৪৯তম বিসিএস ⎯ ফিন্যান্স ও ব্যাংকিং [৭১১]

নিট বর্তমান মূল্য ধনাত্মক হলে, প্রকল্প লাভজনক হয় ও গ্রহণ করা হয়। 

নিট বর্তমান মূল্য ঋণাত্মক হলে প্রকল্প বর্জন করা হয়।

নিট বর্তমান মূল্য শূন্য হলে, ব্যবস্থাপক প্রকল্পটি গ্রহণ/বর্জন করতে পারেন।

উৎস: ফিন্যান্স, ব্যাংকিং ও বিমা-১ম পত্র; মোহাম্মাদ খালেকুজ্জামান ও মোঃ হারুনার রশিদ

লাভজনকতা সূচক (Profitability Index বা PI) হল একটি আর্থিক মেট্রিক যা একটি প্রস্তাবিত প্রকল্পের লাভজনকতা মূল্যায়ন করতে ব্যবহৃত হয়। এটি একটি প্রকল্পের বিনিয়োগের বিপরীতে ভবিষ্যতের নগদ প্রবাহের বর্তমান মূল্যের অনুপাত। PI-এর মান ১-এর বেশি হলে, প্রকল্পটি লাভজনক বলে বিবেচিত হয়, কারণ এটি নির্দেশ করে যে বিনিয়োগের তুলনায় ভবিষ্যতের নগদ প্রবাহের বর্তমান মূল্য বেশি। 

The goal of capital rationing is to direct a company’s limited capital resources to the projects that are likely to be the most profitable.

Hard capital rationing is forced by outside circumstances such as restraints on borrowing.

Soft capital rationing reflects the company's internal attitudes towards spending and saving capital.


Source: Investopedia

অভ্যন্তরীন আয়ের হার যদি ছাড়ের হারের থেকে কম হয় তবে সেই প্রকল্প বাতিল করা হবে।


অভ্যন্তরীন আয়ের হার যদি ছাড়ের হারের থেকে বেশি হয় তবে সেই প্রকল্প গ্রহণ করা হবে।

Net present value (NPV) is used to calculate the current value of a future stream of payments from a company, project, or investment.

To calculate NPV, you need to estimate the timing and amount of future cash flows and pick a discount rate equal to the minimum acceptable rate of return.

The discount rate may reflect your cost of capital or the returns available on alternative investments of comparable risk.

If the NPV of a project or investment is positive, it means its rate of return will be above the discount rate.

Source: Investopedia

The profitability index (PI) measures the attractiveness of a project or investment.

The PI is calculated by dividing the present value of future expected cash flows by the initial investment cost of the project.

When IRR cannot be used or IRR and NPV conflict, PI can be used.

The higher the PI, the better the expected returns from the project.

A PI of less than 1.0 is not worthwhile because the expected returns do not recoup the initial cost.

পে-ব্যাক পিরিয়ড (Payback Period) পদ্ধতির মূল ধারণা হলো, যে সময়সীমায় একটি প্রকল্পের বিনিয়োগ করা অর্থ ফেরত আসে, সেই সময়কালকে "পে-ব্যাক পিরিয়ড" বা "পরিশোধ কাল" বলা হয়। এই পদ্ধতিটি মূলত একটি প্রকল্পের লাভজনকতা এবং ঝুঁকি মূল্যায়নে ব্যবহৃত হয়। 

The Accounting Rate of Return (ARR) is the average net income earned on an investment (e.g. a fixed asset purchase), expressed as a percentage of its average book value.

If the expected return of a share is higher than the required return, it means that the investor can expect to earn more than what they initially thought was necessary to compensate for the risk. This situation typically indicates that the share is undervalued, meaning it's priced less than its intrinsic or true value.

If NPV and IRR conflict, we should use Profitability Index (PI) to take the decision.

একটি কোম্পানির মূলধন কাঠামো হল তার বিভিন্ন দীর্ঘমেয়াদী তহবিল বিকল্পের সমন্বয়। এটি ঋণ এবং ইকুইটি সিকিউরিটি নিয়ে গঠিত এবং এটি একটি কোম্পানির স্থায়ী অর্থায়নকে বোঝায়। এটি দীর্ঘমেয়াদী ঋণ  এবং শেয়ারহোল্ডারদের কাছ থেকে প্রাপ্ত অর্থ দিয়ে গঠিত।

Capital structure refers to a company's mix of capital—its particular combination of debt and equity.

Equity is a company's common and preferred stock—plus its retained earnings.

Debt typically includes short-term borrowing, long-term debt, and a portion of the principal amount of operating leases and redeemable preferred stock.

Important ratios used to analyze capital structure include the debt ratio, the debt-to-equity ratio, and the long-term debt-to-capitalization ratio.

Credit agency ratings can also help investors assess the quality of a company's capital structure.

কর হার কম হলে বিনিয়োগ ও উৎপাদন বৃদ্ধি পায় কিন্তু সরকারি রাজস্ব হ্রাস পায়।

The accounting rate of return (ARR) helps determine the rate of return of a project.
ARR is the average annual profit divided by the initial investment.
Businesses use ARR when comparing the return on multiple projects.
ARR differs from the required rate of return (RRR), or the minimum return an investor would accept for an investment or project that compensates them for a given level of risk.

