GROUP PROJECT ON

CORPORATE FINANCE

BSRM XTREME & GPH ISPAT LTD.

Submitted to,

Kamrul Huda Talukdar

Department Accounting & Finance

Course: FIN440, Section: 09

Submitted by
Tuly Pauline Ghosh 1711225630
Zahidul Islam 1711091630
Md. Saidur Rahman Ridoy 1711946630
Amit Paul 1721679630
Shirajis Salekeen 1721624030
Md. Sajjad Khan Akash 1611159030
Md. Arif Raihan 1330055030
 LETTER OF TRANSMITTAL

Kamrul Huda Talukdar

Senior Lecturer,

Dept. of Accounting & Finance

North South University

Subject: Submission of Term Report.

Dear Sir,

We are contented to give you the final term report on the Corporate Finance. In displaying this
report, we have attempted our level best to incorporate all the significant data and clarifications
to make this paper enlightening and exhaustive. We have relied on the annual reports, DSE and
all trusted sources. If you have any queries regarding the report, please let us know.

Thank you for helping us and guiding us throughout the course.

Best Regards,

Tuly Pauline Ghosh 1711225630

Zahidul Islam 1711091630

Md. Saidur Rahman Ridoy 1711946630

Amit Paul 1721679630

Shirajis Salekeen 1721624030

Md. Sajjad Khan Akash 1611159030

Md. Arif Raihan 1330055030

 EXECUTIVE SUMMARY

We have done a financial analysis of BSRM Xtreme and GPH Ispat Ltd. by calculating the
proforma income statements, proforma balance sheet, EFN, WACC, FCF, stock price and value
of the company. We have done the necessary calculations with the help of excel and tried to gain
the practical knowledge of Corporate Finance by applying the methods and terms that we have
learnt throughout the course. We have calculated the 5 period of budget of forecasting and then
we have calculated the EFN. We have considered the 2016 year as our base year for the
forecasting.
 TABLE OF CONTENTS

Contents
COMPANY PROFILE .......................................................................................................................................................... 1
FORECASTING .................................................................................................................................................................. 2
CALCULATION OF THE RETURN & WACC .......................................................................................................................... 7
COMPANY VALUATION .................................................................................................................................................... 9
CONCLUSION ..................................................................................................................................................................12
REFRENCE .......................................................................................................................................................................12
COMPANY PROFILE

BSRM Xtreme:

BSRM Xtreme is a product that was presented when there were no evaluated steel in Bangladesh. It was a
noteworthy change in the steel business of Bangladesh. The center driver was the confidence in development in
steel items, which brought about bringing the primary EMF tried bar, the main steel brand that passed 5 million
cyclic stacking Fatigue testing in the U.K. what's more, fit in with 10 worldwide norms.

With the biggest steel creating industrial facility in the nation and utilizing the best innovation from Europe, the
organization keeps up volume with solid quality. BSRM is committed to giving the best answer for the
development business. The primary ever 50 mm pole was exceptionally structured and moved for the profound
pilling prerequisites of Padma Bridge. Different specific results of BSRM are additionally intended to address
exceptional issues for the development business.

GPH Ispat Ltd.:

GPH Ispat Ltd. One of the pioneers of Bangladesh in assembling steel guarantees an excessively solid future
and economy with its reality – class items. Structural bar, yet GPH Ispat Ltd. is additionally one of the makers
of low and medium carbon and low amalgam steel billets in Bangladesh, the fundamental element of
assembling evaluated steel bar. As GPH is guaranteeing the most astounding quality items in Bangladesh
according to different universal and national measures, GPH steel billets and Bars is getting traded to different
nations subsequent to feeding national interest. The presentation of GPH Ispat Ltd. has every one of the
possibilities to step forward to a more grounded, more brilliant tomorrow.

Page | 1
FORECASTING

At first we have calculated the forecasting of sales of GPH Ispat Ltd. and BSRM Xtreme and created a
proforma balance sheet. All the major components of both income statements have been changed in accordance
with the percentage of sales growth rate. We have forecasted the income statements for five years of two
companies and used the financial data of 2012-2016 as our reference. We have plugged in the actual sales of
2012-2016 and used the forecast function which is =FORECAST ('x' unknown, 'y' known, 'x' known). The
following proforma income statement is calculated for 2017-2021.

