Page | 1

Page | 2

LETTER OF TRANSMITTAL

6th May, 2015

DR. MOHAMMED KAMRUL HASAN

Assistant Professor
Department of Finance, FBA
American International University-Bangladesh (AIUB)

Subject: To accept Financial Research on Inside Out: A Journey to Orion Power Project Development
- Investment Analysis & Financial Frameworks

Honorable,
I would like to thank you for giving me the opportunity of performing such a kind of Financial Research
on a reputed Company like Orion Group. This task has been given me the prospect to explore one of the
most significant investment of the company to the power plant development.
The report contains the extensive capital budgeting analysis tools which will be appropriate to make
decisions regarding the project. The report explains the future financial feasibility of the company by
illustrating liquidity performance, profitability measurement and capital structure viability.
I have used the financial analytical tools to find out the position of the company. I have employed my
best to come out with a reasonable result.
Ill always be looking forward to your suggestions. I would be very happy to provide you with any
clarification regarding the report. I would wish to have your full consent and support to finish my
desired activity. This report will be submitted to OPA after your permission.

Thank you,
Sincerely,
ABIR, MD. ZABER TAUHID
ID: 14-97517-1
Majoring in Finance
Page | 3

Page | 4

Acknowledgement
It was a great experience having an internship program in Orion Group and preparing the project
analysis report on a proposed sister concern of the group named Orion Power Dhaka Limited. I have
enjoyed all the way of my program and assembled a lot of experiences. But all of those may not be so
smooth without the effort of some person who helped and abridged me in all points in my report.
I would like to show respect first to my honorable supervisor DR. MOHAMMED KAMRUL HASAN
[Assistant Professor, Department of Finance, AIUB] whos guidance and timely nurture has shaped my
report in a decent position.
Im indebted to Mr. Manish Priya [Vice President, Finance Orion Power] who helped me preparing
different financial variables and conditions.
I am also thankful to all my co-workers in the company for the valuable information provided by them
in their respective fields. I am grateful for their cooperation during the period of my report. Lastly, I
thank almighty and my parents for their constant encouragement without which this report would not be
complete.

Dedicated to my beloved Mother

Page | 5

Executive Summary
Orion Power Dhaka Limited, one of the major investing projects of Orion Group. The capital investment
comprises of 856.68 Million Dollars which is structured in 80-20 capital structure combination. The
bulk debt portion of 685.34 Million Dollars are coming from foreign and local financing, the rest of
171.34 Million Dollars are coming from equity financing. The 25 years life project is going to start its
journey in 2019 if everything goes with plan. This huge investment needs intense clinical precision of
exploration before making the decision.
In this study two major aspects of project analysis has been elaborately discussed which will help to take
the investment decisions. The first portion includes implication of advanced capital budgeting tools and
in the second portion includes possible future financial positioning of the project.
First of all the weighted average cost of capital has been calculated by considering all of the costing
factors in foreign and local credit alongside the cost of equity. Then projected cash flows have been
discounted at the cost of capital to find out the probable payback period of the initial investment which
results pretty positive. Calculation of net present value has also shown positive indication towards the
project with 742.76 Million Dollars NPV inline. Alongside IRR, Ive used Modified IRR to replicate the
best possible analysis and to dissolve the fault lines of IRR. Compared to the WACC of 9.21% we have
IRR of 15.79% which obviously is affirmative but even we have MIRR of 11.83% which is evidently
optimistic. The riskiness in the investment has also been evaluated in the study by sensitivity and
scenario analysis. The volatility of NPV, IRR and MIRR has been judged by changing the Revenue and
WACC. In every case Ive found satisfactory results but in one scenario when revenue is 20% down and
WACC is 11.50%, then the project might not be profitable, but the probability of this scenario is very
rare. So obviously it can be said that the project is indubitably acceptable.
In the second portion of study three vital financial performance analysis sector has been discussed which
includes performance of liquidity, performance of activity and performance of profitability. In the
liquidity performance section, the company is not showing its maturity thus its floating on over-liquidity
which indicating the company is not using their current asset wisely. On the other hand, the performance
of activity shows the mature, all the wings of this part is showing very healthy position of the company.
In the part of profitability as well the company has shown its strength. Here also all the arms has its
expected reach. So it can be said that, the project is going to be profitable one to invest.

Page | 6

Table of Contents

Letter of Transmittal
Letter of Endorsement
Acknowledgement
Executive Summary
Overview of the Organization

09

01. The Inception

10

1.1. Rationale of the Study

1.2. Statement of the Problems
1.3. Objectives of the Study
1.4. Scope of the Study
1.5. Limitations of the Study

10
11
12
12
12

02. Review of Financial Literature

13

03. Methodology of the Study

16

04. Analysis and Interpretation of Data

17

4.1. Capital Investment Decision

17

4.1.1. Weighted Average Cost of Capital

4.1.2. Discounted Cash Flows
4.1.3. Discounted Payback Period
4.1.4. Net Present Value
4.1.5. Modified Internal Rate of Return

17
19
20
20
21

4.2. Risk Associated with Investment

22

4.2.1. Sensitivity Analysis

4.2.2. Scenario Analysis

22
23

24

4.3. Financial Framework

4.3.1. Combination of Capital Structure

24

4.3.2. Analysis of Liquidity

25

4.3.2.1. Net Working capital

4.3.2.2 Current Ratio

25
26
Page | 7

 4.3.3. Analysis of Activity

4.3.3.1. Inventory Turnover

4.3.3.2. Receivables Turnover
4.3.3.3. Payables Turnover
4.3.3.4. Asset Turnover
4.3.3.5. Time Interest Earned

4.3.4. Analysis of Profitability

4.3.4.1. Return on Investment/Asset

4.3.4.2. Gross Profit Margin
4.3.4.3 .Net Profit Margin
4.3.4.4. Basic Earning Power

27
27
28
29
30
31
32
32
33
34
35

05. Findings of the Study

36

06. Conclusions

37

07. Recommendations

37

08. Bibliography

38

09. Appendix

39

9.1. PBP, Discounted PBP, NPV & IRR

9.2. Modified IRR
9.3. Sensitivity Analysis
9.3.1. Revenue unchanged with different WACC
9.3.2. Revenue 20% decreased with different WACC
9.3.3. Revenue 20% increased with different WACC
9.4. Financial Framework
9.4.1. Analysis of Liquidity
9.4.2. Analysis of Activity
9.4.3. Analysis of Profitability
9.4.4. Combination of Capital Structure

39
40
41
41
42
43
44
44
44
45
45

Letter of Appreciation to Orion HR

Curriculum Vitae

Page | 8

Overview of the Organization

Orion Group is one of the leading industrial conglomerates in Bangladesh over the years. With the
support of a highly skilled management structure and 18,000 dedicated professionals, Orion has
achieved a degree of success that is unparalleled in the countrys business history. The Groups main
objective follows the principle to reduce rural poverty and foster sustainable economic development of
the country.
Orion has assumed the leadership role with its operations in the Pharmaceuticals, Cosmetics &Toiletries,
Infrastructure Development, Real Estate & Construction, Power, High-tech Agro Products, Hospitality,
Textiles & Garments, Aviation Management sectors. The Group has successfully listed 3 companies on
the Bangladesh Stock Exchange, namely, Orion Pharma Limited, Orion Infusion Limited and Kohinoor
Chemical Company (Bangladesh) Ltd.
Besides, Orion has extensively focused on Infrastructure Development and Power Generation businesses
through major investment undertakings and significantly contributed to the countrys national economy's
stability through the right business to business strategy.
The group has implemented marquee projects which include the first high tech PPP in the country, the
first tallest commercial building in Dhaka and the biggest mushroom processing and freezing plant in
the country. Orion has also already completed 2 units of 100MW each HFO based Power Plants and is
distributing to the national grid on a regular basis. Another 100MW HFO based Plant is under
construction and about 1200 MW Coal Fired Power Plants are down the pipeline. With these, the Group
hopes to become the pioneer in private sector of the country.

