Upload
rana-rizwan
View
218
Download
0
Embed Size (px)
Citation preview
7/25/2019 Mangerial Fin Final
1/29
The name of Allah, the Beneficent, the Merciful
1
7/25/2019 Mangerial Fin Final
2/29
Table of Content:
Acknowledgement 03
Dedication 04
Declaration 05
Executive ummar! 0"
1.0 Chapter No1:
#$0 %ntroduction 0&
3$0 Banking 'i(tor! 0&
4$0 M)B *i(ion And Mi((ion tatement 0+5$0 -.ective of M)B 0+
"$0 /roduct ervice( of M)B 11&$0 Board of Director( 14
'ead ffice 15
10.0 ChapternNo2: 16
11$0 )a2ital Budget )a(h flow E(timation 1"
11$1 %nitial %nve(tment 1&
11$# 2erational )a(h flow 1
11$3 )alculation of %ncremental )a(h flow 1+
11$4 Terminal )a(h low
12.0 Chapter No3: 20
1#$1 )a2ital Budgeting Techniue( #0
1#$# 6et /re(ent *alue ##
13.0 Chapter No4: 24
13$1 )o(t of )a2ital #4
13$# )o(t of De-t #4
13$3 )o(t of /referred tock #5
13$4 )o(t of )ommon tock #5
2
7/25/2019 Mangerial Fin Final
3/29
13$5 7A)) )alculation #5
14.0 Chapter No5: 26
14$1 8everage )a2ital tructure #"
14$# 8everage )alculation #&
14$3 Degree of 2erating 8everage #&
14$4 Degree of inancial 8everage #
14$5 Degree of Total 8everage #
16.0 Chapter No3: 29
1"$1 )onclu(ion 9ecommendation #+
References 31
3
7/25/2019 Mangerial Fin Final
4/29
Acknowle!e"ent:
Ever! 2rai(e i( to Allah alone, The Merciful, The :ind, who give u( the under(tanding and
courage to com2lete our 2ro.ect re2ort and The ;race of Allah -e on /ro2het Muhammad
7/25/2019 Mangerial Fin Final
5/29
$e)cat)ons:
Dedicated to ur 9e(2ected /arent( and Teacher( and riend( i( well$
$eclarat)on
%t i( declared that thi( i( an original 2iece of our own work, exce2t where otherwi(e
acknowledged in text and reference($ Thi( work ha( not -een (u-mitted in an! form for another
degree or di2loma at an! univer(it! or other in(titution for tertiar! education and (hall not -e
(u-mitted -! u( in future for o-taining an! degree from thi( or an! other >niver(it! or
%n(titution$
5
7/25/2019 Mangerial Fin Final
6/29
7/25/2019 Mangerial Fin Final
7/29
1.0C'A#T*R N/: 1
#R#/-* / #R/*CT
To E(timate the )a(h low( for M)B that a 2ro2o(ed unit will generate$ %t re2re(ent( the ca(hflow -enefit( that are likel! to accumulate a( a re(ult of executing the inve(tment$ To calculate
the 6et /re(ent *alue of 2ro.ect o that com2an! can decide that 2ro2o(ed inve(tment will -e
fruitful or not$ To calculate the ex2ected average future co(t of ca2ital for M)B$ To di(cu(( the
leverage, ca2ital (tructure, to ex2lain EB%TE/ a22roach to ca2ital (tructure$
2.0 ntro(ct)on to %C ank )")te:
M)B i( one of the leading -ank( of /aki(tan with a de2o(it -a(e of a-out 9($ #0 -illion and
total a((et( of$ %ncor2orated in 1+4&, M)B (oon earned the re2utation of a (olid and con(ervative
financial in(titution managed -! ex2atriate executive($ %n 1+&4, M)B wa( nationalied along
with all other 2rivate (ector -ank($ Thi( led to deterioration in the ualit! of the Bank?( loan
2ortfolio and (ervice ualit!$ Eventuall!, M)B wa( 2rivatied in 1++1$
During the la(t fifteen !ear(, the Bank ha( concentrated on growth through im2roving (ervice
ualit!, inve(tment in technolog! and 2eo2le, utiliing it( exten(ive -ranch network, develo2inga large and (ta-le de2o(it -a(e and managing it( non2erforming loan( via im2roved ri(k
management 2roce((e($
3.0 ank)n! ')stor:
%t ha( not (o far -een decided a( to how the word CBank? originated$ ome author?( o2inion that
thi( word i( derived from the word( CBaucu(? or Banuet? which mean a -ench$ ther authoritie(
