Financial Analysis Assignment Latest

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Financial Analysis Assignment Page 1

Estimated Cost of the Project

Annexure: 01

(Rupees in Millions)

Sr.

No.Items

Foreign

Cost

Local

Cost

Total

Cost

1

Land --- 75.000 75.000

Development & Legal Charges --- 20.000 20.000

Total Land --- 95.000 95.000

2

Collection of Buildings --- 79.500 79.500

Architect Fee --- 2.385 2.385

Contingency Provision (12%) --- 9.826 9.826

Total Buildings Collection --- 91.711 91.711

3

Plant & Machinery

Foreign Machinery (CIF Cost Karachi to Lahore) 100.000 --- 100.000

Incidentals on Foreign Machinery --- 25.000 25.000

Local Machinery --- 75.000 75.000

Incidentals on Local Machinery --- 7.500 7.500

Contingency Provision (12%) 12.000 12.900 24.900

Installed Cost of Machinery 112.000 120.400 232.400

4

Furniture & Fixtures --- 5.000 5.000

Vehicles --- 10.000 10.000

Pre-Operating Expenses --- 20.000 20.000--- 35.000 35.000

Total Cost of Fixed Assets 112.000 342.111 454.111

Add: Gross Working Capital --- 123.0233 123.0233

Total Cost of the Project 112.000 465.1343 577.1343

Means of Financing the Project:

Loans: Equity:

Long Term Loan: 317.8777 Bridge Finance: 76.3434

Short Term Loan: 41.1324 Sponsors Capital: 141.7808

359.0101 218.1242

577.1343




Production & Sales Estimates

Annexure: 02


Years of Operations 1st

Year 2nd

Year 3rd

Year 4th

Year 5th

Year

Capacity Attained (%) 65% 70% 75% 80% 85%

Production at Attained Capacity 1.950 2.100 2.250 2.400 2.550

Add: Opening Work in Process --- 0.0325 0.035 0.0375 0.04

Total Work in Process 1.950 2.1325 2.285 2.4375 2.59

Less: Closing Work in Process 0.0325 0.035 0.0375 0.04 0.0425

Net Production 1.9175 2.0975 2.2475 2.3975 2.5475

Add: Opening Finished Goods --- 0.1597 0.1747 0.1872 0.1997

Quantity Available for Sale 1.9175 2.2572 2.4222 2.5847 2.7472

Less: Closing Finished Goods 0.1597 0.1747 0.1872 0.1997 0.2122

Quantity Sold 1.7578 2.0825 2.235 2.385 2.535

Sales Revenue:*

(Selling Price x Quantity Sold)369.138 437.325 469.35 550.935 585.585

*Note:

Selling Price for First three years in Rs 210 per unit, and after wards it increases by 10% so for4

th & 5

th year it will be Rs 231 per unit.




Cost of Goods Sold Statement

Annexure: 03


Particulars 1st

Year 2nd

Year 3rd

Year 4th

Year 5th

Year

Raw Materials 195.00 210.00 247.50 264.00 280.50*

Wages & Salaries 10.00 11.00 12.10 13.310 14.641

Factory Overheads:

Cost of Electricity (fixed +

variable)

