Client Name

Ismail Industries

Faculty Advisor

Dr. Mohsin Sadaqat

SBS Thought Leadership Areas

Investment Decision Making

SBS Thought Leadership Area Justification

Investment Decision-Making is one of the most fundamental functions of business managers, including finance managers. A key deliverable of this ELP is a financial model with five-year income statement and cash flow projections and capital budgeting analysis. This section places the project firmly within the Investment Decision-Making domain. The model enables the decision-makers at IIL to see if the intended product will be profitable and financially sustainable in the long run. It assists in analyzing the size and nature of capital to be required, return on investment to be expected, and financial risk involved. This part of the project uses fundamental concepts of corporate finance and strategic planning—basic building blocks of successful investment decision-making. Moreover, employing scenario and sensitivity analysis enables IIL to see the financial consequences of a range of economic scenarios. This enhances resilience as well as reduces vulnerability to unexpected financial shocks, enhancing the project's worth as a decision tool.

Aligned SDGs

GOAL 9: Industry, Innovation and Infrastructure

Aligned SDGs Justification

In essence, the project promotes industrial innovation by assisting Ismail Industries in designing and determining the financial viability of introducing a new product in the confectionery industry. This is consistent with SDG 9's target of ensuring inclusive and sustainable industrialization and creating an environment conducive to innovation. The application of financial modeling, market insight, and performance visualization technology such as Power BI is an example of the utilization of smart infrastructure and technology in making decisions. In addition, the prospect of new machinery being introduced, better packaging materials, and effective production lines all help in establishing contemporary, robust, and effective manufacturing capacities.

NDA

No

Abstract

This Experiential Learning Project (ELP) was carried out in association with Ismail Industries Limited—Candyland Division—with the key aim of determining the financial viability of introducing a new licorice-flavored confectionery product in the Pakistani market. Our fundamental deliverables were a five-year detailed financial model, in-depth profit and loss projections, breakdown of monthly finance, indirect method cash flow statement, capital budgeting parameters (Net Present Value, Internal Rate of Return, and Payback Period), market and industry landscape report, and an interactive Power BI dashboard to graphically visualize important performance indicators and scenario results. These combined deliverables gave an end-to-end perspective of the commercial viability and investment opportunity of the product.

The research design used for this ELP was a data-driven, bottom-up financial modeling strategy complemented by primary and secondary market research. The methodology initiated with an exhaustive analysis of consumer trend behavior and competition offerings in the local confectionary arena. Against this, we arrived at our pricing strategy, estimated sales volumes, and built the cost structure—raw materials, labor, packaging, and fixed overheads. Market drivers like inflation, commodity prices, and competitive moves were incorporated in the assumptions. One crucial choice was the application of the indirect method in determining cash flows solely from P&L-derived figures since real-time working capital data were not available. While it simplified forecasting, it also created some limitations to assess liquidity timing.

Our major findings indicate that although the product is not profitable in Year 1, it becomes break-even by Year 3 and achieves a strong profit of more than PKR 35 million by Year 5. Contribution margin gets better consistently because of production efficiencies and a strategically graduated decrease in piece weight from 9.5g to 7.5g over a period of five years. This "shrinkflation" strategy is expected to boost margins without evoking consumer price sensitivity and is in line with wider industry trends in the face of inflation. The first-year monthly study also uncovered demand seasonality, with major volume spikes during Ramzan and summer vacations, pointing towards the necessity of demand-synchronized manufacturing and marketing initiatives.

Our capital budgeting findings favor investment, with a positive NPV, IRR greater than the firm's WACC, and a prudent payback period. Yet we also recognized key risk drivers, including dependence upon fixed assets, volatility in raw materials costs, and diminishing

revenue within Year 5 as the result of market saturation or SKU cannibalization. The Power BI dashboard that we created as part of the deliverables allows for real-time sensitivity analysis on these risks, providing decision-makers with interactive tools to run scenarios and adjust.

In summary, the licorice product offers Candyland a financially sustainable and strategically appropriate opportunity. With efficient cost management of its initial-stage expenses, forward-looking procurement tactics, and adaptive operations planning, the product can be a long-term asset to Candyland's portfolio. Our end-to-end model and supporting tools provide data-driven grounds for go-to-market decision-making and post-launch fiscal observation

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

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