The sister concerns of Orion Group are listed below:

1.

Agro Products

5.

Food & Beverage

9.

Power

2.

Construction & Allied

6.

Home Appliance

10.

Real Estate

3.

Cosmetics & Toiletries

7.

Infrastructure Development

11.

Textiles & Garments

4.

Energy Sector

8.

Pharma & Healthcare

12.

Orion Footwear

Page | 9

1. The Inception
Bangladesh has a large unsatisfied demand for commercial energy, with most of the supply limited to
urban areas. The countrys economy operates at low levels of commercial energy operation, which is a
crucial bottleneck for the economic development. In order to improve the severe power shortage issue in
Bangladesh and to support economic growth, the government should give highest priority to the power
sector to enhance the generation capacity.
Being authorized by the government and Bangladesh Power Development Board [BPDB] Orion is
setting out plans to develop a 630 MW coal fired power plant at Dhaka on a site that will be arranged
and owned by the company. The Project will be implemented on build, own and operate basis for a
period of 25 years after a 48 month construction period. The project was selected through international
competitive bidding process and the selected project sponsors are required to arrange the necessary
financing as well.
The Project is established in agreement with the Bangladesh Ministry for Energy as laid down in a 25
year Power Purchase Agreement and Implement Agreement. All power generated will be sold by way of
agreement to BPDB.

1.1 Rationale of the Study

This study is proposed to explore in-depth capital budgeting tools to analyze the feasibility of
undertaking the Power Plant Development project by Orion Group and also finding out future financial
stability.
As a regular student of Finance Department of American International University-Bangladesh, I had to
perform a Financial Research, based on a real life project. This study will assist the future students of the
Faculty of Business Administration of AIUB and other universities as a reference guide to perform
further development of this study or to help implementing research work on other Private or Public
Limited Companies.
On the other hand, the company itself will get a quality & reliable study on their business by which they
can justify the reality with the paperwork. By analyzing this research, the company can improve their
future financial performance which will support them to enlarge their business.
Page | 10

1.2 Statement of the Problems

The study will reveal the decision making procedure of the capital investment of the company alongside
the financial framework for 10 years which will be helpful for determining the projects nature and future
profitability.
Following areas to be covered through the Study:
Capital Investment Decision

Financial Framework

1)

Weighted Average Cost of Capital

2)

Discounted Cash Flows

3)

Discounted Payback Period

4)

Net Present Value

5)

Internal Rate of Return

6)

Modified IRR

Analysis of Activity

7)

Sensitivity Analysis

3)

Inventory Turnover

8)

Scenario Analysis

4)

Receivables Turnover

5)

Payables Turnover

6)

Asset Turnover

Combination of Capital Structure

Analysis of Liquidity
1)

Net Working Capital

2)

Current Ratio

Analysis of Profitability
7)

Time Interest Earned

8)

Return on Investment/Asset

9)

Gross Margin

10)

Net Profit Margin

11)

Basic Earning Power Ratio

Important Notes:
1. Every amount in the analysis is in Millions of Dollars
2. Microsoft Excel Sheet is provided in Appendix for each and every calculation and explanation

Page | 11

1.3 Objectives of the Study

General Objective:
The major objective of my study is to measure how precise it was to take the power plant development
project by the company and what will be the financial constancy of the project if taken.
Specific Objectives:
The precise objectives are

To find the firmness of the cash flows generated & related factors

To discover how sensitive the Operating Cash Flow during any sudden change

To measure the Liquidity Performance

To measure the Activity Performance

To determine the Profitability

1.4 Scope of the Study

This Quantitative Financial Research is conducted on the upcoming power plant development project of
Orion Group, located at 53-154, Tejgaon Industrial Area, Dhaka-1208 Bangladesh. This research is
accompanied for the partial requirement of MBA program in American International UniversityBangladesh. As an internee Ill be in Corporate Office of Orion Group for 12 weeks long program.
To collect the research data Ill be using Observation method, Face-to-Face conversation with corporate
personnel for primary data and the Financial Model, brochures and company website as the Secondary
source of Information.
1.5 Limitation of the Study
To expresses my research objectives, I have tried to convey my best effort. But there are some
unavoidable substances that had limit my study. One of the major limitations is the limited time frame;
its a tough job to analyze the decision making process and financial framework of a big project 8-10
weeks. On the other hand, collection of information was very hard; I had to take permission from
management personnel to find the data and performing the study. Time and information limitations
made it difficult to assess wide range view. Though this study has faced few complications but Im
confident that my report is able to answer to the raised problems.
Page | 12

2. Review of Financial Literature

The 856.68 Million Dollar Project comprises with the debt component of USD 685.34 Million and the
equity portion of USD 171.34 Million, which makes 80-20 Capital Structure for the company.
With respect to equity arrangement, the promoter has already incurred the sufficient amount of fund
equivalent to USD 45.44 Million into the project by way of acquiring the land, land development and
other miscellaneous expenses. The remaining equity will be infused by the company during project
implementation.
With respect to debt component, the Base Case includes USD 685.34 Million of project finance senior
credit facilities comprising export credit agency [ECA] covered loans and commercial uncovered loans.
The senior credit facilities will have a tenor of 15 years door-to-door, including a 4.5 year drawdown
period and 11.5 years repayment period. It is currently anticipated that could be amongst the ECAs
providing direct loans subject to final eligible procurement, finalizing their due diligence, board
approvals and final documentation including the local commercial bank that will make their
participation into the project through senior debt financing of amount USD 299.98 Million.

Project Cost Summary

Land & Site Development
Boiler, Turbine & Generator
E&C Cost
Civil Construction
Dredging and Coal Handling EPC Cost
Total Hard Costs
Preliminary & Pre-operative Expenses
Project Management Consultancy
Insurance Cost
Local Transportation Cost
Contingencies
Pre Funded DSRA
Finance Cost (including IDC)
Total project Cost

In Million USD
38.00
195.20
350.00
120.00
21.00
724.20
5.45
13.62
10.58
26.00
10.50
6.90
59.43
856.68

Page | 13

2.1 Capital Structure Detail

The Capital Structure combination and the classification of fund sources are shown below:

Sources of Fund

USD

Debt Financing

685.34

80%

Equity Financing

171.34

20%

Total

856.68

100%

Details of Debt Financing

ECA Financing
Commercial Bank Funding
BIFFL
Long Term Loan
Total

Details of Equity Financing

Sponsors contribution
Quasi Equity (Preferred Stock)
Total

Ratio

Ratio

In Million USD

65.35%
34.65%

447.84
237.50
100.00
137.50

100%

Ratio
63.52%
36.48%
100.00%

685.34

In Million USD
108.84
62.50
171.34

Page | 14

2.2 Key Financial Indicators

The projected key financial indicators are shown below for the overall project life of 25 years.
Amounts are in Millions of Dollars

All of the explanations are discussed in the analysis chapter of the report.

Page | 15

3. Methodology of the Study

This is a Quantitative Financial Study where the systematic experimental investigation will be applied to
find out the Financial Data via statistical, mathematical and computational techniques. The objective of
this quantitative study is to develop and employ Mathematical Models, Graphical Expressions and
Tabular Presentation of the Financial Data. The major hope of this type of report is the numbers will
yield an unbiased result that can be presented to some larger population.

