The project Report:

Course title: Business Finance (fin-301)

Report on New a Business Plan on LTS motorcycle

Prepared for Sheikh Ali Zulfikar Faulty of College of Business Administration

Prepared By UNITY

Submition date 30,nov ,2013 IUBAT :International university of business agriculture and technology

Group member list

SI

NAME

Id

01

Md. Abu hasan

12102494

02

Md. Toufiquzzaman

12102495

03

Md. Shahidul Islam

12102496

04

Sayra Juthy

05

Md .Jhahid al Masud

06

Md.Shaik Shafur Rahaman

08

Liza Akter

Letter of Transmittal

Unity

Bachelor of Business Administration,(BBA) IUBAT, Uttara, Dhaka 30,nov,2013 Sheikh Ali Zulfikar Faulty of College of Business Administration IUBAT
Subject: Report on New Business Plan of motor cycle. Dear Sir,

We are much pleased to submit the project Report on New Business Plan of motor cycle.. For increasing knowledge from this report which is essential requirement for the completion of Finance department. This report is a result of the Project program that we have conducted during specified time. All the presented here is done with utmost sincerely and honesty. We have tried our best to make this report holistic and informative enough. Apart from the academic knowledge gained, this project report and preparation of this report has given us the opportunity to acquaint our self with the term of compare brand attributes that influence customer choice. Yours faithfully Leader of UNITY Md.Toufiquzzam

Letter of Authorization

IUBAT 4,Embankment Drive road, uttara. Md.Toufiquzzaman 30,nov,2013

Program: BBA

Dear sir, You will be happy to know that project Report on New Business Plan of motor cycle. I have received your proposal last week. Based on your proposal you will have to submit it as soon as possible. I hope you will successfully complete the project on time. After successful completion of the project you are requested to write a report based on the project. For any kind of needs dont hesitate to contact with me.

Thank you Sincerely Sheikh Ali Zulfikar

Acknowledgement:

First of all we would like to thank the almighty because of successful completion of this work. We would like to thank our honorable faculty Sheikh Ali Zulfikar of CBA For Providing helps us with the opportunity to work on this subject and gain a real life project experience as well as for giving his valuable time & cooperation & support in performing our task. We also would like to thank those Automobiles company for there continuous help about this report. Many thanks due to mustafizur rhamanfor his help and encouragement.

We lastly would like to express our appreciation to the International University of Business Agriculture & Technology (IUBAT) and I eventually grateful to the University and its excellence that works for education, encourages me and creates knowledge, as knowledge is power.

Introduction
We are the member of Over Viewer Group. Our group has been asked to make a research paper on Anew Business plan FIN 301 course by, Sheikh Ali Zulfikar lecturer of, International university of business agriculture and technology department of business administration. We have been selected to make the case study on NEWA Business plan build up We have selected a specific business and product of some motorcycle brand . Our selected product is only motor bike . We have 7 members in our Over Viewer group. Name and ID of group members: 1.Md. Abu hasan 2.Md. T oufiquzzaman 3.Md. Shahidul Islam 4.Sayra Juthy 5.Md .Jhahidul islam 6.Md.Shaik Shafur Rhaman 7.Liza Akter

The whole company is divided into 10 departments with almost 1700 employees.LTS motors is the a new made up motorcycle company. .LTS Company has many good connection with many

reputed company . it has build up his own ultimate afford. Now it has 3 points in 3 districts . .we have so many iteams ,that means many brand of many model s motorbike s. Someremarkable product are given bellow .

Product range of the LTS company includes:

Yamaha FZ Yamaha r15

Palsure

CD Dawn CD Deluxe Pleasure Passion Plus Super Splendor Glamour Glamour PGM FI Achiever CBZ Extreme Hunk

LTS Motor Corp's Financial Summary

Parameter MAR'13 ( Cr.) MAR'12 ( Cr.) %Change

Balance Sheet:
Share Capital Total Non-Current Liabilities Total Current Liabilities Total Liabilities Total Non-Current Assets Currents Investments Cash and Bank Total Current Assets Excluding Current Investments Total Assets 39.94 464.73 4,170.68 9,641.65 4,564.04 3,009.36 181.04 2,068.25 9,641.65 39.94 1,257.65 4,341.44 9,888.92 5,057.96 3,290.30 76.82 1,540.66 9,888.92 0.00% -63.05% -3.93% -2.50% -9.77% -8.54% 135.67% 34.24% -2.50%

Profit and Loss:

Gross Sales Net Sales PBIDT (Excl OI) PAT 25,659.91 23,768.11 3,191.03 2,118.16 25,235.02 23,579.03 3,535.32 2,378.13 1.68% 0.80% -9.74% -10.93%

