Gas station financial model excel lays out the roadmap for success in the fuel industry. It’s a powerful tool, not just for projections, but for optimizing every aspect of your business, from revenue generation to cost control. This detailed guide delves into the core elements, from revenue projections based on market trends to capital expenditure planning, ultimately equipping you with the knowledge to make informed decisions and achieve sustainable growth.
The model, built in Excel, breaks down complex financial aspects into digestible components. We’ll explore methods for projecting sales, analyzing costs, and understanding profitability metrics. You’ll gain insights into various financial statements, from balance sheets to cash flow projections. The guide also incorporates a crucial element of scenario planning, helping you navigate potential challenges and capitalize on opportunities in a volatile market.
Ultimately, this detailed model equips you with the tools to chart a profitable course for your gas station business.
Introduction to Gas Station Financial Modeling
Fueling financial success for your gas station requires a deep understanding of its financial health. A robust financial model acts as a compass, guiding you through the complexities of the industry and enabling informed decisions. This model is more than just numbers; it’s a powerful tool that can predict future performance, assess risks, and ultimately, drive profitability.Financial models for gas stations provide a crucial framework for evaluating various scenarios, from optimizing pricing strategies to projecting future revenues.
They are indispensable for securing funding, attracting investors, and achieving long-term growth.
Key Financial Aspects of a Gas Station Model
A comprehensive gas station financial model should encompass several crucial financial aspects. These elements provide a holistic view of the business, enabling you to anticipate challenges and leverage opportunities. Forecasting revenue, understanding cost structures, and assessing profitability are critical to success.
Typical Inputs for a Gas Station Financial Model
Constructing a precise financial model requires gathering and analyzing several key inputs. These inputs include historical financial data, market research, and projections for future trends. Accurate data is paramount to ensure the model’s reliability. A well-structured model should include detailed sales data, expense information, and projected growth factors. Essential data points include:
- Historical sales figures (volumes and revenue): These are essential for establishing baselines and identifying trends. For example, comparing sales data from the previous year with the current year allows for assessing growth or decline.
- Detailed cost analysis (fuel costs, labor costs, operating expenses): Fuel price fluctuations are significant, and accurately modeling these costs is essential for assessing profitability. Understanding variable and fixed operating expenses allows for accurate cost projections.
- Projected fuel prices and demand: Predicting fuel prices and demand is essential for long-term planning. Consider recent market trends and regulatory changes to ensure accuracy.
- Projected sales volume and pricing strategies: Anticipating future sales volume and pricing strategies are critical for growth. This involves market analysis and competitor benchmarking.
- Capital expenditure and maintenance requirements: This includes any projected investment in equipment, facilities, or renovations. Planning for these costs is essential for maintaining a healthy cash flow.
Types of Gas Station Financial Models
Different types of models cater to various needs and objectives. Each type provides a unique perspective on the financial health of the business.
- Pro Forma Financial Statements: These models project future financial statements (income statement, balance sheet, and cash flow statement) based on certain assumptions and projections. This allows for a “what-if” scenario analysis.
- Discounted Cash Flow (DCF) Analysis: This method assesses the present value of future cash flows, enabling an estimate of the business’s intrinsic value. It’s particularly valuable for evaluating investment opportunities.
- Sensitivity Analysis: This model examines how changes in key variables impact the financial outcomes. By identifying the sensitivity of revenue to price changes, for example, managers can prepare for potential challenges.
Key Financial Statements in a Gas Station Financial Model
A comprehensive financial model includes the core financial statements, which offer a snapshot of the company’s financial position.
| Financial Statement | Description |
|---|---|
| Balance Sheet | Provides a snapshot of a company’s assets, liabilities, and equity at a specific point in time. It demonstrates the company’s financial position. |
| Income Statement | Reports a company’s financial performance over a period of time, typically a quarter or a year. It shows revenues and expenses, leading to net income or loss. |
| Cash Flow Statement | Details the movement of cash both into and out of a company over a specific period. It reflects the company’s ability to generate cash. |
Revenue Projections for Gas Stations: Gas Station Financial Model Excel
Fueling the future of your business projections starts with accurate revenue estimations. Understanding how gas sales respond to various factors is crucial for informed decision-making. This section dives into the methods for projecting gas station revenue, considering market trends, pricing strategies, and the ever-shifting landscape of fuel prices.