Data Collection & Sources

In order to collect the financial data, two major type of data collection will be used.
Primary Sources of Data: As a primary source following techniques will be used

Internship Experience

Face-To-Face Conversation with office personnel

Direct Observation

Expert opinion form Management

Secondary Sources of Data: As a secondary source following techniques will be used

Financial Model by the Company

Company Website

Market Information

Other Secondary Websites

Page | 16

4. Analysis and Interpretation of Data

[All figures are in Million Dollars]

Ideally, businesses should pursue all projects and opportunities that enhance shareholder value.
However, because the amount of capital available at any given time for new projects is limited,
management needs to use all the techniques to determine which projects will yield the most return over
an applicable period of time.
The following study will reveal how the investment is likely to perform and how suitable it is for the
investor. The study will also focus to reviewing and evaluating the company's financial statements for
understanding of the financial health of the company and enabling more effective decision making.

4.1 Capital Investment Decision

In order to make decisions about capital investment, the company must need analyzing some key capital
budgeting tolls which will enable them to take the right and appropriate decision. According to the
management verdict, the power project is to be for 25 years of life starting from 2019 to 2043.

4.1.1 Weighted Average Cost of Capital

A company's assets are financed by either debt or equity. Likewise, Orion Power has also combines a set
of financing sources which are to be weighted accurately to find the true cost of capital. WACC is the
average costs of these sources of financing, each of which is weighted by its respective use in the given
situation. By taking a weighted average, we can see how much interest the company has to pay for the
money it finances.
For Orion Power, it has four different sources of funds and so costs. The major source of invested
money has come from the debt form local and foreign sources. Details sources are shown below in
excel.
All Cost Components are displayed below table:
Local Debt
Foreign Debt
Equity
Preferred Stock
Interest Rate
13.75% Interest Rate
3.50% FDR Rate 9.75% Dividend Rate
9.00%
Financing Fee
1.00% Hedging Cost
5.00%
Guarantee Fee
0.25%
15%
8.50%
9.75%
9.00%
Page | 17

Classified WACC Calculation:

Sources

Amount

Local Debt
Foreign Debt
Equity
Preferred Stock

237.50
447.84
108.84
62.50

15.00%
8.50%
9.75%
9.00%

3.53%
3.78%
1.24%
0.66%

Total Value of Equity

856.68

WACC

9.21%

Average Tax [Note 01]

Cost

WACC

15%

Here, WACC has been calculated by using following formula:

(

Note 01: Average Tax Rate of 15%: Orion Power has its corporate tax rate of 37.50% per year. The
average tax rate of 15% has been taken instead of 37.50% because the company will be enjoying a Tax
Relaxation period of 15 Years [2019 to 2033] form the commercial production. As the project life is 25
Years, the company will have to pay tax from 2034 and afterwards. So, the company will pay Tax of
375% throughout the life remaining. So, to be rational and realistic is calculation, Ive taken the average
Tax rate of [(375%/25 Years) = 15% P. A]. If average Tax rate is not considered, then the cost of capital
will show higher than the reality which will definitely hamper the decision making.

Page | 18

4.1.2 Discounted Cash Flows

The most right column of below section shows the discounted cash flows. It is a valuation method used
to estimate the attractiveness of an investment opportunity. Discounted cash flow analysis uses future
free cash flow projections and discounts them to arrive at a present value, which is used to evaluate the
potential for investment. Here Ive used the WACC rate of 9.21% to get the DCFs.
After getting the DCFs we can now move on to investment decision tools which will include Discounted
Payback Period, Net Present Value, NPV Profile, Modified IRR and Profitability Index.
Years

Cash Flows

Discounted Cash Flows

* In year 2043 contains the cash inflow plus after tax

salvage value of the capital asset.

2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043

(114.71)
(497.07)
88.37
92.71
97.66
103.65
110.36
117.91
126.38
133.83
139.01
147.33
156.26
165.93
176.47
187.90
200.45
214.08
228.90
246.78
266.39
290.00
316.15
342.46
368.44
392.70
3,539.50

(114.71)
(206.90)
(497.07)
80.92
77.73
74.98
72.87
71.05
69.51
68.22
66.15
62.92
61.06
59.30
57.66
56.16
54.76
53.49
52.31
51.21
50.56
49.97
49.82
49.73
49.33
48.60
47.43
391.45

WACC

9.21%

(206.90)

Here from 2016 to 2019 is basically the

construction and trail-run period and so these
three years is to be considered as the initial
investment period. At the end of the project life,
the capital assets will be sold at market price.
Here in the cash flow, after tax salvage value
has been considered at the end.

Page | 19

4.1.3 Discounted Payback Period

Discounted Payback Period is a capital budgeting tools used to determine the profitability of a project. It
gives the number of years it takes to break even from undertaking the initial expenditure. Future cash
flows are considered are discounted to beginning. So the limitation of only payback period is eliminated.
(

Here it shows the Orion Power takes almost 15 years to cover its initial investment which comparatively
not so good for a the company but in a macroeconomic view the project will contribute to the nations
economy. Orion will have 10 more years after DPBP period according to project life which seems a
profitable figure.

4.1.4 Net Present Value

The net present value refers to the sum of the present values of incoming and outgoing cash flows over
the period of time. NPV is used to analyze the profitability of an investment. NPV can be calculated
using following formula-

(
Where,

= Net cash inflow during the period and i = Interest rate.

As the project has 25 years of long life, its quite time consuming to find out NPVs individually, so here
Ive used Microsoft Excel to find the big projects NPV by using the following formula=NPV (rate, value1, value2)
The Excel outputs the NPV of the project of 742.76 Million Dollars which indubitably positive and
very acceptable and attractive project to invest.
*Excel Sheet is enclosed in Appendix part at the end of report in Appendix Part

Page | 20

4.1.5 Modified Internal Rate of Return

While the IRR assumes the cash flows from a project are reinvested at the IRR, the MIRR assumes that
positive cash flows are reinvested at the firm's cost of capital, and the initial outlays are financed at the
firm's financing cost. Therefore, MIRR more accurately reflects the cost and profitability of a project.
Following table shows both the IRR and MIRR rate of the upcoming project of Orion:
IRR
Using MS Excel: =IRR (Values)

MIRR
Using MS Excel: PV & FV of Terminal Value

IRR = 15.79%
(
(

*Excel Sheet is enclosed in Appendix Part

)
)

*Excel Sheet is enclosed in Appendix Part

First of all, if I consider only IRR = 15.79% looks very attractive comparing to the cost of capital of
9.21% but, when it is compare with MIRR = 11.83% it seems not too profitable but still acceptable as
the rate is above the cost rate. When Ill go for the risk in capital investment section for this project, then
the MIRR most likely show a below cost rate, which will be a matter of thinking.

Page | 21

4.2 Risk Associated with Investment

Risk is always inevitable to the investments. The various risks include cash flows not being paid in time
as agreed, the risk of the investee company collapsing and also the management sinking the invested
funds in risky projects. By incorporating risk in capital budgeting, we may predict the future more
accurately and rationally to minimalize losses.

