Pre-Feasibility Study

DEPARTMENTAL STORE

Small and Medium Enterprise Development Authority
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE 6th Floor ,LDA Plaza , Egerton Road , Lahore 54000, Pkaistan Tel: (042) 111-111-456, Fax: (042) 6304926-7 helpdesk@smeda.org.pk
REGIONAL OFFICE PUNJAB Waheed Trade Complex, 1st Floor, 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore. Tel: (042) 111-111-456 Fax: (042) 5896619, 5899756 helpdesk@smeda.org.pk REGIONAL OFFICE SINDH 5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 5610572 Helpdesk-khi@smeda.org.pk REGIONAL OFFICE NWFP Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 9213046-47 Fax: (091) 286908 helpdesk-pew@smeda.org.pk REGIONAL OFFICE BALOCHISTAN Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 831623, 831702 Fax: (081) 831922 helpdesk-qta@smeda.org.pk

September , 2006

Pre-Feasibility Study

Departmental Store

DISCLAIMER
The purpose and scope of this information memorandum is to introduce the subject matter and provide a general idea and information on the said area. All the material included in this document 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 document, 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. SMEDA does not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. The prospective user of this memorandum is encouraged to carry out additional diligence and gather any information he/she feels necessary for making an informed decision. For more information on services offered by SMEDA, please contact our website: www.smeda.org.pk

DOCUMENT CONTROL
Document No. Prepared by Revision Revision Date Issued by PREF-76 SMEDA-Punjab 2 SEP, 2006 SMEDA-Punjab

2 PREF-76/ Sep, 2006/Rev2

........................5 PURPOSE OF THE DOCUMENT ...10 STORE LAYOUT AND PRESENTATION...................................................................5 3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT....................................................................10 PRICING .......8 PROPOSED LOCATION .......................7 PRODUCT MIX .....11 6..........9 5 STRATEGIC RECOMMENDATIONS .............................................11 6 SECTOR AND INDUSTRY ANALYSIS.....................2 5.....................7 PROJECT CAPACITY AND RATIONALE ..................................Pre-Feasibility Study Departmental Store 1 2 INTRODUCTION TO SMEDA .........................................................................................................................................................................1 SWOT ANALYSIS ...................................14 TARGET CUSTOMERS ..................................1..........................................1...................................3 MARKET POTENTIAL............................... 2006/Rev2 ........................8 RECOMMENDED PROJECT PARAMETERS ........................5 3..6 PROPOSED BUSINESS LEGAL STATUS............................................2 7........................4 MARKETING.......................................5 Strengths and opportunities.................. 11 LEGAL ISSUES REGARDING INDUSTRY ....6 4............................................................4 4.........................................5 4............2 4................ 15 3 PREF-76/ Sep...............8 4.....2 NATIONAL ANALYSIS .10 5.............................................................................................................................3 5......................................................6 PROJECT BRIEF .............1 3..............9 OPPORTUNITY RATIONALE ...............................................1 7..............................................................................3 4............14 7.........................................................................14 RESOURCE MERCHANDISE..........................1 5........................................ 10 USE OF COMPUTER ...............................................6 4..................................7 4.................... 13 7 MARKET INFORMATION ................2 4 PROJECT PROFILE ........................................................................................8 KEY SUCCESS FACTORS/PRACTICAL TIPS FOR SUCCESS ........................................................................................................................................................................................................................................................7 PROJECT INVESTMENT ......................6 3.............................................1 4........................................... 14 8 ELECTRIC AND OTHER EQUIPMENT REQUIREMENT...........6 Weaknesses and threats...............................................................1 6..................

..21 PURCHASES & STOCK CALCULATION...........................................................................................................5 4 PREF-76/ Sep...........................................................................22 ADMINISTRATIVE EXPENSES.........................2 11...........16 HUMAN RESOURCE REQUIREMENT ............................1 9..................................................... 2006/Rev2 .................................................................................................................................................25 12................................................18 PROJECTED BALANCE SHEET ................................................ 16 RENT COST ....24 FINANCIALS ASSUMPTIONS...............................3 11..............16 UTILITIES REQUIREMENT ...............2 9...........................3 9.........................16 CONSTRUCTION COST ................................................................................................ 18 PROJECTED INCOME STATEMENT ...................17 FINANCIAL ANALYSIS...............................................................1 12...............................4 11......3 12......................................................19 PROJECTED CASH FLOW STATEMENT .......2 12....................16 9..........5 11..................................24 OPERATING ASSUMPTIONS ......................................................................................................................20 REVENUE CALCULATION ..............1 11.....24 ECONOMY RELATED ASSUMPTIONS ..............................................24 EXPENSE ASSUMPTIONS ...23 10 11 11.....................Pre-Feasibility Study Departmental Store 9 LAND AND BUILDING REQUIREMENT .......4 LAND REQUIREMENT........................................ 24 CASH FLOW ASSUMPTIONS.......4 12....................6 12 KEY ASSUMPTIONS...............................................