Forecasted Sales Growth Rate

GPH Ispat Ltd.

2017 2018 2019 2020 2021

7717443594 8768733424 9471902265 10423977169 10921308777
Sales(Taka)
Growth Rate -1.6% 13.6% 8.0% 10.1% 4.8%

BSRM Xtreme Ltd.

2017 2018 2019 2020 2021

Sales(Taka) 44899950001 49012344000 53003616001 57967739001 58208972000
Growth Rate -10.1% 9.2% 8.1% 9.4% 0.4%

Proforma Income Statement for both Companies

We have forecasted the sales and used the percentage of sales to calculate the income statement and we have
changed each of the components based on the percentage of sales growth rate. However, the interest expense
has been changed at a constant with respect to long term debt.

Page | 2
 PROFORMA INCOME STATEMENT-GPH ISPAT LTD.

2017 2018 2019 2020 2021

Sales 7,717,443,594.10৳ 8,768,733,424.18৳ 9,471,902,264.79৳ 10,423,977,168.54৳ 10,921,308,777.46৳
COGS 6,365,122,667.69৳ 7,232,195,895.52৳ 7,812,149,071.99৳ 8,597,392,718.71৳ 9,007,577,342.50৳
Gross Profit 1,352,320,926.41৳ 1,536,537,528.66৳ 1,659,753,192.80৳ 1,826,584,449.83৳ 1,913,731,434.96৳
Operating expenses 48,119,600.62৳ 54,674,575.23৳ 59,058,955.02৳ 64,995,307.34৳ 68,096,256.26৳
EBIT 1,304,201,325.79৳ 1,481,862,953.43৳ 1,600,694,237.78৳ 1,761,589,142.49৳ 1,845,635,178.70৳
Interest Expense 396,643,255.68৳ 450,675,010.59৳ 486,814,850.79৳ 535,747,387.18৳ 561,308,083.03৳
EBT 907,558,070.11৳ 1,031,187,942.84৳ 1,113,879,386.99৳ 1,225,841,755.32৳ 1,284,327,095.66৳
Tax at 25% 226,889,517.53৳ 257,796,985.71৳ 278,469,846.75৳ 306,460,438.83৳ 321,081,773.92৳
Net Income 680,668,552.58৳ 773,390,957.13৳ 835,409,540.24৳ 919,381,316.49৳ 963,245,321.75৳
Dividend at 10% 68,066,855.26৳ 77,339,095.71৳ 83,540,954.02৳ 91,938,131.65৳ 96,324,532.17৳
Retained Earnings at 90% 612,601,697.32৳ 696,051,861.41৳ 751,868,586.22৳ 827,443,184.84৳ 866,920,789.57৳

PROFORMA INCOME STATEMENT– BSRM XTREME

2017 2018 2019 2020 2021

Sales 44,899,950,000.80 49,012,344,000.24 53,003,616,000.89 57,967,739,000.89 58,208,972,000.13

COGS 38,164,957,500.68 41,660,492,400.20 45,053,073,600.76 49,272,578,150.76 49,477,626,200.11

Gross Profit 6,734,992,500.12 7,351,851,600.04 7,950,542,400.13 8,695,160,850.13 8,731,345,800.02

Operating Expense 1,798,625,364.29 1,963,361,765.01 2,123,246,198.20 2,322,101,598.69 2,331,765,034.64

EBIT 4,936,367,135.83 5,388,489,835.03 5,827,296,201.93 6,373,059,251.45 6,399,580,765.38

Interest expense 1,274,743,600.66 1,391,497,582.21 1,504,812,818.45 1,645,748,031.67 1,652,596,819.30

EBT 3,661,623,535.17 3,996,992,252.82 4,322,483,383.49 4,727,311,219.78 4,746,983,946.08

Tax (32%) 1,177,413,421.90 1,285,252,915.95 1,389,916,222.34 1,520,090,644.54 1,526,416,508.40

Net Income 2,484,210,113.27 2,711,739,336.87 2,932,567,161.15 3,207,220,575.24 3,220,567,437.68

Dividend(40%) 993,684,045.31 1,084,695,734.75 1,173,026,864.46 1,282,888,230.09 1,288,226,975.07

Retained
Earnings 1,490,526,067.96 1,627,043,602.12 1,759,540,296.69 1,924,332,345.14 1,932,340,462.61

We assumed that the dividend payout ratio and retained earnings ratio would remain same for each year and by
keeping the dividend and retained earnings ratio constant for 5 years we have calculated the dividends and
retained earnings.

