SOUTH EASTERN UNIVERSITY OF SRI LANKA

FACULTY OF APPLIED SCIENCES

DEPARTMENT OF BIOLOGICAL SCIENCES

Degree Program : Bachelor of Science

Academic Year : 2021/2022, Second Year, Semester: II
Course : PAE 22232 - Project Analysis
Course Lecturer : Prof. A. Jahfer (Dept. Accountancy and Finance, FMC, SEUSL)
Hand out No : Introduction
Date: October 6, 2023

1
OVERVIEW OF PROJECT MANAGEMENT

Objectives
• Identify the concepts and attributes associated with project
• Explain project lifecycle
• Explain the Work Breakdown Structure (WBS)
• Project Identification
• Evaluate project proposals using various tools
• Explain the steps of preparing a detailed project report
Concept and Attributes of a Project
•A project is a temporary endeavor that is designed to achieve specific goals and objectives within a
defined timeline, budget, and scope. It involves a unique set of activities that are planned and executed to
achieve a desired outcome.

Some key concepts and attributes of a project are as follows:

•Goals and Objectives: Projects are designed to achieve specific goals and objectives. These goals and
objectives provide a clear direction for the project team and serve as a benchmark for measuring success. The
goals and objectives must be clearly defined, measurable, and achievable within the given constraints.

•Scope: The scope of a project defines the boundaries of the project and identifies what is included and
excluded from the project. A well-defined scope helps ensure that the project team stays focused on
delivering the desired outcome.

• Timeline: Projects have a defined timeline or schedule. The timeline outlines the key milestones,
deadlines, and deliverables that must be achieved within a specific timeframe. It helps the project team to
stay on track and deliver the project on time.
Concept…….
• Budget: Projects have a budget or cost associated with them. The budget outlines the resources required to
complete the project, including labor, materials, equipment, and other expenses. It helps to ensure that the
project is completed within the allocated resources.
• Risk: Projects are associated with risk. Risk can be defined as any event or circumstance that can impact the
project outcome. Identifying and managing risk is essential to ensure that the project is completed
successfully.
• Stakeholders: Projects involve multiple stakeholders, including the project team, sponsors, customers, and
other interested parties. It is important to identify the stakeholders and their requirements and manage their
expectations throughout the project.
• Quality: Projects must adhere to certain quality standards. The quality of the project is defined by the
requirements and expectations of the stakeholders. Quality assurance and control processes must be put in
place to ensure that the project meets the required standards.
• Change: Projects are subject to change. Changes can occur due to various factors such as changes in
requirements, scope, or external factors. It is important to manage changes effectively to ensure that the
project stays on track.
 Classification of Project
• The projects are basically defined in two aspects or categories: Defensive and Aggressive
1. Defensive Project is the project initiated to stabilize and sustain the current business situation.
2. Aggressive Project is the project initiated to enter new business in a commercial manner and
majorly depends upon the future prospective rather than the current scenario

• There is other classification of projects as well which is based on the need of execution and the
time, these can be categorized as:
• Normal Project: Where the time limits are set and adequate.
• Brash Project: Where additional cost are involved to gain time.
• Disaster Project: Anything is allowed to gain time.
• Projects can be further classified into various other classifications like national and international
projects, industrial and non-industrial projects, based on technology, size, ownership, public or
private projects, need, expansion or diversification projects.
 Classification of Project……….
• National and International Projects: This kind of projects is categorized on the basis of
geographical location set as countries. If one country tries to build projects with other foreign
country, such projects are said to be International projects and when it is done in one's own
country, then it is said to be a domestic or national project.
• Industrial and Non-industrial Projects: The projects initiate in one's own country with an
objective to make money and for commercialization, are called industrial projects. For example,
a car manufacturing is an industrial project. While the project which are done for the upliftment
of the society and majorly done with social welfare objectives, are called non-industrial
projects. For example, Building of a canal, agricultural development comes under non-industrial
projects; these are mainly carried up by the government.
• Projects based on Technology: These are largely high technology projects which require lots of
investment and works on new or non-existent technologies like rocket launch project, space
projects, etc. and some other are those projects which use technology which are already proven
like a software ERP project, automobile automation project, etc.
 Classification of Project………..
• Projects based on its size: These projects are based on investment size or capacity of plant to offer
goods or services. This can be further classified down to small, medium and large-scale projects.

