WPL Case study

Case details & Instructions

You are required to set up a model showing the business plan for WPL with its cash flows for the next 5 years including a set of

Following are the points which need to be considered to build the model:
1
2
3
4
5
6
7
8
9
10
11
12
13

END OF SHEET

1
WPL Case study
Case details & Instructions

Western Printers Limited

You are setting up a company called Western Printers Limited ("WPL") and are expecting to commence business on 01 Decem

WPL will be a Mumbai-based company engaged in trading of printers. You have identified a Pune-based manufacturer to purch
sales will be its only revenue stream.

You have identified a medium-sized store for rent at Lamington road in Mumbai which is a hub for computer accessories. This s
cost to make the store ready for operations. You will also have to incur some maintenance expenses every 2 years. You plan to
deputy store manager to manage the day-to-day affairs and 8 sales staff. You have calculated that apart from this, the only othe

Based on your discussions with your supplier, you have noted down the following terms - you will receive printer stock on the 3r
much credit to your customers since most of the clientele is likely to belong to the retail or small offices segment and payment w
inventory at the godown forming part of your premises.

As part of your inheritance, you have a parcel of land in your village which is worth Rs.7 million. You intend to show this as an in
value method on your renovation/refurbishment expenses as well as the maintenance expenditures which you will incur going f
million to start the business. You have spoken with some of your banker friends and concluded that you will be able to secure d
order to sanction the funding.

You are required to set up a model showing the business plan for WPL with its cash flows for the next 5 years including a set of 3-wa

Following are the points which need to be considered to build the model:
Set your column widths as given in table (1a) in the "Model guidelines" sheet
Cell formats (to be set using Cell styles in Excel) , Range names and Model timelines are given in tables (2a), (2b) and (2c) in t
Consider annual timeline for the model. Use financial years as a basis (April to March) (NOTE: your first period will be Apr-201
Set up a check sheet and set the error tolerance as 0.1 (Give this cell a range name of "MaxDeviation"). Set up checks in the m
Set up the Revenue inputs as per tables in section (3a) of the "Model guidelines" sheet
Next set up the Cost-related inputs as per tables in sections (3b) of the "Model guidelines" sheet
The next input section you will be setting up is Fixed assets. You will find the details for these in sections (3c) of the "Model guid
Set up the inputs for Capital Structure as per section (3d) of the "Model guidelines" sheet
Set up the working capital related inputs as per section (3e) of the "Model guidelines" sheet
Set up the tax related input as per section (3f) of the "Model guidelines" sheet
Once you are done with setting up inputs, set up calculations for each item - starting with revenues, fixed costs, variable costs,
Then go about preparing your financial statements - the profit & loss account (income statement), balance sheet and cash flow
Check that your model is working fine by setting up appropriate checks in the model - think of all possible checks that you can s

END OF SHEET

2
3
WPL Case Study
Case study-Model guidelines

Table Instructions >>>>>>

reference

1a Column widths

Column Name
A
B
C
D
E
F
G
H and onwards
O
P and onwards

2a Cell formats

Name of cell style

InputGeneral

InputNumber

InputPercent

InputDate

Actuals

InsheetRefAndCalc

OffsheetRef

BlockedForInput

DifferentFromAdjacent

OutputStyle

Check

4
2b Range names

Range Name
Million
Crore
Lakh
Thousand
MonthsInYear
MonthsInQuarter
MonthsMonthly
QuartersInYear
DaysInYear

2c Model timeline

Key Dates
Model start date
Model timeline (# of years)
Operations start date

3a Revenue inputs

(i) Product volume

Particulars

Printer (# of units sold in first 3 months)

(ii) Product selling price

Particulars (Rs./equipment)

Printer

3b Cost-related inputs

(i) Fixed costs

Particulars

5
 Rent

Personnel Cost
Other fixed cost

(ii) Variable costs

Particulars

Cost of Goods Sold (COGS) - Rs./unit sold

Marketing Cost

Other Variable Costs

3c Fixed assets related inputs

Particulars

Land
Capex

Maintenance Capex

3d Capital structure related inputs

Rs. Mn

Equity capital

6
 Senior debt

Implied debt-to-capital ratio

The Senior debt was drawndown on the first business day i.e. 01 April 2017. The key terms of this debt are pr

Moratorium

Number of equal annual repayment instalments (post moratorium)

Interest rate

3e Working capital related inputs

Inventory
Debtors
Creditors

3f Tax related inputs

Tax rate (% of PBT)

