Accounting & Finance Project Report for Saturn Petcare Analysis

This report assesses Saturn Petcare Australia and New Zealand's potential project investments, focusing on varying sales scenarios and profitability. It evaluates the 'Buddy Project' under normal, improved, and reduced sales conditions, determining its financial viability through cash flow analysis and net present value calculations. Furthermore, the report compares two machinery replacement options (Project A and Project B) using net present value to recommend the more profitable choice. The analysis concludes that investing in both the 'Buddy Project' and Project B is advisable to enhance the company's overall profitability. Desklib offers a range of similar solved assignments and past papers to aid students in their studies.

Running Head: Accounting and Finance
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Project Report: Accounting and Finance

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Contents
Introduction.......................................................................................................................3
Findings............................................................................................................................3
Decision process...............................................................................................................3
Conclusion........................................................................................................................4
References.........................................................................................................................5

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Part A:
Introduction:
The report has been prepared to identify the project and different situation associated
with that project of Saturn Petcare Australia and New Zealand. The case explains that the
company has a project opportunity and wants to invest into the project but before that
company is focusing on the different situation ad outcome from the business. The report
focuses on normal sales, improved sales and reduced sales of the business and the net profit
position of the business.
Findings:
The case explains that there are various outflows associated with the business and the
position of the business would be change according to the situation. The cash flow position of
all the situations have been calculated firstly and it has been recognized that the cash flow
position would be changed according to the changes into the sales position of the business. in
case of the normal estimated sales of the company, it has been recognized that the company
could easily earn $ 35,656,185, the present value of the cash flow of the business in the
normal scenario is $ 1,535,956. It brief positive profitability level of the business.
Further, in case of the lower sales than the estimated sales (5%) of the company, it has
been recognized that the company could easily earn $ 37,963,994, the present value of the
cash flow of the business in the normal scenario is $ 2,478,046. It brief positive profitability
level of the business. Lastly, the higher sales position of the business has been evaluated and
it has been recognized that the company could easily earn $ 33,348,376, the present value of
the cash flow of the business in the normal scenario is $ 593,865. It explains that if the sales
of the business would be decreased by 5% higher or lower than the cash flows and net profit
position of the business would be changed but still the profit level of the business would be
positive (Chandra, 2011). It explains that the “Buddy Project” of Saturn Petcare Australia and
New Zealand is quite impressive and the company is recommended to invest the money to
earn great return from the project.
Decision process:
Further, the new proposal of Saturn Petcare Australia and New Zealand has been
discussed in which the company has two options for the purpose of replace the old

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machineries of the business. the case explains that the total time period and the associated
inflow of both the projects are different. The net present value calculations have been applied
on both the projects and it has been identified that the net present value of project A is $
16,732. On the other hand, the calculations on project B define net profit worth $ 69,135. It
explains that the profit from project B is higher and thus the project B must be accepted by
the business (Fridson & Alvarez, 2011).
Conclusion:
To conclude, it is suggested to Saturn Petcare Australia and New Zealand to invest
into the Buddy project and project B to improve the profitability level of the business.

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References:
Chandra, P. (2011). Financial management. Tata McGraw-Hill Education.
Fridson, M. S., & Alvarez, F. (2011). Financial statement analysis: a practitioner's
guide (Vol. 597). John Wiley & Sons.