Forecasting Financial Statements

Forecasting Financial
Statements
Users
Analysts: to forecast CFs, EPS and other
indicators in valuation, credit analysis
Managers of the firm
Plan firms financial needs
Overall planning & operations
Inventory levels, receivables, capex, dividends, taxes
Performance evaluation
Amiya Sahu, GIM, 2014
Methods
Percentage of Sales: looking at past 3
yr. data
Inventory was 13.5, 12.8, and 14.2 % of sales
for yr1, yr2 & yr3 respectively. On average,
inventory has been 13.5 % of sales. Thus,
given the sales forecast of Rs. 350 crores,
inventory is forecasted to be 0.135(350) = Rs.
47.3 crore
On average accounts payable has been 8.7 %
of sales; thus, accounts payable is estimated to
be 0.087(350) =Rs. 30.5 crore
Methods
Ratios:
Assuming all sales were on credit and a 365 day year,
the firm took 38, 40, and 43 days for collection of
receivables in yr1, yr2 & yr3 respectively.
Given these ratios and some planned improvements in
the billing and collection processes, management
believes that next years receivables will be collected
in 40 days, on average.
Thus, next years receivables is forecasted to be 40
(350/365) = Rs. 38.4 crore.
The firms profit margin averaged 5.4 %. Using this
three-year average, net income for 2015 is forecasted
to be 0.054($350) = Rs. 18.9 crore
Methods
Regression: The cash balances is plotted
against sales and the "best fit" lines drawn in y =
0.05 (sales) + 0.93. This statistical relationship
along with the sales forecast of Rs. 350 can be
can be used to forecast the new level of cash.
2015 forecasted cash will be Rs. 18.5 crore = 0.93 +
0.05(350).
Unless the intercept term in the regression equation is
close to zero, the percent of sales method and the
regression technique will give slightly different
estimates.
Steps
Understand Past Performance
Drivers of Profitability & Growth
Forecast Sales
Quantity
Value
Forecast other income

Forecast Expenses
Operating
Non-operating
Forecast Assets, Liabilities & Shareholders Funds

Forecast Ratios/ Cash Flows
Data/ Info. required
Income Statement
Balance sheet
Cash flow statement
Data of products segment: Product details
Raw material consumed
Forex Transaction
Capital expenditure projects
Management Discussion & Analysis (MDA) Report
Directors report
Notes to accounts
Conference call transcripts
Key news articles (cover stories in Magazines/ newspaper/
websites)
Dealing with Past Data

Try to get data for at least 3 years. 5 years is
better
Make sure that they are consistent
Collect important historical data for companys
industry and its major competitors
Create benchmarks to judge if co. is doing well or
poorly and where is the room for improvement
Get data on industry forecasts for mkt growth,
pricing trends, general economic forecasts: GDP,
interest rate trends
Past performance measures

Growth in sales & profits
Growth in assets
Ratios
Profitability
Return ratios
Asset utilization
Liquidity
Leverage
Common size
Case: SpeedAuto Ltd.
Past Performance: IS Numbers

SpeedAuto ltd.
Mar08
Mar09
Mar10
Mar11
Growth in Total Income
-3.66%
29.00%
47.95%
Growth in Sales
-2.17%
29.30%
39.31%
Growth in Expenses
-3.83%
20.51%
40.58%
-15.71%
130.69%
75.81%
Growth in EBIDTA
Growth in PAT
EBIDTA Margin
EBIDTA Margin (Adjusted)
Net Profit Margin
expenses,
Net ProfitCompensation
Margin (Adjusted)to
-13.40% 159.76%
96.44%
12.84%
11.23%
20.09%
23.87%
15.22%
13.89%
22.51%
27.51%
7.41%
6.66%
13.41%
17.81%
employees,
Indirect
taxes,
repair
& mainte
6.81%
6.49%
12.92%
13.77%
M
G&A as a % to Total Income have come down.
tal Income for 2011 had an effect of Rs. 887.8 Crores from P&E Income.
Income Statement (Common Size)

