Pre Feasibility of Shampoo Plant

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PREFEASIBILITY STUDY

SHAMPOO MANUFACTURING

BY

NISA ENTERPRISES

THE ISLAMIA UNIVERSITY OF BAHAWALPUR 1

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Presented by:

Nadia Shoukat- 23Saqib Hussain- 35Syed Arsalan- 28

MBA Finance,4th semSection A, Morning

Presented to:Mam Fadia NazLecturer of Project Appraisal


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D E D I C A T I O N

WE DEDICATE THIS HUMBLE EFFORT TO

The Holy Prophet“HAZRAT MUHAMMAD”

(P.B.U.H)The greatest Social Worker,Whose every tear was forThe Cause of humanity

And also dedicated toTHE UNFATHOMABLE LOVE, UNFLINCHING SUPPORTUNTIRING MIDNIGHT PRAYERS AND STEADFASTNESS

OF

“OUR REVERED PARENTS”

WHO HAS BEEN A BEACONHOUSEFOR USFOR THE WHOLE OF OUR LIFE, WHO HAS

ALWAYS SHOWED US THE RIGHT PATH, THE PATH OFTRUTHFULNESS AND HONESTY AND WHO HAS BEEN

ALONG WITH US THROUGHOUT OURSTUDYING CARRIER


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Acknowledgements

God never spoils any effort; every piece of work is rewarded according to the nature of devotion for it. We are extremely thankful to ALLAH ALMIGHTY Who, in spite of numerous difficulties, vicissitudes and acute frustrations enabled us to probe the present study and dissertation. We bow our head to ALLAH ALMIGHTY for the buntings and the blessings that He has bestowed upon us. Who has given us the courage and stamina to come up to the expectations of our revered teachers and ever loving parents and to sum up my maneuverings for the completion of this manuscript.

All the respects are for the last Prophet of God, HOLY PROPHET MUHAMMED (Peace Be Upon Him) Who is the greatest scientist of all the ages, whose moral and spiritual teachings enlighten our heart, mind and soul and flourished our thoughts towards achieving higher ideas of life.

We deem it utmost pleasure to avail this opportunity to express the heartiest gratitude and deep sense of obligation to our revered Teacher Mam Fadia Naz, Lecturer, Department of Business Management Sciences, Islamia University, Rahim Yar Khan for his skilled guidance, keen interest, constructive criticism, constant encouragement, valuable suggestions and pains taking supervision throughout the course of our study and research work. The work presented in this manuscript is accomplished under his dynamic, skillful, affectionate guidance and generous transfer of knowledge. Whenever we sought help from him, he was the person who was always there bearing a welcoming smile on his face and having the doors of his good offices always opened for us. We have learnt a great deal from him. We have the honor to express our deep sense of gratitude and profound indebtedness to ever affectionate Mam Fadia Naz for his keen interest, encouragement, generous guidance and untiring help at all times. In fact it was not possible to bring this work to fruitful conclusions without his day and night persuasive and sincere efforts. He has guided us at every step that we took throughout our career at postgraduate level. He has always thought right for our betterment and for our success in the professional field. We cannot


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thank him, as we have no words that can have an idea of the respect we have in my heart for him.

Table of Contents1- Project Profile…………...………………………………….2

2- Production Process……………………....……………...…10

3- Annexure…………...……………………………................19

4- Key Assumptions………………………………….……….27

5- Financial Plan.…………………………….……………….38

6- Financial Statements………………………………………40

7- Financial Analysis…………………..……………………...44

8- Ratio Analysis……………………………………………..49


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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. We do not assume any liability for any

financial or other loss resulting from this memorandum in

consequence of undertaking this activity. Therefore, the content of

this memorandum should not be relied upon for making any

decision, investment or otherwise. The prospective user of this

memorandum is encouraged to carry out his / her own due diligence

and gather any information he/she considers necessary for making an

informed decision.


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01- PROJECT PROFILE


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1 Project Profile

1.1 Project BriefName of company: NISA EnterprisesBrand Name: Hair & Shine ShampooTarget Market: People of all age group belong to particularly

middle class.Plant Capacity: Rated capacity is 500-15000 liters. Daily

production capacity is 10,000 liters/day of 8 hours shift.

Legal Status: Partnership firm

1.2 Opportunity RationalThe Fast Moving Consumer Goods (FMCG) industry is poised to clock a 16 per cent growth in sales during 2008-09, against a growth rate of 14.5 per cent achieved during 2007 (surveyed by FICCI). Among 28 major items of FMCG sector, shampoo is among those which are expected to achieve a growth of 20% i.e. anti-dandruff shampoo 22%. Major reasons of growth are growing economic fundamentals, increased literacy, rapid urbanization, rising population levels, growing consumer demand and increased affordability of the consumers. These changes are due to various incentives proposed in the Union Budget 2008-09, including the major farm loan waiver scheme worth Rs 60 billion. Consumers’ preference for FMCGs is shifting towards higher lifestyle categories like skin care, shampoos, deodorants, anti-aging solutions, fairness products and men’s products. Traditionally in Pakistan and generally all over the world people prefer to use shampoos rather then soaps for hair solution and this perception is gaining more currency day by day which also adds to the advantage of the shampoo industry. Common people especially young generation and women are now more inclined towards their appearance. Moreover the liberalization of media and introduction of a lot of private channels have made both males and females very conscious about looks and fashion, and looks are incomplete without healthy and shiny hairs.


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Furthermore, the growing number of MNEs of FMCG’s (Fast Moving Consumer Goods) have increased the competition in local market and also opened new opportunities through competition.http://www.plunkettresearch.com/Industries/HealthCare/tabid/205/Default.aspx#IndustryTrends

1.3 Production Process

1.3.1 Developing the Formula:Shampoo, as a specialized cleaning product for the hair, was introduced in the 1930s to accompany commercial hair curlers for home hair care. Using soap on hair creates a dull film that contributes to limp and lifeless hair. Shampoo companies developed this as an argument to use the new commercial shampoo products. The 1930s saw the introduction of synthetic products made from polymers and plastics, and the new shampoo formula used forms of these synthetic detergents. This basic shampoo formula was used until the 1960s, when radical changes were made to the ingredients. Conditioners, exotic fragrances, chemicals and additional dyes were incorporated at that time. Personal care companies develop a shampoo formula, apply for a patent and then advertise the unique properties of the shampoo. The basic elements of all shampoos are water (70 to 80 percent), detergents and preservatives. Most shampoos also include oils (coconut, palm kernel or soy bean), sulfates (sodium lauryl, ammonium lauryl and ether), and alkanolamides (to improve both the texture and the foaming ability of the shampoo). Other chemicals are added to the shampoos in small amounts to improve shine and condition the hair. These include dimethicone, quatemium-80 and guar hydroxypropyltrimonium chloride.

