Difference between revisions of "SPIS Toolbox - Finance - Glossary"

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=== '''<span style="color:#879637">Glossary</span>''' ===
 
  
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== '''<span style="color:#879637">Glossary</span>'''<br/> ==
  
 
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| style="width: 200px" | '''Aquifer'''
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| style="width: 251px" | '''Assets'''<br/>
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| style="width: 548px" | Underground geological formation(s), containing usable amounts of groundwater that can supply wells or springs for domestic, industrial, and irrigation uses.
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| style="width: 497px" | position in balance sheet which represents what a company owns.<br/>
 
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| style="width: 200px" | '''Chemigation'''
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| style="width: 251px" | '''Capital expenditures (CAPEX)'''<br/>
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| style="width: 548px" | The process of applying chemicals (fertilizers, insecticides, herbicides, etc...) to crops or soil through an irrigation system with the water.
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| style="width: 497px" | are one-time expenses. Normally they are long-term investments in non-consumable parts of the business, for example money that is spent on pump, panels, machines, etc.<br/>
 
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| style="width: 200px" | '''Conveyance loss'''
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| style="width: 251px" | '''Cash Inflows'''<br/>
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| style="width: 548px" | Loss of water from a channel or pipe during transport, including losses due to seepage, leakage, evaporation, and other losses.
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| style="width: 497px" | all cash receipts realized within a given period (e.g. from sales).<br/>
 
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| style="width: 200px" | '''Crop coefficient'''
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| style="width: 251px" | '''Cash Outflow'''<br/>
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| style="width: 548px" | Loss of water from a channel or pipe during transport, including losses due to seepage, leakage, evaporation, and other losses.
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| style="width: 497px" | outgoing cash, all cash payments realized during a given period (e.g. for buying production inputs, loan installments, buying equipment).<br/>
 
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| style="width: 200px" | '''Crop Water Requirement<br/>(CWR)'''
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| style="width: 251px" | '''Creditors'''<br/>
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| style="width: 548px" | The amount of water needed by a plant. It depends on the climate, the crop as well as management and environmental conditions. It is the same as crop evapotranspiration.
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| style="width: 497px" | payable occurring from past credit (money owed to suppliers for expenses).<br/>
 
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| style="width: 200px" | '''Current (I)'''
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| style="width: 251px" | '''Collateral'''<br/>
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| style="width: 548px" | Current is the electrical flow when voltage is present across a conductor, or the rate at which charge is flowing, expressed in amperes.&nbsp;
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| style="width: 497px" | property or other assets that a borrower offers a lender to secure a loan.<br/>
 
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| style="width: 200px" | '''Deep percolation'''
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| style="width: 251px" | '''Credit Sales'''<br/>
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| style="width: 548px" | Movement of water downward through the soil profile below the root zone. This water is lost to the plants and eventually ends up in the groundwater. [mm]
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| style="width: 497px" | sales made without receiving cash.]<br/>
 
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| style="width: 200px" | '''Drawdown'''
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| style="width: 251px" | '''Current Assets'''<br/>
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| style="width: 548px" | Lowering of level of water in a well due to pumping.
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| style="width: 497px" | cash and other assets which are expected to be converted into cash or consumed during the normal operating cycle of a business.<br/>
 
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| style="width: 200px" | '''Drip irrigation'''
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| style="width: 251px" | '''Debtors'''<br/>
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| style="width: 548px" | Water is applied to the soil surface at very low flow rates (drops or small streams) through emitters. Also known as trickle or micro-irrigation.
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| style="width: 497px" | receivables occurring from past credit sales.<br/>
 
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| style="width: 200px" | '''Emitter'''
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| style="width: 251px" | '''Depreciation'''<br/>
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| style="width: 548px" | Small micro-irrigation dispensing device designed to dissipate pressure and discharge a small uniform flow or trickle of water at a constant discharge which does not vary significantly because of minor differences in pressure head.&nbsp; Also called a "dripper" or "trickler".
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| style="width: 497px" | a cost charged against fixed assets for their replacement. Note: “depreciation” is one of the few expenses for which there is no associated outgoing cash flow.<br/>
 
