Professional Documents
Culture Documents
Ms. Pundir, the managing director and principal owner of Kota Fibres, Ltd., discovered the
problem when she arrived at the parking lot of the companys plant one morning in early January
2001. Trucks filled with rolls of fiber yarns were being unloaded, but they had been loaded just the
night before and had been ready to depart that morning. The fiber was intended for customers who
had been badgering Pundir to fill their orders in a timely manner. The government tax inspector,
who was stationed at the companys warehouse, would not clear the trucks for departure because the
excise tax had not been paid. The tax inspector required a cash payment, but in seeking to draw
funds for the excise tax that morning, Mr. Mehta, the bookkeeper, discovered that the company had
overdrawn its bank account againthe third time in as many weeks. The truck drivers were
independent contractors who refused to wait while the company and government settled their
accounts. They cursed loudly as they unloaded the trucks.
This shipment would not leave for at least another two days, and angry customers would no
doubt require an explanation. Before granting a loan with which to pay the excise tax, the branch
manager of the All-India Bank & Trust Company had requested a meeting with Pundir for the next
day to discuss Kotas financial condition and its plans for restoring the firms liquidity.
Pundir told Mehta, This cash problem is most vexing. I dont understand it. Were a very
profitable enterprise, yet we seem to have to depend increasingly on the bank. Why do we need more
loans just as our heavy selling season begins? We cant repeat this blunder.
Company Background
Kota Fibres, Ltd., was founded in 1962 to produce nylon fiber at its only plant in Kota, India,
about 100 kilometers (km) south of New Delhi. By using new technology and domestic raw
materials, the firm had developed a steady franchise among dozens of small, local textile weavers. It
supplied synthetic fiber yarns used to weave colorful cloths for making saris, the traditional
womens dress of India. On average, each sari required eight yards of cloth. An Indian woman
typically would buy three saris a year. With Indias female population at around 500 million, the
demand for saris accounted for more than 12 billion yards of fabric. This demand was currently
-2being supplied entirely from domestic textile mills that, in turn, filled their yarn requirements from
suppliers such as Kota Fibres.
Synthetic-Textile Market
The demand for synthetic textiles was stable with year-to-year growth and
predictable seasonal fluctuations. Unit demand increased with both population and
national income. In addition, Indias population celebrated hundreds of festivals each
year, in deference to a host of deities, at which saris were traditionally worn. The most
important festival, the Diwali celebration in mid-autumn, caused a seasonal peak in the
demand for new saris, which in turn caused a seasonal peak in demand for nylon textiles
in late summer and early fall. Thus, the seasonal demand for nylon yarn would peak in
mid-summer. Unit growth in the industry was expected to be 15% per year.
Consumers purchased saris and textiles from cloth merchants located in the
villages around the country. A cloth merchant was an important local figure usually well
known to area residents; the merchant generally granted credit to support consumer
purchases. Merchants maintained relatively low levels of inventory and built stocks of
goods only shortly in advance of and during the peak selling season.
Competition among suppliers (the many small textile-weaving mills) to those
merchants was keen and was affected by price, service, and the credit that the mills could
grant to the merchants. The mills essentially produced to order, building their inventories of
woven cloth shortly in advance of the peak selling season and keeping only maintenance
stocks at other times of the year.
The yarn manufacturers competed for the business of the mills through responsive
service and credit. The suppliers to the yarn manufacturers provided little or no trade credit.
Being near the origin of the textile chain in India, the yarn manufacturers essentially banked
the downstream activities of the industry.
Production and Distribution System
Thin profit margins had prompted Pundir to adopt policies against overproduction and
overstocking, which would require Kota to carry inventories through the slack selling season.
She had adopted a plan of seasonal production, which meant that the yarn plant would
operate at peak capacity for two months of the year and at modest levels the rest of the year.
That policy imposed an
annual ritual of hirings and layoffs.
To help ensure prompt service, Kota Fibres maintained two distribution warehouses,
but getting the finished yarn quickly from the factory in Kota to the customers was a
challenge. The roads were narrow and mostly in poor repair. A truck could take 10 to 15 days
to negotiate the trip between Calcutta and Kota, a distance of about 1,100 km, and except
when they passed through cities and highways had only one lane. When two cars or trucks
met, they had to slow down and squeeze past each other or else stop and wait for traffic to pass.
Journeys were slow and dangerous, and accidents were frequent.
