FINANCIALS

At Rs. Rs. 29743200 value of sales we are earning a net profit of 1.14% in
Year 1. Since we will be doing various exhibitions in Year 1 & 2 to create
our brand name, we have taken the exhibition sales as a benchmark to
calculate SPF which is Rs. 1500 for a 2 sq. ft. Exhibition Stall. The Payback
period of our investment is 1 year 3 months.
Sales Budget
Competitors sales = Rs. 3,000 per sq ft.

Assuming our sales is 45% of competitor sales ( Normal

Scenario)
=45% of competitor sales per sq ft* area of the store*no. of
exhibitions in a year*12months
= 45%*3000*36*51*12 =Rs 2,97,43,200 (Annually)

Preliminary expenses.

Preliminary expenses
Legal Expenses
Brand Launch costs(Marketing: 10% of
Annual Sales)
Other Preliminary expenses

19920
00
43560
00
50000
0
7671
055

Rent for zero year

Salary for zero year
Others
Total

Amou
nt
20000
0
62305
5

Physical resources

Description
Land & Building
(Rental)
Exhibition stalls

Resource List
Unit
(Area/N Cost
o.)
per Unit
2000
3

Value
(V)
16600
83
0
45000
150000
0

Exhibition Stall
(Rental)

51

Computers
printer/scanner

5
2

Cost of Interiors
Office Equipment
Details

8000
30000
5000

1500

Vehicles
Airconditioners

1
2

500

500000
41000

Other Resources
Total Fixed
Assets

40800
0
15000
0
10000
75000
0
50000
0
82000
15000
00
34420
00

Initial investment:
Initial investment- Year 0
Total initial investment in fixed assets
Preliminary Expenses
Working Capital Investment (12% of First
year Sales)
Initial Investments
Loan (30% of investment)
Equity ( Debt - Initial Investmnts)

total
344200
0
767105
5
356918
4
14682
239
440467
1.7
102775
67

Income Statement:
PROJECTED INCOME STATEMENTS
Sales
Less Cost of Goods Sold : ( Product
Cost %*Sales)
Product cost %= 100%- Average Retail
Margin%
Gross Profit
Less: Office and Administration
Overheads

Year 1
In Rs.
29743200
11757461
.54
1798573
8.46
8398216.
2

Less: Selling and Distribution

Overheads
Operating Profit (EBIT)
Less: Interest on Loan @13%
Less: Preliminary Expenses ( Written
Off) (1/5)

6989652
2597870
.262
572607.3
21

Earnings before Taxes

Less: Income Tax @30.60%
Earnings After Tax

1534211
491051.
9405
150262
340790

Working notes:
1. OFFICE AND ADMINISTRATION OVERHEADS:
Expenses
Year 1
(In
Rs.)
199200
0
144000
435600
0
419056
.2
148716
0
83982
Total
16.2

Office and Administration

Overheads
Rentals (83*1500 *12)
Electricity
Salary
Depreciation
Other Office Overheads

2. SELLING AND DISTRIBUTION OVERHEADS:

Expenses
Selling and Distribution
Overheads
Advertising (13% of annual
Sales)
Sales Promotion ( 8.5 of Sales)
(Average Markdown%* Seasonal
Sales%)
Other SellingOverheads @ 2%
Total

Year
1 (In
Rs.)
38666
16
25281
72
59486
4
6989

652
3. SALARY
Human Resource List
NO.
Salarie
OF
s
PEOP (Month
Description
LE
ly)
TOP MANAGEMENT
Partners
MARKETING
Marketing Manager
Assistant Manager
Marketing Executives
PRODUCT
Head Designer
SOURCING
Sourcing Manager
Sourcing Associate
QUALITY CONTROL
Quality Controler/Sourcing
Manager
Assistant Quality Control
Manager
FINANCE
Senior Accountant (Free
lancer)
IT
Manager IT
Helper staff
TOTAL

Year 1

50000

120000
0

1
1
1

25000
18000
16000

300000
216000
192000

30000

360000

1
1

25000
18000

300000
216000

25000

300000

18000

216000

15000

180000

1
3

25000
16000

300000
576000
43560
00

15

6. DEPRECIATION:
DEPRECIATION
DEPRECIATION ON MACHINERY
Gross BOOK VALUE
DEPRECATION @ 13.9%
Net Book Value
DEPRECATION ON COMPUTER
Gross BOOK VALUE

1582
000
2200
56
1361
944
1600

DEPRECATION @ 40%
Net Book Value
DEPRICIATION OF FURNITURE AND
FIXTURES ( Interiors)
Gross BOOK VALUE
DEPRECATION @ 18%
Net Book Value
Total

00
6400
0
9600
0
7500
00
1350
00
6150
00
4190
56

Balance Sheet:
Projected Balance Sheet
Source of Fund
Equity
10277567
(Liabilities)
Debt
4404672
Total
Rs.
Liabilities
14,682,239.0
0
Application of Fund
Fixed Assets
3442000
(Assets)
Preliminary
Expenses
7671055
Net Working
3569184
Capital
Total Assets
Rs.
14,682,239.0
0
BREAK EVEN POINT:
Fixed costs = office and Administration overheads + interest on
term Loan +

preliminary expenses written off.

= Rs. 6767056.2 + 572607 + 1534211
= Rs. 8,873,875

Variable cost = cost of goods sold + selling and Distribution

Overheads
= Rs. 11757461.54 + Rs. 8620812
= Rs. 20,378,274

Contribution margin = Net sales variable cost

= Rs. 29743200 - Rs. 20378274
= Rs. 9,364,926
Hence B.E.P (In Rs.) =

Rs. 8873875 /0.315 = Rs. 28,183,609

Margin of safety is 5%
PROFITABILITY RATIOS
1. Net Profit Ratio

= Net Profit / Net Sales x 100

= 340790/ 29743200 x 100
= 1.14%

2. Gross Margin Ratio = Gross Profit /Net Sales x 100

= 17985738 /29743200 x 100
= 60.47%
3. Return On investments = Net Profit / Total Investment x 100
= 340790 / 14682239 x 100
= 2.32%

Percentages
70
60
50
40
30
20
10
0

Net Profit

Gross Margin
Percentages

Return on Investment