CHAPTER - 1 PROJECT AT A GLANCE 1.1 PROJECT BRIEF This objective of this document is to provide information regarding investment opportunity for setting up an Internet Café, with focus on product differentiation i.e., providing some unique services (Video/Audio Chat, Web Developing) which are not offered by a typical Internet Café. The business can be established in any of the major cities of the country. 1.2 OBJECTIVES For operating and establishing “SunShine Internet Café”, we are having some objectives. % To earn profit at less investments. 4 To satisfy our customers providing best quality service at effective price. # Providing the service at low cost by providing the best quality at affordable price. @ To know a fair retum on the capital invested by the owner 1.3 MISSION STATEMENT ‘ To achieve the economies of scale to minimize costs while maximizing value to Customers. * To achieve leadership, core and functional competencies internet cafe business.1.4 PROJECT RATIONALE As the Internet spins a web of interconnectivity around the globe, as it grows literally by the hour, India is struggling, not to catch up but to keep from falling further and further behind. There has been a great increase in Indian content on the Intemet. Many net entrepreneurs have been quick to realize the huge Potential of the global market. Initially, most sites targeted the global Diaspora of Overseas Indians who had more access to the Intemet, not to mention the credit cards that drive Net commerce. But there is a growing realization that the Net can reach the large and wealthy Indian Middle class. This group is rapidly plugging into the Net (still out of range for most people here) and there is increased use of credit cards. The Internet represents so much potential for India, and the demand for efficient Internet infrastructure is growing rapidly. This is where India has been failing. The demand has not yet been met efficiently and this represents an enormous barrier to business and societal development. the government, which has monopolized infrastructure development until recently, has recognized it must not hold back this development. They have opened the industry to private entrants and promised support. In practice, though, the vast bureaucracies that implement (theoretically) the government programs have moved sluggishly and ineffectively. For instance, the private ISPs that were allowed were initially required to acquire their bandwidth from VSNL which wanted a country wide monopoly on this lucrative sector. The result, new users signing up competed for increasingly limited bandwidth. Now the ISPs have been allowed to establish their own gateways but the effect has not yet been felt extensively. The DOT, responsible for providing phone lines to ISPs lagged way behind and the new providers are often left with far too few lines to service the increased demand. Lease lines are reduced, though still very expensive - approximately $1000 per month for a 64 Kpbs line. Businesses are relying more and more on aspects of the Internet. Email, for instance, is a huge asset to companies. And more and more companies are entering into web related business activities, like web site creation, software development, and various service oriented businesses that utilize the Net, like medical transcription or data processing for overseas companies. As the internet demographic becomes more mainstream India is going to a prime battleground for internet business over the next five years. the Internet Service Providers Association of India (ISPAI) was set up in 1998 with a mission to ‘Promote Internet for the benefit of all’. ISPAI is the collective voice of the ISP fraternity and by extension the entire Internet community. Over the years ISPAI has helped influence, shape and mould the telecom policies, so that ISPs and entrepreneurs in the business of Internet can setup and grow their services in an environment that is supportive and enabling.Yop 15 Countries Worldwide, Ranked by Internet Users, December 2008 (millions of unique visitors) a <0 Exe s7.0 [MEE “0. south