Internship Report on
“CAPITAL BUDGETING” by ANITHA.R
USN: 1AM13MBA02
Submitted to VISVESVARAYATECHNOLOGICALUNIVERSITY, BELGAUM
In partial fulfillment of the requirements for the award of the degree of
MASTER OFBUSINESSADMINISTRATION
Under the guidance of
INTERNAL GUIDE EXTERNAL GUIDE
Dr H S Adithya Sameernath.k
Associate Professor AGM Finance & Admin
AMC Engineering College Manjushree Extrusions Ltd. DEPARTMENT OF MANAGEMENT STUDIES
AMC ENGINEERING COLLEGE
(Affiliated to Visvesvaraya Technological
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The firm’s capital budgeting decisions mostly includes accumulation, acquisition, disposition, rejuvenation and replacement of the long term fixed assets. It mainly based on the estimation of future events which is a complex problem for forecasting the future cashflows of an investment.
Investment Decision making is also called as Capital Budgeting, Capital Expenditure Decision, Planning Capital Expenditure and Analysis of Capital Expenditure.
As the resources of an any company are limited, a right choice has to be through the various investment proposals by evaluating their relative merit. It is clear that some techniques should be followed for making evaluation of investment proposals. Capital budgeting decision is considered to be one of the appraising techniques of investment decisions.
Capital Budgeting is a planning process helps the company to look ahead and formalize future goals to determine organization’s longterm investments. It is a Budget for major capital, investment, expenditures
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IMPORTANCE OF THE STUDY
Capital Budgeting is very essential in financial decision making:
Capital budgeting helps the company in taking decisions during making Expansion, Establishment of new projects etc.
While undertaking new projects and at the time of removing the decline stage products etc., It avoids unnecessary expenditure
The firm’s successful performance depends on appropriate capital budgeting analysis because capital investment decisions can improve cash flows.
Capital investment incurs high cost, since many of the firms have scarce capital resources.
Decisions taken are irreversible regarding capital, without much financial loss to the firm.
To choose the best out of many alternatives proposals financial analysis regarding capital investment has to be formulates by using various proposals.. METHODOLOGY OF THE STUDY
The following methodology has been adopted in order to achieve the objective . Taken as a whole project report has been prepared through collection of the information by both primary and secondary
As a result of searching the existing literature, the researcher was able to obtain data that correlated exceptionally well with the research topic. Indeed, the researcher gathered pertinent information from secondary sources; however, the primary sources of data were needed to draw a logical conclusion of the research at hand. So, the next step was major section III, Research Methodology. Being
The company that I have chosen to asses is Loblaw Companies Ltd. I have assessed their financial statement as at June 20th, 2015 and June 14th, 2014, and decided to proceed for future investment in this company with my $10 000. The reasons that I have decided to invest in this company is because, first, they are closing down 52 retail locations that are unprofitable. This will allow them to be less in debts and repay their loans faster. Second, their revenue income has increased since the second quarter of 2014 by $228 million; from $10,307 to $10,535.
The Calaveras Vineyard, established as early as in 1883 in California initially aimed at making wine for the Catholic Church. The man behind this family owned business was Esteban Calaveras. Over the years the ownership has been changing but improvements in brand quality and standards remained the key to success. Technological changes also improved market positions chiefly through capital improvements. New strategies helped the company secure good positions regarding cash flow.
There was not enough information to calculate capital expenditures that associated with the implement of new
What do pro forma financial statements show? There are various things Pro forma financial statement shows but first, let’s understand the word pro forma which means a financial statement based on projection and assumption of what the business future would be to determine what should be happening now. Pro forma financial statement can be thought of as a “Projected results for financial statements in the future, given assumptions about what will happen in the meantime” (Siegel & Yacht, 2009, p. 81).
For the Huffman Trucking Company, strategic planning has been an important part of their functions for over 60 years. For a company like Huffman Trucking, financial planning is extremely important to maintain their continued growth and their overall health in the long term. When analyzing the financial statements for the last three years we looked and three separate types of financial statements: the income statement, balance sheets, and the cash flow budget, we will also try and make assumptions to identify the various risks involved in a business like Huffman Trucking. When looking at the various financial statements we attempt also review the cash flow statements and attempt to make recommendations on the implementation of various short-term working capital strategies on the long term cash flows, try and find an explanation of different corporate risk mitigation techniques capital budgeting, and make an analysis of what effect capital structure on strategic financial planning, and how it works to affect risks.
Management can be defined as getting the maximum efficiency and effectiveness out of a set of activities. A manager carries out this process. My chosen company for this project is Microsoft.
In this era of globalization, the supermarket industry is one of the common investment sectors. It is also forming retail common categories of food products such as fresh and meats, poultry and seafood, fresh fruits and vegetables, canned and frozen foods as well as various dairy products. Investment in this industry can be profitable if succeed but bear in mind that risk still exists if monitoring process is not carried out. Therefore, Professor Michael E. Porter from Harvard Business School has introduced a tool for purposes of analysis potential industry which is the most profitable and potential. Porter stated that five forces are deciding an industry either beneficial at future or it will become a case study and commerce practice (Porter, M.E., 2008).
Solution : Introduction: A budget is an estimation of particular commodity, quantity etc. It can be prepared for any number of days but generally it is prepared wither for a year or quarter... A budget may or may not become the actual outcome.
2.0 Procedure A few secondary resources were used in the research process. These sources range from newspapers articles, news website (BBC) and online databases which were accessed via the Internet. These sources were chosen based on direct relation to the topic and its scope. Moreover, these sources were referred to gain better understanding about the topic and explore expert opinions and research done in order to fulfil the criteria of each objective
II. Problems of the Case Study 1. Considering company’s budget is very limited, installation of the new technology might affect the financial position in the next year operation. 2.
Budgeting can be defined as a solid process to decide the estimate of revenue and expenditure for the specific time period. This definition of budget serves for all, country, city, state, business or personal matter. It is observed that, each successful company never moves forwards without deploying budget process (Al-Shawabikah, 2000). So, talking about Personnel Budgeting, it is one of the crucial aspects of any business to keep labor or personnel budgeting in the mind at the start and end of the year to maintain or increase productivity and profitability of the business.
4. Budgeting provides benchmarks to evaluate subsequent performance. Let's look more closely at each of these benefits. FORMALIZATION OF
b) Analyze the potential implementation of the strategies into the
1- Investment decision 2- Financing decision, 3- Assets Management decision.