ANRS INVESTMENT COMMISSIN

www.investamhara.gov.et

Project Profile on the Establishment of

Galvanized Iron Bathtubs Making Plant

Development Studies Associates

(DSA)

October 2008
AddisofAbaba
Table Contents
1. Executive Summary............................................................................................1
2. Product Description and Application..............................................................1
3. Market Study, Plant Capacity and Production Program..............................2
3.1 Market Study...................................................................................................................2
3.1.1 Present Demand and Supply....................................................................................2
3.1.2 Projected Demand....................................................................................................2
3.1.3 Pricing and Distribution...........................................................................................2
3.2 Plant Capacity..................................................................................................................3
3.3 Production Program.........................................................................................................3
4. Raw Materials and Utilities..............................................................................3
4.1 Availability and Source of Raw Materials.......................................................................3
4.2 Annual Requirement and Cost of Raw Materials and Utilities.......................................3
5 Location and Site...............................................................................................3
6 Technology and Engineering............................................................................4
6.1 Production Process...........................................................................................................4
6.2 Machinery and Equipment...............................................................................................4
6.3 Civil Engineering Cost....................................................................................................5
7 Human Resource and Training Requirement................................................5
7.1 Human Resource..............................................................................................................5
7.2 Training Requirement......................................................................................................5
8 Financial Analysis.............................................................................................6
8.1 Underlying Assumption...................................................................................................6
8.2 Investment........................................................................................................................7
8.3 Production Costs..............................................................................................................7
8.4 Financial Evaluation........................................................................................................8
9 Economic and Social Benefit and Justification...............................................9
ANNEXES...............................................................................................................10

1
 1. Executive Summary

This project profile deals with the establishment of galvanized iron bathtubs making plant in
Amhara National Regional State. The following presents the main findings of the study

Demand projection divulges that the domestic demand for galvanized iron bathtubs is substantial
and is increasing with time. Accordingly, the planned plant is set to produce 3,000 pcs annually.
The total investment cost of the project including working capital is estimated at Birr 1,737,695
and creates job opportunities for 22 citizens.

The financial result indicates that the project will generate profit beginning from the first year of
operation. Moreover, the project will break even at 54.10% of capacity utilization and it will
payback fully the initial investment less working capital in fourth year The result further show
that the calculated IRR of the project is 21.1% and the NPV at 18% annual discount rate is Birr
191,911.

In addition to this, the proposed project possesses wide range of economic and social benefits
such as increasing the level of investment, tax revenue, and employment creation.

Generally’ the project is technically feasible, financially and commercially viable as well as
socially and economically acceptable. Hence the project is worth implementing.

2. Product Description and Application

Galvanized iron bathtubs are household items used for washing clothes, utensil and for bathing.
They are also used for storing things. Because of their durability, galvanized bathtubs are more
preferred to similar tubs made from plastic. In most cases, the bathtubs are attached to a water
supply line and are fixed in one place

1
 3. Market Study, Plant Capacity and Production Program

3.1 Market Study

3.1.1 Present Demand and Supply

Assuming that only 5% of the ANRS’ urban households afford to purchase 1 bathtub, the current
annual demand stands at 24,778. Data is not available coursing domestic production but can
reasonably be estimated to be below 3,000. The number of imported tubs, including plastic tubs,
does exceed 5,000. Therefore, there is large unsatisfied demand.

3.1.2 Projected Demand

The projection is made assuming only 5% of urban household will purchase 1 galvanized iron
bathtub. The projection is depicted in Table 1.

Table 1: Projected Demand

ANRS
No. Annual
Year Household Demand (pcs)
2015 679,813 33,990
2016 707,006 35,351
2017 735,285 36,764
2018 764,697 38,235
2019 795,285 39,764
2020 827,097 41,355
2021 860,180 43,009
2022 894,588 44,729
2023 930,371 46,518
2024 967,586 48,379

3.1.3 Pricing and Distribution

2
Currently, average size galvanized iron bathtub sales, on average, Birr 577.35. Allowing,
attractive profit margin for the whole and retail sellers, the factory price is at Birr 461.88 per
piece.

3.2 Plant Capacity

Thus, given the expected demand for galvanized iron bathtub presented earlier, and the planned
technology, the envisaged plant is set to produce 3000 pieces annually.

