Cost Benefit Analysis in Dubai

Why Cost-benefit Analysis?

Dubai has been evolving as an attractive interstellar space for businesses to flourish and nourish. The possibilities are wide-ranging, but the feasibility is imperative. The feasibility study is made on the basis of a cost-benefit analysis. 

Wise and sensible owners perform the Cost-Benefit Analysis (CBA) before starting a new project or plant to assess all the latent costs and incomes that a company might produce from the project or plant. The conclusion of the examination will determine whether the project is financially feasible or if the company should go for another venture.

Cost-benefit analysis is a process of analyzing the benefits of decisions in a business. It encompasses gaugeable financial metrics such as income earned or costs saved as a result of the decision to continue a project.

CDA is one of the leading Accounting and Auditing firms in Dubai, which has an experienced team of professionals who provide services in Cost-benefit Analysis and other areas of decision-making reports. CDA offers effective cost-benefit to help companies manage cost thereby improving cost efficiency, enhance profitability and make efficient management decisions.

A cost-benefit analysis (CBA) should begin with accumulating an inclusive list of all the costs and benefits linked to the project or decision. Department wise or cost centre wise allocation is a base for these analytical reports.

Costs Involved in Cost-benefit Analysis 

• Direct costs – the direct labour involved in manufacturing, inventory, raw materials, manufacturing expenses.
• Indirect costs - electricity, overhead costs from management, rent, utilities.
• Imperceptible costs - customer impact of pursuing a new business strategy, project, or construction of a manufacturing plant, delivery delays of product, employee impact.
• Opportunity costs - alternative investments, or buying a plant versus building one.
• Cost of potential risks - regulatory risks, competition, and environmental impacts.
• Expenses set aside as provisions
• Management remuneration
• Head office overheads

Benefits of Cost-Benefit Analysis

• Department wise availability of profit
• Helps in decision towards shut down or whether to continue with existing divisions or starting the alternatives
• Proper allocation of workforce
• Helps the inefficient utilization of available resources
• Top-level management can assess the employee wise performance or division wise performance
• Determining the sales price in a way covering the sufficient margin
• Cost Minimise without altering operational efficiency

Significance

• It supports decision making 
• It provides an agnostic, evidence-based view of the issue being evaluated
• It’s free from the influences of opinion, politics, or bias.
• It provides an unclouded view of the consequences of a decision
• It is an invaluable tool in developing business strategy,
• It is an invaluable tool in evaluating a new hire, 
• It is an invaluable tool in making resource allocation 
• It is an invaluable tool in purchase decisions.

Circumstances Utilizing Cost-Benefit Analysis

Cost-benefit analysis is the basis of the decision-making process over a wide variety of standards. In business or finance, the cost-benefit analysis offers inimitable and valuable perception while:

• Assessing new rentals
• Progressing yardsticks for comparing projects
• Determining whether to continue a planned project
• Considering investment occasions
• Gauging social aids
• Judging the desirability of suggested policies
• Measuring change initiatives
• Determining effects on stakeholders and participants

Why CDA?

It’s imperative to analyze all the circumstances and work through all the steps thoroughly without getting biased to economize or to make assumptions on views or best conjectures. CDA’s cost-benefit analysis is as comprehensive as possible. Our experts take a broad view of costs and benefits, including indirect and longer-term effects, on which the interests of all stakeholders who will be affected by the program, are reflected. We examine and assess all the environments thoroughly and come into a better conclusion which is suitable for your business. 

CDA services in the field of business hover over a wide area that includes CFO Services, Auditing Services, Accounting & Bookkeeping Services, Accounting Software services, Due Diligence Services, and Tax Filing & VAT Consultancy services.

Our professional experts are highly talented and customer-centric who can assure you a cost-effective and quality service as per your requirement in compliance with the FTA directions. 

If you would like to start a company or you have any queries regarding your current business, feel good to contact us. CDA is there for your assistance! 

Contact us, and our expert will give you one-hour Free Consultation on cost-benefit analysis in Dubai. 

Frequently Asked Questions [FAQ]

1.What is a cost benefit analysis?

The cost benefit analysis is a method comparing your options while making the business decisions based on the availability of resources. It analyses the sales and other sales related cost assigned within each department to measure the profitability of the business. 

2.Is Cost benefit analysis is a viable form of better decisions making?

No, Cost Benefit Analysis is a tool which helps in making better financial decisions. It’s not an end in itself. However, a part of the value Benefit process requires that you simply think widely on all options before making a final judgment. This is often where most of the people fail in their decision-making attempts. Cost Benefit Analysis is additionally very skilful at providing one viability output for every competing option, making comparisons objective and straightforward.

3.Do cost benefit analysis suitable for the small business owner?

Yes, this idea works equally for small business owners because as it does for large business world. Cost Benefit Analysis may be a decision-making technique that assesses the positive outcomes (benefits) also because the negative outcomes (costs) of various decision alternatives. The trick is to form its implementation easy for the small businessperson. 

4.Can we use Cost Benefit Analysis in decisions with high level of uncertainty? 

Yes, Risk and uncertainty are in evitable part of businesses. Nowadays, it's harder than ever to believe to the increasing complexity of the financial systems. This uncertainty about the longer term is even more prominent once we start facing decisions regarding emerging technologies and E-services. The problem in using Cost Benefit Analysis in such decision-making scenarios is within the incontrovertible fact that the disruption in the technology and risk assessment models leads to poor analysis.

5.Are decisions supported by Cost Benefit Analysis is ethical? 

Yes, the decisions made through cost benefit analysis are often based on the internal policies of the company. Even though it is critiqued for its utilitarian perspective, because the procedure is primarily concerned with maximizing or minimizing benefits or costs. Our analysis will be purely based on maximising the profit with minimum costs relying on the company policy. We provide analysis reports based on the accounting figures the results depends purely on the arithmetical accuracy in the financial statements.

6.What is the experience of CDA in Cost Benefit Analysis?

Be it large enterprises, start-ups, or small businesses, analysis is important to urge the foremost out of each idea and investment to form crucial decisions. CDA as a leading accounting and auditing firm in Dubai, which helps to spot the simplest return on your investment supported the resources, cost, and risks involved. CDA features a team of experts and competent in handling analysis for organizations providing a scientific, evidence-based view of the matter being evaluated for quick deciding across our clientele.

7.What are the benefits of cost benefit analysis?

Performing a cost benefit analysis gives you the chance to delve into specifics on Comparing various projects, Provide ideas for new investments, Appraisal and assessment of various policies and strategies, Forecast the future expenditures etc.

8.Do you guys perform Department wise / product wise cost analysis?

Yes, we do conduct department and product wise cost analysis, if the management provides the data required and information of good knowledge.