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FINANCIAL FEASIBILITY STUDY

A detailed study of projects, including projects that assesses the financial viability of a future business venture. Before deciding the viability or success of a project, and evaluating it, the Financial feasibility takes all financial and non-financial factors into consideration and then makes prediction of the project’s future revenue and costs.

What is the purpose of a financial feasibility study?

Do you have a business in mind? Do you want to know the future revenue and costs for the business? Do you want to know whether it will be profitable? A financial feasibility study will attempt to answer these questions in a formal report. The financial analyst will draw on his/her experience, conduct market research and have discussion with the owners/founders in order to commence work on the financial study report.

What are the areas usually covered in a financial feasibility study report?

  • A brief description of the project/future business venture
  • A mention about the project Sponsors/promoters and key management personnel
  • The business model
  • The scope of the work
  • Capital Asset requirements – Eg: Machinery, Motor Vehicle, Interior Fit-out necessities.
  • Human resource requirements
  • Associated pre-operational cost – Legal fees, approval fees, initial stock, rents, training, salaries etc
  • Projected final statements – Profit and loss and cash flow statements.
  • Project evaluations – Using ratios, Payback, IRR, NPV etc
  • Assumptions- It will give the project sponsors a bird’s eye view of the operations before they commit any capital.

What are the Benefits of a Financial Feasibility Study?

  • The financial feasibility study will be a basis to decide to carry out the new business venture or project.
  • Understand the risks and various internal and external factors affecting a potential business
  • Allows the project promoters to take safeguard actions for future threats that might occur.
  • Understand the project capital costs, future revenue and cost streams.

Who are the parties interested in Financial Feasibility Reports?

Founders, promoters, sponsors and Board of Directors to understand financial status of the organization in short term an also in a long term. Investors, lenders, new business partners and venture capital providers are interested on this report which is helpful to arrive at an opinion about future operations of the entity.

MNI ACCOUNTANTS possess an expert team with a experience of over 10 years in assessing project feasibilities. Our team will work close with the client to derive the inputs and assist you justify the proposed project and make it worth an investment for your business proprietors.