Financial model of the project

A financial model is a system of metrics that will help forecast the revenue, cash flow, profit of a business and calculate, how changes within the company will affect the financial position in the future

AS is To BE – Increases in production capacity of current business (comparison of how it was and how it will be in the delta)

New business within the company – replacing suppliers with own brand (building a model based on actual sales)

New business – substitution / addition of a supplier (displacement of competition in the market)
(building a model based on third-party data: similar production, sales)

New business – new product range (adding volume to the overall sales market), expanding the potential audience (building a model based on third-party data)

We’re doing:

Estimating and accounting for capital expenditure on equipment and enabling service

Estimation of construction costs based on space requirements

Project sensitivity analysis

Profit and loss forecast, Cash Flow forecast report, NPV, IRR, payback period

The financial model of the project allows to forecast all parameters of future production! The most important thing is to calculate the sensitivity of the project to changes in investments and terms!