Requirement
The client required a tool to compare current deals on a per asset basis and to predict future cashflows for upcoming deals.
The client’s legacy system comprised a set of spreadsheets that consumed considerable manual effort to manage and were limited in what could be achieved in the analysis of multiple deals.
The requirement analysis indicated the necessity to model rental, maintenance reserve accumulation, maintenance event costs, maintenance reserve drawdown, interest repayment, capital repayment overheads and asset depreciation.
Solution
The solution was a combined database/spreadsheet solution. The database stored all data regarding commercial details of the deal, asset maintenance costs and maintenance intervals and costs. The database also produced all the cashflows for each deal and provided these to the spreadsheet. The higher-level financial analysis of the deals was performed by the spreadsheet.
Outcome
The database allowed the cashflows to be defined more easily than if they were modeled in a spreadsheet. It was only necessary to define a new potential deal and the cashflows were immediately available from the database, which would have required a laborious manual effort in a spreadsheet.
It was now possible to quickly evaluate the return from a particular deal or to evaluate multiple deals with ease.