1.3.2 Testing the Formula:Shampoo is tested at various times in the development and production process. Modern shampoo is evaluated on the cleaning abilities but also the color, odor and texture of the liquid. The first testing is done in the laboratory to evaluate the formula. This may be done on humans, but some companies use small animals to evaluate the harshness of the detergent and the toxicity of the chemicals. Chemical testing is also done to ensure the shampoo qualities remain stable as the product is shipped and stored at the retail outlet and in the consumers' home.

Once the product formulation is tested, new shampoos are tested by consumer volunteers. Demographic studies are used to isolate key groups of consumers who are most likely to use and buy the


http://www.plunkettresearch.com/Industries/HealthCare/tabid/205/Default.aspx#IndustryTrends


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product. Shampoo samples are distributed to test groups and the subjects are asked to evaluate the product based on smell, cleaning results, texture, color and product packaging. Groups are also asked to evaluate the cost of the product to determine sales success. The results of the test groups are tabulated and changes to the formula are made based on the consumer comments. The new formula (or packaging) is then tested again.

1.3.3 Shampoo Production:Once the test groups and the developers are satisfied with the product, the shampoo is put into large-scale production. The formula is broken down into steps, and the manufacturing plant mixes the ingredients in large vats. Most of the work is done by machinery, but human supervisors observe the process to ensure the shampoo batches are mixed correctly. Some shampoos require refrigeration or heating to create the correct chemical balance and mixing process. The shampoo in each vat is then tested to guarantee the ingredients match the original formula. The amounts of preservatives are also evaluated at this point. Once approval of the ingredients and mixture is given, the shampoo is transferred into machinery to pump the shampoo into the packaging.

1.4 Market Entry TimingFMCG sector enjoys an Evergreen season of demand. Shampoo plant is one of those which can be run 24 hour in all seasons because it is part of fast moving consumer good. So we need not to worry about market entry time. It can be any season of a year. However Hot and dry weather increase the consumption of shampoo and soaps all over the country because usage rate is almost doubled in summer as compare to winter season. Health care products become more attractive and valuable for the general public in metro cities and towns. All these conduce to a mass consumption of FMCG’s in the form of shampoos, conditioners and soaps. People everywhere in general and in northern areas especially are inclined to use shampoo for fresh feeling. This is the most suitable time to enter into market shampoo.


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1.5 Proposed Business Legal StatusThe legal status of business tends to play an important role in any setup; the proposed Shampoo Manufacturing setup is assumed to operate as a Firm.

1.6 Project Capacity and Rationale

1.6.1 Basis/Rationale:In recommending the plant capacity we have considered the following main factors:

Current and future demand for the products in the local

market. Trend of imports by the local market. Availability of raw materials and the seasonal supply. The need to have a medium sized but manageable shampoo

processing plant. Discussions with the industry experts and entrepreneurs.

1.6.2 Plant Capacity:The proposed capacity of shampoo plant is 10,000 liters/ day of 8 hour shift. The plant will be operated at 70% capacity utilization for 8 hours a day in the beginning; however, a 10% annual increase in capacity utilization is assumed.

1.6.3 Raw Material Sourcing – Backward IntegrationIn the FMCG sector, nearly all of the ingredients that can be used are classified by the Cosmetic, Toiletry, and Fragrance Association (CTFA) in the governmentally approved collection known as the International Nomenclature of Cosmetic Ingredients (INCI). The more important ingredients in shampoo formulations are water, detergents, foam boosters, thickeners, conditioning agents, preservatives, modifiers, and special additives. To support the production operations, continuous supply of above ingredients play a key role for the success in the shampoo segment of FMCG. Therefore, it is proposed to finalize the buying deal with the supplier six months prior to the commencement of the production


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operations because all chemicals have to be exported from thailand, singapoor and malaysia.. A day store is also assumed for keeping daily requirement of raw material.

1.7 Project InvestmentTotal cost of the project is estimated at around Rs. 18,774.012. The working capital requirement is around Rs. 2,807.953 and the rest will be the fixed capital. Annextures are attached at the end.

1.8 Proposed Product MixIn start, we will launch only one variant of shampoo that is Anti-Dandruff.Around 10% of the total shampoo market is accounted for by 200 ml bottle packaging , 30 % for 100 ml and 60 % for sachet.

1.9 Proposed Site & Location

The factors which we consider before selecting site & location are included:

1. Iqbal Abad is a factory area and all faciliteis that required by a factory are already aailable there like well-established infrastructure etc.

2. Iqbal Abad is far away from residential area and the fragrance of shampoo during manufacturing will not affect cililians there.

3. It is near to highway.4. It is situated near to market.5. Transportation facility are well-establihed.6. Water is major component of shampoo and and water

conditions are better in Iqbal Abad.7. Local man power will be easily available.8. transportation cost is less.


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1.10 Key Success FactorsFollowing are some factors that we will take into consideration in order to compete the competitors and we will use them as tips for success:

1. BACKWARD INTEGRATION2. PRODUCT QUALITY3. DISTRIBUTION NETWORK 4. PRODUCT MARKETING AND EXISTING COMPETITION5. OTHER MARKETING ASPECTS

5.1-Seasonality of Demand5.2-Market Characteristics 5.3-Packaging5.4-Product Distribution.

A typical distribution setup in health care business involves the following hierarchy starting from the manufacturer to the consumer:

We will take the distribution services from AL-RAZAK ASSOCIATES, 11-B Block-Y Ghulshan-e-Usman, Rahim Yar Khan.


SHAMPOO MANUFACTURER

Designated Wholesaler Distribution Agent Own Field Force

Retailers1. Departmental Stores 3. Supermarkets 5. Hotels

2. Convenience/Town Shops 4. Bakeries/Staple food stores

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1.11 Type of project

It is a NEW project for Nisa Enterprises.

