churidar materials
DESCRIPTION
FEASIBILITY ANALYSISTRANSCRIPT
INTRODUCTION
Entrepreneurship is the act of being an entrepreneur, which is a French
word meaning "one who undertakes an endeavor". Entrepreneurs
assemble resources including innovations, finance and business acumen in
an effort to transform innovations into economic goods. This may result in
new organizations or may be part of revitalizing mature organizations in
response to a perceived opportunity. The most obvious form of
entrepreneurship is that of starting new businesses; however, in recent
years, the term has been extended to include social and political forms of
entrepreneurial activity. When entrepreneurship is describing activities
within a firm or large organization it is referred to as intra-preneurship and
may include corporate venturing, when large entities spin-off organizations.
According to Paul Reynolds, entrepreneurship scholar and creator of the
Global Entrepreneurship Monitor, "by the time they reach their retirement
years, half of all working men in the United States probably have a period
of self-employment of one or more years; one in four may have engaged in
self-employoment for six or more years. Participating in a new business
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creation is a common activity among U.S. workers over their course of their
careers.
INDUSTRIAL BACK GROUND OF INDIA
The Economy of India is the eleventh largest in the world by nominal GDP
and the fourth largest by purchasing power parity (PPP). The country's per
capita GDP (PPP) is $3,290 (IMF, 127th) in 2010. Following strong economic
reforms from the socialist inspired economy of a post-independence Indian
nation, the country began to develop a fast-paced economic growth, as free
market principles were initiated in 1990 for international competition and
foreign investment. Economists predict that by 2020, India will be among
the leading economies of the world.
India was under social democratic policies from 1947 to 1991. The economy
was characterised by extensive regulation, protectionism, public ownership,
pervasive corruption and slow growth. Since 1991, continuing economic
liberalisation has moved the country toward a market-based economy. A
revival of economic reforms and better economic policy in first decade of
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the 21st century accelerated India's economic growth rate. In recent years,
Indian cities have continued to liberalise business regulations. By 2008,
India had established itself as the world's second-fastest growing major
economy. However, as a result of the financial crisis of 2007–2010, coupled
with a poor monsoon, India's gross domestic product (GDP) growth rate
significantly slowed to 6.7% in 2008–09, but subsequently recovered to
7.2% in 2009–10, while the fiscal deficit rose from 5.9% to a high 6.5%
during the same period. The unemployment rate for 2009–2010, according
to the state Labour Bureau, was 9.4 percent nationwide, rising to 10.1
percent in rural areas, where two-thirds of the 1.2 billion population live.
India's large service industry accounts for 57.2% of the country's GDP while
the industrial and agricultural sector contribute 28% and 14.6%
respectively. Agriculture is the predominant occupation in India, accounting
for about 52% of employment. The service sector makes up a further 34%,
and industrial sector around 14%. The labour force totals half a billion
workers. Major agricultural products include rice, wheat, oilseed, cotton,
jute, tea, sugarcane, potatoes, cattle, water buffalo, sheep, goats, poultry
and fish. Major industries include telecommunications, textiles, chemicals,
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food processing, steel, transportation equipment, cement, mining,
petroleum, machinery, information technology-enabled services and
pharmaceuticals. However, statistics from a 2009-10 government survey,
which used a smaller sample size than earlier surveys, suggested that the
share of agriculture in employment had dropped to 45.5%.
Previously a closed economy, India's trade and business sector has grown
fast. India currently accounts for 1.5% of world trade as of 2007 according
to the WTO. According to the World Trade Statistics of the WTO in 2006,
India's total merchandise trade (counting exports and imports) was valued
at $294 billion in 2006 and India's services trade inclusive of export and
import was $143 billion. Thus, India's global economic engagement in 2006
covering both merchandise and services trade was of the order of $437
billion, up by a record 72% from a level of $253 billion in 2004. India's total
trade in goods and services has reached a share of 43% of GDP in 2005–06,
up from 16% in 1990–91.
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INDUSTRIAL BACK GROUND OF KERALA
Kerala has witnessed tremendous development especially from the
economic point of view. Although Kerala economy is primarily based on
agriculture, the strong historical significance and natural attributes of the
state have resulted in the presence of several industries in Kerala.