3.3 Production Program

The program is scheduled based on the consideration that the envisaged plant will work 275 days
in a year in 1 shift, where the remaining days will be holidays and for maintenance. During the
first year of operation the plant will operate at 80 percent capacity and then it grows to 90percent
in the 2nd year. The capacity will grow to 100 percent starting from the 3rd year. This
consideration is developed based on the assumption that market and logistics barriers would take
place for the first two years of operation.

4. Raw Materials and Utilities

4.1 Availability and Source of Raw Materials

Galvanized Iron sheet is produced at home. The firm may require to import some due to high
domestic demand for iron sheets. Therefore, it is assumed that half of the required will purchased
from domestic producers, while the other half will be imported, preferable from Asia.

4.2 Annual Requirement and Cost of Raw Materials

and Utilities

The required raw material is two tons of galvanized iron sheets, the total cost of which is
estimated at Birr 66,716.

5 Location and Site

The appropriate location for the envisaged project in view of the availability of infrastructure as
well as market for the output is Bahir Dar.

3
6 Technology and Engineering
6.1 Production Process

The production process is simple:

 First the metal sheets are cut to different sizes;
 The sheets are moulded into required shapes;
 The bottom is flanged and round;
 The bottom ring is made;
 The parts are assembled;
 Welding is done where necessary; and then
 The final product is ready for sale.
Alternative
Degree of automation varies. The proposed process is labour intensive.

6.2 Machinery and Equipment

The machineries and equipment required for producing galvanized iron sheets is detailed in
Table 2 below
Table 2: Machineries and Equipments
Item Description Qty
1 Iron moulding machine 1

2 Welding tools 4 sets

3 Polishing tools 4 sets

The, total cost of machinery and equipment including estimated to be about Birr 1,283,000.
Except the moulding machine other equipments are available in the local market. The iron
moulding machine can be purchased from:

The National Small Industries Corporation Limited

Ladha Udyog Bhavan
Okhla Industrial Estate

4
New Delhi-110 020
India

6.3 Civil Engineering Cost

There are no civil engineering costs, since the plant uses rented premise. The rent is included in
utilities. The necessary remedial, if required, should be financed by the initial working capital.

7 Human Resource and Training Requirement

7.1 Human Resource

The human resource requirements is shown in Table 3.

Table 3: Human Resource Requirement

Salary/Wage (Birr)

  Job Title No. Monthly Annual

1 General Manager 1 8981 107,772
2 Machinists 3 3335.8 120,089
3 Ass. Machinists 3 2566 92,376
4 Labourers 6 1283 92,376
5 Administration & Finance 1 3335.8 40,030
6 Secretary 1 2181.1 26,173
7 Casher 1 2181.1 26,173
8 Security 4 898.1 43,109
9 Genitor 2 898.1 21,554
  Total 22 569,652
Employment Benefits 20% of Annual
  Salary   113,930
      683,582

7.2 Training Requirement

Birr 51,320 is allotted annually for periodic on job training.

5
8 Financial Analysis
8.1 Underlying Assumption
The financial analysis of based on the data provided in the preceding chapters and the following
assumptions.

A. Construction and Finance

Construction period 2 year

Source of finance 40% equity and 60% loan
Tax holidays 2 years
Bank interest rate 12%
Discount for cash flow 18%
Value of land Based on lease rate of ANRS
Spare Parts, Repair & Maintenance 3% of fixed investment

B. Depreciation

Building 5%
Machinery and equipment 10%
Office furniture 10%
Vehicles 20%
Pre-production (amortization) 20%

C. Working Capital (Minimum Days of Coverage)

Raw Material-Local 30
Raw Material-Foreign 120
Factory Supplies in Stock 30
Spare Parts in Stock and Maintenance 30
Work in Progress 10
Finished Products 15
Accounts Receivable 30
Cash in Hand 30
Accounts Payable 30

6
 8.2 Investment
The total investment cost of the project including working capital is estimated at Birr 1,737,697
as shown in table 4 below. The Owner shall contribute 40% of the finance in the form of equity
while the remaining 60% is to be financed by bank loan.
Table 4: Total Initial Investment and Working Capital

Total Initial Investment

Item Cost
Office equipment 493,827
Plant machinery &
equipment 3,292,178
Total Fixed
Investment 3,786,005
Pre production
capital expenditure 189,302
Total Initial
Investment 3,975,306
Working capital at
full capacity 483,624
Total 4,458,931

Pre-production capital expenditure includes - all expenses for pre-investment studies, consultancy
fee during construction and expenses for company‘s establishment, project administration expenses,
commission expenses, preproduction marketing and interest expenses during construction.

