Académique Documents
Professionnel Documents
Culture Documents
Commerce Department
Project File
Project
Class
Submitted To
:
:
3rd Semester
Submitted By
Asim Mehmood
Roll No
22
41
Table of Contents
S.No
1
2
3
4
5
6
7
8
9
10
11
12
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19
20
21
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28
29
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31
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37
Description
Acknowledgement
Project Profile
General Briefing
Specific Briefing
Overview of Project
S.W.O.T Analysis
Same Business
Market Analysis
Product Design
Organizational Chart
Project Costing
Estimated Sales
Fixed and Variable Cost Sheet
Organization Salary Sheet
Loan Amortization Sheet
WAAC Sheet
Insurance Expense Sheet
Rental Income Sheet
Depreciation Schedule
Projected Cash FLOW
Time Line of PV
NPV Calculation Sheet
Pay Back Period
Discounted Pay Back Period
IRR Calculation
MIRR Calculation
Financial Break Even Analysis
Accounting Break Even Analysis
Income Statement
Budgets Planning
Financial Analysis and Recommendations
Inventory Costing
Organizational MAP
Page No
3
4
5
7
13
14
16
17
18
19
20
20
21
22
23
24
25
26
27
31
33
34
35
36
37
38
39
40
41
42
44
47
58
41
Acknowledgement
This report has been prepared and submitted as a requirement for Finance PROJECT Course.
During the preparation of this report, we had to face several obstacles which were nevertheless removed through
combined group efforts to excel.
We take this opportunity to thank Our Beloved Teacher, Sir ARFEEN SIDDIQUI for his ever-present
guidance, support and ideas throughout the semester. We dedicate this report to him.
There are a number of people who have assisted us and we appreciate their efforts in helping us, especially our
family and friends who were extremely helpful, supportive and patient through the entire process gathering the
required data and completing the report.
All the material which we included in this report is based on data/information gathered from various sources and
is based on certain assumptions. Although, due care and diligence has been taken to compile this report
but the contained information may vary due to any change in any of the concerned factors, and the actual
results may differ substantially from the presented information.
Once again we would like to take this opportunity to thank everyone, without which we would never have been
able to complete our project.
Project Profile
41
Our project SANS is to provide us the potential investment opportunity in setting up and operating a
Large sized Super Market to final consumers of Nazimabad. This report gives an insight into various aspects of
planning, Marketing and viability of project. The report is designed to provide relevant details (including
technical) to facilitate in making the decision by providing various technological as well as business
alternatives.
This launch of Project will give us a chance to capture a huge market.
Project Brief
Super Market is a multi-million dollar industry which continues to grow rapidly in many countries. Our
project is characterized both by trading which is supplied quickly after ordering, and by minimal service. We are
simple product outlet, which provide Domestic items for customers because we have the capital requirements to
start a super market particularly in a metropolitan area of Karachi like Nazimabad to target a huge and dense
population, as we all know that the population is increasing day by day.
General Briefing
Overview of industry:
Supermarket Trend is growing day by day. There are many areas in Karachi where many supermarkets
are providing their services. Demand of supermarket is increasing in every part of city because people mostly
like to save time and want to purchase goods with ease. Supermarket specialized in providing different
commodities in single vicinity. Supermarket is beneficial for customers who purchase in bulk quantity for whole
month.
Gap Availability:
Supermarkets and Super Stores are present in many big areas of Karachi but there are same areas,
where there is a need of such kind of super market like Nazimabad, which cover large area of population. In
Nazimabad and nearly located areas, there are no such types of super markets, which provide every kind of
thing that are easily available in one places. Other areas which cover North Nazimabad like Gulberg,
Liaquatabad and F.B. Area also have no super markets.
Market Analysis:
41
Currently the demand of house holds items are end less, Consumption trend shows that the items of
super market has end less demand as they are the basic necessities for final consumers therefore the future for
the super market will definitely be there.
Competition environment will not affect a lot because same business there but not located at our selected area.
Customer behavior and demographics analysis provides good results for our project.
Technical Analysis:
Raw material for our project is the inventory which is easily availability, Equipment for use are easily
available building site is available machinery chosen are sound and easily available.
Since the world become global village so every machinery can easily available now days. On the other hand that
every owner and investor dont faced any types of troubles to introduce their business due to availability of
technical resources easily.
Human Resources:
Human resources like managers, supervisors, inventory keeper, workers are easily available in this
scenario and there is no need of further training of staff. The world is become technical and super power,
through this skills and abilities can be seeing. Human resource prefers that how employees are managed by
organizations or to the personnel department. Every organization needs skillful employees who work for the
organization effectively and efficiently and also leads through success and development.
Capital Resources:
There are numerous ways to raise capital to start their business, including taking advantage of
government programs that cater to upstart small business owners; Liquidating assets or using them as collateral
for a loan; or encouraging a family or friend to become the creditor.
