BHCL Case Solution

8/10/2019 BHCL Case Solution

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25 hospitals , out of

which 14 are owned

and 11 are owned by

others

Operating revenue Rupees in millions Year Rooms Cummilative

Room rent 1043 0 2190 2190

Medicines &

consumables678 1 90 2280

Management fee 73 2 130 2410

Operating expenses 3 80 2490

Materials 258 4 130 2620

Personnel 258 5 186 2806

Upkeep and services 400 6 355 3161

S&GA 400 7 150 3311

calculation of room

rentoccupacy rate No, of rooms Room rent days in year Total rent

Year 1 0.6 2280 2500 365 1248300000

Year 2 0.606 2410 2875 365 1532570213

Year 3 0.61206 2490 3306.25 365 1839170104

Year 4 0.6181806 2620 3802.1875 365 2247724385

Year 5 0.624362406 2806 4372.515625 365 2796073907Year 6 0.63060603 3161 5028.392969 365 3658513737

Year 7 0.63691209 3311 5782.651914 365 4451010196

Year Total rent (A)

Medicine &

consumables

revenue (B)

Management

fee

Year 1 1248300000 811395000 87381000

Year 2 1532570213 996170638.1 107279914.9

Year 3 1839170104 1195460568 128741907.3

Year 4 2247724385 1461020851 157340707

Year 5 2796073907 1817448040 195725173.5

Year 6 3658513737 2378033929 256095961.6

Year 7 4451010196 2893156627 311570713.7

Revenue from Rent

Operating revenues

Operating expenses


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YearTotal revenue

(A+B)

Material

Expenses(D)

Personnel

Expenses(E)

Upkeep &

service

expenses (F)

S&GA (G)

Year 1 2059695000 308954250 308954250 370745100 370745100

Year 2 2528740851 379311127.6 379311127.6 455173353.1 455173353.1

Year 3 3034630672 455194600.8 455194600.8 546233521 546233521

Year 4 3708745236 556311785.4 556311785.4 667574142.5 667574142.5Year 5 4613521947 692028292.1 692028292.1 830433950.5 830433950.5

Year 6 6036547666 905482149.8 905482149.8 1086578580 1086578580

Year 7 7344166823 1101625023 1101625023 1321950028 1321950028

Revenue Year 1 Year 2 Year 3 Year 4 Year 5

Rent 1248 M 1533 M 1839 M 2248 M 2796 M

Medicines 811 M 996 M 1195 M 1461 M 1817 M

Operating revenue

from Operations(H)2060 M 2529 M 3035 M 3709 M 4614 M

Mananged fee (one

time)87 M 107 M 129 M 157 M 196 M

Total revenue (I) 2147 M 2636 M 3163 M 3866 M 4809 M

Expenses

ME 309 M 379 M 455 M 556 M 692 M

PE 309 M 379 M 455 M 556 M 692 M

UPKEEP 371 M 455 M 546 M 668 M 830 M

S&CG 371 M 455 M 546 M 668 M 830 M

Total Expenses (J) 1359 M 1669 M 2003 M 2448 M 3045 M

EBDIT 788 M 967 M 1161 M 1418 M 1764 M

Depreciation 120 M 132 M 148 M 182 M 236 MEBIT 668 M 835 M 1012 M 1236 M 1529 M

Tax@ 20% 134 M 167 M 202 M 247 M 306 M

Non operating EAT 534 M 668 M 810 M 989 M 1223 M

Add depren 120 M 132 M 148 M 182 M 236 M

Gross cash flow 654 M 800 M 958 M 1171 M 1459 M

Investment 302 M 441 M 392 M 702 M 1071 M

Free cash flow 352 M 359 M 566 M 469 M 387 M

Non Operating CF 300 M 600 M

Non Operating Free

cash flows352 M 659 M 566 M 469 M 987 M

Calculation of Cash flow from operations
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Medicine &

