26 August Financial Analysis

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

FINANCIAL ANALYSIS

AFTERSCHO☺OL – DEVELOPING CHANGE MAKERS

CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME –

World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship

OPEN FOR ALL FREE FOR ALL


FINANCIAL ANALYSISDr. T.K. Jain.

AFTERSCHO☺OLCentre for social entrepreneurship

BikanerM: 9414430763

[email protected]

www.afterschoool.tk

http://www.afterschool.tk/

http://www.afterschoool.tk/


What are the stages in product adoption process? 1 awareness2. Interest3. Evaluate4. Trial5. Adoption


What are different channels of distribution? ZERO LEVEL: or direct marketing –

company sells the goods directly to the company

1 level = there is a distributor or a retailer 2 level =there is a wholsaler or a

manufacturer’s representative besides retailer.

Similarly, 3 or 4 level


What is a heuristic? It is basically a decision rule or decision

process. Consumer generally decide their decision based on their heuristic.


What is marketing information system? The entire information system, through which a

company collects useful marketing data and processes it and the top management is able to take decision based on this is called Marketing Information system. Sales representatives, and Marketing officers send periodical information to the top management for this purpose in prescribed formats.


What is multichannel marketing? When a company uses many channnels

to reach the customers, it is called multichannel marketing. Ex. HUL sells through retailers, through direct marketing and through other channels also.


What is MLM? Multi level marekting or direct marketing

= example AMWAY.


What are megatrends? Large social, economic, technological

and political changes in the economy are called megatrends.


What is a FAD? Unpredictable, short lived craze in social

economic or political arena is called FAD. For example, there was a FAD to wear torn geans.


What is EDLP? Every day low pricing (it has been

popularised by WALMART).


What is dumping? To sell goods at lower then cost in other

countries is called dumping. Example: China selling at a low price to India.


What is CLV? Customer Lifetime value = the entire

stream of benefits that a customer expects to get over his life from a particular product or service.


What is core competency? It is a source of competitive advantage. It

gives a special CPA (customer perceived value), through which customer have valued image of this product. It is difficult to be immitated by the competitors.


What is a captive product? A product that is necessary for other

product is called captive product. A tyre is necessary for a car, ink is necessary for pen to write etc.


EBIT is 24 Crores, Interest is 8 corores, Tax rate is 40%. What is financial leverage? EBIT = 24 Crores. - Interst = 16 Corres Less tax: (16- 6.4) = 9.6 Crores EAT = 9.6 Crores. Financial Leverage = 24/9.6 = 2.5 ans.


Contribution is 40 crores, rest of the information is from previous quesiton, what is operating leverage? =40/24 = 1.66 answer.


In the previous question, what is combined leverage? Contribution / EAT =40 / 9.6 =4.16 answer. Or : (operating leverage * financial

leverage). 1.66*2.5 = 4.15 ans.


Use excel Goal Seek command and find out IRR for the following question: Investment : 22 Crores. Cash inflows: 1st year : 50000 2nd year : 1 Lakh 3 rd year ; 10 Lakh 4th year : 1 Crore 5th year : 4 Crores 6th year to 10 year : 6 Crore per annum 11th year : disposal of plant at Rs. 50 Lakhs.


Solution . . Use goal seek and find the IRR, which

is just 6%, therefore the project is not very attractive.

IRR = internal rate of return It is the rate where PV of cash inflow =

PV of cash outflow.


We issued DDB at Rs. 2500, maturity value is 1 Lakh after 25 years, what is rate of return for investor, and what is cost of capital for company? DDB = Deep Discount Bond

Solve = the answer is 15.9 %ans.


PRICES OF SUGER WAS 20 PER KG IN 1999, PRICE WAS 25 IN 2000, IT WAS 30 IN 2001 AND 31 IN 2002. IT IS 40 THIS YEAR. KEEPING 1999 AS BASE, WHAT IS THE INDEX VALUE? INDEX OF 2000 = 25/20 *100 = 125 INDEX OF 2001 = 30/20 *100 = 150 INDEX OF 2002 = 31/20 *100 = 155 INDEX OF THIS YEAR = 40/20 *100 =

200 ANSWER.


PRICES OF SUGER WAS 20 PER KG IN 1999, PRICE WAS 25 IN 2000, IT WAS 30 IN 2001 AND 31 IN 2002. IT IS 40 IN 2008. KEEPING 2008 AS BASE, WHAT IS THE INDEX VALUE IN 1999, 2000?