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| style="width: 200px" | '''Evaporation'''
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| style="width: 251px" | '''Expenses / expenditure'''<br/>
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| style="width: 548px" | Loss of water as vapor from the surface of the soil or wet leaves. [mm]
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| style="width: 497px" | payment of cash or cash equivalent for good or services received. Cost of resources used up or consumed by the activities of the business.<br/>
 
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| style="width: 200px" | '''Evapotranspiration (ET)'''
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| style="width: 251px" | '''Finished Good Stock'''<br/>
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| style="width: 548px" | Combined water lost from evaporation and transpiration. The crop ET (ETc) can be estimated by calculating the reference ET for a particular reference crop (ETo for clipped grass) from weather data and multiplying this by a crop coefficient. The ETc, or water lost, equals the CWR, or water needed by plant. [mm]
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| style="width: 497px" | an inventory of final products ready for sale.<br/>
 
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| style="width: 200px" | '''GIWR'''
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| style="width: 251px" | '''Financial Viability'''<br/>
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| style="width: 548px" | The Gross Irrigation Water Requirement (GIWR) is used to express the quantity of water that is required in the irrigation system.
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| style="width: 497px" | ability to generate sufficient income to meet operating expenditure, financing needs and, ideally, to allow profit generation. Financial viability is usually assessed using the Net Present Value (NPV) and Internal Rate of Return (IRR) approaches together with estimating the sensitivity of the cost and revenue elements. Both NPV and IRR are the most commonly used decision criteria of a cost-benefit analysis.<br/>
 
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| style="width: 200px" | '''Infiltration'''
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| style="width: 251px" | '''Fixed Assets'''<br/>
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| style="width: 548px" | The act of water entering the soil profile.
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| style="width: 497px" | assets required for long-term use and for physical use in the business (machinery,buildings, office equipment, cars, etc.).<br/>
 
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| style="width: 200px" | '''Fertigation'''
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| style="width: 251px" | '''Fixed Cost'''<br/>
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| style="width: 548px" | Application of fertilizers through the irrigation system. A form of chemigation.
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| style="width: 497px" | costs that do not vary with the level of production.<br/>
 
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| style="width: 200px" | '''Financial viability<br/>'''
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| style="width: 251px" | '''Fixed Investment:'''<br/>
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| style="width: 548px" | The ability to generate sufficient income to meet operating expenditure, financing needs and, ideally, to allow profit generation. It is usually assessed using the Net Present Value (NPV) and Internal Rate of Return (IRR) approaches together with estimating the sensitivity of the cost and revenue elements (See Module FINANCE).<br/>
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| style="width: 497px" | investment made in fixed assets (e.g. machinery).<br/>
 
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| style="width: 200px" | '''Friction loss<br/>'''
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| style="width: 251px" | '''Gross Margin'''<br/>
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| style="width: 548px" | The loss of pressure due to flow of water in pipe. It depends on the pipe size (inside diameter), flow rate, and length of pipe. It is determined by consulting a friction loss chart available in an engineering reference book or from a pipe supplier.<br/>
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| style="width: 497px" | gross income minus gross expenses.<br/>
 
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| style="width: 200px" | '''Global solar radiation (G)<br/>'''
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| style="width: 251px" |  
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| style="width: 548px" | The energy carried by radiation on a surface over a certain period of time. The global solar radiation is locations specific as it is influenced by clouds, air humidity, climate, elevation and latitude, etc. The global solar radiation on a horizontal surface is measured by a network of meteorological stations all over the world and is expressed in kilowatt hours per square meter [kWh/m²].<br/>
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'''Income'''<br/>
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| style="width: 200px" | '''Gravity flow<br/>'''
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| style="width: 497px" |  
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| style="width: 548px" | The use of gravity to produce pressure and water flow, for example when a storage tank is elevated above the point of use, so that water will flow with no further pumping required.<br/>
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income is money generated from the activities of the business.<br/>
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| style="width: 200px" | '''Head<br/>'''
 
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| style="width: 548px" | Value of atmospheric pressure at a specific location and condition. (meters):<br/>head, total (dynamic ) Sum of static, pressure, friction and velocity head that a pump works against while pumping at a specific flow rate, head loss Energy loss in fluid flow.<br/>
 
