Briefly

The workshop goes beyond the simple arithmetic break-even modelling to  include non-cash, multi-product, and in-house/buy-in break-even models. The workshop also covers operating and financial leverage measurements, as well as non-linear break-even analysis. The latter part of the workshop includes incorporating NPV, and regression costing projections into break-even models, and includes the use of Solver to develop optimising solutions. Several Excel functions are added to participant’s toolbox in this workshop.

Detailed Outline - A full one day workshop                                      

For Whom:
Professionals operating in the mining and resource sector, wanting to develop techniques for break-even analysis in strategic investment situations and use Excel’s Optimisation techniques in resource and capital evaluation. The principles and techniques can be applied to major or minor projects in and outside the resource sector.

Assumed expertise:
Applicants should be competent in Excel  with a good understanding of functions and formulae, though specific techniques (including charting) will be included in the workshop.
Although the workshop uses Excel’s regression functions there is little forecasting  methodology required.

Content:
Break-even in its most basic form can be quickly calculated given any set of consistent and relevant values. The workshop is about the situations in which complexities occur such as multi-product break-even, non-linear projected value environments and leverage influences on results. The workshop covers: 

- The basic arithmetic of linear break-even. Consistent comparisons for cost and revenues, and the role of the ‘contribution margin’.

- Multi-product break-even - allocating overhead and building a model to cope with variable product characteristics.

- In-house versus Buy-in break-even modelling and other strategic investment models using break-even criteria.

- Non-cash effects, Fixed Costs and Operating Leverage and Financial Leverage in the break-even process.

- NPV and break-even - issues in calculating the present values of costs and revenues for such a model.

- Non-linear costs and revenues - building a model where the basic B-E arithmetic does not work. Catering for two break-evens. A macro solution.

- Using Excel’s regression functions to forecast costs and revenues for use in break-even model.

- Using Solver to optimise Break-even models by inputting selected constraints rather than seeking specific target values.