Financial & Economic Modelling

We often develop these models for regulated utility businesses as a means of establishing total revenue requirement over a regulatory pricing period. Financial analysis is also conducted for business cases, where the objective is to assess the financial viability of a proposed project.

Economic modelling is a broader form of analysis because it evaluates the costs and benefits of a project from a societal perspective. Therefore, in addition to the financial costs and revenues to businesses, economic appraisal includes impacts that are non-priced (eg. environmental or social ‘externalities’) and other potential impacts that arise outside of a business’s operations. Economic modelling involves assessing the efficiency with which resources are allocated to activities, and the welfare gains and losses from alternative options.