Ques 1. (a) Develop the terminal value of P&G on the basis of the perpetuity growth rate method.

Additionally, construct the pr

Particulars 19-Mar 20-Mar 21-Mar 22-Mar
Free Cash Flows 458.84 525.08 762.24 500.23

1 (b) A firm wants to open a new coal mine. The price of coal is very volatile and the projected profits over the next five years

Ques 2. Sundaram company produces 25,000 units of output attained with the flowing cost details:
Items of Costs Unit Costs
Material $10
Labor $5
Manufacturing Expenses (25% variable 75% fixed) $8
Administrative Expenses (50% fixed 50% variable) $6
Fixed overheads $10,000
Required: Flexible budget for 35,000 and 45,000 output levels for the next month.

Ques 3. From the financial information of Nestle India Ltd., comment on the profitability position of the company by calculatin
23-Dec 22-Dec 21-Dec 20-Dec
BALANCE SHEET OF NESTLE INDIA (in Rs. Cr.)
12 mths 12 mths 12 mths 12 mths
LIABILITIES
EQUITIES AND LIABILITIES
Equity Share Capital 96.42 96.42 96.42 96.42
Reserves and Surplus 2,996.33 2,362.75 1,988.06 1,922.92
TOTAL SHAREHOLDERS FUNDS 3,092.75 2,459.17 2,084.48 2,019.34
NON-CURRENT LIABILITIES
Long Term Borrowings 26.2 26.66 27.47 31.72
Deferred Tax Liabilities [Net] 11.57 0 0 0
Other Long Term Liabilities 266.7 208 210.2 87.85
Long Term Provisions 2,906.33 3,205.16 3,284.54 3,268.27
TOTAL NON-CURRENT LIABILITIES 3,210.80 3,439.82 3,522.21 3,387.84
CURRENT LIABILITIES
Short Term Borrowings 5.21 3.37 6.59 3.12
Trade Payables 2,454.00 2,120.94 1,889.66 1,809.01
Other Current Liabilities 813.02 794.74 568.45 574.46
Short Term Provisions 518.41 160.7 138.54 105.96
TOTAL CURRENT LIABILITIES 3,790.64 3,079.75 2,603.24 2,492.55
TOTAL CAPITAL AND LIABILITIES 10,094.19 8,978.74 8,209.93 7,899.73
ASSETS
NON-CURRENT ASSETS
Tangible Assets 4,545.90 3,043.70 2,993.97 2,179.41
Intangible Assets 0 0 0 0
Capital Work-In-Progress 0 358.36 246.23 638.58
Other Assets 0 0 0 0
FIXED ASSETS 4,545.90 3,402.06 3,240.20 2,817.99
Non-Current Investments 424.65 560.19 710.7 740.83
Deferred Tax Assets [Net] 0 25.61 25.84 19.92
 Long Term Loans And Advances 8.91 9 49.09 46.55
Other Non-Current Assets 1,520.96 1,491.73 1,445.34 89.36
TOTAL NON-CURRENT ASSETS 6,500.42 5,488.59 5,471.17 3,714.65
CURRENT ASSETS
Current Investments 301.77 217.35 63.28 722.94
Inventories 1,873.26 1,928.77 1,580.22 1,416.48
Trade Receivables 202.57 191.89 165.27 164.93
Cash And Cash Equivalents 874.82 945.55 735.41 1,769.87
Short Term Loans And Advances 10.91 10.26 11.85 13.22
OtherCurrentAssets 330.44 196.33 182.73 97.64
TOTAL CURRENT ASSETS 3,593.77 3,490.15 2,738.76 4,185.08
TOTAL ASSETS 10,094.19 8,978.74 8,209.93 7,899.73
dditionally, construct the present value of the developed terminal value using suitable assumptions for WACC (7%) and g (3%).

ts over the next five years are : Rs. 100,000 , Rs. 250,000 , Rs. 10,000 , Rs. 200,000 and Rs. 50,000 respectively. After that profits wi

the company by calculating two profitability ratios.