Total income
Sales
Income from financial services
Other income
Prior period & extra-ordinary income
Change in stock
Total expenses
Raw materials, stores & spares
Purchase of finished goods
Power, fuel & water charges
Compensation to employees
Indirect taxes
Royalties, technical know-how fees, etc.
Rent & lease rent
Repairs & maintenance
Insurance premium
Outsourced professional jobs
Directors' fees
S, G & A
Miscellaneous expenses
Treasury operations expenses
Total provisions
Write-offs
Prior period & extra-ordinary expenses
PBDITA
Depreciation
Amortization
PBIT
Interest Paid
PBT
Provision for Tax
PAT
Adjusted PAT
Mar-08
Mar-09
104.04%
102.45%
100.00%
100.00%
2.84%
1.56%
0.50%
0.62%
0.69%
0.27%
0.69%
-0.26%
97.02%
95.37%
66.03%
63.90%
2.93%
3.90%
0.71%
0.63%
4.61%
5.73%
10.89%
6.61%
0.04%
0.06%
0.06%
0.08%
0.74%
0.74%
0.02%
0.01%
0.01%
0.01%
0.00%
0.01%
3.99%
4.22%
2.13%
2.41%
0.02%
3.22%
0.01%
0.07%
0.09%
0.06%
0.07%
0.06%
13.36%
11.51%
1.70%
1.32%
0.03%
0.00%
11.63%
10.19%
0.05%
0.22%
11.57%
9.97%
3.86%
3.14%
7.71%
6.82%
7.09%
6.61%
Mar-10
102.22%
100.00%
1.20%
0.43%
0.59%
0.38%
88.89%
62.64%
3.39%
0.57%
4.80%
5.06%
0.03%
0.08%
0.61%
0.02%
0.01%
0.01%
3.59%
2.01%
0.00%
0.01%
0.17%
0.06%
20.54%
1.07%
0.00%
19.46%
0.05%
19.42%
5.71%
13.71%
13.18%
Mar-11
108.56%
100.00%
2.99%
0.42%
5.14%
0.48%
89.70%
65.98%
3.29%
0.50%
2.86%
5.55%
0.01%
0.07%
0.46%
0.01%
0.01%
0.01%
2.71%
1.59%
0.00%
0.59%
0.11%
0.12%
25.92%
0.72%
0.00%
25.20%
0.01%
25.19%
5.85%
19.33%
14.31%
Average
104.32%
100.00%
2.15%
0.49%
1.67%
0.32%
92.75%
64.63%
3.38%
0.60%
4.50%
7.03%
0.03%
0.07%
0.64%
0.02%
0.01%
0.01%
3.63%
2.04%
0.81%
0.17%
0.11%
0.08%
17.83%
1.20%
0.01%
16.62%
0.08%
16.54%
4.64%
11.89%
10.30%
Past Performance: BS Numbers

SpeedAuto Ltd.
Mar09
Mar10
Mar11
Growth in Assets
22.28%
44.55%
34.94%
Growth in NFA
18.92%
-2.93%
1.98%
Growth in Working Capital
46.23%
105.90%
26.72%
Growth in Shareholders' Funds
17.77%
56.62%
67.68%
18.24% -15.02%
28.06%
27.29%
18.32%
30.41%
36.37%
51.80%
37.49%
29.45%
27.20%
1.23%
2.75%
20.01%
the fixed
have not.
0.84assets0.84
0.46
-75.67%
13.85%
48.65%
35.84%
9.57%
0.07
Growth in Borrowings
NFAs as % of TAs
CAs as % of TAs
Investments as % of TAs
Cash as a % of TAs
Total D/E
assets have grown but
Mar08
Investments have grown.

