Armenian Railways: Five Year Business Plan
Appendix B: Financial Model
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- Transportation CJSC
- Rollingstock CJSC
- Infrastructure CJSC
- Appendix C: Methodology for Measuring Profitability by Line of Business
Appendix B: Financial ModelHwtsl has created financial models of the three core railway companies in Armenian Railways: Transportation, Infrastructure and Rollingstock. The models are spreadsheet-based and work interactively, as shown in the figure below. Traffic volume is forecast in the model of the Transportation CJSC, and measures of work (tkm and train-km) are passed to the models for the Transportation CJSC and Infrastructure CJSC model. These models calculate operating costs and asset requirements based on the work measures, and charge the Transportation CJSC based on the services rendered. Each model presents the company’s financial results in the form of a Balance Sheet, Income Statement and Cash Flow Statement. Interaction of Financial Models for Core Railway Companies 
Transportation CJSCThe model of the Transportation CJSC starts with the forecast of traffic and revenue. This is based on forecast of the underlying demand for transport, competition and railway prices. (See Appendix A.) The level of traffic, together with the railways’ historical operating relationships, generate physical measures of railway work (pkm, passenger train-km, tkm, tonnes) that are used to forecast operating expenses and asset requirements. Revenues flow to the Income Statement. Projections of collection period and bad debt rates for each traffic type are applied to revenues to calculate average accounts receivable and bad debt. Accounts receivable flow to the Balance Sheet; bad debt to the Income Statement. Flow Chart of Transportation CJSC Financial Model 
The physical measures of railway work interact with projections of labor, asset and other resource productivity to calculate operating expenses and the need for assets. For the Transportation CJSC, these factors are used to calculate the assets required and the operating expenses for Stations and Yards. The physical measures are also passed to the models for the Rollingstock and Infrastructure CJSCs, for calculation of fees for these companies’ services. Wagon hire (net) is calculate based on the CIS rates and the volume of import and export traffic. These operating expenses flow to the Income Statement. The historical asset base, depreciation rates, and the Transportation CJSC’s capital expenditure plans are used to forecast assets, which flow to the Balance Sheet. The Cash Flow Statement is derived from the Income Statement and changes to the Balance Sheet. Rollingstock CJSCThe model of the Rollingstock CJSC starts with the physical measures of railway work calculated in the model of the Transportation CJSC. Using historical operating relationships, tkm, train-km and tonnes are used to forecast the requirement for rollingstock assets (e.g., locomotive hours) and measures of rollingstock work (e.g., locomotive-km). The charging mechanism is applied to these measures, calculating revenues for the Rollingstock CJSC. (This revenue is an operating expense to the Transportation CJSC.) Revenue flows to the Income Statement. Projections of collection period and bad debt rates are applied to revenues to calculate average accounts receivable and bad debt. Accounts receivable flow to the Balance Sheet; Bad debt to the Income Statement. Flow Chart of Rollingstock CJSC Financial Model 
The requirement for rollingstock assets and measures of rollingstock work interact with projections of labor, asset and other resource productivity to calculate operating expenses and the need for assets. For the Rollingstock CJSC, these factors are used to calculate the assets required and the operating expenses for electric locomotives, diesel locomotives, electric trainsets, wagons and coaches. These operating expenses flow to the Income Statement. The historical asset base, depreciation rates, and the Rollingstock CJSC’s capital expenditure plans are used to forecast assets, which flow to the Balance Sheet. The Cash Flow Statement is derived from the Income Statement and changes to the Balance Sheet. Infrastructure CJSCThe model of the Infrastructure CJSC starts with the physical measures of railway work calculated in the model of the Transportation CJSC. Using historical operating relationships, tkm and train-km are used to forecast the wear to the infrastructure and the work the Infrastructure CJSC must do to maintain it. The charging mechanism is applied to these measures, calculating revenues for the Infrastructure CJSC. (This revenue is an operating expense to the Transportation CJSC.) Revenue flows to the Income Statement. Projections of collection period and bad debt rates are applied to revenues to calculate average accounts receivable and bad debt. Accounts receivable flow to the Balance Sheet; Bad debt to the Income Statement. Flow Chart of Infrastructure CJSC Financial Model  The requirement for infrastructure assets and measures of infrastructure work interact with projections of labor, asset and other resource productivity to calculate operating expenses and the need for assets. For the Infrastructure CJSC, these factors are used to calculate the assets required and the operating expenses for track, signaling and communications, and electrification and power supply. These operating expenses flow to the Income Statement. The historical asset base, depreciation rates, and the Infrastructure CJSC’s capital expenditure plans are used to forecast assets, which flow to the Balance Sheet. The Cash Flow Statement is derived from the Income Statement and changes to the Balance Sheet. Appendix C: Methodology for Measuring Profitability by Line of BusinessTo understand the profitability of lines of business, the Transportation CJSC must separate each cost and revenue element between the lines of business. This is done on the basis of cost causality, and is most accurately accomplished by recording revenues and expenses separately by line of business. When separate accounting is not made, revenues and costs must be allocated. Allocations are made on the basis of measurable factors that vary with the cost. For example the cost of shared track is usually allocated on the basis of factors such as gross tonne-km and train-km. 
As shown in the chart above, most of the expense of the Transportation CJSC are fees paid to the Rollingstock and Infrastructure CJSCs. The attribution of these costs to passenger and freight are defined by the charging mechanisms used for setting Infrastructure and Rollingstock fees. For the Transportation CJCS’s internal operating costs, hwtsl proposes an allocation methodology based on direct attribution of costs, where possible, and on employees and station value where direct attribution is not possible. Directory: ECA -> Transport.nsf -> ExtECADocByUnid ECA -> Phonetics and phonology ECA -> Brightspace Platform Requirements 1 Document Change History 1 Brightspace Platform Requirements 2 Brightspace Apps 5 About D2L 9 ECA -> Microservices in the Brightspace Cloud ECA -> Brightspace Assignment Grader for Android 6 ECA -> - ECA -> Brightspace Platform Requirements 1 Brightspace Apps 4 About D2L 9 ECA -> My Course series objective ExtECADocByUnid -> Review of sector transport, infrastructure and communications in bulgaria ExtECADocByUnid -> Review of the sectors transport, infrastructure and communications in romania Download 0.9 Mb. Share with your friends:
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