Company Performance
Kota Fibres had been consistently profitable. Moreover, sales had grown at an
annual rate of 18% in the year 2000. Gross sales were projected to reach (Indian rupees)
INR90.9 million in the fiscal year that ended December 31, 2001 (see Exhibit 1).1 Net
profits reached INR2.6 million in 2000. Exhibits 2 and 3 present recent financial
statements for the firm.
Reassessment
After the episode in the parking lot, Pundir and her bookkeeper went to her office to
analyse the situation. She pushed aside the several items on her desk to which she had intended
to devote her morning: a letter from a field sales manager requesting permission to grant
favorable credit terms to a new customer (see Exhibit 4); a note from the transportation manager
regarding a possible change in the inventory policy (Exhibit 5); a proposal from the purchasing
agent regarding the delivery lead times of certain supplies (Exhibit 6); and a proposal from the
operations manager for a scheme of level annual production (Exhibit 7).
To prepare a forecast on a business-as-usual basis, Pundir and Mehta agreed on
various parameters. Cost of goods sold would run at 73.7% of gross salesa figure that
was up from recent years because of increasing price competition. Operating expenses
would be about 6% of sales also up from recent years to include the addition of a
quality-control department, two new sales agents, and three young nephews with whom she
hoped to build an allegiance to the Pundir family business. The companys income tax rate was
30% and, although accrued monthly, was actually paid quarterly in March, June, September, and
December. The excise tax (at 15% of sales) was different from the income tax and was collected
at the factory gate as trucks left to make deliveries to customers and the regional warehouses.
Pundir proposed to pay dividends of INR500,000 per quarter to the 11 members of her extended
family who held the entire equity of the firm. For years Kota had paid high dividends. The Pundir
family believed that excess funds left in the firm were at greater risk than if the funds were
returned to shareholders.
Mehta observed that sales collections in any given month had been running
steadily at the rate of 40% of the last months sales plus 60% of the sales from the month
before last. The value of the raw materials purchased in any month represented on
average 55% of the value of sales expected to be made two months later. Wages and
other expenses in a given month were equivalent to about 34% of purchases in the
previous month. As a matter of policy, Pundir wanted to see a cash balance of no less
than INR750,000.
1
At the time, the rupee was pegged to the U.S. dollar at the rate of 46.5 rupees per dollar.
Kota Fibres had a line of credit at the All-India Bank & Trust Company, where it also
maintained its cash balances. All-Indias short-term interest rate was currently 14.5%, but Mehta
was worried that inflation and interest rates might rise in the coming year. The seasonal line of
credit had to be cleaned up for at least 30 days each year. The usual cleanup month had been
October,2 but Kota Fibres had failed to make a full repayment at that time. Only after strong
assurances by Pundir that she would clean up the loan in November or December had the bank
lending officer reluctantly agreed to waive the cleanup requirement in October. Unfortunately,
the credit needs of Kota Fibres did not abate as rapidly as expected in November and December,
and although his protests increased each month, the lending officer agreed to meet Kotas cash
requirements with loans. Now he was refusing to extend any more seasonal credit until Pundir
presented a reasonable financial plan for the company that demonstrated its ability to clean up
the loan by the end of 2001.
Financial Forecast
Mehta hurriedly developed a monthly forecast of financial statements using the current operating
assumptions (see Exhibit 8). As an alternative way of looking at the forecasted fund flows, Mehta also
prepared a forecast of cash receipts and disbursements (Exhibit 9). The monthly T-accounts underlying the
forecasts are given in Exhibit 10, and a summary of the forecast assumptions is in Exhibit 11.
Mehta handed over the forecast to Pundir with a graph showing projected sales and
month-end debt outstanding (Exhibit 12). After studying the forecasts for a few moments,
Pundir expostulated:
This is worse than I expected. The numbers show that we cant repay All- Indias loan by
the end of December. The loan officer will not accept this forecast as a basis for more credit. We
need a new plan, and fast. We need those loans in order to scale up for the most important part of
our business season. Lets go over these assumptions in detail and look for any opportunities to
improve our debt position.
Then, casting her gaze toward the stack of memos she had pushed aside earlier, she muttered,
Perhaps some of these proposals will help.
2 The selection of October as the loan-cleanup month was imposed by the bank on the grounds of tradition. Seasonal
loans of any type made by the bank were to be cleaned up in October. Pundir had seen no reason previously to
challenge the banks tradition.
