Financial model of an investment project: optimization of the system for project portfolio monitoring and update

Financial models of investment projects can vary significantly in complexity, level of details, quality, key inputs and outputs and many other criteria. In case of significant changes in external and internal assumptions of a particular project, the financial model may need to be updated or modified. In case ofworking with a pool of projects, additional difficulties arise, e.g. the need to conduct a sensitivity analysis and identify projects for detailed review and update, while maintaining overall requirements for the quality of financial models and consistency of macroeconomic and industry-specific assumptions used. The article presents an attempt to form a system for monitoring and updating of financial models for a pool of projects that are under consideration or financing in a bank or investment fund. The author considers the peculiarities of unscheduled update offinancial models, approaches to the allocation of roles and tasks between major participants in the investment process, an example of an algorithm of actions ofparticipants and examples of notifications that can be sent to responsible employees in order to take further actions on the financial model of a specific project from the general pool.