Financial Simulation (Modeling) of Complex Investment Projects
Complex and long-term investment projects require a careful and detailed financial planning. A creation of a financial model (project simulation) in accordance with good business practice is an exceptionally strong means for a quality analysis and financial planning of complex projects as well as for a quality preparation of negotiations with investors.
A simulation of a project’s life cycle (by the use of a financial model) will enable the following:
- identification of a financially stable (sustainable) scenario,
- identification of a project’s debt capacity and an adequate financial structure,
- evaluation of cost-effectiveness and analysis of its key indicators,
- analysis of financial risks allocation, susceptibility analysis, scenario analysis,
- preparation for quality negotiations with investors.
Financial simulation (with scenario analysis) is especially useful when it comes to projects with a larger number of input parameters difficult to predict.