Contents
- Index
Sensitivty Analysis
©2009 OS Financial Trading System
By how much do we need change the value of key inputs to make IBM's assessed value more consistent with the market price?
Your goal is to understand the underlying economics of the company you are valuing in terms of how from the firm side the three major decisions impact upon your assessments as well as how economy wide constraints impact upon your analysis. This will provide important insights into whether we assess the current market price to be reasonable or not. By attempting to answer the above question provides rich insight into how IBM is being valued by the market as well as which inputs of our "first pass" analysis may be optimistic. This will also provide useful experience for assessing the relative importance of the various inputs into this intrinsic value exercise. For the current exercise sensitivity analysis on Comprehensive Income is clearly a primary target for additional analysis.