INTERNSHIP PROJECT ON

Financial Modelling and Analysis of 10 MW WIND Power

Project in Porbandar, Gujrat IN

Company- Vardhan Consulting Engineers

Under the Supervision of-

Mr. Ashish Kumar
(Mentor)

Submitted By- Akash Awasthi

 ACKNOWLEGEMENT

The satisfaction of completion of any successful task is incomplete

without mentioning the name of people who made it encouragement
crowned our efforts with success. I have a pleasure in submitting the
project report & I take this opportunity to express my sincere gratitude
to all those who have helped me in this completion of this project report.
The MBA curriculum given me a unique opportunity to be in association
with one of the largest multinational company in the country. I am
extremely grateful to Mrs. Neha Kumari (sr. Manager HR_VCE) of the
Organization for giving me the opportunity to work on the project. I am
extremely grateful to Mr. Ashish S Kumar (CEO at VCE), for giving me
opportunity constant encouragement, support & guidance. I express my
heartily gratitude to my project guides, for providing me all the facilities
required in completing this project. My heartily gratitude to all those
who have directly or indirectly given assistance in making this project
easier & possible.
 Executive Summary

The Gautam Buddha University of Greater Noida had given the Subject of
Summer internship Project for Master of Business Administration [M.B.A.]
Semester 3rd Our Project Report subject is Financial Modeling and Analysis in
Vardhan Consulting Analysis (VCE).
Location: Vardhan House, Anand Bazar, Danapur Cantonment, Patna, Bihar
Duration: Duration of the project is 2 Months.
Project title: “Financial Modeling and Analysis”. The Branch head of the Vardhan
Consulting Private Ltd. is Mr. Ashish S Kumar sir who has all information Provide
about the Project Finance and their functions, and my subject topic is a study of
Financial Modelling Analysis of 10 MW Wind Power Project in porbandar there
are various topic i.e. project Finance, function of revenue, cost and debt sheet of
the financial model and revenue model for wind power Project, Residential
Building, Manufacturing Unit and other PPP projects.
Objective of the project:
 To study the concept of Finance.
 To study the function of revenue, cost and debt sheet of the financial model.
 To find out the various steps involved in the finance flows sheet.
 To provide support services to the medium and small scale sectors.
 To streamline system within the Company for settlement of commercial
disputes.
 INDEX

Chapter No. Chapter Name

1 Executive Summary
2 Introduction
3 Organization overview
4 Objectives of the Study
5 Research Methodology

6 Theoretical Background of the

study
7 Data Analysis and Interpretation

8 Conclusion

9 Bibliography
 INTRODUCTION

The project title as “Financial Modeling and Analysis” with a view to

study the different ratios of previous 3 years for financial & constructive
decision for “10 MW Wind Power Project in Porbandar”. Ratio analysis
is a major component of financial and taken a constructive decision for
future prospect of a company. Ratio analysis is also the process of
determining & interpreting numerical relationship based on financial
statement of ratio to interpret the financial statement. I have collected
primary and secondary data from financial statement of company and
discussion with various staff member in organization. I have completed
summer internship project from 14th June to 28th July 2020. Financial
statement that present and organized collection of financial data from the
bases of financial analysis the highlight significance of financial ratio
analysis, the usefulness of the financial ratio to those who manage a firm
as well as to those who are related to it in any way, such as creditors,
investors, financial analysis and so on in order to avoid duplication, it is
discussed here how the different ratios should be use in order to arrive
any one conclusion.
 ORGANIZATION OVERVIEW

VCE is a consulting company founded by group of engineers who have strong

academic background with decades of management experience while working in
companies all across the globe. VCE is providing solutions to the complex
engineering, management and financial issues of clients.

We provide engineering and project management consultancy to energy projects.

Especially Solar PV power project (Utility Scale Large Sized
Projects), Pyrolysis Projects (Plastic to Oil).

Our services include;

1. Feasibility Analysis, Detailed Project Report, Financial Analysis (IM).

2. Financial Closure through Debt or Private Equity for Project Finance.
3. On-site and Off-site Project Management and EPC-Management Services.
4. Documentation and Transaction Services for Sale of Project.
5. Project Development and Transfer of Rights at NTP.

Our lead consultant have 10+ years of experience in energy sector in India,
Philippines, UK, Cambodia and Thailand. We are specialist in Solar PV projects,
we provide tailored made engineering and management solutions for the client’s
needs. The details of our previous clients and projects will be provided on request.
Please write email to us on [email protected] for further
communication and quotations. [VCE Consulting Services]
 PURPOSE OF THE ORGANIZATION

VCE have different business horizons and revenue sources such as;

1. Engineering and Management Consulting.

2. Importing and Branding Pearl Jewellery.
3. Stock Market and Cross-Currency Trading.
4. Insurance and Investment Advisory.

The details of each of the above business activities can be discussed on request.
Please send us an email to [email protected] for more details. From past 3
years we saw a good growth in our all business and expecting good returns to all our
stakeholders.
Apart from the businesses mentioned above, VCE also believe in give back to the
society for building a greater future of our country. The various initiatives on VCE
Society Pay Back are;

Vardhan Merit Scholarship

In this initiative, we pay scholarship to poor under-privileged girls and pay their entire
educational expense till class 12th. So that, financial burden never be the reason for
them to drop out from schools. It also encourages the kids to study with more focus.
Currently, we grant Rs. 50,000 (Fifty Thousand Rupees) per year for this. We believe,
this amount is going to increase in future. (Amount Spent so far, Rs. 3.00 Lakhs+).

