Microrosoft Excel® is most widely used for ﬁnancial modeling and users can either employ Excel to build their own models from scratch, or make use of the Excel based ship investment application Pacoship.
Financial modeling of ship investments helps the analyst to get a better under- standing of the deal. It makes him or her mindful of the deal and helps to identify what makes it work. Some seasoned shipowners can do this perhaps intuitively on the back of an envelope. For the rest of us, ﬁnancial modeling is a necessary tool, not least so as to be able to document the thought process to third-party investors.
One of the beneﬁts of a good ﬁnancial model for analysis of a ship investment is the ability to identify what ﬁnancing arrangement adds most value to the deal.
Financial modelling of ship investments can quantify the downside risk and the upside potential before deciding to invest. It is also a useful tool to monitor risks and performance during the investment period.