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Project Report For Trading in Welding Equipment

Rambilas Chauhan plans to start a proprietorship business called R B Contractor that will trade welding equipment. The total project cost is 17.15 lacs, which will be financed through own funds of 7.15 lacs and a term loan of 10 lacs over 7 years at 9.75% interest. The business is projected to break even at 65.75% sales and earn a net profit of 12.5% after 5 years of operation with 5 employees.

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SHRUTI AGRAWAL
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0% found this document useful (0 votes)
148 views15 pages

Project Report For Trading in Welding Equipment

Rambilas Chauhan plans to start a proprietorship business called R B Contractor that will trade welding equipment. The total project cost is 17.15 lacs, which will be financed through own funds of 7.15 lacs and a term loan of 10 lacs over 7 years at 9.75% interest. The business is projected to break even at 65.75% sales and earn a net profit of 12.5% after 5 years of operation with 5 employees.

Uploaded by

SHRUTI AGRAWAL
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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PROJECT REPORT FOR TRADING IN WELDING EQUIPMENT

1 NAME OF THE ENTERPISES : R B CONTRACTOR

2 CONSTITUTION : PROPRIETORSHIP

3 PROPRIETOR NAME : Rambilas Chauhan

4 UNIT ADDRESS : Dedhagava, Sakaldiha, Chandauli


Uttar Pradesh, 221105

5 NAME OF THE PROJECT/ :Rambilas Chauhan


BUSINESS ACTIVITY PROPOSED Trading of Welding Equipment

6 COST OF PROJECT : 17.15 Lacs

7 MEANS OF FINANCE : Own Fund


Term Loan

8 CURRENT RATIO 4.99

9 PAY BACK PERIOD :


Term Loan 07 YEAR/84 MONTH

10 BREAK EVEN POINT 65.75%

11 NO. OF EMPOLOYEES 5

12 NET PROFIT RATIO 12.50%

13 DEBT EQUITY RATIO 0.94

14 AVERAGE DEBT SERVICE COVERAGE 3.74


RATIO
R B CONTRACTOR
Address at :Dedhagava, Sakaldiha, Chandauli
Uttar Pradesh, 221105
PROJECT COST AND MEANS OF FINANCE

S. No. PARTICULARS Rs.( In Lakhs)

I PROPOSED COST OF PROJECT


Office Equipment 6.15
Furniture & Fixture 7.20
Working Capital 3.80

17.15

II MEANS OF FINANCE

A) Promoter's Contribution 7.15


B) Bank Finance
i) Term Loan 10.00

III TOTAL 17.15


R B CONTRACTOR
Address at :Dedhagava, Sakaldiha, Chandauli ,Uttar Pradesh, 221105

Balance Sheet (Projected)


Estimated Projected Projected Projected Projected
Particulars
1 2 3 4 5
Liabilities
Capital 7.15 9.78 13.04 16.73 20.21
Add: Profit 3.13 4.67 5.21 6.42 7.55
10.28 14.44 18.25 23.16 27.75
Less: Drawings 0.50 1.40 1.52 2.95 3.00
9.78 13.04 16.73 20.21 24.75

Long Term Liabilty


Term Loan 7.92 6.72 5.27 3.70 1.94

Current Liabilty & Provision


Term Loan Instal. Pyable 1.25 1.20 1.45 1.57 1.76
within 12 month
Sundry Creditor for material 0.25 0.85 0.98 1.25 1.42
& Expenses

Total Liabilites 19.20 21.81 24.44 26.73 29.87

Assets
Gross Fixed Asset 13.35 11.71 10.28 9.03 7.93
Less: Depreciation 1.64 1.43 1.25 1.09 0.95
Net Fixed Asset 11.71 10.28 9.03 7.93 6.98

Current Assets
Closing Stock 1.52 3.85 4.25 3.95 3.65
Receivables 3.08 5.54 7.60 8.95 10.45
Loans & Advances 2.25 0.55 1.81 3.25 5.89
Cash in bank/hand 0.64 1.60 1.75 2.65 2.90

