The Five Buckets of Analysis

• Base-case analysis
• What-if analysis
• Breakeven analysis
• Optimization analysis
• Risk analysis

Base Case - the common point. Everything is relative to this comparison.

What-if - also known as sensitivity analysis. Assesses the change in outputs associated with a given change in inputs.

Break-even - just how it sounds. The threshold that is crossed from not making a profit to making a profit.

Optimization- explains what variables achieve the best possible value of an output.

Risk Analysis- using probability models to determine the uncertainty associated with a decision.

Building a Small Business That Warren Buffett Would ... available Spring, 2012