Architecture, Building and Planning - Theses

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End date: 1989 × Start date: 1985 × Type: PhD thesis × Subject: Building ×

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    Construction project cash flow modelling
    Kenley, R ( 1986)
    The thesis investigates construction project cash flows. It is divided into two main components. The first investigates the cumulative gross cash flow profiles (S curves), and the second examines the cumulative net cash flow profiles. The gross cash flow model can be used by either construction industry clients or contractors, whereas the net cash flow model concerns the contractor. Interest in construction project cash flows resulted from changed economic pressures in the 1970s. A rise in inflation was associated with increased client attention to his gross cash flows to the contractor, and similarly higher interest rates had the effect that contractors became concerned with their net cash flows. An examination of the gross cash flow literature found that most models were aimed at discovering generally applicable ideal curves. A similar situation existed within the net cash flow literature. It was argued that the averaging approach is unsuitable for construction project cash flow research, and consequently an approach which concentrates on the individual project was pursued. A gross cash flow model was developed using logistic transformation regression procedures. This yielded excellent results for post-hoc analysis of individual project data. Furthermore the gross cash flow model was found to be suitable for the generation of a construction project net cash flow model, which was similarly oriented towards the post-hoc analysis of single projects. A measure of deviation was used which enabled the identification of projects for which the gross cash flow model was a poor fit. This same procedure was used to exclude projects from the net cash flow analysis. The results from the gross cash flow model analysis indicate that projects do vary considerably from one to another, and this supports the contention made that an individual approach to this research is necessary. The net cash flow model yields an excellent trend line for net cash flow on a project, and thus provides an excellent means for senior management to judge the quality of management employed on a project