Located in the south-western tip of India, Kerala has the following to its
credit:
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The highest literacy rate in India.
Tourism has grown to be a front line industry government backing and
private management.
An efficient public transport system.
Information Technology is becoming a key area of economic excellence
Role of agriculture in Kerala economy
The following are the features of the predominantly agrarian economy of
Kerala:
Kerala is a major producer of cash crops like coconuts, rubber, tea, coffee,
pepper, cardamom, cashew, areca nut, nutmeg, ginger, cinnamon, and
cloves.
Coconuts bring the people their principal source of earning in agriculture.
Nearly 70% of Indian output of coconuts is provided by Kerala. .
Cardamom is one of the major exports of India and the bulk of Cardamom
comes from Kerala.
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Role of industry in Kerala economy Industries of Kerala economy are hugely
based on agriculture and marine products. Some traditional industries are:
Coir and coir products
Marine products
Handloom and handicrafts related to ivory, wood, bone carving, hand
embroidery, cane works, coconut shell carving, and paddy straw picture
making.
Village industries manufacture Khadi, fiber, pottery, lime, paper, matches,
gobar gas, cane, and bamboo.
The economy of Kerala, though small and agro-based, has a lot to look
forward in future with the upcoming of IT and allied industries that are
willing to exploit the yet-to-be tapped resources.
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INTRODUCTION
Entrepreneurial activities are substantially different depending on the type
of organization that is being started. Entrepreneurship ranges in scale from
solo projects (even involving the entrepreneur only part-time) to major
undertakings creating many job opportunities. Many "high value"
entrepreneurial ventures seek venture capital or angel funding in order to
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raise capital to build the business. Angel investors generally seek returns of
20-30% and more extensive involvement in the business.[3] Many kinds of
organizations now exist to support would-be entrepreneurs, including
specialized government agencies, business incubators, science parks, and
some NGOs. In more recent times, the term entrepreneurship has been
extended to include elements not related necessarliy to business formation
activity such as conceptualizations of entrepreneurship as a specific
mindset (see also entrepreneurial mindset) resulting in entrepreneurial
initiatives e.g. in the form of social entrepreneurship, political
entrepreneurship, or knowledge entrepreneurship have emerged
Total Indian Entrepreneurial Activity Average = 12.1%
India was second among all nations in Total Entrepreneurship Activity as
per the Global Entrepreneurship Monitor Report of 2002. But after several
years of data, India appears to have a TEA level rather close to the world
average.
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India is ninth in the Global Entrepreneurship Monitor (GEM) survey of
entrepreneurial countries. It is highest among 28 countries in Necessity
based entrepreneurship, while 5th from the lowest in opportunity based
entrepreneurship.
The liberalization, which was started in 1991, and the Information
Technology boom of the mid-late 90’s, have been significant factors,
leading to a wave of entrepreneurship sweeping through the country.
Indians have entrepreneurial capacity. However the society and
government are not very encouraging towards entrepreneurship. To a
large extent, the Indian society is risk averse. People usually seek secure
and long-term employment, such as government jobs. The physical
infrastructure needs to be improved. Social Attitudes, lack of capital,
inadequate physical infrastructure and lack of government support are
major factors of hindrance.
India is the fifth largest economy in the world (ranking above France, Italy,
the United Kingdom, and Russia) and has the third largest GDP in the entire
continent of Asia. It is also the second largest among emerging nations. The
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liberalization of the economy in the 1990s has paved the way for a huge
number of people to become entrepreneurs.
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SMALL SCALE INDUSTRIES
The contribution of small scale industries to the country's economy
has declined to six percent over the course of last ten years.
According to a survey report released by Central Statistics
Department, the contribution of such industries to the GDP in 2066
declined to six percent from 9 percent recorded in 2057.
The Department carries out this sort of survey in every 10 years.
The slower growth of industrial sector in comparison with service
one is attributed to such decline.
The survey was carried out by incorporating the industries involved
in income oriented activities.
As per the survey, some 32,326 small scale industries were
operating throughout the country during the fiscal year 2065/66.
Out of these, samples were collected from 3,737 industries.
Amongst them, 62 percent were based in rural areas while the
remaining 38 percent were situated in urban areas.
The survey also stated that the investment made by the small scale
industries was to the tune of Rs 3.03 billion while the value of the
products and services generated by them stood at Rs 1.49 billion.
