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Project Finance

This document presents profitability estimates for a 6 year period. It includes projections for sales, costs, profits, cash flows, assets and liabilities. Key highlights include: - Sales are projected to remain steady at Rs. 241.92 lakhs for years 1-5 and decrease slightly in years 6-10. - Costs like power, wages and overheads are projected to increase each year. - Profits including operating profit, PBT and PAT are projected to remain positive each year. - Cash flows remain positive, allowing the business to pay dividends and accumulate retained earnings each year. - Assets and liabilities also increase each year as the business grows.

Uploaded by

Piyush Hirpara
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© Attribution Non-Commercial (BY-NC)
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175 views12 pages

Project Finance

This document presents profitability estimates for a 6 year period. It includes projections for sales, costs, profits, cash flows, assets and liabilities. Key highlights include: - Sales are projected to remain steady at Rs. 241.92 lakhs for years 1-5 and decrease slightly in years 6-10. - Costs like power, wages and overheads are projected to increase each year. - Profits including operating profit, PBT and PAT are projected to remain positive each year. - Cash flows remain positive, allowing the business to pay dividends and accumulate retained earnings each year. - Assets and liabilities also increase each year as the business grows.

Uploaded by

Piyush Hirpara
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Profitability Estimates

Year
Sales

1
172.80

2
207.36

3
241.92

4
241.92

5
241.92

6
241.92

Cost of Production
Power
Wages & Salaries
Factory Overhead
Admistrative ex
Selling Exe.

112.32
6.91
9.00
0.50
1.00
17.28

134.78
8.29
10.00
0.53
1.00
20.74

157.25
9.68
12.00
0.56
1.00
24.19

157.25
9.68
12.60
0.60
1.00
24.19

157.25
9.68
13.23
0.63
1.00
24.19

157.25
9.68
13.89
0.67
1.00
24.19

Total Ex

147.01

175.34

204.68

205.31

205.98

206.68

Gross Profit

25.79

32.02

37.24

36.61

35.94

35.24

Depreciation

6.55

6.55

6.55

6.55

6.55

6.55

operating profit/PBIT

19.24

25.47

30.69

30.06

29.39

28.69

Int on term loan


Int in Bank borrowing

7.20
2.72

7.20
3.26

6.53
3.80

5.63
3.80

4.73
3.80

3.83
3.80

PBT

9.32

15.01

20.36

20.63

20.86

21.06

Priliminry Ex
profit

0.2

0.2

0.2

0.2

0.2

0.2

9.12

14.81

20.16

20.43

20.66

20.86

13.84

11.86

10.16

8.71

7.47

6.41

Provision for tax @ 30%

0.55

2.85

4.96

5.48

5.92

6.30

PAT

8.57

11.96

15.20

14.95

14.74

14.56

6.00

6.00

7.00

7.00

8.00

5.96
6.55
0.2

9.20
6.55
0.2

7.95
6.55
0.2

7.74
6.55
0.2

6.56
6.55
0.2

Dep

Div
Retain
Dep
Prilim
Net Cash

8.57
6.55
0.2
15.32

12.71

15.95

14.70

14.49

Cash Flow

13.31

Share
PBT
Dep
Prilim
Term loan
Working Capital
Loan
A
Capital
Working capital
Prilminary
Term Loan
Int on term loan
workin capital
Tax
Div
B
Opening Bal
A-B
Closing

19.04
6.55
0.2

25.27
6.55
0.2

30.49
6.55
0.2

20.9

4.15

4.19

46.69

29.42

36.17

41.43

29.86
6.55
0.2

29.19
6.55
0.2

28.49
6.55
0.2

36.61

35.94

35.24

5.85

5.89

7.20
2.72
0.55
39.89

3.75
7.20
3.26
2.85
6.00
28.91

7.5
6.53
3.80
4.96
6.00
34.69

7.5
5.63
3.80
5.48
7.00
29.41

7.5
4.73
3.80
5.92
7.00
28.95

7.5
3.83
3.80
6.30
8.00
29.43

8.50
6.80
15.30

15.30
7.26
22.56

22.56
6.75
29.31

29.31
7.20
36.50

36.50
6.99
43.49

43.49
5.81
49.30

Balance Sheet
Liabilities
Sahre
R&S
Term loan
Working Capital
Gov Loan
Term Credit
Assets
Fixed Assets
Dep
Net
Current Assers
Raw material
Stock in progress
Finished goods
book debt
Cash & Bank
Priliminar
Total

