The Business Case Dictionary

Scenario Analysis

Scenario analysis is a method used to analyze and evaluate the potential outcomes of a decision or action, given a range of possible future scenarios. It is a tool used in business cases to identify the risks and opportunities associated with a decision and to understand how different outcomes might affect the overall performance of a business or project.

To conduct a scenario analysis, you need to define a range of possible future scenarios, and then estimate the likelihood and potential impact of each scenario on the decision or action being evaluated. This can involve creating models or projections based on different assumptions about market conditions, economic trends, and other factors that could affect the outcome of the decision.

Once the different scenarios have been defined and analyzed, the results can be used to inform decision-making by providing a better understanding of the potential risks and opportunities associated with the decision. Scenario analysis can be used in a variety of business contexts, including strategic planning, risk management, and investment analysis.


Scenario analysis is one of the features of the Financial Analysis Templates.