1.12 Sponsorsi) NADIA SHOUKAT

Qualification: MBA (Finance)N.I.C #: 31303-3538390-2E-Mail Adresse: [email protected]

ii) SAQIB HUSSAINQualification: MBA (Finance)N.I.C #: 31303-7523648-2E-Mail Adresse: [email protected]

iii) SYED ARSALAN SHAHQualification: MBA (Finance)N.I.C #: 31303-1254795-0E-Mail Adresse: [email protected]

1.14 Current industry Structure

Major brands and Players are:

Shampoo Brand

Company Nmae

Ctagory Available in packaging

Markat Share

Pantene Proctor & Gamble

Shiny hairs 200ml

50% by P & G

Head & Shoulder

Proctor & Gamble

Anti-Dandruff

200ml

Pert Plus Proctor & Gamble

Silky hairs 200ml

Sunsilk Unilever Shiny hairs 100ml, 200ml

28%

Dabur Vatika Dabur Medicated 300ml 12%Bioamla Kala Kola Medicated 100ml,

200ml10%

The flood of imported shampoos at the wholesale and retail outlets in the local markets has posed a serious threat to the local shampoo


mailto:[email protected]



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manufacturers. The customs duty on finished goods and raw material is the same, which is encouraging imports of brand names which are manufactured locally as well,” said Yaqoob Karim, chairman, Pakistan Soap Manufacturers Association. There are no guidelines for the import of such items, and any one can import them without any approval, he said.Total market share of imported and smuggled shampoos is about 29 percent.


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02- PRODUCTION PROCESS


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2- PRODUCTION PROCESS

New shampoos are initially created by cosmetic chemists in the laboratory. These scientists begin by determining what characteristics the shampoo formula will have. They must decide on aesthetic features such as how thick it should be, what color it will be, and what it will smell like. They also consider performance attributes, such as how well it cleans, what the foam looks like, and how irritating it will be. Consumer testing often helps determine what these characteristics should be. Once the features of the shampoo are identified, a formula is created in the laboratory. These initial batches are made in small beakers using various ingredients. In the personal care industry, nearly all of the ingredients that can be used are classified by the Cosmetic, Toiletry, and Fragrance Association (CTFA) in the governmentally approved collection known as the International Nomenclature of Cosmetic Ingredients (INCI). The more important ingredients in shampoo formulations are water, detergents, foam boosters, thickeners, conditioning agents, preservatives, modifiers, and special additives.

Ingredients of Shampoo

Water The primary ingredient in all shampoos is water, typically making up about 70-80% of the entire formula. Deionized water, which is specially treated to remove various particles and ions, is used in shampoos. The source of the water can be underground wells, lakes, or rivers.

Detergents The next most abundant ingredients in shampoos are the primary detergents. These materials, also known as surfactants, are the cleansing ingredients in shampoos. Surfactants are surface active ingredients, meaning they can interact with a surface. The chemical nature of a surfactant allows it to surround and trap oily materials from surfaces. One portion of the molecule is oil compatible (soluble) while the other is water soluble that has little calcium and magnesium. When a shampoo is applied to hair or textiles, the oil soluble portion aligns with the oily materials while the water soluble portion aligns in the water layer. When a number of surfactant molecules line up like this, they form a structure known as a micelle.


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This micelle has oil trapped in the middle and can be washed away with water, thus giving the shampoo its cleansing power.

Surfactants are derived from compounds known as fatty acids. Fatty acids are naturally occurring materials which are found in various plant and animal sources. The materials used most often to make the surfactants used in shampoos are extracted from coconut oil, palm kernel oil, and soy bean oil.

Most commonly used raw material is: Ammonium Chloride Ammonium Lauryl Sulfate Glycol Sodium Laureth Sulfate Sodium Lauryle Sulfate

These detergents work best in water that has little calcium and magnesium, as these elements bind to the detergent and make an insoluble scum. So tetrasodium EDTA is used to sequester the calcium and magnesium from the detergent, while keeping them soluble, so they rinse away without scum.

The detergent cocamidopropyl betaine is added for several of its special properties. It is milder on the skin than the benzine sulfonates, so adding it to the mix reduces the amount of the harsher detergents needed. It is thicker than the other ingredients, so it can be added to make the mix have the right viscosity. It has anti-static properties, so the hair doesn't generate an electric charge and jump to the plastic combs and brushes used when drying the hair. It is a humectants, attracting moisture from the air, thus keeping hair from drying out. Lastly, it has antibiotic properties that can prevent spoiling of the shampoo.The surfactant ammonium xylenesulfonate is a hydro trope, a compound that makes it easier for water to dissolve other molecules. It is added as a thickener, and to help keep some of the odd ingredients added for marketing effect in solution, including perfumes. Glycerol stearate is another emulsifier used for this purpose.

Fungicides will be added for anti-dandruff solution.

Foam boosters In addition to cleansing surfactants, other types of surfactants are added to shampoos to improve the foaming characteristics of the


http://en.wikipedia.org/wiki/Fungicide

http://sci-toys.com/ingredients/glycerol_monostearate.html

http://sci-toys.com/ingredients/xylenesulfonate.html

http://sci-toys.com/ingredients/cocamidopropyl_betaine.html

http://sci-toys.com/ingredients/edta.html

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formulation. These materials, called alkanolamides, help increase the amount of foam and the size of the bubbles. Like primary detergents, they are also derived from fatty acids and have both water soluble and oil soluble characteristics. Cocamide DEA (or MEA or TEA) is used as a foaming agent, to make the lather.

The other surfactants will generate a certain amount of suds, but this foaming agent is added to get the amount just right. Besides its foam stabilizing effects, it is also a viscosity booster.

Thickeners To some extent, the alkanolamides i.e Cocamide DEA (or MEA or TEA) that make shampoos foam also make the formulations thicker..

Preservatives Since shampoos are made from water and organic compounds, contamination from bacteria and other microbes is possible. Preservatives are added to prevent such growth. Preservatives used are: DMDM hydantoin and imidazolidinyl urea . These are added to shampoos, to prevent fungal and bacterial spoilage. They release formaldehyde to kill germs.

Modifiers Other ingredients are added to shampoo formulas to modify specific characteristics. Opacifiers are added to make the formula opaque and give it a pearly look. Materials known as sequestering agents are added to offset the dulling effects of hard water. Acids or bases such as citric acid or sodium hydroxide are added to adjust the pH of a shampoo so the detergents will provide optimal cleaning.

Special additives One of the primary factors that influence the purchase of a shampoo is its color and odor. To modify these characteristics, manufacturers add fragrance oils and governmentally approved and certified FD&C dyes. Other special additives can also have a similar effect. Natural materials such as botanical extracts, natural oils, proteins, and vitamins all impart special qualities and help sell shampoos. Additives such as zinc pyrithione are included to address the problem of dandruff. Other additives are dyes which can color the hair.


http://sci-toys.com/ingredients/imidazolidinyl_urea.html

http://sci-toys.com/ingredients/DMDM_hydantoin.html

http://sci-toys.com/ingredients/cocamide_dea.html

http://sci-toys.com/ingredients/cocamide_dea.html

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Manufacturing Process

After a shampoo formula is developed, it is tested to ensure that its qualities will minimally change over time. This type of testing, called stability testing, is primarily used to detect physical changes in such things as color, odor, and thickness.