Projecting Gas Sales Using Historical Data and Market Trends
Historical sales data provides a solid foundation for projecting future gas sales. Analyzing past sales figures, considering seasonal variations, and identifying trends allows for more accurate estimations. Market trends, such as population growth, competitor activity, and local economic conditions, are equally important. A thorough examination of these factors provides a more nuanced picture of potential sales.
Estimating the Impact of Pricing Strategies on Revenue
Pricing strategies directly impact revenue. A price too high can deter customers, while a price too low may not maximize profit. A detailed analysis of competitor pricing, customer sensitivity to price changes, and potential promotional activities allows for more precise revenue projections. Analyzing the price elasticity of demand, which measures the responsiveness of demand to price changes, can significantly refine revenue projections.
Demonstrating the Impact of Fuel Prices on Gas Station Revenue, Gas station financial model excel
Fuel prices are a primary driver of gas station revenue. Fluctuations in fuel prices have a significant impact on sales volume and overall revenue. For example, a substantial increase in fuel prices can lead to a temporary decrease in sales volume, while a decrease can boost sales. This dynamic interplay is crucial to understanding and accurately modeling revenue.
Revenue Projections under Different Fuel Price Scenarios
A comprehensive financial model should consider different fuel price scenarios. A table outlining potential revenue projections under various fuel price scenarios is presented below. This allows for a more robust evaluation of potential outcomes.
| Fuel Price Scenario | Projected Gas Sales (Gallons) | Projected Revenue ($) |
|---|---|---|
| High ($4.50/gallon) | 10,000 | $45,000 |
| Medium ($4.00/gallon) | 12,000 | $48,000 |
| Low ($3.50/gallon) | 15,000 | $52,500 |
Incorporating External Factors like Competitor Activity into Revenue Projections
Competitor activity significantly impacts gas station revenue. Analyzing competitor pricing strategies, promotional campaigns, and overall market share can provide valuable insights. Tracking competitor actions, assessing their impact on customer behavior, and adjusting revenue projections accordingly will help achieve a more realistic and accurate outcome. For example, a new competitor opening nearby might reduce sales volume, and the model needs to account for this.
Cost Analysis for Gas Stations
Fueling your gas station’s success hinges on a deep understanding of its costs. Knowing what’s eating into your profits is the first step to optimizing operations and boosting bottom-line figures. This section dives into the various cost components, from the predictable to the potentially surprising.
Operating Expenses Breakdown
Operating a gas station involves a complex web of expenses, ranging from everyday necessities to occasional, but crucial, investments. Understanding these costs allows for proactive budgeting and informed decision-making. This comprehensive breakdown clarifies the components of operational costs.
- Fuel Procurement Costs: The cornerstone of any gas station’s income. These costs vary based on market fluctuations, wholesale prices, and the specific fuel type. Keeping tabs on these costs is paramount for pricing strategy and profit margins. For example, a sudden spike in crude oil prices can dramatically impact your bottom line.
- Rent and Utilities: These fixed costs are often a significant portion of the overall expenses. Rent depends heavily on location and property size, impacting the total operational costs. Utilities like electricity, water, and natural gas, vary based on usage and local rates. Consider negotiating favorable contracts with utility providers to minimize these costs.
- Staffing Costs: A crucial part of providing efficient service. Staffing costs are categorized into salaries, wages, and benefits. The number of staff required is directly proportional to the station’s size, hours of operation, and the range of services offered. Flexible scheduling and part-time staff can help control these expenses.
- Maintenance and Repairs: Ensuring the smooth functioning of equipment and infrastructure is crucial. These costs can range from routine maintenance to unexpected repairs, affecting profitability. Predicting and budgeting for these expenses is vital to avoid financial surprises.
- Marketing and Advertising: In a competitive market, attracting customers is essential. Marketing expenses cover promotional activities, advertising campaigns, and potentially loyalty programs. A well-structured marketing plan can drive traffic and improve sales.
- Insurance Premiums: Protecting your assets is a fundamental aspect of running a gas station. Insurance covers liability, property damage, and employee injuries. Insurance costs can vary based on factors like location, equipment value, and insurance coverage choices.
Fixed vs. Variable Costs
Differentiating between fixed and variable costs is critical for budgeting and forecasting. Fixed costs remain constant regardless of sales volume, while variable costs change with the level of activity. Understanding this difference allows for more accurate financial planning.