What is the source of growth in CAs?
Shareholders funds have a very good growth
SpeedAutos dependence on Debt has reduced.
Assets
Gross fixed assets
Land & building
Plant & machinery
Transport & comm. equipment/infrastructure
Furniture,amenities & other fixed assets
Capital work-in-progress
Less: Cumulative depreciation
Net fixed assets
Investments
Equity shares
Mutual funds
Debt instruments
Deferred tax assets
Current assets
Cash & bank balance
Inventories
Receivables
Sundry debtors
Expenses paid in advance
Loans & advances
Total assets
Net worth
Paid up equity capital (net of forfeited capital)
Reserves & surplus
Total borrowings
Bank borrowings
Foreign borrowings
Deferred credit
Current liabilities & provisions
Sundry creditors
Deposits & advances from customers & employees
Other current liabilities
Provisions
Deferred tax liability
Total liabilities
31.77%
5.69%
23.45%
0.88%
0.42%
1.29%
17.63%
14.14%
18.89%
6.39%
1.11%
12.29%
1.34%
18.14%
0.62%
3.57%
7.07%
2.81%
4.07%
0.70%
50.40%
16.19%
0.44%
14.72%
13.61%
0.07%
0.00%
13.54%
19.15%
8.96%
1.01%
0.67%
8.51%
1.45%
50.40%
36.07%
6.14%
24.41%
3.73%
0.49%
1.27%
18.88%
17.19%
18.55%
7.97%
3.54%
7.57%
1.67%
26.65%
1.73%
3.53%
10.14%
3.74%
7.51%
0.76%
63.00%
19.50%
1.51%
17.99%
16.45%
0.08%
2.59%
13.78%
25.34%
8.34%
1.29%
2.94%
12.76%
1.72%
63.00%
28.26%
4.83%
19.11%
2.90%
0.41%
0.97%
15.35%
12.91%
19.16%
6.83%
0.44%
12.18%
1.53%
38.42%
14.09%
3.60%
7.35%
1.93%
11.45%
0.35%
70.43%
23.62%
1.17%
22.45%
10.81%
0.12%
0.00%
10.69%
34.46%
12.67%
1.64%
2.01%
18.13%
1.55%
70.43%
20.53%
3.83%
13.68%
1.81%
0.31%
0.86%
11.08%
9.45%
24.45%
6.12%
0.17%
18.80%
0.97%
35.29%
6.53%
3.17%
9.61%
2.10%
13.88%
0.16%
68.23%
28.42%
1.68%
26.75%
1.89%
0.14%
0.78%
0.97%
36.77%
11.25%
1.53%
1.26%
22.73%
1.14%
68.23%
29.16%
5.12%
20.16%
2.33%
0.41%
1.10%
15.74%
13.42%
20.26%
6.83%
1.32%
12.71%
1.38%
29.62%
5.74%
3.47%
8.54%
2.64%
9.23%
0.49%
63.02%
21.93%
1.20%
20.48%
10.69%
0.10%
0.84%
9.74%
28.93%
10.31%
1.37%
1.72%
15.53%
1.46%
63.02%
Return Ratios
SpeedAuto Ltd.
Mar08 Mar09
ROA
ROCE
Mar10
Mar11
16.82% 31.40% 41.21%

26.73% 55.67% 82.93%
ROE
37.86% 70.87% 85.21%
ROA (net of P&E income/exp)
16.47% 30.54% 33.00%
ROCE (net of P&E income/exp)