hold the o2inion that the word CBank? i( derived from the ;erman word CBack?, which mean(
C.oint (tock fund?$ %t i( therefore, not 2o((i-le to decide a( to which of the o2inion i( correct, for
no record i( availa-le to a(certain the validit! of an! of the o2inion($
Banking in fact i( 2rimitive a( human (ociet!, (ince man came to realie the im2ortance of
mone! a( a medium of exchange the nece((it! of a controlling or regulating agenc! or
7
7/25/2019 Mangerial Fin Final
8/29
in(titution wa( naturall! felt$ /erha2( it wa( the Ba-!lonian( who develo2ed -anking (!(tem a(
earl! a( #000 B)$ %t i( evident that the tem2le( of Ba-!lon were u(ed a( CBank(? -ecau(e of the
2revalent re(2ect and confidence in the clerg!$
')stor of ank)n! #ak)stans #erspect),e:
At the time of inde2endence, there were 631 off)cesof (cheduled -ank( in /aki(tan, of which
478 were located in 7e(t /aki(tan alone$ A( a new countr! without re(ource( it wa( ver!
difficult for /aki(tan to run it( own -anking (!(tem immediatel!$ Therefore, the ex2ert
committee recommended that the 9e(erve Bank of %ndia (hould continue to function in #ak)stan
(nt)l 30th-epte"ber 1947, (o that 2ro-lem( of time and demand lia-ilit!, coinage currencie(,
exchange etc$ are (ettled -etween %ndia and /aki(tan$ The nonMu(lim( (tarted tran(ferring their
fund( and account( to %ndia$ B! the end of une 1+4 the num-er of officer( of cheduled -ank(
in /aki(tan declined from 631 to 225$ There were 1+ foreign -ank( with the (tatu( of (mall
-ranch office( that were engaged (olel! in ex2ort of cro2 from /aki(tan, while there were onl!
two /aki(tani in(titution(, 'a-i- Bank of /aki(tan and the Au(tralian Bank$ The cu(tomer( of the
-ank are not (ati(fied with the uncertain condition of -anking$ imilarl! the 9e(erve Bank of
%ndia wa( not in the favor of ;ovt$ of /aki(tan$ The ;ovt$ of /aki(tan decided to e(ta-li(h a full
fledge central -ank$ )on(euentl! the ;overnorgeneral of /aki(tan (a)eA&a"
)na(!(rate the -tate ank of #ak)stan on (l 1; 1947.Thu( a landmark wa( made in thehi(tor! of -anking when the (tate -ank of /aki(tan a((umed full control of -anking and currenc!
in /aki(tan$ The -anking (tructure in /aki(tan com2ri(e( of the following t!2e($
tate Bank of /aki(tan
)ommercial Bank of /aki(tan
aving -ank($
)ommercial -ank( have -een the mo(t effective mo-ilie( of (aving( and have -een 2roviding
(hortterm reuirement( of working ca2ital( to trade, commerce and indu(tr!$
>2 to Decem-er 31, 1+&3, there were 14 /aki(tan commercial -ank( that functioned all over the
countr! and in (ome foreign countrie( through a network of -ranche($ All the(e commercial
-ank( were nationalied in anuar! 1, 1+&4, and were recognied and merged into the following
five -ank(F
8
7/25/2019 Mangerial Fin Final
9/29
6ational Bank of /aki(tan
Mu(lim commercial -ank limited
'a-i- Bank 8imited
>nited Bank 8imited
Allied Bank of /aki(tan
The ;overnment of /aki(tan in the late +0?( introducing the need for the 2rivatiation of (tate
owned -ank( and com2anie($ The 2rivate (ector ha( acce2ted the challenge and mo(t of the
-ank( are 2rivatied toda!$ The tate Bank of /aki(tan i((ue( the (hare( of the(e 2eriodicall!$
Bank em2lo!ee( and other common 2eo2le( can al(o 2urcha(e the(e (hare( and earn 2rofit$
Throughout the 2eriod of -anking hi(tor! the -ank( have -een ex2anding ra2idl! and achieved
the de(ired goal of 2rogre(($
4.0 %C
7/25/2019 Mangerial Fin Final
10/29
'("an Cap)tal:
The (econd o-.ective of M)B Bank i( to take care of the 'uman ca2ital which i( a nece((ar!