8.3 Production Costs

The total production cost at full capacity operation is estimated at Birr 447,308 as detailed in
table 5 below.
Table 5: Total Production Costs
Total Production Cost at Full Capacity
Items Cost
1.      Raw materials
66716
2.      Utilities
25,650
3.      Wages and Salaries
683,582
4.      Spares and Maintenance
17,250
Factory costs 793,198

7
 5.      Depreciation
162,300
6.      Financial costs
125,114
  Total Production Cost 1,080,612

8.4 Financial Evaluation

I. Profitability

According to the projected income statement attached in the annex part (see annex 3) the project
will generate profit beginning from the second year of operation. During the first year the plant
will incur loose that amounts to Birr 8,020.98. In second year it will make Birr 201,197; the
annual profit gradually increases to reach the maximum Birr 277,898 at the eighth year. Ratios
such as the percentage of net profit to total sales, return on equity and return on total investment
are -0.72%, 15.90% and -1.15%in the first year and are gradually rising to 28.65%, 15.99% and
39.98%. Furthermore, the income statement and other profitability indicators show that the
project is viable.

II. Breakeven Analysis

The breakeven point of the project is estimated by using income statement projection.
Accordingly, the project will break even at 54.10% of capacity utilization.

III. Payback Period

Investment cost and income statement projection are used in estimating the project payback
period. The projects will payback fully the initial investment less working capital in fourth year.

IV. Simple Rate of Return

For the envisaged plant the simple rate of return equals to 16.5%.

V. Internal Rate of Return and Net Present Value

Based on cash flow statement described in the annex part, the calculated IRR of the project is
21.1% and the net present value at 18 % discount is Birr 191,911.

VI. Sensitivity Analysis

8
The envisaged plant is profitable even with considerable cost increment. The plant will remain to
be profitable if a 10% increment in prices occur; the total profit will be Birr 1,762,806. However,
the plant is more sensitive to sales revenue. If sales drops by 10%, total profit will drop to Birr
1,154,913.

9 Economic and Social Benefit and Justification

The envisaged project possesses wide range of benefits where it promotes the socio-economic
goals and objectives stated in the strategic plan of the Amhara National Regional State. These
benefits are listed as follows

A. Profit Generation

The project is found to be financially viable and generate Birr 2,166,430 profit within the project
life. Such result induces the project promoters to reinvest the profit which, therefore, increases
the investment magnitude in the region.

B. Tax Revenue

In the project life under consideration, the region will collect about Birr 845,677 from corporate
tax payment alone (i.e. excluding income tax, sales tax and VAT). Such result create additional
fund for the regional government that will be used in expanding social and other basic services in
the region

C. Employment and Income Generation

The proposed project is expected to create employment opportunity to several citizens of the
region. That is, it will provide permanent employment to 22 citizens.

D. Diversification and integration

The project will augment the on going effort to diversify the region’s economy

E. Public Health

Galvanized iron bathtubs improve hygiene.

