Zama Clothing — Sensitivity & Scenario Analysis
The following sensitivity analysis quantifies the impact of key variable changes on Year 3 net profit, demonstrating the robustness of the financial model under various stress scenarios:
Section 9 · Business Plan
Sensitivity & Scenario Analysis
The following sensitivity analysis quantifies the impact of key variable changes on Year 3 net profit, demonstrating the robustness of the financial model under various stress scenarios:
9.1 Sensitivity Analysis
The following sensitivity analysis quantifies the impact of key variable changes on Year 3 net profit, demonstrating the robustness of the financial model under various stress scenarios:
| Variable | Change | Impact on Year 3 Net Profit | Revised Net Profit |
|---|---|---|---|
| Revenue Volume | -15% | -R4,820,000 | R4,809,000 |
| Revenue Volume | +15% | +R4,820,000 | R14,449,000 |
| Raw Material Costs | +10% | -R5,510,000 | R4,119,000 |
| Raw Material Costs | -10% | +R5,510,000 | R15,139,000 |
| ZAR Depreciation vs USD | +15% | -R3,200,000 | R6,429,000 |
| Labour Costs | +10% | -R1,140,000 | R8,489,000 |
| Combined Downside | All negative | -R14,670,000 | (R5,041,000) |
| Combined Upside | All positive | +R15,550,000 | R25,179,000 |
9.2 Scenario Analysis
| Metric | Pessimistic | Base Case | Optimistic |
|---|---|---|---|
| Year 5 Revenue (R'M) | 145 | 185 | 225 |
| Year 5 Net Margin | 12% | 18.1% | 22% |
| Year 5 Net Profit (R'M) | 17.4 | 33.4 | 49.5 |
| IRR | 18.2% | 28.4% | 36.1% |
| NPV (R'M) | 22.8 | 52.6 | 84.3 |
| Payback Period | 4.8 Years | 3.8 Years | 3.0 Years |
Even under the pessimistic scenario, the investment delivers an IRR of 18.2%, exceeding the cost of capital, and a positive NPV of R22.8 million, confirming the fundamental viability of the business under adverse conditions.
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