FINANCE PROJECT

BY
L.NAGENDRABABU

BUTTA GROUP
The Butta Group is an INR 600 Crore
(USD 130 million) diversified
business enterprise comprising of
verticals like education, hospitality,
automotive, retail, infrastructure
and healthcare.
Cost of Capital, Leverages
Reserves 35,738.26
Total Debt 329,253.58
The WACC of the firm has fallen due to higher debt ratio
Leverage
DOL=Contribution/EBIT 1.549484785 1.549861728

DFL=EBIT/PBT 2.974618024 2.995112569

DCL=DOL*DFL 4.609125368 4.642010342
For 1% change in sales, EBIT by 1.54 times for year 2012-13
total debt 329,253.58 270,552.96

equity share capital 475.88 469.34
value of total capital 329,729.46 271,022.30

Measures of financial leverage

Debt Ratio 0.998556756
Dividend Policy
walters modelr 0.05
MP 625.35
Div 5.50
Gordon's model g=br 0.16
b 0.77
Po 1287.572884
Earning Per Share (Rs) 28.27
CALCULATION
Investments 111,613.60
FV 189,777.97
Calculation of PV of stream of dividends and
maturity value 543.8362069
Investment Ratios
Earning Per Share (Rs) 28.27
Ratio Analysis
5 Dividend Yield Ratio 0.008795075
This ratio has increased over the years. Higher the ratio, better it is. The earnings
ii Profitability Ratios 10 Return on investment or Return on cap employed 0.18573629
Net Profit to Net worth Ratio 0.18573629

iii Overall Profitability Ratio Overall Profitability Ratio 0.016801759
The overall profitability of a firm is good on the extent of operational efficiency

Liquidity Ratios
Current Ratio 7.658315399
The optimum ratio is 2:1. The firm is having 7.65 worth of current assets for every rupee of
current liability.

However, it may as lo indicate that there is too much investment in current asset
quick ratio Liquid Assets ( assumed advances
as prepaid expenses) 27,280.17
Ideal ratio is 1:1. As it is low for 2012-13, it
indicates inadequate investment
investmentefficiency that it enjoys.


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