Fifth day (part three)

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Fifth day (part three)

  1. 1. Corporate finance Gol teamLOGO Presented by : Hatem Ali CPM
  2. 2. Contents Finance and Source of finance financial statement Net present value (NPV) Internal rate of return Pay back workshop Company Logo
  3. 3. Finance The science that describes the management, creation and study of money, banking, credit, investments, assets and liabilities. Finance consists of financial systems. which Some prefer to divide finance into three distinct categories: public finance, corporate finance and personal finance. Company Logo
  4. 4. Source of finance
  5. 5. Financial statement Income statement. that measures a companys financial performance over a specific accounting period Balance sheets. that summarizes a companys assets, liabilities and shareholders equity at a specific point in time. Cash flow statement. which shows the amount of cash generated and used by a company in a given period. Cash inflows usually arise from one of three activities - financing, operations or investing Company Logo
  6. 6. How to start financial plan Financial plan Cost Expected return (initial investment) 5 years of expected return . Operation cost Rent Wage Any expenses
  7. 7. Financial plan Net present value (NPV): the sum of present value of all expected incremental cash flow. Internal rate of return (IRR): The discount rate that’s makes the following relationship hold: PV (inflow)= PV (outflow) Pay back period: the number of years it takes to recover the initial cost of investment.
  8. 8. ExamplePro1 Y0 Y1 Y2 Y3 Y4 Y5Investment -50Cash in 10 15 20 25 30Net cash flow -50 10 15 20 25 30Pro2 Y0 Y1 Y2 Y3 Y4 Y5Investment -200Cash in 20 30 50 70 100Net cash flow -200 20 30 50 70 100Pro3 Y0 Y1 Y2 Y3 Y4 Y5Investment -15Cash in 3 10 15 20 25Net cash flow -15 3 10 15 20 25
  9. 9. Example project 1 2 3 Cost 50,000 200,000 15,000 NPV 57,428 148,742 40,097 IRR 23% 9% 60% PBP 3.8 5 2.6
  10. 10. Questions
  11. 11. Contact Hatem Ali Mobile: 01225568356 e-mail: hatem_aly87@hotmail.com
  12. 12. THANK YOU!

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