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Success Stories

Modeling of Operations for a Natural Resources Company


A large natural resources company continued to experience large changes in its financial results from its operations due to many exogenous variables related to labor relations, government regulations and environmental changes. The parent company requested more stable operational and financial results and returns from its subsidiary.


The company contracted to develop a model of its deep mining coal operations. The model of the coal operations enabled the company to understand the impact of changes to:

Furthermore, what-if analysis facilitated development of scenarios for analysts and  management to anticipate impact of potential strikes, price increases, material costs and quantity changes, and load balance of labor on the company's operating results.


The ensuing model calculated an operational Profit & Loss Report and Balance Sheet based on changes to virtually any factor related to their operations. As operational elements changed according to various scenarios, the company could forecast results and plan alternatives for such factors as:

The model increased management's ability to adapt to anticipated and sudden changes to their assumptions and actual operational conditions. Moreover, analysts performed studies of the effect of price changes of coal on the P&L and other operating aspects, anticipating the reported results to the company's parent. As a result, management proactively anticipated - instead of reacting - to factors both within and outside of their control.

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