4.2.1 Sensitivity Analysis

Sensitivity analysis measures the extent to which the project's cash flows change in response to changes
in one of the vital factors like Revenue and Cost of Capital. The sensitivity analysis process involves
identifying the factors that influence the project's cash flows, establishing a mathematical relationship
between these factors and analyzing how a change in each of these factors affect the project's cash flows.
If a project's cash flows are sensitive to changes in any of the above, it is considered risky and to be
reconsidered.
We will consider following cases in order to determine the projects sensitivity:

Revenue

Revenue

Revenue

Phase 01
WACC
Unchanged
WACC
WACC
Phase 02
WACC
20% Decreases
WACC
WACC
Phase 03
WACC
20% Increases
WACC
WACC

7.50%
9.21%
11.50%

Situation
01
02
03

NPV
$1171.79
$742.14
$366.64

MIRR
11.11%
11.84%
12.91%

IRR

7.50%
9.21%
11.50%

04
05
06

$408.51
$128.83
($101.94)

9.03%
9.56%
10.37%

10.33%

7.50%
9.21%
11.50%

07
08
09

$1,935.08
$1,355.44
$835.21

12.48%
13.29%
14.47%

21.35%

15.79%

*MS Excel Sheet is enclosed in Appendix Part for all Situations

In this analysis Ive taken two important numbers which of them has direct access to change of NPV,
MIRR and IRR. The whole sensitivity has been classified in three phases and nine different situations.
Phase 01: In this phase we have three situations where revenue will be unchanged and cost of capital
will fluctuate. Here in all three situations, we have acceptable position to make the decision.
Page | 22

Phase 02: Here we have some problem in situation 06 when revenue decreases by 20% and cost of
capital raises us to 11.50%. Here, the company may face some sort of financial distress of negative net
present value and lower IRR & MIRR than the capital cost.
Phase 03: In this part, the company may see haven, because the revenue is set to be 20% higher. The
decision is very easy in this phase just like the phase 01, everything is positive to take the project.

4.2.2 Scenario Analysis

Scenario analysis is a process of analyzing possible future events by considering alternative possible
outcomes. Thus, the scenario analysis, which is a main method of projections, does not try to show one
exact picture of the future. Instead, it presents consciously several alternative future developments. Lets
see the scenario analysis of Orion Power in respect to sensitivity analysis.

Revenue
20% Increases
Unchanged
20% Decreases

Revenue
20% Increases
Unchanged
20% Decreases

WACC

WACC

Scenario for NPV

7.50%
$1,935.08
$1171.79
$408.51

9.21%
$1,355.44
$742.14
$128.83

11.50%
$835.21
$366.64
($101.94)

Scenario for MIRR

7.50%
12.48%
11.11%
9.03%

9.21%
13.29%
11.84%
9.56%

11.50%
14.47%
12.91%
10.37%

Here weve found two different form-factors, one in terms of NPV and second in terms of MIRR. For
NPV scenario, we have only one negative NPV in the table in the very worst case scenario when
revenue goes 20% down and WACC rises to 11.50%. This both extreme case may not happen together.
So I obviously can say the project is acceptable.
In the scenario of MIRR similar screen has been reflected like NPV scenario, so here as well only once
we have MIRR below cost of capital in the extreme case. So the project is acceptable in both ways.
Page | 23

4.3 Financial Framework

The following analysis will evaluate the projects suitability for investment. Typically, it will find
whether the entity is stable, solvent, liquid, or profitable enough to be invested in. When looking at the
company, this financial analysis will often focus on the income statement, balance sheet, and cash flow
statement.

4.3.1 Combination of Capital Structure

Capital Structure is a mix of a company's long-term debt and common equity and preferred equity. The
capital structure tells us how a firm finances its overall operations and growth by using different sources
of funds. Lets see Orion Powers capital structure for all 25 years of life.

Capital Structure
100%
80%
60%
40%
20%
0%
1

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Debt

Equity

*Excel worksheet is enclosed in appendix

Here from the beginning year we can see reasonable debt equity combination for the company. But as
years goes by, the percentage of debt is sinking significantly and at the 16th year, when the company is
bound to pay the corporate tax of 37.5%, we see 100% equity financing. After paying off their debts
they havent take any new long-term loans they just increased their equity financing portion. In my
watch its obviously not a good decision because they are paying more tax on their income. If they had
debt then they might get tax benefit over the interest expenses.
Page | 24

4.3.2 Analysis of Liquidity

Liquidity analysis is a group of financial measurements which are used to define a company's ability to
pay off its short-terms debts obligations. In a commonsense the higher rate of ratio reflects the better
company performance regarding liquidity. Lets find out the liquidity performance of Orion Power.

4.3.2.1 Net Working capital

The Net Working Capital ratio is used to measure the efficiency and short-term financial fitness of the
company. This ratio reflects the ability to cover short-term debt with short-term asset. If short-term
liabilities are more than the liquid asset, the company may not pay-off its obligations and may go in
bankruptcy.

NWC Trend
3,000.00
Dollar Amount

2,500.00
2,000.00
1,500.00
1,000.00
500.00
1

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years

*Excel worksheet is enclosed in appendix

Here we can see, Orion Power has its Net working Capital far more than its Current Liability, which
means the company is in an efficient short-term liquidity condition and it can pay off the liabilities only
with current assets without selling any fixed assets. From the 13th year, the curve starts showing extreme
upturn which may eventually cause a poor liquidity management; we will see the similar situation in
current ratio analysis next.
Page | 25

4.3.2.2 Current Ratio

It is a liquidity ratio that measures a company's ability to pay short-term obligations. The ratio is mainly
used to give an idea of the company's ability to pay back its short-term liabilities with its short-term
assets. Generally, higher the current ratio, the more capable the company is of paying its obligations.

Current Ratio Trend

40.00
35.00

Times (X)

30.00
25.00
20.00
15.00
10.00
5.00
1

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years

*Excel worksheet is enclosed in appendix

The ideal ratio could be 2-3 times, but here we can see the excessive increase in the ratio, which may
indicate the company is not using their current asset well. They can invest the idle money in any
profitable site or in marketable securities to earn more revenue.

Page | 26

4.3.3 Analysis of Activity

Activity ratios are used to measure the efficiency of a firm based on its use of its assets, leverage or
other balance sheet items. These ratios are important in determining whether a company's management
is efficient or not. Companies will typically try to turn their production into cash or sales as fast as
possible because this will generally lead to higher revenues.

4.3.3.1 Inventory Turnover

Inventory turnover ratio is an activity measurement ratio which shows how many times a company's
inventory is sold or used and replaced over a specific period of time. We can see the following trend
year by year.

Inventory Turnover Trend

6.90
6.80

Times (X)

6.70
6.60
6.50
6.40
6.30
6.20
6.10
1

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years

*Excel worksheet is enclosed in appendix

We can clearly see here a very decent curve for Orion Power which is going upward year after year that
reflects the inventory is high moving, high sales volume and high demand for the product. But we have a
limitation here; the turnover rate is different for specific industries. But comparing with other sister
concern of Orion, we can say the turnover rate is respectable.
Page | 27

4.3.3.2 Receivables Turnover

Receivables Turnover is a ratio which measures the efficiency of a company in terms to using its assets.
This ratio also helps to find the effectiveness in operating credits and collecting the debts. For Orion Ill
be using Total Sales in terms of Total Sales. Following are the measurement of Orion Power.

Receivables Turnover Trend

46.00

Times (X)

44.00
42.00
40.00
38.00
36.00
34.00
1

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years

*Excel worksheet is enclosed in appendix

We got here, a very high rate of Turnover Rate which implies that the companys extension of credit and
collection of accounts receivable is efficient. From the beginning of the project in 1st to 10th year it was
very efficient in terms of maintaining proficient rate of Receivables Turnover rate, but from 12th year
here is a nose dive in the curve which implies the company should re-assess its credit policies in order to
ensure the timely collection of imparted credit that is not earning interest for the firm.