Economical Analysis:
Economically Supermarkets are providing savings for final consumers and society as they provide
discounts and acceptable prices
Provides employment and consumers satisfaction
Consumers can spend income with in their budget
Ecological Analysis
Ecologically no harms related to that type of projects, no water waste, no side affects, no environmental
pollution and no damage to the society.
41
Specific Briefing
Nature of Business
To provide a Place that will help the households and final consumers in getting their need and
requirements under one roof.
To decrease the tension of parking, to reduce the time consumption on buying, to provide the
alternatives to introduce the economic planning to flourishing the level of middle class people.
Consumer Appeal
Super Markets have become popular with consumers for several reasons. One is that through
economies of scale in purchasing to consumers at a very low cost.
Super markets like Makro and Metro rapidly gained a reputation for their cleanliness, fast service and a childfriendly atmosphere where families can spend time in shopping easily.
The super market provides a new alternative and appealed to consumers' instinct for ideas and products
associated with innovation and modification in product.
Super market featuring child play areas designed to appeal to younger customers. Parents can have a few
minutes of peace while children played or amused themselves with the toys included in the premises.
Many consumers see super markets as symbols of the wealth and well-ordered openness of Western society and
therefore become trendy attractions in many cities around Pakistan, particularly among younger people.
The Future
The Pakistani economy is becoming increasingly service-oriented, and over the past several decades,
super markets that offer the highest levels of convenience have been rewarded with strong sales growth. In the
face of rising population, incomes and increasingly hectic work schedules, a nearly insatiable demand for
41
convenience will continue to drive super market sales. Super market Outlets will strive to find ways to make
their products even more accessible.
Even if incomes stagnate or attitudes change, consumers are unlikely to spend less time in shopping at super
market rather then to shop every thing or item separately at different places.
The value of consumer time, as well as the demand for consistent, high-quality low price products, will continue
to shape the super market image. Super market, once considered a novelty, has become an increasingly
significant part of the consumers
Key to Successes
Think, in your daily routine life,
How much time you left after a busy day?
How much time you spend for buying grocery?
And how much time you left for your buying garments and apparels?
Tension of car parking, at different shopping areas again and again, some time for garments, some time for
meal, some time for entertainment and decoration of houses etc.
All time consumption and tensions would become one fifth less?
If you go for shopping, on a super market, where you can find all things under one roof.
Current Practices
A huge market is available for consumer goods.
41
Target Customers
Customers is a person who grow in an environment and start separate life so their age and gender not
matter, what does matters is lifestyle, interests, geographic location. Changing in life style interest and shifting
become the reason to grow our business.
Major customer groups
Residential customer
Business sector
Governments organization
Retail consumers
Our major consumers will be that group who are innovators and willingness to change life style, purchase
products at various price levels.
Buffer Zone II
Buffer Zone
Farooq-e-Azam
Hyderi
Jalalabad
North Nazimabad
Nusrat Bhutto Colony
Pahar Ganj
Paposh Nagar
Sakhi Hassan
Khandu Goth
Shadman Town
Product Strategy
Like any other type of company, SANS Super Market will need a concise business plan. This plan
should include but is not limited to: the overall concept and goal of the Project; specific financial information
and projections; a description of the target market; Pricing; equipment and employee details; advertising and
marketing plan; and a potential growth strategy.
Market Research
41
This is probably the most critical factor for running a successful super market. We need to visit super
market outlets, franchises and other chains to see how our concept would fit into the neighborhood we are
planning to target. Talk to customers to know their preferences, some detailed meetings with super market
managers / owners over dinner would do the trick in obtaining best practices and critical information that
otherwise could have been overlooked.
We should Keep in mind that because a concept works in one area does not mean it will be wellreceived by customers in our location. Fashion and Tastes are subject to location preference and more often
target market. Another thing to consider is competition, If our market is saturated with similar super markets
and the population may not be large enough to support more super markets, then we may want to rethink our
concept.
Uniqueness
The super market will issue Loyalty card, introduce an exciting way to do grocery shopping while
earning valuable points which can be redeemed into rewards and incentives such as plasma TVs, cars , DVD
players, gift vouchers ,free tickets, digital cameras and more by just filling out application forms at any counter
and start earning. The more you shop, the more you WILL earn.
Availability of Restaurant
Availability of Sitting Area
Availability of Franchises
Availability of Huge Parking Area
Promotional Activities
Every business needs a comprehensive marketing plan. After determining our marketing budget, and
pricing, we will promote our project by billboard advertising, flyers in Newspapers and local cable TV
advertising. We must ask our customers how they found out about Super Market Services, so that we can record
where our advertising and marketing money are best spent.