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It can also provide information about other changes, like microbial contamination and performance differences. This testing is done to ensure that the bottle of shampoo that is on the store shelves will perform just like the bottle created in the laboratory. The manufacturing process can be broken down into two steps. First a large batch of shampoo is made, and then the batch is packaged in individual bottles.

Compounding 1 Large batches of shampoo are made in a designated area of the manufacturing plant. Here workers, known as compounders, follow


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the formula instructions to make batches that can be 3,000 gal (11,000 1) or more. Raw materials, which are typically provided in drums as large as 55 gal (200 1) or in 50-lb (23-kg) bags, are delivered to the compounding area via forklift trucks. They are poured into the batch tank and thoroughly mixed. 2 Depending on the formula, these batches can be heated and cooled as necessary to help the raw materials combine more quickly. Some raw materials such as water or the primary detergents are pumped and metered directly into the batch tank.

These materials are added simply by pressing a button on computerized controls. These controls also regulate the mixing speeds and the heating and cooling rates. Depending on the size and type of shampoo, making a 3,000-gal (11,000-1) batch can take anywhere from one to four hours.

Quality control check 3 After all the ingredients are added to the batch, a sample is taken to the Quality Control (QC) lab for testing. Physical characteristics


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are checked to make sure the batch adheres to the specifications outlined in the formula instructions. The QC group runs tests such as pH determination, viscosity checks, and appearance and odor evaluations. They can also check the amount of detergent that is in the formula and whether there is enough preservative. If the batch is found to be "out of spec," adjustments can be made. For instance, acids or bases can be added to adjust the pH, or salt can be added to modify the viscosity. Colors can also be adjusted by adding more dye. 4 After a batch is approved by QC, it is pumped out of the main batch tank into a holding tank where it can be stored until the filling lines are ready. From the holding tank it gets pumped into the filler, which is made up of a carousel of piston filling heads.

Filling 5 At the start of the filling line, empty bottles are put in a large bin called a hopper. Here, the bottles are physically manipulated until they are correctly oriented and standing upright. They are then moved along a conveyor belt to the filling carousel, which holds the shampoo. 6 The filling carousel is made up of a series of piston filling heads that are calibrated to deliver exactly the correct amount of shampoo into the bottles. As the bottles move through this section of the filling line, they are filled with shampoo. 7 From here the bottles move to the capping machine. Much like the bin that holds the empty bottles, the caps are also put in a hopper and then correctly aligned. As the bottles move by the caps are put on and twisted tight. 8 After the caps are put on, the bottles move to the labeling machines (if necessary). Depending on the type of labels, they can either be stuck on using adhesives or heat pressed. Labels are stuck to the bottles as they pass by. 9 From the labeling area, the bottles move to the boxing area, where they are put into boxes, typically a dozen at a time. These boxes are then stacked onto pallets and hauled away in large trucks to distributors. Production lines like this can move at speeds of about 200 bottles a minute or more.

Flow Chart


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Water 80º C + Salt


Water (80Cº) + Salt+ Cabopol +

Jug war

T SPADD is used to Melting and Inject through vessel

Anti Bacterial Add To Save Shampoo from Bacteria

Yogert Amala and Fertilizer

Garnishing

Color Added, Dye, Fertilizer

Perfume + Caustic at low temperature

Solution Add Anti dandruff

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+ Cabopolo + Low PH dissolve + Jug war High PH dissolves

The Filling Process

Quality Control In addition to the initial checks to make sure the product meets specifications, other quality control checks are made. For example, line inspectors watch the bottles at specific points on the filling line to make sure everything looks right. They notice things like fill levels, label placement, and whether the cap is on correctly. The product is also routinely checked to see if there has been any microbial contamination. This is done by taking a bottle off the filling line and sending it to the QC lab. Here, a small amount of the shampoo product is smeared onto a plate and inoculated with bacteria and other organisms to see if they grow. Additionally, the packaging is also checked to see if it meets specifications. Things such as bottle thickness, appearance, and bottle weight are all checked.


Sensor

Hopper

Rappers

BladeStorter

Packing in Boxes

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03- ANNEXTURES


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01- FIXED COST OF THE PROJECT

ANNEXTURE I-

HAIR & SHNE SHAMPOO

Estimated Cost of Land

The shampoo plant is estimated to require a total area 5 KANAL. This area will give ample space in the beginning for sitting buildings and different services necessary for the project i.e. shampoo processing and filling machinery installation, cold storage for chemicals, day store for keeping daily requirement of raw material along with godown for raw material, management offices and vehicle parking area, etc.

Sr.

DescriptionArea in Marla

Unit cost(Rs.)

Total cost(Rs.) 000’s

1 Land 100 50,000 5000

2 Stamp Duty @ 2% 100 1000 100

3 Capital Value Tax (CVT) @ 4% 100 2000 200

4 Registry Fees @ 1% 100 500 50

5 Municipal Tax @ 1% 100 500 50

6 Misc. Charges @ 0.5% 100 2500 25

Total Cost of Land 56,500 5,425


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ANNEXTURE IIHAIR & SHNE SHAMPOO

Estimated Cost of Civil Works

Sr.

NomenclatureType of

construction

Unit of measureme

nt(sq.feet)

Cost/sq.feet( Rs )

Total cost(Rs. 000)

1 Main factory buildingCemented,

Bricks & MS Sheet

80*110=8800

180 1,548

2 ChowkyCemented & Bricks

20*10=200 400 80

3 Guest roomCemented & Bricks

20*20=400 500 200

4 MasjidCemented & Bricks

20*30=600 700 420

5Office Cemented

& Bricks60*30=180

0600 1,080

6 Material stores Ms Sheet40*30=120

0150 180

7 Store rooms Ms Sheet40*30=120

0150 180

8 Grounds Grassy 30*30=900 60 54

9Other Services ( water plant,

roads, boundary wall, tool shop. boiler)

- 12,000 100 120

Total - 27,100 - 3,862


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ANNEXTURE III

HAIR & SHNE SHAMPOO

Estimated cost of Plant & Machinery

Sr. Item Specificationquantit

y

Cost/unit(Rs. 000)

Totalcost

(Rs. 000)

1

Automatic Oral Liquid Process Equipment

Pipes, pipe fittings and valves are of SS

316, seamless, internally electro polished with DIN

standard unions and silicon Gaskets.

