Financial Concepts Financial Concepts and Performance and Performance Indicators in WWS- Indicators in WWS- Projects Projects O O p p e e r r a a t t i i o o n n s s M M a a n n a a g g e e m m e e n n t t S S u u p p p p o o r r t t Projec Projec t t Water Water Authorit Authorit y of y of Jordan Jordan
Financial Concepts and Performance Indicators in WWS-Projects OperationsOperationsOperationsOperations ManagementManagementManagementManagement SupportSupportSupportSupport.
Mar 27, 2015
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Financial Concepts and Financial Concepts and Performance Indicators in Performance Indicators in
WWS-ProjectsWWS-Projects
OOppeerraattiioonnss
MMaannaaggeemmeenntt
SSuuppppoorrt t
ProjectProject
Water Water Authority Authority of Jordanof Jordan
OOppeerraattiioonnss
MMaannaaggeemmeenntt
SSuuppppoorrt t
ProjectProject
Water Water Authority Authority of Jordanof Jordan
Financial Concepts
• Return on Investment
• Economic Value Added
• IRR, NPV, Payback
• Break-Even Charts
• Investment-, Profit- & Cost Centres
OOppeerraattiioonnss
MMaannaaggeemmeenntt
SSuuppppoorrt t
ProjectProject
Water Water Authority Authority of Jordanof Jordan
OOppeerraattiioonnss
MMaannaaggeemmeenntt
SSuuppppoorrt t
ProjectProject
Water Water Authority Authority of Jordanof Jordan
Return on Investment
OOppeerraattiioonnss
MMaannaaggeemmeenntt
SSuuppppoorrt t
ProjectProject
Water Water Authority Authority of Jordanof Jordan
Assets
OE
L
(Profit)
(Interest)
Return on Investment (ROI) =
Profit + Interest
Assets
OOppeerraattiioonnss
MMaannaaggeemmeenntt
SSuuppppoorrt t
ProjectProject
Water Water Authority Authority of Jordanof Jordan
> 10 %
OOppeerraattiioonnss
MMaannaaggeemmeenntt
SSuuppppoorrt t
ProjectProject
Water Water Authority Authority of Jordanof Jordan
Profit + Interest
Assets= > 10 %
Assets
B/E Chart
Responsibility Accounting
OOppeerraattiioonnss
MMaannaaggeemmeenntt
SSuuppppoorrt t
ProjectProject
Water Water Authority Authority of Jordanof Jordan
Economic Value Added :
Profit plus Interest (51) + 17
- Cost of Capital (56)
---------------------------------------------
= EVA
OOppeerraattiioonnss
MMaannaaggeemmeenntt
SSuuppppoorrt t
ProjectProject
Water Water Authority Authority of Jordanof Jordan
Ownership and Assets Management
OOppeerraattiioonnss
MMaannaaggeemmeenntt
SSuuppppoorrt t
ProjectProject
Water Water Authority Authority of Jordanof Jordan
(1) (2) (3) (4) (5) (6)
A
OE
L
OE
L
A Rev Exp
OpeningBalance
P & LClosingBalance
State concentrates mainly on (4)“We do not need a clock (faster, harder) but a compass”
Sensitivity Analysis of Assets
-40,00%
-20,00%
0,00%
20,00%
40,00%
60,00%
80,00%
100,00%
-50
-40
-30
-20
-10 0 10
20
30
40
50
% Variance
IRR
OOppeerraattiioonnss
MMaannaaggeemmeenntt
SSuuppppoorrt t
ProjectProject
Water Water Authority Authority of Jordanof Jordan
Sensitivity Analysis
-5,00%
-4,00%
-3,00%
-2,00%
-1,00%
0,00%
1,00%
2,00%
3,00%
4,00%
-50
-35
-20
-5 10
25
40
% Variance
IRR
PRICE
QUANTITY
VAR.COSTS
FIXED COST
OOppeerraattiioonnss
MMaannaaggeemmeenntt
SSuuppppoorrt t
ProjectProject
Water Water Authority Authority of Jordanof Jordan
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