1. Concept of non operating items

Non operating projects refer to non-profit investment projects that aim to achieve social and environmental goals and provide services to the public. The prominent feature is that services and use functions provided for the society do not charge fees or only charge a small amount of fees.

2. Purpose of financial analysis of non operating items

The purpose of financial analysis is not necessarily to serve as the basis for investment decisions, but to investigate the financial situation of the project and understand its profit or loss, so as to take measures to maintain its operation and play its functions. For the financial analysis of many non operating projects, the essence is to compare and select schemes so that the selected schemes can meet the project objectives with the minimum cost. Lanzhou Project Feasibility Study Report

3. Requirements for financial analysis of non operating items

1) For projects without operating revenue, profitability analysis is not required. Its financial analysis focuses on financial sustainability.

2) For projects with operating revenue, financial analysis should treat them differently according to the extent to which revenue offsets expenditure. Generally, the order of business income compensation expense is: payment of operation and maintenance cost, payment of turnover tax, repayment of loan interest, provision of depreciation and repayment of loan principal.

4. Non operating items whose benefits are difficult to monetize

For non operating projects whose benefits are difficult to be monetized, the effect cost ratio or cost effect ratio shall be used for scheme comparison and selection. Gansu Feasibility Study Report to write

If the effect and cost of the alternative are different, calculate the effect cost ratio or cost effect ratio of the increment.