Opportunities. startup. 2006/Rev2 .Pre-Feasibility Study Departmental Store 1 INTRODUCTION TO SMEDA The Small and Medium Enterprise Development Authority (SMEDA) was established with the objective to provide fresh impetus to the economy through the launch of an aggressive SME support program. SMEDA has so far successfully formulated strategies for sectors including. textiles. the document covers various aspects of the project concept development. A few priority sectors were selected on the criterion of SME presence. marketing. Weaknesses. The allencompassing sectoral development strategy involved overhauling of the regulatory environment by taking into consideration other important aspects including finance. gems and jewelry. marble and granite. and finance and business management. which comes under trading sector. SMEDA provides help desk services as well as development of project specific documents. leather and footwear. Along with the sectoral focus a broad spectrum of business development services is also offered to the SMEs by SMEDA.1 A SWOT Analysis is a strategic planning tool used to evaluate the Strengths. Whereas the task of SME development at a broader scale still requires more coverage and enhanced reach in terms of SMEDA’s areas of operation. surgical instruments. Opportunities and threats originate from outside the company. A SWOT analysis is usually performed early in 5 PREF-76/ Sep. transport and dairy. The objective of the pre-feasibility is primarily to facilitate potential entrepreneurs in project identification for investment and in order to serve this objective. 2 PURPOSE OF THE DOCUMENT This particular pre-feasibility is regarding Departmental Store. These services include identification of viable business opportunities for potential SME investors. fruits and vegetables. marketing. SMEDA had adopted a sectoral SME development approach. Pre-feasibility studies and business plan development are some of the services provided to enhance the capacity of individual SMEs to exploit viable business opportunities in an effective way. 3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT SWOT Analysis 3. In order to facilitate these investors. Strengths and weaknesses are internal to the company. and Threats involved in a project or business venture. In depth research was conducted and comprehensive development plans were formulated after identification of impediments and retardants. These documents consist of information required to make well researched investment decisions. technology and human resource development. marine fisheries. Since its inception in October 1998.

Though due to lack of proper management and planning but private sector made it one of the successful businesses in Pakistan. commonly part of retail chain under one roof.1      Strengths and opportunities Easy availability of resources(manpower/salesman) Growing population Expanding cities Status symbol to shop from big stores Popularity of variety shopping under single roof Weaknesses and threats 3. and helps organizations evaluate the environmental factors and internal situation facing a project. 4.1. The factors that make this project viable in Pakistan are:        4.2 Easy access to wholesale markets Plentiful availability of resources/salesman No process/transformation involve No specialized/technical knowledge required for entrepreneur Variety of goods under one roof Margin for innovation Easy diversification towards new product mix Project brief The proposed departmental store will provide variety of goods ranges from grocery to garments and alike to customers under one roof.1.1 Opportunity rationale In Pakistan concept of departmental store has gained popularity in late eighties after the emergence of UTILITY STORES by the government. ft. as suppliers do not give credit to newly entrants 4 PROJECT PROFILE Departmental store is a large retail store organized into departments offering a variety of merchandize. 3. The project will offer following broad categories of goods to its customers: 6 PREF-76/ Sep. Public has liked this concept due to the availability of all basic utilities under one roof which saves their time about which people are more conscious these days. The proposed project is a single floor departmental store on an area of approximately 3000 sq.Pre-Feasibility Study Departmental Store the project development process.2     Government polices Heavy taxes in the form of sales tax and income tax on retail business High competition Credibility factor in the initial phase. 2006/Rev2 .

2. 4. 2006/Rev2 .040. 4.395 7 PREF-76/ Sep. Operating time depend on localities requirements.000 2.3 Groceries and food items Baby garments and baby products Crockery and plastic items Soaps detergents and chemicals Ice-cream and beverages Stationery.4 Project Capacity and Rationale The proposed departmental store will have an area of 3000 sqft having covered/indoor shopping facilities.395 12. greeting cards and gifts Cosmetics and artificial jewellery Watches and clocks Electronics/electrical products General items Proposed business legal status Legal status is recommended to be a sole proprietorship/partnership because it requires less legal requirement to start with than a company. The store will operate for 12 to 15 hours from morning to midnight.Pre-Feasibility Study Departmental Store           4. Similarly a lower income tax rate of tax is applicable to sole proprietorship than that of companies.5 Sr.# 1. Project investment Description Capital cost Working capital/Cash in Hand Total Rupees 9.361.679.

