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NPV Dashboard

The NPV Dashboard, under Dashboards > NPV on an initiative's side menu, shows the initiative's net present value (NPV) — what its benefits, less its costs, are worth in today's money — year by year, for it and the initiatives directly beneath it. Use it to compare the planned and forecast NPV, see how they've moved from the baseline, and see when the initiative is forecast to pay for itself.

This article covers both the Advanced and Simple Models. The dashboard is available where it's enabled for the initiative's classification, or the project type — see Standard Dashboards. Where the initiative's classification hides benefit forecasts, the forecast NPV isn't shown.

An NPV Dashboard, with totals above the graph and the table of initiatives.
An NPV Dashboard.

How NPV is worked out

NPV discounts the values of later years, so a benefit or cost further in the future counts for less than one today. It's worked out for every initiative, whether or not it's in a Business Case, in three versions:

  • Planned NPV — the initiative's benefit plan, less its cost budget, including the initiatives beneath it.
  • Forecast NPV — its benefit forecast, less its cost forecast.
  • Actual NPV — the same as the forecast NPV, up to the end of the last financial year. It isn't worked out where the initiative starts in the current financial year or later.

Discounting each year

For each financial year, the year's net value — benefits less costs — is divided by that year's discount factor. The discounted values are then added up, year by year, so the NPV for a year is the total up to and including it.

  • The first year, the present year, isn't discounted: its discount factor is 1.
  • Each later year's discount factor is the previous year's, increased by that year's discount rate.

For example, at a discount rate of 10% a year, the year after the present year is divided by 1.1, and the year after that by 1.21.

Where the rates come from

  • In a Business Case — the rates come from the Business Case's Discount Rate measure, and its Present Year is the year that isn't discounted. The graph covers the Business Case's dates. See Business Cases.
  • Not in a Business Case — the rates come from your organization's first discount rate measure, and the initiative's first financial year isn't discounted. The graph covers the initiative's own dates.

Where an initiative isn't in a Business Case, but initiatives beneath it are, its NPV is the total of the NPVs of the initiatives directly beneath it. Where the initiative has an active baseline, the same three values are also worked out from the baseline — see Baselines.

The totals

Across the top of the dashboard, the initiative's NPV at the end of its timespan:

  • Baseline — the planned NPV when the active baseline was taken. Shown where the initiative is in an active baseline. See Baselines.
  • Plan — the planned NPV.
  • Forecast — the forecast NPV.
  • Variance — the forecast NPV less the planned NPV: green where the forecast is ahead of the plan, and red where it's behind.
  • Discount Rate — the rate for the current financial year.
  • Payback Period — how many years it takes for the forecast NPV to rise above zero.

The NPV graph

The graph shows the initiative's NPV, built up year by year, across each financial year of its timespan:

  • Plan — bars, for the planned NPV.
  • Baseline — bars beside the plan, for the planned NPV when the active baseline was taken. Shown where the initiative has an active baseline.
  • Forecast — a dashed line with points, for the forecast NPV.
  • To Date — a solid line with points, for the actual NPV: the forecast NPV, up to the end of the last financial year. Not shown where the initiative starts in the current financial year or later.

A marker shows the current financial year. Hover over a bar or point to see its value. Each series' color is set by your organization, so it may differ from the image.

The table

Below the graph, the table lists the initiative — shown as This [Classification], in bold — and the initiatives directly beneath it, each with:

  • ID and Name — click the name to open the initiative.
  • NPV Baseline Plan (% of Total) — shown where there's an active baseline.
  • NPV Plan (% of Total) and NPV Forecast (% of Total) — each initiative's planned and forecast NPV, and its share of the column's total.
  • Variance — the forecast NPV less the planned NPV, in green or red.

The last row shows the totals of each column.

For return on investment, see ROI Dashboard. For the other standard dashboards, and choosing which are available, see Standard Dashboards.