CHAPTER-1

INTRODUCTION

1.1 Entrepreneurs

The dictionary meaning of the word Entrepreneur is given as a person ‘who

start a business.’ It also acts that an Entrepreneur is a person ‘who starts an
enterprise, business or a firm.’ An Entrepreneur is an individual who
organizes or operates a business or businesses, taking on financial risk to do
so. An Entrepreneur works for himself and also provides employment to
others.
The Entrepreneur is commonly seen as an innovator, a designer of new
ideas and business processes. The Entrepreneur rather than working as an
employee, run a small business and assumes all the risks and rewards of a
given business venture, idea, or good/service offered for sale. An
Entrepreneur supplies risk capital as a risk taker and monitors and controls the
business activities. The Entrepreneur is usually a sole proprietor, a partner, or
the own who owns the majority of shares incorporated venture.

Definition of Entrepreneur

According to J.A. Schumpeter defines Entrepreneur as “An Entrepreneur is

one who always searcher for change, respond to it and exploits it as an
opportunity innovation is the basic total of Entrepreneur, the means by which they
exploit change as an opportunity for a different business or service.”

1
Qualities of Successful Entrepreneur

• Capacity to take risk • Innovativeness

• Capacity to work hard • Desire for high

achievement
• Energetic • Capacity to solve problem

• Drive • Using feedback

• Self confidence • Taking initiative

• Intelligence and knowledge • Handling failures

• Ability to foresee future • Locus of Control

• Willingness to change • Tolerance of uncertainty

• Ability to mobilize • Flexibility

resources
• Ability to build up • Guarding business secrets
Organization and administer

• Ability to take decisions • Quality conscious

• Willingness to take • Tactful

responsibility

• Information seeking • Have vision

• Monitoring • Welfare Orientation

• Persuasion • Systematic planning

2
COMMON TRAITS:

• Motivation:
• Creativity:
• Persuasiveness:
• Vision:
• Collaboration
• Versatility:
• Risk tolerance:
• Flexibility:
• Decisiveness

BEHAVIOR PATTERNS OF ENTREPRENEUR:

• They Plan Their Day In Advance

• They Get Proper Nutrition And Exercise
• They Position Themselves To Serve
• They Set Clear Goals
• They Take Calculated Risks
• They Know Their Strengths And Weakness
• They Hire A-Team Players
• They Are Constantly Learning

3
1.2 ENTREPRENEURSHIP

Entrepreneurship is the process of starting a business, typically a startup company

offering an innovative product, process or service. The Entrepreneur perceives an
opportunity and often exhibits biases in taking the decision to exploit the
opportunity. The exploitation of Entrepreneurial opportunities includes design
actions to develop a business plan, acquire the human, financial and other required
resources, and to be responsible for its success or failure. Entrepreneurship may
operate within an Entrepreneurship ecosystem which includes Government
programs and services that support entrepreneurs, entrepreneurship resources
(e.g., Business incubators and seed accelerators), entrepreneurship education and
training and financing (e.g., loans, venture capital financing, and grants).

Entrepreneurial activities differ substantially depending on the type of

Organization and creativity involved. Entrepreneurship ranges in-scale from solo,
part time projects to large-scale undertakings that create many jobs. Many “high
value” entrepreneurial ventures seek venture capital or angel funding (seed
money) in order to raise capital for building the business.

DEFINITION
According to J.A. Schumpeter, “Entrepreneurship is essentially a creative
activity. It consists of doing such things as are generally not done in ordinary
course of business. An Entrepreneur is one who innovates, i.e. carries out new
combinations or enterprise”.

4
1.3 INTRAPRENEURS:

Intrapreneurship is the act of behaving like an entrepreneur while working

within a large Organization. Intrapreneurship is known as the practice of a
corporate management style that integrates risk-taking and innovation approaches,
as well as the reward and motivational techniques that are more traditionally
thought of as being the province of Entrepreneurship.
In big enterprises, the top level executives are encouraged to generate new
ideas and convert them into products through research and developmental
activities within the framework of an Organization. Most of these persons
achieved great success in their new ventures. These persons who turned to
Entrepreneurs came to be known as “Intrapreneurs”.
Intrapreneurship is the act of behaving like an entrepreneur while working within
a large organization. Intrapreneurship is known as the practice of a corporate
management style that integrates risk-taking and innovation approaches, as well as
the reward and motivational techniques, that are more traditionally thought of as
being the province of entrepreneurship.