9
ANNEXES

10
 Annex 1: Total Net Working Capital Requirements (in Birr)
CONSTRUCTION PRODUCTION
  Year 1 Year 2 1 2 3 4

Capacity Utilization (%) 0% 0% 80% 90% 100% 100%

1. Total Inventory 0 0 99060.43 111443.946 123824.896 123824.896

Raw Materials in Stock- Total 0 0 13681.912 15393.434 17102.39 17102.39

Raw Material-Local 0 0 3202.368 3602.664 4002.96 4002.96

Raw Material-Foreign 0 0 10479.544 11790.77 13099.43 13099.43

Factory Supplies in Stock 0 0 892.968 1003.306 1116.21 1116.21

Spare Parts in Stock and Maintenance 0 0 3861.83 4346.804 4829.212 4829.212

Work in Progress 0 0 22313.936 25103.178 27892.42 27892.42

Finished Products 0 0 44625.306 50203.79 55782.274 55782.274

2. Accounts Receivable 0 0 120927.882 136044.188 151160.494 151160.494

3. Cash in Hand 0 0 65402.208 73577.484 81752.76 81752.76

CURRENT ASSETS 0 0 271708.608 305672.184 339635.76 339635.76

4. Current Liabilities 0 0 120927.882 136044.188 151160.494 151160.494

Accounts Payable 0 0 120927.882 136044.188 151160.494 151160.494

TOTAL NET WORKING CAPITAL REQUIREMENTS 0 0 150780.726 169627.996 188475.266 188475.266

INCREASE IN NET WORKING CAPITAL 0 0 150780.726 18847.27 18847.27 0

1
 Annex 1: Total Net Working Capital Requirements (in Birr) (continued)
PRODUCTION
  5 6 7 8 9 10

Capacity Utilization (%) 100% 100% 100% 100% 100% 100%

1. Total Inventory 123824.896 123824.896 123824.896 123824.896 123824.896 123824.896

Raw Materials in Stock-Total 17102.39 17102.39 17102.39 17102.39 17102.39 17102.39

Raw Material-Local 4002.96 4002.96 4002.96 4002.96 4002.96 4002.96

Raw Material-Foreign 13099.43 13099.43 13099.43 13099.43 13099.43 13099.43

Factory Supplies in Stock 1116.21 1116.21 1116.21 1116.21 1116.21 1116.21

Spare Parts in Stock and Maintenance 4829.212 4829.212 4829.212 4829.212 4829.212 4829.212

Work in Progress 27892.42 27892.42 27892.42 27892.42 27892.42 27892.42

Finished Products 55782.274 55782.274 55782.274 55782.274 55782.274 55782.274

2. Accounts Receivable 151160.494 151160.494 151160.494 151160.494 151160.494 151160.494

3. Cash in Hand 81243 81243 81243 81243 81243 81243

CURRENT ASSETS 337518 337518 337518 337518 337518 337518

4. Current Liabilities 150217.95 150217.95 150217.95 150217.95 150217.95 150217.95

Accounts Payable 150217.95 150217.95 150217.95 150217.95 150217.95 150217.95

TOTAL NET WORKING CAPITAL REQUIREMENTS 187300.05 187300.05 187300.05 187300.05 187300.05 187300.05

INCREASE IN NET WORKING CAPITAL 0 0 0 0 0 0

2
 Annex 2: Cash Flow Statement (in Birr)
CONSTRUCTION PRODUCTION
  Year 1 Year 2 1 2 3 4
TOTAL CASH INFLOW 774611.25 963086.516 1229439.882 1262192.306 1400756.306 1385640
1. Inflow Funds 774611.25 963086.516 120927.882 15116.306 15116.306 0
Total Equity 309844.5 385233.58 0 0 0 0
Total Long Term Loan 464766.75 577850.37 0 0 0 0
Total Short Term Finances 0 0 120927.882 15116.306 15116.306 0
2. Inflow Operation 0 0 1108512 1247076 1385640 1385640
Sales Revenue 0 0 1108512 1247076 1385640 1385640
Interest on Securities 0 0 0 0 0 0
3. Other Income 0 0 0 0 0 0
TOTAL CASH OUTFLOW 774611.25 774611.25 1225942.424 1091309.536 1236486.118 1187927.134
4. Increase In Fixed Assets 774611.25 774611.25 0 0 0 0
Fixed Investments 737725 737725 0 0 0 0
Pre-production Expenditures 36886.25 36886.25 0 0 0 0
5. Increase in Current Assets 0 0 271708.608 33963.576 33963.576 0
6. Operating Costs 0 0 675827.948 758463.412 841098.876 841098.876
7. Corporate Tax Paid 0 0 0 0 83395 89650.908
8. Interest Paid 0 0 278403.302 125113.028 104261.712 83410.396
9.Loan Repayments 0 0 0 173769.52 173769.52 173769.52
10.Dividends Paid 0 0 0 0 0 0
Surplus (Deficit) 0 188475.266 3500.024 170880.204 164270.188 197712.866
Cumulative Cash Balance 0 188475.266 191972.724 362855.494 527123.116 724835.982