19-Dec
INCOME STATEMENT OF NESTLE INDIA (in Rs. Cr.)
12 mths
INCOME
REVENUE FROM OPERATIONS [GROSS]
96.42 Less: Excise/Sevice Tax/Other Levies
1,822.45 REVENUE FROM OPERATIONS [NET]
1,918.87 TOTAL OPERATING REVENUES
Other Income
53.14 TOTAL REVENUE
13.44 EXPENSES
90.03 Cost Of Materials Consumed
2,906.91 Purchase Of Stock-In Trade
3,063.52 Operating And Direct Expenses
Changes In Inventories Of FG,WIP And Stock-In Trade
0 Employee Benefit Expenses
1,626.58 Finance Costs
478.51 Depreciation And Amortisation Expenses
85.46 Other Expenses
2,190.55 TOTAL EXPENSES
7,172.94 PROFIT/LOSS BEFORE EXCEPTIONAL, EXTRAORDINARY ITEMS AND T
Exceptional Items
PROFIT/LOSS BEFORE TAX
2,341.45 Current Tax
0 Deferred Tax
143.3 TOTAL TAX EXPENSES
0 PROFIT/LOSS FOR THE PERIOD
2,484.75
743.6
0
 46.98
80.44
3,355.77

1,007.45
1,283.07
124.33
1,308.05
12.46
81.81
3,817.17
7,172.94
(7%) and g (3%).

ectively. After that profits will be a constant Rs. 150,000 per year for next 20 years at which time the mine closes. If 7% is the appropriate d

23-Dec 22-Dec 21-Dec 20-Dec 19-Dec

12 mths 12 mths 12 mths 12 mths 12 mths

19,021.05 16,789.53 14,633.72 13,290.16 12,295.27

0 0 0 0 0
19,021.05 16,789.53 14,633.72 13,290.16 12,295.27
19,126.30 16,896.96 14,709.41 13,350.03 12,368.90
121.21 101 120.11 145.85 246.88
19,247.51 16,997.96 14,829.52 13,495.88 12,615.78

8,054.95 7,652.11 6,154.10 5,554.24 5,150.30

417.77 348.02 227.52 189 217.81
0 0 0 0 0
-40.01 -250.27 -62.7 -69.33 -144.19
1,849.18 1,635.46 1,521.30 1,500.95 1,258.17
119.29 154.57 201.19 164.18 129.12
428.91 403.01 390.19 370.38 370.15
4,333.92 3,753.37 3,301.60 2,959.70 2,936.05
15,203.51 13,741.99 11,709.25 10,683.09 9,942.29
4,044.00 3,255.97 3,120.27 2,812.79 2,673.49
-5.71 0 -236.5 0 0
4,038.29 3,255.97 2,883.77 2,812.79 2,673.49
1,039.62 868.61 744.39 763.42 747
0 -3.16 -5.48 -33.06 -41.95
1,039.62 865.45 738.91 730.36 705.05
2,998.67 2,390.52 2,144.86 2,082.43 1,968.44
ses. If 7% is the appropriate discount rate for the first five years and is 8% after that, what is the present value of the mine?
Ques 1 (a). Calculate and develop the enterprise value, equity value & implied share price of the Sun Pharma. Predict whether t
Particulars 19-Mar 20-Mar 21-Mar 22-Mar
PV of Free Cash Flows 501.2 502.17 503.14 504.12
Terminal Value 12,424.86
WACC 7%
Growth Rate 5%
Cash 639
Debt 540
Minority Interest 125
Number of Shares 152
Current Market Price 96

1 (b). How changes in WACC and growth rate will affect the share price calculation.

Ques 2. Graham ltd. produces 25,000 units of output attained with the flowing cost details:
Items of Costs Unit Costs
Material $20
Labor $12
Manufacturing Expenses (75% variable 25% fixed) $8
Administrative Expenses (50% fixed 50% variable) $6
Fixed overheads $35,000
Administrative Expenses (80% fixed 20% variable) $15

Required: Flexible budget for 30,000 and 35,000 output levels for the next month.

