In finance management, what are the main criteria used in analyzing the prospect of financial projects?

• Payback period analysis
• Accounting rate of return
• Net present value
• Internal rate of return

Main Criteria used in analyzing the prospect of the financial project :

Payback period analysis

Accounting rate of return

Net present value

Internal rate of return

The replies given below very much covers all the mathmetical parameters however the other areas to look for is the passion and the past experience of the person involved in the project. Experience shows that most of projects that fail are because the man behind the show is not passionate it is just a business

Better to be analyzed by using methods that affected by time value of money like : 

- Net Present Value

- Profitability Index

- Internal rate of return 

- Discounted Payback Period 

Net Present Value, Cost Ratio, Internal Rate of Return but the most preferred criterion is the net present value however each can provide useful information.

Financial analysts often compare financial ratios (of solvency, profitability, growth, etc.): Past Performance - Across historical time periods for the same firm (the last 5 years for example), Future Performance - Using historical figures and certain mathematical and statistical techniques, including present and future values, This extrapolation method is the main source of errors in financial analysis as past statistics can be poor predictors of future prospects. Comparative Performance - Comparison between similar firms. These ratios are calculated by dividing a (group of) account balance(s), taken from the balance sheet and/or the income statement, by another, for example : Net income / equity = return on equity (ROE) Net income / total assets = return on assets (ROA) Stock price / earnings per share = P/E ratio Comparing financial ratios is merely one way of conducting financial analysis. Financial ratios face several theoretical challenges.

The main criteria used in analyzing the prospect of financial projects Net present  and futureValue. Profitability index. Decision making. Ratio analysis 

 

The main criteria used in analyzing the prospect of financial projects Net pretent Value. Profitability index. Internal rate of return.

Life cycle costing

Value analysis

Internal rate of return

Return of investment 

net present value, internal rate of return and benefit and cost ratio

 

The three essential components that would be used to asses the value of potential project would be profiatability analysis, risk analysis and cash flow analysis.