Management Aptitude Test 18 October

Financial Analysis AFTERSCHOOOL – DEVELOPING CHANGE MAKERS CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME – World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship OPEN FOR ALL FREE FOR ALL

Financial Analysis Dr. T.K. Jain. AFTERSCHOOOL Centre for social entrepreneurship Bikaner M: 9414430763 [email_address] www.afterschool.tk www.afterschoool.tk

There are three companies A,B,C. You want to invest in only one of these, Tax rate 50%. Minimum dividend is 20% (all these). Expected rate of return is 25%. Where will you invest? (each share is of Rs. 10) 25 10 Loan from F.I. at18% 15 20 14% debentures C 10 B 20 A 50 Shares capital

SOLUTION . . . 29.5 19.75 12.5 ROE 2.95 1.975 1.25 EPS 2.95 3.95 6.25 EAT 5.9 7.9 12.5 EBT 4.5 1.8 Interest on debt 2.1 2.8 Interest on debenture 12.5 12.5 12.5 EBIT

Solution . . . ,[object Object]

Equity 10 lakh, 10% preference shares 4 Lakh, 12% debentures 6 Lakh. Market price of share 110, dividend 10/ Tax 50%. We want to borrow 10 Lakhs at 14%, it will reduce market price from 110 to 105 but dividend will increase from 10 to 12. should we go for it? Growth rate 6% ,[object Object],[object Object],[object Object]

Solution . . . . ,[object Object],[object Object],[object Object],[object Object]

Solution . . . ,[object Object],[object Object],[object Object],[object Object]

Calculation of weighted cost of capital . . ,[object Object],[object Object],[object Object]

New wcc. 0.1406 0.013 0.13 0.1 0.0462 0.33 0.14 0.024 0.2 0.12 0.0574 0.33 0.174 wcc weight cost

Solution. . . ,[object Object]

Operating income of my company is 1.86 lakhs. We pay 35% tax. Our capital structure consists of 14% debenture of 4 lakh and 15% preference shares of Rs. 5 lakh and equality shares of Rs. 4 lakh (100 each), what is my EPS? ,[object Object],[object Object],[object Object],[object Object],[object Object]

Operating income of my company is 1.86 lakhs. We pay 35% tax. Our capital structure consists of 14% debenture of 4 lakh and 15% preference shares of Rs. 5 lakh and equality shares of Rs. 4 lakh (100 each), what is my DFL? ,[object Object],[object Object],[object Object],[object Object],[object Object]

My sales are Rs. 25 lakhs and my fixed costs are Rs. 7.5 lakhs. Variable expenses are 50% of sales. What is my DOL? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

I want to buy a new business, the sales in that is 20 lakhs, fixed expenses are 15 lakhs and variable expenses are 12% of sales. Is the decision to buy the business appropriate on the business risk criteria? (I don’t want to take high risk) ,[object Object],[object Object],[object Object],[object Object]

EBIT is 1200 lakhs, EBT is 320 lakhs and Fixed costs are 700 lakhs. What is DCL? What is interest coverage? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

As an investor, I have 2 options, in which I get 6000 after 1 year in another, I get 9000 after 4 years. Discount rate is 10%. Which option is better? ,[object Object],[object Object]

I will need 100 crores after 5 years from now. How much money should I deposit in my bank account every year? Rate : 10% ,[object Object],[object Object],[object Object],[object Object],[object Object]

My equity capital is 60 lakh, debt is 40 lakh. Beta of my stocks is 1.5, risk premium in the market = 10% and treasury bill is at 8%. What is my cost of capital ? ,[object Object],[object Object],[object Object],[object Object],[object Object]

Risk free rate = 7.75%, Beta = 2, Market rate = 16%. Calculate cost of capital using CAPM? ,[object Object],[object Object],[object Object],[object Object]

Risk free rate = 7.75%, Beta = 2, My cost of capital = 16%. Calculate market rate of returns using CAPM? ,[object Object],[object Object],[object Object],[object Object],[object Object]

If Market rate is 14%, risk free rate is 8.25% and my cost of capital is 18%. What is my BETA? ,[object Object],[object Object],[object Object],[object Object]

You have invested your money in four sectors. The average returns are 18, 18, 24 and 16 respectively. Your beta of these sectors are .9, 1.12, 1.5, .95. which is best sector? Risk free return = 10 and market return = 18% ,[object Object],[object Object],[object Object]

Solution . . . . ,[object Object],[object Object]

I shall get 100 crore after 5 years (from afterschooolians), what is the value of that today? Rate = 10% ,[object Object],[object Object],[object Object],[object Object]

ABOUT AFTERSCHOOOL ,[object Object]

Why such a programme? ,[object Object],[object Object],[object Object],[object Object]

Who are our supporters? ,[object Object],[object Object]

About AFTERSCHOOOL PGPSE – the best programme for developing great entrepreneurs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Workshops from AFTERSCHOOOL ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Flexible Specialisations: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Salient features: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Components ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Pedagogy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Basic values at afterschoool ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

www.afterschoool.tk social entrepreneurship for better society

Management Aptitude Test 18 October

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