ROE (net of P&E income/exp)
26.18% 54.14% 66.39%
36.70% 68.10% 63.07%
Asset Utilization
Total Asset turnover
1.69
1.65
1.78
NFA Turnover
6.32
7.63
10.69
Inventory turnover
22.75
24.38
27.38
Debtors Turnover
30.25
41.46
57.37
1.69% 13.78%
6.01%
Cash as % of Total Income
0.60%
Cash Flows
SpeedAuto Ltd.
Net cash flow from operating activities
Net profit before tax & extra-ordinary income
Add: Adjustments for non-cash and non-operating
expenses
Less: Adjstments for non-cash and non-operating income
Operating cash flow before working capital changes
Add:Cash inflow due to
Less: Cash outflow due to
Net cash inflow from investing activities
Less: Cash outflow due to investing activities
Add: Cash inflow due to investing activities
Net cash inflow or (outflow) from financing activities
Less: Cash outflow due to financing activities
Add: Cash inflow from financing activities
Net increase or (decrease) in cash & cash equivalents
Mar-09
360.3
958.1
Mar-10
2,703.90
2,594.40
Mar-11
1,898.90
3,523.90
364.7
160.5
256.6
116.2
1,206.60
10.8
275.2
-205.7
544
338.3
-73.8
322.3
248.5
80.8
147.4
2,607.60
976.7
107.4
-2,184.50
2,311.00
126.5
-554.8
571.9
17.1
-35.5
383.9
3,396.60
456.1
861.8
-678
1,098.90
420.9
-765.9
947.4
181.5
455.1
Valuation Measures
SpeedAuto Ltd.
Mar-08
Mar-09
Mar-10
Book value per share (Rs.)

Price / book value (PB)
(times)
Earnings per share (EPS)
(Rs.)
129.23
202.4
169.69
194.26
4.79
9.95
8.62
8.17
45.37
117.57
90.38
94.55
Cash Flow per share
24.90
186.89
65.62
65.62
Adjusted market price
309.23
1,007.40
1,463.25
1,586.85
13.63
17.14
16.19
16.78
PE (times)
Market capitalisation
Borrowings
Enterprise value
Mar-11 12-Oct-11
8,947.95 29,150.83 42,341.63 45,918.21

1,334.29
1,577.67
1,340.65
326.22
326.22
9,294.34 27,203.32 38,262.51 41,839.09
Forecasting Sales & Total

Income
The first step is to
forecast SALES
Rule of thumb
estimates
Professional
economic
estimates, market
research & analysis
of competitive
situation
Practical consideration
Production capacity
(additions if any)
Sales Quantity & Value
Study industry / firm
specific forecast reports
Make assumptions
Forecast sales Quantity
& Value
Forecast income from
other sources
Forecast total income
Analysis production capacity:

SpeedAuto
Product 1
Measure
Capacity
Production
Capacity utilisation (%)
Opening stock
Opening stock value
Closing stock
Closing stock value
Sales quantity
Growth in sales quantity
Sales value
Mar-07
Mar-08 Mar-09 Mar-10 Mar-11

3,400.00 3,960.00 3,900.00 4,500.00
2,161.03 1,888.89 2,513.90 3,404.04
63.55
47.69
64.45
75.64
36.66
62.4
43.33
53.92
112.32
169.48
128.61
159.65
62.4
43.33
53.92
74.39
169.48
128.61
159.65
230.27
2,139.03 1,907.81 2,506.85 3,387.04
-10.81% 31.40% 35.11%
7,044.00 6,353.01 8,849.85 12,565.91
Value/ Unit
3.29
Growth in Sales value/

Unit
3.33
3.53
3.71
1.12%
6.01%
5.09%
Mar-07
Product 2
Capacity
Capacity
Production
Capacity
utilisation (%)
Sales quantity
Sales value
Royalty
Mar-08
60
500
285.85
Mar-09
Mar-10
Mar-11
274.71
360
346.21
540
440.4
57.17
290.31
96.16
81.55
274.53
340.94
436.88
-5.44% 24.19% 28.14%
2,011.00 1,933.02 2,417.24 3,218.63
Value/ Unit
Growth in Sales
value/ Unit
Sales value
6.93
7.04
7.09
7.37
1.37
1.65%
1.09
0.69%
0.74
3.91%
11.45
38.14
50.47
72.76
70.32
50.47
72.76
577.63
732.1
26.74%
126.17
104.31
Services >> Trade & Commissioning Agents' services
Items related to
Product 1&2
Opening stock
value
Closing stock
value
Purchase value
Sales value
Growth
70.32
87.32
419.76
568.41
837.84 1,146.91
14.44% 36.89%
Services >> Financial services including leasing
Interest
Sales value
81.46
349.84
Additional Information: Sales