Ques 3. From the financial information of Nestle India Ltd., comment on the liqudity position of the company by calculating tw
BALANCE SHEET OF NESTLE INDIA (in Rs. 23-Dec 22-Dec 21-Dec 20-Dec
Cr.) 12 mths 12 mths 12 mths 12 mths
LIABILITIES
EQUITIES AND LIABILITIES
Equity Share Capital 96.42 96.42 96.42 96.42
Reserves and Surplus 2,996.33 2,362.75 1,988.06 1,922.92
TOTAL SHAREHOLDERS FUNDS 3,092.75 2,459.17 2,084.48 2,019.34
NON-CURRENT LIABILITIES
Long Term Borrowings 26.2 26.66 27.47 31.72
Deferred Tax Liabilities [Net] 11.57 0 0 0
Other Long Term Liabilities 266.7 208 210.2 87.85
Long Term Provisions 2,906.33 3,205.16 3,284.54 3,268.27
TOTAL NON-CURRENT LIABILITIES 3,210.80 3,439.82 3,522.21 3,387.84
CURRENT LIABILITIES
Short Term Borrowings 5.21 3.37 6.59 3.12
Trade Payables 2,454.00 2,120.94 1,889.66 1,809.01
Other Current Liabilities 813.02 794.74 568.45 574.46
Short Term Provisions 518.41 160.7 138.54 105.96
TOTAL CURRENT LIABILITIES 3,790.64 3,079.75 2,603.24 2,492.55
TOTAL CAPITAL AND LIABILITIES 10,094.19 8,978.74 8,209.93 7,899.73
ASSETS
NON-CURRENT ASSETS
Tangible Assets 4,545.90 3,043.70 2,993.97 2,179.41
Intangible Assets 0 0 0 0
Capital Work-In-Progress 0 358.36 246.23 638.58
Other Assets 0 0 0 0
FIXED ASSETS 4,545.90 3,402.06 3,240.20 2,817.99
Non-Current Investments 424.65 560.19 710.7 740.83
Deferred Tax Assets [Net] 0 25.61 25.84 19.92
Long Term Loans And Advances 8.91 9 49.09 46.55
Other Non-Current Assets 1,520.96 1,491.73 1,445.34 89.36
TOTAL NON-CURRENT ASSETS 6,500.42 5,488.59 5,471.17 3,714.65
CURRENT ASSETS
Current Investments 301.77 217.35 63.28 722.94
Inventories 1,873.26 1,928.77 1,580.22 1,416.48
Trade Receivables 202.57 191.89 165.27 164.93
Cash And Cash Equivalents 874.82 945.55 735.41 1,769.87
Short Term Loans And Advances 10.91 10.26 11.85 13.22
OtherCurrentAssets 330.44 196.33 182.73 97.64
TOTAL CURRENT ASSETS 3,593.77 3,490.15 2,738.76 4,185.08
TOTAL ASSETS 10,094.19 8,978.74 8,209.93 7,899.73
the Sun Pharma. Predict whether the share price of the allotted company is overvalued or undervalued. Compare the calculated implied sha

n of the company by calculating two liquidity ratios.

19-Dec
12 mths

96.42
1,822.45
1,918.87

53.14
13.44
90.03
2,906.91
3,063.52

0
1,626.58
478.51
85.46
2,190.55
7,172.94
2,341.45
0
143.3
0
2,484.75
743.6
0
46.98
80.44
3,355.77

1,007.45
1,283.07
124.33
1,308.05
12.46
81.81
3,817.17
7,172.94
edict whether the share price of the allotted company is overvalued or undervalued. Compare the calculated implied share price with the cur

calculating two liquidity ratios.

INCOME STATEMENT OF NESTLE INDIA (in Rs. Cr.)

INCOME
REVENUE FROM OPERATIONS [GROSS]
Less: Excise/Sevice Tax/Other Levies
REVENUE FROM OPERATIONS [NET]
TOTAL OPERATING REVENUES
Other Income
TOTAL REVENUE
EXPENSES
Cost Of Materials Consumed
Purchase Of Stock-In Trade
Operating And Direct Expenses
Changes In Inventories Of FG,WIP And Stock-In Trade
Employee Benefit Expenses
Finance Costs
Depreciation And Amortisation Expenses
Other Expenses
TOTAL EXPENSES
PROFIT/LOSS BEFORE EXCEPTIONAL, EXTRAORDINARY ITEMS AND TAX
Exceptional Items
PROFIT/LOSS BEFORE TAX
Current Tax
Deferred Tax
TOTAL TAX EXPENSES
PROFIT/LOSS FOR THE PERIOD
ulated implied share price with the current market price and build suitable arguments for taking investment decisions.

