ACKNOWLEDGEMENTS
“OUR BEST THOUGHTS COME FROM OTHERS”
The successful completion of any research project requires guidance and help
from a number of people. I was fortunate to have all the support.
I feel greatly honored in availing this opportunity of expressing my deep gratitude
to “Dr. E.M KHAN” principal of ABEDA INAMDAR SENIOR COLLEGE OF
ARTS SCIENCE AND COMMERCE PUNE for providing me this opportunity
and guiding me with academics and project work.
I feel greatly delighted to express my deepest sense of gratitude to my learned and
esteem teacher Ms. Shakira shaikh for her valuable assistance, keen interest and
constant motivation at each step and for spending her precious time, without her
help, it would have not been possible for me to complete the project
Last but not the least, I express my sincere thanks to all those people, known and
unknown, who have contributed in making this project a success.
DECLARATION
I, the undersigned, hereby declare that the following documented Project
Report titled “BUSINESS LOAN ON SUNRISE AUTOMATIC BAKERY” is a
bonafide work prepared by me. This is an organized and authentic work carried by
me for the partial fulfillment of the Bachelor of Business Administration. The
findings in this project report are based on the data collected by me from different
sources.
All the deeds put in the fulfillment of the task are genuine and original to best of
my knowledge.
Date:-
Place :- WASIM KHAN
PREFACE
Here are discussing about the project .here we will find out sources
and application of funds, calculation of the revenue, calculation of the
expenditure, interest and installment, calculation of depreciation, cash flow
statement, projected profit & loss a/c, balance sheet.
INDEX
Serial no. Particulars Page no.
1 INTRODUCTION
1.1 SCOPE
1.2 OBJECTIVES
1.3 LIMITATIONS
1.4 VISION AND MISSION
2 ORGANISATION PROFILE
3 RESEARCH METHODOGY
4 FINANCIAL ANALYSIS
4.1 FINANCIAL STATEMENT OF PROJECT
4.2 CALCULATION OF THE REVENUE
4.3 CALCULATION OF EXPENDITURE
4.4 EMI CALCULATION
4.5 CALCULATION OF DEPRECIATION
4.6 PROJECTED CASH FLOW STATEMENT
4.7 PROJECTED BALANCE SHEET
4.8 RATIO ANALYSIS
5 CONCLUSION
5.1 CONCLUSION
5.2 SUGGESTION
5.3 BIBILOGRAPHY
Chapter - 1
INTRODUCTION
SCOPE OF THE PROJECT
The study has a scope to analyze the different loan Schemes of bank and choose
best among them.
The study provides information regarding documentation, paper work and
other important factors involved in getting term loan.
To be competitive and successful in modern corporate world, constant
capital flow is essential. Whether to expand your business or to relocate your
production unit to some other place for cost effectiveness, you require
finance. It’s not always possible to fund them through interest sources. A
delay of a few days can cost you in millions.
Objectives of the Project
To learn preparation of Projected Financial Statements
To learn Deep Analysis of financial Statements
To get knowledge about Loan Procedure
To get knowledge of prevailing Tax-Rate and Depreciation rates
To get knowledge about the popular SMEs for Self employment
To get knowledge about different Bank Policies for granting Loans.
To get experience of effective and efficient working of an enterprise.
To get practical knowledge about sanctioning loan from bank.
To help the firm by telling its solvency, payment policies etc. with the help
of various different ratios.
LIMITATIONS OF THE PROJECT
Due to the strict confidential policy of the bank the accounts department
provided only screened information.
Accuracy of the data cannot be guaranteed.
Due to the busy schedule of the manager of the bank the information is very
limited.
MISSION AND VISSION
To become the largest chain of fine bakery products provider in the
Ahmednagar and enjoy equity that is enjoyed by no other stand alone private
bakery.
To constantly provide quality, taste and services at rational price.
To create wonderful experience uniqueness lies in its elegance refining
which is brought alive by caring their customer.
To provide unique service at rational price and to continually improve our
services and by ensuring to continues satisfaction of the clients.
