Financial Feasibility Analysis

Does the project pay back, and under which assumptions does it stop working?

A financial feasibility analysis turns market, cost and timing evidence into returns. Credence Research builds an editable Excel model with revenue, operating costs, capital spend, financing and cash flow, then tests which assumptions move the answer most, so the decision rests on known risks rather than a single forecast.

When a financial feasibility analysis is needed

It is the step that converts research into an investment case.

Board approval

Present returns with a clear view of what drives them.

Raising debt or equity

Prepare a model that lenders and investors can examine and stress.

Comparing options

Compare plant sizes, locations or technology routes on the same basis.

Reviewing a third-party plan

Check the assumptions in a business plan you have been given.

Which assumptions move returns most

A sensitivity chart ranks the inputs by how far the same change moves returns, so diligence goes where it matters.

Scroll sideways to see the whole figure.

Returns fallReturns riseSelling priceCapacity utilizationRaw material costCapital costStart-up delayBase case
Illustrative. Bars show each input moved up and down by the same amount. Shapes only, not client or market data.

Questions a financial feasibility analysis answers

Returns

  • What NPV, IRR and payback does the base case give?
  • What capital and working capital does the project need?

Risk

  • Which assumptions move returns most?
  • At what price, volume or cost does the project break even?

Financing

  • Can cash flow support the planned debt?
  • How do ramp-up and delays affect cover ratios?

What public data can show, and what needs research

The model is only as good as its inputs, so each input is tied to evidence and given a range.

Where desk research is usually enough and where primary research is needed
TopicPublic data showsStill uncertainHow it is tested
RevenueMarket prices and volumesPrices the project will actually realizeMarket and pricing research
Capital costReported costs of comparable plantsCost for this capacity, location and yearCAPEX benchmarking
Operating costUtility tariffs, wages and input pricesConsumption per unit for this processUnit cost build-up and expert input
FinancingTypical terms in the sectorTerms available for this projectDiscussion with the client's advisers

Illustrative example

This example is illustrative. It shows how a study could be designed and does not describe a client project.

Comparing two plant sizes

Illustrative example
Business question
A company must choose between a smaller plant now and a larger plant in two years.
Evidence gap
Both options look attractive in the company's own plan, which uses a single price forecast.
Research method
One model for both options, with price, cost and timing scenarios and a sensitivity analysis.
Output
Returns for each option under each scenario, and the assumptions that decide which option wins.

What this study does not include

Clear limits keep the findings honest and the scope easy to price.

  • Audited projections or accounting opinions
  • Tax structuring and tax opinions
  • Arranging finance or acting as a lender's adviser

Where a decision needs engineering or legal sign-off, the study says so and lists the questions for that review.

What you receive

Outputs are agreed at scoping; this is a typical set.

  • Editable financial model

    Excel model with revenue, costs, capital, financing and cash flow, unlocked and documented.

    Use it to run your own cases.

  • Scenario and sensitivity analysis

    Base, upside and downside cases, and the effect of each key assumption.

    Use it to see which risks matter.

  • Assumption register

    Every input with its source, date and range.

    Use it to answer questions from investors and lenders.

  • Findings memo

    Whether the case holds and what would change the answer.

    Use it to support the investment decision.

How a feasibility study works

  1. 1

    ScopingThe decision, product, capacity, locations and level of study are agreed, along with what is in and out of scope.

  2. 2

    Primary and secondary researchAnalysts combine company filings, trade and tariff data, capacity announcements and price series with interviews of producers, buyers, suppliers and industry experts.

  3. 3

    ValidationKey figures are cross-checked against at least two independent sources, and every assumption is logged with its source and date.

  4. 4

    ModelingDemand, cost and financial models are built in Excel with base, upside and downside cases, so each assumption can be changed and traced.

  5. 5

    Analyst review and decision memoA senior analyst reviews the findings, and the study closes with a memo on whether the case holds, the riskiest assumptions and the next steps.

Frequently asked questions

Request a feasibility study proposal

Describe the product, location and capacity you are considering, and the decision the study must support. A short brief is enough to start.

What happens next

An analyst reviews the brief and replies within one business day with scoping questions. A proposal follows with the study scope, deliverables and timeline.

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