Glimmer Leaf Manufacturing (GLM)

3-Year Financial Projection

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Table of Contents
Assumptions
Financial Model
Goal Seek
Financial Trend Analysis
Summary
Notes
Assumptions Glimmer Leaf Manufacturing (GLM)
Parameter Value Unit Notes

Investment Details
Investment Date 01-Jul-25 Date Start of Year 1
Minimum Cash Balance Required 50 Millions Rs. Million Required liquidity buffer
Beginning Cash Balance (Start of Y1) 171 Millions Rs. Million Assumption: Starts with adequate cash to maintain minimum required cash 50M
Business Operations
Turnover Year 1 1200 Millions Rs. Million
Revenue Growth Rate 10.00% Percentage
Minimum Growth Rate 155.41% Percentage
Inventory turnover ratio 6 Times per Year
Calendar Days 365 Days
Avg. Collection Period (AR) 45 Days
Avg. Payment Period (AP) 30 Days
Fixed Operating Expense Year 1 150 Millions Rs. Million Excl. Depreciation & Amortization
COGS 60% % of Sales
Variable Operating Expense 10% % of Sales
Fixed Operating Expense Increment 8% Percentage

Taxation
Corporate Tax 20% Percentage Applicable on Earnings Before Tax (EBT)
Financial Model Glimmer Leaf Manufacturing (GLM)
Terminal Year
All figures in Millions unless stated Year End 2026 Year End 2027 Year End 2028

Projected Income Statement

Sales 1,200.00 1,320.00 1,452.00
COGS (720.00) (792.00) (871.20)
Gross Profit 480.00 528.00 580.80
Fixed Ops Expense (150.00) (162.00) (174.96)
Variable Ops Expense (120.00) (132.00) (145.20)
Earnings Before Tax (EBT) 210.00 234.00 260.64
Tax (42.00) (46.80) (52.13)
Net Income (PAT) 168.00 187.20 208.51

Working Capital Components

Receiveables 147.95 162.74 179.01
Inventory 200.00 220.00 242.00
Current Assets (AR + Inv) 347.95 382.74 421.01
Payables (59.18) (65.10) (71.61)
Net WC Required 288.77 317.64 349.41
Cash Required 50.00 50.00 50.00
Net Cash 338.77 367.64 399.41

Simplified Cash Flow Projection

Beginning Cash Balance 171.00 50.23 208.56
Net Operating Profit after tax 168.00 187.20 208.51
Change in NWC (Increase)/Decrease (288.77) (28.88) (31.76)
Ending Cash Balance 50.23 208.56 385.30

Output
Sales 1,200.00 1,320.00 1,452.00
Net Operating Profit (after tax) 168.00 187.20 208.51
Working Capital 288.77 317.64 349.41
Net Cashflows (120.77) 158.32 176.75
Ending Cash Balance 50.23 208.56 385.30
Receiveables 147.95 162.74 179.01
Inventory 200.00 220.00 242.00
Payables (59.18) (65.10) (71.61)
Scenerio A - Cash Balance 800 Million at Year end 2028 Glimmer Leaf Manufacturing (GLM)
Terminal Year
All figures in Millions unless stated Year End 2026 Year End 2027 Year End 2028

Projected Income Statement

Sales 1,200.00 3,064.88 7,827.93
COGS (720.00) (1,838.93) (4,696.76)
Gross Profit 480.00 1,225.95 3,131.17
Fixed Ops Expense (150.00) (162.00) (174.96)
Variable Ops Expense (120.00) (306.49) (782.79)
Earnings Before Tax (EBT) 210.00 757.47 2,173.42
Tax (42.00) (151.49) (434.68)
Net Income (PAT) 168.00 605.97 1,738.73

Working Capital Components

Receiveables 147.95 377.86 965.09
Inventory 200.00 510.81 1,304.65
Current Assets (AR + Inv) 347.95 888.68 2,269.74
Payables (59.18) (151.14) (386.03)
Net WC Required 288.77 737.53 1,883.71
Cash Required 50.00 50.00 50.00
Net Cash 338.77 787.53 1,933.71