Page | 3
 Proforma Balance Sheet

 We have prepared the proforma balance sheet for 5 years according to the sales growth rate of each year
and we have assumed that the current and non-current assets will increase as both of the companies are
performing on 100% efficiency. We have used 2016 as our base year.
 We have assumed the NWC and Debt ratio to be constant and created complete pro-forma balance
sheets for both companies.
 We have calculated EFN by keeping Long-term Debt and the Equity to remain constant initially.

PROFORMA BALANCE SHEET-GPH ISPAT LTD.

2017 2018 2019 2020 2021

Fixed Assets
Property plants & equipment 1,696,925,103.51৳ 1,928,084,564.80৳ 2,082,698,569.18৳ 2,292,042,477.55৳ 2,401,396,628.52৳
Capital work in progress 250,988,233.62৳ 285,178,490.31৳ 308,047,087.03৳ 339,010,656.18৳ 355,184,973.55৳
Intangible Asset 983,437.87৳ 1,117,404.29৳ 1,207,009.46৳ 1,328,332.86৳ 1,391,708.09৳
Investment 358,508,263.15৳ 407,345,172.22৳ 440,010,372.38৳ 484,238,323.77৳ 507,341,504.14৳
Total Assets 2,307,405,038.16৳ 2,621,725,631.62৳ 2,831,963,038.05৳ 3,116,619,790.36৳ 3,265,314,814.31৳
Current Assets
Short Term Investment 303,984,183.61৳ 345,393,683.64৳ 373,090,964.91৳ 410,592,465.09৳ 430,181,975.70৳
Advances, Deposits and
Prepayments 1,043,604,390.53৳ 1,185,766,839.67৳ 1,280,854,037.96৳ 1,409,599,980.52৳ 1,476,852,490.28৳
Inventories 3,015,763,902.34৳ 3,426,578,945.14৳ 3,701,357,915.78৳ 4,073,402,504.39৳ 4,267,745,967.40৳
Trade Receivables 1,105,479,693.78৳ 1,256,070,954.37৳ 1,356,795,872.56৳ 1,493,175,161.92৳ 1,564,415,072.91৳
Cash and Cash Equivalents 2,590,362,296.45৳ 2,943,228,048.60৳ 3,179,246,884.44৳ 3,498,811,116.30৳ 3,665,740,622.54৳
Total Current Assets 8,059,194,466.71৳ 9,157,038,471.42৳ 9,891,345,675.66৳ 10,885,581,228.23৳ 11,404,936,128.83৳
Total Assets 10,366,599,504.87৳ 11,778,764,103.04৳ 12,723,308,713.71৳ 14,002,201,018.59৳ 14,670,250,943.13৳
Equity & Liability
Share Capital 3,118,500,000.00৳ 3,118,500,000.00৳ 3,118,500,000.00৳ 3,118,500,000.00৳ 3,118,500,000.00৳
Share Premium 1,136,440,000.00৳ 1,136,440,000.00৳ 1,136,440,000.00৳ 1,136,440,000.00৳ 1,136,440,000.00৳
Unrealized Gain/ (Loss) on tradable
securities -2,710,416.80৳ -3,079,636.68৳ -3,326,594.19৳ -3,660,969.14৳ -3,835,635.26৳
Retained Earnings 558,069,934.47৳ 634,091,642.88৳ 684,939,748.73৳ 753,786,948.28৳ 789,750,388.12৳
Shareholders' Equity 4,810,299,517.67৳ 4,885,952,006.20৳ 4,936,553,154.54৳ 5,005,065,979.14৳ 5,040,854,752.86৳
Non-Current Liabilities
Long Term Loan 323,073,319.00৳ 323,073,319.00৳ 323,073,319.00৳ 323,073,319.00৳ 323,073,319.00৳
Finance Lease Obligations 18,808,970.00৳ 18,808,970.00৳ 18,808,970.00৳ 18,808,970.00৳ 18,808,970.00৳
Deferred Tax Liability 115,156,102.00৳ 115,156,102.00৳ 115,156,102.00৳ 115,156,102.00৳ 115,156,102.00৳
Non-Current Liabilities 457,038,391.00৳ 457,038,391.00৳ 457,038,391.00৳ 457,038,391.00৳ 457,038,391.00৳
Current Liabilities & Provisions
Current Portion of Long Term Loan 59,400,435.07৳ 67,492,113.69৳ 72,904,337.90৳ 80,232,368.59৳ 84,060,283.05৳
Current Portion of Finance Lease
Obligations 21,658,503.31৳ 24,608,879.81৳ 26,582,277.41৳ 29,254,213.68৳ 30,649,942.48৳
Short Term Borrowings 4,893,979,765.12৳ 5,560,650,158.36৳ 6,006,561,299.20৳ 6,610,315,023.74৳ 6,925,695,473.35৳