Index of 1999 is : 20/40 *100 = 50 Index of 200 is 25/40 *100 = 62.5


What is the formula of LASPEYRES? (target year price * base year quantity) / (

base year price * base year quantity).


ABOUT AFTERSCHOOOL Afterschoool conducts three year integrated PGPSE (after

class 12th along with IAS / CA / CS) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM. This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society.


Why such a programme? To promote people to take up entrepreneurship

and help develop the society To enable people to take up franchising and

other such options to start a business / social development project

To enable people to take up social development as their mission

To enable people to promote spirituality and positive thinking in the world


Who are our supporters? Afterschoolians, our past beneficiaries,

entrepreneurs and social entrepreneurs are supporting us.

You can also support us – not necessarily by money – but by being promotor of our concept and our ideas.


About AFTERSCHOOOL PGPSE – the best programme for developing great entrepreneurs

Most flexible, adaptive but rigorous programme Available in distance learning mode Case study focused- latest cases Industry oriented practical curriculum Designed to make you entrepreneurs – not just an

employee Option to take up part time job – so earn while you

learn The only absolutely free course on internet


Workshops from AFTERSCHOOOL IIF, Delhi CIPS, Jaipur ICSI Hyderabad Branch Gyan Vihar, Jaipur Apex Institute of Management, Jaipur Aravali Institute of Management, Jodhpur Xavier Institute of Management, Bhubaneshwar Pacific Institute, Udaipur Engineering College, Hyderabad


Flexible Specialisations: Spiritualising business and society Rural development and transformation HRD and Education, Social Development NGO and voluntary work Investment analysis,microfinance and inclusion Retail sector, BPO, KPO Accounting & Information system (with CA / CS /CMA) Hospital management and Health care Hospitality sector and culture and heritage Other sectors of high growth, high technology and social

relevance


Salient features: The only programme of its kind (in the whole world) No publicity and low profile course For those who want to achieve success in life – not just a degree Indepth knowledge and expertise Professional approac: World class approach Strong intellectual and business capabilities Flexible – you may stay for a month and continue the rest of the

education by distance mode. / you may attend weekend classes Scholarships for those from poor economic background Latest and constantly changing curriculum – keeping pace with

the time Placement for those who are interested Admissions open throughout the year Latest and most advanced technologies, books and study material


Components Pedagogy curriculum and approach based on IIM Ahmedabad and ISB

Hyderabad (the founder is alumnus from IIMA & ISB Hyderabad) Meditation, spiritualisation, and self development Essential softwares for business Business plan, Research projects Participation in conferences / seminars Workshops on leadership, team building etc. Written submissions of research projects/articles / papers Interview of entrepreneurs, writing biographies of entrepreneurs Editing of journals / newsletters Consultancy / research projects Assignments, communication skill workshops Participation in conferences and seminars Group discussions, mock interviews, self development diaryng Mind Power Training & writing workshop (by Dr. T.K.Jain)


Pedagogy Case analysis, Articles from Harvard Business Review Quiz, seminars, workshops, games, Visits to entrepreneurs and industrial visits Presentations, Latest audio-visuals Group discussions and group projects Periodic self assessment Mentoring and counselling Study exchange programme (with institutions out of India) Rural development / Social welfare projects


Branches AFTERSCHOOOL will shortly open its

branches in important cities in India including Delhi, Kota, Mumbai, Gurgaon and other important cities. Afterschooolians will be responsible for managing and developing these branches – and for promoting social entrepreneurs.


Case Studies We want to write case studies on social

entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs.


Basic values at afterschoool Share to learn more Interact to develop yourself Fear is your worst enemy Make mistakes to learn Study & discuss in a group Criticism is the healthy route to mutual support and

help Ask fundamental questions : why, when, how &

where? Embrace change – and compete with yourself only


www.afterschoool.tk social entrepreneurship for better society

http://www.afterschoool.tk/

26 August Financial Analysis

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