Skip to main content

What is Profitability Projections

Image
By

PROFITABILITY PROJECTIONS:  Finance Assignment Help

The traditional and sophisticated discounting methods of project evaluation have been falted because the financial analysis looks at the capital expenditure proposal in isolation and works out the ROI, PB, NPV or IRR whereas it is has an impact of expansion proposal on the working results of the company. This would highlight the working results - profit/loss statement without and with the new project.
This is computed as below:
1. Cost of production
2. Total administrative expenses
• Administrative Expenses
• Administrative salaries
• Remuneration etc. to directors
• Professional and consultants fees
• Light, postage, Telegrams, Telephones, office stationery etc.
• Taxes and insurance  On office property
• Miscellaneous expenses

3. Total sales expenses
4. Royalty, know-how payable
5. Total cost of production (1 + 2 + 3 + 3 + 4)
6. Expected sales
7. Gross profit before interest and financial expenses (6 - 5)
8. Total financial expenses

• Interest on term loans (long-term)
• Interest on borrowings for working capital (short term)
• Guarantee commissions etc.

9. Depreciation charges
10. Operating profits (7 - 8 - 9)
11. Other incomes
12. Preliminary expenses written off
13. Profit before Taxation (10 + 1 - 12)
14. Provision for Taxation
15. Profit after Tax (14 - 13)

• Less Dividend on preference Capital @
• Less Dividend on Equity Capital @
16. Retained profits
17. Net Cash Accruals (16 + 9 + 12)

Comments

Post a Comment

Popular posts from this blog

A number of the Best Interview Questions on Java Given By experts

By Anonymous
Java language is a programming language which is object oriented. Java is supposed to be the most secure language above the network. One of the significant features of this language is platform independent feature. It can be compiled and run over all operating system. It is frequently said that java projects are very tough to handle so programming experts can help to handle projects and to give java programming assignment help. Java works on the basic of OOPS concept. OOPS denote  Object Oriented Programming System. A few of the basic questions concerning java are listed below: 1. Explain oops? OOPS takes object oriented programming language. In this language the programming is based on objects. Some of its characteristics are Inheritance, Polymorphism, Encapsulation, Abstraction etc. 2. What are the main aspects of java? It is extremely clear that these are the java possessions asked don't try to tell object oriented characteristics. Some of the java possessi...
1 comment
Read more

Awesome Ways To Kick-Start Your Creativity

By
     The brain power is exhausting so much on paper, projects and exams, that’s typical for our well of creativity to run dry and if it does then it’s essential to identify how we can restock it by motivation to reignite that creative spark. Tutorsglobe is releasing pressure of these hectic schedule providing extremely talented tutor's service.             Have you experienced writer’s block, suffered through a dry spell or had your creativity completely flat line? There is don’t matter what profession you’re in or where you are in life, there will be times when your capability to make something new hits the wall. every and any creative juices that were once flowing dry up and you find yourself struggling to create something… just anything.              Brain impairment can affect at any time and in any situation, but generally bring up its ugly head when t...
1 comment
Read more

Importance of Capital Budgeting decisions

By
Importance of Capital Budgeting decisions Capital budgeting decision is a vital part of financial management, as it involves huge capital investment. Many researches have been undertaken in this field to know the best method of Capital budgeting decision.  The result of some of the literature review and surveys shows the following results:             Research conducted by Uma.V Sridharan and Ulrich Schuele (2008) about the Capital Budgeting decisions of German Managers shows that small firms prefer payback period method as the best method and Internal Rate of return is regarded as the second best capital budgeting evaluation method.  While the large firms prefer NPV method as the best and the second best method is internal rate of return method.  Even in case of risk factors both high risk & low risk firm prefer NPV and IRR methods.             The study con...
Post a Comment
Read more