A Feasibility Report on Milk Product

AFeasibility Report onMilk Product

Group Name:S

Partnership deedName of the FirmDate of CommencementBorrowing powerInterestDurationShare in profit and lossBank AccountDissolutionModificationAssumption of Financial FeasibilityWe 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 40:60Debtors are Provided Credit of 30 days. Cash purchase and Credit purchase ratio are 40:60Creditors are provided 30 days credit to us.

Part -1 Cost of Project

ParticularAmtLand & Advances525000Machinery cost8217700Utilities & Communication ( o+ f )401500Vehicles1650000Preliminary Exp39040Pre operating Exp29500Working Capital1137252Total ( Approx : 11999992 )12000000Sources of FundParticularAmtOwner's Fund8400000Borrowed Fund(loan from SBI Bank @ 12% interest)3600000Total12000000Repayment Schedule of Loan (yearly)

Yearopening BalanceInstallmentsInterestClosing Balance14-153600000998675432000303332515-163033325998675363999239864916-172398649998675287837168781117-18168781199867520253789167318-198916739986751070020 Part -2 Statement of Production and Sales in units [for 5 year] Party Pack (750 ml.) 10 unit

YearOp. BalProductionSale Cl. Bal14 - 15Nil1800150030015 - 163001890165054016 - 175401984181570917 - 187092083199679618 - 1979621872196787Scoop (1 carton : 10 unit )YearOp. BalProduction Sale Cl. Bal14 - 15Nil1727514400287515 - 1628751813815840517316 - 1751731904517424679417 - 1867941999719166762518 - 19762520997210837539Bar (1 carton : 10 unit )YearOp. BalProduction SaleCl. Bal14 - 15Nil1550013300220015 - 1622001627514630384516 - 1738451708816093484017 - 1848401794317702508118 - 19508118840194724449Cones (1 carton : 10 unit )YearOp. BalProductionSaleCl. Bal14 - 15Nil1387512100177515 - 1617751456813310303316 - 1730331529714641368917 - 1836891606216105364618 - 19364616865177152796Statement of Raw Material requireParticularParty Pack ( 750 ml )Scoop ( 100 ml )Bar ( 70 ml )Cones ( 100 ml )Milk450351522American Almonds8Walnuts3Raisin708Cashew nuts6584Sugar70201010Glucose40842Skimmed Milk Powder1101368Cocoa Powder60656Essence60545Chocolate Slab701387Cream8010106Cup15Waffle Cones25Stick15Total10751418598Direct Labor cost [piece Rate]ParticularCost (in Rs.) (Per Ltr.)Mixing Worker5[Approx.]Quality Controller12Packaging worker5Total22Manufacturing ExpensesParticularAmt Per YearRent Of Plant ( Factory )900000Transportation cost of raw material ( 1% )70480Electricity Cost2400000Repair & Maintenance Cost150000Depreciation ( machine, U&C of factory and Vehicle )1654673Bonus23000Direct Labour salaries465600Total5663753Administrative and selling overheadParticularPer monthAmtInterest on partner's Capital ( 8% )672000Installment of loan998675Depriciation on utility and Communication (office) 10%24675Telaphone, Computer, printing cost150018000Catelogue printing180021600Bonus46900Miscellaneous Exp.100012000Staff Salary2050002460000Total4253850Cost SheetParty packParticular14-1515-1616-1717-1818-19Direct Material19350002031750213280022392252351025+Direct Labour3960041580436484582648114=Prime Cost19746002073330217644822850512399139+Manufacturing Exp.210418210876211300211777212287=Factory Cost21850182284206238774824968282611426Factory Cost per unit12141208120311981194+Admin, Selling and distribution exp.158038160932163871166924170076Total cost23430562445138255161926637522781502Per unit cost13011293128612791271Profit160160174185200Selling price14411453146014641471ScoopParticular14-1515-1616-1717-1818-19Direct Material24357752557458268534528195772960577+Direct labuor380050399036418990439934461934=Prime Cost28158252956495310433532595113422511+Manufacturing Exp.20194292023745202833220330802038127=Factory Cost48352544980240513266752925915460638Factory Cost per unit280274269264260+Admin, Selling and distribution exp.15167241544440157305016024831632868Total cost63519786524680670571768950747093506Per unit cost367360352345338Profit4250627587Selling price400410414420425ConeParticular14-1515-1616-1717-1818-19Direct Material13597501427664149910615740761652770+Direct labuor305250320496336534353364371030=Prime Cost16650001748160183564019274402023800+Manufacturing Exp.16219731625423162916216330121637044=Factory Cost32869733373583346480235604523660844Factory Cost per unit237231226221217+Admin, Selling and distribution exp.12182081240457126347912871471311536Total cost45051814614040472828148475994972380Per unit cost324316309302295Profit3650617385Selling price360366370375380Bar Particular14-1515-1616-1717-1818-19Direct Material13175001383375145248015251551601400+Direct labuor341000358050375936394746414480=Prime Cost16585001741424182841619199012015880+Manufacturing