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Project Finance And Capital Budgeting

COURSE DESCRIPTION

Objective of this course is to understand principles & modeling techniques of capital budgeting and project finance in detail. Concept of cost of capital, capital budgeting calculation methodology is explained with the help of case studies. In this program, you will also learn the project assessment framework to be followed, evaluating cost of project, feasibility analysis, means of finance, ratios, risk analysis, how to mitigate the risk, project fin modeling – include all financial statements and sensitivity analysis.

CERTIFICATION AWARDED

On successful completion of the program, you would be awarded the professional certification in “PROJECT FINANCE AND CAPITAL BUDGETING” by Moody’s Analytics and EduEdgePro.

COURSE COLLATERALS AND HIGHLIGHTS

  • Comprehensive excel models for capital budgeting and project finance modeling
  • Excel Dashboards for ratio analysis
  • Exhaustive reading material covering detailed 4 sections outlined below
  • Real life case studies on capital budgeting and project finance
  • Practical hands-on Project Finance and Capital Budgeting useful for careers in Project Financing, corporate finance and banks
COURSE OBJECTIVES
  • Finding cost of project and means of financing the project
  • Participant should be able to use various calculation techniques like DCF, NPV, IRR, Payback period
  • Apply a systematic approach to assess project finance transactions
  • Participant is able to undertake effective decision in capital budgeting and project finance
  • Recognize the key characteristics of a robust project
  • Interpret each of the risks to determine their severity and potential impact on the transaction structure
WHO SHOULD ATTEND
On successful completion of the program, you would be awarded the professional certification in “PROJECT FINANCE AND CAPITAL BUDGETING” by Moody’s Analytics and EduEdgePro.
  • Project Financing
  • Commercial banks
  • Corporate Finance
  • Investment funds or fixed income investors, interested in the principles of structuring project finance debt
  • Investment Banking

Fast Facts

Certified by : Moody’s Analytics and EduEdgePro

  • Overview of Capital Budgeting
  • Capital Budgeting Strategy
  • Concept of Cost of Capital
  • Cost of Capital Calculation Techniques
  • Introduction to Project Finance
  • Project Finance Assessment Framework
  • Project Finance Modeling
  • Important Ratios in Project Finance & Analysis
  • Risk Assessment & Mitigation
  • Structuring Project Debt

DETAILED CURRICULUM

This section will run the participant through basics of capital budgeting and introduce concepts of opportunity costs, sunk costs, capital rationing etc. It will also explain capital budgeting strategies like capital expansion and reduction strategies, risk levels and impact of financing alternatives. The participant shall get an overview of capital budgeting in this section.

Overview of Capital Budgeting
  • Overview of Capital Budgeting
  • Opportunity Costs
  • Sunk Costs
  • Capital Rationing
  • Capital Budgeting in a Budget Format
  • The Post Installation Review
  • Capital Budgeting Strategy
    • Capacity Expansion Strategy
    • Capacity Reduction Strategy
    • Risk Levels
    • Duration
    • Impact of Financing Alternatives
    Data Input Techniques
    • Flash Fill
    • Using Fill Handle
    • Absolute and Relative Referencing
    • Working with Named Ranges
    • Inserting Comments

In this section, the concept of cost of capital is explained at length with examples. Participant will learn how to calculate weighted average cost of capital. Participant will also understand the concept of hurdle rate in capital budgeting. Calculation techniques of capital budgeting are taught at length. These include NPV Calculation, Discounted cash flow based approach, internal rate of return, Payback period etc. Decision making using each technique is explained. Participants will work on a case study that will help them develop conceptual clarity.

The Cost of Capital
  • Cost of Capital & It’s significance
  • Cost of Debt
  • Cost of Preferred Stock
  • Cost of Equity
  • Weighted Average Cost of Capital
  • Hurdle Rate
Calculation Techniques
  • Predicting Cash Flows
  • Time Value of Money
  • Net Present Value
  • Scenario and Sensitivity Analysis
  • Internal Rate of Return
  • Incremental Internal Rate of Return
  • Terminal Value
  • Profitability Index
  • Simple Payback Method
  • Discounted Payback Method
  • Breakeven Analysis
  • The Tax Rate
  • Decision Making
Capital Budgeting Controls
  • Capital Budgeting Controls

Objective of this section is to give participants a brief on what is project finance. This section explains the basic concept of project financing. The section also talks at length about the framework to be followed to assess viability of a project which includes analyzing project scope& structure, cost of project, evaluating cost of project, feasibility analysis and means of financing available.

Introduction to Project Finance
  • What is Project Finance?
Assessment Framework
  • Project Scope
  • Project Structure
  • Project Sponsor & Role
  • Market Assessment
  • Feasibility Analysis
  • Estimating the cost of the project
  • Evaluating Regulatory Framework
  • Financial Feasibility & Means of Finance

This section covers Project finance modeling and Risk Analysis. Participants will learn about projecting the three financial statements and using techniques like DCF, NPV, IRR etc. in project finance. Breakeven analysis and sensitivity analysis will also be explained with examples. Important Ratios in Project finance are also covered. Assessment of market risk and operational risk and their mitigation is explained. Participants will be able to develop an understanding of relevant issues for optimizing the risk-­-reward payoffs for lenders. At the end a case study is given that will help candidates apply these concepts and prepare a project finance model.

Project Finance Modeling
  • Introduction to Modeling Steps
  • Projecting Income Statement, Balance Sheet & Cash Flow Statements
  • DCF based approach
  • NPV Calculation
  • IRR Calculation
  • Sensitivity Analysis
  • Scenario Analysis
Important Ratios in Project Finance & Analysis
  • Understanding Objects in VBA
  • Liquidity Ratios
  • Solvency Ratios
  • Profitability Ratios
Risk Assessment & Mitigation
  • Classification of Project Risk
  • Operational Risk & Mitigation
  • Market Risk & Mitigation
Structuring Project Debt
  • Terms of Financing
  • Loan Documentation
  • Monitoring Project Debt
  • Funding project cost over-runs

DETAILED CASE STUDY AND EXCEL IMPLEMENTION

Let us bring our classes to you! Our in-house training is ideal for groups of 10 or more people. We can provide Off-the-shelf training in the form of our classic courses, or we can provide bespoke training, tailored to your organisational goals and objectives. Please contact us for further details.

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