COST SHEET

(IN INR MILLION)

PARTICULAR Rs. Total

Raw Material Consumed 7498
Packing Material Consumed 1672
Finished Goods Consumed 2143
Direct Expenses 1678
Prime Cost 12991

Factory Overheads
Stores and Spare parts consumed 332
Power and Fuel 660
Processing Charges 309
Repair: Plant and Machinery 164

Factory Cost 14456

Add: Opening W.I.P 618
Less: Closing W.I.P 706
14368

Office Overheads
Personal Expenses 3930
Insurance 87
Repairs: Building and Others 154
Rates and Taxes 220
Directors Remuneration 326
Commision to Director 4
Travelling Expenses 872
Professional Expenses 359
Misc. Expenses 1124
Donations 70
Cost of Production 21514
Add: Opening Finished Goods 3272
Less: Closing Finished Goods 4153
Cost of Goods Sold 20633
Selling and Distribution Overheads 5945

Total Cost 26578

Profit 9564

Sales 36142
1.) Raw Material Converion Period = {(Avg Material Inventory *360) / Raw Material Consu

Opening Stock Of Raw Material 1503

Closing stock of Raw Material 1811
Average stock of Raw Material 1657

Opening Stock Of Raw Material 1503

Add: Purchases 7806
Less: Closing stock of Raw Material 1811
Raw Material Consumption 7498

Raw Material Converion Period 80

2.) W.I.P Conversion period = {(Avg W.I.P Inventory *360) /Cost of Production}

Opening Stock Of W.I.P 618

Closing stock of W.I.P 706
Average stock of W.I.P 662

Cost of Production 21514

W.I.P Converion Period 11

3.) Finished Goods Conversion Period = {(Finished Goods Consumption *360) / Cost of
Goods Sold}
Opening Stock Of Finished Goods 3272
Add: Purchases 3024
Less: Closing stock of Finished Goods 4153
Finished Goods Consumption 2143

Cost of Goods Sold 20633

Finished Goods Converion Period 38

4.) Debtors Conversion Period = {(Avg Debtors *360) / Credit Sales}

Opening Debtors 4549

Closing Debtors 4668
Average Debtors 4609

Credit Sales 36142

Debtors Conversion Period 46

5.)Creditor Deferral Period = {(Avg Creditor*360) / Credit Purchases}

Opening Creditors 5256

Closing Creditors 6146
Average Creditors 5701

Raw Material Purchased 7806

Packing Material Purchased 1672
Finished Goods Purchased 3024
Total Credit Purchase 12502

Credit Deferral Period 165

6.) Packing Material Conversion Period = {(Avg Packing Material Inventory*360) / Packing
Consumption}
Opening Stock Of Packing Material 408
Closing stock of Packing Material 378
Average stock of Packing Material 393

Opening Stock of Packing Material 408

Add: Purchases 1642
Less: Closing stock of Packing Material 378
Packing Material Consumption 1672

Packing Material Converion Period 85

Inventory Conversion Period = Raw Material Conversion Period +

W.I.P Conversion Period +
Finished Goods Conversion Period +
Packing Material Conversion Period

Therefore we get, Inventory Conversion(80+11+38+85)=

Period 214 days

*Gross Operating Cycle(G.O.C) = (Inventory Converion Period + Debtors

Conversion Period)

Therefore we get G.O.C (214+46) = 260 Days

*Net Operating Cycle(N.O.C) = Gross Operating cycle - Creditors Deferral Period

Therefore we get N.O.C (260-165)= 95 days

*Number of cycles per year = (360/95)= (3.78 times)= approx 4

*Working Capital Requirement = (Cost of Production / Number of operating

Cycle)

Therefore, (21514/3.78)= 5692 Million(INR)

*Net Cash Position = (Working Capital Available-Working Capital Requirement)

Therefore, (9088-5692)= 3396 Surplus
aw Material Consumption}

ction}

360) / Cost of
ory*360) / Packing Material
approx 4
Particulars (In INR Millions) COC Weight
Equity Capital 682000000 150 2.62
Reserves and Surplus 15603000000 150 59.85
Secured Loan 9782000000 5.95 37.53
26067000000 100

Calculation Of Growth Rate for computation of Cost of Equity

Capital (Ke).
DPS
Dividend Per Share Dividend 2007-08 565000000 4.5
No of Shares 125613708

2008-09 614000000 4.5

136499013

2009-10 1024000000 7.5

136499013

Average Growth Rate = (77.5/3) =

25.83%

COST OF EQUITY (Ke)

Ke= (D/P) + G
where,
Ke = Cost Of Equity
D= Dividend Per share (Current)=
P = Maket Price per share =870 Rs per share

Therefore, Ke= (1024/870) + 0.2583

we get-
 Growth(%)
11.5

66
TOTAL (3 years) 77.50%
(Aggregate)