Product /Service

Military Flight Simulator

MRO IT System

2019 Projected
2014 Average Avg. Units/
Units/ Service Service
Contracts
Contracts
40
40
60
80

Military Flight Simulation

Instruction

200

200

Military Flight Simulator

Service/Maintenance
MRO IT System Services

200
115

200
150

Military Facility Construction

125

150

Product / Service

Milco

Military Flight Simulator

MRO IT System

Co.%
30%
15%

Market%
20.00%
10.20%

Military Flight Simulation

Instruction

17.50%

20.00%

Military Flight Simulator

Service/Maintenance
MRO IT System Services

20%
11.50%

35.00%
20.00%

6%

0.10%

Military Facility Construction

2014 Avg.
2019 Projected
2019 Projected
Revenue / Unit Revenue/Unit 2014 Avg. COGS / COGS / Unit or
or Service
or Service
Unit or Service
Service
15,000,000
15,750,000
9,000,000
9,900,000
5,000,000
5,500,000
3,000,000
3,300,000
1,750,000

1,837,500

600,000

630,000

2,000,000
2,000,000

2,100,000
2,200,000

1,000,000
1,000,000

1,050,500
1,100,000

1,000,000

1,800,000

600,000

900,000

Competitor A
Co.%
Market%
41.00%
15.00%
0.00%
0.00%

Competitor B
Co.%
0%
5.00%

Market%
0%
2.00%

8.00%

5.00%

0%

0%

1.00%
0.00%

1.00%
0.00%

0%
2.50%

0%
2.00%

0%

0%

0%

0%

Gross
Revenue for
COGS for
Profit
% Share of
year 2014
year 2014 2014
Profit
600000000 360000000 240000000
25%
300000000 180000000 120000000
13%

Total

Competitor C
Co.%
Market%
0%
0%
30.00%
7.00%

350000000

120000000 230000000

24%

400000000
230000000

200000000 200000000
115000000 115000000

21%
12%

125000000
75000000 50000000
20050000001050000000955000000

5%
100%

Competitor D
Co.%
Market%
0%
0%
14.00%
1.00%

Competitor E
Co.%
Market%
0%
0%
3.00%
0.20%

0%

0%

0%

0%

0%

0%

0%
7.00%

0%
4.00%

0%
4.50%

0%
1.00%

0%
1.00%

0%
0.20%

0%

0%

0%

0%

0%

0%

Percenta
ge
Projected
Projected
Percentage
change
Revenue
Projected
Gross profits % Share of Change in
in Share
2014
COGS 2014 2019
Profit
Gross Profit Profit
630000000
396000000
234000000
20%
-3%
-5%
440000000
264000000
176000000
15%
47%
3%
367500000

126000000

241500000

21%

5%

-3%

420000000
330000000

210100000
165000000

209900000
165000000

18%
14%

5%
43%

-3%
2%

270000000
135000000
135000000
2457500000 1296100000 1161400000

12%
100%

170%
22%

6%
0%

US market revenue
%market share
300000000000%
20.00%
300000000000%
10.00%
175000000000%

20.00%

112000000000%
115000000000%

35.71%
20.00%

12500000000000%

0.10%

Income Statement-2014
Revenue
COGS

2005000000
1050000000

Gross Margin/Profit

955000000

Selling, General and

Administrative
expenses
Operating Income

401000000
554000000

12

10

ASSETS
Cash
A/R
Inventory
Plant & Equip
Total assets

2014

2015
400
700
500
2000
3600

500
800
400
2100
3800

Comments on financial strength of the Company: 1. The Co.'s h

position. 2. However, it appears the Co's Debtors' position is h
seems to be very high.3. It also appears slow moving of invent
equipment sector. 4. Co's DER is quite comfortable and hence
borrowings from the market. However, the Debt Service Cover
and it implies that the Co has raised debt with tougher repaym
on debt as 7% in the absence of required data. Hence, the ISC
If the interest goes up, then also the Co. can withstand the add
margin in the existing business matrix seems to be comfortabl
may be treated as satisfactory. However, to undertake expansi
on the followings: Tight liquidity management/ a look into the
expansion programme it has to depend on raising capital or ra
that the DSCR does not prove a constraint.