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The survey also pointed out that electricity is a major challenge for
operation of such industries.
However, Dr Jagadish Chandra Pokharel, chairman, National
Planning Commission (NPC), believed that since these enterprises
do not demand high magnitude electricity, there should be an
arrangement of alternative energy to run them.
According to Pokharel, since the role of small scale industries is
pivotal in eradicating poverty as envisioned by Millenium
Development Goals (MDGs), the NPC will rethink the plans and
programmes vis-a-vis such industries. nepalnews.com
Opportunity
The opportunities in the small-scale sector are enormous due to the
following factors:
Less Capital Intensive
Extensive Promotion & Support by Government
Reservation for Exclusive Manufacture by small scale sector
Project Profiles
Funding - Finance & Subsidies
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Machinery Procurement
Raw Material Procurement
Manpower Training
Technical & Managerial skills
Tooling & Testing support
Reservation for Exclusive Purchase by Government
Export Promotion
Growth in demand in the domestic market size due to overall
economic growth
Increasing Export Potential for Indian products
Growth in Requirements for ancillary units due to the increase in
number of greenfield units coming up in the large scale sector. Small
industry sector has performed exceedingly well and enabled our country to
achieve a wide measure of industrial growth and diversification.
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INDUSTRY PROFILE
Comfortable and versatile, Churidar-style clothing, developed in India, can
be worn by both men and women. Simple shapes combine to create these
garments, making them a great first project for novice seamstresses. Outfits
consist of long pants and medium or long tunics. The ideal fabrics for these
garments are cotton, silk and rayon, easy fabrics for beginners to sew.
Because of their minimalistic design, they make the perfect framework for
embroidery or other types of embellishments.
Difficulty: Moderately Easy
Instructions
Things You'll Need:
Measuring tape
Sewing pattern
Fabric
Pins
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Scissors
Marking pencil or tailor's chalk
Thread
Sewing machine
Seam binding (optional)
Measure yourself to get your chest, waist and hip measurements. Be
sure to wear only the undergarments you plan to wear under your new
Churidar clothing, or if you plan to layer these garments over other
clothing, measure yourself over these other garments. A trusted friend
can help make the measuring process easier.
Buy a pattern for Indian clothing, and find your size by comparing your
measurements to the measurements on the back of the pattern
envelope. The envelope will explain how much fabric is needed for your
size. Purchase the required amount of fabric for your outfit, as well as
any notions required, such as buttons or trim.
Cut out the pattern and fabric as directed by the pattern instructions.
Transfer all pattern markings, such as dots and notches, to the fabric
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using your marking pencil or tailor's chalk. These markings are added to
the pattern to assist you in constructing your garment, and will be
referenced in the sewing instructions.
Fit the garment to your body by pinning it together and carefully putting
it on. Churidar clothing is designed to fit fairly loosely around the body.
Re-pin the seams until you are satisfied with the fit, trying it on
repeatedly until you are satisfied.
Sew the pieces together as instructed by the pattern's sewing directions.
If your fabric starts raveling at the edges as you sew, you may want to
enclose the seams with seam binding or by using a zigzag stitch on the
edges.
Hem the bottom of the Churidar pants to the desired length,
traditionally at the ankle. Hem the tunic and sleeves to the desired
length.
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PROJECT AT A GLANCE
Name of the unit : M/S Angel Industries
Address : Kottayam
Constitution : Proprietorship
Location : Kottayam
About the project : Manufactures Of Churidar Materials
Name and address of proprietor : Subash
Thoppil house
Kottayam
Cost of the project : Rs: 1,00,00,000
Means of finance : Own Capital - Rs 60,00,000
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Bank loan - Rs 40,00,000 Rs 1,00,00,000
COMPANY PROFILE
M/S Angel Industries is a small scale business unit. It is a sole trading
concern concern. They produce various types of Churidar Materials. The
unit is located at Kottayam The location is favourable to the industry. The
name of the proprietor is Mr. Subash. He has several years experience in
the field. The unit has gained a reputation in a short span of operations.The
promoter’s skill and ability is the backbone of this industry.
