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FINANCIAL ANALYSIS AND CASE STUDY
Financial Analysis and Case Study
Student Name
Course Name
Institution
Professor’s Name
Date
1
FINANCIAL ANALYSIS AND CASE STUDY
2
Financial Analysis and Case Study
Construct annual incremental operating cash flow statements for the next four years.
Qn
1
Operating Cash Flows
Particulars
Initial Investment
Sales Units
Sales price per unit
Cost per unit
Year 0
$
(342,000.00)
Year 1
Year 2
1,500
Year 3
1,575
Year 4
1,605
1,626
$
240.00
$
252.00
$
264.00
$
276.00
$
100.00
$
105.00
$
110.00
$
115.00
Revenue from Sales
$
360,000.00
$
396,900.00
$
423,720.00
Total Costs
$
150,000.00
$
165,375.00
$
176,550.00
Operating Profit
Less:
Depreciation
$
210,000.00
$
231,525.00
$
247,170.00
$
113,989.00
$
152,019.00
$
50,650.00
EBIT
Tax Provision
$
$
96,011.00
40,324.62
$
$
79,506.00
33,392.52
$
$
196,520.00
82,538.40
EAT
Add:
Depreciation
$
55,686.38
$
46,113.48
$
113,981.60
$
113,989.00
$
152,019.00
$
50,650.00
Cash Flow
Less:
$
169,675.38
$
198,132.48
$
164,631.60
$
448,776.00
$
186,990.00
$
261,786.00
$
25,342.00
$
236,444.00
$
99,306.48
$
137,137.52
$
25,342.00
$
162,479.52
FINANCIAL ANALYSIS AND CASE STUDY
Increase in WC
Add Salvage Value
Operating Cash Flows
3
$
$
(342,000.00)
43,200.00
$
126,475.38
$
47,628.00
$
150,504.48
$
50,846.40
$
113,785.20
$
53,853.12
$
15,000.00
$
123,626.40
Calculate the net present value (NPV) based on the projected cash flows.
Qn 2
Net Present Value
Year
0
1
2
3
4
Operating Cash Flows
$ (342,000.00)
$
126,475.38
$
150,504.48
$
113,785.20
$
123,626.40
Discounting
Factor
1
0.886524823
0.785926261
0.696743139
0.617680088
Net Present Value
Discounted Cash Flow
$ (342,000.00)
$
112,123.56
$
118,285.42
$
79,279.06
$
76,361.57
$
44,049.61
Conduct a sensitivity analysis.
Qn4
Sensitivity Analysis
(Sales Reduction by
50,000)
Revenue from Sales
$
310,000.00
$
346,900.00
$
373,720.00
Total Costs
$
150,000.00
$
165,375.00
$
176,550.00
Operating Profit
$
160,000.00
$
181,525.00
$
197,170.00
$
398,776.00
$
1...