• Project based on ownership: This can be further classified as

• Public sector project: Projects which are of the state, center or both forms of governments, are
known as public sector projects
• Private sector project: Projects with a complete ownership of promoters and investors is known
as private sector projects. Owners may be an individual, partnership firm or a company. These
projects are mostly done with an objective to earn profit and thus have a commercial nature.
• Joint sector project: In these projects, there exist a partnership between the entrepreneurs and the
government; it may be from government. These types of partnership occur on the grounds of
expertise and laisioning work and government arranges for the fund in large amounts. For
example, Project of Train, Dams, Information technology parks, Electricity plants and other
similar natured projects.
Classification of Project………..

• Need based projects: Projects are basically driven by certain needs of the organization and these
needs furthers forms the basis of project categorization as Balancing Project, Modernization
Project, Expansion Project, Diversification Project, Rehabilitation Project and Plant Relocation
Project.
• Balancing Project: Augmenting or strengthening the capacity of particular area within a
chain of entire production plant with a purpose of scaling to the capacity in order to have
optimum utilization, is balancing project.
• Modernization Project: Upgrading the technology to increase the productivity and inevitable
approach of technology is called modernization project.
• Expansion Project: When the production capacity of goods and services is to be increased,
the project that is undertaken is known as expansion project.
Classification of Project………..

• Diversification Project: Project undertaken by the organization to completely divert from its core
business is called diversification project. For example, if a Petroleum company decides to enter
into Information Technology business, then the project will be known as diversification project.

• Rehabilitation Project: When a project is started to revive a loss bearing company, is known as
rehabilitation project.

• Plant Relocation Project: When an organization decides to shift its plant from one location to
another, the project started will be known as relocation project.
 Project Management
• Project management is the art of directing and coordinating the human and material resources throughout the
project by using modern management techniques.
• Project management is a set of skills and techniques used to plan, organize, and execute projects effectively
and efficiently. For successful project management, one must have a clear understanding of the project goals,
scope, timelines, and budget.
• The main purpose of project management is to achieve the predetermined objectives of scope, cost, time,
quality and the satisfaction of the participant.
• Project management requires developing a project plan, which outlines the tasks to be completed, the
resources needed, and the timelines for each task. This plan will also need to identify risks and potential
issues that may arise during the project and include contingency plans to mitigate them.
• During the project, one needs to manage the team, track progress, and communicate regularly with
stakeholders to ensure that the project is on track and meeting expectations. The project plan must also
accommodate changes and unforeseen events.
 Project Management -Activities
Project management includes developing and implementing a plan for the project while considering the
available resources such as manpower, material and cost in the organization. Project management involves the
following activities:
• Planning and analysing the objectives of the project
• Measuring and controlling the risk-involved in the project
• Estimating the organizational resources required in the project
• Assigning tasks to the employees related to the project
• Directing and motivating employees to improve their performance
• Organizing project activities
• Formulating the project
• Forecasting trends in the project
• Completing the project on time
• Keeping up the quality of the project
 Project Management - Challenge

• So, Project Management is the discipline of planning, organizing, and managing resources to bring about the
successful completion of specific project goals and objectives.
• The primary challenge of project management is to achieve all of the project goals and objectives while
adhering to classic project constraints--usually scope, quality, time and budget.
• The secondary and more ambitious--challenge is to optimize the allocation and integration of inputs
necessary to meet pre-defined objectives. A project is a carefully defined set of activities that use resources
(money, people, materials, energy, space, provisions, communication, motivation, etc.) to achieve the project
goals and objectives.
 THE PROJECT MANAGER