We shall ensure high standards of safety and security while at manufacturing
which doesn’t harm the environment in any way.
Chapter -2
Company Profile
SUNRISE AUTOMATIC BAKERS
Sunrise Bakers is a new venture established in 2009 by Abdul Rehman
Chaus.It is a single ownership business setup there is no partner in the business .
The interest of mass in bakery business has been increasing day by day. But,
Sunrise Bakers is successful in attracting more and more customers by its fluent
service and product quality.
It provides quality products with efficient quantity. The behavior with the
customers is specially taken care off. which attracts more customers to buy the
bakery products.
The bakery focuses mainly on two areas:
Profit maximization
Customer satisfaction
Company Profile
PROFILE OF THE COMPANY
Legal Name SUNRISE AUTOMATIC BAKERY
Location PLOT NO. 150 INDL.ESTATE, PUNE ROAD, AHMEDNAGAR - 414005, MAHARASHTRA, INDIA
Telephone numbers +91-241-2343832
E-mail [email protected]
Contact person Mr. Ali Chaus (Manager)
Website WWW.SUNRISE-BAKERY.ORG
Year of establishment 2009
Proprietor Mr. Abdul Rehman Chaus
PRODUCTS
Cakes
Doughnut
Puffs
Rusk
Pizza
Buns
Pastries
Brownies
Biscuit
Breads
Swiss roll
Cookies
Khari
These are the main items produced in bakery.
These items are further produced in different varieties according to their specialties.
As many different items are prepared in bakery in various manners.
The further classification of the items is done below:
Product ranges
Yeast donut Cake donut Egg puff Milk Rusk Whole wheat Rusk Condensed milk Rusk Sweet buns Naan Chocolate biscuit Coconut biscuit Coffee biscuit Dry fruits biscuit Whole meal bread Rye bread Multigrain bread Sugar free bread Almond and date cookies Butter scotch cookies Cashew cookies Jeera khari Masala khari Maska khari Methi khari Swiss roll cakes
1 year sales value approximately
Sr. no Items Quantity Price1 Cakes 32000 8000002 Doughnut 15000 2500003 Puffs 15000 2500004 Rusk 1500kg 2700005 Pizza 3000 2600006 Buns 60000 3500007 Pastries 9000pkt 3000008 Brownies 900kg 2500009 Biscuits 3000kg 65000010 Breads 15000pkt 50000011 Swiss roll 6000 22000012 Cookies 900kg 30000013 Khari 1600kg 400000
TOTAL 4800000
LAND AND BUILDING
A built up unit is about 1600 sq.ft. is adequate. The production area should
be about 500 sq.ft. And can be divided into two major sections. One would have
furnaces (bhattis) and the second one would accommodate the bakery, sales
portion is 300 sq.ft. A packing room is about 200 sq.ft. and raw materials storage
of 200 sq.ft. is sufficient. Finished goods godown can be accommodated in 200
sq.ft. outer portion of 200 sq.ft.
The rent of this kind of unit would vary according to the location but we can
consider the rent to be approximately Rs.20000.