5000-15000 liters

1 1000 1000

2

Installation & Trial run expenses @ 10%

100

Total Cost 1100


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THE FACILITY CONSISTS OF :

Shampoo Syrup VesselOnline shampoo syrup pre filterManufacturing VesselStorage VesselVacuum system for transfer of shampoo syrupFilter press / Inline HomogenizerProduct pipingControl panels


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UNIQUE FEATURES OF THE FACILITY:

The plant is designed to be operated by one operator and one helper, saving on precious man-power costs.

Shampoo syrup and manufacturing vessels are provided with limpet coils for heating and cooling, designed for internal vacuum to facilitate transfer of syrup directly from stores to sugar syrup vessel.

Shampoo syrup is transferred to manufacturing vessel through online shampoo syrup pre filter by vacuum.

Entry of all propeller agitators is from bottom through a specially designed cartridge mechanical seal with TC/TC seal face.

The advantage of the bottom propeller agitator over the conventional agitator is that there are no vibrations of shaft, no couplings in the drive assembly, leading to lower maintenance cost.

Pipes, pipe fittings and valves are of SS 316, seamless, internally electro polished with DIN standard unions and silicon Gaskets.

Manhole of all the vessels is equipped with davit fitting and the cover of the manhole instead of being lifted.

PROCESS CONTROL:Values like current, product temperature are displayed digitally on the electrical control panel. The mechanical seal is equipped with a water circulating system and has a water detection sensor which trips the motor, if the water circulation to the seal is interrupted.

CAPACITIES AVAILABLE:

500 liters to 15000 liters


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ANNEXTURE IV

HAIR & SHNE SHAMPOO

Net Initial Working Capital

A- Current assets: Rs. (000)

Inventories:

Raw material (30 days) 4,530

Finished goods (10% of production-dep) 5051.812

Spares & Stores 50

Total inventories

9631.812

Advances & Deposits 100

Account receivables - - - -

Cash 300

Total current assets

10031.812

B- Current liabilities:

Less: Bank borrowings

(7223.859)

Net initial working capital

2807.953


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ANNEXTURE V

HAIR & SHNE SHAMPOOTotal Estimated Cost of the Project

Sr ItemsTotal cost

(Rs. 000)

1. Estimated cost of land 5,425

2. Estimated cost of civil works 3,862

3. Estimated cost of P & E 1100

4. Fire Insurance 50

5. Generator 2000

6. Technical know how charges 20

7. Project examination fees 100

8. Pre Operation expenses 100

9. Vehicles 1850

10. Furniture and fixtures 1146

Total 15,653

Production charges/ contingencies (2% of total) 313.06

Total fixed cost of the project 15,966.06

Add: Initial working capital 2,807.953 THE ISLAMIA UNIVERSITY OF BAHAWALPUR

33

HAIR & SHINE

Total cost of the project 18,774.012


HAIR & SHINE

04- KEY ASSUMPTIONS

4.1 – Assumptions regarding Production & Sales

Rated Capacity of plant is 5000 to 15000 liters per day. Production capacity of plant is 10,000 liters daily in 8 hours

shift The product is 100ml and 200ml bottles, and 5ml sachet of

shampoo. Daily production is 1000 liters. Annul production is (1,000ltr X 300 days = 300,000ltr) Operating efficiency of the project is assumed at 70% for the

first year operations, 80% for the second and 90% for the third year.

Year end inventory is assumed at 10% of production of that particular year.

100% sales are assumed to be local. Selling prices are assumed in accordance with the prevailing

rates in the local market.

A-Production:

Description2010

(in liters)000’s

2011(in liters)

000’s

2012(in liters)

000’s

70% 80% 80%

Production300 330 330


HAIR & SHINE

+ opening inventory (10%)

--- 30 36

Available for sale300 360 366

- ending inventory (30) (36) (36)

Quantity sold 270 324 330

B-Sales Revenue:

Sales revenue = quantity sold x price

Type I product 200ml: (270 thousand liter x 0.10) /0.20 liter bottle = 135 thousand bottles135 thousand bottles X Rs. 105 = Rs. 14175 thousand

Type II product 100ml(270 thousand liter x 0. 30) /0.10 liter bottle= 810 thousands bottles810 thousands bottles x Rs. 45 = Rs. 36,450 thousand

Type III product sachet (5ml)(270 thousand liter x 0. 60) /0.005 liter bottle= 32,400 thousands bottles32,400 thousands bottles x Rs. 3 = Rs. 97,200 thousand

Local sales2010

(Rs. 000)

2011

(Rs. 000)

2012

(Rs. 000)


HAIR & SHINE

70% 80% 80%

Sachet 141,75 15,592.5 17,151.75

100 ml 36,450 40,095 44,104.5

200 ml 97,200 106,920 117,612

Total sales

revenue 147,825162,607.5 178,868.25

A 10% increase is expected in sales revenue per year.

4.2– Assumptions regarding Cost of Production

1.Raw material cost:

Raw material requirement =total number of unit produce X per unit material

Total # of sachet produced (5 ml): annual production/0.005 liter : (300,000 x 0.60)/ 0.005 liter

: 36,000 thousand sachet 1. Raw material required: 36,000 thousand sachets X Rs. 0.90

: Rs. 32,400 thousand

Total # of bottles produced (100ml): annual production/0.1 liter : (300,000.x 0.30)/ 0.1 liter : 900 thousand bottles


HAIR & SHINE

2. Raw material required: 900 thousand bottles X Rs. 9 : Rs. 8,100 thousand

Total # of bottles produced (200ml): annual production/0.2 liters : (300,000 x 0.10)/ 0.2liters : 150 thousand bottles

3. Raw material required: 50 thousand bottles X Rs. 32 = Rs.4800 thousand

Sizes 2010 (Rs.

000)

2011 (Rs.

000)

2012 (Rs.

000)

Sachet 32,400 35,640 35,640

100 ml 8,100 8,910 8,910

200 ml 4,800 5,280 5,280

Total raw material

cost

45,300 49,830 49,830

10% increase in material cost annually

B- Labor cost:

Sr. Staff TitleNO. of persons

Monthly Salary (Rs. 000)

Annual Salary (Rs.000)

Production Staff (Factory)

1.Factory Manager (Technical Manager)

02 50 1200

2. Processing Supervisors 02 25 600

3. Filling area Supervisors 02 25 600


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4. Engineer 02 30 720

5. Helpers or Shift men 08 12 1152

6. Packaging Staff 02 10 240

Total 18 4512

Fringe benefits at 50% 2256

Total Labor Cost 6768

10% increase in labor cost annually

Labor cost 2010(Rs.000)

2011(Rs.000)

2012(Rs.000)

6768

7444.8 8189.28

C- Manufacturing Overhead cost:

1- Fixed cost

Fixed Costs Total monthly cost (Rs.000)

Total annual cost (Rs.000)

Electricity 40 480

Gas and Lubricants etc 10 120

Water 5 60

Stores & spars 50


HAIR & SHINE

Insurance (15966.06 x .05) 798.303

Repair & Maintenance:

Machinery @ 5% of installation cost of P&M

(1,000,000x.05)

Building @ 3% of construction cost

Vehicles @ 5% cost of vehicles

50

115.88

92.5

Total 1766.683

2. Variable cost

It is expected to increase @ 10% p.a.