The capital asset pricing model, or CAPM, is a financial model that calculates the expected rate of return for an asset or investment.
CAPM does this by using the expected return on both the market and a risk-free asset, and the asset’s correlation or sensitivity to the market (beta).
There are some limitations to the CAPM, such as making unrealistic assumptions and relying on a linear interpretation of risk vs. return.
Despite its issues, the CAPM formula is still widely used because it is simple and allows for easy comparisons of investment alternatives.
For instance, it is used in conjunction with modern portfolio theory (MPT) to understand portfolio risk and expected return.

Source: Investopedia.

In DCF analysis, the discount rate helps businesses and investors calculate the present value of expected future cash flows to decide whether a project or investment is worth pursuing.
Choosing the appropriate discount rate in DCF analysis can depend on factors like opportunity costs, the weighted average cost of capital (WACC), or historical returns, ensuring accurate investment valuation.

IRR is calculated using the same concept as net present value (NPV), except it sets the NPV equal to zero.
The ultimate goal of IRR is to identify the rate of discount, which makes the present value of the sum of annual nominal cash inflows equal to the initial net cash outlay for the investment.
IRR is ideal for analyzing capital budgeting projects to understand and compare potential rates of annual return over time.
In addition to being used by companies to determine which capital projects to use, IRR can help investors determine the investment return of various assets.

Source: Investopedia.

Leverage refers to using debt or borrowed funds to amplify returns from an investment or project.
Companies can use leverage to invest in growth strategies.
Some investors use leverage to multiply their buying power in the market.
A range of financial leverage ratios gauge a company's financial strength with the most common being debt-to-assets and debt-to-equity.
Leverage is often associated with risk, as the higher levered a company is, the more financial risk they are taking on.

Financial leverage is a process where businesses or individuals use loans to fund projects or acquire extra assets for the business. After the project or asset acquisition is complete, the borrower pays back the principal sum with the interest amount.

The operating leverage ratio is used to calculate a company’s break-even point and help set appropriate selling prices to cover all costs and generate a profit.
Companies with high operating leverage must cover a larger amount of fixed costs each month regardless of whether they sell any units of product.
Low-operating-leverage companies may have high costs that vary directly with their sales but have lower fixed costs to cover each month.

DOL(Degree of Operatin Leverage): A financial ratio that measures the sensitivity of a company’s operating income to its sales. The DOL ratio shows the % change in operating income in response to % change in Sales.DOL=% change in EBIT/ % change in sales

DFL (Degree of Financial Leverage): It measures the sensitivity of earnings per share(EPS) to the fluctuation in the operating income.
DFL= % change in EPS/ % change in EBIT

DTL(Degree of Total Leverage): It is the ratio of % change in EPS to % change in sales.
DTL= DOL*DFT= % change in EPS/ % change in sales

Net Income Approach to Capital Structure Theory:
The Net Income Approach suggests that a company can enhance its value and lower its weighted average cost of capital (WACC) by increasing the proportion of debt in its capital structure. This approach is based on several assumptions:

The cost of debt is lower than the cost of equity.
There are no taxes.
The use of debt does not change investors' perception of risk.

(0.7×10%) + (0.3×7%) = 9.1%

Modigliani and Miller Approach:
Proposition I: M&M Proposition I, in its simplest form, states that in a perfect market with no taxes, a company's value is unaffected by its capital structure (the mix of debt and equity it uses). This means a levered firm (with debt) will be valued the same as an otherwise identical unlevered firm (without debt). The core idea is that changes in capital structure only shift the distribution of returns between debt and equity holders, without changing the overall value of the firm. 

Optimal Capital Structure: The optimal capital structure of a firm is the ideal combination of debt and equity financing that enhances the company's market value while minimising its overall cost of capital.

​A firm's cost of capital is typically calculated using the weighted average cost of capital formula that considers the cost of both debt and equity capital.

Each category of the firm's capital is weighted proportionately to arrive at a blended rate, and the formula considers every type of debt and equity on the company's balance sheet, including common and preferred stock, bonds, and other forms of debt.

New Equity Shares: Generally the costliest, as shareholders expect the highest returns due to higher risk and there are issue costs, flotation costs, etc.
New Preference Shares: Fixed return, less risky than equity, so usually less costly than equity.
New Debts: Least expensive due to tax benefits on interest and lower risk to lenders.
Retained Earnings: Not paid out as dividend, have opportunity cost but normally considered cheaper since there is no dilution of control and no flotation costs.

Conflicts in the rankings of mutually exclusive investment projects can arise due to:

a. Difference in costs of projects: Projects with different initial investments can affect which one appears more profitable depending on the method used (e.g., NPV vs. IRR).

b. Difference in timing of cash flows: Timing affects the present value of returns. A project that gives higher returns earlier may be preferred under some criteria, while another with higher returns later may be favored under others.

c. Difference in useful lives of the projects: Different lifespans make direct comparison harder, especially when one project may have to be repeated or replaced within the evaluation period of another.

An independent project is one whose acceptance or rejection does not depend on the decision about other projects. You can accept or reject it regardless of what happens with other projects.

In contrast:

Mutually exclusive projects: Accepting one means you cannot accept the other(s).

Dependent or contingent projects: These projects rely on the acceptance of another project.

WACC can affect investment, capital structure and dividend policy.