MACHINES REQUIRED
Cost of machines:Sr.no. Description Amount
1 Mixers 3000002 Ovens 1000003 Depositor 500004 Divider 50000
Other requirements for production and storage purposes are as follows:
Sr.no. Description1 Proverbs2 Egg breakers3 Slicers4 Moulds5 Dough sheeters6 Dough moulder7 Cookie cutter89
Pan and traysFrizer
In all the total cost of machines is Rs.800000
RAW MATERIAL
Dry yeast wheat flour pea flour corn meal potato flour rice flour ghee baking fruit & nut mix bread mix chocolate berry cookie drop mix non fat milk low heat non fat milk buttermilk powder malted milk powder baking powder baking soda cream of tartar cocoa powder egg powder egg white egg yolk powder vital wheat gluten whey powder com starch potato starch dextrose fruit sugar honey powder milk sugar organic sugar maltitol powder xylitol crystale chocolate sprinkle dark green sprinkle white sprinkle rainbow sprinkle
baking chocolate bowl scrapper baking drops chocolate chips
MANPOWER REQUIREMENT
Salary and wages are on monthly basis.Sr. No. Designation No. Rate Amount
1 Salary 3 10000 30000
2 Wages 5 7000 35000
Total 65000
CHAPTER – 4
RESEARCHMETHODOLOGY
Research:
Research is a careful of critical inquiry or examination in seeking facts or principles, diligent investigation in order to ascertaining something
Research is the manipulation of things, concepts or symbols for the process of generalizing to extend, correct or verify knowledge, whether that knowledge aids in construction of theory or in the practice of an art
Research is a more systematic activity directed towards discovery and development of an organized body of knowledge
METHODS OF DATA COLLECTION
1. Primary Data2. Secondary Data
1. Primary Data:
Primary data are obtained by a study specifically designed to fulfill the data needs of the problem at hand. Such data are original in character and are governed in large number of surveys conducted mostly by government and also by some individuals, institutions and research bodies.
2. Secondary Data:Data which is not originally collected but rather obtained
from published and unpublished sources are known as secondary data .The secondary data constitute the chief material on the basis of which statistical work is carried out in many investigations.
ADVANTAGES TO USE THE PRIMARY SOURCE
1. Primary source shows data in regular detail.2. It frequently defines terms and nits used.3. The secondary source may contain mistakes due to errors in transcription
made when the figures were copied from the primary source.
ADVANTAGES OF SECONDARY DATA:
1. If secondary data are available, they are much quicker to obtain than primary data.
2. It may available on some subjects where it would be impossible to collect primary data.
METHODS OF DATA COLLECTION
The methods and the techniques that can be uses to generate the primary as well as the secondary data are as follows:
1. Visiting Bank.2. By going through the website on the internet.3. By words of mouth.4. Information provided by the bank.
DOCUMENTS REQUIRED FOR SANCTION OF LOAN FOR BUSINESS
1. Proof of identity. (Copy of sales tax/ vat/ Service tax/ Excise registration
receipt or registration under shop and establishment act or pan/ It return of
the concern or water/ Electricity municipal tax bill in the name of concern)
2. Proof of individual identity. (Copy of passport/ Voters identity card/ Photo
pan card/ Driving license)
3. Proof of residence address. (Copy of passport/ Voters identity card/ Driving
license/ Ration card/ Life insurance policy/ Electricity bill/ Telephone bill)
4. Pan number / form 60 of the concern.
5. Financial documents. (Copy of P&L a/c and Balance sheet for last two
years, Audited by a C.A and copies of it returns for the last two years)
6. Bank statement for last 6 months.
7. Partnership deed. (Required only in case of partnership firm)
8. Proof of place of business.
9. Two passport size photographs.
PURPOSE OF THE LOAN
The basic idea behind taking the loan from the bank is to start a new Bakery.
The company is supposed to provide services consistently with taking good care of the users.
The firm requires term loan of Rs.962500.00 to set up a company..
The most essential part of taking loan from the bank is to have working capital in hand.
The loan taken from the bank will repaid in five years.