VCE Internships and Training

In this initiative, we select students from various engineering and management colleges
and provide them internship and training. Our internships and training are very unique in
nature and its specially for the students of Core Engineering Sector (Electrical,
Mechanical, Civil and Energy Engineering) and Finance Management for preparing
them to corporate / industry ready. We provide them mentor from the industry. All this is
done without taking any fee / favor from the students. Currently. We grant Rs. 60,000
(Sixty Thousand Rupees) per year for this. Majority of the amount will be paid as
stipend to the best interns as encouragement.
VCE believes in Society Pay Back and hence we provide Scholarships, Internships and
Training for FREE to deserving students. But, this is NOT just a CSR activity of VCE,
there are other reasons also which gives us the energy to keep continuing this endeavor
for the betterment of society and students.

 The manpower requirement of core sector is huge but it required skilled persons
ONLY. Hence, by providing this internship VCE wants to enhance the skills of
young core engineering graduates.

 The finance sector is highly diversified but also linked to the core knowledge. It
creates lots of confusion in young management students to decide which field of
finance that they should select for career. Hence these internships will help them
to have a clear picture.

 Many students didn’t understand that apart from the technical/academic skills,
they also need corporate skills to enter, survive, sustain and grow in an
organization and hence they need corporate skill development training provided
by VCE.

 Students needed to face the most difficult phase of their life alone, which is the
Job Hunt Phase and that’s a very stressful phase. VCE want to help the student
in this phase by JHT Program.

 VCE is interested to invest more in education sector. In terms of starting new

institutes which is affordable with world class quality education and hence
providing internships and training will help in getting experience.
 Objective of the project/study

To evaluate the financial ranking:

The fiscal positioning of an enterprise is influenced by the fiscal reserves it
possess, its monetary arrangement, its liquidity and its competence to get used to to
transformations in the market in which it operates.
To evaluate the firm's performance:
Performance is the aptitude of the enterprise to accrue revenues that have been
endowed in it. Knowledge about the capacity and inconsistency of revenues assists
the firm in predicting the anticipated monetary flows from the firm's current
reserves and in predicting possible additional fund influx from extra resources that
can be endowed in the enterprise.
To evaluate the alterations in Fiscal Ranking:
Users of fiscal report look for information about the endowments, subsidizing and
functional activities that the enterprise embark on while treatment period. This data
assists in evaluating how effectively the enterprise is able to generate fund and
money and how the firm uses the cash influx.

Utility of Finance Project Report

The major classes of finance information users are current and prospective
investors, staffs, shareholders, clients, governments and their intermediaries. All
these information seekers are completely dependent on fiscal report to assist their
decision-making process.

Investors provide risk capital to the enterprise; hence every fiscal project report
must satisfy their requirements. Common to all of these information seekers is their
curiosity in the capacity of an enterprise to produce funds and funds equivalents
besides the time and assurance of anticipated fund flows.

Project report on finance describes the fiscal effects of the past occurrences, deals
that most information seekers need to associate with the future events. Finance
project report offer only constrained amount of non-fiscal data required by the
seekers of fiscal statements.

Research methodology

10-MW wind power project porbandar

Wind power is one of the few viable sources of alternative energy that are
available to homeowners today. It’s especially popular in areas that have
regular high wind seasons.

However, it’s important to consider not just the natural circumstances that
are going to affect your wind turbine’s power generating abilities, but also
the technical aspects involved.

One of the most important characteristics to look out for in a wind turbine is
its power rating. This is usually measured in kilowatts (kW) and is similar to
a vehicle’s horsepower.

Small wind turbines, sometimes referred to as home wind turbines, are

much smaller than the turbines you see on wind farms. While larger wind
turbines can have a blade diameter that spans the length of a football field,
small wind turbines typically have a diameter up to 10 meters wide.

Because of the smaller blades, these wind turbines have a much smaller
power output than large turbines. That makes small wind turbines perfect
for projects with smaller electricity needs, such as residential, portable, or
off-grid applications.

The best locations for small wind turbines are places that experience
frequent, high wind speeds. Generally speaking, the taller the turbine, the
windier the environment and the more electricity it’s capable of generating.
Most of the best spots for small wind turbines are on rural properties, as
they tend to have a lot of space and few obstructions that would impact
wind speeds. In certain instances, a small wind turbine has the potential to
offset 100 percent of a home’s electricity bill.
 How Much Electricity Does a Wind Turbine
Produce?

This basically represents a combination of the power that’s been used multiplied by the
amount of time during which that power was used.

For instance, let’s say you have a 100-watt light bulb in your living room and you
happen to leave it switched on for 10 hours straight.

During that time period, it would have used something like one kWh. Conversely,
industry experts estimate that a 10kW wind turbine energy system has the potential to
produce up to 10,000 kWh worth of energy per year.

However, this estimation is based on a turbine that’s operating under favourable

conditions, which won’t always be possible in real life.

The reality is that there will be days, weeks and even months where there just isn’t
enough wind for your turbine to produce this amount of energy.

On some days it will only be able to generate a small fraction of its expected energy
output. A soft breeze is not enough to power a wind turbine and extreme heat will
render it practically useless.

The best way to calculate how much electricity does a wind turbine produce is to
multiply the air density with the mechanical efficiency of the turbine.

Then, multiply the answer by the length of the rotor blade and the speed of the wind.

Wind speed

Wind speed is one of the most fundamental determining factors to how much power
does a wind turbine produce. It’s more important than
the turbine’s mechanical construction actually.

Although the use of wind turbines has picked up among residential areas all over
the U.S., most areas in the country just don’t experience the amount of wind needed to
power a turbine consistently.

It doesn’t matter which brand or manufacturer you buy your wind turbine from, it won’t
generate much power if the weather conditions aren’t favourable.
The U.S. Department of Energy is a great resource to consult on this matter, and it
shows the average annual wind speed at 50 meters above the ground.

If your area has wind speeds that are below the 10 miles per hour threshold then your
turbine simply won’t generate the power you need to effectively run your household.

However, if the average wind speed increases marginally to 12 mph then you can
expect to experience a significant boost in the amount of energy that’s generated by
your wind turbine.