Rs.

Electricity (Rs.250/hr x 8 hrs x 300 days) = 600,000Generator Diesel (Rs. 73/ltr x 10ltr/hr x 3 hrs x 300 days) = 657,000Total variable cost =12,57,000

Total Overhead Cost2010(Rs. 000)

2011(Rs. 000)

2012(Rs.000)

Total fixed cost1766.683 1766.683 1766.683

Total variable cost 1257 1382.7 1382.7

Total Overhead Cost 3023.683 3149.383 3149.383


HAIR & SHINE

D- Depreciation cost:

Depreciation Rate (per annum) Cost of asset (Rs. 000)

Depreciation cost

Plant and machinery @ of 10%1000 100

Building @ 5%3862 193.1

Furniture and fixture @ 8% 1146 91.68

Vehicles @ 10%1850 185

Total depreciation cost 569.78

Straight line method of depreciation is used here.

4.3– Assumptions regarding Operating Expenses

A- Administrative Expenses

Sr.

General Administrative Staff # Monthly Salary

Annual Salary


HAIR & SHINE

(Rs. 000) (Rs.000)

1. M.D 01 40 480

2. Finance Manager 01 30 360

3. Marketing head 01 25 300

4.Selling & Distribution In charge

01 20 240

5. Selling & Distribution Officers 02 15 360

6. Accountant/Cashiers 01 20 240

7. Store Keepers 02 8 192

8. Purchase Officer 01 15 180

9. Drivers 01 12 144

10. Guards 02 8 192

11. Sweepers 02 5 120

12. Office Boys 02 8 192

Total 17 206 3000

Fringe Benefits @ 50% 1500

Total Admin Expenses 4500

These expenses are assumed to be increased @ 10% p.a.

B- General expenses:

These expenses are assumed to be increased @ 10% p.a.

General Expenses2010(Rs.000)

2011 (Rs.000)

2010 (Rs.000)

Printing and stationary 100 110 121


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Telephone, fax and postage expenses 50 55 60.5

Entertainment500 550 605

Miscellaneous 250 275 302.5

Total General expenses 900 990 1089

C- Selling expenses

Selling Expenses2010(Rs.000)

2011 (Rs.000)

2010 (Rs.000)

Advertisement exp. 10% of sales 14,782.5 16,260.75

17,886.825

Commission of sale agents 5% of sales 7,391.25 8,130.375 8,943.413

Total selling expenses22,173.75

24,391.125

26,830.238

Distribution and R & D expenses will be 5% of sales each year.

4.4- Land & Building

As we have given above, factory land would be purchased and factory building would be constructed. Total initial outflow for acquisition of land and factory building would be as follows:


HAIR & SHINE

Land for factory Purchased Rs.5,000,000

Construction Rs. 3,862,000

Total Rs. 8,862,000

4.5- Vehicles for Transportation

The proposed setup would require two vehicles to carryout all factory and office activities and to cater delivery requirements. The cost of vehicles is assumed to be Rs. 1,850,000.

Description UnitCost/ vehicle

(Rs. 000)

Total Cost

(Rs.000)

Delievery

Truck(Second Hand)1 1,100 1,200

Hyundai Shehzor 1 650 650

Total 1,850

4.6- Factory office Furniture, Fixtures & Equipments

Description Unit Cost per Unit

(Rs. 000)

Total cost

(Rs. 000)


HAIR & SHINE

Office Furniture & Fixture

AC 5 50 250

Electrical

Fittings

1 200 200

Furniture 1 350 350

Total 600 800

Office Equipment

Computers 10 28 280

Printers 2 18 3

Fax 2 10 20

Scanners 1 10 10

Total 22 660 346

Grand Total 1146

4.4 Power Generator

Operations can be stopped and delieveries can be delayed

due to power failure/non-availability. Therefore to cover up

this risk, a power generator with 200 KVA capacities will be

purchased. A generator of this capacity will cost around Rs.

2,000,000/-.


HAIR & SHINE

05- FINANCIAL PLAN


HAIR & SHINE

NISA ENTERPRISESFINANCIAL PLAN

(in Rs. 000’s)

Years Interest Principal Installement

Total loan amount

0 0 0 0 11,264.407

1 1,802.305 1,126.441 4,132.936 10,137.9662 1,622.075 1,126.441 2,748.516 9,011.5253 1,441.844 1,126.441 2,568.285 7,885.0844 1,261.613 1,126.441 2,388.054 6,758.6435 1,081.383 1,126.441 2,207.824 5,632.2026 901.152 1,126.441 2,027.593 4,505.7617 720.923 1,126.441 1,847.364 3,379.328 540.691 1,126.441 1,667.132 2,252.8799 360.461 1,126.441 1,486.902 1,126.44110 180.231 1,126.441 1,306.672 0.00

PMT = Total Loan Amount / 10 = 11,264.407 / 10 = 1,126.441


HAIR & SHINE

06- FINANCIAL STATEMENTS


HAIR & SHINE

ANNEXTURE VI NISA Enterprises

Estimated Income Statement

Rs. In ‘000Year ending September 30, 2011 2012 2013Sales 147,825 162,607.5 178,868.2

5Less Cost of Sales:Raw Material 45,300 49,830 49,830Labor 6,768 7444.8 8189.28Manufacturing Overheads 3,023.683 3149.383 3149.383Depreciation 569.78 569.78 569.78Total Cost of Manufacture 55,661.46

360,993.96

361,738.44

3Inventory Adjustment – Less (5,566.14

6)(533.250) (74.448)

Cost of sales (50,095.317)

(60,460.713)

(61,663.995)

Gross Profit 97,729.683

102,146.787

117,204.255

Operating ExpensesGeneral & Administration Expenses

5,589 6,147.9 6,762.69

Selling Expenses 22,173.75 24,391.125

26,830.238

Distribution Charges (5% of sales)

