MDE 1113 Financial Analysis PMA

POST MODULE ASSIGNMENT
MASTER OF SCIENCE (ENGINEERING BUSINESS MANAGEMENT)
TOPIC: BUSINESS PLAN
Module Name : FINANCIAL ANALYSIS

Module ID : MDE 1113
Module Lecturer : DR. ROHAIDA BASIRUDDIN
Student Name : Tan Chan Yee
Student IC : 831126-02-5949
Student ID : KL MD121002
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UTM Razak School of Engineering and Advanced Technology
UTM International Campus,
Jalan Semarak, 54100 Kuala Lumpur
TABLE OF CONTENT
NO
ITEM
PAGE
EXECUTIVE SUMMARY
GENERAL COMPANY DESCRIPTION

Mission Statement
Vision Statement
Objective
Goals
Company History
Company Ownership
Company Location and Facilities
2.1
2.2
2.3
2.4
2.5
2.6
2.7
PRODUCT
Product Description
Services
Competitive Comparison
Entry Barriers and Strategies to Overcome
3.1
3.2
3.3
3.4
MARKETING PLAN
Marketing Analysis Summary
Market Segmentation
Target Market Segment Strategy
Market Trend
SWOT Analysis
Competition Edge
11
4.1
4.2
4.3
4.4
4.5
4.6
PRODUCT DEVELOPMENT STRATEGY

Material and Labour
Facilities and Equipment
18
5.1
5.2
MARKETING STRATEGY
Marketing Mix
Marketing Research
Market Segmentation
19
FINANCIAL PROJECTION
Proforma Profit & Loss Accounts
Projection of Taxations & Tax Shields
Projection of Cash Flow
Proforma Balance Sheet
Sensitivity Analysis
22
CONCLUSION
APPENDICES
30
31
1
2
6
6.1
6.2
7
7.1
7.2
7.3
7.4
7.5
8
9
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1. Executive Summary
Green Lightning Consultancy has established a strong foothold in a niche technology market for
green solution to the Mechanical & Electrical Consultants and Commercial & Factory Owner.
The company CEO plans to research and develop more green solution to the customer and
expand the market share to South East Asia by end of 2015. So that he drive the engineering
department to come out with creative idea in order to gain more reputation internationally.
Green Lightning Consultancy currently led by Desmond Tan which triggered his idea on last five
years which is service based company previously. He had able to source his company career
advancement by included Michael Yip and Stephen Hii in to his management profile. Desmond
Tan, CEO cum Technical Advisor of the company are still actively advice his Technical
department which led by Technical Manager if they still have doubt on the process and solution.
Michael Yip is now aggressively targeting the M&E Consultants as he has a very huge network
among the consultants. Stephen Hii however will be targeting end user consumers that willing to
be environmentally conscious group. Through a combination of Sales, Marketing, and Technical
management team, Green Lightning Consultancy will be able to successfully execute on its
business plan.
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2. General Company Description
2.1 Mission Statement

Green Lightning Consultancys mission is to Converting the Energy Research into Expertise
Solution.
2.2 Vision Statement

As part of business in Green Energy Solution, our vision:
1. To convert the lightning strike into energy foam to provide electricity power to the
industry.
2. To offer alternative green solution to the customer
3. To assist WWF and WNO to achieve their target in greener environment
2.3 Objectives
Green Lightning Consultancy had defined THREE major key to success in the industry
1. Build branding awareness among the industry in shortest period of time
2. Provide 100% satisfaction among consumer; target of 0% complaints
3. Expand the business to South East Asia by end of year 2015
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2.4 Goals
Green Lightning Consultancy has identified THREE keys to its success.
1. The first is to research and develop more green solution to the customer. However, we
only research solution that fulfills the need which is based on market demand.
2. The second is to ensure that all of its offerings are based on economic justifications; the
solution should make sense beyond the environmental considerations because it has longterm economic value.
3. The third is to be targeting M&E Consultants and individual consumers. We will work
closely with M&E Consultants providing them the ability to offer green environmental
solutions to their customers. This group is highly grown at Penang, Klang Valley and
Johor Bahru area. The second customer group is individual consumers; an
environmentally conscious group that have sought out a service provider to help them
implement their personal ethics into the design of their new or existing structure. This
segment we will also target to expand the market share to South East Asia by end of 2015.
2.5 Company History

