Latest Enterprise Feasibility Report Writing Techniques and Examples

Author: Ke Linjuan
Publisher:
Publish Date: 2006-11-01
Features: According to the principle of comparison, based on the requirements of the project's product plan, construction scale, process technology plan, etc., estimate the possible cash flow generated by the project investment: (1) Project investment estimation, including equipment purchase, installation, civil engineering, and other engineering costs, as well as various capital expenditures and working capital investments before production; (2) Forecast of product sales revenue or service revenue provided by the project; (3) Forecast of various operating and maintenance costs during the project's operation period. Based on the estimation and forecast results, derive the cash flow of the investment plan. It should be noted that, according to international financial management practices, the investment estimation here does not include "construction period interest." In fact, construction period interest cannot be estimated at this stage.
2. Financial Evaluation of the Investment Plan
Based on the forecast results of the project investment cash flow, prepare auxiliary tables such as the Fixed Asset Investment Estimation Table, Working Capital (Circulating Capital) Estimation Table, Price Table of Major Output and Input Materials, Unit Product Production Cost Table, Fixed Asset Depreciation Table, Amortization Estimation Table of Intangible Assets and Deferred Assets, Operating Cost Estimation Table, Sales Revenue and Sales Tax Calculation Table, etc. On this basis, prepare the Project Investment Cash Flow Table, calculate the pre-tax profit for each year, evaluate the financial profitability of the project investment, and make investment decisions. The main purpose of calculating financial indicators here is to analyze the inherent profitability of the project itself without considering artificial factors such as depreciation, income tax, and financing plans, in order to make investment decisions for the proposed project and select investment projects from the perspective of the financial feasibility of the project itself.
3. Financial Evaluation of the Financing Plan
For projects with feasible financial evaluation of the investment plan, further financing plan analysis should be conducted to select the best financing plan. The object of the investment plan analysis is the project itself, while the object of the financing plan analysis is the financing entity of the project. If the financing entity of the project is not the project company established for the project, the entire enterprise supporting the project needs to be analyzed. The main analysis content includes:
(1) Analyze various possible financing channels and methods based on the balance sheet structure and credit status of the financing entity;
(2) Analyze the appropriate level of financial leverage based on the profitability of the project itself and the financial status of the entire financing entity, conduct financial leverage analysis, and select the debt-to-equity ratio and financing plan;
(3) Calculate financing costs based on the financing plan and prepare the "Financial Plan Cash Flow Table." This table, in addition to including the forecast results of the project investment cash flow, should also include the complete financial plan cash flow of the financing entity itself caused by loan repayment and interest during the construction period and production operation period, dividend distribution, tax payment, etc., for financial sustainability analysis;
(4) Calculate after-tax cash flow to evaluate the profitability of equity investment and its impact on shareholder wealth growth;
(5) Conduct a solvency analysis of the financing entity's debt.
(8) Economic Evaluation
Economic evaluation evaluates the costs and benefits of the project from the perspective of resource allocation and analyzes the economic feasibility of the project. Economic evaluation classifies the inputs of the project into tradable goods and non-tradable goods...