7,391.25 8,130.375 8943.413

Total Operating Expenses (35,154) (38,669.4)

(42,536.341)

Operating Profit / EBI 62,575.683

63,477.387

74,667.915

Other ExpensesFinancial Charges on: Alfalah Loan @ 16% 1,802.305 1,622.075 1,441.844 Bank Borrowings @ 20% 400 0 0Amortization of pre-production expenses

33 33 34

R & D (5% of sales) 7391.25 8130.375 8943.413

Total Other Expenses (9,626.555)

(9785.45)

(10,419.257)

Profit before Tax & Worker’s Fund

52,949.128

53,691.937

64,248.658

Worker’s Fund (10% of (5,294.9 (5369.19 (6,424.8


HAIR & SHINE

PBT&WF) 13) 4) 66)Profit/ (Loss) before Tax 47,654.2

1548,322.7

4657,823.7

92Tax Provision 0 0 0Net Profit 47,654.2

1548,322.7

4657,823.7

92

ANNEXTURE VII NISA Enterprises

Estimated Balance Sheet

Year Ending September 30,

Rs. in ‘000End of Con.

Operating Years

2010 2011 2012 2013ASSETS

CURRENT ASSETS:Cash and Bank Balance 127.952 860.445 1,904.139 2,761.826Short Term Investment 0 42,000 87,000 144,000Accounts Receivable 0 3,695.625 4,065.188 4,471.706Inventories: Raw Material 4,530 4530 4,983 4,983 Finished Goods

0 5,108.79 6,099.396 6,173.844

Stores and Spares

50 55 60.5 66.5

Advances, Deposits and Prepayments

100 110 121 133.1

Total Current Assets 4,807.952

56,359.86

104,233.223

162,590.026

FIXED ASSETS:Fixed Assets at Cost 15,866.06 15,866.06 15,866.06 15,866.06Less: Accumulated Depreciation

0 569.78 1,139.56 1,709.34

Fixed Assets Net 15,866.06

15,296.28

14,726.56

14,156.72

Intangibles 100 67 34 0


HAIR & SHINE

Total Fixed Assets 15,966.06 15,363.28 14,760.5 14,156.72Total Assets 20,774.0

1271,723.1

4118,993.

473176,746.

746LIABILITIES AND EQUITYCURRENT LIABILITIESBank Borrowings 2,000 0 0 0Worker’s Payable 0 5294.913 5,369.194 6,424.866Current Maturity Fund Payable

0 1126.441 1,126.441 1,126.441

Total Current Liabilities 2,000 6421.354 6,495.635

7,551.307

LONG TERM DEBTS:Alfalah FCY Loan 11,264.40

7101,37.96

69,011.525 7,885.084

Total Long Term Debt 11,264.407

101,37.966

9,011.525

7,885.084

EQUITY:Paid up capital 7,509.605 7,509.605 7,509.605 7,509.605Retained Earnings 0 47,654.21

595,976.95

8153,800.7

5Total Equity 7,509.60

555,163.8

2103,486.

563161,310.

355Total Liabilities & Equity 20,774.0

1271,723.1

4118,993.

473176,746.

746

ANNEXTURE VIII

NISA Enterprises

Estimated Cash Flow Statements

Year Ending September 30,

Rs. in ‘000End of Const.

Operating Years

2010 2011 2012 2013SOURCES OF FUNDSOperating Profit 0 62,575.68

363,477.3

8774,667.9

15Add back: Depreciation 0 569.78 569.78 569.78Total Funds from Operations

0 63,145.463

64,.047.167

75,237.695

Other Sources:Alfalah loan @ 16% 11,264.4

070 0 0


HAIR & SHINE

Bank Borrowings 2,000 0 0 0Paid up Capital 7509.60

50 0 0

Total Sources of Funds 20,774.012

63,145.463

64,.047.167

75,237.695

APPLICATION OF FUNDSInvestment in Fixed Assets 15,866.0

60 0 0

R & D charges 0 7391.25 8,130.375

0

Pre-production Expenses 100 0 0 0Repayment of: Alfalah Loan 0 0 1,126.44

11,126.44

1 Bank Borrowings 0 2000 0 0Financial Charges on: Long-term Loans @ 16%

0 1,802.305 1,622.075

1,441.844

Bank Borrowings @ 20%

0 400 0 0

PAYMENT OF: Worker’s Fund 0 0 5,294.91

35,369.19

4Short term investments 0 40,000 45,000 57,000Increase in Current Assets (other than cash)

4680 8,819.415 1,829.669

499.116

Total Application of funds 20,646.06

62,412.97

63,003.473

74,380.008

Cash Surplus 127.952 732.493 1,043.694

857.687

Cash at beginning of year 0 127.952 860.445 1,904.139

Cash at the end of year 127.952 860.445 1,904.139

2,761.826


HAIR & SHINE

07- FINANCIAL ANALYSIS


HAIR & SHINE

ANNEXTURE IX

NISA EnterprisesWeighted Average Cost of Funds

Sources Weights Rates (%) WACF (%)

Debt 0.6016(1-0.40)=

9.65.76

Equity 0.40 15 6Total 11.76

Profit sharing ratio is 15% and it will be given from 4th year.

ANNEXTURE X

NISA EnterprisesCalculation of Internal Financial Rate of Return (IFRR)

In (000’s)

YCapital

outlay

Ope.

IncomeDep. W.Fund Tax

Net cash

returns

Net cash

inflows

0 206,460.

06

0 0 0 0 0 (20,646.0

6)

1 8,819.41

5

62,575.6

83

569.

78

0 0 63,145.4

63

54,326.0

48

2 1,829.66

9

63,477.3

87

569.

78

6,257.56

8

0 57,789.5

69

55,959.9

00

3 499.116 74,667.9

15

569.

78

6,347.73

9

0 68,889.9

56

68,390.8

4

4 0 74,667.9

15

569.

78

7,466.79

2

0 67,770.9

03

67,770.9

03

5 0 74,667.9

15

569.

78

7,466.79

2

0 67,770.9

03

67,770.9

03

6 1,850 74,667.9

15

569.

78

7,466.79

2

0 67,770.9

03

65,920.9

03

7 0 74,667.9 569. 7,466.79 26,880.4 40,890.4 40,890.4


HAIR & SHINE

15 78 2 49 54 54

8 0 74,667.9

15

569.

78

7,466.79

2

26,880.4

49

40,890.4

54

40,890.4

54

9 0 74,667.9

15

569.

78

7,466.79

2

26,880.4

49

40,890.4

54

40,890.4

574

1

0

(9,968.15

3)

74,667.9

15

569.

