Financial Analysis

Financial analysis may be defined as the process of obtaining relevant economic information about a project in order 10 establish its financial viability It is undertaken as one of the feasibility analyses in project formulation. Most of the data required for financial analysis are obtained from market analysis, technical analysis and cost analysis. In order to develop adequate financial information, financial analysis looks at the projected capital cost estimates, projected operating cost estimates and operating revenue estimates. The information collected for the purpose are printed in the form of Performa balance sheet, Performa operating statement and cash flow statement

Financial analysis primarily deals with the interpretation of the financial data incorporated in the Performa financial statements and the presentation of the economic facts in such a form s to make &comparative evaluation I appraisal of projects. In other words, it is mainly concerned with the development of financial profile of the project. Financial analysis deals not only with the financial aspects of a project but also with its operational aspects. Its main purpose is to establish whether the project would enable to achieve the objectives for which it is undertaken. For easy and better comparison and explanation, ratio analysis is used. Through the-ratios the relationship between various financial factors of a project is explained and their trend forecasts are developed.

In order to complete the financial profile of a project, it is also necessary to evaluate the operational strategy and the investment strategy of the project. The break-even analysis is used to explain the operational characteristics of a project. Financial strategy is evaluated in terms of financial leverage, i.e., debt-equity mix and its effect on financial returns from the project. Theoretically different types of capital structure are available-and the ultimate objective is to choose an ideal capital structure, i.e., financing mix. Investment strategy is evaluated in terms of investment criteria such as JRR, NPV, etc. These project selection criteria depict the net contribution of the project towards the improvement of the economic position of the project implementing body.

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David Acheson David Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns.  David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website

Marcus Arkan Marcus Arkan currently serves as the President/Principle Broker of Syndicate Mortgages Inc. After working with a number of Canada's top financial institutions, the experience and knowledge he gained throughout his professional career combined with his drive and entrepreneurial spirit led him to develop his own company. The operation began in 2003 in the basement of his home and now has flourished into a successful corporation with a head office in one of Metropolitan Toronto's busiest sectors and 10 branch locations employing over 100 mortgage professionals. His organization is now one of Ontario's leading mortgage brokerages specializing in residential, commercial, and construction financing. He holds the designation of Accredited Mortgage Professional from the Canadian Association of Accredited Mortgage Professionals. This allows him to differentiate himself from other mortgage originators and demonstrates his commitment to the highest standards of industry performance. For more information on Mr. Arkan and his Syndicate Mortgages Inc., please visit www.syndicatemortgages.com. - Visit Marcus Arkan's Website

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Sameer Madaan Subscribe to Sameer's articles (Visit Sameer's Website) I am Bachelor in Advertising Sales Promotion and Sales Management. I am willing to promote entrepreneurship in India. My mission is to find and create the best possible tools to empower people to realize and expand their human potential. Sameer Madaan is a Silver author on EvanCarmichael.com

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