MBA - Summer Finance Internship Project report (STPR) PDF

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VCE summer internship final report - Financial Modeling and Analysis...

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INTERNSHIP PROJECT ON Financial Modelling and Analysis of 10 MW WIND Power Project in Porbandar, Gujrat IN

Company- Vardhan Consulting Engineers

Under the Supervision ofMr. Ashish Kumar (Mentor)

Submitted By- Akash Awasthi

ACKNOWLEGEMENT

The satisfaction of completion of any successful task is incomplete without mentioning the name of people who made it encouragement crowned our efforts with success. I have a pleasure in submitting the project report & I take this opportunity to express my sincere gratitude to all those who have helped me in this completion of this project report. The MBA curriculum given me a unique opportunity to be in association with one of the largest multinational company in the country. I am extremely grateful to Mrs. Neha Kumari (sr. Manager HR_VCE) of the Organization for giving me the opportunity to work on the project. I am extremely grateful to Mr. Ashish S Kumar (CEO at VCE), for giving me opportunity constant encouragement, support & guidance. I express my heartily gratitude to my project guides, for providing me all the facilities required in completing this project. My heartily gratitude to all those who have directly or indirectly given assistance in making this project easier & possible.

Executive Summary

The Gautam Buddha University of Greater Noida had given the Subject of Summer internship Project for Master of Business Administration [M.B.A.] Semester 3rd Our Project Report subject is Financial Modeling and Analysis in Vardhan Consulting Analysis (VCE). Location: Vardhan House, Anand Bazar, Danapur Cantonment, Patna, Bihar Duration: Duration of the project is 2 Months. Project title: “Financial Modeling and Analysis”. The Branch head of the Vardhan Consulting Private Ltd. is Mr. Ashish S Kumar sir who has all information Provide about the Project Finance and their functions, and my subject topic is a study of Financial Modelling Analysis of 10 MW Wind Power Project in porbandar there are various topic i.e. project Finance, function of revenue, cost and debt sheet of the financial model and revenue model for wind power Project, Residential Building, Manufacturing Unit and other PPP projects. Objective of the project:  To study the concept of Finance.  To study the function of revenue, cost and debt sheet of the financial model.  To find out the various steps involved in the finance flows sheet.  To provide support services to the medium and small scale sectors.  To streamline system within the Company for settlement of commercial disputes.

INDEX Chapter No.

Chapter Name

1

Executive Summary

2

Introduction

3

Organization overview

4

Objectives of the Study

5

Research Methodology

6

Theoretical Background of the study

7

Data Analysis and Interpretation

8

Conclusion

9

Bibliography

INTRODUCTION

The project title as “Financial Modeling and Analysis” with a view to study the different ratios of previous 3 years for financial & constructive decision for “10 MW Wind Power Project in Porbandar”. Ratio analysis is a major component of financial and taken a constructive decision for future prospect of a company. Ratio analysis is also the process of determining & interpreting numerical relationship based on financial statement of ratio to interpret the financial statement. I have collected primary and secondary data from financial statement of company and discussion with various staff member in organization. I have completed summer internship project from 14th June to 28th July 2020. Financial statement that present and organized collection of financial data from the bases of financial analysis the highlight significance of financial ratio analysis, the usefulness of the financial ratio to those who manage a firm as well as to those who are related to it in any way, such as creditors, investors, financial analysis and so on in order to avoid duplication, it is discussed here how the different ratios should be use in order to arrive any one conclusion.

ORGANIZATION OVERVIEW

VCE is a consulting company founded by group of engineers who have strong academic background with decades of management experience while working in companies all across the globe. VCE is providing solutions to the complex engineering, management and financial issues of clients. We provide engineering and project management consultancy to energy projects. Especially Solar PV power project (Utility Scale Large Sized Projects), Pyrolysis Projects (Plastic to Oil).

Our services include; 1. 2. 3. 4. 5.

Feasibility Analysis, Detailed Project Report, Financial Analysis (IM). Financial Closure through Debt or Private Equity for Project Finance. On-site and Off-site Project Management and EPC-Management Services. Documentation and Transaction Services for Sale of Project. Project Development and Transfer of Rights at NTP.