SpeedAuto to Increase Capacity of Product 1 by
300,000 Units by FY 2012 and will increase its
overall production capacity to 50 lakh units a year
by next year
Managing Director: We said we were looking at
20% growth over last year, that means we should
be in the region of 4.5 million in total volume.
Actual growth for April-Sep FY12
Product 1: 17.42%
Product 2: -0.04%
Assumptions!
This is a key step but most tend to skip it
Understand the companys business model,
its future plans and develop a set of
comprehensive assumptions
Just some assumptions will not do
Forecasting line items
Regression does not work well
Most models are Sales-driven forecasting
A Model is only as good as the assumptions

built into it.
Information Sources
Historical relationships
Should be reasonable to be extended into
future period (remain same as past!)
Management forecasts
Could be biased
Industry data
Wide range of firms within an industry
Good judgement
Inexperience/ poor knowledge
Addressing Uncertainties
Range of expected performance
Best/ worst possible outcomes
Re-work forecasts with new

information/ knowledge
Consistency in business economics
Accuracy improves with skills
SpeedAuto Ltd: Assumptions for

Sales
Product1:
Sales quantity will grow by 18%
Unit price will grow by 5% considering inflation
Product2:
Sales quantity will grow by 10% (first quarter
was flat, meet managements expectation)
Price of will grow by 5%
Sale of other (trading income) will grow by

20% mainly spares
Forecasted Sales FY12(E)

Segments
Measure
Mar-10
Capacity
Sales quantity
Growth in sales quantity
Product 1
Sales value
Value/ Unit
Growth in Sales value/ Unit
4,500.00
3,387.04
4,800.00
3996.71 Will grow by 18% YoY
31.40%
35.11%
18.00%
8,849.85 12,565.91
15569.16
3.71
5.09%
360
540
Production
346.21
440.4
Capacity utilisation (%)

Sales quantity
96.16
340.94
81.55
436.88
24.19%
28.14%
10.00%
2,417.24
3,218.63
3717.52
7.09
0.69%
7.37
3.91%
0.74
11.45
837.84
1,146.91
Sales value
Value/ Unit
Growth in Sales value/ Unit
Royalty
3,900.00
2,506.85
3.53
6.01%
Capacity
Product 2
Mar-11Mar2012(E )
Sales value
(trading income) Sales value
3.90
5.00% Will grow by 5%YoY
540
480.57 Will grow by 10% YoY
7.74
5.00% Will grow by 5%YoY
1376.29
Income from other sources

Estimated from the expected size of
investments or obligations
Income from other Sources:

Speed Auto Ltd.
Mar 2008
Total income
Mar 2009
Mar 2010
Mar 2011
10199.22
9825.68
12675.04
18752.59
9803.39
9590.25
12399.92
17274.35
278.88
150.01
148.76
517.26
127.81
104.59
81.71
350.31
127.81
104.59
81.46
349.84
151.07
45.42
67.05
166.95
20.85
45.42
43.35
54.21
130.22
21.2
112.74
Other income
49.34
59.35
53.1
73.18
67.61
26.07
73.26
887.8
67.85
-24.49
47.6
82.79
Income from fin. Serv as % of total
2.73%
1.53%
1.17%
2.76%
Other income as % of total
0.48%
0.60%
0.42%
0.39%
change in stock as % of total
0.67%
-0.25%
0.38%
0.44%
Sales
Fund based financial services income
Interest income
Income from treasury operations
Profit on sale of investments
Gain relating to forex transactions
Change in stock
Assumptions Income from Other

sources (SpeedAuto)
Income from Interest, dividends,
treasury operations and other
income will be as per the past trend
Total Income FY12(E)