50
8.57
60
20.9
11
4.68
155.15

50
14.53
56.25
25.05
11
5.62
162.45

50
23.73
48.75
29.24
11
6.55
169.27

50
31.67
41.25
29.24
11
6.55
169.71

50
39.41
33.75
29.24
11
6.55
169.95

50
45.97
26.25
29.24
11
6.55
169.01

110.5
6.55
103.95

110.5
13.1
97.40

110.5
19.65
90.85

110.5
26.2
84.30

110.5
32.75
77.75

110.5
39.3
71.20

14.04
0.32
5.34
14.4

16.85
0.38
6.38
17.28

19.66
0.45
7.46
20.16

19.66
0.45
7.46
20.16

19.66
0.45
7.46
20.16

19.66
0.45
7.46
20.16

15.30
1.8
155.15

22.56
1.6
162.45

29.31
1.4
169.29

36.50
1.2
169.73

43.49
1
169.97

49.30
0.8
169.03

mates
7
241.92

8
241.92

9
241.92

10
241.92

157.25
9.68
14.59
0.71
1.00
24.19

157.25
9.68
15.32
0.75
1.00
24.19

157.25
9.68
16.08
0.80
1.00
24.19

157.25
9.68
16.89
0.84
1.00
24.19

207.41

208.18

208.99

209.85

34.51

33.74

32.93

32.07

6.55

6.55

6.55

6.55

27.96

27.19

26.38

25.52

2.93
3.80

2.03
3.80

1.13
3.80

0.23
3.80

21.23

21.35

21.44

21.49

0.2

0.2

0.2

0.2

21.03

21.15

21.24

21.29

5.50

4.73

4.06

3.49

6.62

6.89

7.12

7.31

14.40

14.26

14.12

13.99

8.00

9.00

9.00

10.00

6.40
6.55
0.2

5.26
6.55
0.2

5.12
6.55
0.2

13.15

12.01

11.87

3.99
6.55
0.2
10.74

Intial
50
27.76
6.55
0.2

26.99
6.55
0.2

26.18
6.55
0.2

25.32
6.55
0.2
60
11

34.51

33.74

32.93

32.07
110.5

7.5
2.93
3.80
6.62
8.00
28.85

7.5
2.03
3.80
6.89
9.00
29.23

7.5
1.13
3.80
7.12
9.00
28.55

3.75
0.23
3.80
7.31
10.00
25.09

49.30
5.65
54.96

54.96
4.51
59.47

59.47
4.37
63.84

63.84
6.99
70.83

50
52.38
18.75
29.24
11
6.55
167.92

50
57.64
11.25
29.24
11
6.55
165.68

50
62.76
3.75
29.24
11
6.55
163.30

50
66.75
0
29.24
11
6.55
163.54

110.5
45.85
64.65

110.5
52.4
58.10

110.5
58.95
51.55

110.5
65.5
45.00

19.66
0.45
7.46
20.16

19.66
0.45
7.46
20.16

19.66
0.45
7.46
20.16

19.66
0.45
7.46
20.16

54.96
0.6
167.94

59.47
0.4
165.70

63.84
0.2
163.32

70.83
0
163.56

8.5
8.5

normal
Particular
Investmnent
S.p/unit
Demand
Revenue
V.C
Dep
F.C
PBT
Tax @ 50%
PAT
Cash Flow
Cost Of Fund 15%
NPV