CHAPTER - 4
FINACIAL ANALYSIS
Projected cost
Sr.no. Fixed capital Amount
1 Equipments 800000
2 Furniture 100000
3 Computer 20000
4 Fixtures 10000
Total 930000
Sr. no. Working capital Amount1 Raw material 1850002 Labours 350003 Utility 15000
Other expenses4 Salary 300005 Advertisement 50006 Transportation 100007 Sundry expenses 50008 telephone bills 20009 electricity bills 1500010 Rent 2000011 Packaging 8000
Total 330000
Deposit 100000Registrations 15000Total Project cost 1375000
INVESTMENT COST OF THE PROJECT
FINANCIAL DETAILS OF THE PROJECT
SERIA
L PARTICULARS AMOUNT
A BANK FINANCE (70%) 962500
B OWN FUND (30%) 412500
TOTAL COST OF THE PROJECT 1375000
Total Project cost
1375000
30% 70%
Own capital bank loan
30%
70%
Means of FinanceOwn Fund Term Loan
30% own capital =412500
70% bank loan= 962500
STATEMENT SHOWING REVENUE FOR PROJECTED PERIOD
Particulars 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR
Cakes 800000 870000 890000 910000 920000
Doughnut 250000 270000 280000 290000 300000
Puffs 250000 273000 277000 287000 297000
Rusk 270000 272000 282000 292000 302000
Pizza 260000 271000 291000 301000 311000
Buns 350000 360000 370000 380000 390000
Pastries 300000 310000 320000 330000 340000
Brownies 250000 260000 265000 275000 280000
Biscuits 650000 710000 720000 730000 740000
Breads 500000 560000 565000 580000 585000
Swiss roll 220000 240000 245000 250000 255000
Cookies 300000 320000 330000 350000 360000
Khari 400000 430000 435000 439000 440000
Total 4800000 5136000 5280000 5424000 5520000
CALCULATION OF INTEREST AND INSTALLMENT OF BANK LOAN FOR
1 ST YEAR
YEAR MONTH EMI PRINCIPAL INTREST CLOSING BALANCE
1
1 22396 11164 11232 951336
2 22396 11294 11102 940042
3 22396 11426 10970 928616
4 22396 11559 10837 917057
5 22396 11694 10702 905363
6 22396 11830 10566 893533
7 22396 11968 10427 881565
8 22396 12108 10288 869457
9 22396 12249 10146 857208
10 22396 12392 10004 844816
11 22396 12537 9859 832279
12 22396 12683 9713 819596
TOTAL 268748
CALCULATION OF INTEREST AND INSTALLMENT OF BANK LOAN FOR
2nd YEAR
YEAR MONTH EMI PRINCIPAL INTREST CLOSING BALANCE
2
1 22396 12831 9564 806765
2 22396 12981 9415 793784
3 22396 13132 9263 780651
4 22396 13286 9110 767365
5 22396 13441 8955 753924
6 22396 13598 8798 740326
7 22396 13756 8640 726570
8 22396 13917 8479 712653
9 22396 14079 8317 698574
10 22396 14244 8152 684330
11 22396 14410 7986 669920
12 22396 14578 7818 655342
TOTAL 268748
CALCULATION OF INTEREST AND INSTALLMENT OF BANK LOAN FOR
3rd YEAR
YEAR MONTH EMI PRINCIPAL INTRESTCLOSING BALANCE
3
1 22396 14748 7648 640594
2 22396 14920 7476 625674
3 22396 15094 7302 610580
4 22396 15271 7125 595309
5 22396 15449 6947 579860
6 22396 15629 6767 564231
7 22396 15811 6584 548420
8 22396 15996 6400 532424
9 22396 16183 6213 516241
10 22396 16371 6025 499870
11 22396 16563 5833 483307
12 22396 16756 5640 466551
TOTAL 268748
CALCULATION OF INTEREST AND INSTALLMENT OF BANK LOAN FOR
4 th YEAR
YEAR MONTH EMI PRINCIPAL INTRESTCLOSING BALANCE
4
1 22396 16951 5445 449599
2 22396 17149 5247 432450
3 22396 17349 5047 415100
4 22396 17552 4844 397548
5 22396 17757 4639 379791
6 22396 17964 4432 361827
7 22396 18173 4222 343654
8 22396 18386 4010 325268
9 22396 18600 3796 306668
10 22396 18817 3579 287851
11 22396 19037 3359 268814
12 22396 19259 3137 249555
TOTAL 268748
CALCULATION OF INTEREST AND INSTALLMENT OF BANK LOAN FOR
5 th YEAR
YEAR MONTH EMI PRINCIPAL INTRESTCLOSING BALANCE
5
1 22396 19484 2912 230071
2 22396 19711 2685 210360
3 22396 19941 2455 190419
