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Financial Feasibility of Business Plan

This document provides financial projections and assumptions for ABC Company over 4 years. It includes income statements, balance sheets, cash flow statements and notes on capital structure, assets, liabilities, and financing for the projected period. Key figures include annual sales projections, cost assumptions, capital expenditures of $500 million in year 0, long-term debt of 25% of capital structure, and projected profits and cash flows.

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140 views14 pages

Financial Feasibility of Business Plan

This document provides financial projections and assumptions for ABC Company over 4 years. It includes income statements, balance sheets, cash flow statements and notes on capital structure, assets, liabilities, and financing for the projected period. Key figures include annual sales projections, cost assumptions, capital expenditures of $500 million in year 0, long-term debt of 25% of capital structure, and projected profits and cash flows.

Uploaded by

muhammadnain
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 XLS, PDF, TXT or read online on Scribd
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ABC Company

Assumptions

Click here for Cash Balancing


Spot Exchange Rate
Terranian Francs/ 1
Terranian Francs/ 1
Projected Inflation Rate
UK & EU
Terrania

cash balanced

36.85
23.32
Year 0

Year 1

Exchange Rate
Terranian Francs/ 1
Terranian Francs/ 1

36.85
23.32
Year 0

Capex
Debt financing %
Equity financing %
Trade days
Labor cost days
Sales and distribution days
Other payable days
Depreciation
Depreciation Method
Depreciation rate
Unit Costs in year 1
Labour (based upon using 250 workers)
Local components
Component from Germany
Sales and distribution
Production/ Sales
Selling price
Local Workes
Labor capacity
Fixed Costs in Million
Tax Rate

CAPITAL STRUCTURE
Equity
Total Debt
Long Term Debt
Long Term Debt:
Life of loan
Interest rate (% p.a.)
Short Term Financing

Year 2
2%
20%

43.35
27.44
Year 1

500.00
25%
75%

SL
20%

T 3800
T 1800
30
T 400
60000 per year
400 Year 1
300
250
T 50
20%

75%
25%
5 Years
15%
5%

Year 3
3%
15%

48.40
30.63
Year 2

0%
100%
90
30
60
90

3%
10%

51.69
32.71
Year 3

50%
50%
90
30
60
90

50%
50%
90
30
60
90

Valuation
Profit after Tax
Tax shield from Depraeciation
Investment

27.77
(500.00)

45.29
-

53.92
-

Working capital requirement

#REF!
#REF!
#REF!

#REF!
#REF!
#REF!

#REF!
#REF!
#REF!

#REF!
#REF!
#REF!

Year 4
3%
10%

55.21
34.94
Year 4
50%
50%
90
30
60
90

58.44
-

#REF!
#REF!
#REF!

#REF!

ABC Company
Valuation
WACC
Cost of debt on longterm loan
Cost of equity
Debt % based on book value
Equity % based on book value
Terminal growth rate
Marketing discount
Outstanding shares
Tax rate

16.50%
12.00%
18.00%
25.00%
75.00%
8.00%
0%
12,000
20%

Cashflow from Operating Activities


Cashflow from Investing Activities
Adj. Treasury
Debt free cash Flow
Discount factor

Year 0
(500.0)
(500.0)
1.00

PV of Debt free cash flows


PV of Terminal Value
Less: Marketability Discount
Value of the Company
Add: Cash
Business Enterprise Value
Less: Debt
Equity value of Company
Shares no.
Value per share

(222)
804
583
0%
583
24
607
(119)
488
12,000
0.04

Year 1
30.7
15.0
45.7
0.86

Year 2
116.2
14.3
130.4
0.74

Year 3
112.7
13.4
126.0
0.63

Year 4
104.2
12.4
116.6
0.54

ABC Company
Longterm Financial Projection
INCOME STATEMENT
Year 0
Sales
Costs
Labor Cost
Local Component Cost
Component from Germany
Sales and distribution
Depreciation
Fixed Costs
Total Cost
Earning before interest and taxes
Interest
Earning before tax
Tax Amount
Profit afetr Tax
Accumulated Profit/ (loss)

Year 1
658.4

Year 2
735.2

Year 3
785.1

Year 4
838.5

273.6
108.0
49.4
24.0
100.0
50.0
605.0
53.5
18.8
34.7
6.9
27.8
27.8

314.6
124.2
56.8
27.6
80.0
57.5
660.7
74.4
17.8
56.6
11.3
45.3
73.1

346.1
136.6
60.7
30.4
64.0
63.3
701.0
84.1
16.7
67.4
13.5
53.9
127.0

380.7
150.3
64.8
33.4
51.2
69.6
749.9
88.5
15.5
73.0
14.6
58.4
185.4

ABC Company
Longterm Financial Projection

BALANCE SHEET
Equity and Liabilities
Equity
Equity Investement
Accumulated profit/ (loss)
Total Equity
Liabilities
Longterm Loan
Short term financing
Payable

Year 0
375.00

Year 1

Year 2

Year 3

Year 4

375.0

375.0
27.8
402.8

375.0
73.1
448.1

375.0
127.0
502.0

375.0
185.4
560.4

125.0
-

118.8
65.2

111.6
75.0

103.3
82.1

93.8
89.8

Total Liabilities
Total Equity and Liabilities
Assets
Fixed Assets
Tangible Assets