END OF SHEET

7
 Width
3
4.14
3
69.14
29.14
16
16
12.86
4.29
Hidden (0 width)

Format Horizontal Alignment Vertical Alignment

General Center Center

#,##0.0_);[Red](#,##0.0) Right (indent) Center

Percentage (1 decimal) Right (indent) Center

Date (dd-mmm-yy) Right (indent) Center

General Center Center

General Center Center

General Center Center

General Center Center

General Center Center

#,##0.0_);[Red](#,##0.0) Right (indent) Center

[Color46]"Check Center Center

workings";[Color46]"Check
workings";[Yellow]"Ok"

8
 Parameter value
1000000
10000000
100000
1000
12
3
1
4
365

Parameter value
1-Apr-17
5.0
1-Dec-17

01 Dec-2017 to 31-Mar- Y-o-y growth per

2018 annum from FY19
onwards (% p.a.)

1500 5%

01-Dec-17 to 31-Mar- Y-o-y growth per

2017 (Rs. / equipment) annum from FY18
onwards (% p.a.)

25000 5%

01-Apr-2017 to 31-Mar- Escalation pattern

2018 (Rs. Mn)

9
 1.5 5% every 3 years from
operations starting FY 18
with base year rent
applicable for 12 months

10.0 5% increase y-o-y

1.2 Expected to increase by
5% per annum every
year

01-Dec-17 to 31-Mar- Rationale for future

2018 cost

17,000.0 Increase by 5% every

year
5.0% 5% of the revenue per
period
2.0% 2% of the revenue per
period

Depreciation rate (% Capex in the period Rational for future capex

p.a.) Apr-2017 to Mar-2018
(Rs. Mn)
0.0% 7.0 -
15.0% 4.0 -

15.0% 1.5 Maintenance expenditure would

be incurred at an interval of
every 2 years (after FY18). The
base cost of maintenance
expenditure as of today is
Rs.1.5 mn. This is expected to
escalate by 5% p.a. so the
applicable escalated expense
would be incurred whenever
maintenance expenditure is
due

infused on 01 Apr 2017

10.0

10
 5.0

33.3%

7. The key terms of this debt are provided below

2 years Moratorium is for

principal alone. This
means the repayments
would commence after 2
years. Interest would
continue to be accrued
and paid during the
moratorium period as
well

3.0 This instalment

comprises ONLY
principal component.
Interest would be in
addition
11.00% Interest is to be
computed and paid on
average debt during the
year (sum of opening
and closing debt balance
divided by 2)

30 days of variable cost

15 days of sales
45 days of all operating
expenses

34.6%

11
Font Font size Font style

Arial Regular 10

Arial Regular 10

Arial Regular 10

Arial Regular 10

Arial Regular 10

Arial Regular 10

Arial Regular 10

Arial Regular 10

Arial Regular 10

Arial Bold 10

Arial Bold 10

12
13
 Depreciation basis

Not depreciated
Depreciated on WDV basis -
Opening block is depreciated
for the full year while any
additions during the year would
be depreciated for half of the
year

Depreciated on WDV basis -

Opening block is depreciated
for the full year while any
additions during the year would
be depreciated for half of the
year

14
15
 Font colour Fill Border style

Green (RGB 0, 176, 80) Green (RGB 216, 228, 188) Dotted

Green (RGB 0, 176, 80) Green (RGB 216, 228, 188) Dotted

Green (RGB 0, 176, 80) Green (RGB 216, 228, 188) Dotted

Green (RGB 0, 176, 80) Green (RGB 216, 228, 188) Dotted

Green (RGB 0, Green

176, 80)
(RGB 216, 228, 188), scattered dot pattern shaded Dotted

Black (RGB 0,0,0) None None

Green (RGB 0, 176, 80) None None

Black (RGB 0,0,0) Green (RGB 51, 51, 0) None

White (RGB 255, 255, 255) Green (RGB 0, 176, 80) Dotted

White (RGB 255, 255, 255) Green (RGB 79, 98, 40) None

As per number format Green (RGB 79, 98, 40) Solid line

16
17
18
19
20
21
22
23
24
25
All checks are OK

1. Model formats

Input cells

Number format input

Percent format input

Date format input

Insheet references

Offsheet references

Cells blocked for input

Cell contains deviant formula

Output cell

Million
Crore
Lakh
Thousand
MonthsInYear
MonthsInQuarter
MonthsMonthly
QuartersInYear
DaysInYear