Green Lightning Consultancy was solely service based company for the past five years. However,
since the government bodies had recently concentrated in Green Building Index (GBI). Our
company currently had emphasis more to design consulting to Mechanical &Electrical Engineers
Consulting Firms and new factories owner who are interested in new environmental sound
factories.
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2.6 Company Ownership

Green Lightning Consultancy was partnership among THREE young stakeholders; Desmond
Tan, Stephen Hii and Michael Yip who are eager to build up a new company and contribute to
the government policies on Green Building. Desmond act as CEO cum Technical Director of the
company; Stephen act as Sales Director of the company and Michael act as Marketing Director
of the company.
2.7 Company Location and Facilities

Green Lightning Consultancy presently operates from Single lot of Factories lot located in Port
Klang (North Port), Selangor. All manufacturing is out-sourced to contract manufacturers. We
are the sole-distributors to products that we are selling. However, we will soon have a team of
research and development team to develop on new equipment which act towards green
environment.
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3. Product
Lightning Energy Converter is a comprehensive system completed with at least one or more
Lightning Arrester installed on top of the roof of the factory, attached with Rectifier (Convert
AC to DC) and Capacitor Bank to store the energy. Earth Resistance is a key important point
whereby need to be less than 5 ohm.
3.1 Product Description
Early Streamer Emission (ESE) Lightning Arrester/Conductor is designed on a specific initiation

advance; well before the natural formation of an upward leader, able to generate an upward
leader that rapidly propagates to capture the lightning in certain specific radius and direct it to
earth. During a storm the ambient electric filed may rise to between 10 to 20 kV/m. As soon as
Page |7
the field exceeds a threshold representing the minimum risk of a lightning strike, the lightning
terminal is activated. It draws its energy from the ambient electric field the energy required to
generate high voltage pulses, creating and propagating an upward leader. No other power sources
are required, and no radioactive components are used. Besides acting as lightning protection
system, we took this opportunity to attract the lightning strike and convert it into energy source
to supply electricity to the factory.
For conversion of an alternating current (AC) input into a direct current (DC) output, a bridge
rectifier is the most suitable device to be used. Normally, arrangement of four diodes in a bridge
circuit configuration that provides the same polarity of output for either polarity of input will be
configured. An addition of a capacitor may be desired inside the system because the bridge alone
supplies an output of pulsed DC. The function of this capacitor, known as a reservoir capacitor
(or smoothing capacitor) is to lessen the variation in the rectified AC output voltage waveform
from the bridge.
High Voltage Power Capacitors play a key role in the transmission of electrical energy from
Lightning strike and store as a backup to the electrical power system. High voltage power
capacitors also improve the performance, quality and efficiency of electrical systems,
minimizing the power losses, this reducing the environmental load and making them more cost
effective.
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3.2 Services
Green Lightning Consultancy offers a comprehensive solution in terms of providing consultancy
to the Mechanical & Electrical Engineering consulting firms to design on the Lightning Energy
Converter Solution. Between, we also offer consultancy to new or existing factory owner who
are interested in adapting out environmental green solution. Our services is based on a 3G
strategies; whereby stands for Green Management, Green Discussion, and Green Solution.
3.3 Competitive Comparison

1. Outsource Provider 1: The HV Capacitor Bank price is more competitive than when
comparing. However, for the whole solution, we do offer more advantage whereby we are
providing FREE consultation.
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2. Outsource Provider 2: The lightning Arrester/Conductor used is not accordance to NFC

17102 compare to us and are without Early Time Gain certification.
3.4 Entry Barriers and Strategies to Overcome

Awareness of Green Energy among the market is still far behind. Our marketing teams had to
work hard to deliver the knowledge to the consultants and end users. Besides, due to the high
price on the starting to cover the Return of Investments, the investment from the end user is
limited. Our few key major projects are solely specified in through the consultants as we had to
concentrate more on the consultants first.
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4. Marketing Plan
4.1 Marketing Analysis Summary