Invest amount
Unit
Sale
VC
FC
Dep
BEP
BEP

pesi
2
200
25
20
500
240
20
50
190
95
95
115
5.02
577.16
377.16

2
200
15
40
600
480
20
50
50
25
25
45
5.02
225.84
25.84

30000
1400
42000
28000
3000
2000
500 Unit
15000

30
10

1
200
40
10
400
120
20
50
210
105
105
125
5.02
627.35
427.35

28000 V.C
14000
9000
4500 Tax

Cash flow
fixed cost+dep/Contribution
NPV

Account in break even


Financila breakevn point

Investment
sales
Sales Uni
V.C
F.C
Dep
Profit
Tax
Pat
(+) Dep
Cash flow
PV factor 12%

optimisic

20000
18000

15929

12000
1000
2000
3,000
1,000.00
2,000
2000
4,000
5.65

10619
1000
2000
2310
770
1540
2000
3540
5.65

6500
24635
-5365

6600
25014
-4986

PV
NPV

22,600
2,600

20000

Sales
V.C
F.C
PBT

-379
380

42000
5000
11831.13

6500 7915.567 5915.567


3.79
3.79
24635
30000

9000

Certainty equivalent
Ex-1

Investment proposal having outlay of 45 lcs. The ecpected cash flow and certainty equivakent co eficent is as give
Year
Certainty equivalent
1
10
0.9
2
15
0.85
3
20
0.82
4
25
0.78
if risk free return is 5% calacuate net praposal of this

Ans.

Coefficent
1
2
3
4

Rs

Ex-2
Ans.

Ex-3

10
15
20
25
70

Probability
1000
30%
5000
70%

PV
0.9
0.85
0.82
0.78

8.57
11.56
14.17
16.04 NPV
50.3457
5.3457

Certainty equivalent
300 If offer is Rs.3000 than
3500 3000/3800
3800

Projec in 1000000 cash flow 1 year 40,000 ther afret id decrese by Rs.2000 every year aand projetc life
Calcuna NPV rate is 10%
1-0.05*N
Year
Cash flow
Certainty equivalent
PV
1
40000
0.95 34545.45
2
38000
0.9 28264.46
3
36000
0.85 22990.23
4
34000
0.8 18577.97
5
32000
0.75 14902.11
6
30000
0.7 11853.95
Total PV
131134.2
NPV
31134.18

Expected cash flow of the projetc is as following 1-.06*t


Intial
30000
1
7000

8%

2
3
4
5
Ans.

Year
1
2
3
4
5

8000
9000
10000
8000
Cash Flow Certainty equivalent
PV
7000
0.94
6,092.59
8000
0.88
6,035.67
9000
0.82
5,858.48
10000
0.76
5,586.23
8000
0.7
3,811.27
Total PV
27,384.23
NPV
(2,615.77)

equivakent co eficent is as give below

000 every year aand projetc life is 6 year certinity ifactor is Alpha I s 1-.05*T

Considre following data for the 4 year of projetc when is ecpected to reach 70 % of install capacity
of 2880 tn p.a.
at 70%
2016
V.C.
F.C. & Semi F.C
Raw materila
137.2
Saler & Wager
22
Power Fuel water
24.7
Repair & Maintance
2
Selling & ohet
19.2
Adminastrartive
2.5
Int. on WC
10.8
Fixes Selling Exp
6.3
Other Mis
5
Royalty
3
Total
196.9
Int on term loan
12
Dep & Amort
7.5
Total
55.3
Sales
265.6
(-)Dep
7.5
Contribution
68.7
Net Cash Acrual
47.8
Profit
13.4
BEP CU (Capacity Utilization
56.35 After this utilization project (Without Cash)
BEP CU (Capacity Utilization
48.70451 On the base of Cash Profit

DSCR
DSCR
DSCR

PAT + Dep& Amort + Int. on Term Loan + Lease Payment / Instalment + Int. on Term
IRR should be > Cost of capital it show project become viable
it should be > 1.5:1 than only Bank give Loan
It Shows the Repaying capacity of the borrower
5 Year
PAT
Dep
Int. on Term Loan
Int. on Term Loan
Repayment
DSCR

1
0.27
0.7
1.18
2.15
1.18
0
1.18
1.82

2
0.81
0.7
1.18
2.69
1.18
0.4
1.58
1.70

3
1.35
0.7
1.07
3.12
1.07
0.8
1.87
1.67

alment + Int. on Term Loan + Lease rental

4
1.13
0.7
0.93
2.76
0.93
0.8
1.73
1.60

5
0.99
0.7
0.78
2.47
0.78
0.8
1.58 Average
1.56
1.67

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