# Financial Model Stress Test

Stress-test a financial model or forecast against adverse scenarios to surface hidden risks before presenting it to stakeholders.

## Prompt

Act as a financial analyst reviewing a forecast for robustness. Here are the key assumptions and figures in my model:
{{model_assumptions_and_figures}}

Stress-test this model by working through the following:

1. Assumption audit — list every assumption that, if wrong by 20%, would materially change the outcome, ranked by sensitivity.
2. Scenario analysis — model the outcome under three scenarios: Base case (as given), Downside case (key revenue driver down 20%, key cost driver up 15%), and Severe downside (a plausible worst-case event specific to this business, which you should identify).
3. Runway/breakeven impact — for each scenario, state how it affects runway (if applicable) or breakeven timing.
4. Hidden risks — identify 2-3 risks not captured in the numbers at all (e.g. customer concentration, key-person dependency, regulatory exposure).
5. Recommended safeguards — suggest 3 specific actions to reduce exposure to the biggest risks identified.

Present the output in a structured format suitable for an internal stakeholder review.

## Best for

Founders, finance teams, and operators who want to pressure-test a forecast or model before presenting it to investors, a board, or leadership.

## Compatible tools

- Claude
- ChatGPT

## How to use

- Paste your model's key assumptions and figures into {{model_assumptions_and_figures}} — include growth rate, churn/attrition, cash position, burn rate, and any major concentration risks you're aware of.
- Review the assumption audit first to identify which inputs deserve the most scrutiny before finalizing the model.
- Use the scenario analysis to prepare answers for likely investor or board questions about downside risk.
- Implement at least one of the recommended safeguards before your next stakeholder review.

## Customization tips

- If your business has known seasonality or cyclicality, mention it explicitly so the severe downside scenario reflects a realistic worst case.
- Ask for the scenarios to be expressed as a simple table if you want to paste the comparison directly into a deck.
- Follow up by asking the model to draft investor-facing talking points that proactively address the biggest risk identified.

## Example input

Act as a financial analyst... Model assumptions: SaaS company, $2M ARR, 15% monthly growth assumed, 5% monthly churn, $400K cash on hand, $150K monthly burn, largest customer is 18% of revenue.

## Example output

1. Assumption audit: Monthly growth rate (15%) is the most sensitive assumption — a drop to 12% compounds significantly over 12 months. Churn (5%) is second most sensitive. Customer concentration (18% from one account) is a structural risk not reflected in growth assumptions at all.
2. Scenario analysis: Base case reaches $4.8M ARR in 12 months. Downside case (growth down 20%, costs up 15%) reaches roughly $3.6M ARR with monthly burn rising to $172K. Severe downside: loss of the largest customer (18% of revenue) combined with a growth slowdown could push burn multiple above sustainable levels within 6 months.
3. Runway impact: Base case runway is comfortable; downside case shortens runway by roughly 3 months; severe downside could bring runway under 6 months, triggering a fundraising or cost-cutting urgency.
4. Hidden risks: customer concentration (18% in one account), no explicit assumption about cost of customer acquisition rising as market matures, no contingency for a competitor undercutting pricing.
5. Recommended safeguards: diversify customer base to cap any single account below 10% of revenue, build a 3-month cost-reduction contingency plan, and add a acquisition-cost sensitivity line to the model going forward.