Green Lightning Consultancy focuses on THREE major market segments. The first group is
Mechanical & Electrical Engineering consulting firms who are designing on environmental
solution either on a new building or new factory structures. The second customer group is Green
Energy Auditors that in-charge in advising building or factory owners to convert their facilities
into green solution. The third customer group is individual existing building or factory owner
who desire environmental elements designed into their building. The niche of Green Lightning
Consultancy faces competition from eco-architects as well as from the local utilities that may
have a small department that offers green energy consultation advice. The industry often operates
to satisfy clients; it is the end customer that typically requests green energy designs and they
either seek out a specific architect or they request their architect to receive guidance from firms
such as Green Power.
4.2 Market Segmentation

Green Lightning Consultancy has segmented its target market segment into THREE different
major customer groups:
Electrical & Mechanical Engineering Consulting Firms (40%)
This customer group is made up of professional Electrical & Mechanical Consultant that designs
Green Environmental Solution for clients. Consultants have developed a strategic relationship
with Green Lightning Consultancy to offer value-added-services for their clients.
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The consultant firms typically have two to twenty Electrical & Mechanical Engineers working
for the design.
Offer both residential and commercial/factory design work, however at least 50% of their work
is commercial/factory design work.
Yearly revenue ranges from RM500,000 to RM5,000,000.
Green Energy Auditors (20%)

This customer group is made up of Green Energy Auditors that in-charge in advising building or
factory owners to convert their facilities into green solution.
The auditor firms typically have one to five Green Energy Auditors working for the consulting
advice.
Normally audit the building or factory once a year for the authority approval.
Also offer service to approve on the building for Green Building Index (GBI) purposes.
Yearly revenue ranges from RM500,000 to RM1,000,000.
Commercial Buildings / Factories Owner (40%)

This segment contains consumers who are either having a commercial building and factories.
Due to their personal environmental concerns and recognition that it can be cost effective to have
building decisions with environmental considerations, they have requested Green Lightning
Consultancy assistance. They are generally working directly with Green Power for their design
needs and will likely then take these design criteria.
The individual is an environmentalist and they take into account how their action will impact the
environment.
P a g e | 12
The age range of clients is normally 35-65.
Average building income is RM3,000,000 per annum. Please note that while the overriding
concern in using Green Lightning Consultancys services is the positive impact on the
environment, a cost benefit analysis indicates that in the long term it is cost effective to adopt
green energy considerations.
Market Analysis
41%
51%
8%
Mechanical & Electrical

Consultant
Green Energy Auditor
Commercial Buildings /
Factories Owner
4.3 Target Market Segment Strategy

Based on chart above, we can summarize that Mechanical & Electrical Consultant (51% of total
market) and Commercial Buildings / Factories Owner (41% of total market) stands very
important role in our business nature. We had decided to concentrate on these two segments and
open more leads to conquer the market. The Mechanical & Electrical Consultant had been
focused on as they are the key person to design on the Green Energy Solution and present to the
developer or client. Commercial Buildings / Factories Owner however will want the
environmental designs make into their existing building to meet the Green Building Index (GBI)
P a g e | 13
certification. These provide Green Lightning Consultancy with a wide market of interested
customers.
4.4 Market Trend

Based on company sales forecast from past years, Green Energy had become a drastic increasing
trend in future. We had target to expand the market share in the best ever way in next few years.
Histogram below shows five years sales forecast, the trend shows positive growth. In order to
have higher market share in next forecast the company needs to produce more attractive and high
quality Green Environmental Solution with extra features.
SALES FORECAST (2013 to 2017)

RM6,000,000
RM5,000,000
RM4,000,000
RM3,000,000
SALES FORECAST
RM2,000,000
RM1,000,000
RM0
2013 2014 2015 2016 2017
P a g e | 14
4.5 SWOT Analysis

SWOT Analysis is the method to identify the capability of the organization by analyze the
environment with strengths, weaknesses, opportunities and threats. Strengths and weaknesses are
internal factors while opportunities and threats are external factors.
Key Internal Factors