125.0
500.0

184.0
586.8

186.6
634.7

185.4
687.4

183.6
744.0

500.0

400.0

320.0

256.0

204.8

Total Fixed Assets


Current Assets
Account Receivable
Cash and Bank
Total Current Assets
Total Assets

500.0

400.0

320.0

256.0

204.8

500.0
-

162.4
24.4
186.8
586.8
-

181.3
133.4
314.7
634.7
-

193.6
237.8
431.4
687.4
-

206.7
332.5
539.2
744.0
-

ABC Company
Longterm Financial Projection
CASH FLOW STATEMENT
Operating Activities
Cash Receipt
Cash Payment
Labor Cost
Local Component Cost
Component from Germany
Sales and distribution
Tax Payment
Interest Payment
Fixed Costs
Total Cash Payment
Total Operating Activities
Investment Activities
Fixed Capital Investment
Total Investment Activities
Financing Activities
Euity Investment
Increase / (decrease) of short term loan
Increase / (decrease) of longterm loan
Total Financing Activities
Net Cashinflows/ (outflows)
Opening Cash Balance
Ending Cash Balance

496.1

716.2

772.8

825.3

(251.1)
(81.4)
(37.2)
(20.1)
(6.9)
(18.8)
(50.0)
(465.4)
30.7

(311.3)
(120.2)
(55.0)
(27.0)
(11.3)
(17.8)
(57.5)
(600.1)
116.2

(343.5)
(133.6)
(59.7)
(29.9)
(13.5)
(16.7)
(63.3)
(660.1)
112.7

(377.9)
(146.9)
(63.8)
(32.9)
(14.6)
(15.5)
(69.6)
(721.1)
104.2

(500.0)

(500.0)

375.0
125.0

(6.3)

(7.2)

(8.3)

(9.5)

500.0
-

(6.3)
24.4
24.4

(7.2)
109.0
24.4
133.4

(8.3)
104.4
133.4
237.8

(9.5)
94.7
237.8
332.5

ABC Company
Statement of Revenue Projection

Sales (units)
Sales price ()
Revenue in
Exchange Rate ( Terranian Francs/ 1)
Revenue in Terranian Francs in Million

Year 1
60,000
400
24,000,000
27.44
658.45

Year 2
60,000
400
24,000,000
30.63
735.16

Year 3
60,000
400
24,000,000
32.71
785.12

Year 4
60,000
400
24,000,000
34.94
838.48

ABC Company
NOTES:
Equity
Opening
Addition
Withdraw
Ending
Trade Debts
Opening
Addition
Collection
Ending
Days

Year 0 Year 1
Year 2
Year 3
Year 4
375
375
375
375
375
375

375

375

375

375

658
496
162
90

162
735
716
181
90

181
785
773
194
90

194
838
825
207
90

22.49
26.63
12.18
3.95
65.24

25.86
30.62
14.00
4.54
75.03

28.45
33.69
14.95
4.99
82.08

31.29
37.06
15.97
5.49
89.81

251.11
81.37
37.21
20.05
389.74

311.27
120.21
54.96
27.01
513.45

343.52
133.56
59.70
29.91
566.68

377.87
146.91
63.76
32.90
621.44

274
251
22
30

22
315
311
26
30

26
346
344
28
30

28
381
378
31
30

108
81
27
90

27
124
120
31
90

31
137
134
34
90

34
150
147
37
90

Payable
Labor Cost
Local Component Cost
Component from Germany
Sales and distribution
Ending Payable

Payment
Labor Cost
Local Component Cost
Component from Germany
Sales and distribution
Total Payment
Labor Cost

Opening
Addition
Payment
Ending
Days
Local Component Cost
Opening
Addition
Collection
Ending
Days
Component from Germany

Opening
Addition
Collection
Ending
Days

49
37
12
90

12
57
55
14
90

14
61
60
15
90

15
65
64
16
90

Sales and distribution


Opening
Addition
Payment
Ending
Days

24
20
4
60

4
28
27
5
60

5
30
30
5
60

5
33
33
5
60

Fixed Assets
Opening Value
Addition
Depreciation 20%
Ending Value

500
100
400

400
80
320

320
64
256

256
51
205

500
500

Longterm Financing Financing

Opening
Addition
Principal payment
Outstanding

Year 0 Year 1
Year 2
Year 3
Year 4
125.0
118.8
111.6
103.3
####
6.3
7.2
8.3
9.5
125.0

118.8

111.6

103.3

93.8

18.8

17.8

16.7

15.5

25.0

25.0

25.0

25.0

Financial Charges

6 months Kibor

Premium

Payment
Short term Financing

Opening
Addition
Principal payment

Year 0 Year 1
-

Outstanding

Year 2

Year 3
-

Year 4
-

Financial Charges

6 months Kibor

(24.4)
475.6

(109.0)
366.6

(104.4)
262.2

(94.7)
167.5

Premium

Payment

Operating cash + debt repayment


Closing Balance

Cash requirement

500

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