11.235 13.765 16.802 20.440 24.792

Stores, Spares & Consumables 11.62 13.944 16.268 18.592 20.916

Repairs & Maintenance 16.955 20.346 23.737 27.128 30.519

Cost of Insurance Premium 5.0866 5.0866 5.0866 5.0866 5.0866

Depreciation / Amortization 35.5755 35.5755 35.5755 35.5755 30.5755

Miscellaneous Expenses 3.2188 3.5486 3.8987 4.2728 4.4755

Total FOH 83.6909 92.2657 101.3678 111.0949 116.3646

Total Cost 288.6909 313.2657 360.9678 388.4049 411.5056

Add: Opening Work in Process --- 4.8115 5.2210 6.0161 6.4734

Total Work in Process 288.6909 318.0772 366.1888 394.421 417.979

Less: Ending Work in Process 4.8115 5.2210 6.0161 6.4734 6.8584

Cost of Goods Manufactured 283.8794 312.8562 360.1727 387.9476 411.1206

Add: Opening Finished Goods --- 23.6566 26.9415 30.0143 32.3289

Cost of Goods Available for Sale 283.8794 336.5128 387.1142 417.9619 443.4495

Less: Ending Finished Goods 23.6566 26.9415 30.0143 32.3289 34.260

Cost of Goods Sold (CGS) 260.2228 309.5713 357.0999 385.633 409.189




Forecast Income Statement

Annexure: 04


Particulars 1st

Year 2nd

Year 3rd

Year 4th

Year 5th

Year

Sales 369.138 437.325 469.350 550.935 585.585

Less: Cost of Goods Sold (CGS) 260.2228 309.5713 357.0999 385.633 409.189

Gross Profit 108.9152 127.7537 112.2501 165.302 176.396

Less: Selling & Admin. Expenses 11.0741 13.1197 14.0805 16.5280 17.5675

Operating Profit 97.8411 114.634 98.1696 148.774 158.8285

Less: Financial Expenses;

Interest on Long Term Loan 72.476 26.7017 19.0726 11.4436 3.8145

Interest on Short Term Loan 4.5245 5.2995 5.9478 6.3961 6.8074

Interest on Bridge Finance 9.9246 9.9246 9.9246 --- ---

Total Financial Expenses 86.9251 41.9258 34.945 17.8397 10.6219

Profit After Charging financial

expenses10.916 72.7082 63.2246 130.9343 148.2066

Less: Worker Participation Fund 0.5458 3.6354 3.1612 6.5467 7.4103

Pre-Taxation Profit 10.3702 69.0728 60.0634 124.3876 140.7963

Less: Income Tax 2.5925 17.2682 15.0158 31.0969 35.1990

Profit After Tax 7.7777 51.81 45.0476 93.2907 105.5973

(Apportionment of Profit)

Dividend Payable --- --- --- 76.3434 76.3434

Retained Earnings 7.7777 51.810 45.0476 16.9473 29.2539




Working Capital Estimates

Annexure: 05


ParticularsTied-Up

Period

1st

Year

2nd

Year

3rd

Year

4th

Year

5th

Year

Current Assets:

Raw Material

Consumed

45 Days 29.25 31.5 37.125 39.6 42.075

Work in Process 5 Days 4.8115 5.3012 6.1031 6.5736 6.9663

Finished Goods 25 Days 23.6566 30.4129 32.2595 34.8301 36.9541Stores & Spares 2 Months 1.9366 2.324 2.7113 3.0986 3.486

Account Receivables 60 Days 61.523 72.8875 78.225 91.8225 97.5975

Initial Cash 2 Months 1.8456 --- --- --- ---

Gross Working Capital 123.0233 142.4256 156.4239 175.9248 187.0789

Less: Current Liabilities;

Bank Loan (Short Term)75% of

Marketable

Inventories

41.1324 48.1776 54.0718 58.1465 61.8863

Net Working Capital 81.8909 94.248 102.3521 117.7783 125.1926




Cash Flow Statement


Particulars Contractua

l Year1

st Year 2

nd Year 3

rd Year 4

th Year 5

th Year

Sources of Cash:

Operating Profit --- 97.8411 114.634 98.1696 148.774 158.8285

Add: Non-Cash Expenses --- 35.5755 35.5755 35.5755 35.5755 30.5755

Cash from Operations --- 133.4166 150.2095 133.7451 184.3495 189.404

Increase in current liabilities --- 41.1324 7.0452 5.8942 4.0747 3.7398

Increase in long-term

liabilities317.8777 --- --- --- --- ---

Increase in Paid-up capital 141.7808 --- --- --- 76.3434 ---

Increase in redeemable

capital76.3434 --- --- --- --- ---

Decrease in current Assets --- --- --- --- --- ---

Decrease in fixed Assets --- --- --- --- --- ---

Total Sources 536.0019 174.549 157.2547 139.6393 264.7676 193.1438

Less: Application of Cash:

Increase in fixed Assets 454.111 --- --- --- --- ---

Increase in Current Assets --- 121.1777 21.2479 13.9983 19.5009 11.1541

Decrease in current liabilities --- --- --- --- --- ---

Decrease in long-term

liabilities--- 63.5755 63.5755 63.5755 63.5755 63.5755

Decrease in redeemable

capital--- --- --- --- 76.3434 ---

Financial Expenses --- 86.9251 41.9258 34.945 17.8397 10.6219

Worker’s Participation Fund --- 0.5458 3.6354 3.1612 6.5467 7.4103

Income Tax --- 2.5925 17.2682 15.0158 31.0969 35.1990

Dividend --- --- --- --- 76.3434 76.3434

Total Application of Cash 454.111 274.8166 147.6528 130.6958 291.2465 204.3042

Surplus / Deficit 81.8909 (100.2676) 9.6019 8.9435 (26.4789) (11.1604)