VARIOUS DEPARTMENTS ASSOCIATED WITH THE COMPANY
PRODUCTION DEPARTMENT
The unit has a wide manufacturing process.So it has a production department to coordinate the activities
1. Maintain the quality
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2.Reduce the cost of Production
3.Increase the efficiency in production.
Marketing Department
Now a days paper has high demand.To earn maximum profit the unit has a good marketing department.Its functions are:
1. Give Value to customer needs
2.Selecting the advertising Campaign.
3. Plan Customer oriented marketing Strategies
Packing Department
1.Make the product packing Attractive.
2. Pack the products with care
PRODUCTS OF THE COMPANY
Churidar Materials
MISSION OF THE COMPANY
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Maintain good customer satisfaction.
Provide better product with cheaper rate
Maintain a stable growth in sales
PRICING METHOD
Before fixing the price the firm consider the raw material cost as it is
changing frequently.
BUYERS
Direct Sales
COMPETITORS
V Star Creations
Roshni Churidar Materials
DISTRIBUTION CHANNEL
Retailers
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Agents
Direct Sales
COST OF THE PROJECT
Details of Plant
Table No: 4.1
Sl. No
Category Sq.ft Amount
1 Manufacturing Unit 1600 16,00,000
2 Quality Testing Machine 500 5,00,000
3 Were ho using & Packing Unit 900 9,00,000
TOTAL 30,00,000
Details of MachineTable No: 4.2
Sl. No Category No Amount
1 Clothing Machine 2 2,50,000
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2 Cross Stitching Machine 3 2,00,000
3 Inter Lock Machine 4 2,00,000
4 Embroidery Machine 3 2,00,000
5 Swing Machine 20 1,50,000
Tax 1,30,000
TOTAL 32 11,30,000
Details of LandTable No: 4.3
Sl.No Acre/Cent Amount
1 59 Cent 50,00,000
TOTAL 50,00,000
Details of FurnitureTable No: 4.4
Sl.No Item No Amount
1 Chair 20 50,000
2 Table 7 70,000
3 Fixtures 30,000
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TOTAL 27 150000
TAX 20000
GRAND TOTAL 170000
Details of Tools and other Accessories Table No: 4.5
Sl. No Category Amount
1 Tools 50,000
2 Accessories 50,000
TOTAL 1,00,000
Details of VehicleTable No: 4.6
Sl. No Category Amount
1 Tempo Van 6,00,000
TOTAL 6,00,000
Cost of Project at a GlanceTable No: 4.7
Sl.No
Item Amount
1 Plant 30,00,000
2 Machinery 11,30,000
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3 Land 50,00,000
4 Furniture & Fittings 1,70,000
5 Tools & Accessories 1,00,000
6 Vehicle 6,00,000
TOTAL 1,00,00,000
Means of Finance
Own Capital - 60,00,000Borrowed Term loan - 40,00,000
TOTAL - 1,00,00,000
PROFITABILITY ANALYSIS
(A) INCOME
a) SALES
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The expected average annual turnover for the proposed project in the initial year is 42,,00,000 and a nominal increase is made in the subsequent years. The details of turnover are as follows:-
Table No: 4.8
Sl.No
Item Amount
1 Printed Churidar 6,88,000
2 Cotton Churidar 6,32,000
3 Chiridar Salvarkameez 6,94,000
4 Fancy Churidar 9,82,000
5 Designer Embroidary Churidar 6,04,000
6 Traditional Churidar 6,00,000
TOTAL 42,00,000
B) EXPENDITURE a) Raw Materials
The expected average annual raw materials for the proposed project is the initial year is Rs. 12,00,000 and a nominal increase is made in the subsequent years. The details of raw materials are given below:-
Table No: 4.9
Sl.No
Item Amount
26
1 Basic Materilal 6,65,000
2 Fine Fabric 4,25,000
3 Shimmer Threads 21,000
4 Beads 24,000
5 Mirror 12,000
6 Sewers 23,000
7 Packing Materials 30,000
TOTAL 12,00,000
b) Salary
This project may provide employment opportunity for 23 members. The expected average annual salary provided for the persons are Rs. 10,00,000 and a nominal increase is made in the subsequent years. Details of salary is as follows :-
Table No: 4.10
Sl.No
Category No Amount
1 Cutting Staff 2 1,00,000
2 Craftsman 2 1,00,000
3 Quality Controller 1 1,20,000
4 Stock Keeper 1 30,000
5 Office Staff 2 80,000
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6 Skilled Labour 15 5,60,000
7 Driver 1 10,000
TOTAL 23 10,00,000
C) Electricity Charges
The expected average annual electricity charges for the proposed project is Rs. 1,00,000 and a nominal increase is made in the subsequent years.
