Sensitivity analysis is one of the methods for examining the ability of an organization to handle changes in the future.Which financial statement is required for this type of analysis?

Question

Quizplus · Accepted Answer

All three financial statements (balance sheet, income statement, and cash flow statement) are required for sensitivity analysis. The balance sheet provides information on the organization's assets, liabilities, and equity, which are essential in determining the organization's financial health. The income statement provides the organization's revenue and expenses, which are essential in determining the organization's profitability. Lastly, the cash flow statement provides cash inflows and outflows, which are critical in understanding the organization's liquidity position.

Sensitivity Analysis Is One of the Methods for Examining the Ability