Cash Opening Balance --- 81.8909 (18.3767) (8.7748) 0.1687 (26.3102)Cash Closing Balance 81.8909 (18.3767) (8.7748) 0.1687 (26.3102) (37.4706)




Balance Sheet


Particulars ContractualYear

1st

Year 2nd

Year 3rd

Year 4th

Year 5th

Year

Assets:

Current Assets;

Cash & Bank balance 81.8909 (18.3767) (8.7748) 0.1687 (26.3102) (37.4706)

Account Receivable --- 61.523 72.8875 78.225 91.8225 97.5975

Inventories --- 59.6547 69.5381 78.1989 84.1023 89.4814

Total Current Assets 81.8909 102.801 133.6508 156.5926 149.6146 149.6083

Non Current Assets;

Property Plant & Equipment 454.111 454.111 454.111 454.111 454.111 454.111

Less: Accumulated Depreciation --- 35.5755 71.151 106.7265 142.302 172.8775Total Assets 536.0019 521.3365 516.61 503.97 461.4236 430.848

Liabilities & Equities:

Current Liabilities;

Short term loan --- 41.1324 48.1776 54.0718 58.1465 61.8863

Account payable --- --- --- --- --- ---

Dividend Payable --- --- --- --- --- ---

Total Current Liabilities --- 41.1324 48.1776 54.0718 58.1465 61.8863

Non-Current Liabilities;

Bank loan 317.8777 254.3022 190.7267 127.1512 63.5755 ---

Redeemable capital 76.3434 76.3434 76.3434 76.3434 --- ---

Total non-current liabilities 394.2211 330.6456 267.0701 203.4946 63.5755 ---

Equity;

Paid-up capital 141.7808 141.7808 141.7808 141.7808 218.1242 218.1242

Retained Earnings --- 7.7777 59.5877 104.6353 121.5826 150.8365

Total Liabilities & Equities 536.0019 521.3365 516.616 503.98 461.428 430.847




Break Even Analysis

(Annexure No: 07)


Particulars 1

st Year 2

nd Year 3

rd Year 4

th Year 5

th Year

Fix

Cost Variable Fix

Cost Variable Fix

Cost Variable Fix

Cost Variable Fix

Cost Variab

Raw Material --- 195.00 --- 210.00 --- 247.50 --- 264.00 --- 280.

Wages & Salaries 3.00 7.00 3.3 7.7 3.63 8.47 3.993 9.317 4.392 10.2

Electricity 1.680 9.555 1.932 11.8335 2.221 14.5687 2.553 17.8752 2.94 21.84

Stores & spares --- 11.62 --- 13.944 --- 16.268 --- 18.592 --- 20.9

Repairs & Maintenance 4.835 12.12 5.803 14.543 6.769 16.968 7.737 19.391 8.704 21.8

Insurance Premium 5.086 --- 5.086 --- 5.086 --- 5.086 --- 5.086

Depreciation /

Amortization35.575 --- 35.575 --- 35.575 --- 35.575 --- 30.575

Misc. Expenses 0.965 2.253 1.064 2.484 1.169 2.729 1.282 2.991 1.342 3.1

Selling & Admin.

Expenses3.322 7.7518 3.936 9.1837 4.224 9.8563 4.958 11.5696 5.270 12.29

Financial Expenses 86.925 --- 41.925 --- 34.945 --- 17.839 --- 10.621

Total Cost 141.38 245.299 98.62 269.688 93.61 316.36 79.02 343.735 68.93 370.7

Sales 369.138 437.325 469.350 550.935 585.5Breakeven Sales 421.526 257.291 296.349 210.103 187.8

Breakeven Capacity 74% 41% 46% 30% 27

Margin of Safety (9%) 29% 29% 50% 58

Pay Back Period = Investment / Profitability = 577.1343 / 60.704

= 10 years approximately

Average Profitability = Net Profits / No. of Years = 303.5226 / 5 = 60.704

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Financial Analysis Assignment Latest