Financial Analysis and Modelling of Ship Investments
Ship Finance and Investment .
Some of the questions you may want answers to are:
- How much capital do we need for the shipping investment?
- What is the debt capacity of the shipping project?
- What are the purchase and sale timing, the chartering policy, and the ﬁnancing structure that maximizes the net present value (NPV) of equity invested?
- What is the forecast cash impact of ﬁnancing alternatives, chartering policies and market developments? What is required to meet the target return on equity?
- How long will current cash last under various scenarios?
Financial modelling of ship investments with Pacoship 2.0 can quantify the downside risk and the upside potential before deciding to invest. The Pacoship investment model is also an excellent tool for communicating opportunities or potential problems to management, lenders and investors. Financial modelling helps identify opportunities or potential problems early, and investors can plan and prepare for alternative actions in advance. Meaningful ﬁnancial analysis and modelling of ship investments can contribute to better management of risks and hence better risk-adjusted returns.
- To run Pacoship, you need to run Excel on a computer with a Windows operating system. To make use of exporting charts generated by Pacoship directly to Powerpoint you must have Powerpoint installed. To send e-mails directly from Pacoship you need to have Outlook installed.
- Select Project Type (Newbuilding or Secondhand Purchase) and update input data for SHIP, EMPLOYMENT, OPEX and FINANCING. Pacoship calculates Project Cash Flow, Cash Flow to Equity and performs sensitivity analysis.
- You can easily select create the reports from a menu. The reports include a project summary and ship investment analysis together with cash flows, charts and sensitivity analysis. The output can be printed on paper or saved as PDF files
- The application generates a Powerpoint presentation with selected charts.
- Pacoship users can share input data by sending XML data files.
You get better reports, and you save time
From the reports menu in Pacoship you can select the content of the reports you want to generate:
You can print the Pacoship report to a PDF file and add text and other items you choose to tailormake your report.
Pacoship can also generate a Powerpoint presentation. It will have the Pacoship charts you want to include in you presentation. You may edit and add your own text and additional slides.
Pacoship 2.0 connects with Outlook so that you can e-mail your PDF report or XML data.
Pacoship 2.0 is the latest version available. We continue to add new features based on feedback from active users.
The Pacoship application for ship finance and investment modeling has a built-in help menu accessible from the customs Excel ribbon.
On the Pacoship tab on the customs ribbon, you will also find useful links to online help and support.
A good ship ﬁnance model has the following characteristics:
- Key input parameters are clearly identiﬁed;
- The model uses formulas to adjust automatically for changes in input parameters;
- Has a user-friendly, interactive interface and clearly separates input (assumptions) and output (calculated results);
- The model is dynamic, robust, and covers all periods
- Easily produces all the important ﬁnancial output metrics including NPV and internal rate of return (IRR).
Some financial modelling assumptions are factual input at the time of making the investment decision. Examples are ship prices, charter rates, and available terms and conditions of debt ﬁnancing. Other factors, like the future residual value, are not known. To and get a better understanding of the dynamics of future outcomes we use sensitivity.
Sensitivity analysis shows how the return on the shipping investment varies in response to changes in assumptions. We analyze the effect of changes in ship operating costs, time charter earnings, ship values, and financing costs. When preparing a shipping investment analysis we also take into account expected future demand and supply, as well as historical data.
Microsoft Excel® is most widely used for ﬁnancial modeling. You may employ Excel to build your own ship finance models from scratch. Shipping investment analysts will save time and effort and get a better error free model with the Excel-based ship investment application Pacoship.
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