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Financial Evauation

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by

Alejandro Bargallo

on 9 August 2016

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Transcript of Financial Evauation

Investment Budget
How much is needed?
When is required?
Breakeven Point
Sustainability Evaluation
Performance Evaluation
Rr - Real Performance - Expected ratio
Rn - Nominal Performance (INPC/SAR)
Ri - Inflation Ratio - Risk ratio
Fundamental Objective
Profitability
Income - Expenses

Financial Independence
Capital / Fixed Assets

Cash Flow
Net Income / Liabilities
Financial Evauation
Financial Risk
Difference between the expected / planned performance and calculated performance.
Identify, quantify and evaluate project impacts on its environment and its possible impacts.

An impact is a major environment alteration by human actions, its repercussion will vary according with the surroundings vulnerability.
Production Budget
Production volume required to meet sales forecast

Variables:
Expected sales
Inventory levels/value
Initial
End of period
Materials Budget
Materials needed to meet production budget

Variables:
Production Volume
Bill of Materials
Materials Cost
Inventory Level
Labor Budget
Human resources required to produce the product

Variables:
Production Volume
# of Shifts
Standard Work
Labor Costs
Indirect Costs Budget
Costs involved in production but that are not raw materials or direct labor

Examples:
Maintenance
Engineering
Supply Chain
Depreciation
Insurance
Costs & Price Formulas
Unit Cost = Fixed Costs + Variable Costs

Fixed Costs = Raw Materials + Direct Labor

Variable Costs = Indirect Labor + Others Costs


Price = Unit Cost + Profit

Profit = Price - Unit Cost
Project Evaluation
Financial Indicators
NPW - Net Present Worth
Cost / Benefit Ratio
IIR - Internal Interest Rate
ROI - Return of Investment
Meet with experts - consider it only for very specific evaluations
Develop a check list - allows to rapidly identify impacts
Cause - effect matrix
Flow diagrams - shows impact relationships
Maps
Weighted matrix
Sustainability Evaluation Methods
Return of Investment (ROI)
ROI =
Annual Net Profit after taxes (earnings)
Total Capital Investment
X 100
Net Present Worth (NPW)
NPW = Present worth of all cash inflow - Present worth of all Investment items
NPW > 0
Project makes more money than the interest rate
Cost - Benefit Ratio (CB)
CB =
Total Net Income (during project period)
Total Capital Investment
CB > 1
Project is profitable
Interest Rate of Return (IRR)
Iterative process to achieve a NPW=0

Commercial software can resolve it

IRR is compared to the interest of other investments portfolios to evaluate benefit
Full transcript