Total Assets 19.20 21.82 24.44 26.73 29.87


0.00 -0.00 0.00 -0.00 0.00

Note: The above financial statement is only estimate of future business transaction, prepared
on the basis of information provided by the proprietor. We do not vouch the accuracy of the sa

Prepared by-
For Jamuna Shukla & Associates
Chartered Accountants

Shruti Agrawal
Partner
Date : 08.10.2020
Place: Varanasi
R B CONTRACTOR
Address at Dedhagava, Sakaldiha, Chandauli ,Uttar Pradesh, 221105

Profit & Loss Statement (Projected)

Year
Particulars 1 2 3 4 5

Sale 25.00 27.50 30.25 33.28 36.60


Closing Stock of FG 1.52 3.85 4.25 3.95 3.65
.
Total 26.52 31.35 34.50 37.23 40.25

Opening Stock of FG 1.52 3.85 4.25 3.95


Purchases 17.50 19.25 19.45 20.45 22.50
Electricity Exps 0.60 0.66 0.73 0.80 0.88
Freight & Cartage 0.18 0.20 0.22 0.24 0.26
Rent 1.44 1.58 1.74 1.92 2.11
Depreciation 1.64 1.43 1.25 1.09 0.95
Selling & Distribution Exps 0.30 0.33 0.36 0.40 0.44
Administrative Expenses 0.40 0.44 0.48 0.53 0.59
Advertisment Expenses 0.15 0.17 0.18 0.20 0.22
Interest on Term Loan 0.93 0.83 0.72 0.59 0.45
Miscalleneous Expenses 0.25 0.28 0.30 0.33 0.37

Total 23.39 26.68 29.29 30.80 32.71

Net Profit 3.13 4.67 5.21 6.42 7.55


Note: The above financial statement is only estimate of future business transaction, prepared on the basis of i
provided by the proprietor. We do not vouch the accuracy of the same.