thing for the develo2ment and 2ro(2erit! of an! well e(ta-li(hed organiation$
est #lace to >ork:
The third o-.ective of Mu(lim )ommercial Bank 8imited i( to make it a 2lace which i( much
fea(i-le and comforta-le for em2lo!ee( of the -ank$ The M)B i( alwa!( con(ciou( in develo2ing
(uch 2lace where em2lo!ee( of the -ank feel ea(ine(($
Technolo!:
The forth o-.ective of M)B Bank 8imited i( to -ring new and late(t technolog! in the o2eration(
of the -ank$ At M)B, technolog! ha( a direct relation with !our need( it i( a mean( for creating
value and convenience for the cu(tomer$ ver the la(t few !ear( M)B ha( inve(ted heavil! into
(trengthening it( technolog! -ack-one$ Toda! it i( leading the wa! in -anking technolog! and
(etting new (tandard( for the -anking indu(tr! 2enetrating into the local market, li(tening to the
need( of the 2eo2le and educating them of (im2le financial 2roduct( and (ervice( that create -oth
value and convenience$ M)B?( (trength lie( in 2roviding a technological -a(e at the gra(( root(
level of the (ociet! with a challenge to educate and a((imilate (uch (!(tem( acro(( va(t cultural
and economic -ackground($ 7ith over &" automated -ranche(, #43 online -ranche(, over 151
M)B ATM( in #& citie( nationwide and a network of over 1" -ank( on the M6ET ATM (witch,
M)B continuou(l! innovate new 2roduct( and (ervice( that harne(( technolog! for the
cu(tomer?( -enefit$
nerstan)n! ? Relat)onsh)p:
The fifth and ver! im2ortant o-.ective of M)B Bank 8imited i( to create (uch an environment
which i( (uita-le for creating under(tanding and relation(hi2 -etween the em2lo!ee(, thu( going
toward( the wa! of develo2ment and 2ro(2erit!$ ver the !ear(, M)B ha( fo(tered (trong -ond(
with it( cu(tomer($ >nder(tand( them their need($ The! feel comforta-le with M)B it?( their
-ank it re(2ond( to them li(ten( to them 2artner( with them grow( with them$ At M)B,
-anking i( all a-out -eing there for 2eo2le, making a home in their heart(continuou(l! -uilding
relation(hi2( on mutual tru(t and confidence$ 7e under(tand that relation(hi2( are a-out
ex2ectation(our 2roduct( and (ervice( are -a(ed on !our cu(tomer(, ex2ectation($ Be it
financing for 2er(onal or -u(ine(( related need(, fund( tran(fer and trade related facilitie( or need
10
7/25/2019 Mangerial Fin Final
11/29
for different t!2e( of de2o(it account(, M)B offer( !ou a variet! of 2roduct( and (ervice(
cu(tomied to (ati(f! !our individual need($
nerstan)n! Con,en)ence:
The next o-.ective of M)B Bank 8imited i( to make under(tanding a convenient thing for the
whole environment of the -ank, for the 2ur2o(e of -oo(ting u2 it( value( and 2ro(2erit! in (uch a
com2etitive environment$ )onvenience i( what the cu(tomer i( looking for and thi( i( what we
at M)B are continuou(l! (triving to 2rovide$ 7hether it i( the #4 hour( ca(h convenience of our
ATM network or the ea(! availa-ilit! of financing reuirement( or (im2le o2ening of account,
M)B ha( tailored it( 2roduct( and (ervice( to make !our life ea(ier$ M)B know( the 2articular
need( of it( diver(e cu(tomer -a(e d continuou(l! develo2 2roduct( and (ervice( that fulfill the(e
need($
nerstan)n! Rel)ab)l)t:
The la(t -ut not lea(t o-.ective of M)B Bank 8imited i( to make an environment which have an
under(tanding of relia-ilit! in the whole (tructure of the -ank$ 7ith a (trong financial -a(e, a
2romi(ing team and the right re(ource(, M)B ha( 2roved to -e a relia-le 2artner indeed$ M)B
under(tand( the (2ecial need( of the -u(ine((, trading and agricultural (ector($ trategicall!