Hiring Employees
One of the biggest challenge Super Market project face is a lack of qualified personnel. In order to get
and retain qualified employees, we must make sure our pay scales relate clearly to the job's duties and
responsibilities. In addition, we need to find out what other business are paying their employees so that we can
be competitive in the job market, without spending too much on payroll.
Human Resources
Human resources required for project is
Salesmen
Supervisor
Manager
Accountant
41
Receptionist
Security Guard.
Inventory keeper
Technical Resources
Specific and ideal location
Computing Machines
Screens
Cable lines
Gas supplies.
Pcs,
Distribution
We will establish a suitable distribution network so that the customers will find it easy to access. The
dealership will be provided to sound distributors with good market goodwill.
Our Services
Students, Club Members and Sports Persons get a 15% a discount. Just show your I.D card. We accept
all major credit and debit card. Citi Bank, Bank Alfalah, Faisal Bank, MCB, Habib Bank. Standard Chartered
Bank etc. and Gift Vouchers
Grand Strategy
As Grand Strategy we will adopt Growth Strategy and Penetrating Pricing Policy.
Growth Strategy
We will increase our product line and product width and depth and try to capture mass market to
achieve high sales volume utilize low and affordable prices for both consumers and for us.
41
Overview of Project
S.No
Particulars
1.
2.
3.
4.
5.
Proposed Project
Promoters
Operators
Location
Area
6.
7.
8.
Current Practice
Technical experts
Human Resources
Description
Super Market
Owners
Chairman, Managers
North Naizmabad
3500sq yard for Building
1000sq yard for Parking
A huge market is available for consumer goods
Easily Available
Easily Available
Selection of Area
Our outlet setup will be in a densely populated middle income area such as North Nazimabad, the main
reason for selecting this location is the presence of target market and customer traffic which are the prerequisites
for our success.
Area Required
3500 sq yard for building
1000sq yard for parking.
Initial Capital
(150 million)
Same Businesses
41
Name
Address
Current Demand
Industry Analysis
Population of Pakistan is at about 17Billion and increasing at very fast rate. Current market size is very
vast and number of independent families is making their separate houses.
There is a trend of living independently and separately and market's growth potential is very high.
As life is become very fast and consumer do not have time and their demand changes due to so many
related factors like income level, personality, class consciousness, attitude and so many factors there fore we
must need to improve technological developments in production like durability, new styles, lucky draw gifts and
innovations etc.
Economy
Karachi is the financial and commercial capital of Pakistan. It accounts for a lions share of Pakistans
revenue generation. It generates 70% of the total national revenue
41
What to Expect
Fresh produce, an extensive selection of local and international groceries & products, local and
international brand cosmetics on the second level, a huge variety of baby items on the third level, caring and
dedicated management.
PRODUCT DESIGN:
STORE SITE MAP
GROUND FLOOR:
FLOOR 1:
41
FLOOR 2:
Franchises
OFFICIAL WEBSITES:
http://www.sanssupermarket.com
TEL: (92-21) UAN: 111-666-333
E-MAIL : info@sanssupermarket.com
41
Project Cost
S.N
o
1
2
3
4
5
6
7
Quantity
Land
Building Construction & Decoration
Security Cameras Computer
Trolleys
Generators
A.C Plant
Truck
Total
1
1
20 / 6
200
1
1
1
Price
50000000
40000000
0
2100
850000
1100000
1400000
Total
Rs
Salvag
e Value
50000000
40000000
450000
420000
850000
1100000
1400000
94220000
1000000
45000
42000
85000
110000
140000
1422000
Reference
Land and building rate is given by
Al Sharif State Agency.
Truck, Generator, Trolley, A.C Plant rates given by
Shahzad Enterprises, Constriction Company
Estimated Sales
No of Families Targeted
Population / Average Family Member
( 750000/7 ) Expected Families Visit Daily
No of Families*10%
Expected Families Shop
No of Families / 2
Shopping At least by Each Family
Sales Amount
Expected Families * 6000
Per Month Sales
Per Year Sales
750000
107143
10714
5357
6000
32142857
32142857
38571428
6
Assumptio
n
Targeted Market Nazimabad Karachi
41
Fixed Cost
S.No
Per Year
Description
Per Quarter
1
2
3
4
Insurance
Salary
Utilities
Total (1+2+3)
Rs.
Rs.
Rs.
Rs.
794307
10716000
1800000
13310307
0
2679000
450000
3129000
5
6
Total Depreciation
Sub Total (4+5)
Rs.
Rs.
1353850
14664157
338463
3467463
7
8
Interest
Loan Payable
Rs.
Rs.
8000000
2345054
0
0
Rs.
25009211
3467463
Variable Cost
S.No
Per Year
Description
Per Quarter
1
2
3
Maintenance Cost
Transportation
Sub Total (1+2)
Rs.
Rs.
Rs.