Some retailers open shop in a location simply because it is the only vacant space within a stones throw of their home or office.7 Recommended project parameters Human resource Technology 18 Local Financial Summary IRR NPV 38% Rs. Knowledgeable retailers make a thorough examination of possible locations before investing their money and dreams. Faisalabad Sargodha etc.8 Proposed Location Location of stores is of primary concern with any retail organization. greeting cards and gifts Cosmetics and artificial jewellery Watches and clocks Electronics/electrical products General items 4. 1 Assumption taken that store is situated in a town where there are 4.4 Million Location Metropolitan Payback period 3.04 Million 4.6 Product mix The store will offer the following broad categories of goods to its customer: Category of item Proportion Avg Gross Margin Groceries and food items 55% 10% Baby garments and baby products Crockery and plastic items Soaps detergents and chemicals Ice-cream and beverages Stationery. 2. Spending time and money wisely in the process of site selection is of primary importance.000 every month from the proposed store 8 PREF-76/ Sep.000 per day1 Project cost Rs. 8. 2006/Rev2 .Pre-Feasibility Study Departmental Store 4.500 families/houses and each house shop for Rs. The departmental store should be centrally and conveniently located within a developing or a newly developed residential town in any of the big cities like Lahore Islamabad/Rawalpindi.7 Years 10% 8% 3% 10% 3% 2% 2% 3% 4% 35% 30% 10% 25% 10% 20% 30% 30% 15% Capacity Rs. 300. 12.

500 houses/family units.9    Key success factors/Practical Tips for success Retail/departmental store is full of opportunities for success.1:Location City Lahore Mustafa Town Johar Town Wapda Town Nespak PIA Colony Islamabad/Rwalpindi Chack Lala F-10 G-9 G-8 Abpara Market Faisalabad D Ground Peoples Colony Batala Colony Muslim Town Surgodha University Road Shaheen Park Umer Park The proposed departmental store is feasible in any area where there are 4. 4.8. To obtain a good average of profits it is necessary to provide state of art facilities to customers.. 9 PREF-76/ Sep.Pre-Feasibility Study Departmental Store Table 4. There should be regular and sustained marketing through fliers distribution and Cable TV. 2006/Rev2 Areas . but that success is reserved for those who are prepared to commit themselves to everlasting change.

Pre-Feasibility Study Departmental Store   The store should have an ample space for customer car parking.  Frequent clearance sales  Include a gift with purchase. 10 PREF-76/ Sep. The market has certainly created the need for all retailers.  Introduce home delivery services.  Feature your discounted prices predominantly. even those at the higher end. retailers need to take a strategic approach to its use. Some value pricing strategies are as follows:  Provides the consumer with an incentive to become a repeat customer by offering a future discount. banners.5% to 1% of sales in the departmental store business. That is not to suggest that you necessarily need to compete on price.2 Pricing Every retailer has a basic philosophy towards pricing their product. 5 5. etc. Misuse of space can be as detrimental to success as poor buying.1 STRATEGIC RECOMMENDATIONS Marketing Regular and sustained marketing is required for a successful business of departmental store. buy one get one free.  Frequent clearance sales 5. Cable TV. It is very important for every store to create a suitable atmosphere and appealing presentations in order to trigger the consumer’s buying decision. It is advisable to maintain a parking space whereby around 15-20 cars can be parked The staff hired should be well mannered and well trained in dealing with the customers. The important marketing channels would be flyer distribution. location of merchandise. Floor patterns. Some marketing and promotional tips are as under:  Existing customers are best referrals. only that you be aware of providing consumer perceived value.  Know customers’ needs. amounts of merchandise and the appropriate displays are critical in determining space.3 Store layout and presentation Today’s successful retailer is the one making the most profitable use of every square foot of space in the store and in the warehouse. Because space is costly. layout and presentation becomes a key-differentiating factor. Regular advertisement expense should be at least 0. 5. 2006/Rev2 . to become more value oriented. In a world where one can find identical merchandise in more than one store. billboards. What is important is that they create and stick to a strategy for pricing so as to convey a clear message to the consumer.

In late eighties a paradigm shift in grocery store science occurred. This cost around Rs. Now. 2 3 Source: FBS Source: FBS 11 PREF-76/ Sep. childcare. dairy. They selected their goods as they continued through the maze to a cashier.000/- 6 6. and the "milk man").4 Use of computer The computer is an invaluable aid in processing the large number of transactions and vast amounts of information involved in managing a retail operation. The amount of data needed for merchandise planning would require hundreds of man-hours to produce. and breads to their offerings (which had formerly been offered by individual stores such as butchers. This phenomenon grew rapidly. This sector has shown a significant growth over the last few years.9%. bakeries. flowers.2% 3. 2006/Rev2 . fruit and vegetables. and today thousands of stores exist in the big cities. Software for inventory and sales recording and management should be used to have updated data at all the times. Over the decades. whereas a well-designed computer system can perform the task in seconds. The following table shows the contribution of retail and wholesale sector towards GDP for the last 6 years at constant factor cost. the departmental stores have evolved even further.1 SECTOR AND INDUSTRY ANALYSIS National Analysis Departmental stores business is emerging as one of the good business ventures in Pakistan as it provides all the basic merchandise under one roof. These stores also began to offer products beyond the normal scope of the dry-good grocery store. 5. 20. one sees that offer greeting cards. video rental. There should be proper arrangement of lightening. Goods should be properly arranged in shelves categorically having ample passage between the shelves for service trolleys and customers. In 2005-2006 this sector showed a growth of 9. The concept of the "Self-Serving Store" was started. This software not only records each and every sales transaction but also updates stock and cash position after every transaction. They added meat. Customers entered the revolutionary store and walked through a narrow maze of shelves containing groceries. Departmental stores business falls under retail sector. and much more.Pre-Feasibility Study Departmental Store The proposed store should be air-conditioned. fast food.2 This sector’s contribution towards GDP in the year 2005-2006 is 19.

