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    chanapa klongpobsuk
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    The document presents a financial analysis of a new product offering. It includes projections for revenue, costs, sales volumes, expenses and cash flows for the new product over five years. The analysis shows positive net present value and internal rate of return, indicating the new product is financially viable. Key metrics include total revenue increasing from $0 in year one to $26.81 million in year four, with positive cash flows and net income projected each year after the initial investment in product development.

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    P&G

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    The document presents a financial analysis of a new product offering. It includes projections for revenue, costs, sales volumes, expenses and cash flows for the new product over five years. The analysis shows positive net present value and internal rate of return, indicating the new product is financially viable. Key metrics include total revenue increasing from $0 in year one to $26.81 million in year four, with positive cash flows and net income projected each year after the initial investment in product development.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    6 views9 pages

    Base Case

    Uploaded by

    chanapa klongpobsuk
    The document presents a financial analysis of a new product offering. It includes projections for revenue, costs, sales volumes, expenses and cash flows for the new product over five years. The analysis shows positive net present value and internal rate of return, indicating the new product is financially viable. Key metrics include total revenue increasing from $0 in year one to $26.81 million in year four, with positive cash flows and net income projected each year after the initial investment in product development.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 9

    Base case

    Revenue & cost per unit Advanced Seal Premium Product Basic offering
    Revenue $ 22.00 $ 18.00 $ 13.00
    Cost $ 12.00 $ 7.00 $ 6.00
    GP $ 10.00 $ 11.00 $ 7.00
    Cannibalization rate 60% 15%

    Sales Vol. (in million unit)


    Advance seal 2
    Premium Product 1.2
    Basic Product 0.3
    Net Sales Vol. 0.5

    Other Assumption
    Discount Rate 8%
    Tax rate 40%
    Depreciation for DCF 20%
    Depreciation for tax calculation Y1 Y2 Y3 Y4 Y5
    20% 32% 19.20% 11.52% 11.52%
    Incremental for advertising $ 2.00
    Net Working Capital Turnover 8
    SG&A $ 1.00
    CAPEX $ 4.00
    one time dev. $ 1.50

    Proforrma of income statement Y0 Y1 Y2 Y3 Y4


    Revenue
    Revenue $ - $ 18.50 $ 18.50 $ 18.50 $ 18.50
    Cost $ - $ 13.80 $ 13.80 $ 13.80 $ 13.80
    GP $ - $ 4.70 $ 4.70 $ 4.70 $ 4.70

    Revenue
    Advertising Expense $ - $ 2.00 $ 2.00 $ 2.00 $ 2.00
    SG&A Expense $ - $ 1.00 $ 1.00 $ 1.00 $ 1.00
    Depreciation Exp. $ - $ 0.80 $ 1.28 $ 0.77 $ 0.46
    one time dev.v Expense $ 1.50 $ - $ - $ - $ -
    Write-off asset $ - $ - $ - $ - $ 0.69
    Total Expense $ 1.50 $ 3.80 $ 4.28 $ 3.77 $ 4.15

    EBIT $ -1.50 $ 0.90 $ 0.42 $ 0.93 $ 0.55


    Tax Income (Expense) $ -0.60 $ 0.36 $ 0.17 $ 0.37 $ 0.22
    NOPAT $ -0.90 $ 0.54 $ 0.25 $ 0.56 $ 0.33

    Net Working capital


    NWC $ 2.31 $ 2.31 $ 2.31 $ 2.31 $ -
    Change in NWC $ -2.31 $ - $ - $ - $ 2.31
    Free cash flow Y0 Y1 Y2 Y3 Y4

    NOPAT $ -0.90 $ 0.54 $ 0.25 $ 0.56 $ 0.33


    +Depreciation $ - $ 0.80 $ 1.28 $ 0.77 $ 0.46
    + Non-cash item: Write off asset $ - $ - $ - $ - $ 0.69
    Change in NWC $ -2.31 0 0 0 $ 2.31

    - CAPEX $ -4.00 $ - $ - $ - $ -
    Cash Flow
    Net Present Value
    IRR
    Y6
    5.76%
    Minimize Cannibalization
    Revenue & cost per unit Advanced Seal Premium Product Basic offering
    Revenue $ 22.00 $ 18.00 $ 13.00
    Cost $ -12.00 $ -7.00 $ -6.00
    GP $ 10.00 $ 11.00 $ 7.00
    Cannibalization rate 60% 15%