Korea 27.2 MMMM 1.canaaa 21.0 12. Maly 208 TEE ts. spain 179 [+4 mexico 12.5 [1s nethentands 14.0 Note: ages 75+; home and work locations: excludes sarc trom pubNc ruroa: comissére World Matrix as cited in press release, larry 22, 700% Here in India there is 32.1 million peoples are internet users. So there is a great opportunity for India. India's Internet population stands at 32.1 million and is all set to grow to a 100 million by 2007-08. intemet Users in last few years in India: Intrenet Users Internet Usors 70000000 60000000) 60000000 50000000 40000000 30000000 20000000 10000000 ° 60000000 60000000 18481000 7000000 18481000 2001 2002 2003 2004 ©2005 2006 2007 2008 Years Source : http:/ww.indexmundi.com/g/g.aspx1.5 PROPOSED CAPACITY The proposed project is based on 20 computer systems. 1.6 TOTAL PROJECT COST The total cost of the project is approximately Rs.1.110 millionCHAPTER - 2 ORGANIZATIONAL STRUCTURE 2.1 PROPOSED FORM OF ORGANIZATION There are various forms of organizations such as sole proprietorship, Partnership, Pvt. Ltd. Co., co-operative societies etc, Out of these the most suitable form of organization for this Intemet Cafe can be partnership firm. A partnership firm can be registered by two or more persons but not exceeding 20 persons. There are some advantages of this form of organization such as:~ In sole proprietorship only limited funds, which an individual holds, can be invested while shares of a partner ship firm can be distributed among friends, relatives & considerably large organization with more investment can be set up. Partnership firms have a legal entity. It has perpetual succession & a common seal. The profits of a partner ship firm are distributed in the form of profit all its membors, which reduces tax liability of a person. Had he been sole owner of the Firm, he would have to pay tax on the entire profit. 2.2 ABOUT THE MAIN PROMOTERS: The company is being promoted by Mr. Priyank Shah, Mr. Umang Shah & Miss Parmar Jignasha Mr. Priyank Shah has done B.com in Accounting & Financing. Then he has done M.B.A. from one of the premier institute in North Gujarat i.e SVIM, MBA collage Ahmedabad. These competencies help him in knowing the intricacies in Finance as in Administration Department & Head of the Plant. He has extensive knowledge of the real business as well as computer field. He knows computer software such as Capitaline, Prowess, SPSS, Foxpro, DOS, Tally, Newsclips, Capitastocks, Adobe software and many others software. He is the cogent and enthusiastic personality Mr. Umang Shah has done B.Com. After completing his graduation, he has done M.C.A. from one of the premier institute. These competencies help him in knowing the intricacies of this business in operator. He Knows computer software and languages like C, C++, VB, Java, Oracle etc. . He is the cogent and enthusiastic personality. Miss Parmar Jignasha is good at financially aspect & the project isfinanced by her also. She has done B.Com. after completing graduation, she has done M.B.A with specialization of Marketing. She has been responsible for successfully coordinating the activities. 2.3 STEPS IN FORMING A PARTNERSHIP FIRM The first step is to be taken for forming a partnership firm is to select a few names of the proposed firm & put them in order of preference which will be finalized. The second step is to propose. The documents should be signed by all the three members of the proposed partnership firm & stamp by notary. 2.4 NAME OF THE ORGANIZATION Name of our organization would be SunShine Cyber Cafe, which would be located at Opp. Mother Dairy, Near C.U.Shah College, Surendrangar- 363001, Gujarat. 2.5 PROPOSED LOCATION For the Proposed project following premises should be considered. Y Proximity to the majority of people living are from middle income group Y Proximity to Private hostels setup in different areas of cities. ¥ Low cost rent Rs. 4000/- per Marla Y High visibility. 