-5-
Exhibit 1
KOTA FIBRES, LTD.
Summary of Monthly Sales,
Actual for 2000 and Forecast for
2001 (in rupees)
2000
2001
(historical)
(forecast)
January
February
March
April
May
June
July
August
September
October
November
December
2,012,400
2,314,260
3,421,080
7,043,400
12,074,400
15,294,240
14,187,420
7,144,020
4,024,800
3,421,080
2,716,740
2,213,640
2,616,120
2,892,825
4,447,404
8,804,250
13,885,560
17,588,376
16,315,533
8,572,824
5,031,000
4,447,404
3,531,762
2,767,050
Year
75,867,480
90,900,108
-6Exhibit 2
KOTA FIBRES, LTD.
Historical and Forecast Annual Income Statements
(in rupees)
Gross Sales
Excise Tax
Net Sales
Cost of Goods
Gross Profits
Operating Expenses
Depreciation
Interest Expense
Profit Before Tax
Income Tax
Net Profit
1999
2000
2001
(Actual)
(Actual)
(Forecast)
64,487,358
9,673,104
54,814,254
44,496,277
10,317,978
3,497,305
75,867,480
11,380,122
64,487,358
53,865,911
10,621,447
4,828,721
90,900,108
13,635,016
77,265,092
66,993,380
10,271,712
5,454,006
769,103
910,048
5,141,521
1,542,456
3,599,065
908,608
1,240,066
3,644,052
1,093,216
2,550,837
1,073,731
1,835,620
1,908,355
572,506
1,335,848
-7Exhibit 3
KOTA FIBRES, LTD.
Historical and Forecast Balance Sheets
(in rupees)
2000
2001
(Actual)
(Forecast)
Cash
Accounts Receivable
Inventories
Total Current Assets
Gross PP&E
Accumulated Depreciation
Net PP&E
Total Assets
762,323
2,672,729
1,249,185
4,684,237
10,095,646
1,484,278
8,611,368
13,295,604
750,000
3,715,152
2,225,373
6,690,525
11,495,646
2,558,009
8,937,637
15,628,161
Accounts Payable
Notes to Bank (Deposits at Bank)
Accrued Taxes
Total Current Liabilities
Owners' Equity
Total Liabilities and Equity
759,535
684,102
0
1,443,637
11,851,967
13,295,604
1,157,298
3,463,701
(180,654)
4,440,345
11,187,816
15,628,161
-8Exhibit 4
KOTA FIBRES, LTD.
Memo from Field Sales Manager
To:
From:
G. Pundir
A. Bajpai
January 7, 2001
As you know, Pondicherry Textiles is considering making us their prime yarn
supplier for this year. Purchases would be in the neighborhood of INR 6 million and are
not reflected in our current sales forecast. Pondicherry would be one of our largest
accounts. They have accepted our terms on price, but have asked for credit terms of 80
days, net. Unless we extend our credit terms, Pondicherry will not do business with us.
We can expect that Pondicherry will purchase our yarn across the year in about the same
pattern as our other customers.
If you approve this exception to our standard terms (45 days), the Pondicherry district
sales office will meet its quarterly sales quota immediately. Please indicate your approval
below.
Approved:
-9Exhibit 5
KOTA FIBRES, LTD.
Memo from Transportation Manager
To:
From:
G. Pundir
R. Sikh
January 2, 2001
As you asked me to, I have been tracking our supply shipments in the last six
months. The new road between Kota and New Delhi has improved reliability of the
shipments significantly. Our suppliers new manufacturing equipment is now running
consistently, and they have been meeting their shipment dates consistently. As a result,
I would propose that we reduce our raw-material inventory requirement from 60 days
to 30 days. This would reduce the amount of inventory we are carrying by one month,
and should free up a lot of space in the warehouse. I am not sure if that will affect any
other department since we will be buying the same amount of material, but it would
make inventory tracking a lot easier for me. Please let me know so we can implement
this in January.
-10Exhibit 6
KOTA FIBRES, LTD.