Organizations face different challenges while managing a project due to various reasons such as lack of management skills and
disputes among the team members.
• Project manager is the individual who manages the project effectively and efficiently.
• In every organization, it is the duty or responsibility of the project manager to manage the projects
Following are the different challenges in project management:
• Unrealistic deadlines: The biggest challenge project managers face is to complete the project on time and meet project
deadlines.
• Communication deficit: In most organizations, project managers and team members do not give adequate information to the
customers.
• Resource competition: There is a lot of competition in resources required for projects due to availability of the resources
such as manpower and material in the organization
• Undefined vision and goals: Sometimes, the goals of a project are not clearly defined.
• Failure to manage risk: Risk is involved in each and every project.
• Insufficient team skills: The biggest challenge in managing a project is
• insufficient skills of team members
Project analysis
• Project analysis is the assessment of every expense or problem related to a
project, prior to the commencement of work on it. After evaluating the
profitability of a project, the selection process is undertaken.
Why projects fail?
• Inadequate preparation
• Lack of data, outdated information, inadequate background information
• Too many objectives, vague objectives
• Unrealistic time targets
• Unrealistic assumptions
• Poor feasibility studies
• Inadequate supervision & monitoring
• Natural causes
Why do agricultural projects fail?
• History records the dismal failure of the so-called project approach. What are the reasons
for this? The concept clearly proves to be sound. It may, however, be that the project
design is flawed or that implementation is at fault; it may be a poor inaccurate project
analysis; or it may be unforeseen economic, natural or political changes.

A comprehensive list of “where things went wrong” will include the following:

• A lack of local ownership and responsibility, ie. participative planning and development.

• Problems of project design and implementation.

• The use of inappropriate technology, cropping systems and animal husbandry.

• Inadequate or inappropriate infrastructure.

• A weak support system.

Why do agricultural projects fail? …

• Failure to appreciate the social and political environment.

• Administrative problems.

• Changing economic situations and market conditions.

• Externally driven project initiatives.

• Problems related to poor project analysis.

• Unrealistic expectations.
In Summary
• It is necessary choose the best proposal among large number of competing proposals for
implementation.
• Main criteria- The project should be capable enough to generate sufficient revenue to
repay the loans or other benefits to justify the investment.
• How much you will get?..... Will depend on your capacity to make a good deal with
resource providers.
• A well formulated comprehensive project proposal will enhance your capacity to
negotiate for a better deal.
 Project life Cycle
• The Project Life Cycle refers to a series of activities which are necessary to fulfill project goals or
objectives.
• Projects vary in size and complexity, but, no matter how large or small, all projects can be
mapped to the following life cycle structure: Starting the project, Organizing and preparing.
• Most of the projects are likely to be private sector driven. They may be manufacturing projects or
they could be petrochemical or civil engineering projects.
• Your key task, as a project evaluator, is to carefully consider each and every project brought to
your attention and see how useful or valuable they are.
• A project cycle tries to describe the various stages that are involved, from the conception of a
project idea to when the project is executed or actually takes off.
Project Life Cycle
 Project Life Cycle
• Initiation:
The initiation phase marks the start of the project. This is the phase where the project is defined, its goals and
objectives are established, and its feasibility is assessed. During this phase, the project team is identified,
stakeholders are identified, and the project charter is developed.
• Planning:
The planning phase is where the project plan is developed. This includes identifying the scope of the project,
creating a work breakdown structure, identifying resources, developing a schedule, and defining the budget. The
project team also identifies and analyzes potential risks during this phase and comes up with risk management
strategies.
• Execution:
The execution phase is where the project work is performed. This includes implementing the project plan,
managing resources, and monitoring and controlling the project work. The project team also communicates
progress to stakeholders and makes necessary adjustments to keep the project on track
 Project Life Cycle

• Monitoring and Control:

The monitoring and control phase is where the project team monitors the project's progress against
the plan, identifies variances, and takes corrective action. This includes tracking progress, managing
change requests, and managing risk.
• Closure:
The closure phase marks the end of the project. During this phase, the project team completes all the
remaining tasks, obtains final approval from stakeholders, and closes the project. The team also
conducts a final review to identify the lessons learned from the project
 Stakeholders of a Project

• Stakeholders are individuals or groups who have an interest or stake in the outcome of a project.
They can affect or be affected by the project's activities, decisions, and results.
• Effective stakeholder management is essential for project success.
• There are multiple stakeholders involved in each project. Some of the common stakeholders
involved in project management are as follows:
• Project Sponsor
• Project Manager
• Project Team: The project team is responsible for executing the project's activities and delivering
the project's outputs. They may include individuals from different departments or functions within
the organization or external consultants.
 Stakeholders of a Project