Reasons for investment

LTS Motors wants to find ways to maintain competitiveness by reducing costs. It also wants to establish a more sustainable source for Income Gross profit=$60m-38m=$22m Gross profit margin =(22/60)*100=36% Net Profit=$22m-$10=$12 Net profit margin=(12m/60)*100=20% The sales revenue left over after paying costs is profit. There are two common measures of profit. Gross profit is the difference between sales revenue and the direct costs of production. At LTS Motors these include costs of labour, materials and energy. Deducting fixed costs from the gross profit gives the other common measure of profit net profit. This money represents a cash flow that allows the company to purchase further resources and provide a return for the shareholders. LTS Motors wants to installe a outlate for sell their product.. These will provide alternative and sustainable sources of income. However, the cost of this outlate will differ according LTS Motors therefore needed to evaluate the expected financial benefits of both projects before the company could decide to proceed. In the cash flow analysis of the three projects, the cash outflows are the initial investment (in year 0) and the maintenance costs (in years 1 to 3). This cash flow represent that the new project will be helpfull for mother organization

Investment appraisal: A business needs to assess if an investment is worth doing - will it recover its costs, will it make savings, will it provide a profit on the original investment? Evaluating investment is very important for a business organization if anyone take any wrong decition in investment they will face a big trouble. Now LTS Motors want to establish a outlate for Bike in bangladesh. If they set up it in Dhaka city the initil cost will 1 coror if it is chittagong initial cost will 70 lac s but if it is in bogra the initial cost will 50 lacs. And previous statistics says revenues of thies three out lates may differ we assume that SL No 1 2 3 Dhaka Chittagong Bogra 10000000 7000000 5000000 4000000 3000000 1800000 Place Initial cost Revenue (Year1) Revenue (Year2) 4000000 3000000 1800000 Revenue (Year3) 4000000 3000000 1800000 Revenue (year4) 4000000 3000000 1800000

There are several methods of analyzing an investment. Payback The simplest test to understand if an investment will pay for itself is to calculate its payback period. This is the time it will take for the original investment to pay for itself through savings. The largest cost of most projects occurs at set-up. From assuming the cash flow examples, at the end of year 3, How much time they will take to reach in break down point Dhaka PB=(10000000*4)/16000000=2 years and 6 months Chittagong PB=(7000000*4)/12000000=2years 4 month Bogra PB=(5000000*4)/7200000=2 years and 9 months

PB
3.5 3 2.5 2 1.5 1 0.5 0 Dhaka chittagong Bogra PB

Payback is a simple measure it does help to assess risk but does not consider the value of cash flows after the payback period. Financial forecasts are more uncertain the further they are projected into the future.

Average rate of return LTS Motors also looks for any investment not just to pay for itself but also to contribute to its profitability. One method of calculating this is the average rate of return (ARR). This shows the expected average return over the life of the project as a percentage of the original investment. The ARR values help LTS Motors to decide if the projects will give sufficient return. Dhaka ARR=(1500000/100000000)=15% Chittagong ARR=(1250000/7000000)=17.86% Bogra ARR=(800000/5000000)=16%

ARR
19% 18% 18% 17% 17% 16% 16% 15% 15% 14% 14% Dhaka Chittagong Bogra

ARR

Discounted cash flow

A business must consider whether the value of investing in a particular project will be greater than the value it might lose from not investing in other projects. This is known as opportunity cost. Discounted cash flow helps a business consider what the value of money likely to be received in the future is worth today. It takes into account the effect of time on an investment. It also shows how interest rates affect the present value of future revenues. For example, if a business places 100 in a savings account with 10% interest it will grow to be worth 110 in a year's time. Put another way, 110 in a year's time is worth 100 today. By a similar calculation, 100 in a year's time is worth 90.90 (100 x 100/110) today. This is its present value. At a 10% discount rate, the discount factor for year 1 is 0.909. At a 10% discount rate, 100 in two years' time has a present value of 100 x (100/110)2 = 82.60. The discount factor for year 2 is 0.826. Future years discount factors are calculated in the same way. The net present value (NPV) shows the return on investment less the costs of the project. This would help McCain decide whether each project is worth investing in.

Net present value at 10% discount rate This shows NPV on both projects is identical and profitable after discounting the expected cash flows. However, a business will take other important factors into consideration when planning a project, for example, the value of social or environmental impacts. Internal rate of return Internal rate of return (IRR) also uses discounted cash flow. A business must find the rate of return where the NPV is zero. This is compared to the market interest rate to assess if the investment will give a better return than, for example, investing in a bank. The IRR is usually calculated by computer. However, an approximation can be found using trial and error. For example, if a discount rate of 12% is applied to the net present value of Dhaka, Chittagong and Bogra project, the NPV is only just positive. This means that the IRR must be just over 12%.

Net present value of the turbines project, 12% discount rate

Investment for sustainability Sustainable business needs a long term plan. There are a number of pressures that businesses need to respond to from: customers government stakeholders including shareholders environmental pressure groups, such as Friends of the Earth. LTS Motors also looks for ways to reduce its costs without compromising on quality for customers. As market leader, LTS Motors can influence industry standards. It adopts business practices that go further than its legal obligations. The company is committed to improving its performance on environmental protection for both government and environmental groups. It has developed a plan to support both these goals.

Conclusion A business needs to ensure that it will get a good return on investments. Ensuring profitability is the basic goal of every business.

Suggestion for the future report:

Although this is a good subject. So if some one want to work this subject, our suggestion is that take all the information in our own style and make sure that this is correct information. We think that this is the easiest solution to complete the report.

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