Page | 4
Creditors and Accruals 634,800,891.73৳ 721,275,086.64৳ 779,114,473.69৳ 857,427,711.81৳ 898,335,888.85৳
Provision for Tax 180,526,245.87৳ 205,117,991.06৳ 221,566,498.84৳ 243,837,410.97৳ 255,470,979.42৳
Total Current Liabilities & Provisions 5,790,365,841.10৳ 6,579,144,229.56৳ 7,106,728,887.04৳ 7,821,066,728.80৳ 8,194,212,567.16৳
TOTAL SHAREHOLDERS' EQUITY
& LIABILITY 11,057,703,749.77৳ 11,922,134,626.76৳ 12,500,320,432.59৳ 13,283,171,098.94৳ 13,692,105,711.02৳
EFN -691104244.9 -143370523.7 222988281.1 719029919.6 978145232.1

PROFORMA BALANCE SHEET FOR BSRM XTREME

2017 2018 2019 2020 2021

ASSETS
Non-current assets
Property, plant and 10,458,926,521.7 11,438,470,952.18 11,486,072,047.57
equipment 8,859,872,472.57৳ 9,671,349,562.99৳ 6৳ ৳ ৳
intangible assets 32,563,652.85৳ 35,546,162.86৳ 38,440,830.11৳ 42,041,056.28৳ 42,216,009.76৳
1,645,764,645.68 1,799,900,884.15
Investment 1,394,145,455.58৳ 1,521,835,453.54৳ ৳ ৳ 1,807,391,155.71৳
10,286,581,581.00 11,228,731,179.39 12,143,131,997.5 13,280,412,892.61 13,335,679,213.04
Total Non-current Assets ৳ ৳ 5৳ ৳ ৳
Current assets
Short term investment 245,980,098.66৳ 268,509,453.95৳ 290,375,260.55৳ 317,570,735.02৳ 318,892,302.82৳
7,274,839,682.98 7,956,174,299.76
Inventories 6,162,597,252.73৳ 6,727,030,488.49৳ ৳ ৳ 7,989,283,848.52৳
3,683,452,377.86 4,028,430,923.60
Trade and other receivables 3,120,293,297.66৳ 3,406,081,443.52৳ ৳ ৳ 4,045,195,203.15৳
Current account with related 7,257,605,629.83 7,937,326,168.85
companies 6,147,998,095.48৳ 6,711,094,192.16৳ ৳ ৳ 7,970,357,281.28৳
Advances, deposits and 3,557,071,358.55 3,890,213,524.78
prepayments 3,013,234,536.74৳ 3,289,217,154.12৳ ৳ ৳ 3,906,402,613.85৳
Cash and cash equivalent 265,684,337.68৳ 290,018,407.27৳ 313,635,774.59৳ 343,009,742.90৳ 344,437,174.90৳
18,955,787,618.95 20,691,951,139.51 22,376,980,084.3 24,472,725,394.91 24,574,568,424.52
Total Current Assets ৳ ৳ 7৳ ৳ ৳
29,242,369,199.95 31,920,682,318.90 34,520,112,081.9 37,753,138,287.52 37,910,247,637.56
Total Assets ৳ ৳ 2৳ ৳ ৳
Equity
3,417,750,000.00 3,417,750,000.00
Share capital 3,417,750,000.00৳ 3,417,750,000.00৳ ৳ ৳ 3,417,750,000.00৳
4,063,820,743.36 4,444,423,185.40
Retained Earnings 3,442,507,552.05৳ 3,757,807,351.32৳ ৳ ৳ 4,462,918,613.06৳
3,531,278,028.00 3,531,278,029.00
Revaluationre serve 3,531,278,026.00৳ 3,531,278,027.00৳ ৳ ৳ 3,531,278,030.00৳
10,391,535,578.05 10,706,835,378.32 11,012,848,771.3 11,393,451,214.40 11,411,946,643.06
Total Equity ৳ ৳ 6৳ ৳ ৳
Liabilities
Long term borrowings on 1,547,131,995.00 1,547,131,995.00