- Fixed Costs: Examples include rent, insurance premiums, and salaries of permanent staff. These costs are generally consistent from month to month. They are essential for operations but don’t directly relate to sales volume.
- Variable Costs: Examples include fuel purchases, maintenance and repair expenses, and staff wages based on hours worked. These expenses are directly linked to the amount of fuel sold and the number of hours worked. They vary in relation to the business activity.
Estimating Maintenance and Repair Costs
Accurately estimating maintenance and repair costs is essential for financial planning. A proactive approach, including regular inspections and preventative maintenance, can minimize unexpected expenses.
Regular maintenance can significantly reduce the frequency and severity of breakdowns, minimizing downtime and unexpected repair costs.
Estimating Staffing Costs
Accurately estimating staffing costs involves considering the number of employees needed, their respective roles, and their compensation packages. Factors such as hourly rates, benefits, and overtime pay need to be factored into the estimation. Developing a detailed staffing plan is critical for effective cost management.
- Staffing Models: A variety of models exist for estimating staffing costs. These range from simple formulas to more complex simulations, accounting for various scenarios. Detailed analysis and a precise understanding of staff requirements and operational needs are essential for accurate staffing estimations.
Cost Component Impact on Profitability
This table illustrates how different cost components can impact a gas station’s profitability. It provides a snapshot of the potential effects of fluctuations in each area.
| Cost Component | Potential Impact on Profitability |
|---|---|
| Fuel Procurement | Significant impact due to market volatility. |
| Rent and Utilities | Fixed cost, but impactful in the long run. |
| Staffing Costs | Variable depending on staffing model and sales volume. |
| Maintenance and Repairs | Impact varies based on preventative maintenance. |
| Marketing and Advertising | Directly linked to sales growth and customer acquisition. |
| Insurance | Relatively fixed, but crucial for protection. |
Profitability and Financial Performance Metrics
Unlocking the financial health of your gas station hinges on understanding its profitability. This involves more than just revenue; it’s about analyzing the underlying efficiency and performance to make informed decisions. A robust financial model goes beyond simple figures; it reveals the story behind the numbers, guiding you toward smart investments and sustainable growth.
Key Profitability Metrics
Profitability metrics are essential for evaluating a gas station’s financial performance. They provide insights into the station’s operational efficiency and overall financial health. Understanding these metrics allows for strategic adjustments to maximize profitability and ensure long-term success.
- Gross Profit Margin: This metric reveals the percentage of revenue remaining after deducting the cost of goods sold (COGS). A higher gross profit margin indicates better pricing strategies and efficient inventory management. For instance, a station with a 50% gross profit margin on fuel sales is doing well compared to one with a 25% margin, all else being equal.
- Operating Margin: This metric quantifies the profitability of the core operations. It measures the percentage of revenue remaining after deducting all operating expenses, such as labor, rent, utilities, and maintenance. A higher operating margin signifies greater operational efficiency and cost control. This is vital for determining the overall health of the business beyond just the immediate sale of fuel.
Calculating and Interpreting Metrics
Accurate calculations and insightful interpretations of these metrics are crucial. The following examples demonstrate how to use the metrics effectively in a gas station model.
Gross Profit Margin = (Revenue – Cost of Goods Sold) / Revenue – 100
Operating Margin = (Revenue – Cost of Goods Sold – Operating Expenses) / Revenue – 100
These calculations are essential to understand how efficiently your station is operating. For instance, if your gross profit margin consistently falls below the industry average, it might signal the need to review pricing strategies or explore ways to reduce inventory costs.
Return on Investment (ROI)
Analyzing ROI is vital for assessing the attractiveness of a gas station investment. It measures the profitability of an investment relative to its cost.
- ROI Calculation: Return on Investment (ROI) is calculated by dividing the net profit by the initial investment. A higher ROI indicates a more profitable investment.
- Example: If an investment of $1 million in a gas station generates a net profit of $100,000 per year, the ROI is 10%. This metric allows for a comparison of potential investments and helps determine which options offer the best return.
Creating a Financial Dashboard
A comprehensive dashboard is a powerful tool for monitoring key financial metrics. It provides a snapshot of the gas station’s performance at a glance. For example, a dashboard might display real-time gross profit margin, operating margin, and ROI.
