Economic and Financial Feasibility Study: learn about the benefits

Every entrepreneur, when investing in a project or venture, seeks a positive financial return. The economic and financial feasibility study is an in-depth analysis of the company or project to be invested with the intention of knowing if its execution is feasible and if the return on investment is satisfactory. Learn all about the economic and financial feasibility study in the following article.

The Feasibility Study can be divided into two segments: financial and economic. While financial feasibility estimates the investment needed to carry out the project or structuring the company, such as capital, revenue, income, disbursement and expenses, economic feasibility is responsible for studying the cost-benefit ratio of the investment, stipulating whether it is economically viable.

The objective of the study is to analyze whether the investment is safe, therefore, it should be made whenever there is a new project in the company, whether it is the opening of a new branch, the implementation of a new technology or even the launch of a new product. It starts with the analysis of the capital needed to start the project, the necessary operations, the cash needed to keep it running, the expenses, revenues and expected income in the short, medium and long term, as well as the estimated profit after overcoming the costs.

How is the economic and financial feasibility study carried out?

The study is carried out through the projection of revenues, costs, expenses, investments and cash flows, making an in-depth analysis of strategic indicators for your business.

Revenue forecast: indicative of the expected revenue and growth margin.

Projection of costs, expenses and investments: forecasting the costs and investments necessary for the operation to work correctly.

Cash flow projection: projection based on the subtraction between what is projected for income and expenses.

Analysis of key indicators: this step should take place after the projections, including the Net Present Value, Internal Rate of Return, Payback and the break-even point.

For the economic and financial feasibility study to be effective, an expert with an impartial approach is needed.

Conmax is a specialist in Accounting Consulting and in carrying out Economic and Financial Feasibility Study. With this study, you assess the risks involved in the investment in order to reduce them, maximize your profits and improve your results. Today, after 35 years of experience, Conmax remains a reference in the corporate accounting solutions market and specializes in Accounting Consulting. Need an Economic and Financial Feasibility Study? Count on Conmax’s Accounting Consultancy, click and find out.

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