2.6 SERVICES Proposed internet café will provide full access to the resources of internet and other online services, printing, composing, scanning, fax. However or the sake of innovation and differentiation there would be a unique services of Video/Audio Chat. Just being a net café will not serve the purpose as business need to be more than a value addition process rather than a traditional net café, that is why after being operational for first two years there will be a facility added to the cart ie. Web developing. It will not only be the value addition but also a business expansion tool 2.7 DATE OF INCORPORATION: The Company will be incorporated on 1* April, 2009, with registration number.CHAPTER -3 PROJECT BACKGROUND 3.1 PROJECT CONCEPT: Sunshine Internet Cafe is being promoted by a cohesive team of three enthusiastic— Mr. Priyank Shah, Mr. Umang Shah & Miss Parmar Jignasha. The Promoters of the company are well educated and command experience of the diversified areas in their projects. The company will be incorporate to provide intemet service, printing, faxing, net to call etc.. The promoters have a considerable knowledge in this field. Besides having technical and marketing set up, the promoters are financially sound to set up a project of this scale. All these factors combined together resulted into making this organization a reality. 3.2 SCHEDULE OF IMPLEMENTATION: Particulars of Activity Apr May June July Aug 1. Incorporation of Company = 2. Acquisition of Land = 3. Computer & other Equipments 399 355 35 4,Fumiture & Fixtures => 5. Arrangement for Power 355 35 6. Internet Connections 335 35 9. Trial runs => CHAPTER - 4CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT 4.1 KEY SUCCESS FACTORS The common viability of this Internet café depends on the following factors: Location of the project: Location of the project is of prime importance. If the project is set up in a location with high income group, the amount of traffic on the café will be less because majority of the people will have personal computers at their home. A project like this can really do well in places, where the majority of people living are from middle income group, who cannot afford a personal computer. Another location can be near private hostels setup in different areas of cities. Unique Services: Majority of the intemet cafes are operating on a similar kind of services. If the proposed setup is opened with a strategy of differentiation, it can be more successful ie. video/Audio chat facility, for value addition, web development should also be started in the up coming years. In this feasibility web development services are initiated after two years of operations of net café. Quality of Service: The most important factor for the success of the project is the quality of service provided to the customer, which includes customer's privacy, speed of intemet and the atmosphere in the café. 4.2 OT ANALYSIS OPPORTUNITIES Growing population of daily Internet users. The importance of the Internet almost equals that of the telephone. As the population of daily Intemet users increases, 80 will the need for the services of internet café. THREATS Rapidly falling cost of Internet access, The cost of access to the Internet for home users is dropping rapidly. Internet access may become so cheap and affordable that nobody will be willing to pay for access to it. Emerging local competitors. Additional competitors are on the horizon, and we need to be prepared for their entry into the market. A dependence on quickly changing technology. Intemet Café is a place for people to experience the technology of the Internet. The technology that is the Internet changes rapidly.> v v ¥ Cost factor associated with keeping state-of-the-art hardware. Keeping up with the technology of the Intemet is an expensive undertaking. Internet café needs to balance technology needs with the other needs of the business. One aspect of the business can't be sacrificed for the other. 