Dilemma of Asian Bags Essay

Asia Paper handle has since 1990 operated as a maker of plastic carrier bags supplying them on a contract-manufacturing basis to well-known supermarket chains, fast-food outlets, pharmacies and department stores. Lately, Asia Paper Bag exports customized plastic carrier bags to Marks n Spencer and Boots Pharmacy in the United Kingdom.During the Asian pecuniary crisis, Asia Paper Bag had difficulties in meeting its term bestow repayment, and had to restructure the term loan last year. The term loan was restructured by way of a debt moratorium of 24 calendar months on the principal and an extension of the maturity period from five days to eight eld.Currently, Asia Paper Bags turnover is about Rs 3million per month with an average net profit margin of 7%. Lately, with the increase in world oil prices, raw materials for plastic bag deed accept increased by over 5% to USD1,200 per ton. Asia Paper Bags capacity utilization is still low at unaccompanied 40%, later it expanded rap idly pre-crisis. Asia Paper Bag Sdn Bhd s production capacity increased from 200,000tonnes per annum to 350,000tonnes per annum during the pre-crisis period. This was when the company borrowed a term loan of Rs. 10 million to finance the machinery. The raw materials, PE resins, are purchased mainly from Singapore and Thailand, whilst only 15% is sourced domestically.Q.1 List the qualitative risks of Asia Paper Bag relation to slang lending .Q.2 List and explain the appropriate financial ratios to analyze the financial performance (profitability) of Asia Paper Bag Sdn Bhd (Malay equivalent of incorporated).Q.3 State the motives for using ratio abstract as a credit evaluation tool.EQUITY interrogationMr. Prashant Gupta is interested in investing in equity shares of Infosys and Hamdard. Infosys Technologies Ltd. (NASDAQ INFY) which was started in 1981 by seven people with US$ 250. Today, it is a global leader in the next generation of IT and consulting with revenues of over US$ 4 b illion. It offers span bloodline and technology consulting, application services, systems integration, product engineering, custom software development, maintenance, re-engineering, independent scrutiny and validation services, IT infrastructure services and business process outsourcing. Hamdard (Wakf) Laboratories, India is a notable pharmaceutical company in India known for its Unani and Ayurvedic products.It is the worlds largest maker of Unani medicinesSome of its more famous products include Safi, Sharbat Rooh Afza, Cinkara, Roghan Badam Shirin and Pachnol. It is associated with Hamdard Foundation, India. Being conservative in nature, he wants to determine the risk associated with investments. In specific terms, he wants to seek information related to both levered and unlevered beta of these companies. He approaches Nitin Shah, a financial advisor to do the needful. Nitin has collected the relevant information detailed below modus operandi(i) Monthly returns on equity sha res of Infosys and Hamdard for a period of 2 years (w.e.f. October 2006 to September 2008) along with portfolio of S&P CNX NIFTY. (ii) Return on 364-days treasury bills issued by Government of India for the period 2007-08 is 5.15 per cent per annum and 0.419 per month. This rate is to be apply as a proxy for risk-free rate of return. (iii) Debt-equity ratio (based on the average of 2004 to 2008) is 1.6 per cent for Wipro and 31.4 per cent for Dabur. (iv) Corporate tax is 35 per cent.Q. 1 Compute the Beta and interpret it for Prashant. Examine different circumstances with analysis of data. __________________________________________________________________SUBJECT RISK UNDERWRITING AND CLAIMS(A) Mr. Wilson has a car which is 12 years old. The mart value of which is Rs. 1.00 Lacs. However, Mr. Wilson wishes to insure this car for Rs. 5 lacs due to his sentiments attached to it.(B) Mr. Mathew purchased a Money Back Policy from M/s. Supreme Life amends for a Sum Assured of Rs. 2.00 La cs for 15 years. The survivalBenefit after 5 years accrues 25% of Sum Insured. A bonus was accumulate to the maturity.Q.1 Discuss as a Motor Insurance Underwriter, how you would react to this? Q.2 conduct the sum payable at the maturity of the Policy.