Memo from Purchasing Agent
To:
From:
G. Pundir
R. Mohan
January 5, 2001
Hibachi Chemicals of Yokohama has approached us with a proposal to supply us with polyester
pellets on a just-in-time basis from their plant in Majala (20 km away). Those pellets account
for 35% of our raw - material purchases. I am looking into the feasibility of this schemein
particular, whether Hibachi can actually perform on that basisand will report back in two
weeks . If the proposal is feasible, it would reduce our inventory of pellets from 60 days
outstanding to only 2 or 3 days
-11Exhibit 7
KOTA FIBRES, LTD.
Memo from Operations Manager
To:
From:
G. Pundir
L. Gupta
January 7, 2001
You asked me to estimate the production efficiencies arising from a scheme of level annual
production. In essence, there are significant advantages to be gained:
Gross profit margin would rise by 2% or 3%, reflecting labor savings and production
efficiencies gained from a stable work force and the absence of certain seasonal training
and setup costs.
Level production entails lower manufacturing risk. With the load spread throughout the
year, we would suffer less from equipment breakdowns and could better match the routine
maintenance with the demand on the plant and equipment.
-12-
Exhibit 8
KOTA FIBRES, LTD.
Monthly Forecast of Income Statements and Balance Sheets for 2001
(in rupees)
January
February
March
April
May
June
July
August
September
Gross Sales
2,616,120
2,892,825
4,447,404
8,804,250 13,885,560
17,588,376 16,315,533
8,572,824
Excise Taxes
Net Sales
Cost of Goods
Sold
Gross Profit
Operating
Expenses
392,418
2,223,702
433,924
2,458,901
2,638,256 2,447,330
14,950,120 13,868,203
1,285,924 754,650
7,286,900 4,276,350
1,928,080
295,622
2,132,012
326,889
12,962,633 12,024,548
1,987,486 1,843,655
454,501
454,501
454,501
454,501
454,501
454,501
454,501
84,130
84,130
87,047
87,047
87,047
89,964
89,964
11,058
24,825
70,867
158,210
268,352
362,187
October
November
December
3,531,762
2,767,050
667,111
3,780,293
529,764
3,001,998
415,058
2,351,993
2,602,909
399,089
5,031,000 4,447,404
454,501 454,501
2,039,316
312,677
454,501
454,501
92,880
92,880
92,880
95,797
363,212
259,568 145,898
80,686
50,025
40,731
Depreciation
Interest Expense (Income)
(1)
Profit Before
Taxes
(254,068)
(236,566)
(109,858)
295,123
759,168
1,080,835
935,979
164,697 (124,776)
(125,510)
(198,317)
(278,352)
Income Taxes
Net Profit
(76,220)
(177,847)
(70,970)
(165,596)
(32,957)
(76,900)
88,537
206,586
227,751
531,418
324,251
756,585
280,794
655,185
49,409 (37,433)
115,288 (87,343)
(37,653)
(87,857)
(59,495)
(138,822)
(83,506)
(194,847)
89,964
454,501
J
u
n
e
-13Exhibit 8 (continued)
January
February
March
April
May
June
July
August
750,000
750,000
17,997,155 24,748,757
19,666,227 14,469,652
750,000
25,697,603
6,815,272
750,000
17,191,189
3,883,970
38,413,382
33,262,875 21,825,159
September
October
November
December
Assetsis
Cash (1)
Accounts Receivable (2)
Inventories (3)
750,000
2,773,349
2,308,135
750,000
3,291,542
5,850,125
750,000
750,000
5,012,144 10,301,737
11,855,841 17,637,315
750,000
9,003,739
2,950,257
750,000
6,295,049
1,854,837
750,000
5,029,249
1,639,892
750,000
3,715,152
2,225,373
Not
5,831,484
9,891,667
17,617,985
28,689,052
8,527,237
8,443,107
8,706,060 8,619,013
14,358,721
18,334,774
26,324,045
1,614,553
1,146,268
(76,220)
4,010,818
2,962,622
(147,190)
6,805,539
8,842,088
8,767,030 17,419,379
(180,148)
(91,611)
6,826,250
11,508,524
15,392,421
10,931,623
26,169,856
11,138,209
35,275,720
11,669,627
18,334,774
26,324,045
37,308,065
46,945,348
37,308,065
39,968,409
12,703,996
8,899,886
7,419,142
6,690,525
8,792,002
8,702,038
8,612,075
8,869,194
8,776,314
8,683,434
8,937,637
46,945,348
48,760,411
41,964,914
30,437,233
21,573,190
17,676,200
16,102,575
15,628,161
3,883,534
1,935,531
32,950,665 27,167,192
0
280,794
1,614,553
15,795,793
330,203
1,110,950
8,352,899
36,834,199 29,383,517
11,926,212 12,581,397
17,740,548
12,696,685
9,463,849
12,109,341
5,654,715
12,021,484
4,219,913
11,882,662
4,440,345
11,187,816
30,437,233
21,573,190
17,676,200
16,102,575
15,628,161
8,531,966
2,684,601
11,674,120
14,358,721
8,142,024
26,997,556
136,140
48,760,411
41,964,914
690,358
5,002,010
(37,653)
1,039,007
3,278,054
(97,148)
1,157,298
3,463,701
(180,654)
-14Exhibit 9
KOTA FIBRES, LTD.