• Customers:
Customers are the people or organizations who will use or benefit from the project's outputs. They
may be internal or external to the organization.
• Suppliers:
• Suppliers are the people or organizations who provide the resources, materials, or services
required for the project's success. They may include vendors, contractors, or service providers.
Regulators: Regulators are the government or regulatory bodies that have an interest in the
project's outcomes. They may set standards or guidelines that the project must adhere to.
• Effective stakeholder management involves identifying the stakeholders, understanding their
interests, expectations, and requirements, and engaging them throughout the project's
lifecycle. It is essential for managing project risks, managing change, and ensuring successful
completion of the project.
PROJECT ORGANIZATION

Project organization refers to the specific structure, roles, and responsibilities assigned to
individuals and teams involved in a project. Let's understand this with the help of an example.
Suppose a large manufacturing company wants to launch a new product line. To do so, they
will need to create a project team with the necessary skills and resources to manage the project
from start to finish.
The project organization structure may look something like this:
• Project Sponsor
• Project Manager
• Project Team
• Steering Committee: This group of senior executives provides oversight and guidance to the
project manager and project team. They review project progress, provide direction, and make
key decisions.
• Stakeholders
Types of Project Organization

There are three main types of project organization structures:

1. Functional Organization: In this type of project organization, the project team

members are drawn from different functional areas of the organization, such as
engineering, marketing, and finance. Each team member reports to their respective
functional manager, and the project manager has limited authority. The functional
manager is responsible for the team member's performance, and the project manager
is responsible for coordinating and integrating the team's work
2. Projectized Organization:
In this type of project organization, the project team members are organized into a separate
project team for each project. Each team member reports directly to the project manager,
who has complete authority and control over the project. The project manager is
responsible for managing the project budget, schedule, and resources. This structure is
often used in organizations where project work is the primary business function.
3. Matrix Organization:
In this type of project organization, the project team members are drawn from different
functional areas of the organization, and each team member has two reporting lines – to
their functional manager and to the project manager. The project manager has moderate
authority, and the functional manager has partial authority. This structure combines the
strengths of functional and projectized organizations, allowing organizations to balance
resources and expertise while maintaining flexibility. This structure is often used in
organizations where projects are critical to the business but not the primary business
function.
Work Breakdown Structure (WBS)

• Work Breakdown Structure (WBS) is a hierarchical decomposition of project

tasks, deliverables, and work elements that organizes and defines the total scope
of the project. It is a critical tool in project management, used to break down the
project into smaller, more manageable components, and to establish a framework
for organizing and tracking project tasks. The WBS typically starts with the main
project deliverable, and then breaks it down into smaller, more manageable
components or work packages. These work packages can then be further broken
down into smaller, more specific tasks, which can be assigned to individual team
members for execution. The WBS should be developed in collaboration with the
project team and stakeholders to ensure that all key project elements are included
and that everyone is clear on their responsibilitie
Benefits of using a WBS in project management

• Improved project planning

• Better communication
• Enhanced project tracking and monitoring:
• Increased stakeholder engagement
 PROJECT IDENTIFICATION

• Project identification is the first step in the project management process. It involves identifying
potential projects that align with an organization's goals and objectives, evaluating them, and
selecting the best project(s) to pursue.
• The goal of project identification is to determine whether a project is worth pursuing and
whether it has the potential to provide a return on investment.
• The steps involved in project identification are as follows
Idea generation:
The first step in project identification is to generate ideas for potential projects. Ideas can come from
various sources, including customers, employees, management, and stakeholders. Brainstorming
sessions and market research can also help in generating ideas.
Systems for Idea Generation
• Formal system - A management committee
-Planning department or group
-Strategy group
-Periodic strategic planning exercise
-Management audit
-Periodic consulting by external expert
Semi-formal system - Suggestion box system and committees
- Innovation committees
- Joint departmental committees
- Quality circles
- Dialogue session and open house
- Task forces and individual reports/Proposals
• Informal system - Individual experiments
- Individuals encouraged to work as task-force
 Screening:

