BUS305 Small Business Management: Voyage Cashflow

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BUS305 Small Business Management

Task:

Ship information            
    Speed (knots)   Bunkers (tons/day)
  Design speed Sea Margin voyage speed   Main  Auxiliary
1.1. Bulk carrier 75 000DWT            
1.2. Laden voyages 15 5% 14.25   33 1
1.3 Ballast voyages 15 5% 14.25   31 1
1.4 Operating cost $/day   5,620 At 350 days on hire pa 
1.5 Bunker price $/ton         338 531
VOYAGE INFORMATION Distance (miles) Days at sea Days in port   Cargo (tons) Freight $/ton
2.1 Port days/ voyage – loading     3      
2.2. Port days/ voyage – unloading     2      
2.3 Voyage details            
Leg 1: US Gulf-Japan 9,123 26.7 5   54,000 56
Leg 2: Japan-Australia 4,740 13.9 0   Ballast  
Leg 3: Australia-Europe 12,726 37.2 10   70,000 39
Leg 4: Europe-East Cost North America 4,500 13.2 0   Ballast  
2.4 Total loaded voyages 21,849 63.9        
2.5 Total ballast voyages 9,240 27        
2.6 Port congestion provision     10      
2.7 Total round voyage 31,089 90.9 25   124,000 5,754,000
VOYAGE CASHFLOW            
3.1 Freight Earnings $ 5,754,000 From Row 2.7      
3.2 less Broker’s commission 86,310 At 1,5%        
3.3 less Voyage costs            
Bunker oil for main engines 995,674 Days as sea* consumption*price
Diesel oil for auxiliary engines 48,270 Days at sea*consumption*price  
Port costs 418,000          
Canal dues 80,000 One Panama canal transit  
Total 1,541,944          
3.4 less operating costs 651,378 days on voyage*operating cost/day
3.5 Voyage cashflow 3,474,369 Cash generated by voyage (less OPEX)
VOYAGE EARNINGS            
4.1 memo: Days on the voyage 116 From line 2.7 including congestion
4.1 Time-charter equivalent $/day 35,596 (3.5/4.1)+1.4       

By applying the three examples provided in an excel-file “cashflow examples” on three separate sheets, please calculate the outcomes of the following scenarios.

Please return the assignment as an excel-file where the calculations are documented on 13.12 at latest.

Voyage cashflow analysis

1. What is the deadweight utilization on laden voyages?

2. What would be the effect, if you were able to increase the DWT utilization of US Gulf –Japan voyage on the level of Australia-Europe voyage?

3. What would be the minimum deadweight utilization (on laden voyages) for you to break even in voyage cashflow?

4. What would be the effect on voyage cashflow, if the overall freight level would decrease 30%?

5. What is the break-even point in freight rates; how many percent the freight rates can decline, before the voyage cashflow turns negative?

6. How would a 150 dollar increase in bunker price affect the voyage cash flow?

7. What would be the effect of slow steaming, assuming you would drop the voyage speed into 10?

Annual cashflow analysis:

1. What would be the effect on annual cashflow (CASHBOOK BALANCE), if you would be able to reduce the operating costs for 10%

2. What would be the effect, if you would be able to negotiate your loan with 5% interest?

3. What if your loan would be a bullet, instead of equal maturity?

Discounted cashflow analysis:

1. How would the npv of the two options change, if you would use a discount rate of 7%

BUS305 Small Business Management

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