3
 Annex 2: Cash Flow Statement (in Birr): Continued
PRODUCTION
  5 6 7 8 9 10
TOTAL CASH INFLOW 1385640 1385640 1385640 1385640 1385640 1385640
1. Inflow Funds 0 0 0 0 0 0
Total Equity 0 0 0 0 0 0
Total Long Term Loan 0 0 0 0 0 0
Total Short Term Finances 0 0 0 0 0 0
2. Inflow Operation 1385640 1385640 1385640 1385640 1385640 1385640
Sales Revenue 1385640 1385640 1385640 1385640 1385640 1385640
Interest on Securities 0 0 0 0 0 0
3. Other Income 0 0 0 0 0 0
TOTAL CASH OUTFLOW 1173329.16 1163160.102 1148562.128 960197.2 960197.2 960197.2
4. Increase In Fixed Assets 0 0 0 0 0 0
Fixed Investments 0 0 0 0 0 0
Pre-production Expenditures 0 0 0 0 0 0
5. Increase in Current Assets 0 0 0 0 0 0
6. Operating Costs 841098.876 841098.876 841098.876 841098.876 841098.876 841098.876
7. Corporate Tax Paid 95906.816 106589.074 112842.416 119098.324 119098.324 119098.324
8. Interest Paid 62556.514 41705.198 20851.316 0 0 0
9. Loan Repayments 173769.52 173769.52 173769.52 0 0 0
10.Dividends Paid 0 0 0 0 0 0
Surplus (Deficit) 212310.84 222479.898 237077.872 425442.8 425442.8 425442.8
Cumulative Cash Balance 937146.822 1159626.72 1396704.592 1822147.392 2247590.192 2673032.992

4
 Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED
CONSTRUCTION PRODUCTION
  Year 1 Year 2 1 2 3 4
TOTAL CASH INFLOW 0 0 1108512 1247076 1385640 1385640

1. Inflow Operation 0 0 1108512 1247076 1385640 1385640

Sales Revenue 0 0 1108512 1247076 1385640 1385640

Interest on Securities 0 0 0 0 0 0

2. Other Income 0 0 0 0 0 0

TOTAL CASH OUTFLOW 774611.25 774611.25 826608.674 777310.682 859946.146 930747.218

3. Increase in Fixed Assets 774611.25 774611.25 0 0 0 0

Fixed Investments 737725 737725 0 0 0 0

Pre-production Expenditures 36886.25 36886.25 0 0 0 0

4. Increase in Net Working Capital 0 0 150780.726 18847.27 18847.27 0

5. Operating Costs 0 0 675827.948 758463.412 841098.876 841098.876

6. Corporate Tax Paid 0 0 0 0 0 89650.908

-
NET CASH FLOW 774611.25 -774611.25 281903.326 469765.318 525693.854 454892.782
-
CUMULATIVE NET CASH FLOW 774611.25 -1549222.5 -1267319.174 -797553.856 -271860.002 183032.78
-
Net Present Value (at 18%) 774611.25 -656449.516 202457.4 285913.984 271146.654 198836.774
-
Cumulative Net present Value 774611.25 -1431060.766 -1228603.366 -942689.382 -671542.728 -472703.388

5
 Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED (Continued)
PRODUCTION
  5 6 7 8 9 10
TOTAL CASH INFLOW 1385640 1385640 1385640 1385640 1385640 1385640

1. Inflow Operation 1385640 1385640 1385640 1385640 1385640 1385640

Sales Revenue 1385640 1385640 1385640 1385640 1385640 1385640

Interest on Securities 0 0 0 0 0 0

2. Other Income 0 0 0 0 0 0

TOTAL CASH OUTFLOW 937003.126 947685.384 953941.292 960197.2 960197.2 960197.2

3. Increase in Fixed Assets 0 0 0 0 0 0

Fixed Investments 0 0 0 0 0 0

Pre-production Expenditures 0 0 0 0 0 0

4. Increase in Net Working Capital 0 0 0 0 0 0

5. Operating Costs 841098.876 841098.876 841098.876 841098.876 841098.876 841098.876

6. Corporate Tax Paid 95906.816 106589.074 112842.416 119098.324 119098.324 119098.324

NET CASH FLOW 448636.874 437954.616 431698.708 425442.8 425442.8 425442.8

CUMULATIVE NET CASH FLOW 631669.654 1069624.27 1501322.978 1926765.778 2352211.144 2777653.944

Net Present Value (at 18%) 166189.556 137483.714 114849.028 95919.646 81288.314 68886.836
- -
Cumulative Net present Value 306513.832 169030.118 -54181.09 41738.556 123024.304 191911.14
492443.99
Net Present Value (at 18%)

