In this project, you will be required to apply the concepts that you have learnt in the course to arrive at real-world solutions. The project has been divided into multiple smaller questions in order to test your ability to think all the steps and attention to detail.

In this project, you would represent a business magnate who has decided to expand his growing portfolio of companies. Already a key player in the automotive industry, now you're planning to step into EVs or all-electric vehicles. For this next stage of your plan, you are looking for battery manufacturers who might help you in establishing the production facility.

One of your friends told you about the Green Energy Company. It is a small business that has been in the battery manufacturing business for the past 20 years. In this project, you would be evaluating the company for its worth and taking a decision on whether or not you should buy it. In another case, you will also be evaluating a few projects to decide on the next investment for the company. Finally, you will take an investor's perspective to decide if the current performance of the company makes it a lucrative investment opportunity or not.

Below is the balance sheet of Green Energy Company.

e

Below is the income statement of Green Energy Company

question -- 4.

After the initial rounds of research, you set up a meet with the current owners of the company to understand their sentiment towards this buy-out. In the discussion, the owners mentioned the selling price of the company as Rs 5,00,000 Lakhs.

* Use the discounted cash flow method to calculate the value of equity and arrive at a decision of buyo-buy. If it's a no-buy, quote the maximum possible amount that you would be willing to pay to acquire the company.

* What would be the share price if there are 1 Crore shares of the Green Energy Company in the market?

For answer suggestion:

D B Current Assets 1 5 5 Total 9 Non-Current Assets Assets (in Lakhs) Cash Accounts receievables Supplies Other current assets Long-term receivables Other assets Plant and equipment BALANCE SHEET 3042 24701 18958 1272 40790 10332 247101 Current Liabilities Non-Current liabilities Equity 346196 Total Liabilities (in Lakhs) Loans payable Accounts payable Taxes payable Long term debt Deferred income tax liabilities Other long term obligations Stocks Other income 17258 37268 2612 40810 27244 22476 191794 6734 346196 B INCOME STATEMENT (in Lakhs) A 1 2 Revenue 3 Cost of goods sold 4 Production 5 Administrative expenses 6 Depreciation 7 Operating income 8 Interest 9 Tax 10 Net Income 11 12 13 290212 -191586 -36682 -11480 -18745 31719 -766 -10113 20840 Revenue Cost of goods sold Production Administrative expenses Depreciation Operating income Interest Tax Net Income FCF Discounted cashflows Year 0 Enterprise Value: Share price: Year 1 Year 2 Year 3 Year 4 Year 5 D B Current Assets 1 5 5 Total 9 Non-Current Assets Assets (in Lakhs) Cash Accounts receievables Supplies Other current assets Long-term receivables Other assets Plant and equipment BALANCE SHEET 3042 24701 18958 1272 40790 10332 247101 Current Liabilities Non-Current liabilities Equity 346196 Total Liabilities (in Lakhs) Loans payable Accounts payable Taxes payable Long term debt Deferred income tax liabilities Other long term obligations Stocks Other income 17258 37268 2612 40810 27244 22476 191794 6734 346196 B INCOME STATEMENT (in Lakhs) A 1 2 Revenue 3 Cost of goods sold 4 Production 5 Administrative expenses 6 Depreciation 7 Operating income 8 Interest 9 Tax 10 Net Income 11 12 13 290212 -191586 -36682 -11480 -18745 31719 -766 -10113 20840 Revenue Cost of goods sold Production Administrative expenses Depreciation Operating income Interest Tax Net Income FCF Discounted cashflows Year 0 Enterprise Value: Share price: Year 1 Year 2 Year 3 Year 4 Year 5