D) Repairs & Maintenance
The expected average repairs and maintenance of the proposed project is Rs. 50,000 and a nominal increase was made in the subsequent years.
E) Travelling Sales promotion Expense
The expected average travelling & sales promotion expense of the proposed project is Rs. 1,50,000 and a nominal increase was made is the subsequent years.
F) Office Expense
The expected average annual office expense of the proposed project is Rs. 2,00,000 and a nominal increase is made in the subsequent years.
G) Interest on Loan
Interest on loan is provided at 10% per annum.
H) Depreciation
Depreciation is provided at 10% per annum on straight line method. Its details are given below :-
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Table No: 4.11
Sl. No
Category Amount Rate of Depreciation
Depreciation
1 Plant 30,00,000 10% 3,00,000
2 Machinery 11,30,000 10% 1,13,000
3 Land 50,00,000 - -
4 Furniture & Fitting 1,70,000 10% 17,000
5 Tools and Accessories
1,00,000 10% 10,000
6 Vehicle 6,00,000 10% 60,000
TOTAL 1000000 5,00,000
DETAILS OF EXPENDITURE AT A GLANCE
Table No: 4.12
Sl.
No
Category Amount
1 Raw Materials 12,00,000
29
2 Salary 10,00,000
3 Electricity charges 1,00,000
4 Repairs & Maintenance 50,000
5 Travelling & Sales Promotion Expense 1,50,000
6 Office Expense 2,00,000
7 Interest on Loan 4,00,000
8 Depreciation 5,00,000
TOTAL 36,00,000
WORKING CAPITAL REQUIREMENT OF THE PROPOSED PROJECT
The working capital requirement of the proposed project is for 2 months. Its details are as follows:-
Table No: 4.13
Sl. No
Category Amount
1 Raw Material 2,00,000
2 Salary 1,66,667
3 Electricity Charges 16,667
4 Repairs & Maintenance 8,333
5 Travelling & Sales Promotion Expense 25,000
6 Office Expense 33,333
7 Interest on Loan 66,667
8 Depreciation 83,333
TOTAL 6,00,000
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ANNEXURE REFERRED TO THE PROPOSED PROJECT
ANNEXURE I : PROJECTED PROFITABILITY STATEMENT
ANNEXURE II : PROJECTED CASH FLOW STATEMENT
ANNEXURE III : DEBT SERVICE COVERAGE RATIO
ANNEXURE IV : PROJECTED BALANCE SHEET.
ANNEXURE I : PROJECTED PROFITABILITY STATEMENT
RS. IN LAKHS
Year 1 2 3 4 5
A) INCOMESales: 42.00 47.00 53.00 59.00` 65.00B) TOTAL 42.00 47.00 53.00 59.00 65.00
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C) V ariable Expense
a) Opening stock - 2.00 3.00 3.00 2.00
b) Purchase 12.00 12.00 14.00 15.00 17.00
c) Closing stock (2.00) (3.00) (3.00) (2.00) (1.00)
Material Consumed (a+b)-c 10.00 11.00 14.00 16.00 18.00
D) TOTAL 10.00 11.00 14.00 16.00 18.00
E) Gross Profit (B-D) 32.00 36.00 39.00 43.00 47.00
F) Operating Expense
Salary 10.00 12.00 14.00 16.00 18.00
Electricity Charges 1.00 1.20 1.40 1.60 1.80
Repairs & Maintenance .50 .60 .70 .80 .90