Internal Rate of Return 21.1%

6
 Annex 4: NET INCOME STATEMENT ( in Birr)
PRODUCTION
  1 2 3 4 5
Capacity Utilization (%) 80% 90% 100% 100% 100%

1. Total Income 1108512 1247076 1385640 1385640 1385640

Sales Revenue 17000000 25500000 34000000 34000000 34000000
Other Income 0 0 0 0 0
2. Less Variable Cost 9991229.35 14986844.03 19982458.7 19982458.7 19982458.7
VARIABLE MARGIN 7008770.65 10513155.98 14017541.3 14017541.3 14017541.3
(In % of Total Income) 41.23 41.23 41.23 41.23 41.23
3. Less Fixed Costs 2974327 3038263 3102199 3102199 3102199
OPERATIONAL MARGIN 4034443.65 7474892.98 10915342.3 10915342.3 10915342.3
(In % of Total Income) 23.73 29.31 32.1 32.1 32.1
4. Less Cost of Finance 5320383.31 2454604.76 2045503.96 1636403.17 1227302.38
5. GROSS PROFIT -1285939.66 5020288.22 8869838.34 9278939.13 9688039.92
6. Income (Corporate) Tax 0 0 2660951.5 2783681.74 2906411.98
7. NET PROFIT -1285939.66 5020288.22 6208886.83 6495257.39 6781627.94
RATIOS (%)  
Gross Profit/Sales -0.72% 16.13% 20.06% 21.57% 23.07%
Net Profit After Tax/Sales -0.72% 16.13% 14.04% 15.10% 16.15%
Return on Investment 15.90% 18.98% 17.20% 16.84% 16.48%
Return on Equity -1.15% 28.95% 27.99% 30.09% 32.19%
Annex 4: NET INCOME STATEMENT (in Birr): Continued

7
 PRODUCTION
  6 7 8 9 10
Capacity Utilization (%) 100% 100% 100% 100% 100%

1. Total Income 1385640 1385640 1385640 1385640 1385640

Sales Revenue 34000000 34000000 34000000 34000000 34000000
Other Income 0 0 0 0 0
2. Less Variable Cost 19982458.7 19982458.7 19982458.7 19982458.7 19982458.7
VARIABLE MARGIN 14017541.3 14017541.3 14017541.3 14017541.3 14017541.3
(In % of Total Income) 41.23 41.23 41.23 41.23 41.23
3. Less Fixed Costs 2661109 2661109 2661109 2661109 2661109
OPERATIONAL MARGIN 11356432.3 11356432.3 11356432.3 11356432.3 11356432.3
(In % of Total Income) 33.4 33.4 33.4 33.4 33.4
4. Less Cost of Finance 818201.59 409100.79 0 0 0
5. GROSS PROFIT 10538230.71 10947331.51 11356432.3 11356432.3 11356432.3
6. Income (Corporate) Tax 3161469.21 3284199.45 3406929.69 3406929.69 3406929.69
7. NET PROFIT 7376761.5 7663132.05 7949502.61 7949502.61 7949502.61
RATIOS (%)  
Gross Profit/Sales 25.64% 27.15% 28.65% 28.65% 28.65%
Net Profit After Tax/Sales 17.95% 19.00% 20.06% 20.06% 20.06%
Return on Investment 16.71% 16.35% 15.99% 15.99% 15.99%
Return on Equity 35.78% 37.88% 39.98% 39.98% 39.98%

Annex 5: Projected Balance Sheet (in Birr)

