Particulars P4

Net sales 448.27

Growth Rate 9.33%
Income from marketable securirties 16
Non-operating income 27.00
Total Income 491.27
Cost of goods sold 207.73
% of Sales 46.34%%
Selling and Admin. Expenses 71.07
% of Sales 15.85%
Depreciation 28.43
% of Fixed Assets 9.0%
Interest expenses 31.7
% of Debt 12.6%
Total costs and expenses 338.93
Profit before interest and tax (PBT) 109.34
Taxes 43.74
Tax Rate 40.00%
PAT 65.62
Dividend 26.97
% of PAT 41%
Retained Earnings 38.65
Particulars P4
Equity Capital 220
Reserves and surplus 118.65
Debt 250.8
Growth Rate 32%
Total Liabilities 589.45
Fixed Assets 317.07
Growth Rate 70.7%
Investments 108.64
Net Current Assets 163.7
% of Sales. 39.0%
Total Assets 589.45

assumptions:
the net sales are assumed to grow at a rate of 9.33% caculating the growth rate from the last 2 periods
the income from markatable secuties are increasing by 3 each following the trend.
the non-operating income is increasing by 2 following the trend
cost of goods sold are calculated as a percentage of net sales
similarly selling and administration is also calculated accordingly taking into account net sales
depreciation is calculated from fixed assets
interest expenses have taken into consideration debt factor
total cost is the total of all expenses mentionedprofit before interest and tax is total income minus total expenses
tax rate is 40%and PAT is calculated accordingly
dividend is assumed at 41% and the remaining is retained earnings
the equity share capital is the same as the last period
reserves and surplus is calculated by reserves and surplus of previous year + pat - dividend
debt's growth rate is calculated as 32%
the fixed assets growth rate os 70.7%
the net current assets is at 39%
and the investments are arranged according to which side is heavier, assets or liabilities
P5 P6 P7 P8
490.00 535.73 585.74 640.40
9.33% 9.33% 9.33% 9.33%
19 22 25 28
29.00 31.00 33.00 35.00
538.00 588.73 643.74 703.40
227.07 248.27 271.44 296.77
46.34% 46.34% 46.34% 46.34%
77.68 84.93 92.86 101.53
15.85% 15.85% 15.85% 15.85%
31.08 33.98 37.15 40.62
9.0% 9.0% 9.0% 9.0%
41.7 55.1 72.7 95.9
12.6% 12.6% 12.6% 12.6%
377.54 422.28 474.15 534.82
112.46 113.45 111.58 105.58
45.00 45.41 44.66 42.23
40.00% 40.00% 40.00% 40.00%
67.49 68.12 66.99 63.35
27.74 28.00 27.53 26.04
41% 41% 41% 41%
39.75 40.12 39.46 37.31
 P5 P6 P7 P8
220 220 220 220
158.40 198.52 237.98 275.29
331.1 437.0 576.8 761.4
32% 32% 32% 32%
709.46 855.52 1034.81 1256.71
346.66 379.01 414.39 453.07
70.7% 70.7% 70.7% 70.7%
197.48 312.78 462.88 658.67
165.3 163.7 157.6 145.0
39.0% 39.0% 39.0% 39.0%
709.46 855.51 1034.82 1256.72

e last 2 periods

me minus total expenses

 Computation of OIC
PARTICULARS P1
Total Assets 355
Less: Investments 20
Opearting Invested Capital (Total Assets-Investments) 335

Computation of NOPLAT
PARTICULARS 2015
PBT 50
1.(Plus) Interest expenses 20
2.(minus) Interest Income 0
3.(minus) Non-operating Income 0
EBIT (PBT+1-2-3) 70
Tax provision from income statement 20
(Plus) Tax shied on interest expenses (Tax @40%) 8
(minus) Tax on interest income 0
(minus) Tax on non-operating income 0
Taxes on EBIT 28
NOPLAT = EBIT - Taxes on EBIT 42