Income Statement
Total income
Sales
Fiscal Benefits
Other income
Mar-11Forecasting Factor
18752.59
Computed with inputs from
17274.35 company sources and mkt
trends & projections
Mar-12 (E)
21696.12
20662.97
443.53will be 2.50% of Sales

517.26 will be 2% of Sales
516.57
73.18 will be 0.50% of sales
103.31
Prior period & extra-ordinary

income
887.8
Change in stock
82.79
413.26
0.00
assumed that production =
sales
0.00
Operating Costs
Use a simple analysis of past operating
data as % of sales
Detailed approach
Consider each component independently
Price changes in input costs
Existing FG inventory build-up and expected
slowdown in sales would mean COGS will be
down
Budget the depreciation (capacity addition)
Changes in excise duty policy/ tax holidays
Other expenses
Interest expenses based on loan
outstanding
Provisions for income tax based on
tax regulations
Marginal tax rate
Dividend payments
Dividend policy: high/ low
Assumptions: Expense
Items
Expense Items
Assumptions
will remain at the level of 2011 as a % of Sales
3.3% of sales
0.55% of sales
will increase to 3% of Sales
Indirect taxes
will reduce to about 5% of Sales (excise exemption in

Pantnagar plant)
Royalties, technical know-how fees, etc.

Rent & lease rent
Insurance premium
Directors' fees
will be about Rs. 3 crores

0.07% of Sales
0.50% of Sales
will be about Rs. 2.50 crores
S, G & A
will be 3% of Sales considering increasing effotrs to achieve

sales target
2% of Sales
0.2% of sales
0.10% of Sales
Total provisions
Write-offs
Prior period & extra-ordinary expenses
Depreciation
Interest Paid
Provision for Tax
not forecaseted
Budgeted
budgeted
33% of PBT
Balance Sheet Items

Fixed assets and changes can be determined
easily as they are announced in advance
Depreciation trends can be observed
Trends in Investments
Inventories, receivables & cash
can be estimated as a % of sales and using turnover
ratios
Equity
Addition of retained earnings
Debt: raising of LT debt is usually announced

Current liabilities: % of Sales & use creditors days
Assumptions for BS (Assets)

Assets Items
Assumptions
Gross fixed assets
Will grow at 11% per year, based on inputs from

management/ news reports
Accumulated Depreciation
Budget on historical trends
Net fixed assets
Calculated from other items
Inventories
8.8% of sales, based on historical average
Accounts Receivable
Other Non-Current Assets
Will grow at 10% per year, based on inputs from

management
Cash and Marketable

Securities
2.1%, of sales based on historical average
Other Current Assets
Assumptions BS (Liabilities &

Equity)
Equity & Liability Items
Assumptions
Paid-In Capital
Will remain unchanged at 2011 level
Retained Earnings
Calculated from other items
Long-Term Debt
Will remain unchanged at 2011 level
Deferred Income Taxes
Other Non-Current
Liabilities
Accounts Payable
6.1% of sales, same as historical average
Short-Term Debt
Hold level constant at year-end 2011 level
Other Current Liabilities
8.3% of sales, same as 2011
Other Assumptions
Dividend payout ratio
40%, based on discussion with management
Interest on short-term debt 9%, based on economic forecast

Interest on long-term debt
Rates embedded in existing debt, annual

expense Rs. 13.5 million
Interest on cash &

marketable securities
6%, based on economic forecast
Number of shares
outstanding
Will remain unchanged
P/E ratio
Will decline to 16 in 2012

