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  • 1641551982188

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    Anshul Bansal
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    This document summarizes the cash conversion cycle for the current year and previous year based on input data provided. Key metrics like inventory turnover, days of inventory, accounts receivable turnover, days of receivables, accounts payable turnover and days of payables are calculated. The operating cycle and cash conversion cycle are also reported, showing an increase in the current year operating cycle but a decrease in the current year cash conversion cycle compared to the previous year.

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    784920191_1641551982188_1e5582ce-bcb5-4144-a6d1-b13d8f6b6358

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    This document summarizes the cash conversion cycle for the current year and previous year based on input data provided. Key metrics like inventory turnover, days of inventory, accounts receivable turnover, days of receivables, accounts payable turnover and days of payables are calculated. The operating cycle and cash conversion cycle are also reported, showing an increase in the current year operating cycle but a decrease in the current year cash conversion cycle compared to the previous year.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    7 views12 pages

    1641551982188

    Uploaded by

    Anshul Bansal
    This document summarizes the cash conversion cycle for the current year and previous year based on input data provided. Key metrics like inventory turnover, days of inventory, accounts receivable turnover, days of receivables, accounts payable turnover and days of payables are calculated. The operating cycle and cash conversion cycle are also reported, showing an increase in the current year operating cycle but a decrease in the current year cash conversion cycle compared to the previous year.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 12

    Year 1 2 3 4 5 6 7 8

    Cashinflow (Rs, Cr) 0 20 30 50 40 35 35 36


    Cash outflow (Rs, Cr) 220
    Salvage value by selling
    project (Rs, Cr) 200 180 160 140 120 100 80 60
    9 10
    40 54

    40 20
    Year 0 Year 1 Year 2 Year 3 Year 4

    390

    380

    370

    350

    320

    300

    285
    200

    250

    225

    210

    180
    80

    50
    100
    30

    -20

    -35

    -50

    -75

    -110

    -150
    -170

    -150

    -225

    -230

    -245

    -250

    -265

    -280

    -290
    Year 5

    400

    380

    375

    360

    340

    300

    290

    280

    260

    240

    220

    200

    100

    50

    40

    20

    -10

    -30

    -40

    -60

    -100

    -120
    -150

    -200

    -220

    -230

    -240

    -250

    -260

    -270

    -280

    -300
    Company No of outstanding shares (000s) Market Price (Rs.)

    Company A 5000 600


    Company B 4000 400
    Company C (Subsidiary of company A) 2000 800
    Company D (Subsidiary of company A) 3000 700
    Company E (Subsidiary of company A) 5000 1000

    Synergy ( Increase in value) Rs. Crores


    Reduction in COGS 300
    Increase in Revenue 400
    Reduction in Admin cost 200

    Company B is asking for 60% of synergy value as premium over its market value but it is finalised as 50% of synergy value.

    Deal Structure I

    Cash 20%
    Share of A 40%
    Shares of E 20%
    Shares of C 10%
    Shares of D 10%
    s 50% of synergy value.

    Deal Structure II

    Cash 0%
    Share of A 0%
    Shares of E 20%
    Shares of C 40%
    Shares of D 40%
    Intermediary Cost of lease (Lease Rent)

    EMI LEASE RENT

    BANK LESSOR LESSEE


    LOAN Right to use Asset
    Ownership
    COST

    Property/Asset

    Cost of lease
    EMI 200000 per month Particulars
    Commission 5% of EMI Cost of credit (EMI)
    Cost of add 20000 per month + Commission fee
    Profit 13% + Service charge
    VAT 18.50% + Additional service pr
    + profit
    + VAT

    Cost of lease
    Cost of lease (Lease Rent)

    Credit payment in order to acquire Asset/Property


    Commission Fee
    Additional Services
    Profit
    VAT

    Amount
    200000
    10000
    0
    20000
    26000
    40700

    296700
    Cash conversion cycle
    Input Data

    (Rs. Cr) Current Year Previous Year

    Credit Sales 260 220


    Cost of Goods Sold (COGS) 200 180
    Average Inventory 80 70
    Average Receivables 60 50
    Average accounts payables 40 30
    Purchases* 120 100

    Output
    Inventory turnover 2.5 2.571428571 COGS/Average Inventory
    Number of days of inventory(DSI) 146 141.9444444 365/Inventory turnover

    Accounts Receivable turnover 4.33 4.40 Credit sales/ Average receiva


    Number of days of receivables(DSO) 84.23 82.95 365/Accounts receivaberl tur

    Accounts Payables turnover 3 3.333333333 Purchases/ Average accounts


    Number of days of payables(DPO) 121.67 109.50 365/Accounts Payables turno

    Operating cycle (DSI + DSO) 230.23 224.90


    Cash conversion cycle (DSI + DSO - DPO) 108.56 115.40
    COGS/Average Inventory
    365/Inventory turnover

    Credit sales/ Average receivables


    365/Accounts receivaberl turnover

    Purchases/ Average accounts payable


    365/Accounts Payables turnover

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