Faisalbad .9 8.9 Gross fixed capital formation (Investment in fixed assets) in this industry by private sector has also shown a progressive trend.875 There are thousands of departmental stores in Rawalpinidi.9 17.14: Contribution of retail and whole sale sector towards GDP Year 1999-2000 2000-2001 2001-2002 2002-2003 2004-2005 2005-2006 Share %age 17.9%5.3: Major Industry Players of Lahore Name PACE Value Mart Decent Akbari store H Karim Bukhsh Location Gulberg Gulberg.26: Gross fixed capital formation by private sector in wholesale and retail sector at constant prices (Rupees in Million) Year 1999-2000 2000-2001 2001-2002 2002-2003 2004-2005 2005-2006 Retail and wholesale sector Rs. Johar Town Allama Iqbal Town Gulberg.Pre-Feasibility Study Departmental Store Table 6.1.369 9.5 2..1. Allama.2 Growth %age 4. The Mall etc 4 5 Source: FBS Source: FBS 6 Source: FBS 12 PREF-76/ Sep.0 18. In year 2005-2006 growth in gross fixed capital formation by private sector has shown an increase of 17.Gujranwala and this number is increasing day by day.Town etc Wahdat Rd.1 9. some of these are: Table 6. Multan .1. In Lahore there are about 85 to 100 big departmental stores. M 7. The following table shows gross fixed capital formation by the private sector for the last five years: Table 6.6 19.4 11.163 17. 2006/Rev2 .925 11.8 18.Iqbal.111 8.692 15.5 17.8 5.

shall be charged to tax in various slabs ranging from 0. For the year 2006-2007. A registered retailer shall issue invoice and charge and collect sales tax at the rate of three percent (two percent sales tax and one percent income tax) of the value of taxable supplies at the time of supplies thereof. 7 All information only relates to retail business under departmental store 13 PREF-76/ Sep. made in any tax period during the last twelve months ending any tax period if exceeds rupees five million are required to register with sales tax department. 000/. whatsoever taxable or otherwise. For the year 2006-07 rate of tax for a small company is 20% of taxable income. However.2 Legal issues regarding industry7 In order to fulfill its liabilities under Income Tax Ordinance. a retailer whose annual turnover from supplies.50% to 25%. Retailers shall not be entitled to adjustment of any input tax or claim refund of sales tax or income tax. but indirectly it is contributing in the employment growth. while 35% income tax rate shall be applicable on all other companies. income up to Rs100. 1990. 000/. one third of tax paid by the company shall be adjustable against the final income tax liability.of a retailer (sole proprietor and firm whose supplies are exempt from sales tax) in a year is exempt from income tax. DHA etc Jail Road Gulberg Shadman DHA Liberty Gulberg The Mall Cavalry Ground Allama Iqbal Town Although in Pakistan the retail business is not providing employment at a large scale directly. 1990. 6. Income acceding Rs. which shall be paid on monthly basis with return by the 15th day of the month following the tax period in which supplies are made.Pre-Feasibility Study Departmental Store Pot Pouri ARY cash and carry Best Mart Europa Al Fatah Naimat Khana CSD Stores Raheem store Fortress. Companies are coming with top quality products and with the increase in production level the employment also increases. a sole proprietor. 2001 and Sales Tax Act. firm or company doing only retail business as departmental store shall obtain NTN and Sales tax registration number from concerned departments. Under Sales Tax Act.100. As more and more retail outlets are opening and consumer buying has shifted towards packaged/branded products. 2006/Rev2 .

000 8(151 million).3 Resource merchandise Pakistan is one of those countries where abundance of grocery merchandise is available in wholesale markets of every city. Suppliers normally hesitate to supply goods on credit to new stores but after confidence building process a reasonable credit period of 15 days to one month is available to purchasers. New residential towns are being developed. Population of urban areas of Pakistan is 33% of total population.2 Target customers The target customer for departmental stores is the population/family units of big cities. Location and amenities are some of the most vital factors in the success of a store. 7. 7. 2006/Rev2 .Pre-Feasibility Study Departmental Store 7 7. Still a good potential is available for new stores as population of big cities increasing day by day and new societies are being developed.863. The major wholesale markets in Lahore are:       Shahalam Market/Rang Mahal Akbari Mandi Hall Road Urdu Bazar Abid Market Temple Road Moochi Gate 8 Source: FBS 14 PREF-76/ Sep. Total estimated current population of Pakistan is 150.1 MARKET INFORMATION Market potential The market for departmental stores industry in Pakistan has been developing steadily over the last decade and a mushroom growth of large stores observed in all big cities.

