A

FEASIBILITY REPORT
ON

MILK PRODUCT

Group Name:
S

Partnership deed
Name of the Firm
Date of Commencement
Borrowing power
Interest
Duration
Share in profit and loss
Bank Account
Dissolution
Modification

Part -1

Assumption of Financial Feasibility

We work Approximately 300 days in a year.

Estimated sales is decides base on the marketing research and current and
Expected growth of Milk Product Industry.
All cost and other calculation are for 1 carton and 1 carton = 10 units of
Scoop, Bar, Party Pack and Cone.
The loan from state Bank of India is taken at 12% interest per annum,
installment pay every year.
Interest paid to partner at 8% per annum for their capital contribution.
Design capacity is up to 65250 liter ice cream per year, and Normal
Production is 55500 liter per year.
We acquire plant on the rent of Rs. 75000 per month and this rate is
remaining constant for 5 year as per the contract.

Transportation cost is 1% on raw material supplied by the supplier.

Ratio of cash sales and Credit sales are 40:60

Debtors are Provided Credit of 30 days.

Cash purchase and Credit purchase ratio are 40:60

Creditors are provided 30 days credit to us.

Cost of Project
Particular

Amt

Land & Advances

525000

Machinery cost

8217700

Utilities & Communication ( o+ f )

401500

Vehicles

1650000

Preliminary Exp

39040

Pre operating Exp

29500

Working Capital

1137252

Total ( Approx : 11999992 )

12000000

Sources of Fund
Particular

Amt

Owner's Fund

8400000

Borrowed Fund(loan from SBI Bank @ 12% interest)

3600000

Total

12000000

Repayment Schedule of Loan (yearly)

Year

opening Balance

Installments

Interest

Closing Balance

14-15

3600000

998675

432000

3033325

15-16

3033325

998675

363999

2398649

16-17

2398649

998675

287837

1687811

17-18

1687811

998675

202537

891673

18-19

891673

998675

107002

Part -2
Statement of Production and Sales in units [for 5 year]
Party Pack (750 ml.) 10 unit
Year

Op. Bal

Production

Sale

Cl. Bal

14 - 15

Nil

1800

1500

300

15 - 16

300

1890

1650

540

16 - 17

540

1984

1815

709

17 - 18

709

2083

1996

796

18 - 19

796

2187

2196

787

Scoop (1 carton : 10 unit )

Year

Op. Bal

Production

Sale

Cl. Bal

14 - 15

Nil

17275

14400

2875

15 - 16

2875

18138

15840

5173

16 - 17

5173

19045

17424

6794

17 - 18

6794

19997

19166

7625

18 - 19

7625

20997

21083

7539

Bar (1 carton : 10 unit )

Year

Op. Bal

Production

Sale

Cl. Bal

14 - 15

Nil

15500

13300

2200

15 - 16

2200

16275

14630

3845

16 - 17

3845

17088

16093

4840

17 - 18

4840

17943

17702

5081

18 - 19

5081

18840

19472

4449

Cones (1 carton : 10 unit )

Year
14 - 15

Op. Bal
Nil

Production
13875

Sale
12100

Cl. Bal
1775

15 - 16

1775

14568

13310

3033

16 - 17

3033

15297

14641

3689

17 - 18

3689

16062

16105

3646

18 - 19

3646

16865

17715

2796

Statement of Raw Material require

Particular
Milk
American Almonds

Party Pack ( 750 ml )

450

Scoop ( 100 ml )
35

Bar ( 70 ml )
15
8

Walnuts

Raisin

70

Cashew nuts

65

Sugar
Glucose
Skimmed Milk Powder
Cocoa Powder
Essence
Chocolate Slab
Cream
Cup

70
40
110
60
60
70
80

20
8
13
6
5
13
10
15

4
10
4
6
5
4
8
10

Waffle Cones

10
2
8
6
5
7
6

25

Stick
Total

Cones ( 100 ml )
22

15
1075

141

85

98

Direct Labor cost [piece Rate]

Particular

Cost (in Rs.) (Per Ltr.)

Mixing Worker

5[Approx.]

