OBJECTIVE OF THE FINANCIAL ECONOMIC ANALYSIS
An economic and financial analysis projects us an economic evaluation of any proposed investment; as through assessments we conducted a study or can we know whether it is profitable or not that investment.
The investment is known as an expense to the creation, aimed at capital goods and the realization of projects that are presumed lucrative.
Production costs consist or consist of seven (7) elements which are: raw materials, direct labor, Manpower Indirect, Indirect Material, input costs, maintenance costs, depreciation and amortization charges.
SOURCES OF FINANCING FOR A PROJECT
The financial study.
This study aims to identify the sources of capital at the time of investing.
Two sources are identified thus:
1. Internal Sources
Bond issue: papers are issued by the enterprise value determined for the sale and raises capital. Creditors are not shareholders bonus.
Issue of Shares are roles through which the company makes money and owns a particular and actions and is entitled to the benefit of financing. The cost constitute the interest cost you pay for the use of money.
Dividends: These are the earnings that should exist between the differences in income and expenses, when these dividends are to be taken decisions to do with them.
2. External Sources
Along these banks are providing loan facilities to investors.
The loans are assumed to:
· Short-term (1-10 years)
· Medium-term (10 years)
· Long-term (over 10 years).
The structure of the financial analysis is made up of an Economic and Financial Study Study, which implies that a financial analysis of any project includes the following aspects for economic evaluation:
· The competitiveness of the market,
· The financial capacity of the company,
· The Social Economic Status and perspective of the overall country.
One must be careful in the financial analysis of any project, that is, regarding financial decisions to be taken by the Company to take any decision must be made regarding the prospects of the company.
· Investment Decisions.
· You are associated with the project objective.
OPTIMIZATION OF FINANCING
Although the evaluation of a project should be carried out independently of the financing sources, it is clear that the more convenient financing conditions are to be achieved, the more attractive the result of a project.