Strategic Financial Analysis & Design

12/12/2021

Term report
BRANDs4YoU project & Stocks
portfolio
Presented By:

Naeem Uddin 20212-29090

Fawad Ahmed Khan 20201-27610

Syed Mohammad Kumail Abbas 20201-27618

Syed Mushahid Hussain 20201-28448

Submitted to:

Sir Faisal Dehdi

Contents
1 - Report Objectives ....................................................................................................................................................................................................................... 2
2 - Product Description .................................................................................................................................................................................................................... 2
3 - SWOT Analysis ............................................................................................................................................................................................................................ 2
4 – Financial Feasibility .................................................................................................................................................................................................................... 3
Cost of Items ................................................................................................................................................................................................................................ 3
Annual Sell & Charges .................................................................................................................................................................................................................. 4
Annual Expense of Depreciation .................................................................................................................................................................................................. 5
Initial Investment Working ........................................................................................................................................................................................................... 6
Annual Income Statement & Pay Back Period ............................................................................................................................................................................. 7
Balance Sheet ............................................................................................................................................................................................................................... 8
Ratio Analysis ............................................................................................................................................................................................................................... 9
5 - Stocks Portfolio ......................................................................................................................................................................................................................... 10
OIL AND GAS DEVELOPMENT COMPANY................................................................................................................................................................................... 10
FAUJI FERTILIZER BIN QASIM LIMITED ....................................................................................................................................................................................... 10
UNITED BANK LIMITED............................................................................................................................................................................................................... 10
6 - Allotment of Investment Amount ............................................................................................................................................................................................. 11
7 - Fundamentals: .......................................................................................................................................................................................................................... 11
8 - Best Buy Rates........................................................................................................................................................................................................................... 13
9 – Risk Factor ................................................................................................................................................................................................................................ 13
10 – Conclusion .............................................................................................................................................................................................................................. 14

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1 - Report Objectives
The startup we are working to launch for customers by the name is BRANDs4You having four partners. We met at IoBM we are working in different
organization, due to the positive chemistry of working between us we opt the project and want to work on this idea named BRANDs4You as a part time
business initially. Idea is to generate secondhand income by utilizing minimum resources (time and money) available. This idea will encourage the
sustainability and help us in understanding the new learning and techniques, how to grow up new business and how to tackle those challenges.

2 - Product Description
An online shopping store that offers a wide range of female/male replica lifestyle stocks (jewelry, Begs Shoes) of fashion and accessories. Moreover, we
offer customized quality leather products on demand for customer.

3 - SWOT Analysis

Strength: Accessibility is the biggest Strength of ecommerce businesses is their extensive accessibility. In the past, shopping meant physically traveling to a
certain place, within certain times. With ecommerce, buyers can now browse, learn about, and purchase products from the comfort of their homes, at
whatever time of the day (or night). Although teleshopping offers similar benefits, the advent of the internet has seen a huge number of consumers move
away from TV, radio, and press towards computers.
Weaknesses: Customer trust, can be difficult to establish a trusted brand name, especially without a physical business with a track record and face-to-face
interaction between customers and sales staff. You need to consider the costs or setting up a good customer service system as part of your online offering.
Opportunity: The Ecommerce industry has seen immense growth in the recent years and apart from some fluctuations in the global, the situation has
remained favorable for its growth.
Threats: A Political environment change can become threat when any political decision to ban social media platforms, similar example of Tik-Tok is there
which ban recently to prevent vulgarity.