STRENGTHS
1. Well known for quality and reliable service with good
reputation and image
2. Strong financial position, balance sheet with very little
debt to increase cash flow
3. Strong management team with loyal employees
4. Long-range planning
5. Financial ratios
6. Factory set up in developing countries to reduces
production cost
7. Strong relationship with consultants and end users
WEAKNESSES
8. Provide many benefits to employees that raise costs
9. Absence of strategic partner to develop different range
of products
10. Lack of R&D in different market segment
11. Price competition with others manufacturer
12. Represent only one solution for Green Environment
Solution
13. Limited access to international markets
TOTAL
Weight
Rating
Weighted
Score
0.09
0.27
0.07
0.14
0.06
0.08
0.07
0.08
4
2
3
3
0.24
0.16
0.21
0.24
0.09
0.27
0.08
0.07
1
3
0.08
0.21
0.08
0.08
0.09
2
3
3
0.16
0.24
0.27
0.06
0.18
1.00
2.67
P a g e | 15
Weight
Rating
Weighted
Score
0.07
0.21
0.10
0.07
4
2
0.40
0.14
0.05
0.20
0.04
0.12
0.06
0.05
0.05
2
2
3
0.12
0.10
0.15
THREATS
9. Competition from others cheaper solution
10. Consumer tends to choose cheaper solution
11. International Currency Variation cause Fluctuations
12. High and increasing operation costs
13. High turnover rate of experience staff
14. High competition and prices for logistic
15. Competition from other regional airlines
0.10
0.07
0.10
0.08
0.04
0.04
0.07
2
3
1
1
3
3
2
0.20
0.21
0.10
0.08
0.12
0.12
0.14
TOTAL
1.00
Key External Factors

OPPORTUNITIES
1. Growing number of end user looking for green
environmental solution
2. Increased demand for new green technologies
3. Venturing with famous international market player for
R&D purposes
4. Increasing manpower to promote on the products
solution
5. Focus on others product possibility for future
expansion
6. Implementing Total Quality Management
7. 24 hours services hotline
8. Consumer expect green business opportunity
COMPETITIVE PROFILE
(CPM)
Critical Success Factor
MATRIX
Weight
Research and Development

Product Quality
Product Design
Price Competitiveness
Customer Loyalty
Global Expansion
Market Share
Management
Sales Distribution
Financial Position
0.10
0.15
0.15
0.10
0.05
0.11
0.11
0.08
0.05
0.10
TOTAL
1.00
Green
Lightning
Rating Score
2
4
3
4
3
1
4
2
4
4
0.20
0.60
0.45
0.40
0.15
0.11
0.44
0.16
0.20
0.40
3.11
2.41
Competitor 1
Competitor 2
Rating
Score
Rating
Score
3
3
1
1
1
4
2
3
3
3
0.30
0.45
0.15
0.10
0.05
0.44
0.22
0.24
0.15
0.30
2
2
2
1
1
3
2
3
2
3
0.20
0.30
0.30
0.10
0.05
0.33
0.22
0.24
0.10
0.30
2.40
2.14
P a g e | 16

4.6 Competition Edge
For Competitor A, they are good in strategic location with a huge factory. The quality of product
and price are competitive with us but lack of advertising of the product too. For Competitor B,
their advantage is on investment of advertising while their weakness is majorly on the expertise
of the products.
P a g e | 17
5. Product Development Strategy
The company product development strategy is to concentrate efforts on the developing on new
more green environmental products to have more options for the consultants design and end user.
Estimated for each new product development will cost at least 2 to 5 years of research and
development.
5.1 Material and labour

Sources the material required around the world especially on the DC motors and Inverter to build
up new product. Engineers and Architects level of labour are needed to ensure the research and
development progress goes fine.
5.2 Facilities and Equipment

In order to make new product research development, we may need to extend the current factory.
The software needed is Solid work and Auto Desk which may assist in developing the 3D type of
product.
P a g e | 18
6. Marketing Strategy
The marketing strategy is based on developing an awareness regarding Green Lightning

Consultancy and Services to both Mechanical & Electrical Consultants and the end user
consumers. Green Lightning Consultancy will strongly use existing networking and browse
through Association of Consulting Engineers Malaysia (ACEM) and Institute Engineers
Malaysia (IEM) to collect the data of Mechanical & Electrical Consultant firms.
We also will cooperate with Suruhanjaya tenaga (ST) to collect the data information from them
on the IEC standards and Green Energy Manager whereby factories need to appoint them when
the electricity reach certain limits.
Besides, we will co-organize with Institute Engineers Malaysia (IEM) to hold seminars and
technical discussion around Malaysia as a means to develop relationships with many of
Mechanical & Electrical Consultants and end users. This will also serve also as a free source of
information for the Building & Factories owner. We strongly believes that participating in the
seminars and exhibition will be an effective way of meeting many of potential leads and
allowing them to be familiar with our expertise in energy conversion/saving solution.
Green Lightning Consultancy will also increase manpower in Research and Development
division to create new innovative product that able to help customer to perform better green
energy solution.
P a g e | 19
6.1 Marketing Mix