current portion 1,547,131,995.00৳ 1,547,131,995.00৳ ৳ ৳ 1,547,131,995.00৳
Deferred tax liability 840,590,872.00৳ 840,590,872.00৳ 840,590,872.00৳ 840,590,872.00৳ 840,590,872.00৳
Defined benefit obligations
Gratuity 57,366,281.00৳ 57,366,281.00৳ 57,366,281.00৳ 57,366,281.00৳ 57,366,281.00৳
Page | 5
 2,445,089,148.00 2,445,089,148.00
Non-current Liabilities 2,445,089,148.00৳ 2,445,089,148.00৳ ৳ ৳ 2,445,089,148.00৳
Current Liabilities
Trade payables 41,812,576.60৳ 45,642,196.96৳ 49,359,024.94৳ 53,981,808.92৳ 54,206,453.74৳
12,725,391,267.96 13,890,911,822.87 15,022,104,736.2 16,429,019,585.14 16,497,388,804.39
Short term borrowings ৳ ৳ 0৳ ৳ ৳
Current portion of long term
borrowings 411,439,598.48৳ 449,123,414.96৳ 485,697,344.06৳ 531,185,963.50৳ 533,396,489.17৳
Liabilities expenses 310,032,811.65৳ 338,428,764.83৳ 365,988,382.61৳ 400,265,502.83৳ 401,931,204.17৳
1,433,140,100.30 1,567,362,709.12
Current liability 1,214,028,848.71৳ 1,325,221,938.78৳ ৳ ৳ 1,573,885,275.13৳
Provision of WPPF 179,700,008.54৳ 196,158,760.13৳ 212,132,758.25৳ 232,000,328.92৳ 232,965,796.23৳
Other liabilities 393,720,902.76৳ 429,781,861.15৳ 464,780,729.60৳ 508,310,376.18৳ 510,425,705.30৳
15,276,126,014.69 16,675,268,759.67 18,033,203,075.9 19,722,126,274.62 19,804,199,728.13
Total Current Liabilities ৳ ৳ 5৳ ৳ ৳
28,112,750,740.75 29,827,193,285.98 31,491,140,995.3 33,560,666,637.02 33,661,235,519.19
Total Liabilities and Equity ৳ ৳ 1৳ ৳ ৳
3,028,971,086.61 4,192,471,650.50
EFN 1,129,618,459.20৳ 2,093,489,032.92৳ ৳ ৳ 4,249,012,118.37৳

EFN

For calculating EFN first of all we calculate the total assets and total liabilities and equity which is forecasted
through some of the steps. Describing below-

1. At first we calculate forecasted sales using excel.

2. Then we calculate the growth rate.
3. Multiply sales and all the items of sales with the growth rate to calculate the net income of upcoming years
(where the interest expense was fixed)
4. Then we started to calculate the forecasted pro-forma balance sheet.
5. While calculating balance sheet, some of the item of balance sheet changes with the sales in a percentage.
So we calculated those and get the full pro-forma balance sheet.
6. After that we calculated efn for those particular year.
7. Then we increase debt and equity in the same amount and make the efn zero.
8. Again we calculate the debt ratio and make it constant and start increasing debt ratio to calculate efn
 Here the debt ratio is 0.598 for BSRM and we calculate Efn.

