помогите с составлением balance sheet and P&L
задача на англицком..
TV channel project
Introduction
You are working on the project for the development of a 5-year strategy of a federal entertainment TV-channel. The project’s objective is to define the channel’s positioning and future strategy, which can ensure the highest growth in the value of the business for shareholders. You are to analyse the current position of the company and understand main barriers to its growth. You also have to build the financial model for the assessment of strategic options and the value of the business. Another consultant is analysing international comparisons. The first two weeks of the project have elapsed, you’ve conducted several interviews with the company’s management, the industrial expert and got internal documents from the Client where the current state of affairs is described.
The Client asks for a meeting, which was not on the schedule, in a few days time This afternoon an internal meeting will be held to discuss within the team the 2 weeks’ findings, hypotheses and facts.
So far you’ve got the following information:
For some years now the TV-channel has been rated 4-6th among Russia’s TV-channels with respect to the audience share. In 2005 a new shareholder – a large international media-holding specializing in TV-content production and distribution - purchased a 25% share of the company, which led to the change in the programming policy if the channel, specifically, the content became more «women»-focused thought the channel had originally been positioned as “men’s”. At the moment there is an internal disagreement between the management of the Russian and the new shareholders, which roots in the fundamentally different vision of the channel’s future development. The TV channel’s audience share throughout 2006 decreased from 5.6% to 4.8%. Also in spite of the focus shift towards the women audience in 2006, the share of the men audience is bigger, which means the channel is still perceived as “men’s”. The share of children and teenagers is also significant. Throughout 2006 advertising revenue growth has slowed down, yet the revenues brought by advertising remain the main source of the channel’s earnings and make about 90% in the revenue structure or $140 mln for the year 2006. Also the channel gains revenue from selling sponsor time and interactive services. The power ratio (the ratio between the TV-channel’s share in the advertising market and the channel’s audience share) was 1.3 for 2006 slightly lower than in 2005, EBIT margin dropped from 20% to 14% (for 2006).
According to current forecasts, the Russian TV advertising market will be growing at the average rate of 15-20% to 2010, the same as in the last few years. The «Advertising Law», recently taken effect, sets limitations to the amount of broadcasting minutes of direct TV advertisement and sponsor time. It is anticipated that the demand for product placement and concealed sponsorship will soar.
The advertising time is sold via a media-seller, for years this had been VideoInternational, which is by far the largest agent for media sales in the Russian market, but this year a decision was made to change the media-seller from next year. The company’s management does not think this will bring reduction in the advertising sales but will even contribute to the profit growth as a result of a reduction of the agent premium from 12% to 10% of the total advertising sales.
In interviews with the financial department the following data reflecting the company’s operations for 2006 were collected:
• Gross margin=65% (валовая прибыль)
• Administrative expenses (расходы) = 6% of the earnings (поступления) and certain measures are taken to reduce these further to 4% in 2010
• Commercial expenses on average do not exceed 4.5% of earnings
• Depreciation of fixed assets is 10 years, investment into the content is depreciated at the advanced rate 80% in the first year
• The business funding consists of 60% of own capital (including the surplus earnings) and 40% of borrowed capital
• The accounts receivable (дебиторская задолженность) make 11 mln USD, cash resources – 0.5 mln USD, accounts payable (кредиторская задолженность) – about 8.5 mln USD
• Fixed assets (основные средства) make about 12 mln USD in 2006, investment into equipment for the forecasted period are planned as 21 mln USD in equal parts throughout 5 years .
Q1. Using an Excel spreadsheet set out the best profit and loss statement (отчет о прибылях и убытках) and balance sheet (баланс) for 2006 that you can do for the company with the above data. If you can improve this with reasonable assumptions (предположение, допущения) then do so, but clearly show where you have made assumptions
In your client meetings last week the following additional information about the potential investments was acquired:
1. It is necessary to into the regional network in order to maintain regional market share. In 2006-2010 the company intends to spend 50-70 mln USD on the development of the regional network. If they don’t invest into regional network channel’s audience share can decline by 0,8%
2. General Director think that it was an enormous mistake to become more “women”-focused and if they keep this positioning, channel’s audience share will continue to decline. On the other side, if the channel will decide to change it’s positioning , then additional investment in the TV-content will be required: 400-450 mln USD for 5 years, but it will increase power ratio to 1,5 and channel’s audience share to 6,2% in 5 years
The client is planning a shareholder meeting shortly after our meeting with him and while preparing for it wants to have a clear picture about what value growth potential each development option can offer:
1. The current “women”-focused positioning of the channel is preserved with minimum investment required into the in-house produced content. No investment into regional network development.
2. An aggressive growth strategy, which requires a selection of a new positioning concept, heavy investment into the targeted content. And also investment in the development of the regional network.
Q2. Analyse sales and costs and cash flow from different parts of the business and:
1. Model two alternatives of development of the business on reasonable assumptions;
2. Compare (сравнить) the two using discounted cash flow method