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4 – Financial Feasibility

Brands 4 You Cost Inc

20%
Cost of Items

First Year Second Year Third Year

Description Purchase Purchase Purchase
Annual Cost Annual Cost Annual Cost
Price Price Price

Ladies Begs (Type A) 60 4,000 240,000 66 4,800 316,800 72.6 5,760 418,176

Ladies Begs (Type B) 120 3,200 384,000 132 3,840 506,880 145.2 4,608 669,082

Ladies Begs (Type C) 120 2,600 312,000 132 3,120 411,840 145.2 3,744 543,629

Ladies Begs (Type D) 120 2,000 240,000 132 2,400 316,800 145.2 2,880 418,176

Shoe 120 2,900 348,000 132 3,480 459,360 145.2 4,176 606,355

Slipper 60 1,800 108,000 66 2,160 142,560 72.6 2,592 188,179

Bracelet 60 900 54,000 66 1,080 71,280 72.6 1,296 94,090

Watch 120 1,700 204,000 132 2,040 269,280 145.2 2,448 355,450

Belt 60 400 24,000 66 480 31,680 72.6 576 41,818

Total 1,914,000 2,526,480 3,334,954

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Brands 4 You
Annual Sell & Charges

Margin % = 25%
Volume Increase = 10%

Sell 1st Year Revenue (Second Year) Revenue (Third Year)

Revenue
Description Charges
Per (First Year)
Per Day Annual Annual Charges Revenue Annual Charges Revenue
Month

Begs (Type A) 0.2 5 60 5,000 300,000 66 6,000 396,000 73 7,200 522,720

Begs (Type B) 1.0 10 120 4,000 480,000 132 4,800 633,600 145 5,800 842,160

Begs (Type C) 1.0 10 120 3,300 396,000 132 3,900 514,800 145 4,700 682,440

Begs (Type D) 1.0 10 120 2,500 300,000 132 3,000 396,000 145 3,600 522,720

Shoe 0.3 10 120 3,600 432,000 132 4,400 580,800 145 5,200 755,040

Slipper 0.2 5 60 2,300 138,000 66 2,700 178,200 73 3,200 232,320

Bracelet 0.2 5 60 1,100 66,000 66 1,400 92,400 73 1,600 116,160

Watch 0.3 10 120 2,100 252,000 132 2,600 343,200 145 3,100 450,120

Belt 0.2 5 60 500 30,000 66 600 39,600 73 700 50,820

Total 840 2,394,000 924 3,174,600 1016 4,174,500

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Brands 4 You
Annual Expense of Depreciation

DEPRECIATION EXPENSE:
Depreciation
Life in Salvage Total
Sr # Description Units Cost 1st Year 2nd Year 3rd Year
Years Value Amount
1 LAPTOP 2 5 8,000 40,000 80,000 6,400 6,400 6,400
2 MOBILE 1 5 3,000 15,000 15,000 2,400 2,400 2,400
3 TRIPOD STAND 2 5 400 2,000 4,000 320 320 320
4 CAMERA 1 5 6,000 30,000 30,000 4,800 4,800 4,800
5 PRINTER 1 5 2,400 12,000 12,000 1,920 1,920 1,920
6 MISC 2 5 2,000 10,000 20,000 1,600 1,600 1,600
Total 161,000 17,440 17,440 17,440

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 Brands 4 You
Initial Investment Working

1st Year Cost of Items 1,914,000

First Order (40% of 1st Year Cost of Items) 765,600

Freight Charges 53,592

Purchase Of Assets 161,000

Initial Investment Required 980,192

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 Brands 4 You
Annual Income Statement & Pay Back Period

2022 2023 2024

Description Remarks 1st Year 2nd Year 3rd Year

Annual Volume 10% Inc Annually 840 924 1016

Revenue 2,394,000 3,174,600 4,174,500

Direct Cost:
Cost of items 20% Inc Annually 1,914,000 2,526,480 3,334,954
Communication Exp 2000 Monthly 24,000 24,000 24,000
Freight Charges 7% of Cost 133,980 176,854 233,447
Give Away (Marketing Exp) 50,000 50,000 50,000
Depreciation 17,440 17,440 17,440
2,139,420 2,794,774 3,659,840
Net Margin 254,580 379,826 514,660

Margin % 11% 12% 12%

Project Cash Flow:

Net Margin 254,580 379,826 514,660

Add: Non Cash Exp - Depreciation 17,440 17,440 17,440
Cash Inflow 272,020 397,266 532,100