DEFINITION
According to Gifford Pinchot III, “Intrapreneurs are the persons who
resigned from their well-paid executive positions to launch their own ventures”.

5
1.4 Difference Between Entrepreneur And Intrapreneur

S.no Dimension Entrepreneur Intrapreneur

1. Dependency An Entrepreneur is An Intrapreneur is

independent in his dependent on the
operations. Entrepreneur.
2. Raising of An Entrepreneur himself Funds are not raised by
funds raises funds required for the Intrapreneur.
an Enterprise.
3. Risk taking Entrepreneur bears the Intrapreneur does not
entire risk involved in the bear the risk at all.
business.
4. Operations An Entrepreneur operates An Intrapreneur operates
from outside the from within the
Organization. Organization.
5. Profit Entrepreneur enjoys the Intrapreneur does not
profit of the business. take profit out of his
innovations. However, he
gets a lot of perquisites
for his innovations.

6. Ownership Entrepreneur is the real Intrapreneur is not the

owner of the business. owner of the business.
But he works for the
business.

7. Nature of work Entrepreneur converts the Intrapreneur creates

innovative ideas of innovation.
Intrapreneur into viable
opportunities.

6
1.5 Benefits Of Being An Entrepreneur

There are many rewards associated with being an entrepreneur. They are as
below:
Benefits of Entrepreneur are given below:
✓ Control: You choose the work you like to do and that makes the most of
your strengths and skills. The result can be more job satisfaction.
✓ Excitement: Entrepreneurship can be exciting and many entrepreneurs
consider their work highly enjoyable. Each day is filled with new
opportunities to challenge your abilities, skills, and determination.
✓ Flexibility: Entrepreneurs can schedule their work hours around other
commitments, including spending quality time with their families.
✓ Freedom: Freedom to work whenever they want, wherever they want, and
however they want draws many to Entrepreneurship. Most Entrepreneurs
don’t consider their work actual work because they are doing something
they love.
✓ Rational Salary: As an Entrepreneur, your income is directly related to
your efforts and the success of your business.
These are the benefits of Entrepreneurship.

7
 CHAPTER-2

WOMEN ENTREPRENEUR

2.1 Meaning

Traditionally, an entrepreneur has been defined as "a person who organizes

and manages any enterprise, especially a business, usually with considerable
initiative and risk". Rather than working as an employee, an entrepreneur runs
a small business and assumes all the risk and reward of a given business venture,
idea, or good or service offered for sale. The entrepreneur is commonly seen as a
business leader and innovator of new ideas and business processes."

Entrepreneurship plays an imperative role in the growth of any society.

Development of entrepreneurship culture and qualitative business development
services are the major requirements for industrial growth. Entrepreneurship
emerges from an individual’s creative spirit into long-term business ownership,
employment creation, capital formation and economic security. Entrepreneurial
skills are essential for industrialisation and for alleviation of mass unemployment
and poverty. As technology speeds up lives, women are an emerging economic
force, which cannot be neglected by the policy makers. The world’s modern
democratic economy depends on the participation of both sexes. Irene Natividad
has observed that “Global markets and women are not often used in the same
sentence, but increasingly, statistics show that women have economic cloutmost
visibly as entrepreneurs and most powerfully as consumers”.

8
Importance of women entrepreneurship

This development has become a subject of great concern and serious discussion in
recent times. Women in the present day have been recognized as an indivisible
part of the global struggle for a stable economy. Same is the case in India where
women have recently become the symbol of changes.
Reasons that motivate women’s entry in commerce vary but despite all of their
variations in socioeconomic backgrounds, they have proved their worth time and
again. They have taken risks in businesses and managed to make them pay off.
Over and over, Indian women have competed with men and proven to be equal in
every race, including entrepreneurship.

In the closing years of the 21st century, multi- skilled, productive and innovative
women entrepreneurs are inextricable for achieving sustained economic growth.
Globalisation of industrial production and economic interdependence have
become the torch-bearers for all international cooperations. In the dynamic world
which is experiencing the effects of globalisation, privatisation and liberalisation,
women entrepreneurs are likely to become an even more important part of the
global quest for sustained economic growth and social development.

The economic status of woman is now accepted as an indication of the society’s

stage of development. Women (especially rural women) are vital development
agents who can play a significant role in the economic development of a nation,
but they should have an equal access to productive resources, opportunities and
public services. It has also been realised in the last few years that the widespread
poverty and stunted economic growth can be overcome only by gainful and
sustainable economic participation of women. National development will be

9
sluggish, if the economic 11. T.T Gurumoorthy, ‘Self-Help Groups Empower
Rural Women’, Kurukshetra, Vol.48 (5), 2007 engine operates only at half power.