located -ranche( in (mall town( and citie( 2rovide warm (ervice( and advice to the (mall
-u(ine((men and local trader($ M)B (2eak( their language it under(tand( their need( and
2rovide( tangi-le re(ult($ B! re(2onding in a timel! manner with a flexi-le a22roach, M)B
2rovide( it( client( with the relia-le financial (ervice and (u22ort the! reuire to (ucce((full!
achieve their -u(ine(( o-.ective($ 7ith a (olid foundation of over 50 !ear( in /aki(tan and
having recentl! com2leted 10 (ucce((ful !ear( of 2rivatiation, M)B i(
trongl! 2o(itioned to lead the -anking (ector in the new millennium !ou can feel (afe in our
hand($
6.0 #ro(cts an ser,)ces offere b %C bank l)")te:
8.0 #ro(cts:
M)B -ank offer( a wide range of 2roduct( geared toward( the cu(tomer($ The following
11
7/25/2019 Mangerial Fin Final
12/29
2roduct( are availa-le for cu(tomer( areF
Acco(nt:
)urrent Account
/8 aving De2o(it(
Allied Ba(ic Banking Account
oreign )urrenc! De2o(it(
Allied /rofit /lu( G Term De2o(it
Allied /rofit /lu( G De2o(it Account
Allied Monthl! %ncome cheme
Allied Bichat chemeF
7/25/2019 Mangerial Fin Final
13/29
>tilit! Bill(
8ocker(
)ommodit! 2eration(
Cons(ltanc -er,)ces:
%n the 2roce(( of 2rivatiation of 2u-lic (ector unit(, 2ro(2ective -u!er( need 2rofe((ional
a((i(tance and M)B, with it( ex2erti(e offer( to their (2ecialied (ervice for valuation of the
market value of the indu(trial unit, 2re2aring -id document( and arranging finance for the
2urcha(e of the unit$
-elf-(pport)n! -che"e:
8oan for 2oorIneed! 2eo2le
6o marku2 charged
Maximum amount of 9($ #5,000IK
Minimum amount of loan 9($ 5,000IK
A@ t)l)t:
/ioneer to introduce ax for cu(tomer (ervice$
acilitate( (2eed! tran(fer of fund($
7ithin an hour an!where in /aki(tan$
)harge( are de-ited to )u(tomer account$
N)!ht ank)n! -er,)ces:
To facilitate -u(ine(( communit!
nl! in commercial trade( center( 2remi(e(
)lient( can make de2o(it( u2 to F00 2m
Date moved to next for all (uch tran(action
t)l)t )lls Collect)on:
>tilit! -ill collection for maximum cu(tomer(
-.ective i( to create interaction with cu(tomer(
)urrentl! 1050 -ranche( are 2erforming thi( .o-
13
http://www.abl.com.pk/utilityBills.htmhttp://www.abl.com.pk/lockers.htmhttp://www.abl.com.pk/commodityOperations.htmhttp://www.abl.com.pk/utilityBills.htmhttp://www.abl.com.pk/lockers.htmhttp://www.abl.com.pk/commodityOperations.htm7/25/2019 Mangerial Fin Final
14/29
%C R(pee Tra,elers Che(es:
)an -e a (afe(t wa! to carr! ca(h
)heue( i( acce2ted at trade center( -ranche(
6o need to -e aIc holder for traveler cheue(
)heue( are (igned once when i((ued$
>2on delivering (econd (igned are made
%n ca(e of theft no fair to enca(e
AT% BA(to"ate Teller %ach)ne:
Minimum -alance of 9($ 500IK
6o charge( are de-ited 2er tran(action
nl! two hundred 2er annum de-ited
9.0 oar of $)rectors:
%a)n %oha""a %ansha )hairman
%r. -. %. %(neer *ice )hairman
%r. Tar) Raf) Mem-er
14
7/25/2019 Mangerial Fin Final
15/29
%r. -ha&a -alee" Mem-er
%r. -ar"a A")n Mem-er
$r. %(ha""a Da(b Mem-er
%)an Ra&a %ansha Mem-er
$atoE %oha""e '(sse)n Mem-er
%r. Aftab Ah"a Fhan Mem-er
%r. Ab(l ar) )n Al)as Mem-er
%)an "er %ansha Mem-er
%r. %(ha""a Al) Geb Mem-er
%r. "ran %abool /re(identI )E
'ea /ff)ce:
ervice @ualit! Divi(ion,
)om2laint 9e(olution >nit,
#0th loor, M)B Tower,
%$% )hundrigar 9oad, :arachi G &4000
a+F H+##1 3##&003&
15
7/25/2019 Mangerial Fin Final
16/29
*"a)l:
%nfoLmc-$com$2k
#honeF 0#1 +#1#43#
ranch -electe or #ro=ect:
9anch )ode$ 0"1+
8al :urti 9awal2indi Tari A-ad 8alkurti, 9awal2indi
05155"#" I 5111#""
mc-0"1+Lmc-$com$2k
10.0 C'A#T*R N/: 2
11.0 Cap)tal (!et)n! Cash low *st)"at)on:
$ata abo(t %C:
16
7/25/2019 Mangerial Fin Final
17/29
M)B i( con(idering to 2urcha(ing a new unit -! re2lacing it with exi(ting unit$ The exi(ting unit
i( # !ear( old, co(t #5, 00,000 and i( -eing de2reciated under MA)9 u(ing a five !ear recover!