Product Strategy
Green Lightning Consultancy promotes the product by maintaining the core function with extra
innovative value added in all new series products.
Product Innovation
Green Lightning Consultancy focus on the innovation of the product that based on customer
needs.
Pricing Strategy
Green Lightning Consultancy offer accretive price to customer with high performance product
with value added function incorporate to the new products.
Promotion Strategy
Green Lightning Consultancy promotes the products using multi dimensional advertisement such
as;
a. Company Website
b. Direct marketing
c. Event Marketing (Seminar / Exhibition )
d. Distribution Strategy
e. Education on Mechanical & Electrical Consultants
P a g e | 20
6.2 Marketing Research

In market research area two main elements are need to cover;
a. Manufacturing of the series of product that have demand by customer and based on voice of
customer. In other word all feedback from customer has to seriously bring to new product for
improvement to achieve high customer satisfaction.
b. Marketing Channel is another important element where the company has to look in deep on
the potential new market segment and study strength point of competitor so marketing team need
to come out with better strategy to compete with competitor.
P a g e | 21
7. Financial Projection
7.1 PROFORMA PROFIT & LOSS ACCOUNTS
GREEN LIGHTNING CONSULTANCY

PROFORMA PROFIT AND LOSS ACCOUNTS ( IN '000 )
TABLE 1
Year
10
Sales volume in unit
5,000,000
5,500,000
6,050,000
6,655,000
7,320,500
8,052,550
8,857,805
9,743,586
10,717,944
11,789,738
Selling price in $ per unit
SALES REVENUES IN RM
Less :
5,000
5,555
6,172
6,857
7,618
8,463
9,403
10,446
11,606
12,894
Variable costs
4,550
4,641
4,734
4,828
4,925
5,024
5,124
5,227
5,331
5,438
Fixed costs
95
100
105
110
115
121
127
134
140
147
TOTAL COSTS OF
PRODUCTION
4,645
4,741
4,839
4,938
5,041
5,145
5,251
5,360
5,471
5,585
Less:Depreciation,land/bildg
200
200
200
200
200
200
200
200
200
200
Depreciation,plant/mac'nery
40
40
40
40
40
40
40
40
40
40
Less: Amortisation expenses
GROSS PROFIT, $000

GROSS PROFIT MARGIN, %
108
2%
568
10%
1,086
18%
1,678
24%
2,337
31%
3,078
36%
3,911
42%
4,846
46%
5,895
51%
7,069
55%
120
126
132
139
146
153
161
169
177
186
Less:
Administration
and
general
expenses
P a g e | 22
Marketing
expenses
150
162
175
189
204
220
238
257
278
300
270
162
288
307
328
350
374
399
426
455
486
280
779
1,350
1,987
2,705
3,513
4,420
5,440
6,583
-3%
5%
13%
20%
26%
32%
37%
42%
47%
51%
Less: Financial charges
98
88
78
69
59
49
39
29
20
10
NET PROFIT BEFORE

TAX,$'000
260
191
701
1,282
1,928
2,656
3,473
4,391
5,420
6,573
Less: Taxation payment
NET PROFIT AFTER TAX,$'000

NET PROFIT MARGIN,%
260
-5%
191
3%
701
11%
1,282
19%
1,928
25%
2,656
31%
3,473
37%
4,391
42%
5,420
47%
6,573
51%
Contribution margin,$'000
Contribution margin in $
per unit of sales
contribution margin ratio,%
450
0.09
914
0.17
1,438
0.24
2,028
0.30
2,693
0.37
3,440
0.43
4,279
0.48
5,220
0.54
6,275
0.59
7,457
0.63
9%
16%
23%
30%
35%
41%
46%
50%
54%
58%
Break-even sales in $'000
7,885
4,392
3,164
2,524
2,162
1,928
1,770
1,659
1,581
1,527
Break-even sales in volume

