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Considering acquisitions or new developments?

Many products claim to assist with appraisal of acquisitions and new development opportunities.

Many products consider project specific financial measures but without a central investment model, how can you assess the incremental value of such investments? Let alone the incremental NPV, IRR, Payback, Breakeven (for certain portfolios), Opportunity cost , Management efficiencies or Strategic impact?

In the light of HCA pronouncements, new regulatory framework and increasing financial pressures on the sector, it is essential that any investment opportunity is both fully understood and takes account of alternative funds usage - this is where AspreyBI can help.

Our central investment model can be used to assess the incremental value of proposed investments, be they in existing stock, acquisitions or new build, secure in the knowledge that opportunity cost is considered in each investment decision.

Our model calculates and makes sense of individual asset net earnings and other values within stock portfolios. The net earnings value of each asset is calculated from a 30 year projection and rationalised against calculated strategic values and other available financial values - Asset additions of whatever type are evaluated in a similar standard manner to allow their impact to be properly rationalised.

The cost and revenues projected for new investments are rationalised within the central model to identify their overall impact on the portfolio in financial and strategic terms.

Sound investment demands that alternative uses of funds are properly considered.

Without such a central investment model, ad-hoc investment appraisals will be increasingly difficult to justify retrospectively and will suggest poor custodianship.

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