Page | 28

4.3.3.3 Payables Turnover

Payable turnover is an activity measurements tool which can say to the shareholders how many times a
company pays-off its payables in a specific period of time. Following workings are for Orion Power.

Payables Turnover Trend

4.70
4.60
Times (X)

4.50
4.40
4.30
4.20
4.10
4.00
1

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years

*Excel worksheet is enclosed in appendix

Here we can see a very efficient rate of payable turnover which reflects to the investors & creditors that
Orion pays-off its debts in time and has a very low possibility of default. On the other hand the curve is
decreasing gradually this indicates that the company is paying its suppliers more slowly, and may be an
indicator of worsening financial condition.

Page | 29

4.3.3.4 Asset Turnover

This activity measurement ratio measures a firm's efficiency at using its assets in generating sales or
revenue. It explains the amount of sales or revenues generated per dollar of assets. The Asset Turnover
ratio is an indicator of the efficiency with which a company is deploying its assets.

Asset Turnover Trend

0.60

Times (X)

0.50
0.40
0.30
0.20
0.10
1

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years

*Excel worksheet is enclosed in appendix

Orion Power is not to be experienced a good turnover from the beginning of the project, and also
gradually the curve going down which may indicate the company is not utilizing its asset well to
generate sales. We have seen a huge dive of more than 25% at the 12th to 14th year where the rate has
gone down drastically and following the downward turn in following years as well.

Page | 30

4.3.3.5 Time Interest Earned

The TIE ratio measures the ability of a company to pay off its debt obligations. If a company failed to
achieve the desired score, the ultimate destination could be a bankruptcy. Similarly if the ratio is too
high then we can say the company has lack of debt or the company is paying off the obligation too early.

TIE Trend
70.00
60.00
Times (X)

50.00
40.00
30.00
20.00
10.00
1

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years

*Excel worksheet is enclosed in appendix

At the beginning of the project we can see a decent TIE ratio here which indicates, Orion is very much
able to pay off its debt obligations. The trend is going upward aggressively year by year afterwards, this
does not indicating any bad news but the company has paid off its major debt principle so the company
is not paying much interest to finance its operations.

Page | 31

4.3.4 Analysis of Profitability

Profitability Ratios are generally used to assess a business's ability to generate earnings compared to its
expenses and other relevant costs incurred during a specific period of time. For most of these ratios,
having a higher value relative to a competitor's ratio indicates that the company is doing well.
4.3.4.1 Return on Investment/Asset
This ratio indicates how profitable a company is compared to its total assets or investment. ROI/ROA
gives an idea as to how efficient the management is at using its assets to generate earnings. Following
analysis shows Orion Powers ROI/ROA.

ROI/ROA Trend
14.00%

Percentage

12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
1

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years

*Excel worksheet is enclosed in appendix

Here ROI curve is showing pretty smooth movement for Orion Power, where the percentage of return
was increasing about 40-50% each year, but from 13th year we got a downward turn showing just
opposite movement in the curve and then steady till end of the project life. This is because of Corporate
Tax payment. At 16th Year the company is started paying 37.50% Tax to Government after enjoying 15
years of Tax Relaxation period. After starting paying off tax obligation, the company has steady ROI
which may indicate a stable condition for the project.
Page | 32

4.3.4.2 Gross Profit Margin

This GM Ratio represents the percentage of gross profit earned from net sales. It is used to assess a firm's
financial health by finding the proportion of money left over from revenues after deducting the cost of
goods sold. A respectable ratio reflects the ability of the company to retain on each penny of sales to
cover its other obligations and expenses.

Gross Margin Trend

60.00%

Percentage

50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
1

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years

*Excel worksheet is enclosed in appendix

A very healthy GM ratio here for Orion Power shows growth of 20% on an average in each and every
year. This scenario is good for investors those who are investing their money in the company and also
attractive for potential investors. The steady growth throughout the project life shows companys ability
to generate enough profit to pay its obligations and to pay for shareholders dividends.

Page | 33

4.3.4.3 Net Profit Margin

The profit margin ratio measures what percentage of profit the company earning from the amount of
revenue. A respectable PM ratio indicates the company as a profitable company that has better control
over its costs compared to its competitors.

Profit Margin Trend

35.00%

Percentage

30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
1

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years

*Excel worksheet is enclosed in appendix

Here we can see very sharp and strong growth of about 50-60% each year which will definitely attract
investors to invest but after 15th year, there is a nose dive off the PM curve. In this point, there is no bad
news, the company has enjoyed 15 years Tax relaxation period, and then corporate Tax of 37.50% has
been deducted from the revenue. After including Tax payment, the company is again started achieving
growth which is obviously a good sign.

Page | 34

4.3.4.4 Basic Earning Power

Basic earning power ratio is a measure that calculates the earning power of a business before the effect
of the business' income taxes and its financial leverage. The higher the BEP ratio, the more effective a
company is at generating income from its assets.

BEP Trend
16.00%
14.00%
Percentage

12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
1

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years

Here the condition of Orion Power is very good. The company has its BEP percentage curve growing
upward till 13th years about 10-15% growth each year on an average and enjoying decent rate of 13%
average throughout the project life which indicates the company is efficient in operational activities of
the business and can give investors a good rate of dividend in future.

Page | 35

05. Findings of the Study

After analyzing the proposed exploration, Ive come to an end. To find the viability capital investment
decision and the financial framework, Ive used core capital budgeting tools and financial modeling
tools. In case of capital investment decision, Weighted Average Cost of Capital has been calculated
from the financial modeling considering different sources of finance and then Discounted Cash Flows
has been calculated to get the Discounted Payback Period of 14.81 years which is pretty decent for this
huge investment. I got positive indication of Net Present Value of 742.76 Million Dollars in the given
situation which obviously positive and very acceptable and attractive project to invest. The projects
Internal Rate of Return reflects the similar situation of NPV, Ive got IRR of 15.79% compared to
WACC of 9.21% and to get more pure and intensive result Ive gone through Modified IRR which
results 11.83%, its also higher compared to cost of capital, so the project is indubitably a good one.
Besides those, Ive analyzed the risk associated in capital budgeting by sensitivity and the scenario
analysis. The volatility of NPV, IRR and MIRR has been judged by changing the Revenue and WACC.
In every case Ive found satisfactory results but in one scenario when revenue is 20% down and WACC
is 11.50%, NPV shows a negative turn of -242.82 then the project might not be profitable, but the
probability of this scenario is very rare. So obviously it can be said that the project is indubitably
acceptable.
In the financial framework part Analysis of Liquidity, Analysis of Activity and Analysis of Profitability
has been discussed thoroughly. In Analysis of Liquidity, Net Working Capital and Current Ratio shows
excessive increase in the ratio, which may indicate the company is not using their current asset well.
They can invest the idle money in any profitable site or in marketable securities to earn more revenue. In
Analysis of Activity, Inventory Turnover, Receivables Turnover, Payables Turnover and Asset Turnover
ratios has been discussed. In this part of analysis the companys forecasted performance was remarkable.
In the last but not least, Analysis of Profitability where the Time Interest Earned, Return on
Investment/Asset, Gross Margin, Net Profit Margin and Basic Earning Power Ratio has been analyzed.
From the beginning of the project, weve seen very delightful performance in this part but after 15 th year
the company started to pay corporate tax of 37.50% so we can see a sharp downturn in earnings after tax
from 16th year. But the growth rate was stable as expected and remains attractive investment opportunity
to the potential investors.

