Financial Viability Assessment

...see how your proposed project aligns with executive leadership financial strategy 

 

Momentum Financial Viability Assessment quickly measures the financial value of a proposed project to see how the project aligns with executive leadership financial strategy...enabling strategic project selection...globally 24x7.

Financial Viability Assessment | Guidelines 

Executive leadership establishes guidelines for financial viability assessment that include three key financial metrics, three financial ratings and real-world financial factors that consider the time value of money and its impact on future cash flow.

  •   Key Financial Metrics​

    • Rate of Return
    • Payback Period
    • Present Value

 

  •   Financial Ratings​ (Poor/Moderate/Good)

    • For each financial metric, executive leadership establishes strategic threshold values for "Poor" and "Good" to achieve desired financial objectives...globally 24x7​​.

 

 

  • ​​   Financial Viability Index (FVI)

The financial viability index incorporates all three key financial metrics to guide strategic decision making. Why is this important? A project with a “Good” present value may have a “Poor” rate of return…for example, when a contract lasts a long time but doesn’t pay very much. If present value is the only consideration in project selection, you may unknowingly select projects with “Poor” rates of return…this can be avoided by using FVI to guide strategic project selection to optimize value and make best use of limited resources.

As shown in the FVI equation, the FVI value is relative to "Good"...therefore an FVI value of 1.0 or greater has a financial rating of "Good".

 

 

  •    Financial Factors​

Financial factors account for the time value of money and external factors. Financial factors are applied when calculating each of the 3 key financial metrics to provide a real-world estimate of how future cash flow impacts each key financial metric.

  • Tax Rate

  • Discount Rate

  • Inflation Rate

  • Reinvestment Rate

 ​

Financial Viability Assessment | Process

Quickly assess the financial value of your proposed project and see how it aligns with executive leadership financial strategy…is Good (green), Moderate (yellow) or Poor (red)?

1. Initial Investment: Enter the estimated costs to implement the project.

2. Cash Flow: Enter the estimated future cash flow.

3. Financial Viability Assessment | Results: See the estimated financial value the proposed project and compare it against the current improvement portfolio.

 

  • Take Action

    • Select projects based upon strategic financial values and risk ratings that optimize improvement portfolio value and make best use of limited resources.

    • Guide strategic project selection aligned with executive leadership business strategy...globally 24x7.

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