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| style="width: 200px" | '''Insolation<br/>'''
 
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| style="width: 548px" | The rate at which solar energy reaches a unit area at the earth measures in Watts per square meter [W/m<sup>2</sup>]. Also called solar irradiance.<br/>
 
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| style="width: 200px" | '''Irradiation<br/>'''
 
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| style="width: 548px" | The integration or summation of insolation (=solar irradiance ) over a time period expressed in Joules per square meter (J/m2) or watt-hours per square meter [Wh/m<sup>2</sup>]<br/>
 
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| style="width: 200px" | '''Irrigation<br/>'''
 
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| style="width: 548px" | Irrigation is the controlled application of water to respond to crop needs.<br/>
 
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| style="width: 200px" | '''Irrigation efficiency<br/>'''
 
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| style="width: 548px" | Proportion of the irrigation water that is beneficially used to the irrigation water that is applied [%].<br/>
 
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| style="width: 200px" | '''Irrigation head'''
 
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| style="width: 548px" | Control unit to regulate water quantity, quality and pressure in an irrigation system using different types of valves, pressure regulators, filters and possibly a chemication system.
 
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| style="width: 200px" | '''Lateral<br/>'''
 
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| style="width: 548px" | Pipe(s) that go from the control valves to the sprinklers or drip emitter tubes.<br/>
 
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| style="width: 200px" | '''Latitude<br/>'''
 
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| style="width: 548px" | Latitude specifies the north–south position of a point on the Earth's surface. It is an angle which ranges from 0° at the Equator to 90° (North or South) at the poles. Lines of constant latitude, or parallels, run east–west as circles parallel to the equator. Latitude is used together with longitude to specify the precise location of features on the surface of the Earth.<br/>
 
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| style="width: 200px" | '''Leaching<br/>'''
 
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| style="width: 548px" | Moving soluble materials down through the soil profile with the water.<br/>
 
 
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| style="width: 200px" | '''Maximum Power Point<br/>Tracking (MPPT)<br/>'''
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| style="width: 251px" | '''Inflation'''<br/>
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| style="width: 548px" | An important feature in many control boxes to draw the right amount of current in order to maintain a high voltage and achieve maximum system efficiency.<br/>
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| style="width: 497px" | the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.<br/>
 
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| style="width: 200px" | '''Net Irrigation Water Requirements (NIWR)<br/>'''
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| style="width: 251px" | '''Internal Rate of Return'''<br/>
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| style="width: 548px" | The sum of the individual crop water requirements (CWR) for each plant for a given period of time. The NIWR determines how much water should reach the crop to satisfy its demand for water in the soil.<br/>
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| style="width: 497px" | gives the discount rate over the lifespan of a capital investment; i.e. the profit rate generated by a certain investment (amount) over its lifespan. By calculating IRR of a project you can answer the question whether the money is well spent or if less risky investment alternatives might be more profitable in the long run, e.g. putting the money on a bank account to get interest on it.<br/>
 
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| style="width: 200px" | '''Power (P)<br/>'''
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| style="width: 251px" | '''Liabilities'''<br/>
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| style="width: 548px" | s the rate at which energy is transferred by an electrical circuit expressed in watts.&nbsp; Power depends on the amount of current and voltage in the system.&nbsp; Power equals current multiplied by voltage (P=I x V).<br/>Pressure The measurement of force within a system. This is the force that moves water through pipes, sprinklers and emitters. Static pressure is measured when no water is flowing and dynamic pressure is measured when water is flowing. Pressure and flow are affected by each other. [bars, psi, kPa]<br/>
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| style="width: 497px" | claims by creditors against the assets of a business.<br/>
 
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| style="width: 200px" | '''Photosynthesis<br/>'''
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| style="width: 251px" | '''Life Cycle Costing'''<br/>
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| style="width: 548px" | Photosynthesis is a process used by plants and other organisms to convert light energy into chemical energy that can later be released to fuel the organisms' activities (energy transformation).<br/>
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| style="width: 497px" | is a technique for evaluating total cost of ownership to compare different alternatives.<br/>
 