- Key Elements: Include charts and graphs for visualization of trends, allowing for easy identification of patterns and potential issues. Real-time data updates provide a dynamic overview of the business performance.
- Interactive Features: Interactive features facilitate drill-down analysis to explore specific areas of concern or success. This helps in identifying areas requiring immediate attention.
Profitability Comparison
A comparison of profitability metrics across different gas station locations can highlight best practices and areas for improvement.
| Location | Gross Profit Margin (%) | Operating Margin (%) | ROI (%) |
|---|---|---|---|
| Station A | 45 | 15 | 12 |
| Station B | 50 | 20 | 15 |
| Station C | 40 | 10 | 8 |
This table provides a simplified example; a real-world analysis would consider various factors, such as location, fuel pricing, and market conditions.
Capital Expenditure and Financing
Keeping your gas station competitive and profitable often requires significant investment. This section delves into the crucial aspects of capital expenditures (CapEx) and how to fund them effectively within your financial model. We’ll explore the typical investments, various financing options, and how these choices impact your overall financial health.
Typical Capital Expenditures
Gas station operations necessitate ongoing investments to maintain efficiency and attract customers. These investments, often termed capital expenditures, typically include upgrades to equipment, facility improvements, and expansion projects. Examples range from replacing aging pumps and upgrading point-of-sale systems to adding convenience store amenities or renovating the station’s exterior. Modernizing lighting and security systems are also important components of a well-maintained gas station.
Investing in these upgrades often leads to increased operational efficiency, reduced maintenance costs in the long run, and enhanced customer experience.
Financing Options for Capital Projects
Several financing options can be employed for gas station capital projects. These include loans, lines of credit, and even equity financing. Loans, often from banks or specialized lenders, provide a fixed amount of capital for a defined period, with specific repayment schedules. Lines of credit offer flexibility, allowing you to borrow funds as needed up to a predetermined limit.
Equity financing, such as issuing stock or attracting investors, can provide substantial capital but often comes with a dilution of ownership. The optimal choice depends on the specific project, your financial situation, and the overall financial health of the business.
Impact of Capital Expenditures on the Financial Model
Capital expenditures significantly impact a gas station’s financial model. These investments are typically shown as a separate line item in the cash flow statement, reflecting the outflow of funds for equipment and improvements. The model should also account for the potential for increased revenue or decreased operating expenses resulting from these investments. For example, upgrading pumps to accept credit cards might lead to increased sales.
Analyzing the expected return on investment (ROI) for each CapEx project is crucial for effective financial modeling. The financial model should accurately reflect the time value of money, which means that future cash flows need to be discounted to their present value.
Incorporating Debt Financing into the Financial Model
Debt financing plays a key role in funding capital projects. The financial model must account for the principal and interest payments associated with the debt. Interest expense directly impacts the company’s net income and ultimately the overall profitability. To accurately reflect the impact, you should incorporate the interest expense in the income statement and also account for the principal repayment schedule in the cash flow statement.
An example could be a loan taken to upgrade the station’s infrastructure, with a detailed schedule of monthly or quarterly payments of both principal and interest.
Capital Expenditure Timeline
| Year | Description | Estimated Cost ($) |
|---|---|---|
| 2024 | Pump upgrades and POS system replacement | $50,000 |
| 2025 | Convenience store expansion | $100,000 |
| 2026 | Facility renovation and exterior improvements | $75,000 |
This table provides a basic timeline for major capital expenditures. Real-world scenarios will likely involve more complex and nuanced schedules, potentially including smaller, ongoing maintenance projects and upgrades. The financial model should account for the timing of these investments to accurately predict the company’s future financial health.
Sensitivity Analysis and Scenario Planning
Unforeseen events can dramatically impact a gas station’s financial health. From fluctuating fuel prices to unexpected consumer spending patterns, a robust financial model needs to account for these uncertainties. Sensitivity analysis and scenario planning are crucial tools for anticipating and mitigating these risks, providing valuable insights for informed decision-making.Sensitivity analysis essentially probes how changes in various factors affect your bottom line.
It’s like running a series of “what-if” scenarios, enabling you to identify the most critical variables and understand their potential impact on your projections. Scenario planning goes a step further, creating complete narratives around these different possibilities, enabling you to prepare for a wider range of eventualities.
