Business Report

(Vijaypal Singh - )
Introduction
Vijaypal Singh wants to startup grocery store of 150 square feet. He has past experience of 3 years. Their grocery store would be able to provide all dairy
products, daily essentials and staples in the local area.

Location
This shop would be located in Village Gaourala in a owned premises. This area is selected because of high footfall and Asia's largest Airport is gonna set up
there. We expect that 20 customers would daily visit the shop and purchase goods worth of INR 3500 on average from the shop. There are only 1-2 grocery
shops nearby and hence we would be able to yield good amount of sale from this shop.

Target Market
Our primary customer base would be residents of local neighbourhood. We would provide dairy, daily essentials, staples, snacks & branded food, beauty &
hygiene, cleaning & household products which are required frequently in every household. Our primary target base would visit our shop at least 2-3 times in
the week. We will procure the goods from local markets.

Assumptions
The assumptions are as follows:

The amount of Loan taken is 200000₹ for a total period of 18 months at a rate of interest 10%, and a moratorium period of 3 months
Sundry Creditors amount is 25% of total costs, Inventory amount is 25% of total costs, and Cash Balance amount is 5% of sales
Number of store assistants is assumed to be 1
Y-o-Y Salary growth % after 2nd Year is assumed to be 10
Y-o-Y Salary growth % after 1st Year is assumed to be 10
Y-o-Y Sales growth % after 2nd Year is assumed to be 100
Y-o-Y Sales growth % after 1st Year is assumed to be 25
Number of days the store is open in a year is assumed to be 365
Monthly electricity charge in INR is assumed to be 500
Average monthly salary of a store assistant in INR is assumed to be 7000
Gross Margin % on Sales is assumed to be 25
Expected Daily sales in INR is assumed to be 3500

Financial Analysis
a. Project Cost

Fixed Costs

Furnishing 30000.00₹

Working Capital

Working capital requirement 270000.00₹

Grand Total 300000.00₹

b. Means of Finance

Self-Investment 100000.00₹

Term Loan 30000.00₹

Working Capital Loan 170000.00₹

Grand Total 300000.00₹

c. Income and Expenditure

Particulars Amount (INR) - Year 1 Amount (INR) - Year 2 Amount (INR) - Year 3

Income

Revenue from main operations 1277500.00₹ 1596875.00₹ 3193750.00₹

Total Income 1277500.00₹ 1596875.00₹ 3193750.00₹

Expense

Electricity Expenses 6000.00₹ 6000.00₹ 6000.00₹

Salary Expenses 84000.00₹ 92400.00₹ 101640.00₹

Cost of goods sold 958125.00₹ 1197656.00₹ 2395313.00₹

Interest on Term Loan 2472.00₹ 374.00₹ 0.00₹

Interest on Working Capital Loan 14004.00₹ 2123.00₹ 0.00₹

Total Expense 1064601₹ 1298553₹ 2502953₹

d. Profit

Particulars Amount (INR) - Year 1 Amount (INR) - Year 2 Amount (INR) - Year 3

Profit Before Interest and Tax (PBIT) 229375 300819 690797

Interest on Term Loan 2472 374 0

Interest on Working Capital Loan 14004 2123 0

Profit After Interest But Before Tax (PBT) 212899 298322 690797

Tax 0 2416.1 50659.4

Proft after Tax (PAT) 212899 295905.9 640137.6

Balance Sheet
Amount (INR) - Year Amount (INR) - Year Amount (INR) - Year
Liabilities 1 2 3

Promoters Capital 100000 100000 100000

Reserves and Surplus (Profit) 212899 508804.9 1148942.5

Long term borrowings (Term Loan closing balance) 12762 0 0

Short term borrowings (Working Capital closing 72323 0 0

Balance)

Sundry Creditors 262031.25 324014 625738.25

Total 660015.25 932818.9 1874680.75

Amount (INR) - Year Amount (INR) - Year Amount (INR) - Year

Assets 1 2 3

Gross Fixed Asset 30000 30000 30000

Accumulated Depreciation 0 0 0

Net Fixed Asset 30000 30000 30000

Inventory 262031.25 324014 625738.25

Other Current Asset 304109 498961.15 1059255

Cash And Bank Balance 63875 79843.75 159687.5

Total 660015.25 932818.9 1874680.75

Cash Flow Statement
Particulars Amount (INR) - Year 1 Amount (INR) - Year 2 Amount (INR) - Year 3