Quality Controller

12

Packaging worker

Total

22

Manufacturing Expenses
Particular

Amt Per Year

Rent Of Plant ( Factory )

900000

Transportation cost of raw material ( 1% )

70480

Electricity Cost

2400000

Repair & Maintenance Cost

150000

Depreciation ( machine, U&C of factory and Vehicle )

1654673

Bonus

23000

Direct Labour salaries

465600

Total

5663753

Administrative and selling overhead

Particular

Per month

Amt

Interest on partner's Capital ( 8% )

672000

Installment of loan

998675

Depriciation on utility and Communication (office) 10%

24675

Telaphone, Computer, printing cost

1500

18000

Catelogue printing

1800

21600

Bonus

46900

Miscellaneous Exp.

1000

12000

Staff Salary

205000

2460000

Total

4253850

Cost Sheet
Party pack
Particular
Direct Material
+Direct Labour
=Prime Cost
+Manufacturing Exp.
=Factory Cost
Factory Cost per unit
+Admin, Selling and distribution exp.
Total cost
Per unit cost
Profit
Selling price
Scoop
Particular
Direct Material
+Direct labuor
=Prime Cost
+Manufacturing Exp.
=Factory Cost
Factory Cost per unit
+Admin, Selling and distribution exp.

14-15
1935000
39600
1974600
210418
2185018
1214
158038
2343056
1301
160
1441

15-16
2031750
41580
2073330
210876
2284206
1208
160932
2445138
1293
160
1453

16-17
2132800
43648
2176448
211300
2387748
1203
163871
2551619
1286
174
1460

17-18
2239225
45826
2285051
211777
2496828
1198
166924
2663752
1279
185
1464

18-19
2351025
48114
2399139
212287
2611426
1194
170076
2781502
1271
200
1471

14-15
2435775
380050
2815825
2019429
4835254
280
1516724

15-16
2557458
399036
2956495
2023745
4980240
274
1544440

16-17
2685345
418990
3104335
2028332
5132667
269
1573050

17-18
2819577
439934
3259511
2033080
5292591
264
1602483

18-19
2960577
461934
3422511
2038127
5460638
260
1632868

Total cost
Per unit cost
Profit
Selling price

6351978
367
42
400

6524680
360
50
410

6705717
352
62
414

6895074
345
75
420

7093506
338
87
425

Cone
Particular
Direct Material
+Direct labuor
=Prime Cost
+Manufacturing Exp.
=Factory Cost
Factory Cost per unit
+Admin, Selling and distribution exp.
Total cost
Per unit cost
Profit
Selling price

14-15
1359750
305250
1665000
1621973
3286973
237
1218208
4505181
324
36
360

15-16
1427664
320496
1748160
1625423
3373583
231
1240457
4614040
316
50
366

16-17
1499106
336534
1835640
1629162
3464802
226
1263479
4728281
309
61
370

17-18
1574076
353364
1927440
1633012
3560452
221
1287147
4847599
302
73
375

18-19
1652770
371030
2023800
1637044
3660844
217
1311536
4972380
295
85
380

14-15
1317500
341000
1658500
1811933
3470433
224
1360881
4831314
311
39
350

15-16
1383375
358050
1741424
1815881
3557305
218
1385807
4943112
303
57
360

16-17
1452480
375936
1828416
1819908
3648324
213
1411409
5059733
296
70
366

17-18
1525155
394746
1919901
1824252
3744153
208
1437884
5182037
289
81
370

18-19
1601400
414480
2015880
1828753
3844633
204
1465126
5309759
282
93
375

Bar
Particular
Direct Material
+Direct labuor
=Prime Cost
+Manufacturing Exp.
=Factory Cost
Factory Cost per unit
+Admin, Selling and distribution exp.
Total cost
Per unit cost
Profit
Selling price

Working Capital Statement

Particular

2014-15

2015-16

2016-17

2017-18

2018-19

Current assets
Closing stock of F.G.