consumables

0.65

Management fee 0.07

Material expense 0.15

Personnel exp 0.15

Upkeep exp 0.18

S&GA 0.18

Year Rooms Investment Gross NFA Net NFA depre

0 600

1 90 200 1710 1710 120

2 130 300 2010 1890 132

3 80 240 2250 2118 148

4 130 500 2750 2602 1825 186 800 3550 3368 236

6 355 1400 4950 4714 330

7 150 800 5750 5420 379

Years

Inv In Fixed

asset FA in M

Working

CapInvestment

CA Inv In CA

Year 1 200 200 M 618 M 516 M 102 M

Year 2 300 300 M 759 M 618 M 141 M

Year 3 240 240 M 910 M 759 M 152 M

Year 4 500 500 M 1113 M 910 M 202 M

Year 5 800 800 M 1384 M 1113 M 271 M

Year 6 1400 1400 M 1811 M 1384 M 427 M

Year 7 800 800 M 2203 M 1811 M 392 M

Calculation for depreciation

Calculation for Investment

Given


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Year 6 Year 7

3659 M 4451 M

2378 M 2893 M

6037 M 7344 M

256 M 312 M

6293 M 7656 M

905 M 1102 M

905 M 1102 M

1087 M 1322 M

1087 M 1322 M

3984 M 4847 M

2309 M 2809 M

330 M 379 M1979 M 2429 M

396 M 486 M

1583 M 1943 M

330 M 379 M

1913 M 2323 M

1827 M 1192 M

86 M 1130 M

800 M

886 M 1130 M


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Cummilative

depreciation

600

720

852

1000

11821418

1748

2128

Total Inv

(FA+CA)

302 M

441 M

392 M

702 M

1071 M

1827 M

1192 M


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which 14 are owned and

11 are owned by others

Operating revenue

Rupees in

millions

Room rent 1043

Medicines &

consumables678

Management fee 73

Operating expenses

Materials 258

Personnel 258

Upkeep and services 400

S&GA 400

calculation of room rent occupacy rate No, of rooms Room rent days in year

Year 1 0.5 2262 2500 365

Year 2 0.5 2366 2875 365

Year 3 0.5 2430 3306.25 365

Year 4 0.5 2534 3802.1875 365Year 5 0.5 2683 4372.515625 365

Year 6 0.5 2967 5028.392969 365

Year 7 0.5 3087 5782.651914 365

Year Total rent (A)

Medicine &

consumables

revenue (B)

Management fee

Year 1 1032 671 21

Year 2 1241 807 25

Year 3 1466 953 29

Year 4 1758 1143 35

Year 5 2141 1392 43

Year 6 2723 1770 54

Year 7 3258 2117 65

Revenue from Rent

Operating revenues

Operating expenses


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YearTotal revenue

(A+B)

Material

Expenses(D)

Personnel

Expenses(E)

Upkeep &

service expenses

(F)

Year 1 1703 255 255 307

Year 2 2048 307 307 369

Year 3 2419 363 363 435

Year 4 2901 435 435 522Year 5 3532 530 530 636

Year 6 4492 674 674 809

Year 7 5375 806 806 968

Revenue Year 1 Year 2 Year 3 Year 4

Rent 1032 1241 1466 1758

Medicines 671 807 953 1143

Operating revenue from

Operations(H)1703 2048 2419 2901

Mananged fee (one

time)21 25 29 35

Total revenue (I) 1724 2073 2449 2936

Expenses

ME 255 307 363 435

PE 255 307 363 435

UPKEEP 307 369 435 522

S&CG 307 369 435 522

Total Expenses (J) 1124 1352 1597 1915

EBDIT 600 721 852 1022

Depreciation 257 263 298 368EBIT 343 458 554 654

Tax@ 20% 103 137 166 196

Non operating EAT 240 321 388 458

Add depren 257 263 298 368

Gross cash flow 497 584 686 825

Investment 365 438 388 693

Free cash flow 132 146 297 133

Non Operating CF 300

Non Operating Free cash

flows132 446 297 133



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Medicine &

consumables 0.65 Year Rooms

Management

fee0.02 0 2190

Material

expense0.15 1 90

Personnel exp 0.15 2 130

Upkeep exp 0.18 3 80

S&GA 0.18 4 130

5 186

6 355

7 150

Total rent (In

M)Year Rooms Investment Gross NFA Net NFA

1032 0

1241 1 90 200 1710 1710

1466 2 130 300 2010 1754

1758 3 80 240 2250 19872141 4 130 500 2750 2452

2723 5 186 800 3550 3182

3258 6 355 1400 4950 4473

7 150 800 5750 5079

Years

Fixed

Asset FA in M WCA CA

Year 1 200 200 681 516

Year 2 300 300 819 681

Year 3 240 240 968 819

Year 4 500 500 1161 968

Year 5 800 800 1413 1161

Year 6 1400 1400 1797 1413

Year 7 800 800 2150 1797

Calculation for depreciation

Calculation for Investment


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S&GA (G)

