1.1 statement trend analysis to differentiate between successes and

1.1        Introduction Many problems such ascost overrun, schedule delay, low quality, and stakeholders’ dissatisfactionare frequently reported in construction projects in in Egypt and all othercountries. Early predict these deviations help solve the problem and minimizeits effect. Early notice is the outcomes from good forecasting for the project performance.Forecasting is an essential element of project management throughout the lifecycle of a project. The reliable forecasts are critical because even with adetailed plan, there are inherent risk factors that may influence the actualperformance of a project. As a result, the project manager continually seeksleading indicators for potential problems so that appropriate actions can be takenin a timely manner to minimize the expected variances from planned performance.

These leading indicators are the part of the project forecasts. project performanceprediction models developed in this study would enable owners, consultants, andcontractors to predict how successful their projects. Most of theconstruction experts agree on that it has not been easy determining, predictingor influencing project performance during the early phases of the project.

Allsuch work has certain limited accuracy. Although that, many performanceevaluation models have been developed along the previous 3 decades. They aredealing with this problem at three different levels: 1- construction industry;2- company; and 3- project. Models at the construction industry levels are usedto measure the effect of economic, political, and social changes on theperformance of the construction industry as a whole. Kangari, 1988 relates thechanges in construction industry failure rate to some macrocosmic factors:average prime interest rates, amount of construction activity, in?ation, andnew business entering the construction industry. Most performance evaluationmodels for construction companies are based on their annual ?nancial statementsor reports.

Different analytical techniques have been used to develop theseratios: 1-     ?nancial statement trend analysis; 2-     ?nancial statement structuralanalysis; and 3-     ?nancial statement ratio analysis. The most important indicators thatcould be used in ?nancial statement trend analysis to differentiate between successesand non-successes companies are: accounts receivable, under-belling, accountspayable, notes payable, total long-term debts, stock and retained earnings,cost of sales, and gross pro?t.  The aim is to predictthe final performance at early stages in the project, for the reason that incase of undesired performance, the project team should have the time andresources to act proactively and take corrective action without causingschedule delay or cost overrun. Another important aspect is that based onapplied corrective action, what change has occurred in performance should bevisible i.

e. the prediction model should be a time-dependent dynamic model.