Break-even capacity,%
Safety margin
7,885,185
98.56%
-37%
4,348,350
54.35%
26%
3,101,464
38.77%
95%
2,449,317
30.62%
172%
2,077,628
25.97%
252%
1,834,900
22.94%
339%
1,667,247
20.84%
431%
1,547,424
19.34%
530%
1,460,202
18.25%
634%
1,396,420
17.46%
744%
TOTAL OPERATING EXPENSES

NET OPERATING PROFIT,$000
OPERATING PROFIT
MARGIN,%
BREAK EVEN
ANALYSIS
P a g e | 23
7.2 PROJECTION OF TAXATIONS & TAX SHIELDS

PROJECTIONS OF TAXATION AND TAX SHIELD ( IN '000 )
TABLE 2
Year
10
NET PROFIT BEFORE TAX,$'000
1
260
191
701
1,282
1,928
2,656
3,473
4,391
5,420
6,573
Add:Depreciation,land/bildg
200
200
200
200
200
200
200
200
200
200
Depreciation,plant/machinery
40
40
40
40
40
40
40
40
40
40
Amortisation
Land/buildg
120
20
20
20
20
20
20
20
20
20
Plant/machinery
80
40
40
40
40
40
40
40
40
40
TAXABLE INCOME,$'000
213
378
887
1,462
2,108
2,836
3,653
4,571
5,600
6,753
Less : Investment tax credit
TAXABLE INCOME AFTER ITC
378
887
1,462
2,108
2,836
3,653
4,571
5,600
6,753
TAXATION,$'000
Less:
Capital allowances
P a g e | 24
7.3 PROJECTION OF CASH FLOW

PROJECTIONS OF CASH FLOW ( IN '000 )
TABLE 3
Year
CASH INFLOW:
10
SALES REVENUES IN RM
5,000
5,555
6,172
6,857
7,618
8,463
9,403
10,446
11,606
12,894
Payment of variable costs
4,550
4,641
4,734
4,828
4,925
5,024
5,124
5,227
5,331
5,438
Payment of fixed costs
95
100
105
110
115
121
127
134
140
147
Pay't of financial charges
98
88
78
69
59
49
39
29
20
10
Pay't of admin.& gen.exp

Pay't of marketing
expenses
120
126
132
139
146
153
161
169
177
186
150
162
175
189
204
220
238
257
278
300
Payment of taxation
Payment of loan
140
140
140
140
140
140
140
140
140
140
2,049
42
7,202
5,299
5,365
5,475
5,589
5,707
5,829
5,956
6,086
6,221
2,202
256
807
1,382
2,028
2,756
3,573
4,491
5,520
6,673
CASH OUTFLOW:
Pay't of production costs

due to increase in
inventory
TOTAL CASH
DISBURSEMENT
NET CASH INFLOW

Add: Cash opening
P a g e | 25
balance
200
2,002
1,746
940
442
2,471
5,226
8,800
13,291
18,811
CASH CLOSING BALANCE
2,002
1,746
940
442
2,471
5,226
8,800
13,291
18,811
25,484
0.71818443
0.60863087
3
0.51578887
5
0.43710921
6
0.37043153
9
0.313925033
0.266038164
0.225456071
0.191064467
184
491
713
887
1,021
1,122
1,195
1,245
1,275
0.93894597
7
0.90983137
3
0.88161954
7
0.85428250
7
0.82779312
7
0.802125123
0.777253026
0.753152157
0.729798602
173
447
628
757
845
900
929
937
931
NET PRESENT VALUE

ANALYSIS
=
Cash outflow in year 0
Salvage values
Cost of capital
( IN '000 )
NPV of net cash inflow
$100
$0.00
18%
0.84745762
7
1,866
Total NPV of project
6,264,738.3
7
Factor of discount
INFLATION DISCOUNT
=
Inflation rate
Factor of discount
NPV of net cash inflow
after discount for cost of
capital and inflation
Total NPV of project
( IN '000 )
3%
0.96899224
8
1,808
5,006,024
P a g e | 26
7.4 PROFORMA BALANCE SHEET