Our lead consultant have 10+ years of experience in energy sector in India, Philippines, UK, Cambodia and Thailand. We are specialist in Solar PV projects, we provide tailored made engineering and management solutions for the client’s needs. The details of our previous clients and projects will be provided on request. Please write email to us on [email protected] for further communication and quotations. [VCE Consulting Services]

PURPOSE OF THE ORGANIZATION

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Objective of the project/study

To evaluate the financial ranking: The fiscal positioning of an enterprise is influenced by the fiscal reserves it possess, its monetary arrangement, its liquidity and its competence to get used to to transformations in the market in which it operates. To evaluate the firm's performance: Performance is the aptitude of the enterprise to accrue revenues that have been endowed in it. Knowledge about the capacity and inconsistency of revenues assists the firm in predicting the anticipated monetary flows from the firm's current reserves and in predicting possible additional fund influx from extra resources that can be endowed in the enterprise. To evaluate the alterations in Fiscal Ranking: Users of fiscal report look for information about the endowments, subsidizing and functional activities that the enterprise embark on while treatment period. This data assists in evaluating how effectively the enterprise is able to generate fund and money and how the firm uses the cash influx.

Utility of Finance Project Report The major classes of finance information users are current and prospective investors, staffs, shareholders, clients, governments and their intermediaries. All these information seekers are completely dependent on fiscal report to assist their decision-making process. Investors provide risk capital to the enterprise; hence every fiscal project report must satisfy their requirements. Common to all of these information seekers is their curiosity in the capacity of an enterprise to produce funds and funds equivalents besides the time and assurance of anticipated fund flows. Project report on finance describes the fiscal effects of the past occurrences, deals that most information seekers need to associate with the future events. Finance

project report offer only constrained amount of non-fiscal data required by the seekers of fiscal statements.

Research methodology 10-MW wind power project porbandar Wind power is one of the few viable sources of alternative energy that are available to homeowners today. It’s especially popular in areas that have regular high wind seasons. However, it’s important to consider not just the natural circumstances that are going to affect your wind turbine’s power generating abilities, but also the technical aspects involved. One of the most important characteristics to look out for in a wind turbine is its power rating. This is usually measured in kilowatts (kW) and is similar to a vehicle’s horsepower. Smal lwi nd t ur bi nes ,s omet i mesr ef er r ed t o ashome wi nd t ur bi nes ,ar e muc hs mal l ert hant het ur bi nesy ous eeonwi ndf ar ms .Whi l el ar gerwi nd t ur bi nescanhav eabl adedi amet ert hats panst hel engt hofaf oot bal lfi el d, s mal lwi ndt ur bi nest y pi c al l yhav eadi amet erupt o10met er swi de. Bec aus eoft hes mal l erbl ades ,t hes ewi ndt ur bi neshav eamuc hs mal l er powerout putt hanl ar get ur bi nes .Thatmak ess mal lwi ndt ur bi nesper f ect f orpr oj ect swi t hs mal l erel ec t r i c i t yneeds ,suc hasr es i dent i al ,por t abl e,or offgr i dappl i c at i ons . The bes tl oc at i ons f ors mal lwi nd t ur bi nes ar e pl aces t hatex per i ence f r equent ,hi ghwi nds peeds .Gener al l ys peak i ng,t het al l ert het ur bi ne,t he wi ndi ert heenv i r onmentandt hemor eel ec t r i c i t yi t ’ sc apabl eofgener at i ng. Mos toft hebes tspot sf ors mal lwi ndt ur bi nesar eonr ur alpr oper t i es ,as t heyt endt ohav eal otofs pac eandf ew obs t r uc t i onst hatwoul di mpac t wi nds peeds .I ncer t ai ni ns t anc es ,as mal lwi ndt ur bi nehast hepot ent i alt o offs et100per centofahome’ sel ec t r i c i t ybi l l .

How Much Electricity Does a Wind Turbine Produce? This basically represents a combination of the power that’s been used multiplied by the amount of time during which that power was used. For instance, let’s say you have a 100-watt light bulb in your living room and you happen to leave it switched on for 10 hours straight. During that time period, it would have used something like one kWh. Conversely, industry experts estimate that a 10kW wind turbine energy system has the potential to produce up to 10,000 kWh worth of energy per year. However, this estimation is based on a turbine that’s operating under favourable conditions, which won’t always be possible in real life. The reality is that there will be days, weeks and even months where there just isn’t enough wind for your turbine to produce this amount of energy. On some days it will only be able to generate a small fraction of its expected energy output. A soft breeze is not enough to power a wind turbine and extreme heat will render it practically useless. The best way to calculate how much electricity does a wind turbine produce is to multiply the air density with the mechanical efficiency of the turbine. Then, multiply the answer by the length of the rotor blade and the speed of the wind. Wind speed Wind speed is one of the most fundamental determining factors to how much power does a wind turbine produce. It’s more important than the turbine’s mechanical construction actually. Although the use of wind turbines has picked up among residential areas all over the U.S., most areas in the country just don’t experience the amount of wind needed to power a turbine consistently. It doesn’t matter which brand or manufacturer you buy your wind turbine from, it won’t generate much power if the weather conditions aren’t favourable.