Importance of Sensitivity Analysis
Sensitivity analysis is vital for a gas station financial model because it unveils the model’s vulnerabilities and strengths. By analyzing how different variables influence key metrics, you can pinpoint the factors that significantly impact profitability. This proactive approach empowers you to make informed decisions and build a more resilient business plan.
Methods for Analyzing Impact of Variables on Profitability
Various methods exist for analyzing the impact of different variables on profitability. One method involves calculating the percentage change in profit for a given percentage change in a key variable. For example, a 10% increase in fuel prices might result in a 5% decrease in profit. Another approach is to create a series of ‘what-if’ tables, illustrating how changes in key variables (e.g., fuel prices, rent, labor costs) affect your profitability.
Examples of Different Scenarios
Different scenarios provide a richer understanding of potential outcomes. Consider these examples:
- High Fuel Prices: A significant surge in fuel prices could drastically reduce profit margins. This scenario highlights the importance of hedging strategies and exploring alternative revenue streams.
- Low Consumer Spending: A downturn in the economy could lead to decreased consumer spending on non-essential items like snacks and drinks. Your model should consider the potential impact on sales.
- Increased Competition: New gas stations opening nearby might reduce your market share. Sensitivity analysis helps you understand how this competitive pressure could affect your sales and profitability.
Incorporating Risk Factors into the Model
Accurately incorporating risk factors into the model is essential. This often involves estimating probabilities for different scenarios. For example, a 70% chance of high fuel prices and a 30% chance of moderate fuel prices would influence your projections accordingly. This probabilistic approach helps you make informed decisions by considering the likelihood of various events.
Creating Sensitivity Tables
Sensitivity tables are invaluable for demonstrating the impact of various variables on key metrics. A well-designed table will clearly show the relationship between a change in a variable and the resulting change in profit, revenue, or other critical metrics.
Example:
Variable % Change Profit Impact (%) Fuel Price +10% -5% Rent +5% -2% Snack Sales +15% +3%
These tables provide a clear visualization of how different variables affect your bottom line, enabling you to prioritize mitigation strategies and adapt your business plan.
Financial Model Template and Structure
A well-structured financial model is crucial for a gas station. It’s like a roadmap, guiding you through projections and decisions. This template provides a clear framework for analyzing the financial health of your gas station, allowing you to make informed business choices.A robust financial model allows you to predict future performance, evaluate different scenarios, and manage risks effectively. This will ultimately help you to optimize your operations and ensure long-term success.
Financial Model Framework
This framework provides a structured approach to building your gas station’s financial model. It ensures all essential elements are considered and integrated seamlessly.
- Input Data Area: This section houses all the raw data needed for calculations. Think of it as the ‘ingredients’ of your financial model. It includes details like fuel prices, sales volumes, operating expenses, and projected growth rates. Accuracy in this area is paramount.
- Calculation Area: This is where the magic happens! Formulas transform the input data into meaningful financial metrics. This is the heart of the model, linking your inputs to outputs.
- Output Results Area: This section displays the key financial outcomes of your model. Think of it as the ‘recipe’ yielding important information like projected profits, cash flows, and profitability ratios. This is where you’ll find the answers.
Input Data Areas
The input data section is critical for a precise financial model. Each input should be well-defined and easily understood.
- Fuel Price Projections: Gather data from reliable sources, such as historical fuel prices and market analysts’ predictions, for different types of fuel. This is essential for revenue projections.
- Sales Volume Projections: Forecast expected fuel sales, considering factors like seasonal demand, local market conditions, and competitor activity. This is crucial for revenue projections.
- Operating Expenses: Include costs like rent, utilities, labor, and maintenance. Historical data and industry benchmarks are useful.
- Capital Expenditures: Artikel any planned investments in equipment, upgrades, or expansions. Include details on timing and financing.
Calculation Area: Formulas
The calculation area uses formulas to derive crucial financial metrics.
| Metric | Formula | Description |
|---|---|---|
| Revenue | Fuel Price
|
Total income generated from fuel sales. |
| Cost of Goods Sold (COGS) | Fuel Purchase Cost
|
Direct cost of the fuel sold. |
| Gross Profit | Revenue – COGS | Profit after accounting for direct costs. |
| Operating Expenses | Sum of all operating costs | All ongoing costs of operation. |
| Net Profit | Gross Profit – Operating Expenses | Final profit after accounting for all expenses. |
Revenue = Fuel Price
Sales Volume
Net Profit = Gross Profit – Operating Expenses
These formulas are crucial for generating accurate financial projections.