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| style="width: 200px" | '''Priming<br/>'''
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| style="width: 251px" | '''Material Stocks'''<br/>
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| style="width: 548px" | The process of hand-filling the suction pipe and intake of a surface pump. Priming is generally necessary when a pump must be located above the water source.<br/>
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| style="width: 497px" | an inventory of all raw materials not yet used in production.<br/>
 
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| style="width: 200px" | '''Pump<br/>'''
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| style="width: 251px" | '''Net Present Value'''<br/>
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| style="width: 548px" | Converts mechanical energy into hydraulic energy (pressure and/or flow).<br/>Submersible Pump - A motor/pump combination designed to be placed entirely below the water surface.<br/>Surface Pump - A pump that is not submersible and placed not higher than about 7 meters above the surface of the water.<br/>
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| style="width: 497px" | determines the present worth of an investment by discounting the cash inflows and cash outflows generated by this investment over its lifespan. For the determination of the NPV you need to define the expected life span of the investment as well as a discount factor, which might be near to the interest rate on deposits. You could also use the NPV for comparison of alternative investment options.<br/>
 
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| style="width: 200px" | '''Root Zone<br/>'''
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| style="width: 251px" | '''Net Working Capital'''
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| style="width: 548px" | The depth or volume of soil from which plants effectively extract water from [m]<br/>
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| style="width: 497px" | current assets minus current liabilities.
 
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| style="width: 200px" | '''Salinity (Saline)<br/>'''
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| style="width: 251px" | '''Operating expenses (OPEX)'''<br/>
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| style="width: 548px" | Salinity refers to the amount of salts dissolved in soil water.<br/>
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| style="width: 497px" | are the ongoing costs for running a business that are related with the operation and maintenance of it. They are the expenses related to the production activity of the business and they are divided into fixed and variable costs.<br/>
 
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| style="width: 200px" | '''Solar panel efficiency<br/>'''
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| style="width: 251px" | '''Payback Period (PP)'''<br/>
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| style="width: 548px" | Solar panel efficiency is the ratio of light shining on the panel, versus the amount of electricity produced. It is expressed as a percentage. Most systems are around 16% efficient, meaning 16% of the light energy is converted into electricity.&nbsp;<br/>
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| style="width: 497px" | is the length of time required to recover the cost of an investment''.''<br/>
 
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| style="width: 200px" | '''Suction lift<br/>'''
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| style="width: 251px" | '''Profitability'''<br/>
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| style="width: 548px" | Vertical distance from the surface of the water to the pump. This distance is limited by physics to around 7 meters and should be minimized for best results. This applies only to surface pumps.<br/>
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| style="width: 497px" | income minus expenses. Is stated in the income statement (or Profit and Loss Statement), which reports a company's revenue, expenses, and net income over a period of time.<br/>
 
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| style="width: 200px" | '''Surface irrigation<br/>'''
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| style="width: 251px" | '''Raw Material Purchases'''<br/>
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| style="width: 548px" | Irrigation method where the soil surface is used to transport the water via gravity flow from the source to the plants. Common surface irrigation methods are:<br/>furrow irrigation- water is applied to row crops in small ditches or channels between the rows made by tillage implements;<br/>basin irrigation- water is applied to a completely level area sur-rounded by dikes, and<br/>flood irrigation- water is applied to the soil surface without flow controls, such as furrows or borders.<br/>
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| style="width: 497px" | cost incurred on purchase of raw material<br/>
 
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| style="width: 200px" | '''Transpiration<br/>'''
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| style="width: 251px" | '''Revenue'''<br/>
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| style="width: 548px" | Water taken up by the plant's roots and transpired out of the leaves. [mm]<br/>
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| style="width: 497px" | is the income earned by a business typically through selling goods/products or services.<br/>
 
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| style="width: 200px" | '''Voltage (V)<br/>'''
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| style="width: 251px" | '''Variable Cost'''<br/>
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| style="width: 548px" | Voltage is the electric potential between two points, or the difference in charge between two points, expressed in Volts.<br/>
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| style="width: 497px" | cost that varies directly with the level of production delivered.<br/>
 