000 12. 180.000 60.000 Total Cost Rs. Table 7. 2006/Rev2 .000 Availability Split Air Conditioners Refrigerator and deep freezers9 Computers Software (sales and stock management) Printer Fax machine.000 28.000 12.129.000 60.000 100.000 60.000 56.000 100.000 85.000 15.000 1.rest ones can be easly obtained through Beverage & Ice cream companies. 1 2 3 4 5 6 7 8 9 10 11 13 Description No.000 4.000 60.000 16.000 20.3.000 30.Pre-Feasibility Study Departmental Store 8 ELECTRIC AND OTHER EQUIPMENT REQUIREMENT Following is the detail of equipment required for this project. No.1: Detail of Equipment Sr. of Units 4 2 2 1 1 1 1 1 Cost per unit Rs.000 16. 15 PREF-76/ Sep. 2 out of them will be purchased . Phone connections Signboard Motor cycle with delivery cabin Electric Fittings and installation Generator 10 KW Service Trolleys Shelves & Counters Total Local Local Local Local Local Local Local Local Local Local Local Local 9 Total of 5 refregerators are required . 25.000 20.000 60.000 450.000 1 15 85.

6. The cost of required land will be ranging from Rs.000 Current construction cost of departmental stores is approximately Rs. 150. 16 PREF-76/ Sep.000/9.3 Rent cost If the required land acquired on rent.000 to Rs.1. ft. ft area will be Rs.000 to Rs.400.000. 100. Current rate of electricity for these connections is Rs 8. 9. In this pre feasibility the cost of 3000 sqft land taken Rs. Office Warehouse Display/shopping area/Till Total 9.4 Utilities requirement The necessary utilities are Electricity. which is very high due to very expensive land in the proposed locations and high construction cost. The main investment in this business is of land and building. 6.000 per month in different proposed areas of Lahore.1: Area Utilization Description Owner’s Office Accounts & Admin.000.000.2 Construction cost Sq ft.00 million.Pre-Feasibility Study Departmental Store 9 9. 2006/Rev2 . one solely used for home delivery service calls. A three-phase commercial electricity connection is required. Total construction cost of 3000 sq. it will cost around Rs. 120 120 225 2. telephone and water.535 3. Following table shows the covered area requirement for a departmental store: Table 9.1 LAND AND BUILDING REQUIREMENT Land Requirement The proposed departmental store requires an area of approx 3000 sq ft. 2. At least two telephone connections are required. 800 per sq.535 Units 1 1 1 1 Area 120 120 225 2. 4.8 per kilowatt-hour. it is recommended that departmental store should be started at owned place rather on rented premises.

000 96.000 4.000 4. Number of workers required for each department is given below: Table 9.4.000 8.158.500 Annual salary 180.000 540.000 96. 2006/Rev2 .000 192.Pre-Feasibility Study Departmental Store 10 HUMAN RESOURCE REQUIREMENT Skilled salesmen are easily available at competitive wage rates.000 17 PREF-76/ Sep.000 4.) 15.500 8.1: Human resource required Positions Store Manager Salesmen Cashiers Helpers/Cleaners Accounts officer Security Guard Total Number 1 10 2 2 1 1 17 Salary/month (Rs.000 1.000 54.

945 787 6.184 11.720) 64.907) 44.032 3.180 121 9.178 (5.129 Year .236 3.632 8.769 3.427 6.338 4.4 Projected Profit and Loss Rupees (000) Year .314 324 7.371 1.059 3.VIII 89.845 (6.150 10.257 6.146 38.973 (3.032 8.792 7.I Sales/Revenue Cost of Sales: Add opening stock Purchases Less closing stock Sales tax 43.985 10.596 13.612 35.874 4.171 53.288 2.275 19.X 103.775 Gross Profit Operating Expenses: Operating Profit Financial Charges Profit before Taxation Taxation Profit after Taxation Acc.200) 58.889 70.063 Year .889 (5.171 (3.158 2.522 46.242 4.939 4. 2004/Rev1 .700 7.120 38.063 18.408 1.193 3.193 11.388 (4.II 50.668 55.029 4.382 24.727) 53.986 653 6.346 4.671 5.382 Year .748 2.224 3.809 14.884 6.VI 73.668 Year .320 13.090 4.024 2. Profit b/f Un-appropriated Profit c/f 18 PREF-76/ July.433 5.159 18.120 Year .IX 98.288 13.388 58.496 85.117 2.921) 78.1 Projected Income Statement 9.990 2.192 8.400 6.044 2.626 (4.874 13.Pre-Feasibility Study Departmental Store 11 FINANCIAL ANALYSIS 11.014 18.076 5.949 2.699 3.821 13.IV 60.333 4.178 77.129 4.496 (6.045 6.792 4.524 500 7.332 2.858) 32.603 12.546 3.463 13.338 12.973 48.626 64.III 55.612 (2.265) 82.856 1.730 9.596 4.631 Year .036 (7.VII 81.963 46.695 6.401 31.129 8.292) 71.150 3.631 64.159 3.401 9.845 89.581 4.V 67.371 13.297) 48.371 Year .690 16.337 20.272 2.552) 39.692 8.738 12.612 43.144 55.200 1.998 10.789 10.397 Year .397 31.429 2.386 3.522 Year .724 24.202 3.899 1.123 2.240 11.

