Cash Flow Sensitivity

Cash flow sensitivity measures the effect of changes in cash in and cash out on the cash break-even point. Cash flow sensitivity will help determine the significance of degree of change in the cash break-even point. In this section you must assume both best and worst case cash flow scenarios. You will then perform a cash flow sensitivity test to determine the effect of these scenarios on your cash flow situation. This section will help you create a plan of action in case either of these scenarios actually occur.