2. Model timeline

Model start date

Months per period
Model timeline

Model end date

3. Operational dates

Operations start date

First year of operation
Number of months operational in first year of operation

26
4. Revenues

Number of units sold in first year of operation (base year)

Growth in number of units sold per annum
Price per unit in base year
Escalation in price

5. Expenses

5.1 Fixed costs

Rent in base year
Base year rent applicable for how many months
Interval for escalation in rent
Escalation in rent

Personnel cost in base year

Escalation in personnel cost

Other fixed costs in base year

Escalation in other fixed costs

5.2 Variable costs

Cost of goods sold in base year
Escalation in cost of goods sold

Marketing cost

Other variable costs

6. Capex and depreciation

Value of land transferred to business in first year of operation

Capex in first year of operation

Interval for incurring maintenance capex
Maintenance capex as at base year
Escalation in maintenance capex

Rate of depreciation as per WDV method

7. Funding

Equity at the time of commencement of operations

Debt at the time of commencement of operations

Repayment moratorium
Repayment start date

Number of annual repayment instalments (post moratorium)

27
 Rate of interest

8. Working capital

Inventory
Debtors
Creditors

9. Tax

Tax rate

END OF SHEET

28
 1
Forecast
1/Apr/17
Units 31-Mar-18

10.0

10.0%

31-Mar-16

10

10

1,000,000.0
10,000,000.0
100,000.0
1,000.0
12.0
3.0
1.0
4.0
365.0

#date 1-Apr-17
# 12.0
# of years 5.0

#date 31-Mar-22

#date 1-Dec-17
#date 31-Mar-18
#months 4.0

29
 # 1,500.0
% p.a. 5.0%
Rs./unit 25,000.0
% p.a. 5.0%

Rs.million/annum 1.5
# of months 12.0
# of years 3.0
% 5.0%

Rs.million/annum 10.0
% p.a. 5.0%

Rs.million/annum 1.2
% p.a. 5.0%

Rs./unit 17,000.0
% p.a. 5.0%

% of revenues 5.0%

% of revenues 2.0%

Rs. mn 7.0

Rs. mn 4.0
# of years 2.0
Rs. mn 1.5
% 5.0%

% 15.0%

Rs. Mn 10.0

Rs. Mn 5.0
# of years 2.0
#date 1-Apr-19

# 3.0

30
 % p.a. 11.0%

# of months of variable cost 1.0

# of months of revenues 0.5
# of months of expenses 1.5

% of taxable income 34.6%

31
 2 3 4 5
Forecast Forecast Forecast Forecast
1/Apr/18 1/Apr/19 1/Apr/20 1/Apr/21
31-Mar-19 31-Mar-20 31-Mar-21 31-Mar-22

32
33
34
All checks are OK

1. Operational flags and counters

Operations start flag

Operations end flag
Operations ON flag

Operations counter

Number of months in the period

Number of days in the period
Operational proportion of the year

2. Revenues

Number of units sold

Price per unit

Revenue

3. Expenses

3.1 Fixed costs

Rent
Rent escalation flag
### Rent expense for the year

Personnel cost
Personnel cost for the year
Personnel cost for the year (for operational proportion)

Other fixed costs

Other fixed costs for the year
Other fixed costs for the year (for operational proportion)

3.2 Variable costs

Cost of goods sold

Cost of goods sold per unit
Cost of goods sold for the year

Marketing cost

35
 Other variable cost

Total fixed costs

Total variable costs

4. Fixed assets and depreciation

4.1 Asset account

Opening assets block - net
Value of land
Additions during the year
Depreciation for the year