Travelling& Sales Promotion expense
1.50 1.75 2.00 2.25 2.50
Office Expense 2.00 2.25 2.50 2.75 3.00
Interest on Loan 4.00 3.20 2.40 1.60 .80
Depreciation 5.00 5.00 5.00 5.00 5.00
G) TOTAL 24.00 26.00 28.00 30.00 32.00
H) Net Profit (E-G) 8.00 10.00 11.00 13.00 15.00
ANNEXURE II – PROJECTED CASH FLOW STATEMENTRs. In Lakhs
Year Pre-Operative
1 2 3 4 5
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PeriodA) INFLOW
Owned Capital 60.00
Borrowed Term loan
40.00
Inflow from operation
- 8.00 10.00 11.00 13.00 15.00
Add Depreciation 5.00 5.00 5.00 5.00 5.00
Decrease in Current Asset
- 0.00 0.00 0.00 1.00 1.00
B) Total 100.00 13.00 15.00 16.00 19.00 21.00
C) Outflow
Fixed Asset
Plant 30.00
Machinery 11.30
Land 50.00
Furniture & Fittings 1.70
Tools & Accessories 1.00
Vehicle 6.00
Repayment of loan 8.00 8.00 8.00 8.00 8.00
Increase in current asset
- 2.00 1.00 0.00 0.00 0.00
Income Tax - 1.41 2.01 2.31 2.91 3.51
Drawings - 1.55 3.94 5.60 8.00 9.39
D) Total 100.00 12.96 14.95 15.91 18.91 20.90
E) Surplus 0 .04 .05 .09 .09 .10
F) Cumulative Surplus
0 .04 .09 .18 .27 .37
ANNEXURE III : DEBT SERVICE COVERAGE RATIO
RS. In lakhs
Year 1 2 3 4 5
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A) Source of Fund
Inflow 8.00 10.00 11.00 13.00 15.00
Add Depreciation 5.00 5.00 5.00 5.00 5.00
Less Income Tax (1.41) (2.01) (2.31) (2.91) (3.51)
B) TOTAL 11.59 12.99 13.69 15.09 16.49
C) Servicing of Debt
Repayment of Loan 8.00 8.00 8.00 8.00 8.00
D) TOTAL 8.00 8.00 8.00 8.00 8.00
E) DSCR (B/D) 1.45 1.62 1.71 1.89 2.06
ANNEXURE iv – PROJECTED BALANCE SHEET
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Rs. In Lakhs
Year Pre-Operating period
1 2 3 4 5
A) Source of FundOwned Fund 60.00 65.04 69.09 72.18 74.27 76.37
Borrowed Term Loan
40.00 32.00 24.00 16.00 8.00 0
B) TOTAL 100.00 97.04 93.09 88.18 82.27 76.37
C) Application of FundFixed Asset
Plant 30.00 27.00 24.00 21.00 18.00 15.00
Machinery 11.30 10.17 9.04 7.91 6.78 5.65
Land 50.00 50.00 50.00 50.00 50.00 50.00
Furniture & Fittings 1.70 1.53 1.36 1.19 1.02 .85
Tools & Accessories 1.00 .90 .80 .70 .60 .50
Vehicle 6.00 5.40 4.80 4.20 3.60 3.00
Current Asset
Stock 2.00 3.00 3.00 2.00 1.00
Cash in hand - .04 .09 .18 .27 .37
D) Total 100 97.04 93.09 88.18 82.27 76.37
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BREAK EVEN ANALYSIS
Table No: 4.14
Rs. In Lakhs
Particulars 1 2 3 4 5
A) Sales 42 47 53 59 65
B) Variable Cost Raw Material
10.00 11.00 14.00 16.00 18.00
C) Contribution (A-B) 32.00 36.00 39.00 43.00 47.00
D) PV Ratio (C/A)x100 76.19 76.59 73.58 72.88 72.30
E) Fixed Cost 24.00 26.00 28.00 30.00 32.00
F) Break Even Value (E/D) .3150 .3395 .3805 .4116 .4425
BREAK EVEN POINT
It is a point on sale at which total revenue is equal to total cost.