Page | 36

06. Conclusions
After analyzing the capital investment decision and projected financial framework, I would like to say
the company is in the right track. It is obvious that the project is going to be very elegant and profitable
for the investors because of its return from investment and the ability to generate wealth. Weve seen the
company has 14.81 years of discounted payback period which relays that the company has 10 more
years to maximize the wealth for stakeholders. In all the capital budgeting analysis cases weve found
positive look. IRR and MIRR show its acceptance signal for the project. On the other hand, the risk of
the project has been measured by sensitivity and scenario analysis and those also indicates to accept the
project.
In financial framework, the only problem is to the management of liquidity. According to the analysis,
the company has more than 35 times of current ratio which is totally obnoxious. It indubitably indicates
the poor display of liquidity controlling. Other than this, activity and profitability measurement analysis
shows its class, those are really good for the company and attractive to the investors. Finally it can be
said that, the project obviously is acceptable and will be profitable for the company and for economy.

07. Recommendations
After exploring and analyzing all of the concerned factors and forces, I can recommend following things
to the project officials:

Restructuring combination of Capital Structure

Must control the excess liquidity

Contracting the reliable sources of raw materials

Hiring a project manager for better control over operation

Making HR planning for the project

Page | 37

08. Bibliography

[01] Bragg, Steven M.; Business Ratios and Formulas, 2nd Edition; John Willy & Sons, Inc. 2007
[02] Bernstein, L. A. & Wild, John J. Analysis of Financial Statements, 5th Edition; McGraw-Hill 2006
[03] Seitz, N. & Ellison, M. Capital Budgeting & Long Term Financial Decisions, 3rd Edition 1998
[04] About Orion, www.orion-group.net; Accessed on 20th March, 2015 at 08:05pm
[05] Orion Group, en.wikipedia.org; Accessed on 20th March, 2015 at 08:25pm
[06] Capital Budgeting Tools, www.helpsme.com; Accessed on 20th March, 2015 at 08:30pm
[07] Making Capital Budgeting Decisions, smallbusiness.chron.com; Accessed on 22nd March, 2015
[08] Definition of Financial Ratios, www.investopedia.com; Accessed on 22nd March to 11th April, 2015
[09] Projects, www.managementparadise.com; Accessed on 23rd March, 2015 at 09:18pm
[10] Financial Ratios, www.accountingtools.com; Accessed on 23rd March to 11th April, 2015
[11] Capital Budgeting Techniques, www.capitalbudgetingtechniques.com; Accessed on 1th April, 2015
[12] Corporate Finance, www.classof1.com; Accessed on 30th March, 2015 at 10:35pm
[13] Business Resources, www.nfib.com; Accessed on 02nd April, 2015 at 11:15pm
[14] Debt & Equity, www.sec.gov.ng; Accessed on 04th April, 2015 at 08:45pm
[15] Financial Planning, askville.amazon.com; Accessed on 06th April, 2015 at 09:11pm

Page | 38

09. Appendix

9.1 PBP, Discounted PBP, NPV & IRR

Years
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
WACC

Cash Flows
(114.71)
(206.90)

(497.07)
88.37
92.71
97.66
103.65
110.36
117.91
126.38
133.83
139.01
147.33
156.26
165.93
176.47
187.90
200.45
214.08
228.90
246.78
266.39
290.00
316.15
342.46
368.44
392.70
3,539.50

Discounted Cash Flows

0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

(114.71)
(206.90)
(497.07)
67.85
65.18
62.87
61.10
59.58
58.28
57.20
55.47
52.76
51.20
49.73
48.35
47.09
45.91
44.85
43.86
42.94
42.39
41.90
41.77
41.70
41.36
40.75
39.77
328.23

Calculations
Payback Period

7.61

Years

Discounted PBP

14.81

Years

Net Prenest Value

IRR

$742.76
15.79%

9.21%

Page | 39

9.2 Modified IRR

Years
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
WACC

Cash Flows
(114.71)
(206.90)

(497.07)
88.37
92.71
97.66
103.65
110.36
117.91
126.38
133.83
139.01
147.33
156.26
165.93
176.47
187.90
200.45
214.08
228.90
246.78
266.39
290.00
316.15
342.46
368.44
392.70
3,539.50
9.21%

Terminal Value

Terminal Value

(114.71)
(189.45)
(416.77)

Calculations
Modified IRR

11.84%

732.12
703.31
678.41
659.27
642.80
628.82
617.15
598.42
569.18
552.35
536.43
521.58
507.95
495.25
483.76
473.09
463.17
457.24
451.95
450.52
449.72
446.07
439.43
428.87
3,539.50
(720.92)

16,526.36

Page | 40

9.3 Sensitivity Analysis

9.3.1 Revenue unchanged with different WACC

Sensitivity Issue: Revenue Unchanged

Years
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043

Cash Flows
(114.71)
(206.90)

(497.07)
88.37
92.71
97.66
103.65
110.36
117.91
126.38
133.83
139.01
147.33
156.26
165.93
176.47
187.90
200.45
214.08
228.90
246.78
266.39
290.00
316.15
342.46
368.44
392.70
3,539.50

Discounted Cash Flows

Terminal Value

(114.71)
(206.90)
(497.07)
67.84
65.17
62.86
61.09
59.57
58.27
57.19
55.45
52.74
51.18
49.71
48.33
47.07
45.89
44.83
43.84
42.92
42.37
41.88
41.75
41.67
41.33
40.72
39.74
327.99

(114.71)
(189.45)
(416.77)

Terminal Value

WACC
Net Prenest Value

732.12
703.31
678.41
659.27
642.80
628.82
617.15
598.42
569.18
552.35
536.43
521.58
507.95
495.25
483.76
473.09
463.17
457.24
451.95
450.52
449.72
446.07
439.43
428.87
3,539.50

9.21%
$742.14

Modified IRR

11.84%

IRR

15.79%

WACC
Net Prenest Value

7.50%
$1,171.79

Modified IRR

11.11%

IRR

15.79%

WACC 9.21%

11.50%

Net Prenest Value

$366.64

Modified IRR

12.91%

IRR

15.79%

Page | 41

9.3.2 Revenue 20% decreased with different WACC

Sensitivity Issue: Revenue 20% Decreases

Years
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043

Cash Flows
(114.71)
(206.90)

(497.07)
27.06
29.61
32.63
36.44
40.82
45.83
51.56
56.44
59.48
65.01
70.99
77.53
84.76
92.68
101.45
111.07
121.59
134.53
148.82
166.26
185.69
205.20
224.41
242.18
3,381.86

Discounted Cash Flows

Terminal Value

(114.71)
(206.90)
(497.07)
20.77
20.82
21.00
21.48
22.03
22.65
23.33
23.39
22.57
22.58
22.58
22.59
22.61
22.63
22.69
22.74
22.80
23.10
23.40
23.93
24.48
24.77
24.80
24.51
313.38

(114.71)
(189.45)
(416.77)

Terminal Value

WACC
Net Prenest Value
Modified IRR

224.17
224.65
226.64
231.80
237.74
244.42
251.78
252.38
243.56
243.72
243.71
243.73
243.96
244.26
244.84
245.44
246.04
249.27
252.48
258.29
264.14
267.28
267.65
264.49
3,381.86

IRR

WACC
Net Prenest Value
Modified IRR

9.21%
$128.83
9.56%
10.33%

7.50%
$408.51
9.03%

IRR

10.33%

WACC 9.21%

11.50%

Net Prenest Value

($101.94)

