ENTREPREUNARIAL PROJECT MANAGEMENT 




LOPEZ-KAUFMAN Régis

MEHRA Venkatesh

PAYBACK METHOD



  • When you are willing to buy a new machin you have to be sure to make a good investment for the company



  • One proof is if it will be profitable soon thanks the new Cash flow generates by the machin

  • The PAYBACK method calculate in how many times (year/month/day) your investment (cost of the machin) will be profitable

PROJECT 1 or PROJECT 2



Project 1 

Investment : 25,000 Rs


Project 2

Investment: 35,000 Rs


We have to calculate the cumulative Cash Inflows 


Project 1 : We payback the machin after 10 years



Project 2 : 35,000 - 32,000 = 3,000

                   (3000/4000)x 365 = 274 days

                   We payback the Machin after 8 years and 274 days



Conclusion : Project 2 is generate more Cash Inflows and he is more profitable then we have to choose this project instead of the project 1 

N.P.V. METHOD

NPV Method for Net present value is used in capital budgeting to analyze the profitability of a projected investment or project.


If the N.P.V is negative, the investment is considering as non profitable if it is positive the investment is considering as profitable

  • Ct = net cash inflow during the period t
  • Co = total initial investment costs
  • r = discount rate
  • t = number of time period

SOME ISSUES

Difficulty to predict future Cash Inflows 



Difficulty to identify the accurate Discount rate 

RATIO ANALYSIS


  • One of the most important thing for a business is to have a clear idea of his financial health at any time.



  • The evaluation of the financial situation is fundamental for the company in Intern for decision making but also in extern for raise money to Investors or lending to a bank 

   

 

For evaluating their is a very powerful tool it's the ratio !





Ratio analysis is the quantitative analysis of financial informations (level of debt, level of equity,...)from a company financial statement

  • The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations. To evaluate this ability, the current ratio considers the current total assets of a company (both liquid and illiquid) relative to that company’s current total liabilities.


  • More the ratio is high more the company is able to pay these obligations


Debt Equity Ratio = Long Term borrowing/Equity share+Preference Share+Reserve+profit and Loss



  • Debt/Equity Ratio is a debt ratio used to measure a company's financial leverage, calculated by dividing a company’s total liabilities by its stockholders' equity. This ratio indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders’ equity.


  • Higher the ratio is lesser bank will accept to provide a new loan to the company



P.E.R.T. TECHNIQUES


  • Time is often considering like the most problematic and crucial thing for the success of a project 

You have to make an accurate estimate, no project can be completed within the budget and the target completion date. 


  • One tools prove his accuracy for time project managing : 

The P.E.R.T. (Program Evaluation and Review Technique) which was developed for the U.S. Navy Special Projects Office in 1957 to support the U.S. Navy's Polaris nuclear submarine. project

The best thing about PERT is its ability to integrate the uncertainty in project times estimations into its methodology.

It also makes use of many assumption that can accelerate or delay the project progress.


ESTIMATION BY MANAGING TEAM OF FASTEST, AVERAGE, MAXIMUM TIME COMPLETION


Expected completion time = (fatest + 4 x average + maximum) / 6 


Variance = (Maximum - fastest)^2 / 6^2


Standard deviation of the project = Square of the Variance



WHAT IS THE CRITICAL PATH ?

QUESTIONS ?

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Public - 9/2/16, 6:24 AM