Feasibility Study and Financial Analysis

feasibility study

Feasibility study services have many advantages for business owners. Because you will know and prepare a better plan. Especially in finance, including financial projections, Break Even Points (BEP) and others. Because these financial projections can be used as proposals and financial plans to attract investors.

In general, various aspects are required to prepare a feasibility study. The goal is that the feasibility study has the right analysis so that the business owner can make the right commercial decision. In addition, it can help you see the advantages and disadvantages of a business plan so that it can be improved for the best.

The role of the service in carrying out a feasibility study in the financial aspect. Services for conducting feasibility studies attract various aspects to be examined, including financial aspects. Why? Because this aspect has a big role when looking at how much funding is required. Then, this aspect can also be used to see future commercial projections.

Therefore, if this financial aspect has good analysis results, you can get more benefits at the start. Because you can attract a lot of investors so that the funds needed for the implementation of the initial plan can be completed properly. At least, there are important matters in the financial aspect that require services to conduct a feasibility study, namely:

  • Break Point Point (BEP)

BEP is used as a ratio that assesses how long it will take a business to recover previously spent capital. BEP is only used to find out during the month or year of operation that you can “return to investment”.

In addition, this can also be a good start for investors. If the time to return the capital is faster, the profit earned will be more and more so that investors can get results in a fast time and the amount received is also important. The role of the experts in the feasibility study in this case is to calculate and analyze the BEP according to market conditions.

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Thus, the financial projections provided are more realistic and relevant so that you can have a mature estimate of BEP. In addition, the use of the services of these experts can be a weapon to convince investors. Because the analysis and calculations have been tested by experts.

  • Internal rate of return (IRR) and Net Present Value (NPV)

Other ratios used in the financial aspect are IRR and NPV. Both are profitability measures commonly used in financial projections. The difference is that sorting is used to look at the rate of return for an investment and vans to see whether or not an incoming investment will offer the company an advantage.

It can easily understand that these test are usually used by business owners, whereas IRR is used by investors. These two things actually complement each other because if the van value is good, the IRR value also occurs. Well, experts in feasibility studies play a big role in preparing the financial aspects of your business plan. So that the value of the two ratios becomes reliable to convince all parties.

  • Reduction Recovery Period and Recovery Period

Reduction Recovery Period and Recovery Period are usually used to see how long the invested funds can be returned. The difference is that the Reduction Recovery Period pays attention to the issue of time value of money while the Recovery Period . Both are very important because they can provide a profitable return on investment for both business owners and investors.

However, with feasibility study, the analysis of these two ratios will be more precise. Because considering various things that are needed in accordance with valid data

  • Profitability index

This index is used to view and assess each investment project undertaken and estimate profitability.

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