Modified IRR

10.37%

IRR

10.33%

Page | 42

9.3.3 Revenue 20% increased with different WACC

Sensitivity Issue: Revenue 20% Increases

Years
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043

Cash Flows
(114.71)
(206.90)

(497.07)
149.67
155.80
162.69
170.85
179.91
189.99
201.20
211.21
218.54
229.64
241.52
254.32
268.18
283.13
299.45
317.10
336.20
359.02
383.96
413.74
446.61
479.72
512.47
543.21
3,697.15

Discounted Cash Flows

Terminal Value

(114.71)
(206.90)
(497.07)
114.91
109.53
104.73
100.70
97.10
93.89
91.05
87.52
82.92
79.78
76.83
74.08
71.53
69.15
66.97
64.93
63.04
61.64
60.36
59.56
58.87
57.90
56.64
54.97
342.60

(114.71)
(189.45)
(416.77)

Terminal Value

WACC
Net Prenest Value

1,240.07
1,181.97
1,130.18
1,086.75
1,047.87
1,013.23
982.52
944.46
894.81
860.98
829.15
799.44
771.94
746.24
722.68
700.74
680.30
665.21
651.41
642.75
635.30
624.85
611.22
593.24
3,697.15

9.21%
$1,355.44

Modified IRR

13.29%

IRR

21.35%

WACC
Net Prenest Value

7.50%
$1,935.08

Modified IRR

12.48%

IRR

21.35%

WACC 9.21%

11.50%

Net Prenest Value

$835.21

Modified IRR

14.47%

IRR

21.35%

Page | 43

9.4 Financial Framework

9.4.1 Analysis of Liquidity

Years

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

Current Assets
Current Liabilities

67.35
44.50

67.41
45.33

74.84
46.22

90.64
47.17

115.55
48.16

150.37
49.20

205.42
50.28

270.16
51.27

323.13
52.12

370.14
53.26

421.16
54.44

455.47
55.67

Net Working Capital

22.85

22.08

28.61

43.47

67.39

101.18

155.14

218.89

271.02

316.88

366.72

1.51

1.49

1.62

1.92

2.40

3.06

4.09

5.27

6.20

6.95

7.74

Current Ratio

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

548.07
56.95

719.55
58.27

904.91
59.65

1,044.16
61.08

1,197.87
62.58

1,362.81
64.21

1,540.00
65.93

1,732.02
67.81

1,940.40
69.80

2,165.16
71.84

2,406.07
73.89

2,661.97
75.87

2,934.97
78.03

399.79

491.12

661.28

845.27

983.08

1,135.29

1,298.59

1,474.07

1,664.21

1,870.59

2,093.32

2,332.18

2,586.10

2,856.94

8.18

9.62

12.35

15.17

17.09

19.14

21.22

23.36

25.54

27.80

30.14

32.56

35.09

37.61

9.4.2 Analysis of Activity

Years

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

221.32
34.67

226.06
35.36

230.93
36.07

235.92
36.79

241.03
37.53

246.27
38.28

251.66
39.04

257.18
39.82

262.82
40.62

268.62
41.43

274.58
42.26

6.38

6.45

6.46

6.47

6.48

6.49

6.50

6.51

6.52

6.53

6.55

306.54
6.88

315.47
7.07

325.17
7.31

336.03
7.59

347.73
7.90

360.39
8.24

374.10
8.63

386.94
8.88

397.64
8.96

411.60
9.35

Receivables Turnover

44.58

45.25

45.24

45.11

44.89

44.64

44.35

44.22

44.58

Purchase Cost of Coal

Payables

203.93
44.50

208.01
45.33

212.17
46.22

216.42
47.17

220.74
48.16

225.16
49.20

229.66
50.28

234.26
51.27

4.58

4.63

4.63

4.63

4.63

4.63

4.62

306.54
891.28

315.47
858.60

325.17
833.28

336.03
816.34

347.73
808.49

360.39
810.57

0.34

0.37

0.39

0.41

0.43

EBIT
55.62
Annual Interest Expense 39.01

59.96
49.83

64.91
47.49

70.90
45.15

1.20

1.37

1.57

Cost of Sales
216.73
Stock of Fuel (Inventory) 33.99
Inventory Turnover

Net Sales
Receivables

Payables Turnover

Net Sales
Total Assets
Asset Turnover

Time Interest Earned

1.43

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

280.65
43.11

286.79
43.97

293.09
44.85

299.55
45.74

306.17
46.66

313.00
47.59

320.01
48.54

327.25
49.52

334.70
50.51

342.39
51.52

350.27
52.55

358.43
53.60

366.84
54.67

6.56

6.58

6.59

6.60

6.61

6.63

6.64

6.66

6.67

6.69

6.71

6.73

6.75

6.78

426.33
9.76

441.95
10.20

458.57
10.67

476.15
11.18

494.99
11.73

515.08
12.32

536.52
12.96

561.22
13.72

587.85
14.54

618.70
15.52

652.30
16.60

686.30
17.68

720.16
18.76

752.58
19.74

788.23
20.88

44.96

44.63

44.29

43.94

43.57

43.21

42.83

42.44

42.07

41.60

41.16

40.62

40.04

39.52

39.09

38.82

238.94
52.12

243.72
53.26

248.59
54.44

253.57
55.67

258.64
56.95

263.81
58.27

269.09
59.65

274.47
61.08

279.96
62.58

285.56
64.21

291.27
65.93

297.09
67.81

303.04
69.80

309.10
71.84

315.28
73.89

321.58
75.87

328.02
78.03

4.61

4.62

4.63

4.62

4.61

4.59

4.58

4.56

4.55

4.53

4.50

4.48

4.44

4.40

4.36

4.33

4.29

4.26

374.10
832.87

386.94
864.86

397.64
885.09

411.60
899.35

426.33
917.62

441.95
919.18

458.57
979.03

476.15
1,117.77

494.99
1,270.38

515.08
1,376.88

536.52
1,497.85

561.22
1,630.04

587.85
1,774.48

618.70
1,933.75

652.30
2,109.38

686.30
2,301.40

720.16
2,509.56

752.58
2,732.72

788.23
2,972.97

0.44

0.45

0.45

0.45

0.46

0.46

0.48

0.47

0.43

0.39

0.37

0.36

0.34

0.33

0.32

0.31

0.30

0.29

0.28

0.27

77.62
42.81

85.16
40.48

93.63
38.15

101.08
35.81

106.26
33.30

114.58
28.55

123.51
23.20

133.18
15.16

143.72
9.22

155.16
7.74

167.70
6.47

181.34
5.22

196.15
5.01

214.03
5.14

233.64
5.27

257.25
5.42

283.40
5.58

309.72
5.75

335.69
5.91

359.95
6.07

387.19
6.24

1.81

2.10

2.45

2.82

3.19

4.01

5.32

8.78

15.59

20.05

25.90

34.72

39.18

41.66

44.30

47.42

50.75

53.89

56.79

59.30

62.03

Page | 44

9.4.3 Analysis of Profitability

Years

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

6.57
891.28

0.35
858.60

7.35
833.28

15.35
816.34

24.04
808.49

33.52
810.57

53.26
832.87

62.66
864.86

70.05
885.09

82.59
899.35

96.30
917.62

113.30
919.18

129.12
979.03

141.52
1,117.77

154.78
1,270.38

105.67
1,376.88

114.69
1,497.85

125.34
1,630.04

137.02
1,774.48

151.10
1,933.75

166.69
2,109.38

182.38
2,301.40

197.87
2,509.56

212.33
2,732.72

228.57
2,972.97

0.74%

0.04%

0.88%

1.88%

2.97%

4.14%

6.40%

7.25%

7.91%

9.18% 10.49% 12.33% 13.19%

12.66%

12.18%

7.67%

7.66%

7.69%

7.72%

7.81%

7.90%

7.92%

7.88%

7.77%

7.69%

Gross Profit
Net Sales

89.81
306.54

94.15
315.47

99.11
325.17

105.10
336.03

111.81
347.73

119.36
360.39

127.83
374.10

135.28
386.94

140.46
397.64

177.92
458.57

189.35
476.15

201.90
494.99

215.53
515.08

230.35
536.52

248.23
561.22

267.83
587.85

291.45
618.70

317.60
652.30

343.91
686.30

369.89
720.16

394.15
752.58

421.38
788.23

Gross Profit Margin

29.30% 29.85% 30.48% 31.28% 32.16% 33.12% 34.17% 34.96% 35.32% 36.15% 36.99% 37.87% 38.80%

