Bakery Project V5

Paliwala's Bakers Sweet Mart

Name: Roll #: Course: Instructor:

Ali Asghar Paliwala 2002-1-13-2810 Financial Management Sajjad Siraj

Project Name: Paliwala's Bakers & Sweet Mart Introduction: Paliwala's Bakers and Sweet Mart will be started with the idea to introduce bakery products that has never been introduced before in the Pakistani market e.g. flavoured breads and biscuits and to introduce famous and unique sweets from different cultures and around the world. This bakery will be opened on a plot size of around 25 x 35 square foot. This plot is at the back side of Tauheed Commercial Area, Phase 5, Defence. The price of the plot was consulted with a local estate agent (Al - Ameen estate Agency). For the analysis of this project I had visited the Anjarwala's Bakers and Confectioners in Clifton opposite to B.B.Q Tonight.

Paliwala's Bakers Sweet Mart

Income Statement Assumptions No. of Days in a Year

360

Assumption for Sales Selling Price (Rs) 12 120 110 110 100 120 40

Cost (% of Selling Price) 90% 70% 70% 80% 70% 50% 90%

Cost Price (Rs) 10.8 84 77 88 70 60 36

Sales Growth Rate (%) Bread Cake Mithai Mithai (Khoay wali) Biscuit Chips/Nimco Branded Products

Year1

Year2 25% 25% 20% 20% 20% 20% 10%

Year3 10% 5% 10% 10% 2% 2% 0%

Year4 0% 0% 0% 0% 0% 0% 0%

Year5 0% 0% 0% 0% 0% 0% 0%

Sales Unit (Per Day) Bread Cake Mithai Mithai (Kkoay wali) Biscuit Chips/Nimco Branded Products

Year1 40 20 25 25 25 10 70

Year2 50 25 30 30 30 12 77

Year3 55 26.25 33 33 30.6 12.24 77

Year4 55 26.25 33 33 30.6 12.24 77

Year5 55 26.25 33 33 30.6 12.24 77

Sales Amount (Rs. Per Year) Bread Cake Mithai Mithai (Khoya) Biscuit Chips/Nimco Branded Products

Year1 172800 864000 990000 990000 900000 432000 1008000

Year2 216000 1080000 1188000 1188000 1080000 518400 1108800

Year3 237600 1134000 1306800 1306800 1101600 528768 1108800

Year4 237600 1134000 1306800 1306800 1101600 528768 1108800

Year5 237600 1134000 1306800 1306800 1101600 528768 1108800

Cost Amount (Rs. Per Year) Bread Cake Mithai Mithai (Khoya wali) Biscuit Chips/Nimco Branded Products

Year1 155520 604800 693000 792000 630000 216000 907200

Year2 194400 756000 831600 950400 756000 259200 997920

Year3 213840 793800 914760 1045440 771120 264384 997920

Year4 213840 793800 914760 1045440 771120 264384 997920

Year5 213840 793800 914760 1045440 771120 264384 997920

Per Month 3500 3000 2000

Per Year 42000 36000 24000 25000 6000 10000 15000

No. 1 1 4 1 3

Avg Salary per Month 8000 6000 2500 7000 2000

Bread (Per Unit) Cakes (Per lb) Mithai (per Kg) Mithai (Khoay wali) (per Kg) Biscuit (Per Kg) Chips/Nimco (Per Kg) Branded Products (Per Unit)

Operating Expense Electricity Gas Telephone Advertising Stationary Entertainment Miscellaneous Salary Expense Employee Manager Cashier Salesman Chief Baker Assistant to Baker Total Salary Expense

Salary per year 96000 72000 120000 84000 72000 444000

Paliwala's Bakers Sweet Mart

Balance Sheet Assumption Fixed Assets

Land Building Plant & Machinery Furniture & Fixture Office Equipment

Rs.

2000000 200000 400000 200000 25000

Current Assets

Credit Sales (% of Total Sales)

Accounts Receiveable Inventory (Estimated in Rs.) Long Term Liability Loan (5 Years) Current Liability Accounts Payable (50% of Inventory) Owner's Equity

10% Year1 434880 Estimated 180000

Year2 527040 20% plus of Year1 216000

Year3 561556.8 10% plus of Year2 237600

Year4 561556.8

Year5 561556.8

237600

237600

108000

118800

118800

118800

700,000

90000 2560000

Page 3 of 10

Paliwala's Bakers Sweet Mart

Income Statement Year1 (Rs.)

Year2 (Rs.)

Year3 (Rs.)

Year4 (Rs.)

Year5 (Rs.)