741 74.391 Year .668 - 6.020 8.672 24.VII 8.612 750 2.885 15.020 64.171 12.553 Year .928 3.382 1.488 3.VI 8. 2004/Rev1 .020 6.040 1.0 Tangible Fixed Assets Preoperational expenses Current Assets: Stocks Cash in Hand / Bank 9.012 2.246 65.341 80 Year .678 39.829 1.494 16.388 17.213 2.435 2.333 47.020 13.741 3.918 6.435 32.Pre-Feasibility Study Departmental Store 11.852 2.348 16.120 - 6.361 12.IV 8.III 8.V 8.040 1.II 9.248 47.889 28.946 2.215 4.736 7.176 2.612 5.631 - 6.397 0 6.020 46.020 18.176 2.536 19 PREF-76/ July.496 44.401 57.040 19.012 2.775 - 12.036 62.020 6.428 28.121 60 Year .494 1.020 24.488 3.240 Year .2 Projected Balance Sheet 9.319 2.020 55.VIII 8.819 3.298 32.X 7.579 100 Year .536 Owners Equity: Capital Accumulated Profit Long Term Loan Current Liabilities: Current Portion of Long Term Loan Accounts Payable 6.845 53.012 24.848 - 1.020 4.428 39.769 1.240 3.560 6.828 55.626 21.852 2.070 39.973 9.539 31.I 9.055 24.178 36.688 74.IX 7.652 66.819 2.164 11.522 - 6.100 Year .564 3.928 3.917 40 Year .012 2.213 28.020 31.126 6.063 2.829 20.728 20 Year .769 1.215 3.020 38.371 4.319 2.129 5.3 Projected Balance Sheet Year .678 2.946 47.240 55.969 Rupees (ooo) Year .138 20.099 6.564 65.

361 12.531 28.652 Cash Increase/(Decrease) Opening Balance Closing Balance 20 PREF-76/ July.401 9.579 100 2. 2004/Rev1 .028 3.144 121 9.632 17.242 20 220 4.333 9.867 21.482 (26) 4.263 9.251 Total Sources Applications: Fixed Assets Preoperational Expenses Working Capital Re -Payment of Loan Tax 9.881 4.901 5.265 (14) 6.181 3.040 750 750 894 894 4.387 1.Pre-Feasibility Study Departmental Store 11.068 44.094 (26) 9.529 (16) 6.456 4.886 (19) 7.028 1.916 (14) 5.672 6.020 6.867 7.513 6.560 1.494 4.210 (17) 6.251 53.146 140 8.040 21.040 12.560 4.428 5.192 6.040 1.724 162 6.263 36.333 53.070 8.539 7.736 9.539 36.020 12.040 5.181 1.3 Projected Cash flow Statement 9.164 12.5 Projected Cash Flow Rupees (ooo) Year 0 Profit before Financial Charges & Taxation Amortization Depreciation Working Capital Change Cash form other Sources Owners Bank Finance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 - 4.320 20 189 5.692 20 204 4.070 44.401 62.987 750 5.720 9.885 17.531 8.164 1.129 20 238 4.552 (21) 8.357 1.401 151 7.286 (23) 8.014 20 175 6.068 9.963 130 9.155 12.672 28.357 4.736 - - - - - - - - - 1.885 1.

