Calculation of Breakeven Point between 6-8 other banks

The provided assignment content is an analysis of AMD Chemical Pvt. Ltd.'s financial statements and business strategy. The summary highlights the company's strong management team, efficient marketing strategy, and director's personal net worth, which enables the finance department to easily access funds from the market.

AMD chemicals Pvt. Ltd.
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Executive Summary
Present reports aims to discuss business plan of newly opened company AMD chemicals Pvt.
Ltd. AMD chemicals Pvt. Ltd. is small manufacturing company in chemical industry to launch
innovative product chemical analyzer and sensor cartridge.
Chemical Analyzer is device to identify the various chemicals in mixture .It will be revolutionary
product in chemical manufacturing company. Report highlights the existing market gap for
chemical analyzer with the brief analysis of current market analysis.
The later section of report throws light on competitive advantage of company as well as
marketing strategy.
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Contents
1.Introduction..............................................................................................................................................4
2. Vision of AMD chemicals Pvt. Ltd............................................................................................................4
3. Business description................................................................................................................................4
4. Products and Services’ description..........................................................................................................5
5. Market Analysis.......................................................................................................................................6
6.Management and Organization................................................................................................................6
7. Marketing and Sales................................................................................................................................7
8. Competitive advantage............................................................................................................................9
10. Conclusion...........................................................................................................................................10
11. Reference............................................................................................................................................11
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1.Introduction
Wilson family is planning to open new company names AMD chemicals Pvt. Ltd. to
manufacture highly advanced technical product chemical analyzer. It is able to investigate
compounded chemical solutions, which is based on Micron technology.
2. Vision of AMD chemicals Pvt. Ltd.
Product of AMD chemicals Pvt. Ltd. is sensor cartridge and a chemical analyzer. This
advancement in analyzer with the help of chemical and Micron technology era facilitates
improved chemical manufacturing process. The vision of company is to provide
 Better quality products delivery
 Rising production capabilities
 Tackling processing errors and taking quick actions
Such amazing advantages will surely save million dollars on annual basis and will reduce
downtime and improve plant utilization (Winetstien & Pearrlman, n.d.). Additionally, numerous
medical applications work on real time basis, can easily use chemical analysis and save
thousands of lives and decreases the unaffordable hospitals lab charges.
3. Business description
No technology has been used so far for the measurement of product quality on real time basis in
various liquid processing companies (Pollak, 2011). AMD chemicals Pvt. Ltd. aim to launch
device that will perform a laboratory test rather than using a sample. The idea is to eliminate the
samples. Company is providing solution to lower down rejection rate of products using latest
methodologies. In addition, the ratio of thrown away and or re-processed items will be
controlled. There is daunting impact on firm's bottom line because of this ineffectiveness
(Namieśnik, 2002). With the help of chemical analyzer, company promise to increase the rise in
revenue by 40% and lower products costs of its customers. The prices of the latest online
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analyzers are very high with limited access to the applications (Namieśnik, 2002). In addition,
required skilled operators, accuracy generate delays in producing results.
4. Products and Services’ description
Many industrial reports states that the causes behind mainly real-world chemical measurements
are carried out offline, as numerous complicated techniques are not able to determine their
approach from the test lab to Research and Development and avail manufacturing facilities
(Kammer, 1998). This system is required to adopt changes, based on chemical manufacturers'
requirements for cost reduction, to increase competences, and to respond speedily to the market
and to improve the quality of the products. The latest techniques like Mass Spectrometry and Gas
Chromatography are too slow and not able to adapt the dynamic manufacturing trends
(Rouessac, Rouessac, & Brooks, 2007).
Therefore, there is latent demand for chemical analyzer that is cost effective, easy to use, and
reliable.There will be two parts of products-Chemical analyzer and sensor cartridge. Sensor
cartridge need to replace after fixed number of manufacturing run. Real-time and economical
analysis of many complex chemical solutions will be automatically enabled with the help of
chemical analyzer and Sensor Cartridge. The chemical analyzer will help in recognizing the
exact amount of multiple chemicals inside any combination or mixture.