Another factor that contributes to how much power does a wind turbine produce is
altitude. The higher you place the turbine the more power it will generate.

For example, a wind turbine that’s placed on a 100-foot tower will produce 30% more
energy than a wind turbine that’s placed on a 60-foot tower.

The numbers will improve even more if you make sure that there are no obstructions
around or near the turbine, such as trees or other structures.

A common concern among homeowners wanting to purchase wind turbines is that the
rotor blades will fall off and hurt someone during high winds.

Luckily, most manufacturers factor this into the production process, as most wind trines shut down
automatically whenever wind speeds reach the 25 mph threshold.

How much do wind turbines cost?

 
Home or Farm Scale Wind Turbines
Wind turbines under 100 kilowatts cost roughly $3,000 to $8,000 per kilowatt of capacity. A 10
kilowatt machine (the size needed to power a large home) might have an installed cost of
$50,000-$80,000 (or more).
Wind turbines have significant economies of scale. Smaller farm or residential scale turbines
cost less overall, but are more expensive per kilowatt of energy producing capacity. Oftentimes
there are tax and other incentives that can dramatically reduce the cost of a wind project.
Commercial Wind Turbines
The costs for a utility scale wind turbine range from about $1.3 million to $2.2 million per MW
of nameplate capacity installed. Most of the commercial-scale turbines installed today are 2
MW in size and cost roughly $3-$4 million installed. 
Total costs for installing a commercial-scale wind turbine will vary significantly depending on
the number of turbines ordered, cost of financing, when the turbine purchase agreement was
executed, construction contracts, the location of the project, and other factors. Cost
components for wind projects include things other than the turbines, such as wind resource
assessment and site analysis expenses; construction expenses; permitting and interconnection
studies; utility system upgrades, transformers, protection and metering equipment; insurance;
operations, warranty, maintenance, and repair; legal and consultation fees. Other factors that
will impact your project economics include taxes and incentives.

What is a financial model?

A financial model is simply a tool that’s built in spreadsheet software such as MS Excel to
forecast a business’ financial performance into the future.  The forecast is typically based
on the company’s historical performance, assumptions about the future, and requires
preparing an income statement, balance sheet, cash flow statement, and supporting
schedules (known as a 3 statement model). From there, more advanced types of
models can be built such as discounted cash flow analysis (DCF model), leveraged-
buyout (LBO), mergers and acquisitions (M&A), and sensitivity analysis. Below is an
example of financial modeling in Excel.
Financial modeling is hard if you’re trying to figure it out on your own, but with the help of a
professional training program like CFI’s, the modeling process becomes a lot easier. Many
finance professionals find it hard to link the three financial statements together in Excel, so
once you know how to do that, you’ll be off to a great start.
If you’re interested in financial modeling, chances are, you’re planning to land a job offer in the
finance industry. You may want to be an investment banker, a private equity research
specialist, or an analyst or associate in a hedge funds firm. It’s really not a question of whether
financial modeling is hard or not. It’s about your willingness and determination to learn new
skills or hone your current skill set.
Completing a financial modeling course opens more opportunities for career growth, and in an
industry such as finance, you would need continuous learning so you can quickly adapt to
change and be one step ahead of your peers.
The Basics of Financial Modeling

Financial modeling is a representation in numbers of a company's operations in the

past, present, and the forecasted future. Such models are intended to be used as
decision-making tools. Company executives might use them to estimate the costs and
project the profits of a proposed new project.

Financial analysts use them to explain or anticipate the impact of events on a

company's stock, from internal factors, such as a change of strategy or business model
to external factors such as a change in economic policy or regulation.

Financial models are used to estimate the valuation of a business or to compare

businesses to their peers in the industry. They also are used in strategic planning to test
various scenarios, calculate the cost of new projects, decide on budgets, and allocate
corporate resources.

Examples of financial models may include discounted cash flow analysis, sensitivity

analysis, or in-depth appraisal.

Real-World Example

The best financial models provide users with a set of basic assumptions. For
example, one commonly forecasted line item is sales growth. Sales growth is
recorded as the increase (or decrease) in gross in the most recent quarter
compared to the previous quarter. These are the only two inputs a financial
model needs to calculate sales growth.

The financial modeler creates one cell for the prior year's sales, cell A, and one
cell for the current year's sales, cell B. The third cell, cell C, is used for a formula
that divides the difference between cell A and B by cell A. This is the growth
formula. Cell C, the formula, is hard-coded into the model. Cells A and B are
input cells that can be changed by the user.

In this case, the purpose of the model is to estimate sales growth if a certain
action is taken or a possible event occurs.

Of course, this is just one real-world example of financial modeling. Ultimately, a

stock analyst is interested in potential growth. Any factor that affects, or might
affect, that growth can be modeled.
Also, comparisons among companies are important in concluding a stock.
Multiple models help an investor decide among various competitors in an
industry.

Accounting of financial modeling

In investment banking, corporate finance, and the accounting profession, financial
modeling is mainly synonymous with cash flow forecasting. This generally includes
preparing detailed company specific models which are used for the purpose of decision
making and financial analysis. The applications mainly include:
 Business valuation, particularly discounted cash flow, but counting other
valuation problems.
 Management decision making and scenario planning (like “what is”, “what if”,
“what has to be done”, and similar more.
 Cost of capital
 Capital budgeting
 Project finance
 Financial statement analysis

Why is financial modeling important?

Financial modeling acts as a useful tool which enables business options and risks to be
estimated in a cost-effective way against various assumptions, recognize optimal
solutions in estimating financial returns and understand the effect of resource constraints thus
leading to more effective business decisions.
Financial modeling can be referred as an art and like any other art form, it requires constant [practice
and commitment to develop expertise in this area. In the present day world, many companies are
becoming globally integrated with the international economy through the way of
acquiring/establishing international operations. This calls for the requirement of strong financial
models which can assist in performing the evaluation of every country’s operations, reflect on
multiple currencies in their model, estimate varying capacity utilizations to estimate the optimal
capacity under changeable industry demand-supply scenarios and similar more cases.  
Introduction to 3-statement modeling
An integrated 3-statement financial model is a type of model that forecasts a company’s
income statement, balance sheet and cash flow statement.

