SUMMARY TABLE

PLAN 1
YEARS
No of equity
shares @ 10 each

IST

2ND

3RD

4TH

5TH

1,20,00 1,20,00 1,20,00 1,20,00

0
0
0
0
1,20,000

ROI

0.11

0.10

0.11

0.15

0.20

EPS

0.68

2.26

2.17

3.10

4.04

Current Ratio

1.54

1.54

1.55

1.56

1.64

PLAN 2
YEARS
No of equity
shares @ 10 each

IST

2ND

3RD

4TH

60,000

60,000

60,000

60,000

60,000

ROI

0.11

0.12

0.13

0.19

0.23

EPS

0.62

1.37

2.19

5.02

7.89

1.41

1.19

1.04

1.12

1.37

Current Ratio

5TH

COMMENTS:
The company is more financially leverage in plan 2 , in plan 2 the
company is having 85% debt capital.
The EPS is increasing in plan 1 at the increasing profits, but it is
not that much considerable difference from plan 2.
Plan 1 is a conservative plan
The financial leverage helps in improving earnings per share.
Return on investment is increasing in plan 2.
In plan 1 current ratio is more is shows companies liquidity
position is high.
The above information shows that second plan is beneficial for
the company.
Because here company is getting mote return on investment.

PARK RESORTS PIVATE LIMITED

The present proposal is to establish a low cost company dealing with purchase and sales
of marine products. The project is established under the name and style of CRAB &
CRAB PRIVATE LIMITED.
As it deals with the marine products it will need export, import, travelling and mainly
the major expense will be ice to store the sea foods and water electricity charges. And
for that purpose we have taken two different capital expenditure plans to compare which
will give long term benefit to the company.
so in first plan we have taken 70 % debt capital and rest 30 % equity capital & in 2 nd
plan we have taken 85% debt capital and rest 15% as equity capital.
From these information, EPS, ROI & from current ratio we can conclude that the
second plan will be beneficial for the company.
All the annexure relating to calculations, Conclusion and comment are enclosed
herewith.

COMMENTS:
The company is more financially leverage in first plan as
compared to plan first plan
The EPS is increasing in second plan at the increasing profits.
The financial leverage helps in improving earnings per share.
Return on investment is increasing in second plan
Current ratio is also increasing in second pan.
So second plan should be chosen by the company it will be
beneficial.