23-Dec 22-Dec 21-Dec 20-Dec 19-Dec

12 mths 12 mths 12 mths 12 mths 12 mths

19,021.05 16,789.53 14,633.72 13,290.16 12,295.27

0 0 0 0 0
19,021.05 16,789.53 14,633.72 13,290.16 12,295.27
19,126.30 16,896.96 14,709.41 13,350.03 12,368.90
121.21 101 120.11 145.85 246.88
19,247.51 16,997.96 14,829.52 13,495.88 12,615.78

8,054.95 7,652.11 6,154.10 5,554.24 5,150.30

417.77 348.02 227.52 189 217.81
0 0 0 0 0
-40.01 -250.27 -62.7 -69.33 -144.19
1,849.18 1,635.46 1,521.30 1,500.95 1,258.17
119.29 154.57 201.19 164.18 129.12
428.91 403.01 390.19 370.38 370.15
4,333.92 3,753.37 3,301.60 2,959.70 2,936.05
15,203.51 13,741.99 11,709.25 10,683.09 9,942.29
4,044.00 3,255.97 3,120.27 2,812.79 2,673.49
 -5.71 0 -236.5 0 0
4,038.29 3,255.97 2,883.77 2,812.79 2,673.49
1,039.62 868.61 744.39 763.42 747
0 -3.16 -5.48 -33.06 -41.95
1,039.62 865.45 738.91 730.36 705.05
2,998.67 2,390.52 2,144.86 2,082.43 1,968.44
Q1 (a) Construct the statement of the free cash flows for the years 2018, 2019, 2020, 2021 and 2022. Project the free cash flows
Particulars 2019 2020
Net income 2569 3681.56
Depreciation and Amortization 27.2 31.68
Capex 1426 1265.3
Change in working capital 568 -24.51
Net borrowings 542 560.77
Q1 (b) From the following data, identify the undervalued/overvalued stocks:
Market Data
Company Name Price Market Cap
(INR/share) (INR in crore)
Hindustan Unilever Limited 2425 569940
Godrej Consumer 1237 126502
Marico 525 67927
Dabur 538 95371

Ques 2. Wrexham company produces 5,000 units of output attained with the flowing cost details:
Items of Costs Unit Costs
Material $12
Labor $8
Manufacturing Expenses ($50,000 fixed) $10
Selling Expenses (80% fixed 20% variable) $6
Fixed overheads $5,000
Required: Flexible budget for 10,000 and 15,000 output levels for the next month.

Ques 3. From the financial information of Nestle India Ltd., comment on the solvency position of the company by calculating t
23-Dec 22-Dec
BALANCE SHEET OF NESTLE INDIA (in Rs. Cr.)
12 mths 12 mths
LIABILITIES
EQUITIES AND LIABILITIES
Equity Share Capital 96.42 96.42
Reserves and Surplus 2,996.33 2,362.75
TOTAL SHAREHOLDERS FUNDS 3,092.75 2,459.17
NON-CURRENT LIABILITIES
Long Term Borrowings 26.2 26.66
Deferred Tax Liabilities [Net] 11.57 0
Other Long Term Liabilities 266.7 208
Long Term Provisions 2,906.33 3,205.16
TOTAL NON-CURRENT LIABILITIES 3,210.80 3,439.82
CURRENT LIABILITIES
Short Term Borrowings 5.21 3.37
Trade Payables 2,454.00 2,120.94
Other Current Liabilities 813.02 794.74
Short Term Provisions 518.41 160.7
 TOTAL CURRENT LIABILITIES 3,790.64 3,079.75
TOTAL CAPITAL AND LIABILITIES 10,094.19 8,978.74
ASSETS
NON-CURRENT ASSETS
Tangible Assets 4,545.90 3,043.70
Intangible Assets 0 0
Capital Work-In-Progress 0 358.36
Other Assets 0 0
FIXED ASSETS 4,545.90 3,402.06
Non-Current Investments 424.65 560.19
Deferred Tax Assets [Net] 0 25.61
Long Term Loans And Advances 8.91 9
Other Non-Current Assets 1,520.96 1,491.73
TOTAL NON-CURRENT ASSETS 6,500.42 5,488.59
CURRENT ASSETS
Current Investments 301.77 217.35
Inventories 1,873.26 1,928.77
Trade Receivables 202.57 191.89
Cash And Cash Equivalents 874.82 945.55
Short Term Loans And Advances 10.91 10.26
OtherCurrentAssets 330.44 196.33
TOTAL CURRENT ASSETS 3,593.77 3,490.15
TOTAL ASSETS 10,094.19 8,978.74
021 and 2022. Project the free cash flows for the projected years 2023, 2024, 2025 and 2026. (Assume tax rate to be 30%)
2021 2022 2023
3957.23 4268.1 5036.4
114.82 126.21 141.75
1536.2 1789.21 2268.21
628.8 -176.64 253.74
325.21 220.24 268.65

arket Data Financial Data

EV Sales EBITDA EBIT
(INR in crore) (INR in crore) (INR in crore) (INR in crore)
579654 59144 13632 12602
129369 13315 2544 2308
69897 9764 1681 1542
98888 11530 2610 2299

position of the company by calculating two solvency ratios.

