32 Financial Feasibility Terminologies

When you aim to acquire a new skill, start with learning the terminologies.

These 32 terminologies may not cover everything, but they are enough to get you started.

Project financial feasibility has input from several stakeholders, from development to business to marketing, and they all speak their own terminologies.

I believe every finance and accounting professional should know how to prepare a financial feasibility. And trust me, it is not that difficult to prepare one.

I used to think that it required special skills until I took the plunge and created my first model. Later, that model formed the basis for a multibillion-dollar project.

If you haven't already, then start experimenting. These terminologies will provide you with a list of formulas and metrics used in preparation for financial feasibility. It is simpler than you think.

These terminologies are included:

FINANCIAL TERMINOLOGIES
1. Initial Investment (Capex)
2. Operating Expenses (Opex)
3. Revenue
4. Gross Profit
5. Net Income (Net Profit)
6. Cash Flow
7. Payback Period
8. Risk Assessment
9. Project Timeline and Development Phases

FINANCIAL METRICS AND FORMULAS
10. Internal Rate of Return (IRR)
11. Net Present Value (NPV)
12. Return on Investment (ROI)
13. Profitability Index (PI)
14. Return on Equity (ROE)
15. Return on Capital Employed (ROCE)
16. Debt Service Coverage Ratio (DSCR)
17. Terminal value
18. Break-Even Point (BEP)
19. Sensitivity Analysis
20. Discount Rate
21. Weighted Average Cost of Capital (WACC)
22. Working Capital

MARKET ANALYSIS & OTHER METRICS
23. Market Analysis
24. Industry Trends
25. Market Entry Strategy
26. Scalability and Expansion
27. Marketing and Sales Strategy
28. Operating Assumptions
29. Financing Options
30. Exit Strategy
31. Legal and Regulatory Considerations
32. Environmental and Social Impact

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