Capstone Design 2 (Presenter) 20072408 Jo Ji-Yeon 20062410 Park Deuk-Young 20072406 Kim Bo-Kyoung...

Capstone Design 2

(Presenter) 20072408 Jo Ji-Yeon

20062410 Park Deuk-Young

20072406 Kim Bo-Kyoung

20062405 Park Chan Hyeok

2011.09.22

2

Contents

Q&A

Final Goal

Project Plan

Project Outline

Company Introduction

3

1. Company Introduction

Company : Hyun-dai Cor-poration

Address : 1st Avenue Indus-trial Complex, Pyeongdong, Gwangsangu Gwangju Metrocity.

TEL : 062) 944-9011 FAX : 062) 944-9012 Main Business : Iron Fracture, micro-mate-

rial - Cutting CNC Computer model - Manufacturing CNC HOLE - Cutting Stainless steel(SUS) sale

MaterialComplete product

Production

Customer Customer

2. Project Outline

Current Factory System

Current factory system is that workers get order from customer, they

deliver the product to customer after complete the product manually.

Volume of

orders

5

2. Project Outline

Alternative 1 : Is more efficient for producing added manpower for manufacturing press task?

Alternative

Alternative 2 : Is more efficient squeezing manpower as introducing new facility that do manufacturing press task?

Analyze these alternatives through technique trend,marketability & cost analysis, Engineering economic principle, management science etc. many technique.

6

Specific content

Per-

cent-

age

(%)

Schedule (unit : week)

September October November December

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

- Selecting project 10

- Collecting Data 10

- Analyze data 20

- Comparing & Analyzing Al-

ternatives 30

- Feedback 10

- Drawing a conclusion 20

100

3. Project Plan

7

4. Final Goal

The goal is that Hyun-dai Corporation expects efficient in-

vestment decision-making for improving quality of produc-

tion, reducing cost, increasing produce efficiency through

many alternatives.

8

5. Q&A

Q & A

9

Thank you :)

The company’s decision making of manufacturing press about equipment management

(Presenter) 20072406 Kim Bo-Kyoung

20062410 Park Deuk-Young

20061111 Park Chan Hyuck

20072408 Jo Ji-Yeon

2011.10.06

Contents

Q&A

NEXT

Process Flow Diagram

Company Introduction

1. Company Introduction

Company : Hyun-dai Cor-poration

Main Business : Iron Fracture, micro-mate-

rial - Cutting CNC Computer model - Manufacturing CNC HOLE - Cutting Stainless steel(SUS) sale

The total sales: 4,199,657,552 won

Business hours : Weekday 8:00am~5:30pm Weekend 8:00am~4:30pm

Personnel organization: 20 + α (part time)

2. Process Flow Diagram

OrderDetailed

ProcedureTransferfloor plan

Secondary process

Primary process Packing Shipping

Mail, Visit site, Fax CAD Floor Plan(2D)Transfer to engineer’s representative

CuttingHole Process & Bending & Chamfering

Order Detailed Procedure – CAD floor plan

Transfer floor plan

2. Process Flow Diagram

2. Process Flow Diagram

Primary process (cutting)

• Big cutting machine : 2 - (2 people per 1 press) • Small cutting machine : 4 - ( a person per 1 press)• Insert steel into machine and cut

Secondary Process Hole Process Bending Chamfering

• Auto Machine : 2 - (a person per 1 press)• Manual Machine : 3 - (a person per 1 press)

• Manual Machine : 1 - (a person per 1 press)

• Manual Machine : 3 - (a person per 1 press)

2. Process Flow Diagram

Packing Shipping

2. Process Flow Diagram

2. Process Flow Diagram

Primary process Secondary Process

3. NEXT

Financial Statement Analysis

Investigate machine cost

Select several alternatives

4. Q&A

Q & A

Thank you :)

The company’s decision making of manufacturing press about equipment management

(Presenter) 20062405 Park Chan Hyeok

20062410 Park Deuk-Young

20072406 Kim Bo-Kyoung

20072408 Jo Ji-Yeon

2011.10.27

Contents

Liquidity Ratio

Classification and Meaning of Financial Statement Analysis

Financial Statement Ratio Analysis?

