NAME: ANKIT KAPREE

SUBJECT: FINANCIAL MODELLING

ROLL NO: 20204415
ASSIGNMENT 3

CONTENTS
1 Input Information
2 Profit Forecast
3 Sensitivity of Inputs -Scenario

Marks10
INPUT INFORMATION

Base Price $ 125.00

Variable cost (per unit) $ 60.00
Base Units $ 250.00
Tax 30%
Fixed Cost $ 25,000.00
Growth:
Annual Selling Price

Annual Variable Cost

Fixed Overheads

Annual Sales Volume

Minimum cumulative net profits $ 10,000.00

PROFIT FORECAST

YEARS 0 1 2 3 4 5
Selling Price $ 125 $ 138 $ 151 $ 166 $ 183 $ 201
Volume 250 300 360 432 518 622
Revenue $ 31,250 $ 41,250 $ 54,450 $ 71,874 $ 94,874 $ 125,233
Variable Cost per unit $ 60 $ 63 $ 66 $ 69 $ 73 $ 77
Variable Cost $ 15,000 $ 18,900 $ 23,814 $ 30,006 $ 37,807 $ 47,637
Contribution $ 16,250 $ 22,350 $ 30,636 $ 41,868 $ 57,067 $ 77,596
Fixed Cost $ 25,000 $ 25,250 $ 25,503 $ 25,758 $ 26,015 $ 26,275
Gross Profit $ -8,750 $ -2,900 $ 5,133 $ 16,111 $ 31,051 $ 51,321
Tax $ - $ - $ 1,540 $ 4,833 $ 9,315 $ 15,396
Net Profit $ -8,750 $ -2,900 $ 3,593 $ 11,278 $ 21,736 $ 35,925
Cumulative Net Profit $ -8,750 $ -11,650 $ -8,057 $ 3,221 $ 24,957 $ 60,882

PROFIT FORECAST
$130,000
$25,000
$90,000
$50,000 $5,000

$10,000 $-15,000
1 2 3 4 5 6 1 2 3 4 5 6
Revenue $31,250 $41,250 $54,450 $71,874 $94,874 $125,233

Net Profit $-8,750 $-2,900 $3,593 $11,278 $21,736 $35,925

Dynamic Graphs 11

YEARS 0 1 2 3 4 5
Cumulative Net Profit -8750 -11650 -8057 3221 24957 60882

Selling Price
65000

55000

45000

35000

25000

15000

5000
 55000

45000

35000

25000

15000

5000

-5000 1 2 3 4 5 6
Cumulative Net Profit -8750 -11650 -8057 3221 24957 60882
-15000

WORKINGS

Growth in Selling Price

Interval 1%
5% 6
6% 10%
7%
8%
9%
10%

Growth in Variable Cost

Interval 1%
5% 1
6% 5%
7%
8%
9%
10%

Growth in Fixed Overheads

Interval 1%
1% 1
2% 1%
3%
4%
5%
6%

Growth in Volume of Sales

Interval 5%
Conservative Basis (10%) 10% 3
Realistic Basis (15%) 15% Optimistic Basis (20%)
Optimistic Basis (20%) 20% 20%
 DATA TABLE

MANAGEMENT SUMMARY 1 Cumulative profits on Selling Price and Quantity

Break-even $ 11,278
Cumulative Net Profit $ 60,882 $ 60,882 100
DECISION ACCEPT 50 -121404
100 -89008
150 -58188
Q 200 -30282
u 250 -3845
a 300 21463
n
t 350 46128
i 400 70252
t 450 94336
y
500 117613
550 140891
600 164168
650 187145

2 Cumulatve profits on Variable Cost and Quantity

$ 60,882 $ 10,000
$ 50 $ -111,647
$ 100 $ -60,922
$ 150 $ -15,892
$ 200 $ 25,860
Q
u $ 250 $ 65,882
a $ 300 $ 104,384
n $ 350 $ 140,892
t
i $ 400 $ 177,399
t $ 450 $ 213,906
y
$ 500 $ 250,414
$ 550 $ 286,921
$ 600 $ 323,429
$ 650 $ 359,936
fits on Selling Price and Quantity
Selling Price
105 110 115 120 125 130 135
-118053 -114701 -111350 -107998 -104647 -101295 -97944
-82305 -75602 -69126 -63024 -56922 -50821 -44719
-49035 -40301 -31831 -23362 -14892 -6749 1203
-18990 -7948 2655 13258 23860 34238 44318
9408 22661 35682 48282 60882 73482 85962
37125 52245 67365 82485 97134 111660 126186
63768 81408 98622 115570 132517 149464 166036
90412 109795 129163 148531 167599 186367 205135
116125 137914 159703 180892 202006 223121 244235
141823 166033 189494 212954 236414 259874 283334
167522 193403 219209 245015 270821 296627 322434
192620 220772 248924 277077 305229 333381 361533
217643 248142 278640 309138 339636 370134 400632

