What isTEV Study? - Sapient Services
The Techno Economic Viability (TEV) study is the best example of this type of analysis The study considers the project's historical context, project description, accounting statements, operational and management details, marketing policies, financial data, legal requirements, and tax obligations.
In this stage, you collect and evaluate information about the desired project using defined procedures to gather technical or financial data
As global economies shift, business environments change and new technologies emerge Using your knowledge of these trends, you decide whether or not to accept a project.
Components ofTechno Economic Viability Study
Evaluation of the promoter
Even though promoters will be running the project, credit appraisal of the promoter is critical. The promoters' personal and financial profiles are required for the Techno Economic Viability study
To determine whether a potential business partner is financially capable of helping you achieve your goals, it's important to assess his or her personal profile
This includes resourcefulness, past trip record experience, financial stability and support from family members or friends, previous experiences as a business owner or investor
Select a capable management team
Your management must have disciplined experts from various industries to assist you in the success of your project Every team member should have vast experience in: ● Production ● Marketing ● Human resource development ● Finance ● Project implementation
The person who is responsible for the project should have or acquire the necessary skills and expertise.ATechno Economic Viability study must consider all aspects of the business, from organizational structure (including both existing and proposed elements) to personal profiles
Technical evaluation
This one entails extensive research into the most recent technology and resources needed for the project You must also investigate the production process, location selection and rationale in order to achieve projected output, as well as schedule adaptability
Market analysis
To evaluate the project's future growth and outlook, you must have a clear idea of demand for your products in the marketplace. Keep an eye on whether your product supply covers market size, such as the competition scenario, consumer trends, and so on.
Deep industry research
Business owners and other individuals conduct industry analysis to assess the current business environment Understanding the various economic aspects of your industry and also how they can be used to achieve a competitive advantage is beneficial This is a critical component in Techno Economic Viability study, as it is in other businesses, where you compare various key parameters such as operations, products, services, and financial growth trends with your similar projects
It also takes into account the geographical landscape of other industry leaders in the same line of business
The project's financial viability
While preparing one, keep the following points in mind:This means that the project should be able to generate enough cash flow to provide a risk-adjusted return on investment Your project should be able to repay the debt and generate good returns.This is what everyone wants
An analysis of the project's financial viability is made by examining its ability to generate profit using realistic projections To perform this task, you must consider factors like ratio analysis and working capital requirements among others
Simulation and sensitivity analysis
In this method, you perform infinite calculations to determine the possible outcomes and probabilities of any action This financial model is frequently used to forecast the outcome of a decision based on a set of variables. In this case, you examine the impact of changes in key assumptions such as selling and raw material prices to determine the project's financial viability
SWOTAnalysis
SWOTis an acronym that stands for Strengths, Weaknesses, Opportunities, andThreats. It is a strategic planning tool that involves identifying internal and external factors as well as highlighting project objectives to find the positive as well as negative elements to achieve the desired goal These are some variables over which you have some control and can alter to achieve the desired outcome.
RiskAssessment
Finally, but not least, risk assessment is required. It is carried out by identifying operational risk, market risk, financial risk, resource mobilisation risk, project execution risk, regulatory risk, and political risk The decision to include this study is based on the need for mitigating identified risks and developing preventive measures in order to address future issues
About Sapient
Sapient is an independent network of Chartered Engineers/Valuers which provides certification/valuation services for plant and machinery, land, and buildings
Advisory Services,TEV studies, due diligence, compliance consulting, acquisitions as well as mergers advisory, and other financial and business-related issues are among the services we offer We offer a variety of valuations and consulting services to corporations, individuals and other entities that assist in the preparation of financial statements.