PROFORMA BALANCE SHEET
TABLE 4
Year
10
ASSETS:
Cash on hand
2,002
1,746
940
442
2,471
5,226
8,800
13,291
18,811
25,484
Inventories
2,049
2,091
2,092
2,092
2,092
2,092
2,092
2,092
2,092
2,092
47
345
1,152
2,534
4,563
7,319
10,892
15,383
20,903
27,576
Land & building
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
Less: acc.depreciation
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Plant & machinery
200
200
200
200
200
200
200
200
200
200
Less: acc.depreciation
40
80
120
160
200
240
280
320
360
400
Preoperating expenses
255
255
255
255
255
255
255
255
255
255
Less: acc.amortisation
13
20
20
20
TOTAL FIXED ASSETS:
1,208
962
715
475
235
20
5
20
245
20
485
20
725
20
965
TOTAL ASSETS:
1,255
1,307
1,867
3,009
4,798
7,314
10,647
14,898
20,178
26,611
TOTAL CURRENT ASSETS:
LIABILITY & EQUITY:

Income tax payable
Bank loan
P a g e | 27
106
106
106
106
106
106
106
106
106
106
140
34
34
280
174
174
420
314
314
560
454
454
700
594
594
840
734
734
980
874
874
1,120
1,014
1,014
1,260
1,154
1,154
1,400
1,294
1,294
Shareholders'funds
100
100
100
100
100
100
100
100
100
Opening retained earnings
81
781
2,063
3,992
6,648
10,121
14,512
19,932
191
701
1,282
1,928
2,656
3,473
4,391
5,420
6,573
Ending retained earnings

TOTAL SHAREHOLDERS'
EQUITY
149
260
111
11
100
111
81
781
2,063
3,992
6,648
10,121
14,512
19,932
26,505
181
881
2,163
4,092
6,748
10,221
14,612
20,032
26,605
TOTAL LIABILITIES AND

EQUITY
45
567
1,709
3,498
6,014
9,347
13,598
18,878
25,311
Less: acc.repayment
Net owing to the bank
TOTAL LIABILITIES
Unappropriated earning
FINANCIAL RATIO ANALYSIS

=
ASSETS / LIABILITIES
RETURN ON ASSETS
CURR.ASSETS / LIABILITIES
RETURN ON EQUITY
TOTAL DEBTS / TOTAL
EQUITY
PAY BACK PERIOD
1
-36.92
-20.69
-1.38
2434.38
2
-7.51
14.65
-1.98
105.90
3
-5.95
37.52
-3.67
79.50
4
-6.63
42.59
-5.58
59.25
5
-8.08
40.20
-7.68
47.13
6
-9.96
36.32
-9.97
39.36
7
-12.18
32.62
-12.46
33.98
8
-14.69
29.47
-15.17
30.05
9
-17.49
26.86
-18.11
27.06
10
-20.57
24.70
-21.31
24.71
3.19
-0.39
-0.96
-1.46
-0.36
0.16
-0.21
0.05
-0.15
0.03
-0.11
0.01
-0.09
0.01
-0.07
0.01
-0.06
0.01
-0.05
0.00
P a g e | 28
7.5 SENSITIVITY ANALYSIS

SENSITIVITY ANALYSIS
TABLE 5
Estimate
For
Year 1
-
Fixed
Cost
Up
-
Direct
Cost
UP
-
5,000,000
Selling
Price
Down
-
Sales volume in unit

Selling price in $ per unit
5,000,000
SALES REVENUES IN $'000

Less :
5,000
5,000
5,000
4,500
5,000
Variable costs
4,550
4,550
5,005
4,550
4,550
Fixed costs
$1.00
5,000,000
Operating
Costs
Up
-
$1.00
5,000,000
$1.00
5,000,000
$0.90
$1.00
95
105
95
95
95
TOTAL COSTS OF
PRODUCTION
4,645
4,655
5,100
4,645
4,645
Less:Depreciation,land/bil
dg
200
200
200
200
200
40
40
40
40
40
Depreciation,plant/mac'n
ery
Less: Amortisation
expenses
GROSS PROFIT, $000

GROSS PROFIT
MARGIN, %
Less:
108
Administratio
n and
general
expenses
Marketing
expenses
TOTAL OPERATING
EXPENSES
NET OPERATING
PROFIT,$000
OPERATING PROFIT
MARGIN,%
NET PROFIT BEFORE
7
347
99
0
385
115
2%
2%
-7%
-9%
2%
$120
$120
$120
$120
$132
$150
$150
$150
$150
$165
$270
$270
$270
$270
$297
162
Less: Financial charges
171
617
655
182
-3%
-3%
-12%
-15%
-4%
$98
$98
$98
$98
$98
P a g e | 29
TAX,$'000
NET PROFIT MARGIN,%
BREAK-EVEN ANALYSIS
Contribution
margin,$'000
260
269
-5%
715
-5%
450.00
450.00
Contribution margin in $
per unit of sales
contribution margin
ratio,%
0.09
0.09
Break-even sales in $'000

