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Investment appraisal
Published in Paul Clark, Buying the Big Jets, 2017
The main tool of the economic analysis is the profit statement, which helps measure the efficiency of the operation. The main tool of the financial analysis is the cash flow, which helps measure our financing, cash and equity requirements. The distinction between profit and cash is mostly driven by tax rules and timing, as airlines can be cash-rich or cash-weak depending upon the balance of money owed or paid. Highly seasonal charter airlines tend to be victims of this pattern. It is a quirk of airline economics that the business can seemingly be unprofitable for long periods, yet still generate a great deal of short-term cash.
Project Initiation
Published in Jan van ‘t Hoff, Art Nooy van der Kolff, Hydraulic Fill Manual, 2012
Jan van ‘t Hoff, Art Nooy van der Kolff
The project planning forms the basis for the financial planning. An (on-going) cost estimate must be made as the project proceeds. These are the costs for project preparation (including Client’s advisors), construction and maintenance costs, operational costs, costs of financing and the costs of risks. These costs must be offset against the expected project income. Such a financial analysis is an important tool to manage the project and is also often required to obtain project financing from financial institutes, relevant governmental agencies, and investors.
Capital Cost Estimating An Overview
Published in Kenneth K. Humphreys, Paul Wellman, Basic Cost Engineering, 1995
Kenneth K. Humphreys, Paul Wellman
The primary objective of financial analysis is to provide the basis for decision making. The preceding chapters have set the stage for this analysis by translating the problem into terms of project scope and process design. These in turn have provided the framework for developing the inputs of revenue, operating costs, and capital investment. The discussion of the techniques by which this data can be transformed into a workable format from which the financial analysis can now proceed. First a few basic concepts need to be discussed.
Determining the invoicing dates for raw material order and finish product dispatch using neural networks under exchange rate volatility
Published in International Journal of Logistics Research and Applications, 2023
Janith Piyumal Weerasingha, Yapa Mahinda Bandara, Pasan Manuranga Edirisinghe
Financial Management is a key aspect of a business. It involves strategic planning, organising, and controlling the fiscal and financial assets of an organisation. Maintaining the supply of funds, efficient utilisation of funds, ensuring good returns for the shareholders are the main objectives of the financial management of a company. To achieve these objectives, the financial department of a company has to determine the amount of required capital, framing the financial policies and the regulations of the company, and financial control. Financial control includes efficient management of company assets, maintaining best financial practices for the betterment of the company and the stakeholders, and financial decision-making regarding investments and fundraising. There are different financial analysis tools such as ratio analysis, risk management, financial forecasting, cost control, and many other methods of analysing finance in the short term and long term. Company money is spent on salaries, bills, raw materials, liabilities, donations, logistics, and purchases of any other necessities, and effective management of money in these aspects leads to considerable cost reduction. It helps improve the profitability of the company while increasing the company value, leading to economic stability (LSBF Blog Staff 2018). Since manufacturing companies generate tangible products, their cost factors are distributed in a wide range of business activities. Cost reduction can be applied to factors such as variable overheads, raw material cost, supply chain cost, and direct labour cost. Yousefi and Pishvaee (2018) stated that the optimisation of supply chain finance in cost domains impacts the overall profitability of the company. Since the usual source of money in a supply chain network is the final customer, both physical product flow, as well as financial flows should be considered for the overall performance of the supply chain. Further, they mentioned the importance of developing methods to plan and control the money flow through the supply chain as it impacts the growth of the company simultaneously with the economy of the country. To achieve the desired performance of the supply chain, financial decisions and operational decisions should be inline as physical and financial flows affect each other. Yousefi and Pishvaee (2018) further mentioned that most of the studies regarding supply chain optimisation had neglected the uncertainty of financial parameters. The exchange rate is a major financial parameter of a supply chain of international businesses and very sensitive to dynamism in world economies.