Q&A

Stability Ratio

1. Financial Statement Analysis

Financial Statement Ratio Analysis - It is the process of understanding the risk and profitability of a firm (busi-

ness, sub-business or project) through analysis of reported financial infor-mation, particularly annual and quarterly reports.

Purpose of Financial Statement Analysis- It is the selection, evaluation, and interpretation of financial data, along with other

pertinent information, to assist in investment and financial decision-making.

- May be used internally to evaluate issues such as employee performance, the effi-ciency of operations, and credit policies, and externally to evaluate potential invest-ments and the credit-worthiness of borrowers, among other things

2. Classification and Meaning of Financial Statement Anal-ysis

Classification Detailed Ratio Meaning

Liquidity ratio Current Ratio, Quick Ratio Evaluation of short-term solvency

Stability ratio Debt to Equity Ratio, Owner's Equity to Total Assets, Times-interest-earned ratio, Fixed assets to long term capital ratio, Fixed ratio, Total borrowings and bonds payable to total assets

Evaluation of long-term Debt-to-income ability

Activity ratio Receivable turnover ratio, Receivables collection period, Inventory turnover ra-tio, Inventory Average Retention Period, Total asset turnover ratio, Turnover of net worth

Efficiency Evaluation of Asset Management

Profitability ratio Profit margin ratio ,Return on equity, Re-turn on total asset

Business performance is evaluated by sales or profitability.

Growth ratio Growth Rate of Sales , Growth rate of to-tal assets, Growth rate of Net income

Asset and profits are measured by variable ratio.

3. Liquidity Ratio

1. liquidity ratio - Company's ability to repay short-term debt rating- Short-term investments and Verification of the conformity between short-

term financing

1-1. Current Ratio- It is a financial ratio that measures whether or not a firm has enough re-

sources to pay its debts over the next 12 months.- It compares a firm's current assets to its current liabilities

→ More than 150%

* Current Ratio = current asset / current liabilities

㈜현대기업의 Current Ratio = (2,645,278/85,419) X 100 = 3096.83%

3. Liquidity Ratio

1-2. Quick Ratio- In finance, the quick ratio measures the ability of a company to use its near

cash or quick assets to extinguish or retire its current liabilities immedi-ately.

- Quick assets include those current assets that presumably can be quickly converted to cash at close to their book values.

→ More than 100%

* Quick Ratio = quick assets / current liability

현대기업의 Quick Ratio = (1,676,129/85,419) X 100 = 1962.24%

4. Stability Ratio

2. stability ratio - It evaluate long-term default risk by using debt and capital- The Company's ability to remain in business in the long run, without having

to sustain significant losses in the conduct of its business.

2-1. Debt to Equity Ratio- The relative size of the debt to capital- Company‘s Financial Risk- It is a financial ratio indicating the relative proportion of shareholders' equity and debt

used to finance a company's assets.

→ Less than 100%

* Debt to Equity Ratio = liabilities/ owner's capital 현대기업의 Debt to Equity Ratio = ((85,419+2,382,497)/1,869,594) X 100 =

132%

4. Stability Ratio

2-2. Capital adequacy ratio- It show us equity out of Company's total assets- Capital adequacy ratios ("CAR") are a measure of the amount of a bank's core capital

expressed as a percentage of its assets weighted credit exposures.