The U.S. Department of Energy is a great resource to consult on this matter, and it shows the average annual wind speed at 50 meters above the ground. If your area has wind speeds that are below the 10 miles per hour threshold then your turbine simply won’t generate the power you need to effectively run your household. However, if the average wind speed increases marginally to 12 mph then you can expect to experience a significant boost in the amount of energy that’s generated by your wind turbine. Another factor that contributes to how much power does a wind turbine produce is altitude. The higher you place the turbine the more power it will generate. For example, a wind turbine that’s placed on a 100-foot tower will produce 30% more energy than a wind turbine that’s placed on a 60-foot tower. The numbers will improve even more if you make sure that there are no obstructions around or near the turbine, such as trees or other structures. A common concern among homeowners wanting to purchase wind turbines is that the rotor blades will fall off and hurt someone during high winds. Luckily, most manufacturers factor this into the production process, as most wind trines shut down automatically whenever wind speeds reach the 25 mph threshold.

How much do wind turbines cost?

Home or Farm Scale Wind Turbines Wind turbines under 100 kilowatts cost roughly $3,000 to $8,000 per kilowatt of capacity. A 10 kilowatt machine (the size needed to power a large home) might have an installed cost of $50,000-$80,000 (or more). Wind turbines have significant economies of scale. Smaller farm or residential scale turbines cost less overall, but are more expensive per kilowatt of energy producing capacity. Oftentimes there are tax and other incentives that can dramatically reduce the cost of a wind project. Commercial Wind Turbines The costs for a utility scale wind turbine range from about $1.3 million to $2.2 million per MW of nameplate capacity installed. Most of the commercial-scale turbines installed today are 2 MW in size and cost roughly $3-$4 million installed. Total costs for installing a commercial-scale wind turbine will vary significantly depending on the number of turbines ordered, cost of financing, when the turbine purchase agreement was

executed, construction contracts, the location of the project, and other factors. Cost components for wind projects include things other than the turbines, such as wind resource assessment and site analysis expenses; construction expenses; permitting and interconnection studies; utility system upgrades, transformers, protection and metering equipment; insurance; operations, warranty, maintenance, and repair; legal and consultation fees. Other factors that will impact your project economics include taxes and incentives.

What is a financial model? A financial model is simply a tool that’s built in spreadsheet software such as MS Excel to forecast a business’ financial performance into the future. The forecast is typically based on the company’s historical performance, assumptions about the future, and requires preparing an income statement, balance sheet, cash flow statement, and supporting schedules (known as a 3 statement model). From there, more advanced types of models can be built such as discounted cash flow analysis (DCF model), leveraged-buyout (LBO), mergers and acquisitions (M&A), and sensitivity analysis. Below is an example of financial modeling in Excel. Financial modeling is hard if you’re trying to figure it out on your own, but with the help of a professional training program like CFI’s, the modeling process becomes a lot easier. Many finance professionals find it hard to link the three financial statements together in Excel, so once you know how to do that, you’ll be off to a great start. If you’re interested in financial modeling, chances are, you’re planning to land a job offer in the finance industry. You may want to be an investment banker, a private equity research specialist, or an analyst or associate in a hedge funds firm. It’s really not a question of whether financial modeling is hard or not. It’s about your willingness and determination to learn new skills or hone your current skill set. Completing a financial modeling course opens more opportunities for career growth, and in an industry such as finance, you would need continuous learning so you can quickly adapt to change and be one step ahead of your peers.

The Basics of Financial Modeling Financial modeling is a representation in numbers of a company's operations in the past, present, and the forecasted future. Such models are intended to be used as decision-making tools. Company executives might use them to estimate the costs and project the profits of a proposed new project. Financial analysts use them to explain or anticipate the impact of events on a company's stock, from internal factors, such as a change of strategy or business model to external factors such as a change in economic policy or regulation. Financial models are used to estimate the valuation of a business or to compare businesses to their peers in the industry. They also are used in strategic planning to test various scenarios, calculate the cost of new projects, decide on budgets, and allocate corporate resources. Examples of financial models may includ...