Women entrepreneurship in India

Indian Government defines woman owned business as an entity where a

woman or a group of women owns at least “51% of the capital” and give 51% of
generated employment to women. Women are 48% of Indian population but their
participation is still below par as only 34% of Indian women are engaged in
financial and economic activities, many of which are unpaid or underpaid
workers. With gender-bias problems in some regions of India, women have also
become victims of unemployment.

This bias has proven to be advantageous to certain extent as women have

taken up entrepreneurship to fill the void and prove their critics wrong. In India,
women constitute half of the total population (495.74 million), but their
participation in the economic activity is very low. The Female Work Participation
Rate was 25.7 per cent in 2001.

In India, women are relatively powerless with little or no control over

resources and little decision making power. Women in the informal sector are
found to be home-based workers, engaged in the petty manufacture of goods,
either on piece rate basis or on own account, petty traders and petty shopkeepers
or service specialists. Studies reveal that 89 per cent of India’s women workers
toil in the informal sectors in sub-human conditions. Over 2/3 of the enterprises
are selfowned and have a fixed capital of less than Rs.50/- . Over 4/5 of the
women workers in this sector earn less than Rs.500/-p.m. The income earned by
women in this sector is said to be about ¼ of that of a woman in the organised
sector”
10
Schemes for women entrepreneurs

Government banks and financial institutions have introduced different schemes

for the development of women entrepreneur in India. Of them importance
schemes are described below:

1. Development of women and children in rural area (DWCRA).

2. Scheme of IDBI.
• Interest subsidy.
• Refinance facility.
• Mahila Udyam Nihi (MUN).
• Mahila Vikas Nidhi (MVN).
3. Scheme of Karnataka SFC.
4. Scheme of IFCI.
5. Rajasthan finance corporation’s scheme.
6. SBIS stree Shakti package.
7. SIDBIS assistance.
8. BOI priyadharshini yojana.

Requirements of women entrepreneurship

There are five reasons why India needs more women entrepreneurs. They are
below:

i. Economic growth
ii. Narrowing gender gap
iii. Company culture and safety at workplace
iv. Funding/investment to women led startups
v. Social change
11
 2.2 WOMEN ENTREPRENEUR IN CURRENT SCENARIO

MELINDA GATES
(Co-chair and founder bill Melinda gates foundation)

Personal life:
Melinda began dating CEO Bill gates in 1987, after meeting him at a trade fair in
New York. In 1994, she married Gates in a private ceremony held in Lanai,
Hawaii. The couple have three children: daughters Jennifer Katharine Gates (born
1996) and Phoebe Adele Gates (born 2002), and son Rory John Gates (born
1999). The family resides in an estate on the shore of Lake Washington near
Seattle. Gates and her husband were suggested as possible vice-presidential picks
in the 2016 United States presidential election, according to a reportedly hacked
email published by Wiki Leaks from Hillary Clinton's campaign chairman, John
Podest.

12
Early Life:

Melinda Ann French was born on August 15, 1964 in Dallas, Texas. She is the
second of four children to Raymond Joseph French Jr., an aerospace engineer, and
Elaine Agnes Amerland, a homemaker. Melinda has an older sister and two
younger brothers.
Melinda, a Catholic, attended St. Monica Catholic School, where she was the top
student in her class year. At age 14, Melinda was introduced to the Apple II by her
father, which later inspired her interest in computer games and the BASIC
programming language.
Melinda graduated as valedictorian from Ursuline Academy of Dallas in 1982.
She earned a bachelor's degree in computer science and economics from Duke
university in 1986 and an MBA from Duke's Fuqua School of Business in 1987.
At Duke, Melinda was a member of the Kappa Alpha Theta sorority, Beta Rho
Chapter.

Career :
Gates' first job was tutoring math and computer programming to children. After
graduation, Melinda joined Microsoft as a marketing manager, where she was
responsible for leading the development of various multimedia products. These
included Cinemania, Encarta, Publisher, Microsoft Bob, Money and Word. In
addition, she worked on Expedia, which is now one of today's biggest travels
booking websites. Despite the commercial failure of Microsoft Bob, Gates later
recalled that a software demo was "one of the hardest things I've ever done".In the
early 1990s, Gates was appointed as General Manager of Information Products, a
position which she held until 1996. She left Microsoft to focus on starting and
raising her family.

