A Financial Evaluation Of Jiale Commercial Hotel Reconstruction Project

Financial appraisal indicates analyzing and calculating directly generated financial benefits and expenses, compiling financial statement, computing financial appraisal indexes, and investigating projects’such financial statuses as profitability, liquidity, and foreign currency balance with the start of enterprises and according to market price and national existing finance and tax system and price system, so as to judge projects’financial feasibility.In order to reduce possible losses brought by investors’decision-making errors, to maintain production and operation stability, and to improve economic performances, it is necessary to conduct systematic project financial appraisal, because real estate development projects are large in investment amount and long in construction period, and there are multiple risks, such as fluctuations in policy, poor management, and natural hazards. Therefore, financial appraisal has not only immeasurable significance on feasibility research of real estate development projects but also profound meaning on scientific and reasonable decisions of real estate development projects.The author made financial appraisal on Jiale Commercial Hotel Reconstruction Project in the way of combining qualitative analysis and quantitative analysis, and dynamic analysis and static analysis after considering influences of time value of money, based on the principle of linking theory with practice, and according to characteristics of real estate industry.Firstly, the author elaborated basic theory of project financial appraisal through researching on status and development trends of project financial appraisal theory. And then analyzed feasibility of project construction conditions after introduced project backgrounds of hotel reconstruction project. On the basis of it, the author estimated data needed by such financial appraisals as construction investment funds, cost, operation revenue, and taxes, compiled such relevant statements as balance sheet, cash flow statement, and income statement.Secondly, the author estimated the reconstruction project’s profitability and debt paying ability on the basis of project financial appraisal index system and through combining dynamic index analysis and static index analysis. As a result, the author found that this project has operation feasibility from the angle of finance, because its profitability is relatively strong, debt paying period is short, and development prospect is good.Finally, the author conducted uncertainty appraisal and risk identification towards the reconstruction project through break even balance analysis and sensitivity analysis method,and the author offered proposals for reducing risks. Through research, the author found that this project’s anti-risk capability is relatively strong.In short, the author offered constructive proposals after conducting systematic financial appraisal towards Jiale Commercial Hotel Reconstruction Project through comprehensively applying project financial appraisal theory knowledge and combining characteristics of real estate industry, aiming at providing a reference model for similar project financial appraisal of real estate industry in the future.