2082675

3608555

4545147

4829222

4414146

Debtors

846625

951506

1058532

1178049

1311215

Cash & Bank

522025

998121

1982108

3643775

6070284

Total current assets

3451325

5558182

7585787

9651046

11795645

Less: Current Liabilities

Creditors

352401

370012

394961

407901

428288

Total current
Liabilities

352401

370012

394961

407901

428288

Net working capital

3098924

5188170

7190826

9243145

11367357

Profit and loss account

Particular

14-15

15-16

16-17

17-18

18-19

Total receipts

19015175

22638665

25715791

28390201

30638437

Total Payment

18204336

20782454

22826713

24306417

25159177

PBT

810839

1856211

2889078

4083784

5479260

Tax Paid (12.5%)

101355

232026

361135

510473

684908

709484

1624185

2527943

3573311

4794352

17737

40605

63199

89333

119859

691747

1583580

2464744

3483978

4674493

Service Tax (2.25%)

15564

35631

55457

78390

105176

PAT

676183

1547949

2409287

3405588

4569317

VAT(2.5%)

Balance-sheet
Particulars

As at 31st
As at 31st
As at 31st
As at 31st
As at 31st
March 2015 March 2016 March 2017 March 2018 March 2019
(A) Sources of Fund
8400000
8400000
8400000
676183
1547949
2409287
3033325
2398649
1687811
12109508
12346598
12497098
(B) Application of Fund

8400000
3405588
891673
12697261

8400000
4569317
0
12969317

Plant & Machineries

Add: Addition
Less: Depreciation
Net plant & Machineries

8217700
0
1639198
6578502

6578502
0
1639198
4939304

4939304
0
1639198
3300106

3300106
0
1639198
1660908

1660908
0
1639198
21710

Vehicles
Less: Depreciation ( 10% )

1650000
165000

1485000
165000

1320000
165000

1155000
165000

990000
165000

Net
Utility & Communication

1485000
401500

1320000
361350

1155000
321200

990000
281050

825000
240900

Less: Depreciation
Net U & C
land advance
Preliminary Exp

40150
361350
525000
31232

40150
321200
525000
23424

40150
281050
525000
15616

40150
240900
525000
7808

40150
200750
525000
0

Owners fund
P & L account
Long term loan
(a)Total sources of fund
Fixed assets:

Pre operating Exp

29500

29500

29500

29500

29500

Closing stock of F.G.

2082675

3608555

4545147

4829222

4414146

Debtors

846625

951506

1058532

1178049

1311215

Cash & Bank

522025

998121

1982108

3643775

6070284

Total current assets

3451325

5558182

7585787

9651046

11795645

Creditors

352401

370012

394961

407901

428288

Total current Liabilities

352401

370012

394961

407901

428288

Net working capital

3098924

5188170

7190826

9243145

11367357

12109508

12346598

12497098

12697261

12969317

Net working capital:

Current assets, loans &
advances

Less: Current Liabilities &

Provisions

Profit Distributed
(b)Total application of funds

Cash flow
Particular

2014-15

2015-16

2016-17

2017-18

2018-19

cash from operating activity [A]

-607893

1303051

2250979

3197617

4289453

Cash From investment activity [B] 10719200

Cash From Financial act. [C]

11960960

Cash Flow [A+B+C]

633867

1303051

2250979

3197617

4289453

[+] op. bal. of cash

763373

522025

998121

1982108

3643775

Cls. Bal. of cash

1397240

1825076

3249100

5179725

7753228

Distribute b/w part.

875215

826955

1266992

1535950

1682944

balance c.f.

522025

998121

1982108

3643775

6070284

Part -3
Evaluation of Project
Net Present Value Method (NPV)
Years

Cash
Inflow

PV factor at
13%

PV of Cash
Inflow

2520531

0.885

2230670

3392297

0.7831

2656508

4253635

0.6931

2948194

5249936

0.6133

3219786

6413665

0.5428

3481337

Total Present Value of Cash

Inflow

14536495

less: Cash outflow

12000000

Net Present Value

2536495

Payback Period
Years
1

Cash
Inflow
2520531

Cumulative Cash
inflow
2520531

3392297

5912828

3
4
5

4253635
5249936
6413665

10166463
15416399
21830064

Cost of
Project

12000000

Payback Period = 3 + 1833537x12

5249936
= 3 + 4.79 months
= 3 years 4months 6 days

Profitability Index
Particular

Amount

Present Value of Cash Inflow

14536495

Initial investment

12000000

Profitability Index

1.21

Internal Rate of Return (IRR)