4.3 KEY SUCCESS FACTORS The commercial viability of this proposed Internet Café depends on the following factors: Location of the project is of prime importance. If the project is set up in a location with high income group, the amount of traffic on the café will be less because majority of the people will have personal computers at their home. A Project like this can really do well in places, where the majority of people living are from middle income group, who cannot afford a personal computer. Another location can be near private hostels setup in different areas of cities Majority of the Internet cafés are operating on a similar kind of services. If the proposed setup is opened with a strategy of differentiation, it can be more Successful i.e. video chat facility, or a small snack café along with the Internet service. With more services provided under the same roof, more traffic can be generated in the Internet café. The most important factor for the success of the project is the quality of service provided to the customer, which includes customer's privacy, speed of Internet and the atmosphere in the café. 4.4 TARGET CUSTOMERS The proposed project intends to cater to students and middle income group people Furthermore will be a magnet for local and traveling professionals who desire to work or check their e-mail massages in friendly environment. Y Students Y Business people Y Middle Income Groups Y Private Hostels The large student population will become an important part of the Net Café customer base. The student population continues to grow with the success of the educational institutes. Evening entertainment, access to the Internet, and the up- scale ambiance will attract the students. Business community is growing rapidly with the addition of new companies day by day. Internet café will provide anopportunity to local and traveling professionals to check their e-mails communications, this will be an attracting entity for the Middle income group and for the residents of private hostels as they do not have ccess to the internet at their living places. 4.5 MARKET NEED As the popularity of internet continues to grow at an exponential rate, easy and affordable access is quickly becoming a necessity of life. Public wants access to the methods of communication and volumes of information now available on the intemet, and access at a cost they can afford and in such a way that they are not socially, economically and politically isolated. 4.6 MARKET TRENDS More than 90 percent of visitors of these cafes and clubs are youngsters and their sole objective to get to these is to get enjoyment. 4.7 KNOWLEDGEABLE AND FRIENDLY STAFF Intemet café is a service business. The success of the business depends upon the quality of the service offer and delivering the service consistently. So a knowledgeable friendly and eager to please staff, state-of-art computer hardware and a clear vision of the market need will help it succeed. 4.8 INTERNET CONNECTION The major cost of an Intemet café is the Internet connection. For providing better service, the proposed project will use a High Band width connection for better speed as the project is going to provide service of video chat. It is recommended that the Internet connection should be taken from the best Internet service provider. 4,9 RECOMMENDED CONNECTION If the project is set up in area, where DSL Intemet connection is available, it is recommended to use DSL Internet connection instead of a any other Intemet connection This will improve the speed of Internet, which will improve the performance of video chat and will also reduce the telephone expense. 4.10 MARKETING Marketing will play an important role in success of the project, as majority of the 10players in the industry are following the strategy of low price with no differentiation, i.e., they are providing similar services and competing with each other on the basis of lower prices. It is recommended to follow a different strategy for the proposed project, which is the product differentiation. For this purpose, a special service of video chat facility is going to be offered by the proposed project. To build an image of a reliable and excellent Internet service, extensive promotion in the locality near the project will be done by use of print media and billboards. CHAPTER - 5 TECHNICAL ANALYSIS. "5.1 EQUIPMENT REQUIREMENT