Kamal Pvc Industries Pvt Finance Essay

The area in the finance of dealing with the decisions on monitory grounds is identified as corporate finance. Maximize shareholder value is the primary object of corporate finance. The decisions and techniques can be long term or short term. The long term decisions are pertaining to capital investment which consist with equity or debt financing and when or whether payment of dividends to shareholders. Decisions deal with current assets and current liabilities such as managing inventories, cash and short term lending and borrowing are focused by short term decisions. Raise capital as appropriate by evaluating the company's financial needs that best fit to the needs, grow, develop, create and acquire businesses based on that, is corporate finance which also associate with investment banking.

Kamal (PVC) Industries (Pvt) Ltd (KPL)

The company founded in 1982 as a PVC pipe manufacturer producing limited range of pipes with one injection molding machine and single extruder and a small number of operators and resources. In 1985 added another two extruder machines and a PVC mixing plant to enhance the production capacity. The range of products with KTK brand was established in the market with a good reputation for high quality. In late 1990s further expanded the production process by investing on sophisticated machinery in the entire process. They were awarded with ISO 9001-2000 quality certificate for the range of products.

Presently introduced with a wide range of products such as agricultural pipes in HDPE, irrigation drip pipes, electrical trunking and rain water gutters in PVC.A Now the company is in the capacity of manufacturing pipes in large diameter to cater the requirement of National Water Supply Department and considerable market share gained in the PVC pipe industry.

The company intends to further expand the product range to cover pressure pipes with large diameter and sewerage fittings by offering complete solution to water and waste water projects.

By implementing 5S practices in the work flow company has improved the productivity and steps taken to ensure safety of products and quality up to standards of national and international.

Models & Concepts

Share Holder Value

Discuss about the management decision which grow earnings, dividend and share price of the company that affects the ability to increase the cash flow and deliver value to share holders over a period.

Valuation

Discuss about the dividend valuation model which value of the firm's share capital

Cost of capital

Discuss about the beta value of the company and provide firm's overall cost of capital. Calculating cost of debt, cost of capital and weighted average cost of capital (WACC) are also discussed by the author.

Financial Statement Analysis

Calculated firm's all possible ratios such as short term solvency, long term solvency, activities and profitability and changes.

Performance indicators of the company

Used the following performance indicators to assess the general and financial standing of the company.

Growth Measure - Compounded Annual Growth Rate of Total Assets (CAGRTA)

Profitability Measure - ROA

Profit Margin Measure - NPM

Asset Utilization Measure - Sales-to-Asset Ratio (STA)

Risk Measure - Variance of ROA (VROA)

Tobin's Q Ratio

Total Sales

Earnings per Share (EPS)

EPS = {PAT / n}, 'n'= number of equity shares

Market Capitalization = MV per Share * n

Book Value of Equity (BV) = {Net Worth / n}

Price-to-Earnings Ratio (P/E Ratio)

P/E Ratio = Market Price per Share / EPS = Market Capitalization / PAT

Price-to-Book Value Ratio (P/BV Ratio)

P/BV Ratio = Market Value per Share / Book Value per Share = Market Capitalization / Net Worth

Following table contains some of the above ratios of Kamal PVC Industries (Pvt) Limited 

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