Income
Statement
In Mn
Revenue
Sales Revenue
COGS

2000
1050

Gross Profit

950 A

Operating
Expenses
SG&A

400 (20% of revenue)

Other operating
exp
Depreciation

45

Interest expense
Amortization
Total

126
56
627 B

Operating
Income

323 A-B

Income Tax
Net income
Retained
earnings at the
beginning of the
year
Net income at
the end of the
year

96.9 C
226.1 A-B-C

0X

226.1 (A-B-C)+X

LIABILITIES
A/P
Long term Debt(Current year)
Long term debt
Shareholders equity
Total

2014

2015

500
200
1600
1300
3600

600
200
1700
1300
3800

on financial strength of the Company: 1. The Co.'s high Current Ratio shows a stable liquidity
However, it appears the Co's Debtors' position is high. More than 4 months collection period
e very high.3. It also appears slow moving of inventory. May be it's a trend in the Defence
sector. 4. Co's DER is quite comfortable and hence it can go for expansion programme by
from the market. However, the Debt Service Coverage Ratio seems to be on the lower side
es that the Co has raised debt with tougher repayment terms. 5. We have assumed interest
7% in the absence of required data. Hence, the ISCR is worked out to a comfortable position.
st goes up, then also the Co. can withstand the additional interest burden as the profit
he existing business matrix seems to be comfortable. The overall financial position of the Co.
ated as satisfactory. However, to undertake expansion programme, the Co. has to concentrate
wings: Tight liquidity management/ a look into the inventory & receivable manahement. For
programme it has to depend on raising capital or raising debts with softer repayment terms so
CR does not prove a constraint.

Military Flight Simulator

MRO IT System
Military Flight Simulation
Instruction
Military Flight Simulator
Service/Maintenance
MRO IT System Services
Military Facility Construction

Corporate tax
WACC
Cost of Debt
Share holders Equity
Debt

Cost of equity
Value
Current debt

2014
Current ratio
Asset to Debt ratio
Debt service coverage ratio
Quick ratio
Total Debt/Equity ratio
Long Term Debt/ShareHolder's Equity
Short term debt/Shareholders equity
Days sales outstanding(DSO)
Days inventory outstanding(DIO)
Days Payable outstanding(DPO)
Cash Conversion cycle
Receiveble turnover
Inventory turnover
LT debt as a % of Invested Capital
ST debt as a % of Invested Capital
LT debt to total debt
Interest coverage ratio

Depreciation
300
300

2015

2.285714
2.125
1.565217
1.52
1.218098
1.571429
1.625
1.769231 1.923077
1.230769
0.153846
127.75
173.8095
173.8095
127.75
4.444444
2.333333
0.551724
0.068966
0.888889
3.151587

Amortization
30
0
15
0

300

12

300

12

300
500

0
0

12
20

45

56

101
30%
8%
7.00%
1300
1800

Refernce for cost of debt

http://pages.stern.nyu.edu/~adamodar/Ne

12%
3100
200

Current Assets
Current Liabilities
Total Liabilities
Invested Capital

2014
1600
700
2300
2900

2015
1700
800
2500
3000 Equity+ long term debt

yu.edu/~adamodar/New_Home_Page/datafile/wacc.htm

Products
Military Flight Simulator
MRO IT System

Market Market Market share of

Relative market
growth share
largest competitor
share
0.98% 20.00%
30%
0.67
1.92% 10.20%
15%
0.68

Military Flight Simulation

Instruction

0.98% 20.00%

25%

0.80

Military Flight Simulator

Service/Maintenance
MRO IT System Services

0.98% 35.00%
1.92% 20.00%

26%
28%

1.35
0.71

1%

0.10

Military Facility Construction 12.47%

0.10%

Chart Title
0.85
0.80
0.75
0.70
0.65
0.60
0.8

1.2

1.4
0.68

1.35

1.6
0.10

1.8

1.8