Viper Construction Specialist Case Study

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INTRODUCTION Viper Construction Specialist is a start-up construction establishment located at main Gulshan-e-Iqbal in Karachi. VCS expects to catch the interest of a upper class and upper-middle class customer base with its broad design of bungalows. The company plans to build a strong market position in the town, due to the mild competitive climate in the area. In this business we buy the plot of 1500 yards at main Gulshan-e-Iqbal at the corner side and divide it into three further sub-plots of 500 yards. But initially we buy the flat of 2 rooms on rent to build our office and buy some assets for the office like furniture, office supplies, air conditioners, computers etc. And do marketing for our company. After office completion, we start…show more content…
COMMON-SIZE INCOME STATEMENT FOR THE MONTH ENDED DECEMBER 31st, 2010 Particulars Amount in Rs ( % of Sales) Sales 100% 75,000,000 less: Cost of manufacturing (5,201,500*3) Construction Cost 15,604,500 20.80% Purchase Purchase of Land (1500 yards) 35,000,000 46.70% Sales Deed(7%) 299,250 0.4% Subdivion cost and bribe 100,000 0.1% Total Cost 51,003,750 68.0% Gross Profit 23,996,250 32.0% less: Operating Expenses Admin Expenses 1,735,000 2.31% Marketing expenses 50000 0.07% Total Operating expenses 1,785,000 2.38% EBT (Net Profit) 22,211,250 29.62% less: Taxes (25%) 5,552,813 7.40% EAT OR (Net Income) 16,658,438 22.22% BALANCE SHEET AS ON DECEMBER 31st, 2010 Assets Rs Liabilities & O.Equity Rs Current Assets Current Liabilites - Cash on hand 71,618,438 Long Term Liabilities - Inventory - Total Liabilities - Total C.Assets 71,618,438 Capital Fixed Assets O.Equity 55,000,000 Land - Retained Earnings 16,658,438 Computers 15,000 Aqib shah 4,164,609 furniture 15,000 Sumaya Qazi 4,164,609 Acs 10,000 Hammad Amin 4,164,609 Total F.Assets 40,000 Waqas Hamid 4,164,609 Total Assets 71,658,438 Total Liabilities &…show more content…
r=12.5% n=1 FV=PV (1+r) ^n FV=55000 (1.125) ^1 FV=61,875,000 So, therefore it is better to do this business rather than putting 55 million in the bank. CONCLUSION After discussions with the Architect, Town Planner and Real Estate Agent and having researched the alternatives, Upper Class and Upper Middle Class people recommend mostly those bungalows which we are constructiong. The conclusion was reached from information provided by the Architect, Town Planner and Real Estate Agent. We feel that Viper Construction Specialist will suit the needs and demand of the People that they want we are sure that they like bungalows of this design. Furthermore out of this investment you can see that we gain 16.3 million to our owners ‘equity and now we have 72 million on hand so again we invest 70 million on this business to expand our company to make our company a corporation by buying plot of 2000 yards at Defence or Gulshan-e-Iqbal and construct 4 bungalows of 500 yards on it and like this we again and again purchase plots, construct bungalows on them and sell them and expand our business in all over Karachi even all over in Pakistan in just coming 10 yrs. BIBLIOGRAPHY
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