Project Cost (Cash Outflow) (980,192) - -

Net Cash Flow for the year (708,172) 397,266 532,100

Accumulated Net Cash Flow (708,172) (310,906) 221,194

Payback in Years 2.6

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Balance Sheet
Balance Sheet Brands 4 You Balance Sheet Brands 4 You
For The Year Ended Dec'31, 2022 For The Year Ended Dec'31, 2023
Amount in Rs. Amount in Rs.
Assets Liabilities and Equity Assets Liabilities and Equity
Fixed Assets: Liabilities: Fixed Assets: Liabilities:
Equipment's 161,000 Current Liabilities: Equipment's 161,000 Current Liabilities:
Less: Accumulated Dep (17,440) A/c Payable (30% Credit) 229,680 Less: Accumulated Dep (34,880) A/c Payable (30% Credit) 303,178

Long Term Liabilities: - Long Term Liabilities: -

Total Fixed Assets 143,560 Total Liabilities 229,680 Total Fixed Assets 126,120 Total Liabilities 303,178

Current Assets: Owners’ Equity: Current Assets: Owners’ Equity:

Inventory (40% of Year Sale) 819,192 Partner 1 250,000 Inventory (40% of Year Sale) 1,081,333 Partner 1 250,000
A/c Receivable - Partner 2 250,000 A/c Receivable - Partner 2 250,000
Cash 521,508 Partner 3 250,000 Cash 730,131 Partner 3 250,000
Partner 4 250,000 Partner 4 250,000
Net Income for the year 2022 254,580 Net Income for the year 2022 & 23 634,406
Total Current Assets 1,340,700 Total Equity 1,254,580 Total Current Assets 1,811,464 Total Equity 1,634,406

Total Assets 1,484,260 Total Liabilities and Equity 1,484,260 Total Assets 1,937,584 Total Liabilities and Equity 1,937,584

Owner Investment 1,000,000 Opening Balance of Cash 521,508

First Order (70% on Cash) (535,920) 2nd Order (70% on Cash) (171,494)
Freight Charges (53,592) Freight Charges (17,149)
Purchase Of Assets (161,000) Purchase Of Assets -
Net Margin 2022 254,580 Net Margin 2023 379,826
Depreciation 17,440 Depreciation 17,440
Cash in Hand 521,508 Cash in Hand 730,131

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Brands 4 You
Ratio Analysis
For the years 2022 & 2023

Description Formulae Year 2022 Year 2023

1 - Liquidity Ratios:
Current ratio Current Assets 1,340,700 100 5.8 1,811,464 100 6.0
Current Liabilities 229,680 x = 303,178 x =

Quick ratio Current Assets - Inventory 521,508 100 2.3 730,131 100 2.4
Current Liabilities 229,680 x = 303,178 x =

Working Capital C. Assets - C. Liabilities 1,340,700 229,680 1,111,020 1,811,464 303,178 1,508,286
- = - =

2 - Profitability Ratios:
Gross Profit Margin Gross Profit 480,000 100 20% 648,120 100 20%
Sales 2,394,000 x = 3,174,600 x =

Net Profit Margin Net Profit 254,580 100 11% 379,826 100 12%
Sales 2,394,000 x = 3,174,600 x =

3 - Efficiency / Turn over Ratios:

Inventory Turn Over Cost of Goods Sold 1,914,000 365 156.22 Days 2,526,480 365 156.22 Days
Inventory 819,192 x = 1,081,333 x =

Purchase Turn Over Cost of Goods Sold 1,914,000 365 43.8 Days 2,526,480 365 43.8 Days
A/c Payable 229,680 x = 303,178 x =

4 - Investment Ratios:
Net Income - Interest (1-
Return of Assets T) 254,580 100 17% 379,826 100 20%
x = x =
Total Assets 1,484,260 1,937,584

Net Income - Interest (1-

Return of Equity T) 254,580 100 20% 379,826 100 23%
x = x =
Total Equity 1,254,580 1,634,406

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5 - Stocks Portfolio

OIL AND GAS DEVELOPMENT COMPANY

Oil and Gas Development Company Limited, commonly known as OGDCL is a Pakistani oil and gas company. It has a primary listing on the Pakistan Stock Exchange, and
secondary listing on the London Stock Exchange. Established in 1961 by the Government of Pakistan, it was turned into a public listed company on 23 October 1997.
Government of Pakistan holding 74% stake in the company. Rest is held by private investors.