Schedule of Cash Receipts and Disbursements for 2001
(in rupees)
January
Assume:
Sales
2,616,120
February
March
2,892,825
4,447,404
April
8,804,250
May
June
13,885,560
17,588,376
8,973,543 4,715,053
26,997,556 32,950,665
July
August
September
October
November December
16,315,533
8,572,824
5,031,000
4,447,404
3,531,762
2,767,050
2,767,050
2,446,072
27,167,192 15,795,793
1,942,469
8,352,899
1,521,878
5,002,010
1,870,526
3,278,054
1,988,817
3,463,701
4,081,147
185,647
Purchases (1)
Debt Outstanding
2,446,072
1,146,268
Receipts:
2,515,500
462,166
2,374,632 2,726,802
1,816,354 5,804,408
3,514,657
8,652,349
6,190,142 10,836,774
9,578,178 5,953,108
Disburs.:
1,591,054
0
11,058
392,418
2,446,072 4,842,338
0
350,000
24,825
70,867
433,924
667,111
7,637,058
0
158,210
1,320,638
9,673,607 8,973,543
0
350,000
268,352
362,187
2,082,834 2,638,256
4,715,053
0
363,212
2,447,330
2,767,050
0
259,568
1,285,924
2,446,072
350,000
145,898
754,650
1,942,469
0
80,686
667,111
1,521,878
0
50,025
529,764
1,870,526
350,000
40,731
415,058
Operating Expenses
Accrued Income Tax Paid
Wages
Dividends
Subtotal: Disbursements
454,501
0
540,958
0
2,989,989
454,501
454,501
454,501
0
0
0
831,665 1,646,395 2,596,600
0
500,000
0
4,190,986 8,531,210 12,167,005
454,501
454,501
0
460,390
3,289,026 3,051,005
0
500,000
15,768,320 16,789,882
454,501
0
1,603,118
0
9,583,214
454,501
0
940,797
0
5,707,839
454,501
292,770
831,665
500,000
5,775,555
454,501
0
660,439
0
3,805,206
454,501
0
517,438
0
3,073,606
454,501
0
635,979
500,000
4,266,794
Receipts - Disbursements
(12,323)
762,323
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
-15Exhibit 10
KOTA FIBRES, LTD.
Forecast T-Accounts Supporting Financial Statements
(in rupees)
1.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Beginning of Period
2,672,729
2,773,349
3,291,542
5,012,144
10,307,737
17,997,155
24,748,757
25,697,603
17,191,189
9,,003,739
6,295,049
5,029,249
+ Sales
2,616,120
2,892,825
4,447,404
8,804,250
13,885,560
17,588,376
16,315,533
8,572,824
5,031,000
4,447,404
3,531,762
2,767,050
2.
885,456
1,046,448
1,157,130
1,778,962
3,521,700
5,554,224
7,035,350
6,526,213
3,429,130
2,012,400
1,778,962
1,412,705
1,630,044
1,328,184
1,569,672
1,735,695
2,668,442
5,282,550
8,331,336
10,553,026
9,789,320
5,143,694
3,018,600
2,668,442
End of period
2,773,349
3,291,542
5,012,144
10,301,737
17,997,155
24,748,757
25,697,603
17,191,189
9,003,739
6,295,049
5,029,249
3,715,152
Beginning of Period
1,249,185
2,308,135
5,850,125
11,855,841
17,637,315
19,666,227
14,469,652
6,815,272
3,883,970
2,950,257
1,854,837
1,639,892
+ purchases (3)
2,446,072
4,842,338
7,637,058
9,673,607
8,973,543
4,715,053
2,767,050
2,446,072
1,942,469
1,521,878
1,870,526
1,988,817
Schedule of Inventories
+ Labour
3.