• After generating project ideas, the next step is to screen them. The screening process involves
evaluating the ideas against a set of criteria, such as feasibility, market potential, and alignment
with organizational goals. The purpose of screening is to eliminate ideas that are not feasible or do
not align with organizational goals.
• An idea that is very risky and novel would typically go through the following steps:
• Initial brainstorming
• Concept testing
• First feasibility report
• Market survey
• Test marketing or pilot project
• Market research
 Feasibility study
Once the ideas have been screened, the next step is to conduct a feasibility study on
the remaining ideas. The feasibility study helps in determining whether the project is
technically feasible, financially viable, and meets other criteria such as legal and
regulatory compliance.
 Project selection
Based on the results of the feasibility study, the next step is to select the best
project(s) to pursue. The selection process involves evaluating the potential projects
against the organization's goals, objectives, and available resources.
 Project charter
After selecting a project, the next step is to develop a project charter. A project
charter outlines the project's objectives, scope, timelines, budgets, resources, and
stakeholders. The project charter helps in providing a clear direction and framework for the
project
 FEASIBILITY STUDIES

• Some investment proposals pass through the stage of project feasibility study.
Large projects usually need a feasibility test before a significant amount of money
is committed. The strategic content in such projects is high but availability or
relevance of internal data is less.
• Project feasibility is a test where the viability of investment is evaluated.
Evaluation is based on secondary but comprehensive data. There are basically
three types of feasibilities evaluated in the project feasibility study:
a. Market feasibility
b. Technical feasibility
c. Financial feasibility
Market Feasibility

• Market feasibility study aims at assessing the potential sales of a proposed

product, if any. This is also known as market analysis. The study of market
feasibility is based on the following factors:
• Study of general economic factors and indicators
• Demand estimate
• Supply estimate
• Identification of critical success factors
• Estimating demand-supply gap
(a) General economic indicators

• The demand potential of any product is likely to have some kind of association
with some economic indicators. Changes in demand and changes in a particular or
some economic indicators may take place simultaneously or with lead or lag.
Some of the important economic indicators include gross domestic product, per
capita income, income disparity, rate of urbanization, population growth rate,
literacy rate, government spending, money supply and others.
b) Demand estimate

Demand projection is a most important step in project feasibility study. Salient points related to
demand estimation are given below:
• End-user profile
• Study of influencing factors
• Regional, national and export market potential
• Infrastructure facilities which may facilitate or constrain demand
• Demand forecasting: Qualitative methods
Time Series Projection Method
Causal Methods
Demand forecasting

• Qualitative method
• Jury of executive method: This method involves soliciting the opinion of a group of
managers on expected future sales
• Delphi Method: This method is used for eliciting the opinions of a group of experts
with the help of a mail survey.
• Time Series Projection Method
• Trend projection method
• Exponential smoothing method
• Moving average method
• Causal Methods: Chain ratio method, consumption level method, end use method, bass
diffusion method, leading indicator method, econometric method
c) Supply estimate

• The past trend of supply of goods can be studied and further extrapolated.
Projections so made need to be adjusted with the help of additional information
like new projects planned by businesses in the economy, import possibility as
governed by import policy, import tariff and international prices. Information
regarding entry barrier is also useful.
d) Estimating demand-supply gap

• Demand and supply estimates, fine-tuned with the changing factors, are compared with each other
for finding a gap. Demand-supply gap, for relevant geographical territory only, is meaningful. It is
quite likely that the forecast of demand and supply may not be a single point forecast. It may be in
terms of various scenarios.
• The demand and supply projections given Table shows calculation of demand-supply gap for a
particular product in the next five years.
• | Year | Demand (Units) | Supply (Units) | Demand-Supply Gap (Units) |
• |------|-----------------|-----------------|---------------------------|
• | 2024 | [Demand value] | [Supply value] | [Gap value] |
• | 2025 | [Demand value] | [Supply value] | [Gap value] |
• | 2026 | [Demand value] | [Supply value] | [Gap value] |
• | 2027 | [Demand value] | [Supply value] | [Gap value] |
• | 2028 | [Demand value] | [Supply value] | [Gap value] |
Demand and Supply Projections for Smartphones (in units)
Year Demand (in units) Supply (in units)
2024 100,000 80,000
2025 120,000 110,000
2026 150,000 130,000
2027 180,000 160,000
2028 200,000 180,000

