Contents
Unit 6: Business Decision Making
Module objectives
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Creating and interpreting financial forecasts
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Viability of a business – ratios analysis
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Threats and 'what if' scenarios
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Module 6: Creating, interpreting and analysing financial forecasts

Threats and 'what if' scenarios

SWOT analysis to identify potential threats

Part of SWOT analysis is to look at the external threats a business may face. These are important as this is usually beyond the control of the business.

 

You can remind yourself of the SWOT analysis here:

 

SWOT Analysis

'What if' scenarios

'What if' analysis is a way of looking at alternatives and exploring their consequences.

You can use programs such as Excel to explore how changing different variables would affect the expected outcome, e.g. what the effect of raising or lowering the price of products could be.

Here's a video showing how to use an Excel spreadsheet to do one type of 'what if' analysis:

PESTLE Analysis

PESTLE analysis enables businesses to look at threats in multiple external contexts, e.g. political, economic, social and so on.

 

Follow the link to learn more about PESTLE analysis:

 

PESTLE Analysis