240000
1200000
1440000
60000
300000
360000
Inventory
Rs.
364299732
91074933
Total (3+4)
Rs.
365739732
91434933
41
Salary Chart
Human
Resources
S.No
No. Of
Workers
Salary
(Rs)
Total
(RS)
Manager
30000
90000
1080000
Auditor
25000
25000
300000
Accountant
15000
30000
360000
Supervisor
20000
120000
1440000
Salesman
40
8000
320000
3840000
Inventory Keeper
10000
40000
480000
Helpers
20
7000
140000
1680000
Receptionist
8000
32000
384000
Security Guards
10
6000
60000
720000
6000
36000
432000
10
Sweepers
893,000.00
Salary Expense
1st Year
2nd Year
3rd Year
4th Year
5th Year
6ht Year
7th Year
8th Year
9th Year
10th Year
Total
Per Year
(Rs)
10,716,000
In Rs.
Per Quarter
Per Year
2679000
2679000
2679000
2812950
2812950
2812950
2953598
2953598
2953598
3101277
10,716,000
10,716,000
10,716,000
11,251,800
11,251,800
11,251,800
11,814,390
11,814,390
11,814,390
12,405,110
113,751,68
0
28437920
Assumption
5% Increase in salary after every 3 year
In Rs.
Year
Loan Amount
Installment
Interest
Principle
Balance
1st
50,000,000
10,345,054.15
8,000,000
2,345,054
47,654,946
2nd
47,654,946
10,345,054.15
7,624,791
2,720,263
44,934,683
3rd
44,934,683
10,345,054.15
7,189,549
3,155,505
41,779,178
4th
41,779,178
10,345,054.15
6,684,669
3,660,386
38,118,793
5th
38,118,793
10,345,054.15
6,099,007
4,246,047
33,872,745
6th
33,872,745
10,345,054.15
5,419,639
4,925,415
28,947,330
7th
28,947,330
10,345,054.15
4,631,573
5,713,481
23,233,849
8th
23,233,849
10,345,054.15
3,717,416
6,627,638
16,606,211
9th
16,606,211
10,345,054.15
2,656,994
7,688,060
8,918,150
10th
8,918,150
10,345,054.15
1,426,904
8,918,150
103,450,541.50
53,450,542
50,000,000
Total
Ist Year Loan
($10,345,054.15)
10,345,054
Financial Formula
Referenc
e
Interest rate given by Soneri Bank
Dated: 13.04.2010.
Equity
100000000
Debt
50000000
Assets
150000000
Tax
{ ( E / A)
30
Cost of Equity ( Ks )
21
Cost of Debt
16
( Kd )
WACC
( Cost of Equity) }
WACC
0.66667
WACC
0.14
WACC
0.177333333
WACC
17.73
0.21
{ ( D / A)
0.33333
0.03733
( Cost of Debt )
0.16
(1 - Tax ) }
0.7
ks =
16%
5%
21%
Assumption
5% Risk added in cost of equity
Insurance Expense
41
In Rs.
Item
Cost
Premium Amount
Fire Insurance
Building
Security Computers
Trolleys
Generator
A.C Plant
Truck
Total
Fire Insurance
40000000
450000
425000
850000
1100000
1400000
44225000
(Rs. 15 Per Thousand)
663375
Other Damages
Security Computers
Trolleys
Generator
A.C Plant
Truck
Total
Other Insurance
Clause A & C
F.I.F
C.E.D
Insurance Expense
1st Year
2nd Year
3rd Year
4th Year
5th Year
6ht Year
7th Year
8th Year
9th Year
10th Year
Total
450000
425000
850000
1100000
1400000
4225000
(Rs. 3.2 Per Thousand)
TOTAL
5% or Maxim 2000
TOTAL
1% of Total
16% of Total
Chargeable Premium
13520
676895
2000
678895
6789
108623
794307
In Rs.
794307
794307
794307
794307
794307
794307
794307
794307
794307
794307
7943070
Reference
By Adam jee Insurance Company I.I Chundrigar Road Karachi
Rental Income
41
S.No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Item
Franchises
Parlor
Restaurant
Ice Cream Shop
Gift Shop
Toy Shop
Men Garments
Women Garments
Children Garments
Shoes Shop
Purse and Imported Item
Jewelry
Crockery
Pharmacy
Cd's Shop
Total
Quantity
Amount Rs.
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Amount Rs.