fits on Variable Cost and Quantity

Variable Cost
$ 15,000 $ 20,000 $ 25,000 $ 30,000 $ 35,000 $ 40,000 $ 45,000
$ -116,647 $ -121,647 $ -126,647 $ -131,647 $ -136,647 $ -141,647 $ -146,647
$ -65,922 $ -70,922 $ -75,922 $ -80,922 $ -85,922 $ -90,922 $ -95,922
$ -20,892 $ -25,892 $ -30,892 $ -35,892 $ -40,892 $ -45,892 $ -50,892
$ 20,860 $ 15,860 $ 10,860 $ 5,860 $ 860 $ -4,140 $ -9,140
$ 60,882 $ 55,882 $ 50,882 $ 45,882 $ 40,882 $ 35,882 $ 30,882
$ 100,134 $ 95,134 $ 90,134 $ 85,134 $ 80,134 $ 75,134 $ 70,134
$ 137,392 $ 133,517 $ 128,517 $ 123,517 $ 118,517 $ 113,517 $ 108,517
$ 173,899 $ 170,399 $ 166,899 $ 161,899 $ 156,899 $ 151,899 $ 146,899
$ 210,406 $ 206,906 $ 203,406 $ 199,906 $ 195,281 $ 190,281 $ 185,281
$ 246,914 $ 243,414 $ 239,914 $ 236,414 $ 232,914 $ 228,664 $ 223,664
$ 283,421 $ 279,921 $ 276,421 $ 272,921 $ 269,421 $ 265,921 $ 262,046
$ 319,929 $ 316,429 $ 312,929 $ 309,429 $ 305,929 $ 302,429 $ 298,929
$ 356,436 $ 352,936 $ 349,436 $ 345,936 $ 342,436 $ 338,936 $ 335,436
 140
-94593
-39027
9155
54399
98067
140712
182458
223903
265349
306794
348240
389685
431131

$ 50,000
$ -151,647
$ -100,922
$ -55,892
$ -14,140
$ 25,882
$ 65,134
$ 103,517
$ 141,899
$ 180,281
$ 218,664
$ 257,046
$ 295,429
$ 331,936
 SENSITIVITY OF INPUTS THROUGH SCENARIO

1 Sensitivity of annual selling price growth

Scenario Summary
Current Values: With 5% growth rate
Changing Cells:
$B$39 5% 5%
Result Cells:
$H$16 $ -12,755 $ -12,755
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.

Sensitivity:
Sensitivity for every % change in growth $ -

2 Sensitivity of annual variable cost growth

Scenario Summary
Current Values: With 5% growth rate

Changing Cells:
$B$48 5% 5%
Result Cells:
$H$16 $ -12,755 $ -12,755
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.

Sensitivity:
Sensitivity for every % change in growth $ -

3 Sensitivity of fixed overheads cost growth

Scenario Summary
Current Values: With 1% growth rate

Changing Cells:
$B$57 1% 1%
 Result Cells:
$H$16 $ -12,755 $ -12,755

Sensitivity:
Sensitivity for every % change in growth $ -

4 Sensitivity of Volume of sales growth

Scenario Summary
Current Values: Conservative Basis

Changing Cells:
$C$66 10% 10%
Result Cells:
$H$16 $ -12,755 $ -12,755

Sensitivity:
Sensitivity for every % change in growth $ -
 With 6% Growth Rate With 7% Growth Rate With 8% Growth Rate With 9% Growth Rate

6% 7% 8% 9%

$ -6,738 $ -785 $ 5,326 $ 11,596

$ 100,271 $ 170,998 $ 226,001 $ 270,558

With 6% Growth Rate With 7% Growth Rate With 8% Growth Rate With 9% Growth Rate

6% 7% 8% 9%

$ -15,739 $ -18,800 $ -22,025 $ -25,583

$ -49,737 $ -86,368 $ -115,879 $ -142,535

With 2% Growth Rate With 3% Growth Rate With 4% Growth Rate With 5% Growth Rate

2% 3% 4% 5%
$ -15,945 $ -19,216 $ -22,665 $ -26,441

$ -159,545 $ -215,370 $ -247,764 $ -273,736

Realistic Basis Optimistic Basis

15% 20%

$ 2,589 $ 19,598

$ 102,289 $ 161,763
 With 10% Growth Rate

10%

$ 17,957

$ 307,119

With 10% Growth Rate

10%

$ -29,517

$ -167,623

With 6% Growth Rate

6%
$ -30,328

$ -292,894