FAUJI FERTILIZER BIN QASIM LIMITED

Fauji Fertilizer Bin Qasim Limited (FFBL) is mainly involved in manufacturing of chemical fertilizers for the agriculture sector of Pakistan. FFBL is the only manufacturer
of DAP and Granular Urea in Pakistan. Its fertilizer manufacturing complex is located at Port Qasim Karachi, whereas its registered office (Head Office) is in DHA Phase-2
Islamabad. Company is listed on Pakistan Stock Exchange (PSX) since May 14, 1996 and the trade symbol of the company is “FFBL”.

UNITED BANK LIMITED

United Bank Limited (UBL) is a Pakistani multinational commercial bank which is a subsidiary of British company Bestway Group. It is based in Karachi, Pakistan. It is one
of the largest banks in the Pakistani private sector, with over 1,400 branches across Pakistan, 19 branches overseas, and a customer base exceeding 4 million.
Agha Hasan Abedi founded the bank in 1959 and under his leadership, it became the second largest bank in Pakistan. In 1974, the Government of Pakistan nationalized
the bank. This, in turn, led to Agha Hasan Abedi founding the Bank of Credit and Commerce International.
In 2002, the Government of Pakistan sold 51 percent shares of the bank to a consortium of Abu Dhabi Group and Bestway. Also, the bank merged its operations in the
UK with those belonging to National Bank of Pakistan to form United National Bank Limited. United Bank owns 55% of the joint-venture and National Bank of Pakistan
owns the remainder.

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6 - Allotment of Investment Amount
Divide your total investment by 3, considering Rs.6,60,000 then allocate Rs. 2,20,000 for OGDC (Oil and Gas Development Company Limited), likewise Rs. 2,20,000 for
FFBL (Fauji Fertilizer Bin Qasim Limited) & Rs. 2,20,000 for UBL (United Bank Limited). We have selected the scripts on the basis of following fundamentals and
technical indicators:

7 - Fundamentals:
 Payout
 Book value
 Current Price
 Sales Revenue
 Risk Factor
 Future Outlook

Stock Market Portfolio

Po = 110.10 Po = 25.51 Po = 129.95
P1 = 155.1 P1 = 38.7 P1 = 188
D1 = 8.0 D1 = 2.1 D1 = 16.0
OGDC

FFBL

UBL
D1 + P1 - Po D1 + P1 - P o D1 + P1 - Po
r = r = r =
Po Po Po

53.00 15.29 74.05

r = = 48.14% r = = 59.94% r = = 56.98%
110.10 25.51 129.95

WACC = 55.02%

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8 - Best Buy Rates

 OGDC @ PKR 83.12

 FFBL @ PKR 23.90
 UBL @ PKR 138.45

9 – Risk Factor

 OGDC
Comments: Undervalued with Low Risk factor
Predictions =Rates.165
 FFBL
Comments: Undervalued with Low Risk factor
Predictions =Rates.40+
 UBL
Comments: Undervalued with Low Risk factor
Predictions =Rates.170.

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10 – Conclusion

Investment Investment
Investment Stocks Return WACC
Amount Weightage
OGDC 220,000 33% 48.14% 16.0%
Stock Market
FFBL 220,000 33% 59.94% 20.0%
Portfolio
UBL 220,000 33% 56.98% 19.0%
Total 660,000 100% 165.06% 55.02%

Investment Investment Investment

Return WACC
Projects Amount Weightage

Brands4You Project 1,000,000 60% 10.63% 6.4%

Stock Market Portfolio 660,000 40% 55.02% 21.9%
Total 1,660,000 100% 28.28%

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