Prepared by-
For Jamuna Shukla & Associates
Chartered Accountants

Shruti Agrawal
Partner

Date : 08.10.2020
Place: Varanasi
A B C D E F G H
1 TERM LOAN REPAYMENT SCHEDULE
2 Loan Amount 10.00 Lacs
3 Repayment Period 84.00 Months
4 Rate of Interest 9.75% Yearly
5 Amount of Installment 0.16
6 REPAYMENT SCHEDULE & INTEREST CALCULATION OF LOAN
7 Month Opening Bal. Addition Installment Principal Interest Closing Bal.
8 1 - 10.00 0.16 0.08 0.08 9.92
9 2 9.92 - 0.16 0.08 0.08 9.84
10 3 9.84 0.16 0.08 0.08 9.76
11 4 9.76 0.16 0.08 0.08 9.68
12 5 9.68 0.16 0.08 0.08 9.60
13 6 9.60 0.16 0.08 0.08 9.52
14 7 9.52 0.16 0.08 0.08 9.44
15 8 9.44 0.16 0.08 0.08 9.35
16 9 9.35 0.16 0.08 0.08 9.27
17 10 9.27 0.16 0.08 0.08 9.18
18 11 9.18 0.16 0.09 0.07 9.10
19 12 9.10 0.16 0.09 0.07 9.01
20 13 9.01 0.16 0.09 0.07 8.92
21 14 8.92 0.16 0.09 0.07 8.84
22 15 8.84 0.16 0.09 0.07 8.75
23 16 8.75 0.16 0.09 0.07 8.66
24 17 8.66 0.16 0.09 0.07 8.57
25 18 8.57 0.16 0.09 0.07 8.48
26 19 8.48 0.16 0.09 0.07 8.39
27 20 8.39 0.16 0.09 0.07 8.30
28 21 8.30 0.16 0.09 0.07 8.20
29 22 8.20 0.16 0.09 0.07 8.11
30 23 8.11 0.16 0.09 0.07 8.02
31 24 8.02 0.16 0.09 0.07 7.92
32 25 7.92 0.16 0.10 0.06 7.83
33 26 7.83 0.16 0.10 0.06 7.73
34 27 7.73 0.16 0.10 0.06 7.63
35 28 7.63 0.16 0.10 0.06 7.54
36 29 7.54 0.16 0.10 0.06 7.44
37 30 7.44 0.16 0.10 0.06 7.34
38 31 7.34 0.16 0.10 0.06 7.24
39 32 7.24 0.16 0.10 0.06 7.14
40 33 7.14 0.16 0.10 0.06 7.03
41 34 7.03 0.16 0.10 0.06 6.93
42 35 6.93 0.16 0.10 0.06 6.83
43 36 6.83 0.16 0.10 0.06 6.72
44 37 6.72 0.17 0.12 0.05 6.61
45 38 6.61 0.17 0.12 0.05 6.49
46 39 6.49 0.17 0.12 0.05 6.37
47 40 6.37 0.17 0.12 0.05 6.25
48 41 6.25 0.17 0.12 0.05 6.14
49 42 6.14 0.17 0.12 0.05 6.02
50 43 6.02 0.17 0.12 0.05 5.89
51 44 5.89 0.17 0.12 0.05 5.77
52 45 5.77 0.17 0.12 0.05 5.65
53 46 5.65 0.17 0.12 0.05 5.53
54 47 5.53 0.17 0.13 0.04 5.40
55 48 5.40 0.17 0.13 0.04 5.27
56 49 5.27 0.17 0.13 0.04 5.15
57 50 5.15 0.17 0.13 0.04 5.02
58 51 5.02 0.16 0.12 0.04 4.90
59 52 4.90 0.16 0.12 0.04 4.78
60 53 4.78 0.17 0.13 0.04 4.65
61 54 4.65 0.17 0.13 0.04 4.52
62 55 4.52 0.17 0.13 0.04 4.38
63 56 4.38 0.17 0.13 0.04 4.25
64 57 4.25 0.17 0.14 0.03 4.11
65 58 4.11 0.17 0.14 0.03 3.98
66 59 3.98 0.17 0.14 0.03 3.84
67 60 3.84 0.17 0.14 0.03 3.70
68 61 3.70 0.17 0.14 0.03 3.56
69 62 3.56 0.17 0.14 0.03 3.42
70 63 3.42 0.17 0.14 0.03 3.28
71 64 3.28 0.17 0.14 0.03 3.13
72 65 3.13 0.17 0.14 0.03 2.99
73 66 2.99 0.17 0.15 0.02 2.84
74 67 2.84 0.17 0.15 0.02 2.70
75 68 2.70 0.17 0.15 0.02 2.55
76 69 2.55 0.17 0.15 0.02 2.40
77 70 2.40 0.17 0.15 0.02 2.25
78 71 2.25 0.17 0.15 0.02 2.10
79 72 2.10 0.17 0.15 0.02 1.94
80 73 1.94 0.17 0.15 0.02 1.79
81 74 1.79 0.17 0.16 0.01 1.63
82 75 1.63 0.17 0.16 0.01 1.48
83 76 1.48 0.17 0.16 0.01 1.32
84 77 1.32 0.17 0.16 0.01 1.16
85 78 1.16 0.17 0.16 0.01 1.00
86 79 1.00 0.17 0.16 0.01 0.84
87 80 0.84 0.17 0.16 0.01 0.67
88 81 0.67 0.17 0.16 0.01 0.51
A B C D E F G H
89 82 0.51 0.17 0.17 0.00 0.34
90 83 0.34 0.17 0.17 0.00 0.18
91 84 0.18 0.17 0.17 0.00 -
A B C D E F G H
92 SCHEDULE OF LOAN REPAYMENT
93

94 Repayment of Loan is worked out as under:


95

96 Particular 1 2 3 4 5 6 7
97

98

99 Opening Balance 10.00 9.01 7.92 6.72 5.27 3.70 1.94


100 Repayment 0.99 1.09 1.20 1.45 1.57 1.76 1.94
101 Closing Balance 9.01 7.92 6.72 5.27 3.70 1.94 -
102

103
104
105
106
107
STATEMENT SHOWING DEPRECIATION ON FIXED ASSET

PARTICULARS RATE 1 2 3 4 5 6 7
OF
DEP.