2eriod$ The exi(ting unit i( ex2ected to have u(eful life of 5 more !ear($ The new unit can -e
2urcha(ed at 4,000,000 and reuire( 400,000 in(tallation co(t, it ha( a 5!ear u(a-le life and
would -e de2reciated -! u(ing a five !ear recover! 2eriod$ %t can currentl! (ell the exiting unit
for 9($ #,#00,000 without incurring an! removal or cleanu2 co(t$ At the end of 5 !ear(, the
exi(ting unit ha( ero market value the new unit would -e (old out to net 1,500,000$ The irm i(
(u-.ect to a 40 tax rate$ The e(timated earning( -efore de2reciation, intere(t, and taxe( over the
5 !ear( for -oth and exi(ting unit( are given -elow
Bu!ing of new unit( following item( increa(edF
C(rrent assets C(rrent l)ab)l)t)es
Account( 2a!a-leK1,#00,000
Account( receiva-leK1,#00,000
%nventor! K 1,"00,000
*arn)n!s before eprec)at)on; )nterest an ta+es
Jear 6ew unit Exi(ting unit
1 #,#00,000 +00,000
# #,#00,000 &00,000
17
7/25/2019 Mangerial Fin Final
18/29
3 #,#00,000 "50,000
4 #,#00,000 500,000
5 #,#00,000 450,000
11.1 n)t)al n,est"ent:
nstalle cost of new Asset
)o(t of new A((et 4,000,000
H%n(tallation )o(t 400000
Total )o(t of 6ew A((et 4,400,000Afterta+ -ale procees fro" ol asset
/roceed( from (ale of old A((et
7/25/2019 Mangerial Fin Final
19/29
11.2ncre"ental operat)n! cash )nflows
New unit
Jear
/rofit
-efore
De2$ and
Tax
De2reciatio
n
6$/
-efore
Tax
Taxe(6$/ after
Taxe(
2erating
)a(h low($
%nflow(
1#,#00,00
00,000
1,3#0,00
05#,000 &+#,000 1,",000
##,#00,00
01,40,000 &+#,000 31",00 4&5,#00 1,3,#00
3#,#00,00
0
3",0001,3"4,00
0
545,"00 1,400 1,"54,400
4#,#00,00
05#,000
1,",00
0"",00 1,003,#00 1,531,#00
5#,#00,00
05#,000
1,",00
0"",00 1,003,#00 1,531,#00
" 0 ##0000
7/25/2019 Mangerial Fin Final
20/29
=
11.3 Calc(lat)on of ncre"ental Cash lows:
Jear 6ew >nit Exi(ting >nit
%ncremental
2erating )a(h
low
1 1,",000 &40,000 +3#,000
# 1,3,#00 &40,000 1,143,#00
3 1,"54,400 50,000 1,0&4,400
4 1,531,#00 4#0,000 1,111,#00
5 1,531,#00 3"0,000 1,1&1,#00
" ,000 50000 3,000
11.4 Ter")nal Cash low:
After Ta+ -ale procees fro" sale of new Asset
20
7/25/2019 Mangerial Fin Final
21/29
/roceed( from (ale of new A((et 1,500,000
Tax on (ale of new A((et 51#,000
Total 2roceed( from (ale of new A((et +,000
After Ta+ procees fro" sale of ol asset
/roceed( from (ale of old a((et 0
HTax on (ale of old A((et 0
Total 2roceed( from (ale of old A((et 0
H)hange in networking ca2ital 1,"00,000
Terminal )a(h low #,5,000
Tax )alculation(F
