Which process is key in evaluating demand shifts for revenue sources?

Sensitivity analysis is crucial in evaluating demand shifts for revenue sources because it assesses how changes in key assumptions or variables can impact revenue generation. This method allows finance professionals to understand the degree to which different factors, such as economic conditions, population growth, or changes in legislation, can influence revenue streams. By applying sensitivity analysis, organizations can create a range of potential revenue outcomes, providing insights into which factors have the most significant effect on demand for their services or products.

In this context, while revenue trend analysis and revenue portfolio analysis are valuable for understanding past patterns and the overall makeup of revenue sources, they might not capture the direct impact of varying assumptions. Univariate regression can help identify relationships between individual variables, but it typically does not account for the interaction between multiple factors, which is essential for understanding the broader implications of demand shifts.