Output Results Area
The output area presents the results of your calculations in a clear and organized manner.
- Key Financial Metrics: Display key metrics like revenue, cost of goods sold, gross profit, operating expenses, and net profit.
- Profitability Ratios: Calculate profitability ratios, such as gross profit margin and net profit margin. This helps to assess the efficiency and profitability of your gas station.
- Cash Flow Projections: Project cash inflows and outflows to understand the cash flow position of the business over time.
Data Sources and Assumptions
Fueling your gas station financial model requires a strong foundation. Accurate data and well-defined assumptions are paramount to creating a realistic and reliable forecast. Just like a meticulously crafted roadmap, your model will only be as good as the data and assumptions it’s built upon. Let’s delve into the essential elements for a robust and trustworthy model.
Data Sources
A robust financial model demands a diverse range of data points. These sources should ideally be verifiable and reliable. Gathering data from multiple sources helps to mitigate potential biases and ensure a comprehensive understanding of the market. Your model’s accuracy depends on the quality of the input data.
- Market Research Reports: Industry reports from credible sources like the Energy Information Administration (EIA) or market research firms provide valuable insights into trends, pricing, and consumption patterns. This data allows you to understand the current landscape and potential future developments in the gas station industry.
- Historical Sales Data: Analyzing past sales data (including gas volume, prices, and other relevant sales metrics) is crucial for identifying trends and establishing a baseline for projections. Looking at historical patterns will enable you to estimate future sales.
- Local Data: Regional factors significantly influence gas station performance. Information on local demographics, competition, and economic conditions are vital. This localized knowledge is critical for your model’s accuracy.
- Government Regulations: Local and national regulations can impact operational costs, pricing, and other aspects of the business. Understanding and incorporating these factors is essential.
- Fuel Prices: Data on historical and projected fuel prices is essential for accurately estimating revenue and cost components. A reliable fuel price data source is critical for any gas station financial model.
Reliability of Data Sources
Data reliability is paramount. A model based on unreliable sources will yield inaccurate results. Assess the source’s credibility, methodology, and potential biases before integrating the data into your model.
| Data Source | Reliability | Justification |
|---|---|---|
| Market Research Reports | High | Published by reputable firms, usually with thorough methodologies. |
| Historical Sales Data | Medium | Accuracy depends on data collection methods and record-keeping quality. |
| Local Data | Medium-High | Depends on the source’s credibility and data collection methodology. |
| Government Regulations | High | Generally well-documented and publicly available. |
| Fuel Prices | High | Data is frequently updated and sourced from trusted industry sources. |
Defining Assumptions
Assumptions are crucial for projecting future scenarios. Clearly defining assumptions ensures transparency and enables you to understand the factors driving your model’s outputs.
- Growth Rate Assumptions: Projected sales growth rates should be supported by reasonable arguments. For example, “Assuming a 5% annual growth rate in gas sales, based on the projected increase in local population and economic activity.” These justifications will make your model more believable.
- Pricing Assumptions: These assumptions should consider market dynamics, competitive pressures, and potential price fluctuations. For example, “Assuming a 10% annual increase in gas prices, reflecting historical inflation and predicted supply-demand dynamics.”
- Cost Assumptions: Assumptions for operational expenses (e.g., labor, utilities) need to be meticulously justified. Consider current market conditions and trends.
Documenting and Justifying Assumptions
Thoroughly document all assumptions, explaining the reasoning behind each one. This is critical for model transparency and future revisions. A well-documented model allows for better understanding and adjustments.
Documenting assumptions is like leaving breadcrumbs for future analysis. It allows you to track your thought process and make informed revisions as conditions evolve.
Validating Data and Assumptions
Validating the accuracy of data and assumptions is vital. This process involves cross-referencing data from multiple sources, comparing with industry benchmarks, and reviewing the reasonableness of assumptions.
- Cross-referencing: Compare data from different sources to identify discrepancies and ensure consistency.
- Benchmarking: Compare your findings with industry benchmarks and competitor data to assess the reasonableness of your projections.
- Sensitivity Analysis: Analyze how changes in key assumptions affect the model’s output. This helps you understand the model’s robustness.