Follow trend with market index/ Industry peers
Balancing the BS: use Plug

The amount by which a forecasted B/S does
not balance is called the plug amount
It is the amount you have to plug into the
balance sheet to balance it
Plug amount is called DNF discretionary
funding needed
Usually following items are used as plug:
Assets: Cash, Marketable securities
Eq& Liabilities: ST debt, LT Debt, Equity
Income Statement
Total income
Sales
Mar-10
12675.04
Mar-11
18752.59
12399.92
17274.35
Fiscal Benefits
Other income
Change in stock
302.13
148.76
53.1
73.26
47.6
Total expenses
Indirect taxes
Royalties, technical know-how fees,
Rent & lease rent
Insurance premium
Directors' fees
11022.53
7767.3
419.81
70.35
594.64
626.93
3.75
9.52
76.2
2.43
0.86
0.64
S, G & A
Total provisions
Depreciation
Amortisation
Write-offs
P&E expenses
PBDITA
Depreciation
PBIT
Interest Paid
PBT
Provision for Tax
PAT
Adjusted PAT
445.17
248.85
1.19
132.77
0
20.87
6.97
2546.36
132.77
2413.59
5.98
2407.61
707.5
1700.11
1633.82
Forecasting Factor
Mar-12
21696.12
Computed with inputs from company sources; and mkt trends &
projections
20662.97
443.53
will be 2.50% of Sales
516.57
517.26
will be 2% of Sales
413.26
73.18
will be 0.50% of sales
103.31
887.8
0.00
82.79
assumed that production = sales
0.00
15495.65
18776.73
11396.89
will remain at the leve of 2011
13632.56
568.41
3.3% of sales
681.88
86.61
0.55% of sales
113.65
493.58
will increase to 3% of Sales
619.89
959.52will reduce to about 5% of Sales (exemption in Pantnagar plant) 1033.15
2.36
will be about Rs. 3 crores
3.00
11.35
0.07% of Sales
14.46
79.67
0.50% of Sales
103.31
2.44
2.50
0.91
1.00
0.98
1.00
will be 3% of Sales considering increasing efforts on sales
468.58
target
619.89
275.24
2% of Sales
413.26
102.61
0.2% of sales
4.13
124.42
Budgeted
90.54
0
18.86
0.10% of Sales
20.66
20.12
not forecasted
0.00
4476.86
4431.77
124.42
Budgeted
90.54
4352.44
4341.23
1.69
budgeted
32.62
4350.75
4308.61
1011.02
33% of PBT
1421.84
3339.73
2919.39
Amiya
Sahu,
GIM,
2014
2472.05
2919.39
Assets
Gross fixed assets
Less: Cumulative depreciation
Mar-10
3503.82
1903.39
Mar-11
Mar - 12 (E )
3546.64 will add capacity. Will cost Rs. 150 crore
3696.64
1914.59
2.5% of GFA
2005.131
Net fixed assets

Investments
Deferred tax assets
1600.43
2375.7
190.12
1632.05
4223.82
167.99
24% of Sales
1.4% of Sales
1691.509
4959.11331
289.28
Current assets
Cash & bank balance
Inventories
Receivables
Sundry debtors
Expenses paid in advance
Loans & advances
4763.8
1747.22
446.21
911.08
239.45
1419.84
43.1
6095.87
1127.87
547.28
1660.87
362.76
2397.09
28.47
PLUG
3.2% of Sales
9% of Sales
2.5% OF Sales
10% of Sales
0.5% of Sales
7796.78412
2693.03
661.22
1859.67
516.57
2066.30
103.314861
8733.7
11785.44
14323.43
2928.34
4910.22
6661.85522
144.68
2783.66
1340.65
289.37
4620.85
326.22
No change
Add RE
Will maintain current borrowing
4272.9
1571.2
6351.3
1943.08
11% of Sales
7025.41
2272.93
203.27
264.91
249.71
217.59
2248.72
3925.72
191.81
197.7
1.5% of Sales
1.5% of Sales
20% of Sales
1.5% of Sales
309.94
309.94
4132.59
309.94
Total assets
Equity & Liabilities

Net worth
Paid up equity capital (net of
forfeited capital)
Reserves & surplus
Total borrowings
Current liabilities & provisions
Sundry creditors
Deposits & advances from
customers & employees
Other current liabilities
Provisions
Deferred tax liability
289.37
6372.48522
326.22
Ratios & Performance