307

369

435

522636

809

968

Year 5 Year 6 Year 7

2141 2723 3258

1392 1770 2117

3532 4492 5375

43 54 65

3575 4547 5440

530 674 806

530 674 806

636 809 968

636 809 968

2331 2965 3548

1244 1582 1893

477 671 762766 911 1131

230 273 339

537 638 792

477 671 762

1014 1309 1553

1052 1784 1153

-39 -475 400

600 800

561 325 400


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Room actually

added Cummilative

0 2190

72 2262

104 2366

64 2430

104 2534

148.8 2683

284 2967

120 3087

depreCummilative

depreciation

600 600

257 857

263 1120

298 1418368 1785

477 2263

671 2934

762 3695

Current Asset Investment

165 365

138 438

148 388

193 693

252 1052

384 1784

353 1153


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which 14 are owned

and 11 are owned by

others

Operating revenue Rupees in millions Year Rooms

Room rent 1043 0 2190

Medicines &

consumables678 1 90

Management fee 73 2 130

Operating expenses 3 80

Materials 258 4 130

Personnel 258 5 186

Upkeep and services 400 6 355

S&GA 400 7 150

calculation of room

rentoccupacy rate No, of rooms Room rent days in year

Year 1 0.6 2280 2500 365

Year 2 0.63 2410 2875 365

Year 3 0.6615 2490 3306.25 365

Year 4 0.694575 2620 3802.1875 365

Year 5 0.72930375 2806 4372.515625 365Year 6 0.765768938 3161 5028.392969 365

Year 7 0.804057384 3311 5782.651914 365

Year Total rent (A)Medicine & consumables

revenue (B)

Management

fee

Year 1 1248 811 150

Year 2 1593 1036 191

Year 3 1988 1292 239

Year 4 2525 1642 303

Year 5 3266 2123 392

Year 6 4443 2888 533

Year 7 5619 3652 674

Revenue from Rent

Operating revenues

Operating expenses


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Year Total revenue (A+B) Material Expenses(D)Personnel

Expenses(E)

Upkeep &

service

expenses (F)

Year 1 2060 309 309 371

Year 2 2629 394 394 473

Year 3 3280 492 492 590Year 4 4167 625 625 750

Year 5 5389 808 808 970

Year 6 7330 1100 1100 1319

Year 7 9272 1391 1391 1669

Revenue Year 1 Year 2 Year 3 Year 4

Rent 1248 1593 1988 2525

Medicines 811 1036 1292 1642

Operating revenue

from Operations(H) 2060 2629 3280 4167

Mananged fee (one

time)150 191 239 303

Total revenue (I) 2209 2820 3518 4470

Expenses

ME 309 394 492 625

PE 309 394 492 625

UPKEEP 371 473 590 750

S&CG 371 473 590 750

Total Expenses (J) 1359 1735 2165 2750

EBDIT 850 1085 1354 1720Depreciation 86 96 108 132

EBIT 765 989 1246 1588

Tax@ 20% 115 148 187 238

Non operating EAT 650 840 1059 1350

Add depren 86 96 108 132

Gross cash flow 735 937 1167 1482

Investment 199 442 403 722

Free cash flow 536 494 764 760

Non Operating CF 300

Non Operating Free

cash flows 536 794 764 760



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CummilativeMedicine &

consumables

0.65

2190 Management fee 0.12

2280 Material expense 0.15

2410 Personnel exp 0.15

2490 Upkeep exp 0.18

2620 S&GA 0.18

2806

3161

3311

Total rent Year Rooms Investment Gross NFA

1248 0

1593 1 90 200 1710

1988 2 130 300 2010

2525 3 80 240 2250

3266 4 130 500 27504443 5 186 800 3550

5619 6 355 1400 4950

7 150 800 5750

Years Fixed Asset FA in M WCA

Year 1 200 515

Year 2 300 657

Year 3 240 820

Year 4 500 1042

Year 5 800 1347

Year 6 1400 1833

Year 7 800 2318

Calculation for depreciati

Calculation for Investme


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S&GA (G)

371

473

590750

970

1319

1669

Year 5 Year 6 Year 7

3266 4443 5619

2123 2888 3652

5389 7330 9272

392 533 674

5781 7864 9946

808 1100 1391

808 1100 1391

970 1319 1669

970 1319 1669

3557 4838 6119

2224 3025 3827171 239 276

2053 2787 3551

308 418 533

1745 2369 3018

171 239 276

1916 2607 3294

1105 1885 1285

811 722 2009

600 800

1411 1522 2009


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Net NFA depreCummilative

depreciation

600 600

1710 86 686

1925 96 782

2154 108 889

2642 132 10223418 171 1192

4779 239 1431

5511 276 1707

CA Current AssetInvestment

516 -1 199

515 142 442

657 163 403

820 222 722

1042 305 1105

1347 485 1885

1833 485 1285

on

t


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BHCL Case Solution

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