The proposed project is going to be of 20 computer systems and the details of the. Equipment required for the project is given below: EQUIPMENT REQUIREMENT DETAILS Description No. Cost Per Total Cost(Rs.) Unit(Rs.) Computer 2A 25000 525000 System(P-4) Hub’ 7 6000 6000 Computer Camera 21 1000 21000 UPS: 1 60000 60000 Printer 1 28000 28000 ‘Scanner 1 4000 4000 Modem DSL. 1 8000 8000 Other Equipment Networking Cable 720% 70 port 7200 Total Equipment 659200 Cost FURNITURE & FIXTURE DETAILS Description No. Rate (Rs) Total Cost(Rs.) Computer Table & 21 ‘5000 105000 Cabins Computer Chairs 2 2000 42000 Air Conditioner 2 25000 50000 Telephone Sets 2 1000 2000 Fax Machine 1 5000 5000 Carpet 200 sqit 30 per sqft 27000 Total Furniture & 231000 Fixtures The project is based on Pentium-4 computer systems. Second hand systems are also available in the market at much lower prices. The reason for using the latest system is the new software coming in the market that requires more powerful systems which will provide better service to the customer. The prices of computer Rsystems vary with the introduction of new technology in the market. 5.2 HUMAN RESOURCE REQUIREMENT The details of human resource requirement for the project are given in the following table: Human Resource Requirement Description No. Monthly ‘Annual Salary Salary(Rs) (Rs) Network 7 8000 ‘96000 Administrator Security Guard [7 4000 48000 Total Cost 144000 5.3 LAND & BUILDING REQUIREMENT The details of the area required for the proposed project is given in the below table: Covered Area requirement Details Description ‘Area Required (sq ft) ‘Computer Cabins 600 Sitting Area 100 Administrator Office 100 Free Space 100 Total Area Required 900 Recommended Mode It is recommended that this project should be started in a rented building, as this will reduce the initial capital cost. The approximate area required is almost 4- marla space. The details of monthly rent are given below: Rental Cost Details: Description Monthly Rent (Rs) ‘Annual Rent (Rs) ‘Approximate Rent @ Rs. | 16000 192000 4000 per maria §.4 UTILITIES REQUIREMENTS Mainly two utility are required to operate the cafe. BY Electricity v Telephone CHAPTER - 6FINANCIAL PROJECTIONS 6.1 CAPITAL OUTLAY Cost of Project The total outlay on the project works out working capital required to be brought Project works out to Rs.1110200, the det to Rs. 918200 and the margin money for in is Rs. 192000. Thus, the total cost of ails of which are given as under: - Capital Expenditure Total Cost (Rs) Equipment 659200 Fumiture & Fixtures 231000 Pre — Operational Expense 26000 Total Capital Expenditure (A) 918200 Working Capital Up Front insurance Payment 0 Up Front Building Rent 792000 Total Working Capital (B) 192000 Total Investment in Project (A+ B) 1110200 The working of the various major comp upon quotations and estimates obtained operative expenses are taken on estima! Project Returns onents of the cost estimates are based from suppliers. The preliminary and pre- ted basis. intemal Rate Of Retum 35% NPV (Rs) 360258 Pay Back Period (Years) 2.36 6.2 MEANS OF FINANCE For the purpose of this pre-feasibility study, it has been assumed that all the funding required for this project would be provided by the investor himself. 1 5PARTICULAR RATIO | AMOUNT Equity Shareholder Fund Priyank 773_| 370067 Umang 173_| 370067 Jignasha| 173_[ 370067 6.3 KEY ASSUMPTIONS FINANCIAL ASSUMPTIONS: Project Life(Years) 5 Equity 100% Discount Rate 20% PRODUCTION ASSUMPTIONS : NO. Of Computers 24 Total capacity per day(Hours) 240 Maximum Capacity Per Year 86400 Capacity Utilization (Year 1) % 70% ‘Capacity Utilization (Year 1) hours 60480 ‘Capacity Growth Rate Per Year % 5% Maximum capacity 100 Composing/pages/day First year capacity 20% Increase in composing capacity 5% First year capacity Web Developing | 5 Iweblyear Increase in W.D,per Year 2z OPERATING ASSUMPTIONS: Shift per day 1 Hours Operational Per Shift 12 Days Operational Per Month ED} Days Operational Per Year 360 Pre-Operational Period 1 ECONOMY RELATED ASSUMPTIONS Electricity charges per month/year 25,212 