100000
1200000
30000
360000
50000
600000
20000
240000
20000
240000
20000
240000
30000
360000
30000
360000
30000
360000
20000
240000
20000
240000
20000
240000
30000
360000
30000
360000
20000
240000
470000
5640000
Rental Income
1st Year
2nd Year
3rd Year
4th Year
5th Year
6th Year
7th Year
8th Year
9th Year
10th Year
Total
Reference
Rent charges by Hyderi market, U.P Society,
Assumptio
n
5% Increase in Rental income after every 3
year
DEPRECIATION SCHEDULE
41
Building
Straight Line Method
Building Cost
Life (in years)
Salvage Value
Years Cost
1
40000000
2
40000000
3
40000000
4
40000000
5
40000000
6
40000000
7
40000000
8
40000000
9
40000000
10
40000000
40000000
40
1000000
Salvage Value
1000000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
Life
40
40
40
40
40
40
40
40
40
40
Total
Dep. Cost
975000
975000
975000
975000
975000
975000
975000
975000
975000
975000
9750000
Trolley Depreciation
Straight Line Method
Cost
life (in years)
Salvage Value
Year
1
2
3
4
5
6
Cost
425000
425000
425000
425000
425000
425000
425000
6
42500
Salvage Value
42500
42500
42500
42500
42500
42500
Life
6
6
6
6
6
6
Total
Dep.
Dep. Cost
63750
63750
63750
63750
63750
63750
382500
A.C Plant
Diminishing Balance Method
Cost
Life (in years)
1100000
12
41
Rate
0.083333333
Years
1
2
3
4
5
6
7
8
9
10
Cost
1100000
1008700
924978
848205
777804
713246
654047
599761
549981
504332
Rate
0.083
0.083
0.083
0.083
0.083
0.083
0.083
0.083
0.083
0.083
Dep.
Cost
91300
83722
76773
70401
64558
59199
54286
49780
45648
41860
Total
Dep.
Book Value
1008700
924978
848205
777804
713246
654047
599761
549981
504332
462473
637527
Generator
Diminishing Balance Method
Cost
Life (in years)
Rate
Years
1
2
3
4
5
6
7
8
9
10
Cost
850000
765000
688500
619650
557685
501917
451725
406552
365897
329307
850000
10
0.1
Rate
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
Dep. Cost
85000
76500
68850
61965
55769
50192
45172
40655
36590
32931
Total Dep.
Book Value
765000
688500
619650
557685
501917
451725
406552
365897
329307
296377
553623
450000
10 years
0.1
41
Years
1
2
3
4
5
6
7
8
9
10
Cost
450000
405000
364500
328050
295245
265721
239148
215234
193710
174339
Rate
0.1000
0.1000
0.1000
0.1000
0.1000
0.1000
0.1000
0.1000
0.1000
0.1000
Dep Cost
45000
40500
36450
32805
29525
26572
23915
21523
19371
17434
Total Dep.
Book value
405000
364500
328050
295245
265721
239148
215234
193710
174339
156905
293095
Truck
Diminishing Balance Method
Cost
Life (in years)
Rate
Years
1
2
3
4
5
6
7
8
9
10
1400000
15
0.066670
Cost
1400000
1306200
1218685
1137033
1060852
989774
923460
861588
803861
750003
Rate
0.067
0.067
0.067
0.067
0.067
0.067
0.067
0.067
0.067
0.067
Dep. Cost
93800
87515
81652
76181
71077
66315
61872
57726
53859
50250
Total Dep.
Book Value
1306200
1218685
1137033
1060852
989774
923460
861588
803861
750003
699753
700247
Asset
Cost
Salvage
Value
Life of
Asset
Dep Exp
1st Year
Total Dep
Exp of 10
Book
Value
41
o
1
2
3
4
5
6
7
Year
Land
Building
Trolleys
A.C Plant
Computer, camera
Truck
Generator
Total
50000000
40000000
425000
1100000
450000
1400000
850000
94225000
0
1000000
42500
110000
45000
140000
85000
1422500
40
40
6
12
10
15
10
0
975000
63750
91300
45000
93800
85000
1353850
0
9750000
382500
637527
293095
700247
553623
12316992
50000000
30250000
42500
462473
156905
699753
296377
81908008
Depreciation Expense
Per Year
1st Year
2nd Year
3rd Year
4th Year
5th Year
6ht Year
7th Year
8th Year
9th Year
10th Year
Total
1353850
1326988
1302475
1280102
1259678
1241028
1160245
1144685
1130468
1117474
12316992
Per
Quarter
338463
331747
325619
320026
314919
310257
290061
286171
282617
279369
3079248
Ist Year
2nd
3rd
4th
5th
41
1
2
3
Inventory Sales
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
94220000
55780000
5640000
40276800
0
40840800
0
36429973
2
794307
1200000
1800000
10716000
37881003
9
29597961
1353850
28244111
8473233
5640000
42290640
0
42854640
0
38251471
9
794307
1200000
1800000
10716000
39702502
6
31521374
1326988
30194387
9058316
5640000
44405172
0
44969172
0
40164045
5
797307
1200000
1800000
10716000
41615376
2
33537958
1302475
32235483
9670645
5922000
46625430
6
47217630
6
41770607
3
837172
1260000
1890000
11251800
43294504
5