→ More than 40% (Less than 15% : insolvent enterprise)

Capital adequacy ratio = owner's capital/asset현대기업의 Capital adequacy ratio = (1,869,574/4,337,511) X 100 = 43.1%

2-3. Times-interest-earned ratio- It is a measure of a company's ability to honor its debt payments.- Evaluate the ability to pay interest expense through Operating profit.→ More than 200%

* Times-interest-earned ratio = business profits / interest cost

현대기업의 Times-interest-earned ratio = (355,960 / 152,287) X 100 = 233.7%

4. Stability Ratio

2-4. fixed assets to net worth and fixed liabilities and fixed ratio- Measure the degree of immobilization of the capital- Fixed-asset turnover is the ratio of sales (on the profit and loss account) to

the value of fixed assets (on the balance sheet). - It indicates how well the business is using its fixed assets to generate

sales.→ Less than 100%

* fixed assets to net worth and fixed liabilities = noncurrent asset / (equity capital + fixed liabilities  )

현대기업의 fixed assets to net worth and fixed liabilities = (1,691,975/(1,869,594+2,382,497)) X 100 = 39.8%

* fixed ratio = noncurrent asset / equity capital 현대기업의 fixed ratio = (1,691,975/1,869,594) X 100 = 90.4%

4. Stability Ratio

2-5. Total Borrowings and bonds payable to total assets- Measured against debt to total capital

* Total Borrowings and bonds payable to total assets = (long-term debt + short-term debt) / return on assets

현대기업의 Total Borrowings and bonds payable to total assets = (2,363,479/4,337,511) X 100 = 54.5%

→ Less than 100% → profitability↑, stability  ↑

5. Next

Activity ratio Profitability ratio Growth ratio

Q & A

Thank you :)

The company’s decision making of manufacturing press about equipment management

(Presenter) 20062410 Park Deuk-Young

20062405 Park Chan Hyeok

20072406 Kim Bo-Kyoung

20072408 Jo Ji-Yeon

2011.11.03

Contents

Q&A

Financial ratio assessment result

Growth ratio

Profitability ratio

Activity ratio

Classification and Meaning of Financial Statement Analysis

Classification Detailed Ratio Meaning

Liquidity ratio Current Ratio, Quick Ratio Evaluation of short-term solvency

Stability ratio Debt to Equity Ratio, Owner's Equity to Total Assets, Times-interest-earned ratio, Fixed assets to long term capital ratio, Fixed ratio, Total borrowings and bonds payable to total assets

Evaluation of long-term Debt-to-income ability

Activity ratio Receivable turnover ratio, Receivables collection period, Inventory turnover ra-tio, Inventory Average Retention Period

Efficiency Evaluation of Asset Management

Profitability ratio Profit margin ratio ,Return on equity, Re-turn on total asset

Business performance is evaluated by sales or profitability.

Growth ratio Growth Rate of Sales , Growth rate of to-tal assets, Growth rate of Net income

Asset and profits are measured by variable ratio.

3. Activity ratio

3. Activity ratio- Activity ratios measure the effectiveness of the firms use of resources.

3-1. Receivable turnover ratio and Receivables collection period- Measure the effectiveness of receivables collection.

(Unit : a thousand won)

* Receivable turnover ratio = Sales account / Receivable

= (4,199,657 / (855,660 + 430,134)) = 3.2662

* Receivables collection period = 365day / Receivable turnover ratio

= 365 / 3.2662 = 111 day

→ ㈜ Hyundai corp. buy and sell product on credit, and sales credit is collected after 111days.

3. Activity ratio

3-2. Inventory turnover ratio and Inventory Average Retention Period- In accounting, the Inventory turnover is a measure of the number of times inventory is

sold or used in a time period such as a year.

The equation for inventory turnover equals the cost of goods sold divided by the average inventory.

(Unit : a thousand won)

* Inventory turnover ratio = Cost of sales / Inventory average balance

= (3,639,820 / 969,149) = 3.7559 collects

* Inventory Average Retention Period = 365 day / Inventory turnover ratio

= 365 / 3.7559 = 97day

→ It looks that capital dropped on inventories is collected in about 97 days.-

4. Profitability ratio

4. Profitability ratio - Measure the company's use of its assets and control of its expenses to generate an ac-

ceptable rate of return

4-1. Profit margin ratio

- Profit margin is an indicator of a company's pricing strategies and how well it controls costs.