21-Dec 20-Dec 19-Dec
12 mths 12 mths 12 mths

96.42 96.42 96.42

1,988.06 1,922.92 1,822.45
2,084.48 2,019.34 1,918.87

27.47 31.72 53.14

0 0 13.44
210.2 87.85 90.03
3,284.54 3,268.27 2,906.91
3,522.21 3,387.84 3,063.52

6.59 3.12 0
1,889.66 1,809.01 1,626.58
568.45 574.46 478.51
138.54 105.96 85.46
2,603.24 2,492.55 2,190.55
8,209.93 7,899.73 7,172.94

2,993.97 2,179.41 2,341.45

0 0 0
246.23 638.58 143.3
0 0 0
3,240.20 2,817.99 2,484.75
710.7 740.83 743.6
25.84 19.92 0
49.09 46.55 46.98
1,445.34 89.36 80.44
5,471.17 3,714.65 3,355.77

63.28 722.94 1,007.45

1,580.22 1,416.48 1,283.07
165.27 164.93 124.33
735.41 1,769.87 1,308.05
11.85 13.22 12.46
182.73 97.64 81.81
2,738.76 4,185.08 3,817.17
8,209.93 7,899.73 7,172.94
2025 and 2026. (Assume tax rate to be 30%)

Financial Data
EPS Earnings
(INR in Rupee) (INR in crore)
43.42 9962
17.45 1702
11.32 1225
10 1703

23-Dec 22-Dec 21-Dec

INCOME STATEMENT OF NESTLE INDIA (in Rs.
Cr.) 12 mths 12 mths 12 mths
INCOME
REVENUE FROM OPERATIONS [GROSS] 19,021.05 16,789.53 14,633.72
Less: Excise/Sevice Tax/Other Levies 0 0 0
REVENUE FROM OPERATIONS [NET] 19,021.05 16,789.53 14,633.72
TOTAL OPERATING REVENUES 19,126.30 16,896.96 14,709.41
Other Income 121.21 101 120.11
TOTAL REVENUE 19,247.51 16,997.96 14,829.52
EXPENSES
Cost Of Materials Consumed 8,054.95 7,652.11 6,154.10
Purchase Of Stock-In Trade 417.77 348.02 227.52
Operating And Direct Expenses 0 0 0
Changes In Inventories Of FG,WIP And Stock-In Trade -40.01 -250.27 -62.7
Employee Benefit Expenses 1,849.18 1,635.46 1,521.30
Finance Costs 119.29 154.57 201.19
Depreciation And Amortisation Expenses 428.91 403.01 390.19
Other Expenses 4,333.92 3,753.37 3,301.60
TOTAL EXPENSES 15,203.51 13,741.99 11,709.25
PROFIT/LOSS BEFORE EXCEPTIONAL, EXTRAORD 4,044.00 3,255.97 3,120.27
Exceptional Items -5.71 0 -236.5
PROFIT/LOSS BEFORE TAX 4,038.29 3,255.97 2,883.77
Current Tax 1,039.62 868.61 744.39
Deferred Tax 0 -3.16 -5.48
TOTAL TAX EXPENSES 1,039.62 865.45 738.91
PROFIT/LOSS FOR THE PERIOD 2,998.67 2,390.52 2,144.86
 20-Dec 19-Dec
12 mths 12 mths

13,290.16 12,295.27
0 0
13,290.16 12,295.27
13,350.03 12,368.90
145.85 246.88
13,495.88 12,615.78

5,554.24 5,150.30
189 217.81
0 0
-69.33 -144.19
1,500.95 1,258.17
164.18 129.12
370.38 370.15
2,959.70 2,936.05
10,683.09 9,942.29
2,812.79 2,673.49
0 0
2,812.79 2,673.49
763.42 747
-33.06 -41.95
730.36 705.05
2,082.43 1,968.44