2017 2018 2019 2020 2021

Debt
17,474,066,333 19,074,518,771 20,627,833,682 22,559,760,401 22,653,642,644
Equity 1376767289 2139328169 2879429628 3799926672 3844658351
Page | 6
  The debt ratio is 0.601 for GPH Ispat and the debt equity calculated for 3 years. Because is the 2017 and
2018 the EFN is negative that means no external financing is not needed for those two year.

2021 2020 2019

Debt 8830913294 8428773550 7658930750
Equity need to increase 798482897 568361490 127824809.2

CALCULATION OF THE RETURN & WACC

We got the 5-year Treasury bond rate of 5.94% from Uttara bank and Bangladesh bank website. The remaining
data has been collected from INVESTING.COM and Annual report taken directly from their website. We took
average of the DSE index of the last 5 years and made out our risk premium for the two companies which is
7.28%. After that we calculated the Beta for both the companies using COVAR/VARP function in excel. We
used The Wall Street Journal website to find the long term debt and interest expense for calculating cost of debt.

Then we used the financial statements of both the companies to calculate Cost of Debt (Rd), Cost of Equity
(Re), Total Debt and Total equity. The Tax rate is given 25% for GPH ISPHAT and 32% for BSRM. Now we
used the formula of Cost of Equity to calculate the data.

Beta for GPH ISPAT = 0.45

Cost of Equity (Re) = Rf+β(Rm-Rf)

Beta for BSRM = 1.09

Cost of Debt, Rd = (Interest Expense/Total Interest Bearing Debt)
Then we calculated the total debt and total equity of both companies and calculated the Wd and We of the two
companies.

Finally, we put all the data in the WACC formula.

Page | 7
 WACC (GPH Ispat Ltd.)
Risk Free Rate 5.94%

Beta 0.45

Market Premium 1.34%

Cost of Equity 6.534%

Cost of Debt 6.39%

Tax Rate 25%

Rd(1-T) 7.98%

Total Debt 17,165,306993

Total Equity 5,528,937,420
Value of The Firm 22,694,244,413
We 24.362%

Wd 75.638%
WACC 7.62%

WACC (BSRM Xtreme)

Risk Free Rate 5.94%

Beta 1.09

Market Premium 1.34%

Cost of Equity 7.401%

Cost of Debt 113.44%

Tax Rate 32%

Rd(1-T) 77.13%

Total Debt 32,871,654,780

Total Equity 12,808,900,532
Value of The Firm 45,680,555,312
We 28.04%

Wd 71.96%

WACC 57.57%

Page | 8
 COMPANY VALUATION
Necessary Formula to calculate FCF:

FCF= EBIT(1-T)+Depreciation Expense-(Capital Expenditure-δNWC)

Capital expenditure = Present year fixed asset – Previous year fixed asset

Change in NWC = Present year Net Working Capital – Previous year Net Working Capital
N.B: The value of “Depreciation” is not stated in the income statement of both of the companies. So we have
assumed the value to be “0”.

FCF of GPH Ispaat

2017 2018 2019 2020 2021

1,600,694,237.78
EBIT 1,304,201,325.79৳ 1,481,862,953.43৳ ৳ 1,761,589,142.49৳ 1,845,635,178.70৳
Depreciation 0.00৳ 0.00৳ 0.00৳ 0.00৳ 0.00৳
1,600,694,237.78
NWC 1,304,201,325.79৳ 1,481,862,953.43৳ ৳ 1,761,589,142.49৳ 1,845,635,178.70৳
Capital
Expenditure -26,852,498.27৳ 231,159,461.29৳ 154,614,004.38৳ 209,343,908.37৳ 109,354,150.98৳
Change in
NWC 209,436,065.79৳ 177,661,627.64৳ 118,831,284.35৳ 160,894,904.72৳ 84,046,036.20৳
Tax Rate 25% 25% 25% 25% 25%
1-T 0.75 0.75 0.75 0.75 0.75
FCF 1,214,337,569.85৳ 1,057,783,499.74৳ 1,164,612,784.0৳ 1,272,605,096.95৳ 1,358,773,940.58৳

