The purpose of financial analysis of the plan in the justification reports is to obtain financial and economic indicators to make the appropriate decision.
The ultimate goal of any project is to earn money and profit from selling the product or providing services. But the very important question is how much profit it is profitable to achieve and if so, how much income the shareholder has gained the necessary benefit from his investment. Therefore, in order to achieve the appropriate criteria and indicators to determine the profitability or non-profitability of projects, a series of financial and economic indicators have been defined and used by experts and great economists during the past years.
The purpose of financial analysis of the plan in the justification reports is to obtain financial and economic indicators to make the appropriate decision. The necessary feed is for calculating financial and economic indicators of investment costs and production costs, which are predicted and presented in the technical studies section of the report. In this part of the report using investment costs, production costs, projected annual revenue for the project and other basics and assumptions needed to perform calculations, profit (loss) statement, cash flow statement, forecast balance sheet And other financial and economic tables that are used to calculate the indicators are prepared and adjusted.
In the financial analysis phase of a justification
plan, an attempt is made to answer the question, "What will be the project
from a financial point of view?" At this stage, it is necessary to
determine the income and expenditure situation in each year and the required
capital composition, and if there was no problem, to check the cash flow during
different years. The measures taken to estimate capital and cost in technical
analysis are carefully reviewed and analyzed in this phase. Design analysis in
operational terms, sensitivity analysis and risk analysis are all performed in
the financial analysis phase