Closing assets block - net

4.2 Capex
Capex in the first year of operation
Maintenance expenditure flag
Maintenance expenditure for the year

Capex for the year

4.3 Depreciation
Depreciation on opening block
Depreciation on additions during the year

Total depreciation for the year

5. Debt and interest

5.1 Debt
Opening debt
Additions during the year
Repayments during the year

Closing debt

5.2 Repayment
Repayment start flag
Repayment end flag
Repayment ON flag

Repayment for the year

5.3 Interest
Interest charged for the year

36
 6. Equity

Opening equity
Infused during the year

Closing equity

7. Working capital

Inventory
Debtors
Creditors

Working capital for the period

Change in working capital

END OF SHEET

37
 Period reference 1
Period type Forecast
Start date 1-Apr-17
Units End date 31-Mar-18

#flag 1-Dec-17 1
#flag 31-Mar-22 0
#flag 1

# 1

# 12
# 365
% 4.0 33%

# 5% 1,500 1,500.0
Rs./unit 5% 25,000 25,000.0

Rs. mn 37.5

#flag 3.0 1.0

Rs. mn 5% 1.5 1.5

Rs. mn 5% 10.0 10.0

Rs. mn 3.3

Rs. mn 5% 1.2 1.2

Rs. mn 0.4

Rs./unit 5% 17,000 17,000.0

Rs. mn 25.5

Rs. mn 5% 1.9

38
Rs. mn 2% 0.8

Rs. mn 5.2
Rs. mn 28.1

Rs. mn 0.0
Rs. mn 7.0 7.0
Rs. mn 4.0
Rs. mn (0.3)

Rs. mn 10.7

Rs. mn 4.0
#flag 2.0 0.0
Rs. mn 5% 1.5 1.5

Rs. mn 4.0

Rs. mn 15.0% 0.0

Rs. mn 0.3

Rs. mn 0.3

Rs. mn 0.0
Rs. mn 5.0 5.0
Rs. mn 0.0

Rs. mn 5.0

#flag 1-Apr-19 0.0

#flag 31-Mar-22 0.0
#flag 3.0 0.0

Rs. mn 1.7 0.0

Rs. mn 11.0% 0.3

39
Rs. mn 0.0
Rs. mn 10.0 10.0

Rs. mn 10.0

Rs. mn 1.0 7.0

Rs. mn 0.5 4.7
Rs. mn 1.5 (12.5)

Rs. mn -0.8
Rs. mn 0.8

40
 2 3 4 5
Forecast Forecast Forecast Forecast
1-Apr-18 1-Apr-19 1-Apr-20 1-Apr-21
31-Mar-19 31-Mar-20 31-Mar-21 31-Mar-22

0 0 0 0
0 0 0 1
1 1 1 1

2 3 4 5

12 12 12 12
365 366 365 365
100% 100% 100% 100%

4,725.0 4,961.0 5,209.0 5,469.0

26,250.0 27,562.5 28,940.6 30,387.7

124.0 136.7 150.8 166.2

0.0 0.0 1.0 0.0

1.5 1.5 1.6 1.6

10.5 11.0 11.6 12.2

10.5 11.0 11.6 12.2

1.3 1.3 1.4 1.5

1.3 1.3 1.4 1.5

17,850.0 18,742.5 19,679.6 20,663.6

84.3 93.0 102.5 113.0

6.2 6.8 7.5 8.3

41
 2.5 2.7 3.0 3.3

13.3 13.8 14.5 15.2

93.0 102.6 113.1 124.6

10.7 10.1 11.2 10.6

0.0 0.0 0.0 0.0
0.0 1.7 0.0 1.8
(0.6) (0.6) (0.6) (0.7)

10.1 11.2 10.6 11.7

0.0 1.0 0.0 1.0

1.6 1.7 1.7 1.8

0.0 1.7 0.0 1.8

0.6 0.5 0.6 0.5

0.0 0.1 0.0 0.1

0.6 0.6 0.6 0.7

5.0 5.0 3.3 1.7

0.0 0.0 0.0 0.0
0.0 (1.7) (1.7) (1.7)

5.0 3.3 1.7 0.0

0.0 1.0 0.0 0.0

0.0 0.0 0.0 1.0
0.0 1.0 1.0 1.0

0.0 1.7 1.7 1.7

0.6 0.5 0.3 0.1

42
10.0 10.0 10.0 10.0
0.0 0.0 0.0 0.0

10.0 10.0 10.0 10.0

7.8 8.5 9.4 10.4

5.2 5.7 6.3 6.9
(13.3) (14.6) (16.0) (17.5)

-0.4 -0.3 -0.2 -0.2

-0.4 -0.1 -0.1 -0.1

43
All checks are OK

1. Operational flags and counters

Operations ON flag

Operations counter

Number of months in the period

Number of days in the period
Operational proportion of the year

2. Income statement

Revenues
Fixed costs
Variable costs

EBITDA

Depreciation

EBIT

Interest

EBT

Tax

PAT

Revenue growth
EBITDA margin
PAT margin

3. Cash flow statement

EBITDA
Less: taxes
Add / (less): change in working capital

Cash flow from operating activities

44
 Capex

Cash flow from investing activities

Inflow of equity
Inflow of debt
Debt repayment
Interest

Cash flow from financing activities

Net cash generated / (used) in the period

Opening balance of cash

Closing balance of cash and cash equivalents

Check

4. Balance sheet

Equity
Reserves and surplus

Shareholders' funds

Debt funds

Total liabilities

Gross block
Accumulated depreciation

Net block

Inventory
Debtors
Cash and Cash equivalents

Current assets

Creditors (current liabilities)

