It is increasingly common for logistics engineers to expand their operating range in terms of services. Although this section of the Economic Viability Study is more typical of a tax consultant than a logistics consultant, it is no less true that there are many aspects that when brought together in an overall project, can help reduce costs for the overall calculation of the project in question.
Movint’s experience as a logistics consultancy has led us to be able to offer this service at a very high level of quality. This has in turn made it possible to fragmentize the service into three complexity levels, in order to adapt to the needs and complexities of each case.
Level 1: Calculation of costs and return on the investment.
In order to conduct this study it is necessary to know the current situation, with the expenses and costs directly associated with the area of investment and investment, direct costs related to it. This way we can make the comparison between the two scenarios (current and new), calculating the return on the investment.
In cases where no current situation is available (because it is a new business), using the project data, we calculate the return on investment based on the earnings expectations for the activity.
At this level we do not develop the Financial Statements (Balance Sheet and Profit and Loss Account).
In order to conduct this analysis it is necessary to know:
- The project’s time period.
- Volume of activity.
- Pricing model.
- Details on investments.
- Amortization method.
- Minimum time frame for return on investment.
- Current situation.
- Directly associated expenses.
- Financial ratio forecasting.
- Sources and system for financing of investment.
The result is a series of tables detailing the investment, its yearly repercussion on costs, a calculation of its return, and a comparison with the current situation, so as to be able to evaluate whether it is a “good” investment.
Level 2: Static viability plan
At this second level, we assess the Financial Statements. Therefore there will be some additional information needs.
Internally, the documentation already includes detailed accounts, and allows for a degree of flexibility, without actually being a simulator. There will not be a user control panel where key project parameters can be modified.
Added to all the aforementioned needs are the needs from having to make Financial Statements:
- The composition of the Equity.
- The structure and functions of the Corporate group (if there is one).
- Structural expenditure.
- Other semi-structural expenditures, such as entry and exit transport, equipment renting, etc.
- Check if the client wants to break down the information by product lines, markets, and other key features of the business.
- How is the investment distributed among different groups in order to calculate the repercussion.
- How the distribution of structural expenditures is administered. Distribution systems.
The result obtained, in addition to those already obtained from the first level, although in greater detail, is a (partially) dynamic file that allows for small modifications to be made.
Level 3: Viability plan with simulator
With level 3, a file with all the necessary data is included, with a control panel, from which all key project parameters can be modified and that automatically updates all the tables and Financial Statements.
The information needs are essentially the same as in level 2. The only thing that would need to be known is to what level simulator is to obtain for items that are projected to be variables. For example, how many references are wanted within the product lines in order to adjust the simulation.
The result is that obtained at level 2, in more detail if possible, and the simulator.