시스템다이내믹스를 활용한 선박투자의 재무적 타당성 평가 연구

Abstract

ABSTRACT

A Study on Financial Feasibility of

Ship Investment Project using

System Dynamics

Choi, Jung Suk

Department of Shipping Management

Graduate School

Korea Maritime & Ocean University

Advised by Professor Lee, Ki-Hwan

This study is initiated to overcome limits of current method in purchase of vessel, requiring immense amount of investment, and to stimulate virtuous cycle by introducing financial feasibility of vessel investment project.

The objective of this study is to develop a dynamic and systematic vessel investment economic feasible model based on casual loop between variables affecting business performance in purchase of vessel.

To achieve the objective, this study conduct establishing of financial feasibility of vessel investment model using System Dynamics method. Then perform simulation to get the dynamic DCF. Finally conduct comparison analysis with the commonly used DCF method.

Formerly, feasibility studies related to purchase of vessel was not actively in progress, despite the critical importance of the study. Most widely used vessel investment validity method is DCF based profit estimation. This method holds limitations; under the DCF method, income and cost affecting business performance is merely estimated through fragmentary practice to project future profitability. Thus, DCF method holds limitations since the method does not fully consider future market condition. On the other side, vessel investment requires minimum investment period of 10 years, therefore enhanced realistic method to project income and cost is magnified in businesses.

System Dynamics is a dynamic analysis method performing simulation, using casual loop between social phenomenon and dynamic system. Hence, system dynamic method is regarded as a realistic method since it estimates future income, cost and profitability in consideration of casual loop between various variables that could occur in a respect to vessel investment.

To fulfill the above statements, system dynamics through 5 processes using financial feasibility of vessel investment project is performed.

First, structure of system is set in place then income and cost factor variables in evaluation of business performance and using analysis of actual case is selected. The case used in this study is a 1,800TEU container vessel ordered by a “A Korean shipping company” Case which evaluated business performance following vessel investment of financial amortization period throughout 12 years were used in actual Empirical analysis.

Based on the case, to evaluate dynamic business performance using system dynamics, 6 variables: income, cost, business performance, shipping market, world economy, financing market were selectively applied in particular model.

Second, casual loop diagram between 6 variables are structured and casual relationship stream in variables affecting financial validity evaluation is examined from qualitative point of view. Prior to the structuring of casual loop diagram, relationship between income and cost which affects business performance immediately are set up and causal relationship with shipping market, financial market and world economy are identified. Besides, additional casual loop diagram is established for various variables used in projection of sub-model, bunker price and second hand vessel prices.

Third, in a step to stock flow diagram, 3 main models: income, cost and business performance, 3 sub models: bunker price forecast, freight rate income forecast, second hand vessel price forecast are established and estimated value using dynamic simulation is forecasted and enhanced business performance estimation reality.

Fourth, objectivity of simulated result in accordance with reality is verified by comparing the result with historic data. Variables used simulating estimation of studied model are bunker price, second hand price and government bond. results between Historic time series of variables and simulated result were 0.989, 0.916, 0.998, showing high correlationship. Furthermore, MAPEs results which is used to see coherency between historic data and simulated results came out to be 10.01%, 10.19%, 4.16%, showing suitable coherence.

Fifth, Dynamic NPV result derived from such system dynamics is compared with NPV result of general DCF method. Dynamic NPV result revealed to be more conservative than the general DCF method based NPV result. It is analyzed that conservative outcome of dynamic NPV result is owing to the various factors such as depressed global economy and acceleration of unbalance between supply and demand in shipping market was reflected and improved reality in vessel investment.

Under the above performed study, to overcome the limitations of commonly used DCF method in financial feasibility analysis model in purchase of vessel, SD model, a dynamic analysis method is applied and induced resonable estimation based on casual relation between variables.

Additionally, a new forecast model is established for overall management of risks in variables used and future cash flow estimation is provided but it has few limitations of it’s own.

First, SD evaluation method, forecasting future cash flow using results of estimation of various variables and casual loop diagram structured through qualitative decision shows difficulty in selection of variables from objective proof side.

Second, limiting number of variable in studied model due to the adversity in structuring such a model and credibility of performed results is where the advantage of system dynamics was not fully utilized.

Third, rather than to offer an alternative to overcome limitations of commonly used DCF method, dynamic DCF evaluation method with SD is used and could not fully surmount the limitations.

Thus, conducive to improve financial feasibility of vessel investment project, diversified variables and analysis to prove objectivity needs to be analyzed. Eventually, objectivity in cash flow forecast and supplementary analysis method in accordance with reality needs to be applied to improve credibility and prediction of SD model.