    Sales Vol. (in million unit)


    Advance seal 2
    Premium Product 1.2
    Basic Product 0.3
    Net Sales Vol. 0.5

    Other Assumption
    Discount Rate 8%
    Tax rate 40%
    Depreciation for DCF 20%
    Depreciation for tax calculation Y1 Y2 Y3 Y4 Y5
    20% 32% 19.20% 11.52% 11.52%
    Incremental for advertising $ 2.00
    Net Working Capital Turnover
    SG&A $ 1.00
    CAPEX $ 4.00
    one time dev. $ 1.50

    Proforrma of income statement Y0 Y1 Y2 Y3 Y4


    Revenue
    Revenue
    Cost
    GP 0 0 0 0 0

    Expenses
    Advertising Expense
    SG&A Expense
    Depreciation Exp.
    one time dev.v Expense
    Write-off asset
    Total Expense 0 0 0 0 $ -

    EBIT
    Tax Income (Expense)
    NOPAT 0 0 0 0 0

    Net Working capital


    NWC
    Change in NWC
    Free cash flow Y0 Y1 Y2 Y3 Y4

    NOPAT
    +Depreciation
    + Non-cash item: Write off asset
    Change in NWC 0 0 0 0 0

    - CAPEX
    Cash Flow
    Net Present Value
    IRR
    Y6
    5.76%
    Drive Revenue
    Revenue & cost per unit Advanced Seal Premium Product Basic offering
    Revenue $ 21.00 $ 18.00 $ 13.00
    Cost $ 12.00 $ 7.00 $ 6.00
    GP $ 33.00 $ 25.00 $ 19.00
    Cannibalization rate 60% 15%

    Sales Vol. (in million unit)


    Advance seal 3.25
    Premium Product 1.95
    Basic Product 0.49
    Net Sales Vol. 0.81

    Other Assumption
    Discount Rate 8%
    Tax rate 40%
    Depreciation for DCF 20%
    Depreciation for tax calculation Y1 Y2 Y3 Y4 Y5
    20% 32% 19.20% 11.52% 11.52%
    Incremental for advertising $ 3.25
    Net Working Capital Turnover
    SG&A $ 1.00
    CAPEX $ 4.00
    one time dev. $ 1.50

    Proforrma of income statement Y0 Y1 Y2 Y3 Y4


    Revenue
    Revenue $ - $ 26.81 $ 26.81 $ 26.81 $ 26.81
    Cost $ - $ 22.43 $ 22.43 $ 22.43 $ 22.43
    GP $ - $ 4.39 $ 4.39 $ 4.39 $ 4.39

    Expenses
    Advertising Expense $ - $ 3.25 $ 2.00 $ 2.00 $ 2.00
    SG&A Expense $ - $ 1.00 $ 1.00 $ 1.00 $ 1.00
    Depreciation Exp. $ - $ 0.80 $ 1.28 $ 0.77 $ 0.46
    one time dev.v Expense $ 1.50 $ - $ - $ - $ -
    Write-off asset $ - $ - $ - $ - $ 0.69
    Total Expense $ 1.50 $ 5.05 $ 4.28 $ 3.77 $ 4.15

    EBIT $ -1.50 $ -0.66 $ 0.11 $ 0.62 $ 0.24


    Tax Income (Expense) $ -0.60 $ -0.27 $ 0.04 $ 0.25 $ 0.09
    NOPAT $ -0.90 $ -0.40 $ 0.06 $ 0.37 $ 0.14

    Net Working capital


    NWC $ 3.35 $ 3.35 $ 3.35 $ 3.35 $ -
    Change in NWC $ 3.35 $ - $ - $ - $ -3.35
    Free cash flow Y0 Y1 Y2 Y3 Y4

    NOPAT $ -0.90 $ -0.40 $ 0.06 $ 0.37 $ 0.14


    +Depreciation $ - $ 0.80 $ 1.28 $ 0.77 $ 0.46
    + Non-cash item: Write off asset $ - $ - $ - $ - $ 0.69
    Change in NWC $ 3.35 $ - $ - $ - $ -3.35

    - CAPEX $ 4.00 $ - $ - $ - $ -
    Cash Flow
    Net Present Value
    IRR
    Y6
    5.76%

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