FCF of BSRM

2017 2018 2019 2020 2021

EBIT 4,936,367,135.83৳ 5,388,489,835.03৳ 5,827,296,201.93৳ 6,373,059,251.45৳ 6,399,580,765.38৳

Depreciation - ৳ - ৳ - ৳ - ৳ - ৳

NWC 4,936,367,135.83৳ 5,388,489,835.03৳ 5,827,296,201.93৳ 6,373,059,251.45৳ 6,399,580,765.38৳

Capital -
Expenditure 996,254,128.43৳ 811,477,090.43৳ 787,576,958.77৳ 979,544,430.42৳ 47,601,095.39৳
Change in
NWC 2,556,506,977.83৳ 452,122,699.20৳ 438,806,366.91৳ 545,763,049.51৳ 26,521,513.93৳
Tax Rate 0.32 0.32 0.32 0.32 0.32
1-T 0.68 0.68 0.68 0.68 0.68
FCF 6,909,490,758.62৳ 3,304,818,696.60৳ 3,613,790,825.4৳ 3,899,898,910.0৳ 4,330,635,339.0৳
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 STOCK PRICE CALCULATION

Assuming the P/E Ratio of 2018 of BSRM and GPH ISPAT is kept constant. For BSRM the P/E Ratio was
13.30 where the GPH ISPAT was 17.64. Then we multiple the EPS of 2021 with P/E Ratio to get the Stock
price of 2021 of both companies.

BSRM Xtreme

P/E Ratio EPS STOCK PRICE

13.30 5.27 70.091

STOCK PRICE OF GPH ISPAT

P/E RATIO EPS STOCK PRICE
17.64 1.92 33.8688

ENTERPRISE VALUE

We calculated the Enterprise value of 2021 for both companies using the stock price calculated above. Then we
multiplied the stock price of 2021 with the outstanding share to get the market capital. The formula we used to
calculate is -

ENTERPRISE VALUE= MARKET CAP +TOTAL DEBT- TOTAL CASH

ENTERPRISE VALUE OF 2021(BSRM)

Total Share outstanding 375952500
Stock Price 70.091
Market Capitalization 2.635088668
Total debt 1777555668.00
Total Cash 524690721.00
Enterprise value 1252864950
Discount Rate (Wacc) 57.57%

ENTERPRISE VALUE OF 2021(GPH ISPAT)

Total Share outstanding 360186750

Stock price 33.8688
Market Capitalization 1.2199093
Total Debt 8359030241

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 Total Cash 224349184
Enterprise value 8134681058
Discount rate (Wacc) 7.62%

VALUE OF THE COMPANY

In order to calculate the value of the company, we have used the PV of all the FCF which were calculated above
and sum up with the enterprise value for both the companies. To calculate the PV, we used the estimated
WACC which we have calculated above. The enterprise value of the companies is considered as salvage value.

Value of the company (GPH Ispat Ltd.)

Year PV of cash flow

2017 1128356783

2018 913294438

2019 934334940.2

2020 948684287

2021 941200763

Enterprise value 8134681058

Value of the company 13000552269

Value of the company (BSRM Xtreme Ltd.)

Year PV of cash flow

2017 4385029358
2018 1331069000

2019 923724379.5

2020 632643732.2

2021 445845041
Enterprise value 1252864950

Value of the company 8971176460

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CONCLUSION
After doing the analysis, we came to a conclusion that GPH Ispat Ltd. is in the better position than BSRM
XTREME if we consider the overall situation. GPH Ispat Ltd. considerably has lower WACC than BSRM
Xtreme which reflects a positive position of GPH Ispat Ltd. Also, GPH Ispat Ltd. has the higher company value
in comparison with BSRM Xtreme. Both the organizations need to take a shot at their money related
circumstance to improve it. These two organizations may have an extraordinary future ahead if the use their
budgetary resources productively and take right money related choice at correct time.

REFRENCE
Get Updates on annual report Info of BSRM Steels Bangladesh. Retrieved from https://bsrm.com/bsrm-steels-
ltd/#parentVerticalTab6

BSRM is a Leading Steel and Rod Manufacturer in Bangladesh. Retrieved from https://bsrm.com/about-us/

Dhaka Stock Exchange. (n.d.). Dhaka Stock Exchange. Retrieved from https://www.dsebd.org/

Background - GPH Ispat. Retrieved from http://www.gphispat.com.bd/About/Background/

Annual Reports. Retrieved from http://www.gphispat.com.bd/AnnualReports/

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