PROJECT VALUATION

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PROJECT VALUATION by Mind Map: PROJECT VALUATION

1. Liabilities / Assets

2. MAIN ACCUNTS TO WATCH:

2.1. ASSETS

2.2. LIABILITIES AND EQUITY

2.3. P&L

2.4. HORIZONTAL & VERTICAL ANALISIS

2.4.1. HORIZONTAL ANALISIS

2.4.1.1. changes from one year to another

2.4.2. VERTICAL ANALISIS

2.4.2.1. Do the present structure generates opportunities on the upcoming years?

3. BASIC QUESTIONS

3.1. INDUSTRY

3.2. OBJETIVE

3.2.1. VOLUME

3.2.2. MARGIN

3.3. TIME ISSUES

3.3.1. YTD, YTGO, 4QRB...

4. KPI´S

4.1. Tangible equity

4.2. Liabilities / Equity

4.3. EBITDA / Interests

4.4. EBITDA / Interests + CPLTD

4.5. Quick ratio

4.6. Acid test

4.6.1. (Current Assets – Inventories) / Short term liabilities

4.7. Working capital turnover

4.7.1. Sales / Working capital

5. VALUE CREATION

5.1. SOLVENCY

5.2. LIQUIDITY

5.3. PROFITABILITY

6. PROJECT

6.1. Set of coordinated activities which are related to each other and work for a specific purpose. It’s an idea, and its decision of execution will be based on valuation techniques.

7. Method of valuation

7.1. Set of tools / techniques that allow whether a project is acceptable or not.

8. Economic engineering

8.1. Set of financial and industrial tools for decision making.

9. DEPENDENCY

9.1. Mutually exclusive

9.1.1. Between 2 projects, just one project can be executed and the other must discarded.

9.2. Independent

9.2.1. The execution of a certain project won’t affect the feasibility of another project.

9.3. Interdependent

9.3.1. Complementary: Several projects arise from the selection of a given project

9.3.2. Competitive: A set of projects are proposed while only the best must be selected.

10. PROFILE

10.1. Private

10.1.1. It’s execution will be determined based on the role on the enterprise

10.1.2. New business units

10.1.2.1. creation of a new product or service

10.1.3. Changes in the business units

10.1.3.1. only changes into the means of production.

11. STAGES OF A PROJECT

11.1. idea

11.2. prefeasibility

11.3. investment

11.4. operation

11.5. feedback

12. CANVAS MODEL

13. Data Retrieval & External Forces

13.1. EXTERNAL FORCES

13.1.1. 7 P’s of Marketing

13.1.1.1. PRODUCT

13.1.1.2. PLACE

13.1.1.3. PRICE

13.1.1.4. PROMOTION

13.1.1.5. PEOPLE

13.1.1.6. PROCESS

13.1.1.7. PHYSICAL ENVIRONMENT

14. QUANTITATIVE ANALYSIS

14.1. Net present value

14.1.1. A present value of future cash flows so we can evaluate if its better than the initial investment.

14.1.2. The NPV uses s a discount rate like inflation, sector rate of return, loan interest rate etc.

14.1.3. If the NPV is BIGGER, then it should be accepted, if not it should be rejected

14.2. Internal Rate of Return

14.2.1. With the IRR we can get the breakeven discount rate of any project. It is related with the NPV. If the IRR is lower than the discount rate, the project should not be considered.

14.3. Modified Internal Rate of Return

14.3.1. It assumes different rates for the cash flows

14.4. Return on investment

14.4.1. It evaluates the % of the return provided by future discounted cash flows.

14.5. CAGR

14.5.1. It presents the annual percentage return on a long term investment.

14.6. Return period

14.6.1. It indicates when the project will start to generate returns.

14.7. Discounted Return period