BREAK EVEN POINT:Fixed Cost/PV Ratio
PV Ratio: (Contribution/Sales) x 100
Contribution: Sales – Variable Cost
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BREAK EVEN ANALYSIS
1 2 3 4 50
5
10
15
20
25
19.05
21.28 20.7522.03
23.08
SCALE : 1 UNIT=0.05
YEAR
BREAK EVEN POINT
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DEBT EQUITY RATIO
Table No: 4.15
Rs. In Lakhs
Particulars 1 2 3 4 5
A) Borrowed Fund 32.00 24.00 16.00 8.00 0
B) Owned Fund 65.04 69.09 72.18 74.27 76.37
C) Debt Equity Ratio (A/B) .4920 .3473 .2217 .1077 0
DEBT EQUITY RATIO
It is a ratio between proprietors fund and outsider’s fund Debt Quality Ratio:- Borrowed Fund/Owned Fund
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DEBT EQUITY RATIO
1 2 3 4 50
5
10
15
20
25
19.05
21.28 20.7522.03
23.08
SCALE : 1 UNIT=0.1
YEAR
DEBT EQUITY RATIO
39
FIXED ASSET TO NET WORTH RATIO
Table No: 4.16
RS: In Lakhs
Particulars 1 2 3 4 5
A) Fixed Assets 95.00 90.00 85.00 80.00 75.00
B) Owned Fund 65.04 69.09 72.18 74.27 76.37
C) FANWR (A/B) 1.4606 1.3026 1.1776 1.0772 .9821
FIXED ASSET TO NET WORTH RATIO
It is the ratio between fixed assets to proprietor’s fund.
Fixed asset to net worth ratio = fixed assets/owned fund
40
FIXED ASSET TO NET WORTH RATIO
1 2 3 4 50
5
10
15
20
25
19.05
21.28 20.7522.03
23.08
SCALE : 1 UNIT=0.2
YEAR
FIXED ASSETS TO NETWORTH RA-
TIO
41
FIXED ASSET TURNOVER RATIO
Table No: 4.17
Rs: In Lakhs
Particulars 1 2 3 4 5
A) Sales 42 47 53 59 65
B) Fixed Asset 95 90 85 80 75
C) FTAR (A/B) .4421 .5222 .6235 .7375 .8667
FIXED ASSET TURNOVER RATIO
It is the ratio between sales and fixed assets.
Fixed Asset Turnover Ratio = Sales/Fixed Assets
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FIXED ASSET TURNOVER RATIO
1 2 3 4 50
0.2
0.4
0.6
0.8
1
1.2
0.67020.7422
0.8186
0.96351
SCALE : 1 UNIT= 0.1
YEAR
FIXED ASSETS TURNOVER
RATIO
43
NET PROFIT RATIO
Table No: 4.18
Rs. In Lakhs
Particulars 1 2 3 4 5
A) Net Profit 8.00 10.00 11.00 13.00 15.00
B) Sales 42.00 47.00 53.00 59.00 65.00
C) Net Profit Ratio (A/B)x100
19.05 21.28 20.75 22.03 23.08
NET PROFIT RATIO
It is the ratio between net profit and sales
Net Profit Ratio = (Net profit/Sales x 100)
NET PROFIT RATIO
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1 2 3 4 50
0.2
0.4
0.6
0.8
1
1.2
0.67020.7422
0.8186
0.96351
SCALE : 1 UNIT= 5
YEAR
NET PROFIT RATIO
PROPRITORY RATIO
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Table No: 4.19
Rs. In Lakhs
Particulars 1 2 3 4 5
A) Shareholders fund 65.04 69.09 72.18 79.27 76.37
B) Total Assets 97.04 93.09 88.18 82.27 76.37
C) Proprietary Ratio (A/B) .6702 .7422 .8186 .9635 1.00
PROPRITORY RATIO
It is the ratio between shareholders fund and total assets.
Proprietary Ratio = Shareholders Fund/Total Asset
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PROPRITORY RATIO
1 2 3 4 50
0.2
0.4
0.6
0.8
1
1.2
0.67020.7422
0.8186
0.96351
SCALE : 1 UNIT= 0.2
YEAR
PROPRITORY RATIO
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CONCLUSION
By verifying the balance sheet it is identified that the financial position of
the firm is sound.
By verifying debt service coverage ratio the firm is able to repay their
interest instalments.
The firm has the capacity to repay all their liabilities in time
Increase in profit is a measurement of operating efficiency of the firm
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SUGGESTION
The taste and preference of the customers are changing day to day in this
industry. The firm should be aware of changing trends in the industry.
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BIBLIOGRAPHY
Reserch Methodology – Patel ,Kithabi Publication.
Cost Accounting – L R Pooti Chand Publication
Web Site
www.indian economy.com
www.keralaeconomy.co.in
www.manufacturingprocess.com
www.smallscaleindustries.org
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