FINANACIAL ANALYSIS

AFTERSCHO☻OL
– DEVELOPING CHANGE MAKERS
CENTRE FOR SOCIAL ENTREPRENEURSHIP
PGPSE PROGRAMME –
World’ Most Comprehensive programme in social
entrepreneurship & spiritual entrepreneurship
OPEN FOR ALL FREE FOR ALL

www.afterschoool.tk AFTERSCHO☺OL's
AFTERSCHO☺OL's MATERIAL
MATERIAL 1
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 FINANACIAL ANALYSIS

Dr. T.K. Jain.

AFTERSCHO☺OL
Centre for social entrepreneurship
Bikaner M: 9414430763
tkjainbkn@yahoo.co.in
www.afterschool.tk, www.afterschoool.tk

www.afterschoool.tk AFTERSCHO☺OL's
AFTERSCHO☺OL's MATERIAL
MATERIAL 2
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Net profit after tax : 22500, interest: 2000, dep:
3000, tax rate: 50%, sinking fund appropriation:
7.5% of outstanding debt. , what is DSCR?
• Net profit before tax : 45000.
• Add interest : 2000.
• Add : depreciation: 3000
• Total amount : 50000
• DSCR = 50000/2000 = 25 answer.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 3

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 Sales of a product amount to 200 units per
month at Rs. 10 per unit. Fixed overhead is Rs.
400 per month and variable cost Rs 6 per unit.
There is a proposal to reduce price by 10%.
How many units must be sold to maintain
profit?

• Present profit : 200*10 – (400 + 6*200)

• =400
• BEP = (fixed cost + target profit) /
contribution per unit.
• = (400+400) / (9-6) = 800/3 = 267 per
month. answer.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 4
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 Selling price per unit : 25, direct material : 8,
direct labour : 5, fixed overhead : 24000.
Variable overhead : 60% on direct labour. Trade
discount : 4%. What is the profit, if sales is
15% above the BEP level?

• BEP = Fixed cost / PV ratio

• Net selling price : 25- 4% of 25 = 24
• Variable cost: 8+5+3 = 16
• Contribution: 24-16 =8, PV ratio=8/24*100 =
33%
• BEP = 24000/33% = 72000
• Sales : 72000+10800=82800
• Profit : 27600-24000 = 3600 (answer. )
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 5
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 NET PROFIT AFTER TAX=75000
INTEREST = 10000, I.T. RATE 50%, WHAT IS
DSCR?
• Interest coverage ratio (DSCR)
• = Profit before interest & taxes/ interest
• Profit after tax = 75000, so profit before
tax = 150000
• Add interest = 160000
• DSCR = 160000/10 = 16 (which seems to
be comfortable one).

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 6

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• Goti Ltd. have two processes—Preparing and
Finishing. The normal output per week is 7,500
units (completed) at a capacity of 75%. It had
production problems in preparing and require
2,000 units per week of prepared material.
• The existing cost structure of one prepared unit
of Transferor Ltd. at existing capacity…
• Material Rs. 2.00 (variable 100%)
• Labour Rs. 2.00 (variable 50%)
• Overhead Rs. 4.00 (variable 20%)

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 7

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 Continued….

• The sale price of a completed unit is Rs. 16 with

a profit of Re. 4 per unit. What will happen to its
profitability for 6 months (25 weeks) with the
following alternative transfer prices per unit:
• (i) Marginal Cost; (ii) Marginal Cost + 25%; (iii)
Marginal Cost + 15% Return on (assume capital
employed Rs. 20 lakhs); (iv) Existing Cost; (v) At
an agreed Market Price of Rs. 8.50

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 8

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 Solution…

• Full capacity : 10000 units per week

• If it gets goods at marginal cost, there is
no impact on its profit – as it will continue
to earn the same profit.
• If it gets marginal cost + 25%, let us
calculate the marginal cost first :
• 2000*3.8=7600 + 25% = 9500
• Thus its profits will reduce by 1900 per
week.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 9
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• Price : 16 * 7500 = 120000
• Less fixed cost :
• Labour cost = 10000
• Overhead = 32000
• Less variable expenditure (as the different
alternatives…)
• Profit = 4 * 2000 = 8000
• Less increased cost 1900 = 6100 per week.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 10

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• If 15% interest is charged then minimum
profit by the supplier will be 5770, thus
profit will reduce by 5770 per week.
• If agreed market price is 8.5, then we have
to calculate, profit accordingly.
•

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 11

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 About AFTERSCHO☺OL

• PGPSE - World’s most comprehensive

programme on social entrepreneurship –
after class 12th
• Flexible – fast changing to meet the
requirements
• Admission open throughout the year
• Complete support from beginning to the
end – from idea generation to making the
project viable.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 12
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 Branches of AFTERSCHO☺OL

• PGPSE programme is open all over the

world as free online programme.
• Those who complete PSPSE have the
freedom to start branches of
AFTERSCHO☺OL
• A few branches have already started -
one such branch is at KOTA (Rajasthan).

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 13

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 Workshop on social entrepreneurship

• We conduct workshop on social

entrepreneurship – all over India and out
of India also - in school, college, club,
association or any such place - just send
us a call and we will come to conduct the
workshop on social entrepreeurship.
• These workshops are great moments of
learning, sharing, and commitments.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 14

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 FREE ONLINE PROGRAMME

• AFTERSCHO☺OL is absolutely free

programme available online – any person can
join it. The programme has four components :
• 1. case studies – writing and analysing – using
latest tools of management
• 2. articles / reports writing & presentation of
them in conferences / seminars
• 3. Study material / books / ebooks / audio / audio
visual material to support the study
• 4. business plan preparation and presentations
of those plans in conferences / seminars

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 15

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 100% placement / entrepreneurship

• AFTERSCHO☺OL has the record of

100% placement / entrepreneurship till
date
• Be assured of a bright career – if you join
AFTERSCHO☺OL

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 16

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 Pursue professional courses along with
PGPSE

• AFTERSCHO☺OL permits you to pursue

distance education based professional /
vocational courses and gives you support
for that also. Many students are doing CA
/ CS/ ICWA / CMA / FRM / CFP / CFA and
other courses along with PGPSE.
• Come and join AFTERSCHO☺OL

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 17

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