Question: leld given below. You have performed the common sizing and horizontal analysis to the financial statements of FinMan Ltd. You have selectively considered the current




leld given below. You have performed the common sizing and horizontal analysis to the financial statements of FinMan Ltd. You have selectively considered the current (Year 0) parameters, as mentioned in the Table below. Based on the values, you have calculated the Year 1 ratios and growth rates. Year 0 Year 1 The growth rate in Sales revenues (y-o- y) NA 4% Gross Profit Margin 30% 32% SG&A expense/Sales revenue 15% 7 15% 12.5% 12.5% Depreciation/NetPPE -1 Net Working capital turnover 6 7 Year 0 Year 1 NA 4% The growth rate in Sales revenues (y-o- y) Gross Profit Margin 30% 32% 15% 15% SG&A expense/Sales revenue 12.5% 12.5% Depreciation/NetPPEt-1. 6 7 Net Working capital turnover 4 5 Net PPE turnover 30% 30% Corporate Tax rate Depreciation/NetPPEt-1 12.5% 12.5% Net Working capital turnover 6 7 Net PPE turnover 4 5 Corporate Tax rate 30% 30% Net Working Capital Turnover: Sales revenue/Net Working capital Sales revenue/Net PPE Depreciation/ Net PPE, t-1: Depreciation/ Beginning period Net PPE Sales revenue for Fin Man at Year 0 = Rs 1000 million. The growth rate of 4% at Year 1 denotes growth from Year 0 to Year 1 for Sales Revenue. There are no debt and interest payments. Beginning period Net PPE for Year 0 is Rs 40 crores. Project Sales revenue, Net Profit, Gross Profit, EBIT, Net PPE and Net Working capital values for Year 1. [5] Depreciation/NetPPE -1 12.5% 12.5% Net Working capital turnover 6 7 Net PPE turnover 4 5 Corporate Tax rate 30% 30% Net Working Capital Turnover: Sales revenue/Net Working capital Sales revenue/Net PPE. Depreciation/ Net PPE, t-1: Depreciation/ Beginning period Net PPE Sales revenue for FinMan at Year 0 = Rs 1000 million. The growth rate of 4% at Year 1 denotes growth from Year 0 to Year 1 for Sales Revenue. There are no debt and interest payments. Beginning period Net PPE for Year 0 is Rs 40 crores. Project Sales revenue, Net Profit, Gross Profit, EBIT, Net PPE and Net Working capital values for Year 1. [5] Options
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