Exp.18119331815881181990818242521828753=Factory Cost34704333557305364832437441533844633Factory Cost per unit224218213208204+Admin, Selling and distribution exp.13608811385807141140914378841465126Total cost48313144943112505973351820375309759Per unit cost311303296289282Profit3957708193Selling price350360366370375Working Capital StatementParticular2014-152015-162016-172017-182018-19Current assetsClosing stock of F.G.20826753608555454514748292224414146Debtors846625951506105853211780491311215Cash & Bank522025998121198210836437756070284Total current assets345132555581827585787965104611795645Less: Current LiabilitiesCreditors352401370012394961407901428288Total current Liabilities352401370012394961407901428288Net working capital309892451881707190826924314511367357Profit and loss accountParticular14-1515-1616-1717-1818-19Total receipts1901517522638665257157912839020130638437Total Payment1820433620782454228267132430641725159177PBT8108391856211288907840837845479260Tax Paid (12.5%)1013552320263611355104736849087094841624185252794335733114794352VAT(2.5%)177374060563199893331198596917471583580246474434839784674493Service Tax (2.25%)15564356315545778390105176PAT6761831547949240928734055884569317Balance-sheetParticularsAs at 31st March 2015As at 31st March 2016As at 31st March 2017As at 31st March 2018As at 31st March 2019(A) Sources of FundOwners fund84000008400000840000084000008400000P & L account6761831547949240928734055884569317Long term loan3033325239864916878118916730(a)Total sources of fund1210950812346598124970981269726112969317(B) Application of FundFixed assets:Plant & Machineries82177006578502493930433001061660908Add: Addition00000Less: Depreciation16391981639198163919816391981639198Net plant & Machineries657850249393043300106166090821710Vehicles1650000148500013200001155000990000Less: Depreciation ( 10% )165000165000165000165000165000Net148500013200001155000990000825000Utility & Communication401500361350321200281050240900Less: Depreciation4015040150401504015040150Net U & C361350321200281050240900200750land advance525000525000525000525000525000Preliminary Exp31232234241561678080Pre operating Exp2950029500295002950029500Net working capital:Current assets, loans & advancesClosing stock of F.G.20826753608555454514748292224414146Debtors846625951506105853211780491311215Cash & Bank522025998121198210836437756070284Total current assets345132555581827585787965104611795645Less: Current Liabilities & ProvisionsCreditors352401370012394961407901428288Total current Liabilities352401370012394961407901428288Net working capital309892451881707190826924314511367357Profit Distributed(b)Total application of funds1210950812346598124970981269726112969317Cash flowParticular2014-152015-162016-172017-182018-19cash from operating activity [A]-6078931303051225097931976174289453Cash From investment activity [B]107192000000Cash From Financial act. [C]119609600000Cash Flow [A+B+C]6338671303051225097931976174289453[+] op. bal. of cash76337352202599812119821083643775Cls. Bal. of cash13972401825076324910051797257753228Distribute b/w part.875215826955126699215359501682944balance c.f.522025998121198210836437756070284 Part -3 Evaluation of ProjectYearsCash InflowPV factor at 13%PV of Cash Inflow125205310.8852230670233922970.78312656508342536350.69312948194452499360.61333219786564136650.54283481337Total Present Value of Cash Inflow14536495less: Cash outflow12000000Net Present Value2536495Net Present Value Method (NPV)Payback PeriodYearsCash InflowCumulative Cash inflowCost of Project12520531252053123392297591282834253635101664631200000045249936154163995641366521830064Payback Period = 3 + 1833537x12 5249936 = 3 + 4.79 months = 3 years 4months 6 daysProfitability Index

ParticularAmountPresent Value of Cash Inflow14536495Initial investment12000000Profitability Index1.21Internal Rate of Return (IRR)YearsCash InflowPV Factor at 20%PV of Cash FlowPV factor at 21%PV of cash flow125205310.83320996020.8262081959233922970.69423542540.6832316938342536350.57924628550.5642399050452499360.48225304690.4662446470564136650.40225782930.3852469261Total Present Value Of Cash Inflow1202547311713678LESS: Cash out Flow1200000012000000Net Present Value25473-286322= 20% + 12025473 - 12000000 x 1% 12025473 - 11713678 = 20% + 0.082

= 20.082Ratio AnalysisLiquidity Ratio:Current Ratio:Liquid / Acid test Ratio:Profitability RatioGross Profit Ratio: Net Profit RatioOperating Ratio: Return on capital Employee:Cash Profit RatioLeverage RatioDebt Equity ratio:Activity RatioInventory turnover ratio (ITR): Working Capital Turnover Ratio: Fix Assets Turnover Ratio: Interest coverage ratio: Future ExpansionTo 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.