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<br/>{{SPIS Reference}}
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{{SPIS Reference}}

Revision as of 14:44, 2 June 2017

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Introduction

The Toolbox on Solar Powered Irrigation Systems (SPIS) is designed to enable advisors, service providers and practitioners in the field of solar irrigation to provide broad hands-on guidance to end-users, policy-makers and financiers. Risks related to system efficiency, financial viability and the unsustainable use of water resources can thus be minimized. The Toolbox comprises informative modules supplemented with user-friendly software tools (calculations sheets, checklists, guidelines). read more

Modules and tools touch upon:

  • assessing the water requirements,
  • comparing the financial viability,
  • determining farm profitability and payback of investment in SPIS,
  • sustainably design and maintain a SPIS,
  • highlight critical workmanship quality aspects,
  • and many more.
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Glossary

Assets
 position in balance sheet which represents what a company owns.
Capital expenditures (CAPEX)
 are one-time expenses. Normally they are long-term investments in non-consumable parts of the business, for example money that is spent on pump, panels, machines, etc.
Cash Inflows
 all cash receipts realized within a given period (e.g. from sales).
Cash Outflow
 outgoing cash, all cash payments realized during a given period (e.g. for buying production inputs, loan installments, buying equipment).
Creditors
 payable occurring from past credit (money owed to suppliers for expenses).
Collateral
 property or other assets that a borrower offers a lender to secure a loan.
Credit Sales
 sales made without receiving cash.]
Current Assets
 cash and other assets which are expected to be converted into cash or consumed during the normal operating cycle of a business.
Debtors
 receivables occurring from past credit sales.
Depreciation
 a cost charged against fixed assets for their replacement. Note: “depreciation” is one of the few expenses for which there is no associated outgoing cash flow.
Expenses / expenditure
 payment of cash or cash equivalent for good or services received. Cost of resources used up or consumed by the activities of the business.
Finished Good Stock
 an inventory of final products ready for sale.
Financial Viability
 ability to generate sufficient income to meet operating expenditure, financing needs and, ideally, to allow profit generation. Financial viability is usually assessed using the Net Present Value (NPV) and Internal Rate of Return (IRR) approaches together with estimating the sensitivity of the cost and revenue elements. Both NPV and IRR are the most commonly used decision criteria of a cost-benefit analysis.
Fixed Assets
 assets required for long-term use and for physical use in the business (machinery,buildings, office equipment, cars, etc.).
Fixed Cost
 costs that do not vary with the level of production.
Fixed Investment:
 investment made in fixed assets (e.g. machinery).
Gross Margin
 gross income minus gross expenses.

Income

income is money generated from the activities of the business.

Inflation
 the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.
Internal Rate of Return
 gives the discount rate over the lifespan of a capital investment; i.e. the profit rate generated by a certain investment (amount) over its lifespan. By calculating IRR of a project you can answer the question whether the money is well spent or if less risky investment alternatives might be more profitable in the long run, e.g. putting the money on a bank account to get interest on it.
Liabilities
 claims by creditors against the assets of a business.
Life Cycle Costing
 is a technique for evaluating total cost of ownership to compare different alternatives.
Material Stocks
 an inventory of all raw materials not yet used in production.
Net Present Value
 determines the present worth of an investment by discounting the cash inflows and cash outflows generated by this investment over its lifespan. For the determination of the NPV you need to define the expected life span of the investment as well as a discount factor, which might be near to the interest rate on deposits. You could also use the NPV for comparison of alternative investment options.
Net Working Capital current assets minus current liabilities.
Operating expenses (OPEX)
 are the ongoing costs for running a business that are related with the operation and maintenance of it. They are the expenses related to the production activity of the business and they are divided into fixed and variable costs.
Payback Period (PP)
 is the length of time required to recover the cost of an investment.
Profitability
 income minus expenses. Is stated in the income statement (or Profit and Loss Statement), which reports a company's revenue, expenses, and net income over a period of time.
Raw Material Purchases
 cost incurred on purchase of raw material
Revenue
 is the income earned by a business typically through selling goods/products or services.
Variable Cost
 cost that varies directly with the level of production delivered.
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