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Financial Evauation

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Alejandro Bargallo

on 20 February 2018

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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
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

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

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

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

Supply Chain
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
Weighted matrix
Sustainability Evaluation Methods
Return of Investment (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