Years

Cash
Inflow

PV Factor at
20%

PV of Cash
Flow

PV factor at
21%

PV of cash
flow

2520531

0.833

2099602

0.826

2081959

3392297

0.694

2354254

0.683

2316938

4253635

0.579

2462855

0.564

2399050

5249936

0.482

2530469

0.466

2446470

6413665

0.402

2578293

0.385

2469261

Total Present Value Of

Cash Inflow

12025473

11713678

LESS: Cash out Flow

12000000

12000000

Net Present Value

25473

-286322

= 20% +

12025473 - 12000000
12025473 - 11713678

= 20% + 0.082
= 20.082

x 1%

Ratio Analysis

Liquidity Ratio:
Current Ratio:

30
27.54

25
23.66

20
Rate

15
10
9.79
5
0
2014-15

19.21
15.02

2015-16

Current Ratio

2016-17
Year

2017-18

2018-19

Liquid / Acid test Ratio:

20
18
16

17.23

14
12
Rate

11.81

10
8
7.66

6
4
23.8
0
2014-15

Liquid Ratio

5.21

2015-16

2016-17
year

2017-18

2018-19

Profitability Ratio
Gross Profit Ratio:
30
27.93

25

25.16

20
15
Rate 15.68

22.36
19.45
G.P. Ratio

10
5
0
2014-15

2015-16

2016-17

2017-18

2018-19

Year

Net Profit Ratio

20
18
16

17.42

14

14.45

12
Rate

10
8
6

11.38

N.P. Ratio

8.13

4
3.99
2
0
2014-15

2015-16

2016-17
Year

2017-18

2018-19

Return on capital Employee:

120
100
99.31
80
Rate

92.44

87.1

82.2

60

76.98
Operating ratio

40
20
0
2014-15

2015-16

2016-17

2017-18

2018-19

Year

Operating Ratio:
50
45

44.94

40
35
33.78

30
Rate

25
15
10
5
6.76
0
2014-15

ROC Employee

23.98

20
15.43

2015-16

2016-17
Year

2017-18

2018-19

Cash Profit Ratio

30
25
20
Rate

15
14.89
10

17.83

24.46

22.28

20.09

Cash Profit Ratio

5
0
2014-15

2015-16

2016-17
Year

2017-18

2018-19

Leverage Ratio
Debt Equity ratio:
50
45
40
42.86
35
30
Rate

33.71

25

Debt equity Ration

24.86

20
15

16.23

10
5
0
2014-15

7.89
2015-16

2016-17
Year

2017-18

2018-19

Activity Ratio
Inventory turnover ratio (ITR):
7
6
6.02
5
4.65

3.83

Rate 3

3.48

3.59 Inventory Turnover Ratio

2
1
0
2014-15

2015-16

2016-17
Year

2017-18

2018-19

Working Capital Turnover Ratio:

4.5
4
4.04
3.5
3
2.5
Rate

2.55

WIC Turnover period

1.95

1.5
1

1.61

1.37

0.5
0
2014-15

2015-16

2016-17
Year

2017-18

2018-19

Fix Assets Turnover Ratio:

10
9

9.07

8
7
6
Rate

4.97

4
3
2
11.65
0
2014-15

Fix Assets Turnover rate

3.22
2.26
2015-16

2016-17

2017-18

2018-19

Year

Interest coverage ratio:

8
7

7.03

6
5
Rate

4.67

Int. Turnover rate

2
1
00.73
2014-15

1.79

2015-16

2016-17
Yaer

2017-18

2018-19

Future Expansion

To take care of every need and to provide the best ice cream to our
customers, we are going to expand our existing product line which
would include other products such as Kulfi, Sundae, etc.

Considering the increasing response from our customers and

retailers about the different kinds of ice cream and its flavor, we are
going to open shops in the city by the end of 5 years of our business.

We are also going to equip with the technology that reduces the time
in manufacturing ice cream in efficient and in speedy way.