Computation of ROIC
PARTICULARS 2015
1. NOPLAT 42
2. Operating Invested capital at the beginning N/A
ROIC (NOPLAT/OIC at the beginning)*100 N/A
 Computation of Net Investment
PARTICULARS 2015
Net Fixed Assets at the end 225
(Plus) Net current assets at the end 110
a. Total assets at the end 335
Net Fixed Assets at the beginning N/A
(Plus) Net current assets at the beginning N/A
b. Total assets at the beginning N/A
Net Investment (a-b) N/A

Computation of FCF
PARTICULARS 2015
1. NOPLAT 42
2. Minus Net Investment N/A
FCF (NOPLAT-NI) N/A

Computation of Financing Flow

PARTICULARS 2015
FCF N/A
(Plus) non-operating cash flow 0
Financing Flow N/A
inference:
1) the operating invested capital is increasing over the three periods. This inc
2) NOPLAT has increased initially and then has decreased. It is a metric that c
3) ROIC has decreased. This tells us that the efficiency of aloocating the capita
4) the net investment has increased by 85 margin. This tell us about the comp
5) the free cash flow is not good in P3 as it is negative and shows that the com
6) the financing flow is calculated by adding free cash flow and non-operating
n of OIC
P2 P3
360 490
10 40
350 450

of NOPLAT
2016 2017 2018 2019
140 143
25 24
5 13
20 25
140 129
56 58
10 9.6
2 5.2
8 10
56 52.4
84 76.6

n of ROIC
2016 2017 2018 2019
84 76.6
335 350
25.0746269 21.885714
et Investment
2016 2017
230 290
120 160
350 450
225 230
110 120
335 350
15 100

n of FCF
2016 2017 2018 2019
84 76.6
15 100
69 -23.4

inancing Flow
2016 2017 2018 2019
69 -23.4
12 15
81 -8.4
ee periods. This increase can be due to new projects initiated by the company.
It is a metric that calculates a company's operating profits after adjusting taxes.
oocating the capital is not profitable to investments.
us about the company's investment in property, plants and fixed and current assets
shows that the company is inefficient in generating cash.
and non-operating cash flow
e company.
usting taxes.

and current assets

Year EPS EGR
Current 5
1 6 20%
2 7.2 20%
3 8.64 20%
4 10.37 20%
5 12.44 20%

6 14.68 18%
7 17.03 16%
8 19.41 14%
9 21.74 12%
10 23.92 10%

We know that the value of stock at the end of 10th year can be calc

Value during low growth period = EPS of transition period (1+gn) pa

Therefore, value of share is = 23.92(1.10)(0.6)/0.14-0.10

Value of share = 394.68
PV of Value of Share in SGP =

PV of Value of Share in SGP =

the value of the share as per three stage growth model will be:

PV of Div. in high growth phase

PV of Div. in transition phase
PV of Value of Share in SGP
value of the share as per three stage growth m
 Pay out ratio DPS COE
20% 1.2 18%
20% 1.44 18%
20% 1.73 18%
20% 2.07 18%
20% 2.49 18%
PV of Div. in high growth phase

28% 4.11 17.2

36% 6.13 16.4
44% 8.54 15.6
52% 11.3 14.8
60% 14.35 14
PV of Div. in transition phase

k at the end of 10th year can be calculated based on Earning per share in 11th year and taking g

= EPS of transition period (1+gn) pay out ratio in stable growth period/cost of equity in stable p

.92(1.10)(0.6)/0.14-0.10
 Value of share/ Cum.COE in year 10

394.68/4.72 = 83.62

ee stage growth model will be:

n high growth phase 5.27

n transition phase 13.53
of Share in SGP 83.62
e share as per three stage growth model 102.42
 Cum.COE PV of DPPV @18%
1
1.18 1.02 0.8475
1.39 1.04 0.7182
1.64 1.05 0.6086
1.94 1.07 0.5158
2.29 1.09 0.4371
5.27

2.68 1.59 0.3858

3.12 2.12 0.3454
3.61 2.68 0.3135
4.14 3.26 0.2887
4.72 3.88 0.2697
13.53

year and taking growth of 10% and payout ratio of 60% and the cost of equity of 14%

equity in stable phase - growth rate in stable growth phase

f equity of 14%