Monday 13 December 2021

What are the main elements of the feasibility analysis report?

The feasibility analysis report mainly includes the following:


The necessity of project construction. 

From the project level analysis of the proposed project in the realization of the enterprise's own sustainable development goals, important strategies and the need to survive and grow capacity, and from the level of national economic and social development to analyze whether the proposed project meets the requirements of rational allocation and efficient use of resources. 


Whether it meets the requirements of regional planning, industry development planning, urban planning, whether it meets the requirements of national industrial policy and technical policy, whether it meets the requirements of environmental protection and sustainable development.

Market analysis. 


The investigate and forecast the supply and demand situation and prices of the proposed project products and major inputs in the international and domestic markets, study and determine the target market of the products, forecast the market share that may be occupied on the basis of competitiveness analysis, and study the marketing strategy of the products.

Research on the project construction program. mainly include: 

The construction scale and product program, process technology and major equipment program, site (plant) site selection, main raw materials, auxiliary materials and fuel supply programs, general map transportation and civil engineering programs, public, auxiliary engineering programs and energy conservation, water conservation measures, environmental protection and management measures, occupational safety and health measures and fire facilities program, project organization and human resources allocation.

Investment estimates. 


The estimate the investment required for the project on the basis of determining the project construction programme. estimate the construction cost, equipment acquisition fee, installation project fee, other construction costs, basic reserve fee, price increase reserve fee, construction period interest and working capital.

The financing programs. 


On the basis of determining the amount of investment in investment estimate, the financing subject, source of funds, capital structure and financing cost and financing risk are studied and analyzed. comparing, selecting and determining financing schemes in the light of the financial analysis of financing schemes.

Financial analysis (also known as financial evaluation). 


The estimate operating income and cost expenses in detail according to the prescribed accounts, forecast cash flow, prepare financial statements such as cash flow statements, calculate relevant indicators, conduct financial profitability, solvency and financial viability analysis, and evaluate the financial feasibility of the project.


Economic analysis (also known as national economic evaluation). 


The economic analysis should be carried out on projects whose financial cash flow does not fully and truthfully reflect their economic value. from the point of view of the effective allocation of social and economic resources, identify the direct and indirect economic costs and benefits of the project, compile the flow table of economic cost benefits, calculate the relevant evaluation indicators, analyze the contribution of the project construction to economic development and the social resources consumed by the project, and evaluate the economic rationality of the project.

Economic impact analysis. 


The projects with greater regional and macroeconomic impact, it should also be analyzed from the perspectives of regional economic development, industrial layout and structural adjustment, regional fiscal revenues and expenditures, income distribution and whether they may lead to monopoly. for projects involving national economic security, it should also be analyzed from the perspectives of industrial technology security, resource supply security, capital control security, industrial growth security, market environment security, etc.

The analysis of resource utilization. 


For projects with high energy consumption, water consumption and large consumption of natural resources, energy, water resources and natural resource utilization efficiency should be analyzed;

Analysis of land use and resettlement programmes for migrants. for new construction land projects, we should analyze the project land use situation and propose measures to save land. projects involving relocation and migration should also analyze the rationality of relocation and resettlement programmes.


Social evaluation. 


For projects involving the public interest, such as rural poverty alleviation projects, on the basis of social survey, we should analyze the social impact of the proposed project, analyze the needs of key stakeholders, support and acceptance of the project, analyze the social risks of the project, and propose solutions to prevent and solve social problems.

Uncertainty analysis. 

Conduct sensitivity analysis, calculate sensitivity coefficients and critical points, identify sensitive factors and their impact on project effectiveness, make breakeven analysis, calculate breakeven points, and roughly predict the project's ability to adapt to market changes.

Risk analysis. 


The main risk factors of the project are identified, the degree of risk is estimated by qualitative and quantitative analysis methods, and countermeasures to prevent and reduce risk are proposed.

Conclusions and recommendations.

After the above analysis and research, we should summarize the advantages of the recommended scheme, identify the main problems that may exist and the main risks that may be encountered, make clear conclusions on the feasibility of the project, and make recommendations on the next steps of the project and the problems that need to be solved in the implementation of the project.

Hope to adopt!

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