1 / 30

Understanding Finance in Wind Energy Market Analysis

Learn about financial aspects of wind energy projects, market trends, risk management, investment criteria, and renewable energy consumption. Explore annual reports, balance sheets, income statements, and key performance indicators.

alaula
Télécharger la présentation

Understanding Finance in Wind Energy Market Analysis

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Finance Lecture # 1 Jan H. Jansen E-mail: jan.jansen@han.nl

  2. Wind energy

  3. Dropbox URL: https://www.dropbox.com/home#:::64295139

  4. Minor Wind Energy Project Management

  5. Minor Wind Energy Project Management Commercial Engineering

  6. Commercial Educational unit: WEPM-C (7.5 ECTS)

  7. What is our ambition? • Recognizing trends in the Wind Energy market • Analyzing an annual report of a wind energy supplier; • Constructing an cash flow overview of wind energy project; • Establish risk awareness (project- , exchange -, interest rate- and political risks) • Decision criteria for an investment in a wind energy project (PBP, ROI, NPV, IRR and BET). • Financially sourcing a wind energy project.

  8. Assessment • WEPM-C-FC • Written exam of 120 minutes (PW8) • WEPM-P-FR • Finance will also be assed in the final report and presentation of the project of this minor

  9. Programme

  10. Energy Market

  11. Electricity market • Complex market • See slide before • The art of electricity • Not directly tangible • Storage problems • Capacity • Transformation of Wind (free good) into Electricity (economic good)

  12. Overview Energy Market • Macro level • Energy prices (P) • Energy demand (Q) • Meso level / Industry level • Micro level / Firm level • Value chain & supply chain • Annual Reports

  13. Macro level • Energy prices (P) • Prices of substitutes / Trends • http://www.bloomberg.com/energy/ • http://www.energy.eu/ • Energy demand (Q) • Trends • http://www.nwea.nl/ • http://www.ewea.org/

  14. Renewable energy in final energy consumption (2020 target) Source: www.energy.eu

  15. Renewable electric energy in the EU Resource: www.energy.eu

  16. Meso level / Industry level Wind Energy Farm Distribution Suppliers

  17. Micro level / Firm level Wind Energy Farm Input > Throughput > Output Procurement > Production > Sales

  18. Annual reports • Market & Strategy • Corporate Governance • Corporate Social Responsibility (CSR) • Sustainability • Financial ratios • Profitability • Liquidity • Solvency • Activity

  19. Fixedassets: Property, Plant & Equipment Intangibleassets Financial noncurrentassets Currentassets: Inventories Debtors / AR Cash & Cash equivalents Equity: IssuedCapital Retainedearnings / Reserves Long Term Liabilities Provisions Loans Bonds Currentliabilities: Creditors / AP Bank overdraft Taxes Dividend Structure of the balance sheet

  20. Costs Costs of Sales: Cost of raw materials Cost of (manufacturing) labour Costs of depreciation of equipment Overhead costs: Selling expenses R&D expenses General expenses Administrative expenses Other expenses Incidentals Financial charges Operating income Revenues / Sales Structure of the income statement/ profit & loss account

  21. Profit definitions • Gross Profit: • Revenues - Cost of Sales • Operating Income / EBIT: • Gross Profit - Overhead costs • EBITDA: • EBIT + Depreciation + Amortization • EVA: • NOPAT - Capital Charges : • NOPAT = EBIT - Taxes • Capital Charges = Invested Capital * Cost of Capital

  22. Performance of the company: Liquidity The ability of an asset to be converted into cash without a significant price concession • Current ratio: • Current Assets / Current Liabilities • Quick ratio: • { Current Assets -/- Inventories } / Current Liabilities

  23. Performance of the company: Solvency Solvency shows how the extent to which the firm is financed by debt • Debt Ratio: • Debt / Total Assets • Debt-To-Equity Ratio: • Debt / Shareholder’s Equity

  24. Performance of the company: Profitability Compares profit (output) with invested money (input) of the firm • Gross Profit Margin: • Gross Profit / Sales • ROI (ROA) = Return on Investment (Assets) • Net Profit after taxes / Total Assets • ROE = Return on Equity • Net Profit after taxes / Shareholder’s Equity

  25. Performance of the company: Economic activity Provides performance information of the efficiency of some internal processes • Asset turnover • Sales / Assets • Inventory turnover • Cost of goods sold / Inventory • Receivable turnover (collection period) • Sales / Receivables

  26. Du Pont formule ROE = NPM * TAT * EM • NPM = Net Profit Margin (Market profit) • NPM = Net Profit / Sales • TAT = Total Assets Turnover (Utilisation) • TAT = Sales / Total Assets • EM = Equity Multiplier (Financial structure) • EM = Total Assets / Total Equity

  27. Altman’s Z-score • Working Capital / Total Assets * 1.2 • Retained Earnings / Total Assets * 1.4 • EBIT / Total Assets * 3.3 • Market Value Equity / Book Value Liabilities * 0.6 • Sales / Total Assets * 0.999

  28. Annual reports (2010) of Sustainable Energy Industry • Van Oord(case for the lectures) • Teams • Eneco • Vestas • ABB • RWE • GE • Siemens • Nordex • BP • Shell

  29. Organisation

More Related