Book *alue of a((et at the end of !ear 5K ##0,000
1,500,000##0,000K1,#0,000 9eca2tured de2reciation
Tax 1,#0,000N$40K51#,000
12.0 C'A#T*R N/: 3
12.1 Cap)tal (!et)n! Techn)(es:
12.2 Net #resent
7/25/2019 Mangerial Fin Final
22/29
# 1143#00
3 10&4400
4 1111#00
5 11&1#00
" 3000
7e will di(count our uture ca(h inflow at the rate of 1"$
N#
7/25/2019 Mangerial Fin Final
23/29
14.2 Cost of $ebt:
M)B can (ell 10 !ear, 1#00 2ar value -ond( 2a!ing annual intere(t of +$ And the -ond can -e
(old at 1500 each floatation co(t of 400$
6et /roceed(K ale(lotation )o(t
K1500400
K1100
A22roximation -efore co(t of de-t
:dK%H 2ar value G6dIn I6dH/ar *alueI#
K10H 1#001100I10I1100H1#00I#
BeforeGtax co(t of de-tK10$#"
Aftertax co(t of de-tK 10$#"N
7/25/2019 Mangerial Fin Final
24/29
14.4 Cost of Co""on -tock:
:(K D1I/o Hg
/oK1#00, gK5, D1K0
:(K 0I1#00 H0$05
K11$"&
14.5 >ACC Calc(lat)on:
ource of )a2ital Book *alue )o(t 7eight
De-t &00,000 "$1" 0$5
/I 50,000 +$# 0$035
)I "50,000 11$"& 0$4"5
K
7/25/2019 Mangerial Fin Final
25/29
)nanc)al e,era!e:
%t i( concerned with the relation(hi2 -etween the firm?( EB%T and it( common (tock earning( 2er
(hare
7/25/2019 Mangerial Fin Final
26/29
/$$Div
7/25/2019 Mangerial Fin Final
27/29
Jchan!e )n *TH 0$1&
$H0$14I0$1& K 1$0 An(
or %ncrea(e
$H J chan!e )n *#-KJchan!e )n *T
J chan!e )n *#-H 533I3K 0.39
J chan!e )n *TH 0$#5
$K 0$3+I0$#5K 1.56 e,era!e e+s)st
15.5 $e!ree of Total e,era!e:
or Decrea(e
$TH $/L$
$/H 1$55
$H 1$0
$TH
7/25/2019 Mangerial Fin Final
28/29
onl!$ 8ow 2rofit margin( re(ulted in lack of ualit!$ %t i( not in the favor of com2an! in the
longer term($ )om2an! doe(n?t have (ignificant contact with the market$ o (ome effort in thi(
regard al(o needed to -e done$
References:
#erson:
nter,)ew fro" %al)k "a)r /perat)onal %ana!er of %C alk(rt) ranch
Contact no: 03341104031
>ebs)tes
1 7elcome to M)B Bank 8imited
2 htt2FII-log($reuter($comI2aki(tanI#00I05I05Ima!-ank-u!(into2aki(tan
28
http://www.mcb.com.pk/ir/ir.asphttp://blogs.reuters.com/pakistan/2008/05/05/maybank-buys-into-pakistan/http://www.mcb.com.pk/ir/ir.asphttp://blogs.reuters.com/pakistan/2008/05/05/maybank-buys-into-pakistan/7/25/2019 Mangerial Fin Final
29/29
3 htt2FIIwww$o-i2aki(tan$com
4 htt2FIIwww$linkedin$com
5 htt2FIIfinance$google$com
6 htt2FIIfinance$!ahoo$com
http://www.obizpakistan.com/http://finance.google.com/http://finance.yahoo.com/http://www.obizpakistan.com/http://finance.google.com/http://finance.yahoo.com/