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Worksheet Templates. Monday , April 02nd , 2018 - 12:53:39 PM

Real life applications for a cash flow worksheet vary widely, from stock analysis to project finance, even the government! This is a real life case study of a financial analyst using a cash flow worksheet at a civil engineering firm to forecast the profitability of a bridge project. It demonstrates some universal components of such a project, as well as one unique way to estimate long term value.

On the revenue side, Daves past experience with the City of Metropolis and similar projects indicate payment will come in 3 large chunks, then a revenue share of the bridge tolls for 10 years. The 3 large payments are what ESP is bidding on, and they need to cover the costs of each phase. Dave also adds a variable profit margin above costs. Using this profit margin as a variable, his goal is to estimate the lowest margin ESP can charge above its costs to ensure NPV exceeds the companys standard project bidding hurdle rate of 12%.

In the last step of his cash flow worksheet, Dave sums the expenses and revenues for each year and all 5 scenarios. He charts these out in graphs with a horizontal line for minimum acceptable return. ESP has access to public project funding at a 6% interest rate, to which he adds 3% for additional risk factors, for a 9% discount rate. Finally, he discounts the net returns per year under all scenarios at 9%, and calculates an NPV for each revenue path. This gives him 5 project values at 5 different revenue assumptions based on his variable markup. At least 3 of these NPVs must exceed the companys 12% hurdle rate in his cash flow worksheet for the bid to viable.

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