ExpressoFresh Brew Café — Sensitivity & Scenario Analysis
The sensitivity analysis evaluates the impact of key variable changes on project NPV. The tornado diagram below illustrates the relative sensitivity to changes in the five most critical operational variables.
Section 12 · Business Plan
Sensitivity & Scenario Analysis
The sensitivity analysis evaluates the impact of key variable changes on project NPV. The tornado diagram below illustrates the relative sensitivity to changes in the five most critical operational variables.
12.1 Sensitivity Analysis
The sensitivity analysis evaluates the impact of key variable changes on project NPV. The tornado diagram below illustrates the relative sensitivity to changes in the five most critical operational variables.
Figure 12.1: Sensitivity Analysis (Tornado Diagram)
The analysis confirms that average ticket price and daily foot traffic are the most significant drivers of project value. This underscores the importance of maintaining premium pricing and investing in customer acquisition and retention strategies.
12.2 Scenario Analysis
| Scenario | Revenue (Yr 3) | EBITDA (Yr 3) | Net Profit (Yr 3) | Project IRR |
|---|---|---|---|---|
| Base Case | R8.5M | R1.87M | R1.15M | 42.8% |
| Optimistic (+15% traffic, +10% ticket) | R11.1M | R2.82M | R1.95M | 58.4% |
| Conservative (-10% traffic, -5% ticket) | R6.9M | R1.24M | R0.68M | 28.1% |
| Downside (-20% traffic, -10% ticket) | R5.4M | R0.72M | R0.28M | 15.6% |
Even under the downside scenario, the business remains profitable and generates a positive IRR of 15.6%, demonstrating the resilience of the business model. The conservative scenario, which represents a more realistic adverse case, delivers a strong 28.1% IRR and maintains healthy profitability.
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