16Electricity Growth Rate 10% Wages Growth rate 10% Equipment Maintenance Growth Rate 2% DEPRECIATION EXPENSE ASSUMPTIONS, ‘Computer Equipment 20% Fumiture-Fixtures 20% Pre-Operation 20% EXPENSE ASSUMPTIONS Intemet Connection Charges Year 1__| 300000 ‘Connection Type 512 KB ‘Connection Charges Per Month 25000 ‘Composing Charges (Y%of Composing | 50% sales) Web Development Charges(%of Web | 50% sales) Intemet connection charges(Decrease | 1% Rate) Equipment maintenance(%of internet | 2% sales) Prepaid Building Rate(Months) 12 Rent Rate Per Marla 4000 Sq. ftin per maria 225 Rent Growth rate 10% Insurance Rate(%of net fixed Assets) 2% Marketing &selling Expense(% of 2% sales) Taxes 20% Printing expense(%of Printing Price) 50% Fax(%Price of per Fax) 50% REVENUE ASSUMPTIONS "7Video / Audio Chat Pricefhour 2 internet Plain price/Hour 20 Plain internet Usage 60% Video/Audio Usage 40% Internet sales price decrease rate. 0% W.A sales price per hour 22 Printing revenue(%of internet sales) | 10% Fax revenue (% of internet sales) 3% ‘Composing price 20 Web price 10000 6.4 FINANCIAL ANALYSIS 186.4.1 PROJECTED INCOME STATEMENT Particular 2010 | 2011 | 2012 | 2013 | 2014 Sales 733056 | 142560 | 152064 | 161568 Internet Sales 0 0 0 oO 1710720 Printing Revenue 133056_| 142560 _| 152064 | 161568 | 171072 Fax Revenue 30917 | 42768 | 45619 | 48470 | 51322 Composing Revenue | 144000 | 180000 | 216000 | 252000 | 288000 Web development Revenue 50000 _| 70000 | 90000 64753 | 179092 | 198432 | 214771 Total Revenue 3 8 3 8__| 23ta114 Cost Of Goods Sold Intemet Connection Charges 300000 | 297000 | 294030 | 291090 | 288179 Printing Charges 66528 | 71280 | 76032 | 80784 | 85536 ‘composing charges 72000 | 90000 | 108000 | 426000 | 144000 Web Development 25000 | 35000 | 45000 Fax Charges 79958 | 21364 _| 22810 | 24235 | 25661 Machine Maintenance 26612 28512 30413 32314 34214 Direct Electrici 237553 | 219766 | 229217 | 238668 | 248118 Total COGS 722651 | 727942 | 785502 | 828091 | 870708 106298 131962 Gross Profit/Loss g2ase2|__6 _| 1198821] 7 _| 1440406 ‘Operating Expenses Payroll Admin 744000 | 158400 | 174240 | 191664 | 210830 Marketing&selling 26611 | 28512 | 30413 | 32314 | 34214 ‘Amortization (Pre- Operation) s600_| 5600 | 5600 | s600 | 5600 Depreciation 178040 | 478040 _| 478040 | 478040 | 178040 Total 354251 | 370552 | 386293 | 407618 | 428684 Operating Profit/loss 570631 | 692434 | 810528 | 912009 | 1011722 Non Operating Expenses Financial Charges(Short Term) 26880_| 32341 | 34800 | 37554 | 40633 Financial Charges(long Term) 35291 | 29952 | 23866 | 16927 | 9017 Building rent 192000 _| 211200 | 232320 | 255552 | 281107 Total 254171 | 273493 | 290986 | 310033 | 330757 9Profit Before Tax 346460 | 41a941 | 519542 | 601976 | 680965 Tax 63292 | 83788 _| 103909 | 120396 | 136193, Profit After Tax 253168 | 335153 | 415633 | 481580 | 544772 Retained Eaming(vear 700395 Beginning) 253168 | 588321 5 | 1485537 Relained Eaming(year 100395 | 148553 Ending) 253168 | 588321 4 5 | 2030309 6.4.2 PROJECTED BALANCE SHEET 20Particular YearO | 2010 | 2011 | 2012 | 2013 | 2014 Assets ‘Cash 400676 | 875997 | 1425712 | 2034436 | 2608437 upfront Insurance 17804 | 14243 | 10682 | 7122 | 3561 Upfront Building Rent |" 792000 | 211200 | 232320 | 255552 | 281107 | 309218 Total Current Assets 132000 | 629682 | 1122560 | 1691946 | 2322665 | 3011216 Gross Fixed Assets | 890200 | 890200 | 890200 | 890200 | 890200 | 890200 Less:Accumulated Depreciation 178040 | 356080 | 534120 | 712160 | 890200 Net Fixed Assets | 690200 | 742160 | 534120 | 356080 | 178040 | 0 Pre- Operational | 28000 | 22400 | 16800 | 11200 | 5600 0 Total Intangible Assets 28000 | 22400 | 16800 | 11200 | 5600 0 Total Assets 47110200 | 1364242 | 1673480 | 2059226 | 2506305 | 3071216 Liabilities Running Finance. 