SVKMI'S NMIMS School of Business Management Program: MBA. Yeu Trimester: Subject: Advance Financial Statement Analysis, Marks: 20 Date: 13" September 2013 “Tian: 3 es (01.00 p= 04.00 pm) FINAL EXAMINATION 2013-2014) Instructions: The made asta be sed in Exe, kindly ave the Exe fle with our roll number and name and hand ito the examination parent |ARCinc sa Pharmaceutical Dsribton company. The company glans to start operations in Api 2008, The companys planning to setup ‘operations in teste fit yr of operations. The lstbution business sa complieated business hat requires permissions rom vaous foverament agencies and channels. The Pharmaceuia eetiauton shes alo requires the company to get dstibtion icenses for various Sates. The company at preset pln to havea skeleton sat atthe HO to get the business started, the detail fthe personnels as follows:‘The comers plant nfse Rs S00, 000 of apt inthe Fist month of operation The company has plans for having tribution network or year 2009, Sa Tent People onapee Sangh Wiener) keae Sear Kothapur Area armedgar. Chine Narayangaon Barer Sangamer “Anmednagaé AreaStandar sales projections per slesperion: [Protaa— [Pa [Preater [Apr [way [lone [iy] Aap Sot JO Nar [ ae ry / | I Tae Fa aa aateTs | aa Be | OT | Hw | | HST 350 | 3 | 300 | 35 3 pees] ae] ar i aaa} ara Pw et ara} pa a 350 | ao | ee | a] ja aia fas ai ano | Saas asa 2] S| 5] 30 [a Paoraaters | 36a Heo) a0 | SO] aa ARE | Hw ae | 50 | S00 [00 300 7p aaa ae ee ae ae ar ae ae PT | afar | ae aaa] apa Pa Pa [# ‘STablets 1976 aa [aR pares} eer] a aaa a ara aaa ae Fa | FT aE)“Teal HO cost for th yea 2009 are planned as per the table given below, al these cash outlowsare to be ncred in Api 208: Preliminary onetime expenses cen agian) roa0 Fina Ace Purchased Schad okt 2 flows, the purchase month of he faa assets gven nthe schedule, depreciation has tobe rove for he entire year even ifthe asset purchased during the weac, aed Fe set mun cated or vont ucwsetin | nem tneb Computer "50,000 “April 2008 2% eee 9a | ar i | Electrical fittings ~~ 30,000 ‘May 2003 % oF are 8 ea i ‘The company hast pay Rs. 50,000 towards depos forthe ented premises inthe fst mont f the operations ALDThe company expects regular expenses ona monty basis as foows [(Offie reat 1500] "Telephone bil Sa Electricity bil 000 000 le tne sles “te comaany a prasent has th folowing incentive scheme Every sls person wig an incentive of 2% or sales above Rs. S000 ina mth ‘The area manages getincentive based onthe average sales of sles perion the average sles forthe are excedsRs 50.000 per sles person na gen month, the ares managers get 15 tes the commission rat given to theses ppl, The incentive forte area managers ‘on the average sales achieved over and above the Rs. 5,000 mark ‘The other istbution costs thatthe company shoul face at follows: hI aetvty 8. 325,000 per month Free unt (ove and above the sample os] would cst Rs 15,00 fo the est wo months and Rs. 750 thereat for every month Distution cost of Sf revenues per month ‘Medica! book 10,0006 the frst month only Samples costs another complicated cost forthe company asit depends on the numberof visits tat the salesperson would conduct with the doctors, the numberof samples on an average hat he woul give fo the doctors per vii ee. The conany has done this calculation fr you and ‘he estimated cos willbe onan average of s.145,580 per month ‘The company plans to write of 10% ofthe preiminary expenses every yea" sla.“The Sala structure forthe Salespersons follows ead quarter vst ar for 9 dein month for every salesperson. The sales parson wil get daly allowance of R50, anda travel aowance of Rs 504d, ‘Custaton vist forthe salesperson are about 15 days ia month the sles person gts diy aowance of Rs 100 and a travelallwance of V5aday “The snes person gets a Telephone atowance of. 250 per month anda mscelaneus allowance of Rs 109 er month, ‘The slay structure ofthe four area managers ia follows ‘The area managersare expected to rvel24 daysina month, they get a dal allowance of: Daly atowanceof R150 Travel alowance of R60 ‘The area manager gets Rs 1805 Telephone expense a month and Rs 500 2 misc expenses ‘The company expects ala of cash crunch tng thelist ear and expect the cash lows ote a follows: aletion rom customers ‘The company does nt expect any colletion nthe month of Api, May anne Calections in ly wil be 8 of Api'sales and 20% of May Sales. Colton in August wil be 20% of Apis and 80% of Meysaes Colin September wil be 80% of une Sle and 2% of uly sales Colacion in October willbe 208 of une and 8% of uy sales Cotections in November willbe 88 of August sles ana 20% of Sept sles eleCellecions in Gecemberwilbe 20% Augut sles ana BOK of September sls Colectons in January wil be 80% of October sales and 20% of November sales Colections in February willbe 20%of October sale and BOK of November sales Collections in arch wil be 805 of December sles and 20% of anuary ales ‘The company has gros margin of 30% |e the company has 70% of sales as mater cost from manufacturer ‘The company procures materal flows: ‘The sles that wi be atievedin Api the raw materalrequerent wi be paid tthe Beginning athe month, thu for every month the rawmaterial forthe ses tobe achieved willbe paid atthe Beginning ofthe month ‘Material Cost hs tobe galt the contract manufactures flows: “Te material equrement fr Api 2020 wil be Re 539,636 Salaries abity forthe month has tobe pss on he ist ofthe nxt month ‘NINO overheads panned when the business started have tobe pi in the Fst month Monthy Expenses have tpi fr bythe company 3 follows leone Toke pido tea of ert wa —| ey Bl “Tote pido te ol erat oth Misc ise) | Atbeend ofthe men He“The company has desde ta gnreaavance taxon interest cost forthe ist year of projection, ‘he company wilborrw money onan overdraft ait to makeup for deft im cash The company requires a minimum balance of Rs150,000 ‘You ate equted todo the folowing: 1 Crate a business model forthe company ‘The model snouls have hs flowing characteris, 1 The compony shoul finaly get hee important reports 1. Balance Sheet 1 Income Statement Wi, canstatement ‘The model has o bee to navigate ‘The mode! has tobe spl to understand ‘The model should allow a what. anaysis with alae parameters