P3 Toolkit

Analytical Tools

P3-VALUE: Financial Assessment Tool User Manual

April 19, 2013

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Chapter 5. Summary

The Financial Assessment Tool User Manual is an educational resource part of FHWA's P3-VALUE suite of tools. This User Manual corresponds to the FHWA Financial Assessment Tool and is intended to guide users in understanding how to conduct a value for money analysis and a financial viability assessment. Together, the Financial Assessment Tool and this User Manual provide:

• A side-by-side comparison of a notional PSC and P3 Estimate to complete a hypothetical quantitative VfM analysis process; and
• Information on the project cash flows and funding requirements.

The Financial Assessment Tool has been designed for use in FHWA-sponsored training. FHWA anticipates that at the conclusion of the training, users will have a greater understanding and appreciation of the VfM analysis process and several of the important considerations in conducting this type of analysis. FHWA encourages users to seek further guidance from appropriate experts (either in-house or external) to conduct a VfM analysis for real-world projects or to develop their own tools and processes for evaluating potential projects. The level of knowledge gained from the FHWA training should help in such an effort.

Financial Assessment Tool Limitations

To provide a notional example of a functioning and interactive Financial Assessment Tool, a number of assumptions and formulas relate to the pre-populated "Example Scenario" and may not be suitable for all potential scenarios. Additionally, a financial analysis model for a "real-world" project would be highly customized to reflect the unique project structure and the entities involved in delivering the project and to optimize the financing required to deliver the project for the lowest cost.

Because the "VfM Analysis" section does not contain NPC calculations, users must import the NPC results and cash flows from the PSC Tool and Shadow Bid Tool, respectively, into the Financial Assessment Tool to complete the analysis. Thus, if a user is interested in updating the project scenario to make another comparison, the user must first change the assumptions in the underlying PSC and Shadow Bid Tools, save new versions of those files, and re-import the files in the "Source Data" sheet. This process is designed to accommodate diverse operating systems and keep calculation times to a reasonable duration.

 

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