13
Gates served as a member of Duke University's Board of Trustees from 1996 to
2003. She attends the annual Bilderberg Group conference and has held a seat on
the Board of Directors of The Washington Post company since 2004. She was also
on the Board of Directors at Drugstore.com, but left in August 2006 to focus on
philanthropy projects. Since 2000, Gates has been active in the public eye, stating
"As I thought about strong women of history, I realized that they stepped out in
some way". This has helped her work become recognized, while shaping and
delivering goals of the Bill & Melinda Gates Foundation. As of 2014, Bill and
Melinda have donated US$28 billion to the Foundation.

The Moment Of Lift: How Empowering Women Changes The

World
In 2019 Melinda Gates debuted as an author with the book The Moment of Lift:
How Empowering Women Changes the World. Former President Barack Obama
starred in a comedy sketch in order to promote the book. The book highlights the
failure to acknowledge women's unpaid work, drawing on feminist economist
Marilyn Waring's book If Women Counted.
14
Women In Technology:
Gates' experience of a male-dominated workplace at Microsoft inspired her to
encourage more women in the computing field. In September 2016, Gates
announced her desire on increasing the diversity in the workplace, especially in
the technology industry, stating:
Every company needs technology, and yet we’re graduating fewer women
technologists. That is not good for society. We have to change it.
She explained that she would be in "learning mode" after which she would begin
addressing the problem. She also spoke about this topic as one of the speakers at
the Grace Hopper Celebration on October 4, 2017. In the 2016 annual letter from
the Gates Foundation, Gates said women should "spend more time doing paid
work, starting businesses, or otherwise contributing to the economic well-being of
societies around the world. The fact that they can't, holds their families and
communities back."

Awards And Rewards:

In 2002, Melinda and Bill Gates received the Award for Greatest Public Service
Benefiting the Disadvantaged, an award given out annually by Jefferson Awards.
In December 2005, Melinda and Bill Gates were named by Time as Persons of the
Year alongside Bono. Melinda and Bill Gates received the Spanish Prince of
Asturias Award for International Cooperation on May 4, 2006, in recognition of
their world impact through charitable giving.
In November 2006, Melinda was awarded the Insignia of the Order of the Aztec
Eagle, together with Bill, who was awarded the Placard of the same order, both
for their philanthropic work around the world in the areas of health and education,
particularly in Mexico, and specifically in the program "Un país de lectores" .

15
In May 2006, in honor of her work to improve the lives of children locally and
around the world, Seattle Children's Hospital dedicated the Melinda French Gates
Ambulatory Care building at Seattle Children's (formerly Children's Hospital and
Regional Medical Centre). She chaired a campaign for the hospital to fundraise
$300 million to expand facilities, fund under-compensated and uncompensated
care, and grow the hospital's research program to find cures and treatments In
2007, Gates received an honorary doctorate in medicine from the Karolinska
Institute in Stockholm, Sweden. In 2009, she and her husband received honorary
degrees from the University of Cambridge. Their benefaction of $210 million in
2000 set up the Gates Cambridge Trust, which funds postgraduate scholars from
outside the UK to study at the University. Lastly, she was awarded an honorary
Doctor of Humane Letters by Duke University in 2013 as a tribute for her
philanthropic commitment.
She was ranked 3 in Forbes 2013, 2014 and 2017 lists of the 100 Most Powerful
Women, 4 in 2012 and 6 in 2011.

16
Gates was appointed an honorary Dame Commander of the Order of the British
Empire in 2013 for services to philanthropy and international development. In
recognition of the foundation's philanthropic activities in India, Bill and Melinda
jointly received India's third-highest civilian honor, Padma Bhushan, in 2015. In
2016, President Barack Obama awarded Gates and her husband with the
Presidential Medal of Freedom for their philanthropic efforts.

In 2017, President François Hollande awarded Gates and her husband with
France's highest national award, the Legion of Honour, in Paris for their charity
efforts. That year, she was awarded the Otto Hahn Peace Medal 2016 of the
United Nations Association of Germany (DGVN), Berlin-Brandenburg, "for
outstanding services to peace and international understanding" in the historic
Berlin Town Hall. That year, Gates was listed by UK-based Company Richtopia
at number 12 in the list of 200 Most Influential Philanthropists and Social
Entrepreneurs Worldwide.

17
2.3 Problem Faced By Women Entrepreneur

Some of the challenges and problems faced by women entrepreneurs are discussed
below.

1. Family restriction: Women are expected to spend more time with their family
members. They do not encourage women to travel extensively for exploiting
business opportunities.