• Assumptions:
• Yearly Growth Rate:
• The demand for smartphones is projected to grow at a yearly rate of 20% based on market trends and
consumer preferences.
• Supply Capacity:
• The supply capacity is projected to increase gradually due to production improvements, expanded
manufacturing capabilities, and efficient supply chain management.
• Market Dynamics:
• The market is expected to experience occasional fluctuations due to factors like new product releases,
technological advancements, and economic conditions.
Observations and Analysis:
• In 2024, there is a demand-supply gap of 20,000 units (100,000 demand - 80,000 supply).
• The gap narrows in 2025 as supply increases to meet growing demand.
• By 2026, the demand-supply gap is further reduced, and supply is closer to meeting the
demand.
• In 2027 and 2028, supply has been increased to meet and potentially exceed the growing
demand, resulting in a surplus.
• Key Considerations:
• The company may need to invest in increased production capacity, optimize the supply chain,
or adjust manufacturing processes to close the initial demand-supply gap.
• Ongoing market monitoring and adjustments are necessary to align production with changing
demand patterns and avoid excess inventory.
 II. Technical Feasibility
• Technical Feasibility" in project analysis refers to the assessment of whether the
proposed project can be successfully implemented from a technological perspective. It
involves evaluating the technical requirements, capabilities, and constraints associated
with the project to determine if the necessary technology and expertise are available to
bring the project to completion.
• Key components of technical feasibility analysis include:
• Technology Requirements: Identify and specify the technologies needed for the
project. This could include hardware, software, equipment, and other technical
resources.
• Technical Expertise: Assess whether the required technical skills and expertise are
available within the project team or if additional training or hiring is necessary.
• Compatibility: Evaluate the compatibility of the proposed technology with existing
systems, infrastructure, and industry standards. Ensure that the new technology can
seamlessly integrate with the current environment.
 II. Technical Feasibility..
• Risk Assessment: Identify and analyze potential technical risks and challenges that may arise
during the project implementation. This could include issues related to scalability, data
security, and technology dependencies.
• Prototyping and Testing: Consider developing prototypes or conducting testing to validate the
technical feasibility of the project. This allows for early identification of technical issues and
adjustments.
• Regulatory and Compliance Considerations: Ensure that the project complies with relevant
regulations and industry standards. Assess whether the proposed technology aligns with legal
and regulatory requirements.
• Resource Availability: Evaluate the availability of key technical resources, including skilled
personnel, materials, and equipment. Ensure that there are no significant shortages that could
impede project implementation.
• Cost Estimation: Estimate the costs associated with acquiring and implementing the required
technology. This includes not only the initial investment but also ongoing maintenance and
operational costs.
II. Technical Feasibility..
If there is an ample market demand without enough supply, the focus should shift
over to technology. The following inquiries must be made with respect to
technology analysis:

a) Availability of commercially exploitable technology and its alternatives:

If technology is available, then should one buy the latest technology or would an old
one be fine? Usually, in a cheap labour economy, less than the latest technology
works fine from the labour-to-capital ratio angle. However, the choice has to depend
on the effects of technology on the desired quality of product and cost of product
versus investment needed in a given technology.
 II. Technical Feasibility..

