What Is Financial Feasibility

By Author: khazraji
Total Articles: 2
Comment this article

For assessing the proper financial perspective it is necessary to study the performance over a period of 3 or 4 years. Financial feasibility covers the study of
a) The cost of project
b) cost of production and profitability
c) Cash flow estimates
d) proforma balance sheet
The cost of the product should include the study of the capital cost of the project and net working capital requirements.The sources of capital include share capital, debenture reserves and surpluses, long term borrowings and deferred payments

Financial analysis seeks to ascertain whether the proposed project will be financially viable and sound.It is essential to ensure whether the project will be able to meet the burden of the service department and whether the proposed project will satisfy the return expectations of those who provide the capital. Financial analysis will also indicate the relative position of the project as compared with other opportunities available for investment.