1. BY NAVEEN KUMAR DUTTA
MBA (FINANCE),FINANCIAL MODELING

2. Assumptions - Bus
Cost of
Bus 7,500,000
Maintenance / year 10%
Escalation Rate - Maintenance 15%
Life of Bus (years) 4
Deprecation Rate 25%

3. Assumptions - Operating Revenues
 Seating Capacity 35
 Load Factor 50%
 Tariff (Rs./Ticket) 300.00
Escalation Rate - Tariff 10%

4. Assumptions - Operating Costs
 Fuel Efficiency ( Km / L ) 5
Driver Cost (Rs./ Trip) 500
Miscellaneous (Rs. / Trip) 500
Toll Amount (Rs. / Trip) 500

5. Assumptions - General
 Tax Rate 33%
Debt is to be repaid in 4 equal annual
installments at the end of every year
Interest Income 5%
 Diesel rate (Rs./Lit) 42
Diesel Price escalation 15%
Inflation 10%

6. Assumptions - Operating
General Route Mumbai - Pune
Distance (Kms) 155
Estimated Time Hours/Trip 3
 Trips / Day 4

7. Assumptions - Financing
 Debt 75%
 Equity 25%
Interest on Debt 15%
Tenure of loan (years) 4
Cost of Equity 20%

8.  2016 2017 2018 2019 2020
Flag 0 1 2 3 4
Revenue 7,665,000 8,431,500 9,274,650 10,202,115
Other Income
Fuel Costs 1,900,920 2,186,058 2,513,967 2,891,062
Maintenance Expenses 750,000 862,500 991,875 1,140,656
Driver Costs 730,000 803,000 883,300 971,630
Miscellaneous Costs 730,000 803,000 883,300 971,630
Toll Amount 730,000 730,000 730,000 730,000
Cost of Revenues 4,840,920 5,384,558 6,002,442 6,704,978

9. 2016 2017 2018 2019 2020
Gross Pofit / (EBITDA) 2,824,080 3,046,942 3,272,208 3,497,137
Depreciation 1,875,000 1,875,000 1,875,000 1,875,000
Interest Expense 843,750 674,776 480,456 256,988
Profit Before Tax 105,330 497,166 916,752 1,365,149
Income Taxes 34,759 164,065 302,528 450,499
Profit After Tax 70,571 333,101 614,224 914,650

10. 2016 2017 2018 2019 2020
BOP - Debt 5,625,000 5,625,000 4,498,507 3,203,041 1,713,254
Int Expense 843,750 674,776 480,456 256,988
EAI 1,970,243 1,970,243 1,970,243 1,970,243
EOP - Debt 4,498,507 3,203,041 1,713,254 (0)
Principle Repaid 1,126,493 1,295,466 1,489,786 1,713,254
LINKED TO BALANCE
SHEET IN ” EXCEL”

11. 2016 2017 2018 2019 2020
Assets
Cash 819,078 1,731,713 2,731,151 3,807,546
PPE, Gross 7,500,000 7,500,000 7,500,000 7,500,000 7,500,000
Acc Depreciation - 1,875,000 3,750,000 5,625,000 7,500,000
PPE, Net 7,500,000 5,625,000 3,750,000 1,875,000 -
Total Assets 7,500,000 6,444,078 5,481,713 4,606,151 3,807,546

12. Liabilities
Debt 5,625,000 4,498,507 3,203,041 1,713,254 (0)
Equity 1,875,000 1,875,000 1,875,000 1,875,000 1,875,000
Retained Profit 70,571 403,672 1,017,896 1,932,546
Total Liabilities 7,500,000 6,444,078 5,481,713 4,606,151 3,807,546
LINKED TO DEBT
SCHEDULE

13. 2016 2017 2018 2019 2020
Net Income (PAT) 70,571 333,101 614,224 914,650
Depreciation 1,875,000 1,875,000 1,875,000 1,875,000
Cash Flow From Operations - 1,945,571 2,208,101 2,489,224 2,789,650
Capex (7,500,000)
Cash Flow from Investing (7,500,000) - - - -
Debt (Repayment)/Issuance 5,625,000 (1,126,493) (1,295,466) (1,489,786) (1,713,254)
Equity Addition 1,875,000
Cash Flow from Financing 7,500,000 (1,126,493) (1,295,466) (1,489,786) (1,713,254)
Net change in Cash - 819,078 912,635 999,437 1,076,395
Cash - BOP 819,078 1,731,713 2,731,151
Cash - EOP 819,078 1,731,713 2,731,151 3,807,546

14. 2016 2017 2018 2019 2020
Net Income - 70,571 333,101 614,224 914,650
+ Depreciation - 1,875,000 1,875,000 1,875,000 1,875,000
- Capital Expenses (7,500,000) - - - -
- Debt Repayment/+ raised 5,625,000 (1,126,493) (1,295,466) (1,489,786) (1,713,254)
Cash Flow to Equity (1,875,000) 819,078 912,635 999,437 1,076,395

15. 2016 2017 2018 2019 2020
FCFE (1,875,000) 819,078 912,635 999,437 1,076,395
Cost of Equity 20.0%
NPV 538,813
IRR 33.80%

16. Financing Debt (%) - For Neutral Case
InterestRate(%)
34% 10% 25% 40% 55% 95%
12% 17.4% 19.2% 21.8% 26.0% 129.0%
13% 17.3% 19.0% 21.4% 25.3% 121.5%
14% 17.3% 18.8% 21.0% 24.6% 113.8%
15% 17.2% 18.6% 20.6% 23.9% 105.9%
16% 17.1% 18.4% 20.2% 23.1% 97.9%
17% 17.1% 18.2% 19.8% 22.4% 89.7%