39231261
1280102
37951159
11385348
5922000
19770878
21136071
22564838
26565811
31203239
21124728
22463058
23867313
27845913
32462917
21124728
22463058
23867313
27845913
32462917
14864615
0
14731916
3
14601668
7
14473658
5
143476908
489567021
495489021
434414316
837172
1260000
1890000
11251800
449653288
45835734
1259678
44576056
13372817
15000000
0
22
15000000
0
24
15000000
0
41
7th
8th
9th
5922000
51404537
2
51996737
2
45179088
8
837172
1260000
1890000
11251800
46702986
0
52937512
1241028
51696484
15508945
6218100
53974764
1
54596574
1
46986252
4
879031
1323000
1984500
11814390
48586344
4
60102297
1160245
58942052
17682615
6218100
56673502
3
57295312
3
48865702
5
879031
1323000
1984500
11814390
50465794
6
68295177
1144685
67150492
20145148
6218100
59507177
4
60128987
4
50820330
6
879031
1323000
1984500
11814390
52420422
7
77085647
1130468
75955180
22786554
36187539
41259436
47005345
53168626
59433142
81908008
55780000
37428567
42419681
48150030
54299094
60550616
137688008
1
2
3
Inventory Sales
10th
6529005
624825363
631354368
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
37428567
42419681
48150030
54299094
198238624
24
14223588
0
14107563
5
13993094
9
13880048
2
137683007
528531438
922983
1389150
2083725
12405110
545332405
86021963
1117474
84904488
25471347
Assumptions
The Sales are expected to increase by 5% every year and Rental income is additional which will also,
would be increasing 5% after every 3year while the cost of raw materials is assumed to increase by
5%.
41
150000000
15000000
0
2112472
8
2246305
8
2386731
3
2784591
3
3246291
7
3742856
7
4241968
1
4815003
0
5429909
4
19823862
4
10
(1.173)1
(1.173)2
(1.173)3
(1.173)4
(1.173)5
(1.173)6
(1.173)7
(1.173)8
(1.173)9
(1.173)10
17942860
16205782
_____________/
________________________/
14625315
____________________________________/
14493181
_______________________________________________/
14351270
__________________________________________________________/
14054214
_____________________________________________________________________/
13529175
________________________________________________________________________________/
13043707
___________________________________________________________________________________________/
12493888
______________________________________________________________________________________________________/
38743056
_________________________________________________________________________________________________________________/
169482449
19482449
41
Cash Flows
-150000000
21124728
PV
21124728
22463058
/( 1.1773 )^1
/( 1.1773 )
^2
22463058
23867313
/( 1.1773 )^3
23867313
27845913
/( 1.1773 )^4
27845913
32462917
/( 1.1773 )^5
32462917
37428567
/( 1.1773 )^6
37428567
42419681
/( 1.1773 )^7
42419681
48150030
/( 1.1773 )^8
48150030
54299094
/( 1.1773 )^9
10
198238624
/( 1.1773 )^10
54299094
19823862
4
1.177
3
1.386
1
1.631
9
1.921
3
2.262
0
2.663
2
3.135
4
3.691
4
4.346
1
5.116
8
17942860
16205782
14625315
14493181
14351270
14054214
13529175
13043707
12493888
38743056
169482449
NPV
NPV
NPV
=
=
15000000
0
19482449
41
Cash Flows
Cost
Recovered
Balance
-150000000
21124728
150000000
21124728
128875272
22463058
128875272
22463058
106412214
23867313
106412214
23867313
82544901
27845913
82544901
27845913
54698987
32462917
54698987
32462917
22236070
37428567
22236070
37428567
-15192497
42419681
48150030
54299094
10
198238624
Year before full recovery + Unrecovered amount / Cash flow of the Year
+
5
22236070
+
5.5940936
5 Year 6 Month
37428567
0.59409355
41
In Flows
-150000000
PV
21124728
/( 1.1773 )1
21124728
1.1773
17942860
22463058
/( 1.1773 )2
22463058
1.3861
16205782
23867313
/( 1.1773 )3
23867313
1.6319
14625315
27845913
/( 1.1773 )4
27845913
1.9213
14493181
32462917
/( 1.1773 )5
32462917
2.2620
14351270
37428567
/( 1.1773 )6
37428567
2.6632
14054214
42419681
/( 1.1773 )7
42419681
3.1354
13529175
48150030
/( 1.1773 )8
48150030
3.6914
13043707
54299094
/( 1.1773 )9
54299094
4.3461
12493888
10
198238624
/( 1.1773 )10
198238624
5.1168
38743056
15000000
0
S.N
o
Cost
16948244
9
Recovere
d
Balance
150000000
17942860
132057140
132057140
16205782
115851357
115851357
14625315
101226043
101226043
