Ship Finance Cash Flow Models with Excel
Website for Analysis of Shipping Investments
Some of the ship finance questions you may want answers to are:
Total capital needed for the project.
Debt capacity of the project.
The financing structure that maximizes the Net Present Value (NPV) of equity invested?
Impact of financing alternatives, chartering policies and market developments.
Earnings, operating costs and the residual value of a ship investment required to meet the target return on equity.
How long will current cash last under various scenarios?
Ship Finance and Investment Analysis help shipping investors and lenders to get a better understanding of the deal. Financial modeling of ship investments makes him or her mindful of the deal and helps to identify what makes it work.
Some shipowners with a long term track record can do this on the back of an envelope. For the rest of us, ﬁnancial modeling g is a necessary tool. It is also useful to be able to document the thought process to third-party investors.
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 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. Analysts can employ Excel to build their own ship finance models from scratch. Shipping investment analysts may also make use o the Excel-based ship investment application Pacoship.
Excel Application for Ship Finance and Investment Modelling:
The Pacoship Excel application has a Ribbon Menu with six main sections: Project, Input, Dashboard, Cashflow, Reports and Help. By clicking a button (icon) in any of the sections, relevant action is triggered. You may click the buttons in any order, but a good workflow can be to move from left to right.
Pacoship is a time-saving tool for Shipowners, shipbrokers, banks, investors and other financiers. People with a maritime background moving into commercial position positions will also find it useful.
- 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.
An E-mail with your download and Activation Key is automatically generated and sent to you immediately after check out.
Remember to check your junk mail folder. Automatically generated e-mails may end up there.
Do not hesitate to ask for help or user support.
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.
Book an Online Meeting with Lars Patterson for Pacoship Demonstration and User Support:
If you find some issue or bug please send an e-mail to:
If you report an issue that needs to be fixed, you will receive a Free User License.
Pacoship 2.0 is the latest version available. We continue to add new features based on feedback from active users.
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Marine Finance Glossary:
We have now added a Marine Finance Glossary with explanations of shipping finance and ship investment terms to this website. It also has explanations of ship lease structures and terms.
Our Marine Finance Glossary is work in progress. We are inviting industry practitioners to contribute to making the glossary helpful and comprehensive. Please send an e-mail to email@example.com to propose a new entry or suggest improvements to existing glossary wordings.
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