Simplified Cash Flow Projection

Beginning Cash Balance 171.00 50.23 207.44
Net Operating Profit after tax 168.00 605.97 1,738.73
Change in NWC (Increase)/Decrease (288.77) (448.76) (1,146.18)
Ending Cash Balance 50.23 207.44 800.00

Output
Sales 1,200.00 3,064.88 7,827.93
Net Operating Profit (after tax) 168.00 605.97 1,738.73
Working Capital 288.77 737.53 1,883.71
Net Cashflows (120.77) 157.21 592.56
Ending Cash Balance 50.23 207.44 800.00
Receiveables 147.95 377.86 965.09
Inventory 200.00 510.81 1,304.65
Payables (59.18) (151.14) (386.03)
FINANCIAL TREND ANALYSIS Glimmer Leaf Manufacturing (GLM)
Financial KPI's

WORKING CAPITAL REQUIREMENT FORECASTED TREND ANALYSIS

300 1,600

250 1,400 1,452.00

242.00
1,320.00
220.00 1,200
200
200.00 1,200.00
179.01

RUPEES IN MILLIONS
1,000
RUPEES IN MILLIONS

150 162.74
147.95
800
100

600
50

400
-
2026 2027 2028 317.64
349.41
200 288.77
(50) (59.18) (65.10) (71.61) 187.20 208.51
168.00
-
(100) 2026 2027 2028

Receiveables Inventory Payables Sales Net Operating Profit (after tax) Working Capital

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 SUMMARY Glimmer Leaf Manufacturing (GLM)

Summary of Key Findings (Based on initial 10% growth)

Growth Projection: GLM projects steady growth, with sales increasing from Rs. 1,200 million to Rs. 1,452 million over three years at a 10% annual growth rate. Net income is also projected to grow from Rs. 168 million to Rs. 208.5
1
million.

Increasing Working Capital Needs: As sales grow, the investment required in working capital (AR + Inventory - AP) increases significantly, rising from Rs. 288 million in Year 1 to Rs. 349 million in Year 3. The Total Working Capital
2
Required (including the minimum cash buffer) grows from Rs. 388 million to Rs. 400 million.

Liquidity Strain: The simplified cash flow projection indicates a potential liquidity problem. Despite growing profits, the cash required to fund the increase in Accounts Receivable and Inventory (net of the increase in Accounts
3
Payable) exceeds the net income generated.

High Growth for Target Cash (Goal Seek): Achieving a substantial positive cash balance of Rs. 800 million by Year 3 requires an exceptionally high annual sales growth rate (approx. 155.41%). While generating higher profits, this
4 aggressive growth would also demand even larger investments in working capital, making the target difficult without significant external funding or drastic changes in working capital management (e.g., reducing AR days, increasing
inventory turnover, extending AP days).

Recommendations:

1 GLM needs to carefully review its working capital management policies. Strategies to reduce the AR collection period or improve inventory turnover could lessen the cash strain.

2 The company must proactively plan for financing needs. In case of negative cash balance even at moderate growth, securing lines of credit or other funding sources will be crucial to support operations and growth plans.

3 The feasibility of the 155.41% growth rate required for the Rs. 800 million cash target should be critically assessed, as it implies a massive operational scale-up and associated funding requirements.
 NOTES Glimmer Leaf Manufacturing (GLM)

1 AR = (Annual Sales / 365) * Avg. Collection Period

2 Inventory = Sales / Inventory Turnover Ratio (Using year-end Sales as a proxy for COGS)

3 AP = (Annual COGS / 365) * Avg. Payment Period

4 NWC = Accounts Receivable + Inventory - Accounts Payable

5 Total Working Capital Required = NWC + Minimum Cash Balance

Change in NWC: Represents the cash outflow needed to fund the growth in working capital. Year 1 change assumes NWC was 0 at the very start. Subsequent years calculate
6
the year-over-year change.

Ending Cash Balance: Beginning Cash + Net Income - Increase in NWC. (Note: This is a simplified cash flow focusing on operating income and WC changes. It ignores financing,
7
investing activities, and non-cash charges like depreciation, which were not provided).

8 The negative ending cash balance highlights a potential liquidity issue under the initial assumptions.