Sales Bread Cakes Mithai Mithai (Khoaywali) Biscuit Chips/Nimco Branded Products Total Sales Total Revenue

172800 864000 990000 990000 900000 432000 1008000 5356800 5356800

216000 1080000 1188000 1188000 1080000 518400 1108800 6379200 6379200

237600 1134000 1306800 1306800 1101600 528768 1108800 6724368 6724368

237600 1134000 1306800 1306800 1101600 528768 1108800 6724368 6724368

237600 1134000 1306800 1306800 1101600 528768 1108800 6724368 6724368

Cost of Goods Sold Bread Cakes Mithai Mithai (Khoaywali) Biscuit Chips/Nimco Branded Products Total COGS

155520 604800 693000 792000 630000 216000 907200 3998520

194400 756000 831600 950400 756000 259200 997920 4745520

213840 793800 914760 1045440 771120 264384 997920 5001264

213840 793800 914760 1045440 771120 264384 997920 5001264

213840 793800 914760 1045440 771120 264384 997920 5001264

Gross Profit

1358280

1633680

1723104

1723104

1723104

Operating Expense Electricity Sui Gas Telephone Advertising Expense Stationary Entertainment Miscellaneous Salary Expense Depriciation Expense - Building Depriciation Expense - Plant & Machinery Depriciation Expense - Furniture & Fixture Depriciation Expense - Office Equipment Total operating Expense

42000 36000 24000 25000 6000 10000 15000 444000 10000 40000 20000 5000 677000

42000 36000 24000 25000 6000 10000 15000 444000 10000 40000 20000 5000 677000

42000 36000 24000 25000 6000 10000 15000 444000 10000 40000 20000 5000 677000

42000 36000 24000 25000 6000 10000 15000 444000 10000 40000 20000 5000 677000

42000 36000 24000 25000 6000 10000 15000 444000 10000 40000 20000 5000 677000

Operating Profit

681280

956680

1046104

1046104

1046104

78500

66500

54500

42500

30500

Net Profit Before Tax

602780

890180

991604

1003604

1015604

Income Tax

120556

178036

198320.8

200720.8

203120.8

Net Profit After Tax

482224

712144

793283.2

802883.2

812483.2

Interest Payment for Loan

20%

Paliwala's Bakers Sweet Mart

Balance Sheet Year0

Year1

Year2

Year3

Year4

Year5

2000000 200000

2000000

2000000

2000000

2000000

2000000

Fixed Assets

Land Building Acc Depreciation: Building Plant & Machinery Acc Depreciation: P & M Furniture & Fixture Acc Depreciation: F & F Office Equipment Acc Depreciation: Off Equipt

400000 200000 25000

200000 10000 400000 40000 200000 20000 25000 5000

200000 20000 400000 80000 200000 40000 25000 10000

190000 360000 180000 20000

320000 160000 15000

2750000 Current Assets Cash & Bank Balance Accounts Receiveables Inventory

Total Assets Current Liabilities Accounts Payable Long Term Liabilities Long Term Loan Owner's Equity Capital Retained Earnings

435000 0 0

3260000

280000 140000 10000

2675000 52,184 527040 216000

200000 40000 400000 160000 200000 80000 25000 20000

170000

240000 120000 5000

2600000 574,011 561556.8 237600

200000 50000 400000 200000 200000 100000 25000 25000

160000

150000 200000 100000 0

2525000 1,342,294 561556.8 237600

2450000 2,070,178 561556.8 237600

802224

795224

1373168

2141451.2

2869334.4

3552224

3470224

3973168

4666451.2

5319334.4

0

90000

108000

118800

118800

118800

700,000

600,000

500,000

400,000

300,000

200,000

2560000

2560000 482224

3042224 712144

3754368 793283.2

4547651.2 802883.2

5350534.4 812483.2

Drawings Total Equity + Liabilities

187,344 434880 180000

200000 30000 400000 120000 200000 60000 25000 15000

180000

3,260,000

180000

180000

300000

300000

350000

3,552,224

3,470,224

3,973,168

4,666,451

5,319,334

Paliwala's Bakers Sweet Mart

Cash Flow Statement (Indirect Method) Net Income Add: Depreciation Expense Add: Increase in Accounts Payable Less: Increase in Accounts Receiveables Less: Increase in Inventory Net Cash Flow from Operating activities

Year 1 482224 75000 90000 434880 180000 32344

Year 2 712144 75000 18000 92160 36000 676984

Year3 793283.2 75000 10800 34516.8 21600 822966.4

Year 4 802883.2 75000 0 0 0 877883.2

Year 5 812483.2 75000 0 0 0 887483.2

100000 180000 280000

100000 180000 280000

100000 300000 400000

100000 300000 400000

100000 350000 450000

-247656

396984

422966.4

477883.2

437483.2

Net Cash Flow from Investing Activities Long Term Loan payments principal Drawings from capital Net Cash Flow from Financing Activities

Net Cash Flow

Paliwala's Bakers Sweet Mart

Long Term Loan Payment Schedule - 7 years Loan Amount (Rs.) Interest Rate (Yearly) Interest Rate (Montly) Period