14493181
86732862
86732862
14351270
72381592
72381592
14054214
58327378
58327378
13529175
44798203
44798203
13043707
31754496
31754496
12493888
19260607
10
19260607
38743056
-19482449
1948244
9
Year before full recovery + Unrecovered amount / Cash flow of the Year
19260607
9
3874305
6
0.497137
9.49713702
9 Year 5 Month
41
Cash Flows
20.2222577
Rate
PV
-150000000
21124728
/( 1+IRR )1
21124728
1.2022
17571395
22463058
/( 1+IRR )2
22463058
1.4453
15541722
23867313
/( 1+IRR )3
23867313
1.7376
13735640
27845913
/( 1+IRR )4
27845913
2.0890
13329748
32462917
/( 1+IRR )5
32462917
2.5114
12925970
37428567
/( 1+IRR )6
37428567
3.0193
12396353
42419681
/( 1+IRR )7
42419681
3.6299
11686198
48150030
/( 1+IRR )8
48150030
4.3639
11033607
54299094
/( 1+IRR )9
5.2464
10349722
10
198238624
/( 1+IRR )10
54299094
19823862
4
6.3074
31429645
508299925
Formula
IRR
IRR
IRR
IRR
=
=
=
20.2222577
IRR
20.222258%
150000000
150000000
Financial Formula
41
Cash Flows
-150000000
21124728
*( 1.1773 )9
21124728
4.3461
FV
91809174
22463058
*( 1.1773 )8
22463058
3.6914
82920976
23867313
*( 1.1773 )7
23867313
3.1354
74834113
27845913
*( 1.1773 )6
27845913
2.6632
74158017
32462917
*( 1.1773 )5
32462917
2.2620
73431896
37428567
*( 1.1773 )4
37428567
1.9213
71911932
42419681
*( 1.1773 )3
42419681
1.6319
69225439
48150030
*( 1.1773 )2
48150030
1.3861
66741420
54299094
*( 1.1773 )1
54299094
1.1773
63928133
10
198238624
*( 1.1773 )0
198238624
1.0000
198238624
867199725
Present Value of Out Flow
150000000
867199725
(1+ MIRR) 10
(1+ MIRR) 10
867199725
5.78133150
1
(1+ MIRR)
10/10
5.78133150
1
(1+ MIRR)
1.19179837
MIRR
0.19179837
MIRR
19.18%
(1+MIRR)1
0
150000000
1/10
^0.
1
41
100.00%
89.55%
10.45%
408408000
365739732
42668268
13310307
1353850
28004111
8401233
19602878
20956728
89.55% of Sales
10.45 % of Sales
14664157
10.45% Sales - fc, dep
30% ( 10.45 % sale - fc, dep)
70% ( 10.45 % sale - fc,dep )
Dep+ 70% ( 10.45 Sales-fc,
dep)
10 Year Data
Fixed Cost
Decrication 10 Year
Total Fixed Cost
Cash flow
Cash flow
Cash flow
Rs
.
Rs
.
=
=
=
Investment
Discount rate
Year
150000000
150000000
150000000
150000000
177171691
Break even sales
13310307
12316992
25627299
Deprecation +
12316992
0.07315 Sales
25627299
17939109
150million
16%
10
=
=
=
=
=
=
0.07315 sales-5622117
0.07315 sales-5622117
0.07315 sales-5622117
0.35353395 Sales0.35353 Sales
501150373
(PVIFA)
{ 1- 1/(1.16)`10 } / 0.16
4.833
27171691
41
100.00%
89.55%
10.45%
408408000
365739732
42668268
13310307
1353850
28004111
402768000
5640000
408408000
14664157
1353850
13310307
41
Income Statement
Ist Year
2nd
3rd
4th
5640000
44405172
0
44969172
0
40164045
5
5922000
46625430
6
47217630
6
41770607
3
5th
Rental Income
Inventory Sales
402768000
408408000
364299732
5640000
42290640
0
42854640
0
38251471
9
44108268
794307
1200000
1800000
10716000
46031681
794307
1200000
1800000
10716000
48051265
797307
1200000
1800000
10716000
54470233
837172
1260000
1890000
11251800
61074706
837172
1260000
1890000
11251800
14510307
29597961
1353850
28244111
8473233
14510307
31521374
1326988
30194387
9058316
14513307
33537958
1302475
32235483
9670645
15238972
39231261
1280102
37951159
11385348
15238972
45835734
1259678
44576056
13372817
19770878
21136071
22564838
26565811
31203239
7th
8th
9th
6218100
56673502
3
57295312
3
48865702
5
6218100
59507177
4
60128987
4
50820330
6
84296098
879031
1323000
93086568
879031
1323000
4
5
6
7
8
9
10
11
12
13
14
15
5640000
6th
Rental Income
Inventory Sales
514045372
519967372
4
5
6
7
451790888
6218100
53974764
1
54596574
1
46986252
4
68176484
837172
1260000
76103217
879031
1323000
5922000
5922000
489567021
495489021
434414316
10th
6529005
624825363
631354368
528531438
102822930
922983
1389150
41
8
9
10
11
12
13
14
15
Utilities
Salaries
1890000
11251800
1984500
11814390
1984500
11814390
1984500
11814390
2083725
12405110
15238972
52937512
1241028
51696484
15508945
16000921
60102297
1160245
58942052
17682615
16000921
68295177
1144685
67150492
20145148
16000921
77085647
1130468
75955180
22786554
16800967
86021963
1117474
84904488
25471347
36187539
41259436
47005345
53168626
59433142
Budgeting
Sales Budget
Budgeted Sales
Selling Price
Budgeted Sales Rs.