Differences in competitive strategy and product mix cause the profit margin to vary among different companies.

(Unit : a thousand won)

* Profit Margin Ratio = Net Income / Revenue

= (172,533/4,199,657) X 100 = 4.11%

→ ㈜ Hyundai corp. sales Net Income growed averagely by 4.11% comparing with the previous year.

4. Profitability ratio

4-2. Return on Owner’s Equity (= Return on equity)

- Return on equity (ROE) measures the rate of return on the ownership interest of the common stock owners. It measures a firm's efficiency at generating profits from every unit of share-holders' equity (also known as net assets or assets minus liabilities).

- ROE shows how well a company uses investment funds to generate earnings growth.

(Unit : a thousand won)

* Return on Owner’s Equity = Net Income / Owner's capital

= (172,533/1,869,594 ) X 100 = 9.23%

→ Profit rate of Hyundai corp. increased by 9.23% comparing with the previous year.

4. Profitability ratio

4-3. Return on total asset

- The return on assets percentage shows how profitable a company's assets are in generating revenue.

(Unit : a thousand won)

* Return on total asset = Net Income / Total asset

= (172,533/4,337,511) X 100 = 3.98%

→ Total asset of Hyundai corp. showed regular growth by 3.98% comparing the previous year.

5. Growth ratio

5. Growth ratio

- Coefficient of fluctuation by year of financial statement like sales or total assets

5-1. Growth Rate of Sales (Unit : a thousand won)

* Growth Rate of Sales

= (the sales for this term– the sales for former period)/ the sales for former period

= ((4,119,658-3,561,769)/3,561,769) X 100 = 17.9%

→ Hyundai corp. shows high growth at 17.9% comparing the sales for former pe-riod..

5. Growth ratio

5-2. Growth rate of total assets

(Unit : a thousand won)

* Growth rate of total assets

= (the asset for this term– the asset for former period)/ the asset for former period

= ((4,337,511-4,136,053)/4,136,053) X 100 = 4.87%

→ Hyundai corp. shows regular growth at 4.87% comparing the asset for for-mer period.

5. Growth ratio

5-3. Growth rate of Net income

(Unit : a thousand won)

* Growth rate of Net income

= (net profits during the term– the profits for former period)/ the profits for former period

= ((172,533-142,270)/142,270)X 100 = 21.27%

→ Hyundai corp. shows high growth at 21.27% comparing the profits for former period.

Financial Statement

엑셀 파일 / 스캔 ( 재무제표 )

A valuation basis of financial state-ments ratio

Classification Detailed Ratio Ratio (%) excellent normal shortfall

Liquidity ratioCurrent Ratio 3096.83 V

Quick Ratio 1962.24 V

Stability ratio

Debt to Equity Ratio 132 V

Owner's Equity to Total Assets 43.1 V

Times-interest-earned ratio 233.7 V

Fixed assets to long term capital ratio 39.8 V

Fixed ratio 90.4 V

Total borrowings and bonds payable to total assets 54.5 V

Activity ratio

Receivable turnover ratio 3.2662 V

Receivables collection period 111 day V

Inventory turnover ratio 3.7557 V

Inventory Average Retention Period 97day V

Profitability ratio

Profit margin ratio 4.11 V

Return on equity 9.23 V

Return on total asset 3.98 V

Growth ratio

Growth Rate of Sales 17.9 V

Growth rate of total assets 4.87 V

Growth rate of Net income 21.27 V

Result

Hyundai corp. would be useful when purchasing equipment making a decision of intention to invest based on valuation basis of financial statements ratio of past and current managerial condition.

Q & A

Thank you :)

The company’s decision making of manufacturing press about equipment management

(Presenter) 20072408 Jo Ji-Yeon

20062410 Park Deuk-Young

20062405 Park Chan Hyeok

20072406 Kim Bo-Kyoung

2011.11.17

Contents

Q&A

Next

Alternative 1 – Investment Project

Alternatives

The existent circumstances

The existent circumstances

Can’t accept 80% of all orders annually

→ 20% loss

Decreasing loss and increasing productivity to ex-tend equipment

Alternatives

Alternative 1 : Is more efficient for producing added manpower for manufacturing press task?