Sensor Cartridge
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Chemical analyzer
5. Market Analysis
There is a strong growth in the sale of process control systems. IN 1997, the ratio of the sales
was $3.86 billion whereas it reached at the level of $4.6 billion by the end of 2000. In 2004, it
reached at $5.75 billion. The rapid expansion is lined up for the chemical analyzer industry,
rising at a high annual rate of 7.8% from (In 1991 it was $1.45 billion in 2001, it was $3.10
billion). Liquid and gas analysis of this market is almost split. It has also been expected that 50%
of the current market is for the process control. Inside this market, revenues will grow very fast
and it should reach $1.3 billion in 2000, up from $880 million in 1993 for online analyzers.
6.Management and Organization
Additional expertise and skills play a vital role in the growth of any company so that company
should stand like a great market leader. Therefore, CEO, president and chief scientific officer
needs to be recruited by AMD chemicals Pvt. Ltd. These leaders acts as milestones and helps to
capitalize the gaps of the currently existing in market (Kirwan, 2009).
The chief executive officer, Roger and AMD chemicals’ president Dalton are employed together
for starting up the company operation. At the latest stage, Roger will be responsible for business
development, paying attention on the current product development strategy and market analysis
for an emerging chemical cartridge technology. The chief financial officer and vice president of
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AMD chemicals play a major role for managing the finances of the organization. They will be
responsible to manage team of proficient financial and accounting expert to AMD chemicals Pvt.
Ltd. Additionally, AMD chemicals Pvt. Ltd. and Micron technology have become business
partners and the shareholders. AMD chemicals Pvt. Ltd. is engaged in working closely with the
multi-disciplinary panel of world-class scientists in order to commercialize the Micron. In AMD
chemicals Pvt. Ltd., the inventors will be fully engaged for the creative development and to
support the company. The seasoned business people bring their complementary skills in order to
stand on the hurdles that AMD chemicals has to test with the help of AMD chemicals's advisers
(Longenecker, Palich, & Hoy, 2011). Within different commercial markets, so many consultants
are part of AMD chemicals Pvt. Ltd., dedicatedly work further in order to develop marketing
strategy and for building the potential understand for the Micron.
CEO president chief
financial
officer
chief
scientific
officer
scientists
vice
president
consultant
s
CEO
president
chief financial officer
chief scientific officer
scientists
vice president
consultants
Organizational structure of AMD chemicals Pvt. Ltd.
7. Marketing and Sales
AMD chemicals Pvt. Ltd. proposes to enter this business market by becoming the partner with
large process control (OEMs) original equipment manufacturers that provide biotechnological
companies, biotechnological companies, and instrumentation to fine chemical manufacturers.
New potential markets are not at all limited to environmental testing, medical diagnostics, and
beverage processing.
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Price: The estimates signify that for Micron, there is high sensitivity of the price (Frey, 2004). It
reflects that the valued customers’ base uses between $25,000 and $150,000 for the sophisticated
chemical analyzers wherever they want to. AMD chemical Pvt. Ltd. is decided to sell $ 50000
per chemical analyzer and sensor cartridge is priced at $250 after each manufacturing run.
Product: AMD chemicals will position of chemical analyzer for innovative technology for
quality control and better chemical process (Frey, 2004). Chemical analyzer is compatible with
existing chemical analysis technology. AMD chemicals’ analyzer can be used to be added to the
current analytical methods and to be working with the presented instrumentation.
Promotion: AMD chemicals Pvt. Ltd. is going to sublicense the chemical analyzer to co-
development customers and OEM partners. These business partners are liable to do chemical
analyzers’ mass marketing and the technology is promoted through their channels (Frey, 2004).
In each respective market niche, AMD chemicals Pvt. Ltd. will recognize and spotlight on a key
player that would surely avail advantage from AMD chemicals’ chemical analyzer and will
flourish from the unreasonable competitive benefit that this specific technology will be offering.
For later markets, AMD chemicals likes to work with the current investors. Also, supporting the
research is required to promote chemical receptors. In chemical analyzer technology, scientist
team will also assist in the publication of the efforts in the prominent research journals in order
to set the product as a milestone (Mukerjee, 2008).