Net current assets

Total assets

Check

END OF SHEET

45
 Period reference 1
Period type Forecast
Start date 1-Apr-17
Units End date 31-Mar-18

#flag 1.0

# 1.0

# 12.0
# 365.0
% 33%

Rs. mn 37.5
Rs. mn (5.2)
Rs. mn (28.1)

Rs. mn 4.1

Rs. mn (0.3)

Rs. mn 3.8

Rs. mn (0.3)

Rs. mn 3.6

Rs. mn 34.6% (1.2)

Rs. mn 2.3

% 0.0%
% 11.0%
% 6.2%

Rs. mn 4.1
Rs. mn (1.2)
Rs. mn 0.8

Rs. mn 3.7

46
Rs. mn (11.0)

Rs. mn -11.0

Rs. mn 10.0
Rs. mn 5.0
Rs. mn 0.0
Rs. mn (0.3)

Rs. mn 14.7

Rs. mn 7.4
Rs. mn 0.0

Rs. mn 0.0 7.4

OK OK

10.0
2.3

12.3

5.0

17.3

11.0
(0.3)

10.7

7.0
4.7
7.4

19.1

(12.5)

6.6

17.3

OK OK

47
 2 3 4 5
Forecast Forecast Forecast Forecast
1-Apr-18 1-Apr-19 1-Apr-20 1-Apr-21
31-Mar-19 31-Mar-20 31-Mar-21 31-Mar-22

1.0 1.0 1.0 1.0

2.0 3.0 4.0 5.0

12.0 12.0 12.0 12.0

365.0 366.0 365.0 365.0
100% 100% 100% 100%

124.0 136.7 150.8 166.2

(13.3) (13.8) (14.5) (15.2)
(93.0) (102.6) (113.1) (124.6)

17.7 20.3 23.1 26.4

(0.6) (0.6) (0.6) (0.7)

17.2 19.7 22.5 25.7

(0.6) (0.5) (0.3) (0.1)

16.6 19.3 22.2 25.6

(5.8) (6.7) (7.7) (8.9)

10.9 12.6 14.5 16.7

10.3% 10.2% 10.2% 10.2%

14.3% 14.9% 15.4% 15.9%
8.8% 9.2% 9.6% 10.1%

17.7 20.3 23.1 26.4

(5.8) (6.7) (7.7) (8.9)
(0.4) (0.1) (0.1) (0.1)

11.6 13.6 15.4 17.4

48
 0.0 (1.7) 0.0 (1.8)

0.0 -1.7 0.0 -1.8

0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0
0.0 (1.7) (1.7) (1.7)
(0.6) (0.5) (0.3) (0.1)

-0.6 -2.1 -1.9 -1.8

11.0 9.8 13.4 13.8

7.4 18.4 28.3 41.7

18.4 28.3 41.7 55.5

OK OK OK OK

10.0 10.0 10.0 10.0

13.2 25.8 40.4 57.1

23.2 35.8 50.4 67.1

5.0 3.3 1.7 0.0

28.2 39.2 52.0 67.1

11.0 12.7 12.7 14.5

(0.9) (1.5) (2.1) (2.8)

10.1 11.2 10.6 11.7

7.8 8.5 9.4 10.4

5.2 5.7 6.3 6.9
18.4 28.3 41.7 55.5

31.4 42.5 57.4 72.9

(13.3) (14.6) (16.0) (17.5)

18.1 28.0 41.5 55.4

28.2 39.2 52.0 67.1

OK OK OK OK

49
All checks are OK

Error tolerance

Total checks

Balance sheet check

Negative cash balance

END OF SHEET

50
 Period reference 1 2
Period type Forecast Forecast
Start date 1-Apr-17 1-Apr-18
Units End date 31-Mar-18 31-Mar-19

0.10

OK

OK
OK

51
 3 4 5
Forecast Forecast Forecast
1-Apr-19 1-Apr-20 1-Apr-21
31-Mar-20 31-Mar-21 31-Mar-22

52