Return to Previous Page

Take Over of Transportation Business in Uttarakhand*

CASELET, ACCOUNTING, FINANCE AND CONTROL
ET Cases - GSMC, 5 Pages

Case Preview

Take Over of Transportation Business in Uttarakhand

 

The Himalayan tragedy which struck Uttarakhand in June 2013 had set the state’s economic development and industry back by many years. The natural calamity severely affected a number of industries, many of which were nascent in a newly formed state.1,2, 3

Uttarakhand recognized as abode of Gods depends largely upon agriculture and religious tourism as its primary source of income. But the economic structure was completely broken down after the natural disaster. The transportation business was often considered ancillary to tourism sector. One of the transporters: Mr. Virendra Rawat (Mr. Rawat) was operating a transportation business under the name of Nanda Devi Express Pvt.Ltd. His transportation business was severely affected by this natural calamity which occurred by torrential rains and heavy landslides in the hills. He owned a fleet of 50 Skyline Eicher buses all purchased within one year prior to disaster. Currently, none of the buses were operating and all parked in his workshop (Exhibit I).....................



1 http://nidm.gov.in/PDF/pubs/ukd-p1.pdf
2 https://www.youtube.com/watch?v=2bequCAWT9Y
3 http://nidm.gov.in/PDF/pubs/ukd-p1.pdf

Teaching Note Preview

Take Over of Transportation Business in Uttarakhand

 

Synopsis

This caselet presents the situation of transportation business operating in region after a disaster strucks. The transportation business was totally shattered in the region. And was in a do or die situation for Mr. Rawat, the business owner operating in the region to pursue his business of transportation.

But perceived as an opportunity for some, there arises the scenario of taking decisions to leave a routine job to become a first generation entrepreneur. The case presents the story of Mr Anirudh Dhyani who after completion of his study, resident from the same disaster hit region, left for doing the job in far place and is living alone without his family and friends from past six years.

After the occurrence of natural disaster, Mr.Anirudh Dhyani perceived this as an opportunity and was interested in taking over the Transportation business from Mr. Rawat

Prerequisite Conceptual Understanding/Before the Classroom Discussion

As a first generation entrepreneur one needs to understand the various issues related to Profit and Loss Account, Balance sheet, Ratio Analysis, Benefit Cost Analysis, Valuation process and Entrepreneurial traits required of disaster hit Transportation business to perform the calculation for ascertaining the Fare price to be charged per passenger in the current scenario.

Case positioning and setting

The problem in the present scenario is to acquire disaster hit transportation business and profit and loss considerations in terms of decisions to be made by Mr. Anirudh Dhyani as a first generation entrepreneur. The case finds its application in understanding financial statement analysis, Ratio Analysis, costing of tickets by bus transporter, Benefit cost analysis valuation of the business and entrepreneurial decision for overtaking a disaster hit transportation business. The case covers the academic area of Financial Management, Entrepreneurial decisions; Tourism based economy and understanding the problems and prospects faced by the transportation business owner. The case may be taught in Business Management classes at graduate or Post Graduate level...................

$3.37
Rs 0
Product code: FIN-2-0031, FIN-2-0031A

Abstract

After the natural calamity occurred in the Himalayan state of Uttarakhand in June 2013, the economic activity in the state was totally shattered. The torrential rains totally washed away all the major roads and the transportation sector also felt the lion’s share of the heat in the disaster affected areas.

One such affected person of this natural disaster was a transportation business owner, Virendra Rawat. He owned a fleet of 50 buses under the name Nanda Devi Express Pvt. Ltd. And due to the heavy rains landslides occurred in hills where he lost all his family members tragically. Ten of his buses also turned into scrap. He himself was bed ridden after all this disaster. He wanted to sell his business in order to meet his medical bills.

Mr. Anirudh Dhyani a management graduate went to Delhi in search of job. He was currently working with a mid-sized company and kept on changing his jobs frequently. As a new comer in the industry he switched several organizations in a span of six years. Starting as a call centre executive, he moved to various profiles like selling debit cards, thereafter opening bank accounts and even to space selling to refrigerator sale till the mid -2016.He often felt alienated in the new city and struggled to cope up with being alone.

He was interested in taking over the business from its current owner with the help of his father’s earnings and a bank loan. The major heads of expenses include office salary, driver and supporting staff wages, various legal fees, depreciation, advertisement expenses, maintenance charges for the bus, diesel, mobile oil, overhauling of bus etc. The question was what Investment should he make in the business and what profits can he expect from the investment made in the business?



Pedagogical Objectives

In view of the context as above, the pedagogical objectives of the case study are to perform the calculation required for ascertaining the fare price to be charged per passenger in the current scenario. All the calculations consider the year July 2016 as point of starting business for the financial data provided in the complete case.
I. To understand the various valuation factors to pay for new business activity.
II. To explore the benefit cost analysis by performing financial statement analysis and calculations required to start transportation business.
III. To understand the first generation entrepreneur mindset for undertaking new business.

Case Positioning and Setting

The case may be taught at Graduate or Post Graduate level for Business Management course to teach Financial Management subject.


* GSMC 2017, IIM Raipur

This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
$3.37
Rs 0

Related Products

There are no related products to show here at the moment.




Request for an Inspection Copy

(Strictly for Review Purpose, Not to be Used for Classroom Discussion/Trainings)