944.677.037.899.475 2.926.86% Year .00% Year .320 33.250 2.933 81.433.713 2.748.852.432.067 73.525 2.244.815.738 2.561.576 5.475 6.784.160 5.875.881 2.340.681.Pre-Feasibility Study Departmental Store 11.X 90.000 4.640 3.184 2.960 2.IX 85.653 98.044.848 50.466 1.000 1.011.408.000 Sale Price growth rate Purchase price growth rate Revenue (Rupees): 1 Groceries and food items 2 Baby garments and baby products 3 Crockery and plastic items 4 Soaps detergents and chemicals 5 Cosmetics and artificial jewellery 6 Ice cream and Beverages 7 Stationery and greeting cards/gifts 8 Watches and Clocks 9 Electronic and electrical appliances 10 General items Proportion 55% 10% 8% 3% 10% 3% 2% 2% 3% 4% 23.433.212.320 60.235.00% Year .374.212. 2004/Rev1 .III 48.007.622.963.067 40.922 2.960 10.303.713 1.777 9.034 6.828.320.700 8.120 1.489.923.866 2.915 1.600 10.617.112.700 1.969 1.407 2.540.II 44.320.152 67.983 1.070 3.079.000 21 PREF-76/ July.250 1.VII 70.424 1.960 4.522.000 43.014.374.640 2.032.74% Year .454 2.121.511.944.332 6.000 4.932 1.000 6% 5% 6% 5% 6% 5% 6% 5% 6% 5% 6% 5% 6% 5% 6% 5% 6% 5% 27.VI 64.24% Year .466 2.408.565 7.748.333 55.108.474 44.216.200 30.070 1.371.437.011.108.166 1.280 103.666 1.090.321 89.136 5.000 864.090.159.4 Revenue Calculation Optimum Projection Projected Revenue (Rupees) (Rs.322 1.060.677.218.949.159.570 9.166 1.815.340.963.847 2.760.949.200.966 60.944.029.828.922 7.662.218.474.000 50.704.000 864.032.653 53.777 3.200 8.56% Year .152 36.123.136 1.832 4.011.828.987.00% 100% 108.120 4.874.426 89.322 2.560 3.609 8.IV 53.000 1.060.094.123.704.000 3.661 7.200 3.565 2.000 per day)* Year .474.000 1.184 1.044.VIII 77.235.915 4.456.371.662.511.219 103.037.296.237 6.363.138.424 1.878 2.939 73.200.677.112.511.777 1.763 67.784.I 40.090. 300.007.332 2.369 98.433.474.303.700 3.847 5.662.454 1.219 56.704.000 1.832 1.969 2.622.296.070 8.322 6.923.949.296.540.000.000 43.40% Year .454 7.728.212.V 58.696 1.407 5.852 2.242.881 1.42% Year .475 1.983 1.094.250 5.827 8.136 2.474 81.569.200 55.667.321 49.95% Year .

495 4.883.164 189.016 4.080 258.991.893 483.166.317 4.873.991.360.533 176.997.136 1.Pre-Feasibility Study Departmental Store 11.507.368 709.325 252.697.155 312.949 3.249 2.000 2.186 853.200 604.627 4.163.034.390 557.695 944.129.683 558.076 110.160 82. 2004/Rev1 .533 775.781.380.302 12.769.645.648.118 3.351 30.906 2.197 2.330 6.705 938.080 5.600 100.305 300.012 77.427.384.044 5.061.170.624 1.274.925 2.400 2.905 858.419.898.548 1.150 22 PREF-76/ July.086 130.000 2.575 1.193 70.781.288.388 Stocks (Rupees) 1 Groceries and food items 2 Baby garments and baby products 3 Crockery and plastic items 4 Soaps detergents and chemicals 5 Cosmetics and artificial jewellery 6 Ice cream and Beverages 7 Stationery and greating cards/gifts 8 Watches and Clocks 9 Electronic and electrical appliances 10 General items 415.600 270.025 15.552 586.541 3.692.744 3.967 460.973.864 7.844 235.217 312.823 272.334 67.911 643.200 122.542.572 62.215 213.468.409.654 189.209 1.299 363.408 360.840 1.916 2.950 23.810.084.600 48.166.720 57.621 43.650.299 142.961.349 5.022 805.288 1.495.754.714 81.929 156.800 35.376 240.590 2.976 1.932 229.498 58.162 117.117.171.363 1.840 6.088 89.229 2.000.588.331 172.209 5.413.512 1.360 416.479 1.400 3.197 1.723 20.958 2.768.200 1.190.672 3.808.066 56.429 68.413 85.000 9.795 1.334 346.186 1.829 399.981 208.177.128 258.496.557 278.448 64.770 1.090 480.905 36.782 531.668 314.322 172.617 1.718 1.279.264 507.387.973 1.695 3.820.120 208.337.025 886.400 1.601.022 3.471 344.428.627 975.072.813 4.297.954 2.568 380.626.645.612 291.305 1.442.856.650.102.156.820 11.000 24.163.889.190 5.928 16.810.004 780.864 3.288 283.800.845.651 4.813 6.273.418 378.939 705.407.698.548.135.229 533.271.611.265 991.299 7.169.448 2.879 229.834 3.932 13.878 129.190.593 98.425 419.057.279.357.072.496.883 48.429 613.570.085 89.436 234.271 53.545.718 2.720 484.727.792 2.153 1.712.179.872 75.830 3.758.374.467 73.299 1.032.571.501 27.703.505.607 645.200 1.361.872 48.330 1.433 100.427.933.816 115.5 Purchases & Stock Calculation Gross margin % of Sales : 1 2 3 4 5 6 7 8 9 10 Groceries and food items Baby garments and baby products Crockery and plastic items Soaps detergents and chemicals Cosmetics and artificial jewellery Ice cream and Beverages Stationery and greating cards/gifts Watches and Clocks Electronic and electrical appliances General items 10% 35% 30% 10% 25% 10% 20% 30% 30% 15% 10% 35% 30% 10% 25% 10% 20% 30% 30% 15% 10% 35% 30% 10% 25% 10% 20% 30% 30% 15% 10% 35% 30% 10% 25% 10% 20% 30% 30% 15% 10% 35% 30% 10% 25% 10% 20% 30% 30% 15% 10% 35% 30% 10% 25% 10% 20% 30% 30% 15% 10% 35% 30% 10% 25% 10% 20% 30% 30% 15% 10% 35% 30% 10% 25% 10% 20% 30% 30% 15% 10% 35% 30% 10% 25% 10% 20% 30% 30% 15% 10% 35% 30% 10% 25% 10% 20% 30% 30% 15% Purchases (Rupees): 1 2 3 4 5 6 7 8 9 10 Groceries and food items Baby garments and baby products Crockery and plastic items Soaps detergents and chemicals Cosmetics and artificial jewellery Ice cream and Beverages Stationery and greeting cards/gifts Watches and Clocks Electronic and electrical appliances General items 21.759 51.941 2.932 2.648 5.674 2.360.495 22.812 439.036.800 907.915 1.190 1.021 18.240.078 118.636 330.186 33.726 1.363 6.503.400 691.990 2.392 156.696 458.299 1.787 1.182 137.975 44.849 3.864 1.795 40.141 284.118 3.800 234.793.028.000 1.186.716 1.286 193.575 91.025 4.155.128 2.266 142.344 3.689 2.924 4.792.000 201.468 1.409.866 1.253 108.777.496.800 151.249.531.038 343.

