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6. Office Address : Business: Nasir Trde Centre (Level#12), 89, Bir Uttam C.R
Datta Road, Dhaka-1205
Factory: West Rasulpur, Kamrangirchar, Dhaka-1211,
Bangladesh
7. Year of incorporation : 2006
8. Authorized Capital : BDT 30.00 Million
9. Paid –up Capital : BDT 10.00 Million
10. Total Asset : BDT 4,497 million
11. Total Liabilities : BDT 2,029 million
The firm has been availing different types of credit facility from different banks &
Financial Institution. Credit line information showed in the above, firms total credit
limit (only Funded Facility considered) is BDT 1630.28 million and present outstanding
is BDT 1455.16 million. The firms waited average rate of interest is 9.9%. Since the
firm is non-listed therefore the tax rate is 35%. Considering the above information
firm calculated cost of debt is 6.44%
Calculation :
Formula KD = Kd(1-t)
Formula:
KS = (D1/Po)+g
D1 = Divided to be paid end of the year is BDT 3.9
Po = Current market price of share is BDT 522.00
G = Growth rate is BDT .044
KS = (3.9/522)+.044
KS = 5.19%
Leverage
We have asked to the finance manger Whether they calculate the leverage of the firm. The
manager inform that there is no ready reference always however the calculate as an when
required, such as for Board of Directors and for business proposal to the bank as per the universal
formula He also informed that fro the given financial information leverage of the firm can be
calculated.
Degree of Operating Leverage: A quantitative measure of sensitivity of a firm’s operating profit
to change in the firms sales is refer to the Degree of Operating Leverage
DOL of the fir is as under (Data refer to the income statement)
Implication: If the sales increase by 10% Operating profit will increase by 12.70% again if the
sales is dropped by 10% operating profit will dropped by 12.70% of the firm.
The greater is a DOL the more its EBIT will very with sales fluctuations, therefore the DOL is refer
as the indicator of the firm’s business risk.
Degree of financial Leverage: Degree of financial leverage is a quantitative measure of the
sensitivity of a firms earning per share to change in the firms operating profit.
DFL = EBIT/EBIT-Ff
EBIT = 50,973.00
Interest (Ff) = 191,074.00
DFL = 50,973.00 / (50,973.00- 191,074.00)
DFL = 1.25
Implication: If 20% increase in EBIT, the DFL indicates EPS will increase 25% if EBIT is dropped
by 20% EPS will also be dropped by 25%
Degree of Combined leverage. A degree of combined leverage (DCL) is a leverage ratio that
summarizes the combined effect that the degree of operating leverage (DOL) and the degree of
financial leverage have on earnings per share (EPS), given a particular change in sales.
DFL = 1.25
DOL = 1.27
Implication: If sales of the Panna Battery Ltd increases by 10% it EPS will increase by 15.90%
Energypac Engineering Limited
Company Profile
Company Name : Energypac Engineering Ltd
Established : 1982
Industry : Engineering
Weighted
Capital Portion Capital Weight Rate
Rate
NPV 4849222
Working Capital Management
Conclusion:
From our observation and the provided data it
can be remarked that the firm are using the
financial tools and technique based on their
requirements and following financial
management practices their own ways
Thank You