While accounting enables us to understand a company’s historical financial statements,

forecasting those financial statements enables us to explore how a company will
perform under a variety of different assumptions and visualize how a company’s
operating decisions (i.e. “let’s reduce prices”), investing decisions (i.e. “let’s buy an
additional machine”) and financing decisions (i.e. “let’s borrow a bit more”) all interact to
impact the bottom line in the future.

A well-built 3-statement financial model helps insiders (corporate development

professionals, FP&A professionals) and outsiders (institutional investors, sell side equity
research, investment bankers and private equity) see how the various activities of a firm
work together, making it easier to see how decisions impact the overall performance of
a business.
Formatting a 3-statement model
It is critical that a complex financial model like the 3-statement model adheres to a
consistent set of best practices. This makes both the task of modeling and auditing
other people’s models far more transparent and useful. We have written an Ultimate
Guide to Financial Modeling Best Practices, but we’ll summarize some key takeaways
here.
Periodicity
One of the first decisions to make in a 3-statement model concerns the periodicity of the
model. Namely, what are the shortest time periods the model will be partitioned into:
annual, quarterly, monthly or weekly. This will typically be determined by the 3-
statement financial model’s purpose. Below we outline some general rules of thumb:

Model structure
When models get large, adhering to a strict structure is critical. Key rules of
thumb include:

 Use roll-forward schedules when forecasting balance sheet items.

 Aggregate inputs in one worksheet or one section of the model and separate them from
calculations and outputs.

 Avoid linking files together.

3-statement models include a variety of schedules and outputs, but the core elements of
a 3-statement model are, as you may have guessed, the income statement, balance
sheet and cash flow statement. A key feature of an effective model is that it is
“integrated,” which simply means that the 3-statement models are modeled in a way
that accurately captures the relationship and inter-linkages of the various line items
across the financial statements. An integrated model is powerful because it enables the
user to change an assumption in one part of the model in order to see how it impacts all
other parts of the model consistently and accurately.
The income statement
The income statement illustrates a company’s profitability. All three statements are
presented from left to right, with at least 3 years of historical results present in order to
provide historical rations and growth rates from which forecasts are based. Inputting the
historical income statement data is the first step in building a 3-statement financial
model. The process involves either manual data entry from the 10K or press release, or
the use of an Excel plugin such as Factset or Capital IQ to drop historical data directly
into Excel.

Forecasting typically begins with a revenue forecast followed by the forecasting of

various expenses. The net result is a forecast of the company’s income and earnings
per share. The income statement covers a specified period such as quarter or year.

The balance sheet

Unlike the income statement, which shows operating results over a period of time (a
year or a quarter), the balance sheet is a snapshot of the company at the end of the
reporting period. The balance sheet shows the company’s resources (assets) and
funding for those resources (liabilities and shareholder’s equity). Inputting historical
balance sheet data is similar to inputting data in the income statement. The data is
inputted either manually or through an Excel plugin.

In large part, the balance sheet is driven by the operating assumptions we make on the
income statement. Revenues drive the operating assumptions in the income statement,
and this continues to hold true in the balance sheet: Revenue and operating forecasts
drive working capital items, capital expenditures and a variety of other items. Think of
the income statement as the horse and the balance sheet as the carriage. The income
statement assumptions are driving the balance sheet forecasts.
Cash flow statement
The final core element of the 3-statement model is the cash flow statement. Unlike on
the income statement or the balance sheet, you aren’t actually forecasting anything
explicitly on the cash flow statement and it isn’t necessary to input historical cash flow
statement results before forecasting. That’s because the cash flow statement is a pure
reconciliation of the year-over-year changes in the balance sheet.
Every individual line item on the cash flow statement should be referenced from
elsewhere in the model (it should not be hardcoded) as this is a reconciliation.
Constructing the cash flow statement correctly is critical to getting the balance sheet to
balance. To see how this done, watch this free lesson on cash flow statement modeling.

What is a financial model used for?

The output of a financial model is used for decision making and performing financial analysis,
whether inside or outside of the company. Inside a company, executives will use financial
models to make decisions about:
Raising capital (debt and/or equity)
Making acquisitions (businesses and/or assets)
Growing the business organically (e.g., opening new stores, entering new markets, etc.)
Selling or divesting assets and business units
Budgeting and forecasting (planning for the years ahead)
Capital allocation (priority of which projects to invest in)
Valuing a business
Financial statement analysis/ratio analysis
Management accounting
Who builds financial models? (jobs and career)
There are many different types of professionals who build financial models.  The most common
types of career tracks are investment banking, equity research, corporate development, FP&A,
and accounting (due diligence, transaction advisory, valuations, etc).
To learn more about jobs and careers that require building financial models, explore
our interactive career map.
How can you learn financial modeling?
The best way to learn financial modeling is to practice.  It takes years of experience to become
an expert at building a financial model and you really have to learn by doing. Reading equity
research reports can be a helpful way to practice, as it gives you something to compare your
results to. One of the best ways to practice is to take a mature company’s historical financials,
build a flat-line model into the future, and calculate the net present value per share. This should
compare closely to the current share price or the target prices of equity research reports.
It’s also important to establish a solid base understanding by taking
professional financial modeling training courses such as ours offered at CFI, with
many locations across North America or directly online. In the meantime, you may also be
interested in having a go at building your own financial models. Feel free to use our available
free templates to get a jump start before taking one of our courses.

What are financial modeling best practices?

