Calculation of Internal Source
Description $ in Billion
Retained Earnings 3
Asset Sales 1
Improved Working Capital 1.5
Total 5.50
Total external source required
Description $ in Billion
Total cost required 10
Less Internal resources -5.5
Total external source required 4.5
Capital structure Debt
$ In Billion
Loans 1
Trade Credits 0.5
Islamic Finance 0.5
Total Debt 2
Total capital Structure 5.5
Debt Portion 36.36%
Equity portion 63.64%
Data For Wacc calculation
Value of Debt 2
Value of Equity 3.5
Cost of Debt 6%
Cost of Equity 12%
Corporate Tax Rate 25%
After Tax cost of Debt 4.50%
Total Capital 5.5
Calculation Of WACC
Debt 0.09
Equity 0.42
Total 0.51
WACC 9.27%
Capital structure Equity
$ in Billion
New Equity 2
Venture Capital 1
Crowdfunding 0.5
Total Equity 3.5
1
2,3
Ratios
Current ratio
TurnOver Ratios
Inventory Turnover Days
Debtor Collection Period
Creditor Payable Period
4
Working Capital Cycle
Working Capital Cycle Days
5
EOQ(Economic order quantity)
EOQ
H(Holdind cost) per unit $
S(Ordering Cost) $
D(Demand in units ) $
EOQ
6
Impact Of debtors days reduction
cash Flow Improvement
requirement 7 and 8 theory
Working Capital Ratio
Description $ In Billion $ In Billion
Assets
Inventory 5
Account Receivable 3
Cash 2
Total Assets 10
Liabilities
Account Payable 4
Short term Loan 1.5
Total Liabilities 5.5
Net working Capital
Total Asset/Total liabilities 1.82
Days
365/(COGS/Inventory ) 91.25
Account Receivable/net credit sales *365 36.5
Account Payable/net credit Purcahse *365 97.3333333333
Invetnory Turnover+Debtor Collection Period -Creditor payable period
30.42
Units
√(2DS/H)
5
100000
1000000
200000 Units
$ In Billion
from 36 days to 30 days
reduction of Days *(credits sales /365)
0.493150684931507 493.15 Million
$ In Billion
4.5
Data for ratios $ In Billion
Total Assets 10
Total liabilities 5.5
COGS 20
Account Receivable 3
Account Payable 4
Inventory 5
Credit Sales 30
Credit purchase 15
Indian
Year Cash Flows Cummulative Cash Flow
1 0.7 0.7
2 0.9 1.6
3 1.2 2.8
4 1.5 4.3
5 1.8 6.1
6 2
Indonesia
Year Cash Flows Cummulative Cash Flow
1 0.8 0.8
2 1 1.8
3 1.1 2.9
4 1.4 4.3
Investment recoverd during 5th year 5 1.6 5.9
6 1.9
Investment recoverd during 5th year
Indian
ARR= Average Annual Accounting Profitx100
Initial Investment
$ In Million
ARR
Intial Investment 5000
Average Annual Accounting Profit 1350
ARR 27%
Indonesia
ARR= Average Annual Accounting Profitx100
Initial Investment
$ In Million
ARR
Intial Investment 5000
Average Annual Accounting Profit 1300
ARR 26%
India Plant
$ In Billion $ In Billion $ In Billion $ In Billion $ In Billion
Description Year 1 Year 2 year 3 year 4
Cash Inflows 0.721 0.95481 1.3113 1.6883
Cash outflows -5
Profit -5 0.721 0.95481 1.3113 1.6883
Less Tax @ 25% -0.18025 -0.2387025 -0.327825 -0.422075
Profit after tax 0.54075 0.7161075 0.983475 1.266225
Net Cash flows -5 0.54075 0.7161075 0.983475 1.266225
DF @10% 1 0.90909 0.8264 0.7513 0.683
Present Value -5 0.491590417 0.591791238 0.738884767 0.864831675
NPV -0.329959539
DF @20% 1 0.8333 0.69444 0.579 0.4822
Present Value -5 0.450606975 0.497293692 0.569432025 0.610573695
NPV -1.642943438
Indonesia Plant
$ In Billion $ In Billion $ In Billion $ In Billion
year 5 year 6 Description year 1
2.0867 2.3881 Cash Inflows 0.824
Cash outflows -5
2.0867 2.3881 Profit 0.824
-0.521675 -0.597025 Less Tax @ 25% -0.206
1.565025 1.791075 Profit after tax 0.618
1.565025 1.791075 Net Cash flows -5 0.618
0.621 0.5645 DF @ 10 1 0.90909
0.971880525 1.011061838 Present Value -5 0.56181762
NPV -0.471784692
0.402 0.335 DF @20% 1 0.8333
0.62914005 0.600010125 Present Value -5 0.5149794
NPV -1.711406513
$ In Billion $ In Billion $ In Billion $ In Billion $ In Billion
year 2 year 3 year 4 year 5 year 6
1.0609 1.202 1.5757 1.85484 2.2687
1.0609 1.202 1.5757 1.85484 2.2687
-0.265225 -0.3005 -0.393925 -0.46371 -0.567175
0.795675 0.9015 1.181775 1.39113 1.701525
0.795675 0.9015 1.181775 1.39113 1.701525
0.8264 0.7513 0.683 0.621 0.5645
0.65754582 0.67729695 0.807152325 0.86389173 0.960510863
0.69444 0.579 0.4822 0.402 0.335
0.552548547 0.5219685 0.569851905 0.55923426 0.570010875
India Plant
$ In Billion $ In Billion $ In Billion $ In Billion $ In Billion
Net Cash flows -5 0.54075 0.7161075 0.983475 1.266225
DF @10% 1 0.90909 0.8264 0.7513 0.683
Present Value -5 0.491590417 0.591791238 0.738884768 0.864831675
NPV -0.329959539
DF @20% 1 0.8333 0.69444 0.579 0.4822
Present Value -5 0.450606975 0.497293692 0.569432025 0.610573695
NPV -1.642943438
Data to be used
Calculation Of IRR
Description $ In Billion
NPV at Lower rate -0.32995954
NPV at Higher rate -1.64294344
Lower Rate 10.00%
Higher Rate 20%
Higher Rate -Lower rate 10.00%
NPV lower -NPV higher 1.3129839
NPV lower rate/net npv -0.251305092
IRR 7.49%
Indonesia Plant
$ In Billion $ In Billion $ In Billion
1.565025 1.791075 Net Cash flows -5
0.621 0.5645 DF @ 10 1
0.971880525 1.011061838 Present Value -5
NPV -0.471784692
0.402 0.335 DF @20% 1
0.62914005 0.600010125 Present Value -5
NPV -1.711406513
Data to be used
Calculation Of IRR
Description $ in Billion
NPV at Lower rate -0.47178469
NPV at Higher rate -1.71140651
Lower Rate 10.00%
Higher Rate 20%
Higher Rate -Lower rate 10.00%
NPV lower -NPV higher 1.23962182
NPV lower rate/net npv -0.380587597
IRR 6.19%
$ In Billion $ In Billion $ In Billion $ In Billion $ In Billion $ In Billion
0.618 0.795675 0.9015 1.181775 1.39113 1.701525
0.90909 0.8264 0.7513 0.683 0.621 0.5645
0.56181762 0.65754582 0.67729695 0.807152325 0.86389173 0.960510863
0.8333 0.69444 0.579 0.4822 0.402 0.335
0.5149794 0.552548547 0.5219685 0.569851905 0.55923426 0.570010875