668 78.401.136.747 58.560 237.178 89.040 1.789.VI Year .IX Year .123 146.389 140. 2004/Rev1 .679 53.132 1.000 3.821.308 294.679 105.472 4.114 1.110 20.856 50.186 39.705 43.039.192 5.913 446.022 64.000 43.234 515.363 6.600 951.000 129.000 3.000 4.446 185.687 153.458 161.V Year .IV Year .159 176.899 150.315 221.I Year .260 36.022 127.153 58.032.240.742 73.796 98.822 99.759 188.735 86.236 160.599 1.297 220.000 151.158.042 55.160 103.304 490.095 20.828 160.370 1.504 109.949 109.327 203.760 64.134 277.699.485 251.708 95.930 182.046.III Year .765.929 90.462 267.872 335.469 77.420 1.585.061 2.400.X Administrative Salaries legal & Audit Fee Entertainment Telephone.668 40.527 130.286 2.847 1.200 77.225 1.617 81.350 432.300 166.600 33.266.799 20.738 309.147 243.868 5.012 2.478 2.687 78.159 368.275 48.685 70. Fax and Postage Electricity Advertisement Repair of building and equip Fuel for generator and delivery delivery motorcycle Insurance stocks Travelling conveyance Printing and stationery Depreciation Amortization 1.760 34.099 1.605.032 185.151.942.560 132.900 20.375 405.748 132.245 1.039 23 PREF-76/ July.853.635 175.624 71.307 6.6 Administrative Expenses Year .426 121.VIII Year .999 162.746 60.371 90.II Year .532.168 64.843.304 2.708 48.811 176.326.096 2.735 44.459.624 139.000 3.503 53.000 30.747 115.923 201.685.288.116 146.220 67.Pre-Feasibility Study Departmental Store 11.834 20.738.256.000 4.055 120.243.408 99.787 1.VII Year .707 1.247 304.044 120.392.350.458 82.

3 Cash Flow Assumptions Accounts receivable (average) Accounts payable average 12. 2004/Rev1 14 hours 360 days No of days 07 30 30 15 03 30 30 60 60 30 10% 10% 14% 35% 0 days 15 days 0.08% 70% 6% .3% 0.Pre-Feasibility Study Departmental Store 12 KEY ASSUMPTIONS 12.3% 0.1 Operating Assumptions Hours operational per day Days operational per year Stock inventory remain in store Category of item  Groceries and food items  Baby garments and baby products  Crockery and plastic items  Soaps detergents and chemicals  Ice-cream and beverages  Stationery.2 Economy Related Assumptions Electricity cost growth rate Wage growth rate Markup rate on long-term loan Tax rates 12.1% 4% 10% 20% 0. greeting cards and gifts  Cosmetics and artificial jewellery  Watches and clocks  Electronics/electrical products  General items 12.5% to 1% 10% 0.4 Expense Assumptions Telephone Expenses (% of Revenue) Repair and maintenance (% of revenue) Insurance of stocks (% of stock) Annual sales growth Amortization of deferred cost Advertisement % of sales Electricity growth rate Traveling and conveyance % of sales Printing and stationery % of sales Proportion of sales tax taxable sales and purchases Revenue price growth rate 24 PREF-76/ July.

5 Financials Assumptions Project life (Years) Debt Equity Interest rate on long-term debt Debt tenure (Years) Debt payments per year 4% 10 50% 50% 14% 5 12 25 PREF-76/ July. 2004/Rev1 .Pre-Feasibility Study Departmental Store Purchase price growth rate 12.

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