In order to promote support and awareness to the valued clients and customers, very useful and
recognized website (http://www.AMD chemicals.net ) has been introduced which is in place and
has been treated as a hotline. Technology’s video demonstrations have been used as supporting
promotional material. Also, one more supporting material will be developed soon which is in
progress as of now. When the recognized and reputed chemical manufacturing companies will
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accept this technology, it will result that the analyzer will be a need for quality control
laboratories, pilot plants, retrofitting on existing plants and in new developed plants.
Place: An OEM that has already running into the market will take care of the Instrument
distribution that is seen as early adopters by AMD chemicals. As of now, only authenticated,
accepted, and well channels use AMD chemicals pvt. Ltd.’s chemical analyzer only. The Sensor
Cartridge will be shipped from company to OEM partner's customers by using identifiable
shipping subcontractor services likewise Federal Express, UPS and DHL.
8. Competitive advantage
The most competitive existing Analyzer technologies fighting against AMD chemicals Pvt. Ltd.
are High performance liquid chromatography (HPLC), Mass spectrometry (MS) and Gas
chromatography (GC).There are many reasons which support that AMD chemicals Pvt. Ltd. is
step ahead from other. The existing technologies were facing some major drawbacks of the
chemical solutions, they should identify regarding the complexities, or real-time analysis was not
offered at all. The observation states that the efficiency of the latest chemical analyzer is not at
all harmful and comparatively more balancing to AMD chemicals. Reason being, analyzer is
capable enough to be grouped together with the existing systems to serve a new elements on their
running logical competences (Bereznoy, 2015).
AMD chemical Pvt. Ltd. has competitive advantage over competitors by Identifying and
producing real-time logical platforms for the solutions of complex chemical problems.
AMD chemical Pvt. Ltd. has been recognized as a reputed firm that introduces highly
customized analytical sensing technology for diverse trade applications. Therefore, when AMD
chemicals has launched a pre-production prototype chemical analyzer before production, it is
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going to authorize the creation of chemical analyzer and will contract out the sensor cartridges’
manufacture and design.
9. Financials
Profit and Loss account for next 2 Year
Figures in Million AUD
Particular December 2018 December 2019
Sales
Domestic 295.55 401.76
Other Revenue 11.60 10.58
Total 307.15 412.34
Total Sales 307.15 412.34
Cost of sales
Raw materials 238.37 279.76
Labor expense 3.41 4.13
Manufacturing Expense 49.31 58.96
Depreciation 31.20 27.91
Total of Above Cost 322.29 370.76
Opening Stock of Raw
Material - 14.30
Sub-total 322.29 385.06
Closing Stock of Raw Material 14.30 16.78
x) Cost of Production 307.99 368.28
Opening Stock of Finished
Goods - 43.66
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Sub-total 307.99 411.94
Closing stock of Finieshed
Goods 43.66 51.43
Cost of Sales 264.33 360.51
G.P ( Gross profit) 42.82 51.83
Administrative and Sales
Expense 5.75 6.68
9. Interest 22.82 20.81
10.Operating profit after
interest(8-9) 14.25 24.34
(iii) Net of other non-
operating income/expenses - -
12. Profit before tax/loss
{10+11(iii)} 14.25 24.34
13. Provision for taxes 3.90 6.06
14. Net profit/loss (12-13) 10.35 18.28
 Selling and administrative expense contains Insurance, travel , telephone expense, selling and
marketing expense
 Manufacturing expense contains electricity , water and rent and other overheads
ANALYSIS OF BALANCE SHEET (Rs.in lacs)
LIABILITIES December 2018 December 2019
CURRENT LIABILITIES
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Short Term Borrowing
(ii) From other banks 70.00 70.00
Sub total (A) 70.00 70.00
Creditor For Expense 1.61 2.42
Creditor for raw material 13.84 23.20
Provision for Taxation 3.90 2.30
