We conduct financial feasibility studies in conjunction with traditional and innovative financing arrangements. We develop the revenue requirement for public utility rate recovery.
We prepare computerized financial planning models to suit your individual needs, complete with documentation and training. We believe that financial modeling must adequately mirror the current and forecasted economic conditions affecting any organization and service area. We employ modular approaches to financial planning to create a flexible framework for exploring alternative courses of action. Our staff is experienced in financial and operational modeling, cash flow projections, cost-benefit analysis, and sensitivity testing and related research.
Rate of Return Studies
A regulatory-determined price for service allows a utility a fair opportunity to recover all costs associated with providing the service. A rate of return will maintain and support a company's credit, enabling the company to raise or attract additional capital. Our staff is accomplished in addressing the range of capital structure issues including the appropriateness of using actual, consolidated, hypothetical or double-leveraged capital structure. We are experienced in calculating embedded cost rate of the various forms of fixed cost capital. We also assist clients in related financial areas including debt service, dividend policy and private placement of fixed capital securities.
Our lead-lag studies determine the appropriate working capital allowance a utility should be afforded an opportunity to earn on as part of its rate base claim. The lead-lag study represents the level of funding required to operate on a day-to-day basis in providing for the cost of service. This is measured by calculating the net lag between (1) the provision of the cost of service and the receipt of the revenue requirement from the company's customers and (2) the receipt of goods and services by the company in providing for the cost of service and the payment by the company for those cost of service items.
Economic Valuation Studies
We conduct economic valuation studies for acquisitions and divestitures of assets and/or common stock, condemnation proceeding, sale of public assets, and for stock option plans. Our studies reflect various approaches including the cost approach, income approach, comparable sales approach, and market multiples approach.
Debt Financing Reports
We prepare debt financing reports or opinions that support the feasibility of the issuance of debt financing, and that supports Trust Indenture tests.
Economic and Demographic Studies
Our economic and demographic studies are used to support customer demand studies for public utilities, waste generation studies for solid waste authorities and to provide the economic/demographic background included as part of the offering material for financing.
Financial Decision Studies
We prepare financial decision studies for capital budgeting purposes, to determine future capital requirements, and determine the impact of a financial decision on investors and customers.
Related Financial Studies
We conduct related financial studies for determining optimum capital structure, debt service levels, dividend policy, maximizing shareholder returns, private placement of debt, and financial benchmarking.