Indicators
EBIDTA Margin
Net Profit Margin
Net Profit Margin (Adjusted)
Mar-10
20.09%
13.41%
12.92%
Mar-11
23.87%
17.81%
13.77%
Mar-12 (E )
20.43%
13.46%
13.78%
Growth in Assets
Growth in NFA
Growth in Working Capital
Growth in Shareholders' Funds
NFAs as % of TAs
CAs as % of TAs
Investments as % of TAs
Cash as a % of TAs
D/E
44.55%
-2.93%
86.38%
56.62%
18.32%
54.55%
27.20%
20.01%
0.46
34.94%
1.98%
27.96%
67.68%
13.85%
51.72%
35.84%
9.57%
0.07
21.53%
3.64%
27.90%
35.67%
11.81%
54.43%
34.62%
18.80%
0.05
ROA (net of P&E income/exp)

ROCE (net of P&E income/exp)
ROE (net of P&E income/exp)
Total Asset turnover
NFA Turnover
Inventory turnover
Receivable Turnover
Cash as % of Total Income
31.77%
58.15%
68.10%
1.72
7.63
24.38
41.46
13.78%
33.97%
70.44%
63.07%
1.83
10.69
27.38
57.37
6.01%
33.25%
68.19%
50.46%
1.51
12.22
24.51
47.00
12.41%
1.11
1.01
0.96
0.87
1.11
1.02

112.93
85.43
100.89
Current ratio
Quick Ratio
EPS

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Forecasting Financial

Amiya Sahu, GIM, 2014

Amiya Sahu, GIM, 2014

Forecast other income

Forecast Assets, Liabilities & Shareholders Funds

Data/ Info. required

Dealing with Past Data

Amiya Sahu, GIM, 2014

Past performance measures

Amiya Sahu, GIM, 2014

Case: SpeedAuto Ltd.

Amiya Sahu, GIM, 2014

Past Performance: IS Numbers

Growth in Total Income

Amiya Sahu, GIM, 2014

Income Statement (Common Size)

Past Performance: BS Numbers

Growth in Working Capital

Growth in Shareholders' Funds

Investments have grown.

Amiya Sahu, GIM, 2014

16.82% 31.40% 41.21%

37.86% 70.87% 85.21%

ROA (net of P&E income/exp)

16.47% 30.54% 33.00%

ROCE (net of P&E income/exp)

26.18% 54.14% 66.39%

Amiya Sahu, GIM, 2014

36.70% 68.10% 63.07%

Cash as % of Total Income

Amiya Sahu, GIM, 2014

Book value per share (Rs.)

Cash Flow per share

Adjusted market price

8,947.95 29,150.83 42,341.63 45,918.21

9,294.34 27,203.32 38,262.51 41,839.09

Amiya Sahu, GIM, 2014

Forecasting Sales & Total

Amiya Sahu, GIM, 2014

Analysis production capacity:

Mar-08 Mar-09 Mar-10 Mar-11

Growth in Sales value/

Amiya Sahu, GIM, 2014

Services >> Trade & Commissioning Agents' services

Services >> Financial services including leasing

Amiya Sahu, GIM, 2014

Additional Information: Sales

Amiya Sahu, GIM, 2014

A Model is only as good as the assumptions

Amiya Sahu, GIM, 2014

Re-work forecasts with new

Amiya Sahu, GIM, 2014

SpeedAuto Ltd: Assumptions for

Sale of other (trading income) will grow by

Forecasted Sales FY12(E)

Capacity utilisation (%)

(trading income) Sales value

480.57 Will grow by 10% YoY

Amiya Sahu, GIM, 2014

Income from other sources

Amiya Sahu, GIM, 2014

Income from other Sources:

Prior period & extra-ordinary income

Income from fin. Serv as % of total