1. Excel tips and tricks -

It’s very important to follow best practices in Excel when building a model.  For more details
you can take our free Excel course, which outlines the following key themes:
Limit or eliminate the use of your mouse (keyboard shortcuts are much faster)
Use a blue font for hard-codes and inputs (formulas can stay black)
Keep formulas simple and break down complex calculations into steps
Ensure you know how to use the most important Excel formulas and functions
Use INDEX and MATCH instead of VLOOKUP to query data
Use the CHOOSE function to build scenarios
 
2. Formatting -
It’s important to clearly distinguish between inputs (assumptions) in a financial model, and
output (calculations). This is typically achieved through formatting conventions, such as making
inputs blue and formulas black. You can also use other conventions like shading cells or using
borders.
 

3. Model layout and design -

It’s critical to structure a financial model in a logical and easy to follow design. This typically
means building the whole model on one worksheet and using grouping to create different
sections. This way it’s easy to expand or contract the model and move around it easily.
The main sections to include in a financial model (from top to bottom) are:
Assumptions and drivers
Income statement
Balance sheet
Cash flow statement
Supporting schedules
Valuation
Sensitivity analysis
Charts and graphs
How do you build a financial model? (10 Step Guide)
Financial modeling is an iterative process. You have to chip away at different sections until
you’re finally able to tie it all together.
Below is a step-by-step breakdown of where you should start and how to eventually connect all
the dots. For much more detailed instruction, and to work through your own Excel model,
check out our financial modeling courses.
 
1. Historical results and assumptions -
Every financial model starts with a company’s historical results.  You begin building the financial
model by pulling three years of financial statements and inputting them into Excel. Next, you
reverse engineer the assumptions for the historical period by calculating things like revenue
growth rate, gross margins, variable costs, fixed costs, AP days, inventory days, and AP days, to
name a few.  From there you can fill in the assumptions for the forecast period as hard-codes.

2. Start the income statement -

With the forecast assumptions in place, you can calculate the top of the income statement with
revenue, COGS, gross profit, and operating expenses down to EBITDA.  You will have to wait to
calculate depreciation, amortization, interest, and taxes.
3. Start the balance sheet
With the top of the income statement in place, you can start to fill in the balance sheet.  Begin
by calculating accounts receivable and inventory, which are both functions of revenue
and COGS, as well as the AR days and inventory days assumptions.  Next, fill in accounts
payable, which is a function of COGS and AP days.
 

4. Build the supporting schedules -

Before completing the income statement and balance sheet, you have to create a schedule for
capital assets like Property, Plant & Equipment (PP&E), as well as for debt and interest. The
PP&E schedule will pull from the historical period and add capital expenditures and subtract
depreciation. The debt schedule will also pull from the historical period and add increases in
debt and subtract repayments. Interest will be based on the average debt balance.
 

5. Complete the income statement and balance sheet -

The information from the supporting schedules completes the income statement and balance
sheet. On the income statement, link depreciation to the PP&E schedule and interest to the
debt schedule. From there, you can calculate earnings before tax, taxes, and net income. On
the balance sheet, link the closing PP&E balance and closing debt balance from the
schedules. Shareholder’s equity can be completed by pulling forward last year’s closing balance,
adding net income and capital raised, and subtracting dividends or shares repurchased.
 
6. Build the cash flow statement -
With the income statement and balance sheet complete, you can build the cash flow
statement with the reconciliation method. Start with net income, add back depreciation, and
adjust for changes in non-cash working capital, which results in cash from operations. Cash
used in investing is a function of capital expenditures in the PP&E schedule, and cash from
financing is a function of the assumptions that were laid out about raising debt and equity.
 

7. Perform the DCF analysis -

When the 3 statement model is completed, it’s time to calculate free cash flow and perform the
business valuation. The free cash flow of the business is discounted back to today at the firm’s
cost of capital (its opportunity cost or required rate of return). We offer a full suite of
courses that teach all of the above steps with examples, templates, and step-by-step
instruction.  Read more about how to build a DCF model.
 

8. Add sensitivity analysis and scenarios -

Once the DCF analysis and valuation sections are complete, it’s time to incorporate sensitivity
analysis and scenarios into the model. The point of this analysis is to determine how much the
value of the company (or some other metric) will be impacted by changes in underlying
assumptions. This is very useful for assessing the risk of an investment or for business planning
purposes (e.g., does the company need to raise money if sales volume drops by x percent?).

9. Build charts and graphs -

Clear communication of results is something that really separates great from merely good
financial analysts. The most effective way to show the results of a financial model is through
charts and graphs, which we cover in detail in our advanced Excel course, as well as many of the
individual financial modeling courses. Most executives don’t have the time or patience to look
at the inner workings of the model, so charts are much more effective.

10. Stress test and audit the model -

When the model is done, your work is not over. Next, it’s time to start stress-testing extreme
scenarios to see if the model behaves as expected. It’s also important to use the auditing tools
covered in our financial modeling fundamentals course to make sure it’s accurate and the Excel
formulas are all working properly.
 Theoretical Background of the study

Classification of Ratios: -
A financial ratio is a useless piece of information. In context, however, a financial
ratio can give a financial analyst an excellent picture of a company's situation and
the trends that are developing. A ratio gains utility by comparison to other data and
standards.
Financial ratios quantify many aspects of a business and are an integral part of
financial statement analysis. Financial ratios are categorized according to the
financial aspect of the business which the ratio measures. Although these
categories are not fixed in all over the world however there are almost the same,
just with different names:
Profitability ratios which use margin analysis and show the return on sales and
capital employed.
Gross profit ratio: - This ratio indicates the relation between production cost
and sales and the efficiency with which goods are produced or purchased. If it has
a very high gross profit ratio it may indicate that the organization is able to produce
or purchase at a relatively lower cost. Gross profit is the profit we earn before we
take off any administration costs, selling costs and so on.

Net profit ratio: - This ratio is so important because it tells us the amount of net
profit of the turnover (sales) a business has earned. The net profit ratio indicates
that’s portion of sales available to the owners after the consideration of all types of
expenses & costs.