Net Profit 212899 295905.9 640137.6

Non Cash Non Operating Expenses

Depreciation 0 0 0

Interest Paid 16476 2497 0

Non Cash Non Operating Income

Cash Flow before Working Capital Changes 229375 298402.9 640137.6

Increase in Current Asset 566140.25 256834.9 862018.1

Decrease in Current Asset 0 0 0

Increase in Current Liability 262031.25 61982.75 301724.25

Decrease in Current Liability 0 0 0

Cash Flow From Operating Activities -74734 103550.75 79843.75

Calculation of cash flow from investing activities

Purchase of fixed assets 30000 0 0

Cash Flow From Investing Activities -30000 0 0

Calculation of cash flow from financing activities

Capital Raised 100000 0 0

Term Loan Availed 30000 0 0

Working Capital Loan Availed 170000 0 0

Repayment of Term Loan Principal 17238 12766 0

Interest Paid on Term Loan 2472 374 0

Repayment of Working Capital Principal 97677 72331 0

Interest on Working Capital Loan 14004 2123 0

Cash Flow from financing activities 168609 -87594 0

Net Cash Flow For The Year 63875 15956.75 79843.75

Opening Cash Balance 0 63875 79831.75

Closing Cash Balance 63875 79831.75 159675.5

Difference 0 0 0
Calculation Of Debt Service Coverage Ratio (D.S.C.R)
Amount (INR) - Year Amount (INR) - Year Amount (INR) - Year
Particulars 1 2 3

Net Profit 212899 295905.9 640137.6

Interest Paid on Term Loan 2472 374 0

Interest on Working Capital Loan 14004 2123 0

Depreciation 0 0 0

Taxes 0 2416.1 50659.4

EBDIT (Earning Before Depreciation Interest and 229375 300819 690797

Tax)

Payments :

Installment payment of Term Loan 19710 13140 0

Installment payment of Working Capital Loan 111681 74454 0

TOTAL 131391 87594 0

D.S.C.R 1.75 3.43 0

Break Even Point And Ratio Analysis

Particulars Amount (INR) - Year 1 Amount (INR) - Year 2 Amount (INR) - Year 3

Fixed Cost 106476 100897 107640

Variable Cost 958125 1200072.1 2445972.4

Total Cost 1064601 1300969.1 2553612.4

Sales 1277500 1596875 3193750

Contribution (Sales-Variable Cost) 319375 396802.9 747777.6

B.E.P in % 33.34% 25.43% 14.39%

Break Even Sales in INR 425918.5 406085.31 459580.63

Net Profit Ratio 16.67% 18.53% 20.04%

Conclusion
On examining the technical and financial aspects of the grocery store, it can be stated that the enterprise is technically feasible and economically viable.

Scaling Up Potential
Based on consumer feedback, the enterprise owner can increase the variety of products being offered which would make product assortment more relevant
and hence, these products could be frequently sold which would help to increase the turnover and profitability of the business.
Suppliers
The enterprise owner would procure the supplies from the local market itself.
Term Loan Repayment Schedule (in INR)
Month Opening Balance EMI Interest Principal Closing Balance

1 30000 0 250 -250 30250

2 30250 0 252 -252 30502

3 30502 0 254 -254 30756

4 30756 2190 256 1934 28822

5 28822 2190 240 1950 26872

6 26872 2190 224 1966 24906

7 24906 2190 208 1982 22924

8 22924 2190 191 1999 20925

9 20925 2190 174 2016 18909

10 18909 2190 158 2032 16877

11 16877 2190 141 2049 14828

12 14828 2190 124 2066 12762

13 12762 2190 106 2084 10678

14 10678 2190 89 2101 8577

15 8577 2190 71 2119 6458

16 6458 2190 54 2136 4322

17 4322 2190 36 2154 2168

18 2168 2190 18 2172 0

Working Capital Loan Repayment Schedule (in INR)

Month Opening Balance EMI Interest Principal Closing Balance

1 170000 0 1417 -1417 171417

2 171417 0 1428 -1428 172845

3 172845 0 1440 -1440 174285

4 174285 12409 1452 10957 163328

5 163328 12409 1361 11048 152280

6 152280 12409 1269 11140 141140

7 141140 12409 1176 11233 129907

8 129907 12409 1083 11326 118581

9 118581 12409 988 11421 107160

10 107160 12409 893 11516 95644

Month Opening Balance EMI Interest Principal Closing Balance

11 95644 12409 797 11612 84032

12 84032 12409 700 11709 72323

13 72323 12409 603 11806 60517

14 60517 12409 504 11905 48612

15 48612 12409 405 12004 36608

16 36608 12409 305 12104 24504

17 24504 12409 204 12205 12299

18 12299 12409 102 12307 0