Break-even sales in
volume
Break-even capacity,%
7,885
9%
5.00
0.00
50.00
0.01
-6%
450.00
0.09
0%
-1%
100%
709,667
709,666,667
-8871%
63,270
70,300,000
-879%
7,990,741
99%
280
-17%
9%
7,991
7,885,185
753
-14%
9%
8,111
8,111,111
101%
8. Conclusion
In future development, company strategies is to move forward to South East Asia by end of year
2015. We had figure out few ideas and strategies that must be developed first before the mission
could be accomplished. The first is on selling back the energy generated by the lightning strike to
the TNB grid for monthly bill deduction. The second is by cooperate more with Suruhanjaya
Tenaga personnel in making this product as compulsory when setting up a new factories or on
the existing factories as well. The third is to communicate with others countries authorities to
educate them on the effectiveness and awareness of the product.
With these few strategies, we strongly believe that we are able to make it throughout the South
East Asia as per expected time.
P a g e | 30
9. APPENDICES
Organizational Chart
CEO
Technical
Director
Project Team
R&D Team
Production
Team
Marketing
Director
Sales Director
Marketing
Team
Sales Team
Account &
Human
Resource
Service Team
P a g e | 31
High Voltage Capacitor Bank Schematic Diagram
P a g e | 32
Lightning Arrestor Schematic Diagram
P a g e | 33

MDE 1113 Financial Analysis PMA

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POST MODULE ASSIGNMENT

MASTER OF SCIENCE (ENGINEERING BUSINESS MANAGEMENT)

TOPIC: BUSINESS PLAN

Module Name : FINANCIAL ANALYSIS

GENERAL COMPANY DESCRIPTION

PRODUCT DEVELOPMENT STRATEGY

2. General Company Description

2.1 Mission Statement

2.2 Vision Statement

2.5 Company History

2.6 Company Ownership

2.7 Company Location and Facilities

3.1 Product Description

Early Streamer Emission (ESE) Lightning Arrester/Conductor is designed on a specific initiation

3.3 Competitive Comparison

2. Outsource Provider 2: The lightning Arrester/Conductor used is not accordance to NFC

3.4 Entry Barriers and Strategies to Overcome

4.1 Marketing Analysis Summary

4.2 Market Segmentation

Yearly revenue ranges from RM500,000 to RM5,000,000.

Green Energy Auditors (20%)

Yearly revenue ranges from RM500,000 to RM1,000,000.

Commercial Buildings / Factories Owner (40%)

The age range of clients is normally 35-65.

Mechanical & Electrical

4.3 Target Market Segment Strategy

4.4 Market Trend

SALES FORECAST (2013 to 2017)

2013 2014 2015 2016 2017

4.5 SWOT Analysis

Key Internal Factors

Key External Factors

Research and Development

UTM Razak School of Engineering and Advanced Technology

4.6 Competition Edge

5. Product Development Strategy

5.1 Material and labour

5.2 Facilities and Equipment

The marketing strategy is based on developing an awareness regarding Green Lightning

6.1 Marketing Mix

6.2 Marketing Research

7.1 PROFORMA PROFIT & LOSS ACCOUNTS

GREEN LIGHTNING CONSULTANCY

Sales volume in unit

Selling price in $ per unit

Less: Amortisation expenses

GROSS PROFIT, $000

Less: Financial charges

NET PROFIT BEFORE

Less: Taxation payment

NET PROFIT AFTER TAX,$'000

Break-even sales in $'000

Break-even sales in volume

TOTAL OPERATING EXPENSES

7.2 PROJECTION OF TAXATIONS & TAX SHIELDS

GREEN LIGHTNING CONSULTANCY

NET PROFIT BEFORE TAX,$'000

Less : Investment tax credit

TAXABLE INCOME AFTER ITC

7.3 PROJECTION OF CASH FLOW

GREEN LIGHTNING CONSULTANCY

Payment of variable costs

Payment of fixed costs

Pay't of financial charges