Rate of Return Ratio (ROR) or Overall Profitability Ratio the rate of return ratios
are thought to be the most important ratios by some accountants and analysts. One
reason why the rate of return ratios is so important is that they are the ratios that we
use to tell if the managing director is doing their job properly.
1- Return on assets: - This ratio shows the profitability of investment in the
firm so higher the ratio is better and more desirable while the company is
 earning less and less profitability ratio. Although it is better than four years
ago, however it is generally earning less profitability.

2- Return on equity: - This is so crucial ratio from the shareholders point of

view. The higher it is the better will be the position. While in this company the
ratio is going down ward which shows all the problems the company having
and a not desirable financial position.

Liquidity ratios measure the availability of cash to pay debt, which give a picture
of a company's short-term financial situation.
1-Current ratio: - This ratio measurers the solvency of the company in the
short term. Current assets are those assets which can be converted into cash within
a year. Current liabilities and provisions are those liabilities that are payable within
a year. A current ratio 2:1 indicates a highly solvent position.
2- Quick ratio: - Liquid ratio indicates the backing available to liquid liabilities
in the form of liquid assets. Primarily because the current ratio includes inventory
assets which right not be able to term to cash immediately. A liquid ratio of 1:1 is
supposed to be standard &ideal.

Debt-Equity Ratio, Solvency or Gearing ratios measures the percentage of

capital employed that is financed by debt and long-term finance. The higher the
gearing, the higher the dependence on borrowing and long-term financing. The
lower the gearing ratio, the higher dependence on equity financing. Traditionally,
the higher the level of gearing, the higher the level of financial risk due to the
increase volatility of profits. It should be noted that the term “Leverage” is used in
some texts.
1 - In this ratio shareholders’ fund is the share capital plus reserve and surpluses.
In case of high debt equity it would be obvious that the investment of creditors is
more than owners. And if it is so high then makes the firm in a risky position. Or if
it is too low it might indicate that the organization has not utilized its capacity of
borrowing which must be utilized and that is because the borrowing from outsiders
is a good source of fund for business with lower returns in compare to equity.

2-Proprietatry ratio: - This ratio indicates the relationship between the owner
funds & total assets, the assets can be basically fixed or current ratio can be further
analyses accordingly.

Turn over Ratios: or activity group ratios indicate efficiency of organization to

various kinds of assets by converting them to the form of sales.
1-Fixed assets turnover ratio - The level of sales generated due to investment in
fixed assets. the greater ratio it is inferred the more intensively the fixed assets
have been used.

2-Current assets turnover ratio - This ratio indicates the efficiency with which
current assets turn into sales. A higher ratio implies by and large a more efficient
use of funds. Thus, a high turnover rate indicates reduced lock-up of funds in
current assets. An analysis of this ratio over a period of time reflects working
capital management of a firm.

3-Working capital turnover ratio - A high working capital turnover ratio

indicates the capability of the organization to achieve maximum sales with the
minimum investment in working capital.

4-Capital employed turnover ratio - Capital employed can be expressed in

different terms, all generally refer to the investment required for a business to
function. By "employing capital" you are making an investment. So, capital
employed indicated the long-term funds supplied by creditors and owners of the
firms.
Which Ratio for whom: -
As before mentioned there are varieties of people interested to know and read these
information and analyses, however different people for different needs. And it is
because each of these groups have different type of questions that could be
answered by a specific number and ratio. Therefore we can say there are different
ratios for different groups, these groups with the ratio that suits them is listed
below:
1. Investors: these are people who already have shares in the business or they are
willing to be part of it. So they need to determine whether they should buy shares
in the business, hold on to the shares they already have or sell the shares they
already own. They also want to assess the ability of the business to pay dividends.
As a result the Return on Capital Employed Ratio is the one for this group.
2. Lenders: This group consists of people who have given loans to the company so
they want to be sure that their loans and also the interests will be paid and on the
due time. Gearing Ratios will suit this group.
3. Managers: managers might need segmental and total information to see how
they fit into the overall picture of the company which they are ruling. And
Profitability Ratios can show them what they need to know.
4. Employees: the employees are always concerned about the ability of the
business to provide remuneration, retirement benefits and employment
opportunities for them, therefore these information must be find out from the
stability and profitability of their employers who are responsible to provide the
employees their need. Return on Capital Employed Ratio is the measurement that
can help them.
5. Suppliers and other trade creditors: businesses supplying goods and materials to
other businesses will definitely read their accounts to see that they don't have
problems, after all, any supplier wants to know if his customers are going to pay
them back and they will study the Liquidity Ratio of the companies.
6. Customers: are interested to know the Profitability Ratio of the business with
which they are going to have a long term involvement and are dependent on the
continuance of presence of that.
7. Governments and their agencies: - are concerned with the allocation of
resources and, the activities of businesses. To regulate the activities of them,
determine taxation policies and as the basis for national income and similar
statistics, they calculate the Profitability Ratio of businesses.

8. Local community: - Financial statements may assist the public by providing

information about the trends and recent developments in the prosperity of the
business and the range of its activities as they affect their area so they are
interested in lots of ratios.

9. Financial analysts: - they need to know various matters, for example, the
accounting concepts employed for inventories, depreciation, bad debts and so on
therefore they are interested in possibly all the ratios.

10. Researchers: - researchers' demands cover a very wide range of lines of

enquiry ranging from detailed statistical analysis of the income statement and
balance sheet data extending over many years to the qualitative analysis of the
wording of the statements depending on their nature of research.
 Data Analysis and interpretation

Wind power generation capacity in India has significantly increased in

recent years. As of 30 September 2020, the total installed wind power
capacity was 38.124 GW, the fourth largest installed wind power capacity in
the world. Wind power capacity is mainly spread across the Southern,
Western and Northern regions.

