Making finance count
Our financial economics and corporate finance expertise straddles continents and crosses industries.
We take a fresh approach to advising regulatory bodies, governments and corporates on how to meet the challenges they face.
What we do:
- Estimate and interpret the cost of capital
- Advise on regulatory finance for regulated utilities and regulators
- Financial modelling
- Profitability assessment
- Due diligence for corporate transactions
- Financial analysis in legal disputes
Estimating the cost of capital is a thorny issue. We apply creative thinking with robust modelling techniques to get the answers you need to meet your regulatory requirements and business objectives.
Our analysis is:
- Internally consistent
- Based on technically adept modelling techniques
Our advice is:
- Enhanced by a deep understanding of wider regulatory and policy contexts
Our expertise is employed in relation to:
- Regulatory finance
- Profitability measurement and asset valuation
- Transaction support and due diligence
- Dispute support and damages estimation
We have a vast array of regulatory expertise in the financial sector.
Cost of capital and financeability
We’re past masters at estimating the cost of capital and carrying out financeability assessments.
Industries we help include:
Risk and reward
We’ll help balance your risk and reward within the regulatory incentives framework.
We’ll help assess the Return on regulated equity, and its impact on your overall risk / reward package.
This includes allowed equity return, risk exposure to costs, as well as incentive and risk-sharing mechanisms.
Regulatory cost analysis
We advise regulatory bodies on topics including:
- Cost benchmarking
- Efficiency and productivity analysis
- Cost accounting
- Developing regulatory information and business plans.
- Assessing underlying costs
We have extensive experience advising on the development, preparation and analysis of regulatory accounts.
How we help:
- Producing regulatory accounts
- Reviewing accounts for regulators or regulated bodies
- Advising regulators on the development of regulatory accounting frameworks
We’ve created financial models to support an extensive range of business needs, including:
- Regulatory financial models for estimating regulated prices or revenues, assessing levels of profitability, or determining financing needs.
- Financial models to support business developments and acquisitions.
- Provide training and support on the use of models we’ve developed or on the regulator’s models
- Produce user manuals, train individuals and run group workshops
- Support companies using regulatory models for business plan submissions or analysing regulatory results
- Undertake Quality Assurance proposals for companies and regulators
Reliably measuring a business’s profitability is essential in many instances.
- High profits can be used as evidence of market power of excessive pricing
- Low profits may indicate predatory pricing or margin squeeze
- Damages claims are often based on loss of profits, requiring robust estimates of past of future profitability
The Frontier way
- We think more broadly than just the accounting measures of costs and revenues, replacing them with their economic counterparts for our analysis
- We work closely with your business and industry experts, to understand the scale and nature of any adjustments needed
- We consider the most appropriate methods for valuing tangible and intangible assets
- We draw on our expertise in estimating the cost of capital to estimate your profitability
- That way, we’ll know whether your profits may be considered high or low relative to a comparable business
We undertake due diligence and transaction support for a range of countries and sectors, for both regulated and commercial targets.
Working with leading investment banks and financial advisors we review and advise on company or asset valuations.
We have an unrivalled knowledge of regulatory frameworks and commercial market conditions, worldwide.
We bring together financial analysis and regulatory capabilities to support clients on a wide range of commercial disputes, investor-state arbitrations, judicial reviews and regulatory appeals.
This insight and expertise allows us to assess the fairness of regulatory decisions and regimes. It can also determine the reasonableness of management decisions in shareholder or joint venture disputes.
We use analytical techniques such as IRR analysis to determine investment success and other forms of economic profitability. This requires financial modelling, as well as an understanding of financial data in relation to regulatory decisions.
The UK Financial Conduct Authority to look at issues of persistent debt with overdrafts as well as fundamental reform of unplanned overdrafts