78

14,933.5

38

53,760.9

17

6,543.24 16,511.3

93

209,490.

107

498,676.

19

PVIFA = Capital Outlay / Ave. Net Inflows= 209,490.107 / 49,867.619

= 4.201 or 11%

Assumptions:i. The economic life of the asset would be 10 years.ii. The entire capital outlay would be incurred one year before

the commencement of commercial operations.iii. Vehicles would be replaced after every 5 years.iv. Salvage value at the end of the project would represent

recovery of working capital, salvage value of building, office furniture & fixtures and origional value of land ( as it is assumed to be remain constant within 10 years).

In (000’s) years Inflows 24% 24.5%

1. 54,326.048 43,811.329 43,635.380

2. 55,959.900 36,394.316 36,102.579

3. 68,390.84 35,870.124 37,148.126

4. 67,770.903 28,665.303 28,207.582

5. 67,770.903 23,117.179 22,656.693

6. 65,920.903 18,133.976 17,701.376

7. 40,890.454 9,071.313 8,819.348


HAIR & SHINE

8. 40,890.454 7,315.575 7,083.814

9. 40,890.4574 5,899.657 5,689.810

10. 16,511.393 1,921.175 1,845.399

Total

210,199.947 208,8910.107

Capital outlay = 209,490.10724% = 210,199.94724.5% = 208,890.107R1 = DCF @ 24% - Capital Outlay = 210,199.947 – 209,490.107 = 709.84

R2 = DCF @ 24% - DCF @ 24.5% = 210,199.947 – 208,890.107 = 1,309.84

D1= 24.5% - 24% = 0.50%

R3 = D1 x R1 = 0.50% x 709.84 = 354.92

= R3 / R2 = 354.92 / 1,309.84 = 0.2710

IFRR = 24% + 0.2710 = 24.2710%

Since IFRR (24.2710) is greater than WACF (11.76%). So, project is attractive and viable.

Commercial BreakEven Point:ANNEXTURE XI

(In Rs 000’s)

Items Variable cost Fixed Cost Total Cost


HAIR & SHINE

Material 45,300 45,300Labor 6,768 6,768FOH 1,257 1,766.683 3,023.683Depreciation 569.78 569.78Selling Expense 22,173.75 22,173.75Admin & Gen. 5,589 5,589Interest on loan 1,802.305 1,802.305Interest on bank borrowing

400 400

Total 83,290.055 2,336.463 85,626.518

Commercial BE =Fixed Cost /( Sales value of production–Variable cost)xO.E

= 2,336.463 / (147,825 – 83,290.055) x 70%

= 2.54 %

Cash Break- Even Ratio:ANNEXTURE XII

(In Rs 000’s)

Items Variable cost Fixed Cost Total CostMaterial 49,830 49,830Labor 8,189.28 8,189.28FOH 1,520.97 1,766.683 3,287.653Selling Expense 26,830.238 26,830.238Admin & Gen. 6,762.69 6,762.69Interest on loan 1,441.844 1,441.844Loan installemnet

1,126.441 1,126.441

Worker’s fund 6,424.860 6,424.860Total 102,126.323 1,766.683 103,893.006


HAIR & SHINE

Cash BE = Fixed Cost/ [( Sales – A/R – Variable Cost ] x OE = 1,766.683 / [( 17,8868.25 – 4,471.706) – 102,126.323] x 80 % = 1.96 %


HAIR & SHINE

08- RATIO ANALYSIS

8.1- Profitability Ratios

8.1.1- Gross Profit Ratio

GROSS PROFIT RATIO= GROSS PROFIT/NET SALES

Years Gross profit Sales GP Ratio %

2011 97,729.683 147,825 66

2012 102,146.787 162,607.5 62.81

2013 117,204.255 178,868.25 65.52


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8.1.2- OPERATING PROFIT RATIO

Years Ope. profit Sales Ratio %

2011 62575.683 147,825 42.33

2012 63477.387 162,607.5 39.03

2013 74667.915 178,868.25 41.75

8.1.3- NET PROFIT RATIO

Years Net profit Net Sales NP Ratio %


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2011 47654.215 147,825 32.23

2012 48322.746 162,607.5 29.71

2013 57823.792 178,868.25 32.23

8.2- Short Term Solvency Ratio

8.2.1 - CURRENT RATIO

Years Current Assets Current Liab. Current Ratio

%

2011 56359.36 6421.354 8.77

2012 118993.473 6495.635 18.31

2013 176746.746 7551.307 23.40


HAIR & SHINE

8.2.2 QUICK RATIO

Quick Ratio=CASH EQUILANTS+MARKETABLE SEURITIES+NET RECEIVEABLES/CURRENT LIAB.

YearsMost Liquid

Current Assets

Current

LiabilitiesQuick Ratio %

2011 46,556.07 6421.354 7.25

2012 92,969.327 6495.635 14.32

2013 151,233.532 7551.307 20.02


HAIR & SHINE

8.3- Long Term Solvency Ratio

8.3.1- DEBT RATIO

Debt ratio =T .LIABILTIES/T.ASSETS

Years Total liabilities Total Assets Debt Ratio %

2011 16559.32 71723.14 23.08

2012 15507.16 118993.473 13.0

2013 15436.391 176746.746 8.73

8.3.2- DEBT EQUITY RATIO

Years Total liabilities Total Equity D/E Ratio %

2011 16559.32 161310.355 30.01

2012 15507.16 103486.563 14.98

2013 15436.391 55163.82 9.56


HAIR & SHINE

8.4- Turnover Ratios

8.4.1- Inventory turnover Ratio

Inventory turnover =CGS/AVG. INVENTRY

Years Inventory turnover

Ratio (times)

2011 18

2012 20

2013 202


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8.4.2- Account Receivable Turnover Ratio

A/R turnover =NET SALES/AVG. GROSS RECIEVEBLES

Years A/R turnover Ratio

(%)

2011 40

2012 40

2013 40

8.4.3- Assets Turnover Ratio

Assets Turnover = NET SALES /AVG TOTAL SALES


HAIR & SHINE

Years Assets turnover (%)

2011 2.06

2012 1.36

2013 1.01

8.4.4- FIXED ASSETS

Years Net Sales Fixes AssetsFixed Assets

Ratio %2011 147825 14156.72 9.622012 162607.5 1460.5 11.0152013 178868.25 15363.28 12.63


HAIR & SHINE

REFRENCES

http://www.plunkettresearch.com/Industries/HealthCare/ tabid/205/Default.aspx#IndustryTrends

www.sameda.gov.pk




Pre Feasibility of Shampoo Plant

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