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Demographic Age Group
Wise
Psychographic- Attitude/Behavior
Wise
Main
Target
Segmentation & Targeting
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Financial Analysis
Basic Assumptions
Factory operates on a single shift basis, working 8hours a day and 6 days a week.
The working efficiency of the plant is 80% of the ratedcapacity 125 metric tonnes.
Interest on Capital 14%
Depreciation 10%
All costs incurred are calculated at upper end of the
band and incomes at lower end. The end product is being sold at 70 /- per kg which is
lower than the market rate.
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Financial Analysis ( Cont)
Expenses - I
Fixed Cost
Building Product Quantity Rate Total20 * 15ftSq 75 Rooms
= 22,500ft 10,000/Sq Ft 22,50,00,000
FSI City Limit 1.5
Other Amenities Restaurants 2 * 4000Sq Ft 10,000/Sq Ft 8,00,00,000
Laundry 1 * 1000 Sq Ft 10,000/Sq Ft 1,00,00,000
ConferenceRoom 2 * 2000 SqFt 10,000/Sq Ft 4,00,00,000
Parking 1 floors= 4000 10,0000/sq Ft 4,00,00,000
Storage &Generator Room 1000
ft
Addl Land 2,000 Sq ft 20,0000/Sq Ft 40,00,00,000
InfraFixed Cost 79,50,00,000
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Expenses- II
Fixed Cost
Services Product Quantity Rate Total
Air Conditioning 1 Centralized 2 Crores 2 ,00,00,000
Laundry 10 machines 10,00,000 10,00,000
Restaurant/ Bar - 2 Crores 2,00,00,000
Internet-Wifi - 5 Lakhs 5,00,000
Furniture - 1.5 Crore 1,50,00,000
Cabs 10 40 Lakhs 40,00,000
Swimming Pool 1 10 lakhs 10,00,000
Spa &
Gymnasium
1 Crore 1,00,00,000
ChildCareFacilities 2 Lakhs 2,00,000
others Installation cost 10 Lakhs 10,00,000
TotalServicesFixed
Cost
7,27,00,000
TotalFixedCost Total Services + Total Infra Cost = 86,77,00,000
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Expenses- III
VARIABLECOST Monthly
Product Quantity Rate Total
Admin+ Labour 1:3 1:5 12,00,000
Utilities Water ( S.Pool
+ Daily Use)
300Kl +
500Kl60 Rs/Kl 48,000
Electricity 1.5 Lakh units 9 Rs / Kwh 14,50,000
Fuel (Generator+Cab)
5 Lakhs 5,00,000
Website
Maintenance
25,000 25,000
Promotional
Costs
1% of sales 50,95,800 50,95,800
Other Costs 10,00,000
Total Var Cost 93,13,800
Total Cost Total fixedcost + Total Var Cost = 87,70,13,000
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Financing & Revenue Options
Revenues StreamsMonthly(M)
Day(D)
Monthly
Service Quantity Rate Total
Swimming 10 people/D 1200/-hr 3,50,000
Conference 20 /Month 20,000 4,00,000
GYM& SPA 10 people/D 250/- day 75,000
Restaurants 10 Lakhs/D 3,00,00,000
Pub 2 Lakhs/D 60,00,000
Room Tariff @ 50%
Occupancy
7000/- 78,75,000
Monthly TotalIncome 4,47,00,000
Yearly Total Income 53,64,00,000
Financing Options :
Debt To Equity : 2:1
Cost of Capital : 18%
Return on investment expected:1st year 10%
2nd Year 14%
3rd Year 18%
Weighted Average Cost ofCapital
!st Year 15.33%2nd year 16.67%
3rd Year 18 %
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Financial Analysis (Cont)Sales Realization Per Year
X Total Sales Amount 53,64,00,000
Y Sales Commission 5% of sale 2,68,20,000
Total Sale X Y 50,95,80,000
PROFIT
EBITD SALE EXPENDITURE 50,95,80,000
-87,70,13,000 = - 36,74,33,000
Interest on Capital At 18% 7,89,31,170
Depreciation At 10% 8,67,70,000
Taxes At 30% 0
Profit After taxes -53,31,34,170
II Year
EBITD Sale Prev Loss
Expenditure-Interest
50,95,80,000
53,31,34,170 93,13,800
-11,17,99,140
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Projected Break Even & ROI
A: SALES Sales 7,68,00,000B: Variable Cost + 3,10,20,000 +
Intereston Capital 71,42,800 =3,81,62,800
C: Contribution A B 3,86,37,200
BREAK EVEN = Fixed Cost / Contribution = 2,00,00,000/3,86,37,200
= 51.76% maximum
Return on Investment = PAT / Investment = 1,19,96,040/5,10,20,000
= 23.51% minimum
Break Even Analysis& Return on Investment
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Project Decisions ;
Based on the values given by considering the
attributes in the excel sheet:
Delhi has high return on investment and thebest place to setup the hotel.