Office Equipment 15%


Opening Balance - 5.23 4.44 3.78 3.21 2.73 2.32
Addition 6.15 - - - -
Depreciation 0.92 0.78 0.67 0.57 0.48 0.41 0.35

Closing Balance 5.23 4.44 3.78 3.21 2.73 2.32 1.97

Furniture & Fixture 10%


Opening Balance - 6.48 5.83 5.25 4.72 4.25 3.83
Addition 7.20 - - - - - -
Depreciation 0.72 0.65 0.58 0.52 0.47 0.43 0.38

6.48 5.83 5.25 4.72 4.25 3.83 3.44


Closing Balance 11.71 10.28 9.03 7.93 6.98 6.15 5.42
BREAK EVENT POINT AND RATIO ANALYSIS

PARTICULARS 1 2 3 4 5
Fixed Cost 3.08 3.02 2.99 3.01 3.06
Variable Cost 20.31 23.67 26.29 27.79 29.64
Total Cost 23.39 26.68 29.29 30.80 32.71
Gross receipt 25.00 27.50 30.25 33.28 36.60
Contribution (GR-VC) 4.69 3.83 3.96 5.48 6.96
BEP in % 65.75% 78.73% 75.64% 54.88% 44.00%
Inventory 1.52 3.85 4.25 3.95 3.65
Inventory Holding Period(in days) 23.72 52.66 52.97 46.81 40.73
Debt Equity Ratio 0.94 0.61 0.40 0.26 0.15
Net Profit Ratio(In %) 12.50% 16.96% 17.23% 19.30% 20.62%
Current Ratio 4.99 5.63 6.35 6.66 7.21
6 7
3.15 3.28
32.68 33.76
35.84 37.04
40.26 44.29
7.58 10.53
41.60% 31.17%
3.95 3.80
40.23 37.44
0.06 -
20.81% 24.94%
7.71 18.09
CALCULATION OF DEBT SERVICE COVERAGE RATIO

Particulars 1 2 3.00 4 5

Cash Accrual 4.77 6.10 6.46 7.51 8.50


Interest on Tern Loan 0.93 0.83 0.72 0.59 0.45

Total (A) 5.70 6.93 7.18 8.11 8.95

Repayment
Interest on Term Loan 0.93 0.83 0.72 0.59 0.45
Princpal Amount 0.99 1.09 1.20 1.45 1.57

Total (B) 1.92 1.92 1.92 2.04 2.02

DSCR (A/B) 2.97 3.61 3.74 3.97 4.43


Avg DSCR 3.74
CASH FLOW STATEMENT

PARTICULARS 1 2

CASH IN FLOW
Net Profit 3.13 4.67

Depreciation 1.64 1.43

Promoter Capital 7.15 -

Loan From Financial Institution 10.00 -

21.92 6.10

CASH OUT FLOW


Fixed Assets 13.35 -

Repayment of Loan 0.99 1.09

Drawing 0.50 1.40

Increase in Working Capital 6.44 2.65

Total [ B ] 21.28 5.14

Cash Balance [ A - B ] 0.64 0.96


Add Opening Balance - 0.64
Closing Cash & Bank Balance 0.64 1.60
LOW STATEMENT

3 4 5 6 7

5.21 6.42 7.55 8.38 11.05

1.25 1.09 0.95 0.83 0.73

- - - - -

- - - - -

6.46 7.51 8.50 9.21 11.78

- - - - -

1.20 1.45 1.57 1.76 1.94

1.52 2.95 3.00 3.25 3.90

3.59 2.22 3.68 3.80 6.94

6.31 6.61 8.25 8.81 12.78

0.15 0.90 0.25 0.40 -1.00


1.60 1.75 2.65 2.90 3.30
1.75 2.65 2.90 3.30 2.30

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