39.77%

40.79%

41.84%

42.93%

44.23%

45.56%

47.11%

48.69%

50.11%

51.36%

52.37%

53.46%

Net Income
Net Sales

6.57
306.54

0.35
315.47

7.35
325.17

15.35
336.03

24.04
347.73

129.12
458.57

141.52
476.15

154.78
494.99

105.67
515.08

114.69
536.52

125.34
561.22

137.02
587.85

151.10
618.70

166.69
652.30

182.38
686.30

197.87
720.16

212.33
752.58

228.57
788.23

2.14%

0.11%

2.26%

4.57%

6.91%

4.00% 28.16%

29.72%

31.27%

20.51%

21.38%

22.33%

23.31%

24.42%

25.55%

26.57%

27.48%

28.21%

29.00%

55.62
891.28

59.96
858.60

64.91
833.28

70.90
816.34

77.62
808.49

143.72
979.03

155.16
1,117.77

167.70
1,270.38

181.34
1,376.88

196.15
1,497.85

214.03
1,630.04

233.64
1,774.48

257.25
1,933.75

283.40
2,109.38

6.24%

6.98%

7.79%

8.69%

9.60% 10.51% 11.24% 11.69% 12.01% 12.74% 13.46% 14.49% 14.68%

13.88%

13.20%

13.17%

13.10%

13.13%

13.17%

13.30%

13.44%

13.46%

13.38%

13.17%

13.02%

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

Net Income
Total Assets
Return on Investment

Net Profit Margin

EBIT
Total Assets
Basic Earning Power

33.52
360.39

53.26
374.10

62.66
386.94

70.05
397.64

148.77
411.60

82.59
411.60

157.71
426.33

96.30
426.33

9.30% 14.24% 16.19% 17.62% 20.06% 22.59%

85.16
810.57

93.63
832.87

101.08
864.86

106.26
885.09

114.58
899.35

123.51
917.62

167.37
441.95

113.30
441.95

133.18
919.18

309.72
335.69
359.95
387.19
2,301.40 2,509.56 2,732.72 2,972.97

9.4.4 Combination of Capital Structure

Years

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

Equity
Long-Term Debts

171.34
668.21

171.34
633.94

171.34
599.68

171.34
565.41

171.34
531.14

171.34
496.87

171.34
462.61

171.34
428.34

171.34
374.75

171.34
301.84

171.34
218.62

171.34
100.93

171.34
25.00

171.34
15.00

171.34
5.00

171.34
-

171.34
-

171.34
-

171.34
-

171.34
-

171.34
-

171.34
-

171.34
-

171.34
-

171.34
-

Capital Employed

839.55

805.28

771.01

736.74

702.48

668.21

633.94

599.68

546.09

473.18

389.96

272.26

196.34

186.34

176.34

171.34

171.34

171.34

171.34

171.34

171.34

171.34

171.34

171.34

171.34

% of Debt Financing

80%

79%

78%

77%

76%

74%

73%

71%

69%

64%

56%

37%

13%

8%

3%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

% of Equity Financing

20%

21%

22%

23%

24%

26%

27%

29%

31%

36%

44%

63%

87%

92%

97%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Page | 45

Letter of Appreciation to Orion HR

23rd April 2015

FAISAL R FERDOUS
Manager
Human Resource Management
Orion Group
Orion House, 153-154 Tejgaon I/A
Dhaka 1208, Bangladesh

Dear Sir,
I want to thank you for giving me the opportunity and to select as an intern candidate in your
organization. My time with the company has been very exciting. I can certainly see why our clients are
so interested in all the available types of services you offer. The intern role provided me with a lot of
great experiences. I truly have enjoyed my time here.
My mandatory internship period of 10 weeks required by my university has ended in 15th April 2015.
Im departing your organization with a great deal of capability which will definitely have an impact on
my career. I want to thank you again and wish you the best of luck and look forward to hearing great
things about your company.

Sincerely

MD ZABER TAUHID ABIR

Internee

Page | 46

Curriculum Vitae

MD. ZABER TAUHID ABIR

Date of Birth
E-Mail
Phone

: 23rd October, 1990

: zt.abir@gmail.com
: 0177 88 166 76

Citizenship
Address

: Bangladeshi
: 376/1 Jahanara Villa (A2)
Mirpur 10, Dhaka 1216, Bangladesh

Career Objectives

To develop a promising role in the organization with career growth opportunities.

To apply my knowledge and skills in a best possible way to achieve the organizational goals.
To face and to solve arising challenges in an effective manner.

Education
Master in Business Administration
Major in Finance
American International University-Bangladesh (AIUB)

CGPA: 3.98 in scale of 4.00

Bachelor in Business Administration

Major in Accounting & Finance
American International University-Bangladesh (AIUB)

CGPA: 3.97 in scale of 4.00

HSC (Department of Business)

Gazipur Cantonment College
Dhaka Board, 2009

GPA : 4.60 in scale of 5.00

SSC (Department of Business)

Gazipur Cantonment Board School
Dhaka Board, 2007

GPA : 4.38 in scale of 5.00

Achievements
1. The honor of Summa Cum Lau De and Gold Medal for remarkable academic performance in
Bachelor Degree.
2. Academic scholarship during graduation.
3. Certified Participant and Winner in Say Yes for Children by UNICEF 23rd January, 2002.
Page | 47

Experience
Navana Limited, Toyota Finance & Accounts Department.
Internship for BBA Program: 11th May 2013 to 31st August 2013
Orion Group Department of Finance OPDL
Internship for MBA Program: 3rd February 2015 to 15th April 2015

Academic Reports & Papers [Publicly available in www.academia.edu]

Short-Term Liquidity Analysis: Square Pharmaceuticals, Renata Pharmaceuticals

ALTMANS Z-Score Analysis: ACI Limited

Marketing Mix Analysis & Competitors Evaluation: A study on Abdul Monem Ltd. Bangladesh

Cultural Issues Relevant to the International Business Operating in Bangladesh

The Global Financial Crisis: Above & Beyond

Report On Product Strategy, Branding Strategy & Comparative Position in the Market

Skills

Fluent in English, speaking and writing

Proficient in Computing, including- Microsoft Office (Word, PowerPoint, Excel).

Programming experience in Visual Studio 2010

Working experience on Tally. ERP 9 by Institute of Professional Development Programs, IPDP

Working experience on SPSS 17

Strengths

Self-motivated

Trustworthy

Quick learner

Extrovert

Dedicated

Energetic

Leadership ability

Adaptability

MD. ZABER TAUHID ABIR

Page | 48

Please Contact for any Quarry

MD. ZABER TAUHID ABIR
zt.abir@gmail.com
Page | 49