods (single-factor analysis, multi-factor analysis, uncertainty index, sensitivity coefficient). Contribution of the paper is essentially a practical demonstration of the real data (from the company, which operates as a subcontractor of components for the automotive industry), their interpretation and subsequent discussion.

Scientific aim The aim of this contribution is to judge the sensitivity, rate of uncertainty, and to evaluate the expected development of chosen risky factors which influence reaching the planned economic result (before taxation) in a chosen manufacturing enterprise in 2017.

Findings Our sensitivity analysis has proven that key risk factors of fulfilling the target economic result in a chosen manufacturing enterprise include reaching at least the planned sales volume for 2017, growth of sale price at least in 2.955% as compared to 2016 and purchase material price which should decrease in 3% as compared to 2016.

Conclusions The contribution assessed the sensitivity, the degree of uncertainty and assessed also the expected of selected risk factors influencing the achievement of the planned profit.

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Published

2017-09-21

Issue

2017: PROCEEDING OF SELECTED PAPERS

Section

Finance in Digital Transformation

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