2. Lack of Finance: Family members do not encourage women entrepreneurs.

They hesitate to invest money in the business venture initiated by women
entrepreneurs.

3. Lack of Education: Women are generally denied of higher education,

especially in rural areas and under developed countries.

4. Role Conflict: Marriage and family life are given more importance than career
and social life in Indian society.

5. Unfavorable Environment: The society is dominated by males. Many

business men are not interested to have business relationship with women
entrepreneurs. Male generally do not encourage women entrepreneurs.

7. Lack of Mental strength: Business involves risk. Women entrepreneurs get

upset very easily when loss arises in business.

18
8. Lack of Information: Women entrepreneurs are not generally aware of the
subsidies and incentives available for them. Lack of knowledge may prevent them
from availing the special schemes.
9. Stiff Competition: Women face lot of competition from men. Due to limited
mobility they find difficult to compete with men.

10. Mobility: Moving in and around the market, is again a tough job for Middle
Class Women Entrepreneurs in Indian Social system.

11. Male-Dominated Society: Male chauvinism is still the order of the day in
India. The Constitution of India speaks of equality between sexes.

Suggestion To Overcome That Problem Faced By Women

Entrepreneurs In India:

The problems women face pose a challenge for government and the authorities to
tackle, but with the right approach and some time, they can be solved. Everyone
must understand the importance of women entrepreneurship. On top of all, women
need motivation and any discouragement must be dealt with.

Following are some measures that can be taken to make women empowered
so that they can continue their business activities as confidently as Indian men.

• Creating better education opportunities.

• Making provisions for personality development and training.
• Improving communication skills.

19
• Institutions where women can learn entrepreneurial skills and risk taking
abilities.
• Measures to change the attitude of society concerning women and women
entrepreneurs in India.

2.4 Reason To Become A Women Entrepreneur

Here, then, are seven advantages of being a female entrepreneur.

• The stats on women entrepreneurs are on your side.

• Female entrepreneurs focus more on collaboration than competition.
• Women business owners have more mentors and role models than ever
before.
• Women's strength in emotional intelligence is a competitive advantage.
• The parenting experience has its entrepreneurial benefits.
• Women make great leaders.
• Female entrepreneurs have the ability to create a women-friendly corporate
culture.

20
 CHAPTER-3

3.1 BACKGROUND:
Wedding favors are small gifts given as a gesture of appreciation or gratitude to
guests from the bride and groom during a wedding ceremony or a wedding
reception. The tradition of distributing wedding favors is a very old one. It is
believed that the first wedding favor, common amongst European aristocrats, was
known as a bonbonniere.

Gifts may also be personalized with the couple's names, initials or wedding date.
Chocolates in innovative shapes represent a blend of classic favors with modern
themes, along with personalized effects, both on the chocolate (with edible ink)
and on the wrappers.

Vision:

The vision statement on “sac magasin” is to enhance the beauty inside and
outside also to become a leading manufacturer of bags.

Mission:

We aim to provide solution to satisfy our customer’s need by providing them

quality wedding bags in affordable price and will be delivered on time

21
COMPANY NAME:

The word “Sac Magasin” refers as the French word of wedding bag that
contains many colors and different varieties of wedding bags.

COMPANY LOGO:

The company logo of “Sac Magasin” which is given for send off purposes at
the end any family function it denotes a token of love who were attending the
ceremony.

22
COMPANY SLOGAN:

Service offered:

o Free home delivery

o Discount for regular customer
o Online shopping mode
o Name and image will be printed

23
Different types of bags:

➢ Star Tissue

➢ Bride Velvet

24
➢ Paper Tissue

➢ Pure velvet

25
➢ Silk Bag

➢ Net velvet

26
➢ Satin Velvet

➢ Velvet Sac Magasin

27
 3.2 PROJECTED BUSINESS PROPOSAL

BUSINESS PROPOSAL:

Our capital is 3, 00,000 out of with Rs 2, 00,000 we contributed from our

savings and Rs 1, 00,000 from bank loan. The list of our initial investment and
expenses done so to start this venture has been listed below.

NATURE:

This is the sole proprietor enterprise.