540,958
831,665
1,646,395
2,596,600
3,289,026
3,051,005
1,603,118
940,797
831,665
660,439
517,438
635,979
1,928,080
2,132,012
3,277,737
6,488,732
10,233,658
12,962,633
12,022,548
6,318,171
3,707,847
3,277,737
2,602,909
2,039,316
End of period
2,308,135
5,850,125
11,855,841
17,637,315
19,666,227
14,469,652
6,815,272
3,883,970
2,950,257
1,854,837
1,639,892
2,225,373
(1)
(2)
(3)
(4)
(5)
759,535
1,614,553
4,010,818
6,805,539
8,842,088
8,142,024
3,885,534
1,935,531
1,614,553
1,110,950
690,358
1,039,007
+ Purchases (4)
2,446,072
4,842,338
7,637,058
9,673,607
8,973,543
4,715,053
2,767,050
2,446,072
1,942,469
1,521,878
1,870,526
1,988,817
1,591,054
2,446,072
4,842,338
7,637,058
9,673,607
8,973,543
4,715,053
2,767,050
2,446,072
1,942,469
1,521,878
1,870,526
End of Period
1,614,553
4,010,818
6,805,539
8,842,088
8,142,024
3,883,534
1,935,531
1,614,553
1,110,950
690,538
1,039,007
1,157,298
-16Exhibit 10 (continued)
January
February
March
April
May
June
July
August
September
October
November
December
11,851,967
11,674,120
11,508,524
10,931,623
11,138,209
11,669,627
11,926,212
12,581,397
12,696,685
12,109,341
12,021,484
11,882,662
(177,847)
(165,596)
(76,900)
206,586
531,418
756,585
655,185
115,288
(87,343)
(87,857)
(138,822)
(194,847)
00
00
500,000
00
00
500,000
00
00
500,000
00
00
500,000
11,674,120
11,508,524
10,931,623
11,138,209
11,669,627
11,926,212
12,581,397
12,696,685
12,109,341
12,021,484
11,882,662
11,187,816
00
(76,220)
(147,190)
(180,148)
(91,611)
136,140
00
280,794
330,203
00
(37,653)
(97,148)
(76,220)
(70,970)
(32,957)
88,537
227,751
324,251
280,794
49,409
(37,433)
(37,653)
(59,495)
(83,506)
00
00
00
00
00
460,390
00
00
292,770
00
00
00
(76,220)
(147,190)
(180,148)
(91,611)
136,140
00
280,794
330,203
00
(37,653)
(97,148)
(180,654)
10,095,646
10,095,646
10,095,646
10,445,646
10,445,646
10,445,646
10,795,646
10,795,646
10,795,646
11,145,646
11,145,646
11,145,646
00
00
350,000
00
00
350,000
00
00
350,000
00
00
350,000
10,095,646
10,095,646
10,445,646
10,445,646
10,445,646
10,795,646
10,795,646
10,795,646
11,145,646
11,145,646
11,145,646
11,494,646
84,130
84,130
87,047
87,047
87,047
89,964
89,964
89,964
92,880
92,880
92,880
95,797
1,568,408
1,652,339
1,739,586
1,826,633
1,913,680
2,003,643
2,093,607
2,183,571
2,276,451
2,369,332
2,462,212
2,558,009
8,527,237
8,443,107
8,706,060
8,619,013
8,531,966
8,792,002
8,702,038
8,612,075
8,869,194
8,776,314
8,683,434
8,937,637
End of Period
-17Exhibit 11
KOTA FIBRES, LTD.
Forecast Assumptions
Ratio of:
Income Tax/Profit Before Tax
Excise Tax/Sales
This Month Collections of Last Month's Sales
This Month Collections of Month-before-Last Sales
Purchases/ Sales two months later
Wages/Purchases
Annual Operating Expenses/Annual Sales
Capital Expenditures (every third month)
Interest Rate on Borrowings (and deposits)
Minimum Cash Balance
Depreciation/Gross PP&E (per year)
(per month)
Dividends Paid (every third month)
30%
15%
40%
60%
55%
34%
6.00%
350,000
14.5%
750,000
10%
0.83%
500,000
-18Exhibit 12
KOTA FIBRES, LTD.
Trend of Certain Financial Accounts by Month
(in millions of rupees)