b) Transferability of those technologies

• Whether the transfer of technology is possible from the political angle
• Whether transfer of technology is possible from the operations (environment) angle
• Either due to the import restrictions imposed by the government or because of export
restriction or economic sanctions imposed by an exporting nation, a particular
technology cannot be transferred. In today’s regime of the World Trade Organization,
normally one cannot expect import restrictions (unless there is no political relationship
between the two countries) but economic sanctions from the exporting nations are quite
possible, making it impossible to transfer technology from one country to another.
Sometimes, the technology owner may not be willing to transfer the technology.
III. Financial Feasibility
• Demand and price estimates are derived from the market feasibility study. Project costs and operating costs
are derived from the technical feasibility study. The estimates need to be supplemented with tax implications
depending upon the prevailing tax laws and financial costs emanating from the financing alternative
considered for the project.
• This provides enough information for the calculation of the financial bottom line of the project. The financial
feasibility check involves a detailed financial analysis. Financial analysis includes quite a few assumptions
and calculations. Some are briefly described below:
• Estimates
Projections are made for price of product, the cost of various resources required for manufacturing goods and
capacity utilization. Use of the thumb rule or actual data of some comparable projects are generally included in
the estimates.
• Period of analysis
The period of estimate is determined and the terminal value of the project is forecast. The period of estimate
should be justified by factors like, the product life cycle, business cycle, ability to forecast, period of debt
funds, etc.
• Financing alternatives
Financing alternatives are considered and a tentative choice of financing mix is made together with
assumptions regarding the cost of funds and repayment schedules
III. Financial Feasibility
• Basic working
Based on assumptions and estimates, some schedules are prepared. Some of the schedules made for this purpose
include:
• Debt servicing schedule (interest payment and principal repayment schedule)
• Working capital schedule
• Working financing schedule (working capital loan, interest and repayment schedule)
• Depreciation schedule for income tax purpose
• Schedule of cash flow from operations
• Project cash flow schedule
Financial indicators
• Financial indicators play a crucial role in project analysis by providing quantitative measures to assess the
economic viability, profitability, and financial health of a project. These indicators help stakeholders make
informed decisions about whether to invest in, continue, or terminate a project.
• Based on the projected financial statements, some important financial indicators are calculated for a quick
viability check. Here are some key financial indicators commonly used in project analysis
• The interest cover ratio (also known as times-interest-earned or TIE)
Since indicates the safety and timely payment of interest to the lenders of money, it is calculated
with the help of the following formula:
• Interest Cover Ratio = PAT + Interest Expense/ Interest Expense

• The payback period (PBP)

• Discounted payback period
• The net present value (NPV)
• The internal rate of return (IRR)
• MIRR
• Profitability Index (PI)
• Sensitivity Analysis
• Return on Investment (ROI):
ROI calculates the percentage return on an investment relative to its cost. It is expressed as a percentage and is
calculated using the formula:

• Return on Equity (ROE)

• Break-Even Point (BEP)

 Impact of delays in project completions
• Project delays can plague any industry, any team and any individual project.
• Delay and cost overrun are intrinsic part of most projects despite the much acquired knowledge in
project management. Although some may argue that this is negligible.
• A project delay can represent a costly occurrence for any organization especially in the present age
of cut throat competition and diminishing margins.
• Therefore, it is important for an organization to understand what causes a delay and how to prevent
it from occurring. The major causes of project delay are as follows:
• Design errors
• Subcontractor Delays
• Scope change
• Shipping and Supply Delays
• Inappropriate and inadequate procurement
• Climate Delays
• Complexity of project
• Client-End Delays
• Post execution phase Delay
 Preparation of Detailed Project Report

• A Detailed Project Report (DPR) is a comprehensive document that outlines

the various aspects of a project in detail. It serves as a roadmap for project
execution and provides a clear understanding of the project's scope, objectives,
timelines, resource requirements, risks, and deliverables.
• Contents of a DPR:
The DPR typically includes the following sections:
Introduction: This section provides an overview of the project, including its
background, objectives, and scope.
Project Description: This section provides a detailed description of the project,
including its methodology, timelines, deliverables, and resource requirements.
Contents ....

• Market Analysis: This section provides a detailed analysis of the market in which
the project will operate, including an assessment of the competition, customer
needs, and market trends.
• Technical Feasibility: This section assesses the technical feasibility of the
project, including the availability of technology, infrastructure, and human
resources.
• Financial Analysis: This section assesses the financial viability of the project,
including an analysis of the project's costs, revenue potential, and profitability.
• Risk Analysis: This section identifies and assesses the risks associated with the
project and provides a risk management plan to mitigate those risks.
Contents ....
• Project Organization and Management
This section outlines the organizational structure of the project team, including roles
and responsibilities. It also provides details on project management tools,
communication channels, and reporting mechanisms.
• Project Implementation Plan:
This section provides a detailed implementation plan, including timelines, milestones,
and resource allocation.
• Monitoring and Evaluation Plan: This section outlines the monitoring and
evaluation plan for the project, including the indicators to be used to measure
progress and the methods to be used to evaluate project outcomes.
• Conclusion: This section summarizes the key findings of the report and provides
recommendations for project implementation.
Questions
1. State the benefits of project management.
2. What are the challenges in project management?
3. Discuss the major causes for delay in project management
4. Describe the 5 stages of project lifecycle
5. Who are the common stakeholders in a project?
6. List the steps involved in project identification.
7. Describe the contents of DPR.
Thank you