Wind power costs in India are decreasing rapidly. The levelized tariff of

wind power reached a record low of ₹2.43 (3.4¢ US) per kWh (without any
direct or indirect subsidies) during auctions for wind projects in December
2017. In December 2017, union government announced the applicable
guidelines for tariff-based wind power auctions to bring more clarity and
minimize the risk to the developers.

The table below shows India's year on year installed wind power, annual
wind power generation and annual growth in wind power generation since
2006.

Installed wind power capacity and generation in India since 2007

Financial 06- 07- 08- 09- 10- 11- 12- 13- 14- 15-
16-17 17-18 18-19 19-20
year 07 08 09 10 11 12 13 14 15 16

Installed
7,8 9,5 10,9 13,0 16,0 18,4 20,1 22,4 23,4 26,7 32,28 34,04
capacity 35,626 37,669
50 87 25 64 84 21 50 65 47 77 0 6
(MW)

Genera 28,2 28,6 46,01 52,66

tion 62,036 64,485
14 04 1 6
(GWh)

Wind power by state

There is a growing number of wind energy installations in states across India.

Installed wind capacity by state as of 31 October

2019

State Total Capacity (MW)

Tamil Nadu 9231.77

Gujarat 7203.77

Maharashtra 4794.13

Karnataka 4753.40

Rajasthan 4299.73

Andhra Pradesh 4077.37

Madhya Pradesh 2519.89

Telangana 128.10

Kerala 62.50

Others 4.30

Total 37090.03
Tamil Nadu
Tamil Nadu's wind power capacity is around 29% of India's total. The Government of
Tamil Nadu realized the importance and need for renewable energy, and set up a
separate Agency, as registered society, called the Tamil Nadu Energy Development
Agency (TEDA) as early as 1985. Tamil Nadu is a leader in Wind Power in India. In
Muppandal wind farm the total capacity is 1500 MW, the largest wind power plant in
India. The total wind installed capacity in Tamil Nadu is 7633 MW. During the fiscal year
2014–15, the electricity generation is 9.521 GWh, with about a 15% capacity utilization
factor.

Maharashtra
Maharashtra is one of the prominent states that installed wind power projects second to
Tamil Nadu in India. As of end of March 2016, installed wind power capacity is 4655.25
MW. As of now there are 50 developers registered with state nodal agency
"Maharashtra energy Development Agency" for development of wind power projects. All
the major manufacturers of wind turbines including Renew Power, Suzlon, Vestas,
Gamesa, Regen, Leitner Shriram have presence in Maharashtra.

Gujarat
Gujarat government's focus on tapping renewable energy has led to sharp rise in the
wind power capacity in the last few years. According to official data, wind power
generations capacity in the state has increased a staggering ten times in last six years.
Gujarat have 16% of total capacity of country. ONGC Ltd. has installed a 51MW wind
energy farm at Bhuj in Gujarat. Renewable energy projects worth a massive Rs 1 lakh
crore of memorandums of understanding (MoUs) in the Vibrant Gujarat Summit in 2017.

Rajasthan
4298 MW wind power plant has been installed in Rajasthan.

Madhya Pradesh
In consideration of unique concept, Govt. of Madhya Pradesh has sanctioned another
15 MW project to Madhya Pradesh Windfarms Ltd. MPWL, Bhopal at Nagda Hills near
Dewas under consultation from Consolidated Energy Consultants Ltd. CECL Bhopal. All
the 25 WEGs have been commissioned on 31.03.2008 and under successful operation.
Kerala
55 MW production of wind power is installed in Kerala. The first wind farm of the state
was set up in 1997 at Kanjikode in Palakkad district.
The agency has identified 16 sites for setting up wind farms through private developers.

Odisha
Odisha a coastal state has higher potential for wind energy. Current installation capacity
stands at 2.0 MW. Odisha has a windpower potential of 1700MW. The Govt of Odisha is
actively pursuing to boost Wind power generation in the state. however it has not
progressed like other states primarily because Odisha having a huge coal reserve and
number of existing and upcoming thermal power plants, is a power surplus state.

West Bengal
The total installation in West Bengal is 2.10 MW till Dec 2009 at Fraserganj, Distt- South
24 Paraganas. More 0.5 MW (approx) at Ganga Sagar, Kakdwip, Distt - South 24
Paraganas. Both the project owned by West Bengal Renewable Energy Development
Agency (WBREDA), Govt. of WB and project was executed on turnkey basis by Utility
Powertech Limited (UPL).

Kashmir
The union territory of Ladakh and its Kargil district are potential wind energy areas,
which are yet to be exploited. Wind Speeds are higher during the winter months in
Ladakh, which is complementary to the hydro power available during the summer
months from the snow melt water. Being a Himalayan region located at higher altitude,
the heating energy requirements are high which can be met by the renewable energy
resources such as wind, solar and hydro power. The union territory is yet to open its
account in grid connected wind power installations.
Projects
India's largest wind power production facilities (10MW and greater)

Rank Power plant Producer Location State MWe

Jaisalmer Wind
1 Suzlon Energy Jaisalmer Rajasthan 1064
Park

Muppandal Wind
2 Muppandal Wind Kanyakumari Tamil Nadu 1500
Farm

Brahmanvel Parakh Agro

3 Dhule Maharashtra 528
windfarm Industries

Siemens
4 Kayathar Gamesa, ReNew Tutcorin Tamilnadu 300
Power

Gadre Marine
5 Dhalgaon windfarm Sangli Maharashtra 278
Exports

Vankusawade Wind Suzlon Energy

6 Satara District. Maharashtra 259
Park Ltd.

7 Vaspet ReNew Power Vaspet Maharashtra 144

Siemens
8 Tuljapur Gamesa, ReNew Osmanabad Maharashtra 126
Power

9 Beluguppa Wind Orange Beluguppa Andhra 100.8

Rank Power plant Producer Location State MWe

Park Renewable Pradesh

Mamatkheda Wind Orange Madhya

10 Mamatkheda 100.5
Park Renewable Pradesh

Anantapur Wind Orange Andhra

11 Nimbagallu 100
Park Renewable Pradesh

Damanjodi Wind Suzlon Energy

12 Damanjodi Odisha 99
Power Plant Ltd.

13 Jath Renew Power Jath Maharashtra 84

14 Welturi ReNew Power Welturi Maharashtra 75

Tuppadahalli
Acciona Chitradurga
15 Energy India Pvt Karnataka 56.1
Tuppadahalli District
Ltd