Other current Liability 4.69 6.29
Currrent Liability 24.04 34.21
Total current Liability 94.04 104.21
TERM LIABILITIES
Term Deposit 148.88 130.74
Total Term Liability 148.88 130.74
Total Outside Liabilty 242.92 234.95
NET WORTH
Equity Shares 55.00 57.35
Surplus /Deficit 10.35 18.28
Net Worth 65.35 75.63
TOTAL LIABILITIES 308.27 310.58
CURRENT ASSETS
Cash & bank 1.05 1.15
Receivables other than defered & export 46.60 55.38
Inventory: 14.30 16.78
(iii)Finished goods 43.66 51.43
Advances to suppliers of raw materials &
stores/spares 6.00 6.25
- Others
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4.40 5.32
TOTAL CURRENT ASSETS(total of 26 to 33) 116.01 136.31
FIXED ASSETS
Gross Black 223.46 202.18
Depreciation to date 31.20 27.91
NET BLOCK (35-36) 192.26 174.27
43. TOTAL ASSETS (34+37+41+42) 308.27 310.58
Costing Structure
Product
Chemical
analyzer
Cayridge
Sensor
Price Unit 50000.00 250.00
Raw material 35000.00 200.00
Water 1000.00 5.00
Electricity 1500.00 7.50
Labor 2500.00 7.50
Total Cost 40000.00 220.00
Contribution 10000.00 30.00
% of Contribution 20.00% 12.00%
Calculation of product Mix and its Contribution
Product
Chemical
analyzer
Cayridge
Sensor Total
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Product mix 2.00 1.00 3.00
Contribution 10000.00 30.00 10030.00
Total Contribution per month 20000.00 30.00 20030.00
Contribution per product Mix 20030.00
Calculation of Breakeven point
Calculation of Breakeven Point
Amount in
AUD
Total Fixed Cost Asset (a)
223460000.0
0
Contribution per Product mix 20030.00
Total Unit to be produced 11156.27
Important Ratio
Particular March 31' 17 March 31' 18
Net Sales 307.15 412.34
(Exports) 0.00 0.00
Operating Profit 14.25 24.34
PBT 14.25 24.34
PBT/Net Sales (%) 4.64 5.90
PAT 6.74 10.46
Cash Accruals 37.94 38.37
PBDIT 68.27 73.06
PUC 55.00 57.35
TNW 61.74 67.81
Adjusted TNW 61.74 67.81
TOL/TNW 3.89 3.46
TOL/ adjusted
TNW 3.89 3.46
Current Ratio 1.27 1.31
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10. Conclusion
AMD chemical Pvt. Ltd.’s chemical analyzer and Sensor Cartridge will be one time solution of
complex chemical quantity control. It is highly advanced product to identify the presence of
different chemicals in any mixture. AMD chemicals Pvt. Ltd. have strong management team who
are committed to handle different business functions. AMD chemical Pvt. Ltd. developed an
efficient marketing strategy of product that ensures the success of product in market. Also the
director personal net worth are so strong that finance has been availed easily from the market.
11. Reference
Bereznoy, A. (2015). Changing competitive landscape through business model innovation: The
new imperative for corporate market strategy. Journal of the Knowledge Economy.
doi:10.1007/s13132-015-0324-x
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Frey, A. W. (2004). Effective marketing mix. New Hampshire: Amos Tuck School of Business
Admin.
Kammer, R. (Ed.). (1998). Guide to Nist national institute of standards and technology, 1998.
Washington, DC, United States: DIANE Publishing Company.
Kirwan, J. (2009). Good small business planning guide: How to get your small business off to
the best possible start. London: A & C Black Publishers.In-line Citation
Longenecker, J. G. G., Palich, L., & Hoy, F. (2011). Small business management: Launching
and growing entrepreneurial ventures (16th ed.). Boston, MA, United States: South-Western
College Publishing.
Mukerjee, H. S. (2008). Industrial marketing. New Delhi: Excel Books.
Namieśnik, J. (2002). Trace analysis — challenges and problems. Critical Reviews in Analytical
Chemistry, 32(4), 271–300. doi:10.1080/10408340290765579
Pollak, P. (2011). Fine chemicals: The industry and the business (2nd ed.). United States:
Wiley-Blackwell.
Rouessac, F., Rouessac, A., & Brooks, S. (2007). Chemical analysis: Modern instrumentation
methods and techniques (2nd ed.). United States: Wiley, John & Sons.
Winetstien, M., & Pearrlman, L. (n.d.). Cost effectiveness of automated multichannel chemistry
analyzers. DIANE Publishing.
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