Economic Analysis For A Company’s Logistics Warehouse Expansion Project Summary

Since the reform and opening up, the sustainable and healthy national economy development has stimulated the investment and financing system reform as well as the diversification of investment entities, which brought great opportunity for company expansion and exploring new economic growth areas. In order to meet the growing demand for expanding reproduction and material requirements, urban logistic becomes possible and necessary so as to achieve sustainable economic development. Stable and reliable return on investment stimulated the enthusiasm of enterprises to invest in logistics. The development of modern logistics industry has significant importance to change the economic growth mode, accelerate the formation of the service-oriented economic structure, improve urban services facility, and enhance the city’s international competitiveness.Large-scale investment, long term construction and operation period, and uncertainties are the main features of investment and construction projects in logistic industry. Investors who want to seize opportunities and ensure successful investment to stand out in the intense competition must conduct scientific research on the market, financial and risk analysis for logistics construction projects. At the same time, in order to minimize the investment risks and increase returns on investment, the project pre-feasibility study, particularly the project financial and economic analysis has draw more and more investors’ attention and has been widely adopted.This paper focuses on the economic analysis for company A’s logistic warehouse expansion projects. By adopting quality and quantity analysis methodology, integrating dynamic analysis and static analysis and a thinking route from theory to practice, this paper introduced the economic analysis concept, the purpose of economic analysis, financial benefits and cost estimation, financial indicators for profitability analysis and the basic theory of establishing cost-effectiveness evaluation program. This paper also conducts research for Company A’s warehouse expansion project background, the natural conditions, analysis basis, technical conditions for analysis; furthermore, this paper conducts a scientific and objective market research on project finance data, total investment plan and financing prediction, total cost estimation, profit and profit distribution, investment loan serving plan. By adopting widely used methods of index analysis for financial profitability, financial benefits and cost estimation, this paper draws a conclusion that Company A;s logistic warehouse expansion project is technically possible and economically rational, therefore come out an overall evaluation of the project. On summarizing the paper writing experience, it also indicates the possible problems and deficiencies so as to direct further research.