16 Dangiri Wind Farm Oil India Ltd. Jaiselmer Rajasthan 54

Orange Madhya
17 Bercha Wind Park Ratlam 50
Renewable Pradesh

Aban Loyd
18 Cape Comorin Chiles Offshore Kanyakumari Tamil Nadu 33
Ltd.

19 Kayathar Subhash Subhash Ltd. Kayathar Tamil Nadu 30

Rank Power plant Producer Location State MWe

20 Jasdan NTPC LTD. Jasdan Gujarat 25.0

21 Ramakkalmedu Subhash Ltd. Ramakkalmedu Kerala 25

Gudimangalam
22 Gudimangalam Gudimangalam Tamil Nadu 21
Wind Farm

Shalivahana
23 Shalivahana Wind Green Energy. Tirupur Tamil Nadu 20.4[37]
Ltd.

Wescare (India) Andhra

24 Puthlur RCI Puthlur 20
Ltd. Pradesh

25 Lamda Danida Danida India Ltd. Lamba Gujarat 15

Mohan Breweries
26 Chennai Mohan Chennai Tamil Nadu 15
& Distilleries

27 Shah Gajendragarh MMTCL Gadag Karnataka 15

MP Windfarms Madhya
28 Jamgudrani MP Dewas 14
Ltd. Pradesh

Chitradurga
29 Jogmatti BSES BSES Ltd. Karnataka 14
District

Newam Power
30 Perungudi Newam Perungudi Tamil Nadu 12
Company Ltd.
Rank Power plant Producer Location State MWe

Kethanur Wind Kethanur Wind

31 Kethanur Tamil Nadu 11
Farm Farm

Sanjay D.
32 Shah Gajendragarh Gadag Karnataka 10.8
Ghodawat

33 Hyderabad TSRTC Telangana SRTC Hyderabad Telangana 10

Madras Cements
34 Muppandal Madras Muppandal Tamil Nadu 10
Ltd.

Chettinad
10
35 Poolavadi Chettinad Cement Corp. Poolavadi Tamil Nadu
Ltd.

Offshore wind power plants

India has an offshore wind energy potential of around 70 GW in parts along the coast of
Gujarat and Tamil Nadu.
India started planning in 2010 to enter into offshore wind power, and a 100 MW
demonstration plant located off the Gujarat coast began planning in 2014.In 2013, a
consortium (instead of group of organizations), led by Global Wind Energy Council
(GWEC) started project FOWIND (Facilitating Offshore Wind in India) to identify
potential zones for development of off-shore wind power in India and to stimulate R & D
activities in this area. The other consortium partners include the Centre for Study of
Science, Technology and Policy (CSTEP), DNV GL, the Gujarat Power Corporation
Limited (GPCL) and the World Institute of Sustainable Energy (WISE). The consortium
was awarded the grant of €4.0 million by the delegation of the European Union to India
in 2013 besides co-funding support from GPCL. The project action will be implemented
from December 2013 to March 2018.
The project focuses on the States of Gujarat and Tamil Nadu for identification of
potential zones for development through techno-commercial analysis and preliminary
resource assessment. It will also establish a platform for structural collaboration and
knowledge sharing between stakeholders from European Union and India, on offshore
wind technology, policy, regulation, industry and human resource development.
FOWIND activities will also help facilitate a platform to stimulate offshore wind related
R&D activities in the country. The consortium published initial pre-feasibility assessment
reports for offshore wind farm development in Gujarat and Tamil Nadu on 16 June
2015.In September 2015, the India's cabinet has approved the National Offshore Wind
Energy Policy. With this, the Ministry of New & Renewable Energy (MNRE) has been
authorized as the Nodal Ministry for use of offshore areas within the Exclusive
Economic Zone (EEZ)
India seems pacing up rapidly towards offshore wind energy development as the Nodal
Ministry (MNRE) & Nodal Agency (NIWE) calls with the Expression of Interest
(EoI)inviting the bidders for development of first 1000MW commercial scale offshore
windfarm in India, near the coast of Gujarat. The EoI published on 16 Apr 2018,
specifies the proposed area identified under the FOWIND & FOWPI study funded by
European Union. The proposed location of the offshore windfarm could be 23–40 km off
the coast from the Pipavav port, Gulf of Khambhat. The proposed area covers about
400sq km. The wind measurements & other data collection are under progress under
the supervision of NIWE.
 Conclusion

In project period all company member give many information in this

project I Calculate some ratio and analysis some annual accounts to see
company’s Financial position this is useful interpret company financial
position with this study here I conclude that, liquidity position of
company is not good so company improve this. Turnover ratios of
company increases continuously and Fund management of company is
effective and efficient to generate the sales. Solvency position of
company are good and capital structure of company mostly relay on
equity or own sources and due to that capital more expensive.
Profitability position of company good but Operating expenses of
company increases year by year. In overall financial position of
company is good and some improvement are to be needed. This project
definitely guides the company for formulating the financial strategies in
the future.

Bibliography
References: -

1. https://corporatefinanceinstitute.com/resources/knowledge/modeli
ng/what-is-financial-modeling/
2. https://cdm.unfccc.int/Projects/DB/SIRIM1277472383.2/view
3. https://en.wikipedia.org/wiki/Wind_power_in_India#Installed_capacit
y