Quantitative risk analysis: how not to lose in business?


Today, a large number of business plan projects, even if they have a corresponding section containing an analytical aspect, narrow the problem only to the analysis of financial or banking risks and do not reflect the full range of risks. However, specialists need to widely use both qualitative and quantitative risk analysis. More detail on the second type.


Quantitative analysis applies only to risks that are qualified in the process of qualitative analysis as those with the use of which has a significant impact on the achievement of goals. In conducting such an analysis, the effect of such events with the assignment of a certain digital rating should be evaluated.

Quantitative analysis may sometimes not be necessary in developing effective risk response measures. The most common among the commonly used analytical methods are the following:

- sensitivity study, which involves determining the reflection of the degree of uncertainty of each individual element of a business project when adopting other elements of the base value;

- consideration of the projected monetary value by multiplying each value by the probability of its occurrence, the results are summarized.

Quantitative analysis of any investment project determines the numerical value of the values ​​of certain risks. It is based on the territory of probabilities, the theory of operations research and mathematical statistics.


Quantitative analysis is carried out in the event of two conditions: a basic calculation of a business project and a full-fledged qualitative analysis. His task is to numerically measure the influence of certain changes of factors on the dynamics of criteria showing the effectiveness of a project.

Often used such methods of quantitative analysis of bznes-projects:

- analysis of such performance indicators as net present value and rate of return, as well as the profitability index;

- adjustment of the discount rate;

- Monte Carlo method (the second name is simulation modeling);

- building a decision tree.


All listed analytical methods of business projects are based on probabilistic approaches.

Quantitative and qualitative analysis and their effectiveness directly depends on the requirements for the final indicators (results), the information base and the level of reliability of planning. For example, for small projects, quite effective methods are: analysis of the adjustment of the discount rate and sensitivity. For large projects, however, simulation modeling and the construction of curves of probability distributions. If the result of the project depends on the adoption of certain decisions, it is necessary to build a decision tree.

Thus, the methods of analysis should be applied in a complex with the use of their simplest varieties at the assessment stage, and more complex and requiring additional data - with the resulting substantiation of business projects.

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