4 22396 20174 2222 170245
5 22396 20409 1987 149836
6 22396 20647 1749 129189
7 22396 20888 1508 108301
8 22396 21132 1264 87169
9 22396 21379 1017 65790
10 22396 21628 768 44162
11 22396 21881 515 22135
12 22396 22135 260 00000
TOTAL 268748
Calculation of depreciation on the assets
Depreciation on Furniture:
YEARS W.D.V OF THE ASSET
ADDITIONS TOTAL DEPRECIABLE
AMOUNT
DEPRECIATION @ 10%
CLOSING AMOUNT OF ASSET
1
100000 100000 10000 90000
2
90000 90000 9000 81000
3
81000 81000 8100 72900
4
72900 72900 7290 65610
5
65610 65610 6561 59049
Depreciation on computer:
YEARS W.D.V OF THE ASSET
ADDITIONS TOTAL DEPRECIABLE
AMOUNT
DEPRECIATION @ 50%
CLOSING AMOUNT OF ASSET
120000 20000 10000 10000
210000 10000 5000 5000
35000 5000 2500 2500
42500 2500 1250 1250
51250 1250 625 625
Depreciation on Fixture:
YEARS W.D.V OF THE ASSET
ADDITIONS TOTAL DEPRECIABLE
AMOUNT
DEPRECIATION @ 10%
CLOSING AMOUNT OF
ASSET
110000 10000 1000 9000
29000 9000 900 8100
38100 8100 810 7290
47290 7290 729 6561
56561 6561 656 5905
Depreciation on EQUIPMENT:
YEARS W.D.V OF THE ASSET
ADDITIONS TOTAL DEPRECIABLE
AMOUNT
DEPRECIATION @ 10%
CLOSING AMOUNT OF
ASSET
1800000 800000 80000 720000
2720000 720000 72000 648000
3648000 648000 64800 583200
4583200 583200 58320 524880
5524880 524880 52488 47392
1st year
Trading & profit & loss account
particulars Amount particulars AmountTo purchases 2220000 By sales 4800000To wages 420000To utilities 180000To gross profit 1980000
4800000 4800000To salary 360000 By gross profit 1980000To advertisement 60000To transport 120000To sundry 60000To telephone 24000To electricity 180000To rent 240000To packing 96000To interest 125808To depreciation 101000To preli.exp. w/o 3000To NPBT 610192 1980000
Cash flow statement:
inflow Amount Outflow AmountOwn capital 412500 Working capital 3960000Bank loan 962500 Tax 48815sales 4800000 EMI 268748
Fixed assets 930000Registration 15000Deposit 100000Cash in hand 852437
6175000 6175000
Balance sheet
liabilities Amount Assets AmountOwn capital 973877 Fixed assets 829000
Bank loan 819560 Current assets:
Cash in hand 852437
Deposit 100000Miscellaneous expenses:Preliminary ex. 12000
1793437 1793437
2nd year
Trading and profit and loss a/c
particulars Amount Particulars AmountTo purchases 2331000 By sales 5136000To wages 441000To utilities 189000To gross profit 2175000
5136000 5136000
To salary 378000 By gross profit 2175000To advertisement 63000To transport 126000To sundry 63000To telephone 252000To electricity 189000To rent 252000To packing 100800To interest 104462To depn 86900To preli.exp.w/o
3000
To NPBT 783638 2175000
Cash flow statement
Inflow Amount Outflow AmountOpening cash 852437 Working capital 4158000Sales 5136000 Tax 62691
EMI 268748Cash in hand 1498998
5988437 5988437
Balance sheet
liabilities Amount Assets AmountOwn capital 1694824 Fixed assets 742100
Bank loan 655274
Cash in hand 1498998Deposit 100000Preliminary ex. 9000
2350098 2350098
3rd year
Trading and profit and loss accountParticulars Amount Particulars AmountTo purchases 2375400 By sales 5280000To wages 449400To utilities 192600To gross profit 2262600
5280000 5280000
To salary 385200 By gross profit 2262600To advertisement 64200To transport 128400To sundry 64200To telephone 25680To electricity 192600To rent 256800To packing 102720To interest 79927To depn 76210To preli.exp.w/o
3000
To NPBT 883663 2262600
Cash flow statement
Inflow Amount Outflow AmountOpening cash 1498998 Working capital 4237200Sales 5280000 Tax 70693