192000 231010 _| 248570 | 268242 | 290238 | 314789 Long Term Loan | 252080 | 213944 | 170470 | 120909 | 64409 0 Total Liabilities | 444080 | 444954 | 419040 | 389151 | 354647 | 314789 Equity Paid up Capital 666120 _| 666120 | 666120 | 666120 | 666120 | 666120 Retained Earning 0 253168 | 588320 [1003955 | 1485537 | 2030307 Total 666120 _| 919288 | 1254440 | 1670075 | 2151657 | 2696427 Total Liabilities & Equity 4110200 | 1364242 | 1673480 | 2059226 | 2506304 | 3011216 6.4.3 PROJECT CASH FLOW aYearo | 2010 2011 2012 | 2013 | 2014 ‘Operating Activities Net Profit 253,168 _| 335,152 | 415,635 |481,582[544,770 Depriciation 178,040_| 178,040 | 178,040 [178,040| 178,040 Insurance amortization 5.600 | 5,600 | 5,600 | 5,600 | 5,600 Upfront insurance Payment -17,804 [3,561 | 3,561 | 3.561 | 3,561 Cash Provided By 0 419,004 | 522,353 | 602,636 |668,783|731,971 Operations Financing Activities Tong term Debt principle -38,136 | 43,475 | -49,561 |-56,500 |-64,409 Payment Building Rent Payment | -192,000 | -211,200 | -232,320 | -255,562 |-281,10|-309,21 7 8 Building Rent Expense 792,000_| 211,200 | 232,320 [255,552 [281,107 ‘Addition to Long term debt | 252,080 ‘Addition to Short Term Debt| 192,000 | 39,010 | 47,560 | 19,672 [21,995 | 24,561 Paid up Capital 666,120 Casfh Flow By Financing | 948,200 | -18,326 | -47,034 | -53,121 |-60,059|-67,969 Activities Investing Activities Capital expenditure | -918,200 Cash Flow by Investing | -918,200 Activities Net Cash 0 475,319 | 549,715 |606,724| 664,002 Cash Balance brought 0 0 400,678 | 875,997 | 1,425,7 | 2,034,4 Forward 12 36 Cash Balance 0 400,678 | 875,997 |1,425,712| 2,034,4 | 2,698,4 36 37 Cash carried Forward 0 400,678 | 875,997 | 1,425,712| 2,034,4 | 2,698,4 36 37 26.4.4 RATIO ANALYSIS 1. GROSS PROFIT RATIO = Gross Profit / Net sales Year 2010 2014 2012 2013 2014 Gross Profit | 924882 | 1062986 | 1198821 | 1319627 | 1440406 Sales 1647533 | 1790928 | 1984323 | 2147718 | 2341114 Gross Profit [56.14 59.35 60.41 61.44 62.33 Ratio(%) Gross Profit Ratio(%) 64 cd 60.41 & 60 59.35 2 5 58 8 5 56 a 54 52 2010 ©2011 «2012, 20132014 Years 2. NET PROFIT RATIO = Net Profit / Sales Year 2010 2011 2012 2013 2014 Net Profit [253168 | 335153 415633 | 481580 544772 Sales 1647533 | 1790928 | 1984323 | 2147718 | 2341114 Net Profit 15.37 18.71 20.95 22.42 23.57 Ratio(%) 2BNet Profit Ratio(%) 25) 22.42 20.95 20 18.71 15 40 Percentage 23.57 2010 ©2011 +2012 «20132014 Years 3. ASSETS TURNOVER RATIO = Sales / Total Assets Year 2010 2011 2012 2013 2014 Total Assets 1364242 | 1673480 | 2059226 | 2506305 | 3011216 ‘Sales 4647533 | 1790926 | 1984323 | 2147718 | 2311114 Assets 0.83 0.93 1.04 117 1.30 Turnover(times) Total Assets Turnover'times) Percentage 2010 ©2011-2012, 2013 Years 2014 4, RETURN ON OWNER’S EQUITY = PAT / Owner's Equity X 100 24Year 2010 2011 2012 2013, 2014 PAT 253168 | 335153 _| 415633 _| 481580 | 544772 Owner's Equity | 919288 | 1254440 | 1670075 | 2151657 | 2696427 Return on 27.54 26.72 24.89 22.38 20.20 Equity (%) Return on Owner's Equity 305 27.54 26.72 25 3” 5 15 210 5 ° 2010 2011202, 20132018 Years 5. CASH RATIO = Cash / Current Liabilities X 100 2010 2071 2012 2073, 2014 400678 | 675997 _| 1425712 | 2034436 | 2698437 231010 _| 248570 | 268242 | 290238 | 314789 Cash Ratio(%) | 173.45 | 352.41 | 531.50 | 700.95 | 857.22 25Percentage meee sees 2010 Cash Ratio(%9) 2011 2012 Years 2013 2014 26CHAPTER -7 CONCLUSION After making this report we have faced real environment stress in real business. This research work has enabled us to gather a lot of information about the café business and we have been able to apply our classroom knowledge to the practical life very effectively. In conclusion, from the above Projected Balance Sheet, Projected income, Projected Cash Flow and other major financial ratio calculation it can be said that the project is very much feasible, having good profitability, conceived by the people already experienced in the similar field. Promoters are having expertise in marketing for decades. Individually each promoter is having a sound financial background. The group concerns are also in profitable existence for a number of years. The financial and economic feasibility of the project is well established on the basis of estimates and projections. All the assumptions and basis of estimation are on the principle of conservatism and prudence. Therefore, it can be concluded that the business has a high potential. 2