Use Case: During the Project Development Phase
During the project development phase, it quickly becomes necessary to assess its economic viability. Depending on the company, this analysis may be conducted by the finance team or by the development/construction team.
Since these projects are still in uncertain stages, decision-making must rely on a simple tool to ensure swift execution: the structure of financial models and the assumptions used are generally standardized. This is even more crucial when technical teams are responsible for editing the models, as one of their primary needs is ease of use.
The simplification and standardization of input data often require modeling shortcuts, which must later be adjusted when the project reaches the financing stage. This update allows for more accurate profitability projections and helps determine the amount of debt the project can sustain.
In the first case, it’s important to gain user buy-in not only through visual appeal but also through clear navigation and ease of input for the required information. In the second case, the data structure is key, as it ensures the ability to modify a model — and, in the worst-case scenario, at least allows for simple copy-pasting between different files
In a traditional spreadsheet-based model, the challenge lies in the file’s structure and its ability to evolve into a more advanced model.
What are the key points related to financial modeling during the project development phase
Peerception models differ from traditional spreadsheets through an expressive and intuitive interface. The structure of the various components of a financial model is visually represented by flexible blocks, both in their creation and editing. It becomes very easy to add a forecasted capital or operating expense by adjusting, for example, the applicable inflation rate or the period during which the expense will be contracted.
How does the Peerception application address these challenges?
Is the structure of your models and some associated assumptions recurring? You can create a predefined template that can be reused when building new financial models.
Several team members working on the same project? The application allows for access sharing. All information is centralized in a single file, eliminating the need to duplicate or create multiple versions of the same document.
What are the benefits ?
In summary, this initial evaluation phase involves just a few actions:
Create a model from a predefined template.
Add or remove expenses and revenues based on quotes or contracts.
Modify assumptions related to these expenses and revenues.
Review the calculated key indicators (IRR, NPV, etc.).
Make a decision.
Once the decision is made and the model is ready to be shared with the finance teams, it can simply be shared through the application. The teams will then be able to refine the model’s structure, update certain assumptions, or add financial debt.
With the application, you gain:
Simplicity, with a very limited number of steps to calculate and update your key indicators.
Reliability in your models, thanks to a fixed framework and editing limited to economic assumptions.
The ability to quickly adapt your model structure, thanks to the modularity of Peerception models
