Financial estimates helps to identify.pptx

Good info about financial estimate

1. Financial estimates

2. Cost of project Means of financing Estimates of sales and production Cost of production Working capital requirements and its financing Profitability projection Cash flow and balance sheet

3. Cost of project Land and its site development Building and its civil works Plant and machinery Technical know how and machinery fee Expense on foreign and Indian techniques abroad Pre operative cost Initial cash loses

4. Means of finance Shared capital Loans Debenture capital - borrowed capital that the company is obligated to repay at a later date. It is considered a liability on the company's balance sheet.  Deferred credit - A common example of a deferred credit is a  government grant Incentive sources

5. Estimates of sales and production It is not advisable to assume a high capacity utilization level in the first year of operation. It is sensible to assume that capacity utilization would be somewhat low in the first year and rise thereafter gradually to reach the maximum level in the third or fourth year of operation. For practical purposes, it may be assumed that production would be equal to sales . The selling price used may be the present selling price: it is generally assumed that changes in selling price will be matched by proportionate changes in  cost of production . Sales and production are closely interred –related. Hence they may be estimated together.

6. Cost of production Material cost Utilities cost Labour coat Overhead cost

7. What Is Working Capital ? It is the difference between a company’s  current assets —such as cash, accounts receivable/customers’ unpaid bills, and inventories of raw materials and finished goods—and its  current liabilities , such as accounts payable and debts. It's a commonly used measurement to gauge the short-term health of an organization Working Capital = Current Assets - Current Liabilities