Alternative

Alternative 2 : Is more efficient squeezing manpower as introducing new facility that do manufacturing press task?

Income Statement

Turnover of last year : 42 hundred million won.

* Revenue : Same as 7 hundred million 5 thousand annually.

* Reason : For a year, it can only accept 80% of all orders and

progress turnover standard with 20% of loss.

* Labor : 18 million per a person of annual salary system and increase 5% yearly (employ 6 new employers).* Materials : Occupy 62% of turnover.* Overhead : Pay ten million for operating expenses, marketing cost, common maintenance cost.

Income Statement

.

Income Statement

Income Statement

*Taxable Income = Revenue – Expenses

*Taxes = Taxable Income x 0.36

*Net Income = Taxable Income - Taxes

Income Statement

Cash Flow Statement

* 2 Big manual press machine : 1 hundred million per a machine.

* 2 Small manual press machine : 50 million per a machine.

* Invested total 3 hundred million.

Cash Flow Statement

Cash Flow Statement

Cash Flow Statement

*NPV(MARR:15%) = -100,000 + 74,521(P/F,15%,1) + …… + 238,272(P/F,15%,5) = 214,705

*IRR= 74.12% *AE(15%)= 214,705(A/P,15%,5) = 64,050

Result

This project collected early investment cost, 3 hundred mil-lion and capital costs prospering to MAPR, and made 214,705 additionally.

So, This project is appropriate to adopt for investment al-ternative.

Q & A

Thank you :)

The company’s decision making of manufacturing press about equipment management

(Presenter) 20062410 Park Deuk-Young

20072408 Jo Ji-Yeon

20062405 Park Chan Hyeok

20072406 Kim Bo-Kyoung

2011.12.08

Contents

Q&A

Result

Alternative 2

Alternative 1 : Is more efficient for producing added manpower for manufacturing press task?

Alternative

Alternative 2 : Is more efficient squeezing manpower as introducing new facility that do manufacturing press task?

Alternatives

Income Statement

* Revenue : The sales that got 5% from 7 hundred million 5 thousand are same with seven hundred eighty seven million five hundred thousand annually.

* Reason : that it make to work more exactly than manual machine and make to able to bigger work.

* Labor : 18 million per a person of annual salary system and increase 5% yearly

* Materials : Occupy 62% of turnover. (= 4 억 6500 만원 )

* Overhead : Pay sixty million for electric power, O2, gas cost.

Income Statement

.

Income Statement

Income Statement

* Taxable Income = Revenue – Expenses

* Taxes = Taxable Income x 0.36

* Net Income = Taxable Income - Taxes

Income Statement

Cash Flow Statement

* Invested total 6 hundred million.

Cash Flow Statement

Cash Flow Statement

* NPV(MARR:15%) = -100,000 + 59,382(P/F,15%,1) + …… + 530,518(P/F,15%,5) = 323,514

* IRR = 75.27% * AE(15%) = 323,514(A/P,15%,5) = 96,509

Result

This project collected early investment cost, 6 hundred mil-lion and capital costs prospering to MARR, and made 323,514 additionally.

Result

We accomplish incremental analysis to decide order of pri-ority using IRR appraisal of in-vestment technique. The big-gest reason of incremental analysis is that an end result of NPV technique maked with the absolute value of the value of money and an end result of IRR technique are different when initial investment capital of each alternatives is differ-ent.

when IRR > MARR, people in-vest. Alternative 1 and 2 are satisfied. but to select order of priority of alternative with IRR rate that initial investment capital of alternative 1, 2 is 1 hundred million is same so re-sult with NPV technique is right.

NPV = 424,959 ( 천원 )AE = 126,772 ( 천원 )

NPV = 573,671 (천원 )AE = 171,135 ( 천원 )

Select

Q & A

Thank you :)