EMI 268748Cash in hand 2202357
6778998 6778998
Balance sheet
liabilities Amount Assets AmountOwn capital 2507794 Fixed assets 665890
Bank loan 466453 Cash in hand 2202357
Deposit 100000Preliminary ex. 6000
2974247 2974247
4th year
Trading and profit and loss account
Particulars Amount Particulars AmountTo purchases 2419800 By sales 5424000To wages 457800To utilities 196200To gross profit 2350200
5424000 5424000
To salary 392400 By gross profit 2350200To advertisement 65400To transport 130800To sundry 65400To telephone 26160To electricity 196200To rent 261600To packing 104640To interest 51728To depn 67589To preli.exp.w/o
3000
To NPBT 985283 2350200
Cash flow statement
inflow Amount Outflow AmountOpening cash 2202357 Working capital 4316400sales 5424000 Tax 78822
EMI 268748Cash in hand 2962387
7626357 7626357
Balance sheet
liabilities Amount Assets AmountOwn capital 3414255 Fixed assets 598301
Bank loan 249433 Cash in hand 2962387
Deposit 100000Preliminary ex. 3000
3663688 3663688
5th year
Trading and profit and loss accountParticulars Amount Particulars AmountTo purchases 2464200 By sales 5520000To wages 466200To utilities 199800To gross profit 2389800
5520000 5520000
To salary 399600 By gross profit 2389800To advertisement 66600To transport 133200To sundry 66600To telephone 26640To electricity 199800To rent 266400To packing 106560To interest 19317To depn 60330To preli.exp.w/o
3000
To NPBT 1041753 2389800
Cash flow statement
Inflow Amount Outflow AmountOpening cash 2962387 Working capital 4395600Sales 5520000 Tax 83340
EMI 268748Cash in hand 3734699
8482387 8482387
Balance sheet
liabilities Amount Assets AmountOwn capital 4372668 Fixed assets 537971
Bank loan 0 Cash in hand 3734699
Deposit 100000Preliminary ex. 0
4372670 4372670
YEARLYCASH IN HAND GRAPH
year1 year2 year3 year4 year50
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
852437
1498998
2202357
2962387
3734699
Series 1
CALCULATION OF RATIO ANALYSIS
Year Net profit ratio=sales/net profit1 4800000/561377=8.552 5136000/720947=7.123 5280000/812970=6.494 5424000/906461=5.985 5520000/958413=5.75
Year Fixed assets to current assets=fixed assets/current assets1 829000/952437=0.872 742100/1598998=0.463 665890/2302357=0.284 598301/3062387=0.195 537971/3834699=0.14
Year Debt service coverage ratio=Net profit after tax+depreciation+interest/interest+installment
1 788185/394556=1.992 912309/373210=2.443 969107/348675=2.774 1025778/320476=3.205 1038060/288065=3.60
CHAPTER - 5
CONCLUSION
Conclusion of the project
After the study we came to the conclusion that loan sanction required too
many legal formalities to be completed and many legal documents to be submitted
to the bank but since the confectionary industry is the rising industry we can get
the loan sanctioned easily.
From this observation we can say that bakery business can be in profit which
will enable us to pay back the loan installment on time.
SUGGESTIONS
The Bakery should perform its activities according to the pre- planned.
Continuous taking of the customer are one of the main reason for growth of the business.
To be a successful Company and aiming to expand business in future and all the necessary activities should be done in advance which will make you approach your dream.
BIBILOGRAPHY
Referred books:
Financial management : Khan & Jain
Financial management : S N Mahesh
Research Methodology: C.K.Kothari.
WEBLINKS:
1. www.justdial.com 2. www.yellopages.com 3. www.wikipedia.org 4. www.askme.com 5. www.yahooanswers.com