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Project Finance and Investment Modelling


Project Finance and Investment Modelling – Two Day Programme 


The purpose of the course is for participants to learn how to build a project finance and investment model using best practice principles. This will include the development of integrated financial statements and the mastering of the main Excel techniques (such as forecasting, risk issues, differing scenarios and optimisation). They will learn how to deal with more problematic modelling issues and gain hands-on experience of applying these skills.

The main topics covered are:

• International model design
• Integrated financial statements
• Debt modelling and sizing
• Risk, sensitivity and optimisation
• Gain hands-on modelling experience

Module 1 Overview of the Course and Model Case

  • Common modelling errors
    • Systematic Design Method
    • Model design and structure – key steps
    • Key Excel features and techniques
  • Practical: producing a model framework using best practice

Module 2 Production Forecast

  • Production sales and volume
  • Input prices and gross costs
  • Practical: completing operating statements

Module 3 Fixed Assets

  • Depreciation of fixed assets
  • Schedules and workings
  • Practical: CAPEX and depreciation schedules

Module 4 Project Financing and Cash

  • Financing and loans
  • Loan drawdown
  • Rate, terms and repayment
  • Debt amortisation schedules
  • Practical: Loans schedule

Module 5 Income Statement and Balance Sheet

  • Adding income and balance sheet
  • Model checks on consistency
  • Dealing with any circular references
  • Practical: completing and checking the initial statements

Module 6 Cash Flow and Ratios

  • International cash flow
  • Cash flow to equity and debt providers (CFADS)
  • Loan life / project life ratio
  • Annual debt service ratio
  • Interest cover
  • Practical: producing single point answers

Module 7 DCF and Initial Value

  • Discount rate
  • Methods of adding terminal value
  • Producing an equity valuation
  • Practical: adding equity valuation to the template

Module 8 Risk and Sensitivity

  • Adding risk techniques
  • What-if analysis
  • Dynamic changes
  • Practical: Adding sensitivity and scenarios

Questions and Answers