700,000 12% 1% 84

Installment No. 1 2 3 4 5 6 7 8 9 10 11 12 Total (Year1)

Interest Amount 7000 6916.67 6833.33 6750 6666.67 6583.33 6500 6416.67 6333.33 6250 6166.67 6083.33

13 14 15 16 17 18 19 20 21 22 23 24

6000 5916.67 5833.33 5750 5666.67 5583.33 5500 5416.67 5333.33 5250 5166.67 5083.33

Principal Payment 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33

8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33

Total Amount Paid 15333.33 15250 15166.67 15083.33 15000 14916.67 14833.33 14750 14666.67 14583.33 14500 14416.67

14333.33 14250 14166.67 14083.33 14000 13916.67 13833.33 13750 13666.67 13583.33 13500 13416.67

Balance 691,667 683,333 675,000 666,667 658,333 650,000 641,667 633,333 625,000 616,667 608,333 600,000

5000 4916.67 4833.33 4750 4666.67 4583.33 4500 4416.67 4333.33 4250 4166.67 4083.33

8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33

13333.33 13250 13166.67 13083.33 13000 12916.67 12833.33 12750 12666.67 12583.33 12500 12416.67

4000 3916.67 3833.33 3750 3666.67 3583.33 3500 3416.67 3333.33 3250 3166.67 3083.33

8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33

12333.33 12250 12166.67 12083.33 12000 11916.67 11833.33 11750 11666.67 11583.33 11500 11416.67

3000 2916.67 2833.33 2750 2666.67 2583.33 2500 2416.67 2333.33 2250 2166.67 2083.33

8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33

11333.33 11250 11166.67 11083.33 11000 10916.67 10833.33 10750 10666.67 10583.33 10500 10416.67

2000

8333.33

10333.33

66500

100000

54500

100000

42500

100000

30500

100000

291,667 283,333 275,000 266,667 258,333 250,000 241,667 233,333 225,000 216,667 208,333 200,000

Total (Year5) 61

100000

391,667 383,333 375,000 366,667 358,333 350,000 341,667 333,333 325,000 316,667 308,333 300,000

Total (Year4) 49 50 51 52 53 54 55 56 57 58 59 60

78500

491,667 483,333 475,000 466,667 458,333 450,000 441,667 433,333 425,000 416,667 408,333 400,000

Total (Year3) 37 38 39 40 41 42 43 44 45 46 47 48

Principal (Yearly)

591,667 583,333 575,000 566,667 558,333 550,000 541,667 533,333 525,000 516,667 508,333 500,000

Total (Year2) 25 26 27 28 29 30 31 32 33 34 35 36

Yearly Interest

191,667

Paliwala's Bakers Sweet Mart 62 63 64 65 66 67 68 69 70 71 72

1916.67 1833.33 1750 1666.67 1583.33 1500 1416.67 1333.33 1250 1166.67 1083.33

8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33

10250 10166.67 10083.33 10000 9916.67 9833.33 9750 9666.67 9583.33 9500 9416.67

183,333 175,000 166,667 158,333 150,000 141,667 133,333 125,000 116,667 108,333 100,000

Total (Year6) 73 74 75 76 77 78 79 80 81 82 83 84 Total (Year7)

1000 916.67 833.33 750 666.67 583.33 500 416.67 333.33 250 166.67 83.33

8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33

9333.33 9250 9166.67 9083.33 9000 8916.67 8833.33 8750 8666.67 8583.33 8500 8416.67

18500

100000

6500

100000

91,667 83,333 75,000 66,667 58,333 50,000 41,667 33,333 25,000 16,667 8,333 0

Paliwala's Bakers Sweet Mart

Project Costing Uses

Land Building Plant & Machinery Furniture & Fixture Office Equipment Cash & Bank Balance

Rs.

2000000 200000 400000 200000 25000 435000

Total Uses

3260000

Sources Long Term Loan Capital

700,000 2560000

Total Sources

3,260,000

Paliwala's Bakers Sweet Mart

Depriciation Assumption Sheet Fixed Assets Cost Building 200000 Plant & Macinery 400000 Furniture & Fixture 200000 Office Equipment 25000 Total Depreciation Expense Acc Depriciation - Building Acc Depriciation - Plant & Machinery Acc Depriciation - Furniture & fixture Acc Depriciation - Office Equipment

Life (Years) 20 10 10 5

Year1 10000 40000 20000 5000 75000

Year2 10000 40000 20000 5000 75000

Year3 10000 40000 20000 5000 75000

Year4 10000 40000 20000 5000 75000

Year5 10000 40000 20000 5000 75000

10000 40000 20000 5000

20000 80000 40000 10000

30000 120000 60000 15000

40000 160000 80000 20000

50000 200000 100000 25000