Project Financial Analysis

Posted on Aug 31, 2024 in Mathematics

Reinvestment Balance

4.13.4 – Balance of Personnel

The cost of labor is one of the main items of the operating costs of a project. The relative importance they have within them will depend, inter alia, the degree of automation of the production process of specialization of staff required, the labor market conditions, labor laws, the number of shifts required, and so on.

The study of the project requires the identification and quantification of personnel needed in the operation to determine the cost of pay per period.

The calculation of remuneration will be based on market prices and current labor considerations on future changes in labor costs. For its calculation should be considered the exit for the company to be created with the project, which includes, besides the salary or wages, social laws, bonds or food collation and mobilization, bonuses, production bonuses, etc..

The development of a personal balance allows to systematize the information regarding the labor work and calculate the amount of remuneration for the period. Below is deemed as a Balance personal example for different years, (the costs are at UF):

Balance of Staff

4.13.5 – Balance of Earnings

It must estimate the balance of payment for each year (the costs are in UF):

Balance of Remuneration

4.13.6 – Material Balance

The calculation of the material is made from a production schedule that first defines complete the type, quality and quantity of materials required to operate at production levels expected. Subsequently, more compatible with inventory levels and procurement policies, will be paid its value.

The consideration of stock levels is important because it will determine lots purchases that reconciles the cost of storage and conservation of those stocks with the discounts that are available in volume purchasing of materials required.

It is important that the materials to be studied not only those directly (elements of conversion in the process) but also the indirect or complementary to the process, ranging from personal hygiene to lubricants for maintenance or packaging for the product finished.

In estimating the cost of materials is possible to determine the cost to different volumes of production and obtain the total cost of materials per session, as well as for labor.

In the material balance should be considered the unit of measurement to allow for their quantification. There are, however, many costs which by their nature can not be grouped around a variable common. In this case, we call on a stock of general supplies including all those inputs that are beyond classification.

Estimates of the Balance of materials which will be obtained as an example, and which are the variables that must be taken into account, the above must be estimated for all years of project (the costs are at UF):

Material Balance

4.13.7 – Input Balance

It must estimate the balance of inputs to complement the material balance for the above must be estimated for all years of the project (the costs are at UF):

Input Balance