Schedule 1
Q1
10069200
0
Q2
10069200
0
Q3
10069200
0
Q4
10069200
0
10069200
0
10069200
0
10069200
0
10069200
0
Q3
Q4
Collection Budget
Q1
Q2
Beginning Balance
10069200
0
10069200
0
10069200
0
10069200
0
10069200
0
10069200
0
Q3
91074933
Q4
91074933
Schedule 3
Cost of Budgeted Sales
10069200
0
10069200
0
Purchase Of R.M
Q1
91074933
Q2
91074933
41
Add:
Less:
Schedule 4
Beginning Balance ( Given)
Quarter 1st Collection
Quarter 2nd Collection
Quarter 3rd Collection
Quarter 4th Collection
Total
Assumption
50% Payment in Current Quarter
Schedule 7
Add:
Less:
Schedule 8
5500870
96575803
0
96575803
Add:
Less
5500870
96575803
5500870
91074933
5500870
96575803
5500870
91074933
Q2
48287902
48287902
45537467
48287902
93825368
Q3
45537467
45537467
91074933
Q4
45537467
45537467
91074933
Q2
Q3
Q4
90000
300000
80000
300000
110000
300000
80000
300000
2679000
450000
338463
2679000
450000
338463
2679000
450000
338463
2679000
450000
338463
794307
3857463
338463
3519000
3847463
338463
3509000
3877463
338463
3539000
4641770
338463
4303307
Q2
10466509
9
10069200
0
20535709
9
Q3
10802273
1
10069200
0
20871473
1
Q4
11410079
8
10069200
0
21479279
8
Cash Budget
Q1
5500870
96575803
5500870
91074933
55780000
10069200
0
15647200
0
41
D.R.M Inventory
Selling & Adm
Equipment Purchase
Total Disbursement
Add:
Less:
Less:
Less:
Excess ( Deficit )
Financing
Borrowing
Repayment of Loan
Interest @ 16%
Tax @ 30%
48287902
3519000
93825368
3509000
91074933
3539000
91074933
4303307
51806902
10466509
9
97334368
10802273
1
94613933
11410079
8
95378240
11941455
8
11410079
8
2345054
8000000
6073233
10299627
0
10466509
9
Cash Balance
10802273
1
FINANCIALANALYSIS
The cost projections cover the cost of land, building, inventory, equipment including office furniture etc. The
specific assumptions relating to individual cost components are given as under:
Account Receivables:
All sales will be made strictly on cash basis. It is not advisable to operate a super market on credit basis.
Account Payables:
41
All purchases will be made on credit basis which was paid 50% in current quarter and 50% in next
quarter. It would be beneficial for as to maintain cash balance in hand.
Financial Charges:
It is assumed that long-term financing for 10 years will be obtained in order to finance Sans Super
Market setup which would mainly include construction & dcor of Building, Purchase of machinery &
equipment, purchase of inventory etc. This facility would be required at a rate of 16% annum with Yearly
installments over a period of 10 years. The installments are assumed to be paid at the end of every year.
Taxation:
The tax rate is 30% would be paid after end of year
Depreciation on Equipment:
Depreciation on Stores fixtures Equipment like computers and security cameras are assumed to be at
the rate of 10% per annum based on the diminishing balance method, Trolleys depreciation assumed to be at
the rate of 17% per annum based on Straight line method, Stores Machinery like AC Plant, Generator and
Truck are assumed to be at the rate of 8%, 10% and 7%per annum respectively based on the diminishing
balance method for the projected period. Building depreciation based on straight line method having life of 40
years.
Utilities consumption:
The Utility consumptions per month Rs.150000, It is assumed that utilities expenses will be increased
by 5% every year.
NPV Analysis:
41
NPV
NPV
NPV
=
=
150000000
19482449
Recommendation:
Diversification of products
New Branch
Credit Cards
Promotional Offers
41