8
 CONSTRUCTION PRODUCTION
  Year 1 Year 2 1 2 3 4
TOTAL ASSETS 774611.25 1737697.766 1858625.648 1893151.178 1929082.876 1964496.242
1. Total Current Assets 0 188475.266 463681.332 668527.678 866758.876 1064471.742
Inventory on Materials and Supplies 0 0 18439.276 20743.544 23047.812 23047.812
Work in Progress 0 0 22313.936 25103.178 27892.42 27892.42
Finished Products in Stock 0 0 44625.306 50203.79 55782.274 55782.274
Accounts Receivable 0 0 120927.882 136044.188 151160.494 151160.494
Cash in Hand 0 0 65402.208 73577.484 81752.76 81752.76
Cash Surplus, Finance Available 0 188475.266 191972.724 362855.494 527123.116 724835.982
Securities 0 0 0 0 0 0
2. Total Fixed Assets, Net of Depreciation 774611.25 1549222.5 1386923 1224623.5 1062324 900024.5
Fixed Investment 0 737725 1475450 1475450 1475450 1475450
Construction in Progress 737725 737725 0 0 0 0
Pre-Production Expenditure 36886.25 73772.5 73772.5 73772.5 73772.5 73772.5
Less Accumulated Depreciation 0 0 162299.5 324599 486898.5 649198
3. Accumulated Losses Brought Forward 0 0 0 0 0 0
4. Loss in Current Year 0 0 8021.316 0 0 0
TOTAL LIABILITIES 774611.25 1737697.766 1858625.648 1893151.178 1929082.876 1964496.242
5. Total Current Liabilities 0 0 120927.882 136044.188 151160.494 151160.494
Accounts Payable 0 0 120927.882 136044.188 151160.494 151160.494
Bank Overdraft 0 0 0 0 0 0
6. Total Long-term Debt 464766.75 1042617.12 1042617.12 868847.6 695078.08 521308.56
Loan A 464766.75 1042617.12 1042617.12 868847.6 695078.08 521308.56
Loan B 0 0 0 0 0 0
7. Total Equity Capital 309844.5 695078.08 695078.08 695078.08 695078.08 695078.08
Ordinary Capital 309844.5 695078.08 695078.08 695078.08 695078.08 695078.08
Preference Capital 0 0 0 0 0 0
Subsidies 0 0 0 0 0 0
8. Reserves, Retained Profits Brought Forward 0 0 0 -8021.316 193178.744 387763.656
9.Net Profit After Tax 0 0 0 201200.06 194587.478 209182.886
Dividends Payable 0 0 0 0 0 0
Retained Profits 0 0 0 201200.06 194587.478 209182.886
Annex 5: Projected Balance Sheet (in Birr): Continued
  PRODUCTION

9
 5 6 7 8 9 10
TOTAL ASSETS 2014507.582 2089442.48 2178975.352 2456873.152 2734770.952 3012668.752
1. Total Current Assets 1276782.582 1499262.48 1736340.352 2161783.152 2587225.952 3012668.752
Inventory on Materials and Supplies 23047.812 23047.812 23047.812 23047.812 23047.812 23047.812
Work in Progress 27892.42 27892.42 27892.42 27892.42 27892.42 27892.42
Finished Products in Stock 55782.274 55782.274 55782.274 55782.274 55782.274 55782.274
Accounts Receivable 151160.494 151160.494 151160.494 151160.494 151160.494 151160.494
Cash in Hand 81752.76 81752.76 81752.76 81752.76 81752.76 81752.76
Cash Surplus, Finance Available 937146.822 1159626.72 1396704.592 1822147.392 2247590.192 2673032.992
Securities 0 0 0 0 0 0
2. Total Fixed Assets, Net of Depreciation 737725 590180 442635 295090 147545 0
Fixed Investment 1475450 1475450 1475450 1475450 1475450 1475450
Construction in Progress 0 0 0 0 0 0
Pre-Production Expenditure 73772.5 73772.5 73772.5 73772.5 73772.5 73772.5
Less Accumulated Depreciation 811497.5 959042.5 1106587.5 1254132.5 1401677.5 1549222.5
3. Accumulated Losses Brought Forward 0 0 0 0 0 0
4. Loss in Current Year 0 0 0 0 0 0
TOTAL LIABILITIES 2014507.582 2089442.48 2178975.352 2456873.152 2734770.952 3012668.752
5. Total Current Liabilities 151160.494 151160.494 151160.494 151160.494 151160.494 151160.494
Accounts Payable 151160.494 151160.494 151160.494 151160.494 151160.494 151160.494
Bank Overdraft 0 0 0 0 0 0
6. Total Long-term Debt 347539.04 173769.52 0 0 0 0
Loan A 347539.04 173769.52 0 0 0 0
Loan B 0 0 0 0 0 0
7. Total Equity Capital 695078.08 695078.08 695078.08 695078.08 695078.08 695078.08
Ordinary Capital 695078.08 695078.08 695078.08 695078.08 695078.08 695078.08
Preference Capital 0 0 0 0 0 0
Subsidies 0 0 0 0 0 0
8. Reserves, Retained Profits Brought Forward 596949.108 820727.402 1069434.386 1332734.212 1610632.012 1888529.812
9. Net Profit After Tax 223780.86 248704.418 263302.392 277897.8 277897.8 277897.8
Dividends Payable 0 0 0 0 0 0
Retained Profits 223780.86 248704.418 263302.392 277897.8 277897.8 277897.8

10