A. Capital Employed:

S.no Particulars Amount

1. Capital(own investment) 2,00,000
2. Bank loan 1,00,000
Total 3,00,000

B. Start up expenses:

S.no Particulars Amount

1. Name board charge 1,000
2. Insurance 5,000
3. Telephone connection charge 3,000
4. Registration(vehicle) 5,000
5. Legal expenses 6,000
Total 25,000

28
C. Fixed assets:

S.no Particulars Amount

1. Machinery 4,000

2. Furniture 50,000

3. Building 50,000

4. Intangible assets(computer, patents) 16,000

Total 1,30,000

D. Contingent Equipment:

S.no Particulars Amount

1. Repair and maintenance 5,000

2. Telephone charges 4,000

3. Transport charges 1,000

4. Advertisement 5,000

Total 15,500

29
 E. Equipment required for homemade bag:

S.no Particulars Amount

1. Billing machine 5,000

2. Interior designer 6,000

3. Scissors, Glue, inch tape, cutter, measuring 2,000

scale
4. Cloths 10,000

5. Stitching machine 20,000

6. Finishing touches 2,000

Total 45,000

F. Administrative expenses:

S.no Particulars Amount

1 Helping girl 4,000

2 Maintenance 2,000

Total 6,000

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G. Raw materials:

S.no Particulars Qty Amount

1. Designer Border role 50 2,000
2. Designer Rope 2 5,00
3. Designer stones 2 5,00
4. Satin cloth role 2 5,000
5. Net cloth role 2 4,000
6. Tissue cloth role 2 4,000
7. Glass sheet 5 1,000
8. Wire role 10 2,000
9. Beads (packet) 10 1,000
10. Power machine 2 2,000
11. Fabric glue 2 2,00
12. Machine oil 1 1,000
13. Printing machine 2 10,000
14. Printing ink 1 2,000
15. Printing board 2 5,000
16. Scissor 2 2,00
17. Disappearing marker (Teas) 5 1,00
18. Cutter 2 1,00
19. Measuring scale 2 1,00
20. Tailoring machine 2 5,000
21. Velvet cloth role 5 5,000
Total 50,700

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H. Purchases
S.no Particulars Amount
1. Cash purchase 31,500
2. Credit purchase 30,000

I. Sales
S.no Particulars Amount
1. Cash sales 1,45,800
2. Credit sales 40,000

J. Utilities:

S.no Particulars Amount

1 Electricity 10,000
2 Water 9,000
Total 19,000

K. Closing Stock:

S.no Particulars Amount

1. Materials 21,200
Total 21,200

32
 CHAPTER-4
FINANCIAL PLANNING
4.1 Projected bank account
Dr Cr.
Particulars Rs Particulars Rs

To capital a/c By start up expenses 25,000

Own source 2,00,000 By advertisement 5,000

Bank loan 1,00,000 By fixed assets 1,30,000

By raw material a/c 50,700

By interest on loan 15,000

By balance c/d 74,300

3,00,000 3,00,000

To balance b/d 74,300 By salaries 3,000

To cash sales 1,45,800 By maintenance 2,500

By EB charge 10,000

By telephone charge 1,000

By water charge 9,000

By balance c/d 1,94,600

2,13,100 2,13,100

33
 4.2 Projected Profit And Loss Account

Particulars Notes no Amount

Revenue from operation 1 1,85,800

Other income 2 Nil

Total revenue(A) 1,85,800

Expenses:

Cost of materials consumed 3 91,000

Employee benefits expenses 4 3,000

Finance costs 5 5,000

Depreciation and amortization expenses 6 13,250

Other expenses 7 37,000

Total expenses(B) 1,46,250

Profit before extraordinary(A-B) 36,550

Less: extraordinary items Nil

Profit for the year 36,550

34
 Note for Profit And Loss Account

Note no. Particulars Amount Amount

1 Revenue from operation:

Sales 1,85,800
3 Cost of materials consumed:
Opening stock Nil
Add: purchase 61,500
Less: closing stock 21,200
Raw material 50,700 91,000
4 Employee benefits expenses:
Salaries 3,000
5 Finance cost
Interest on loan 5,000
6 Depreciation and amortization
expenses:

Building 5,000
Furniture 1,000
Equipments 2,250 8,250
Preliminary expenses written off 5,000
Total 13,250
7 Other expenses:
Electricity charge 10,000
Rent 25,000
Sundry expenses 2,000 37,000

35
 4.3 Projected Balance Sheet

Particulars Note no. Amount

I. LIABILITIES:

i. Capital employed:

Capital 1 2,00,000

Reserve and surplus 2 36,550

ii. Non-current liabilities:

Long term borrowing 4 1,00,000

iii. Current liabilities:

Short term borrowings 8 5,000

Trade payable 9 41,000

Total 3,82,550

II. .ASSETS:

iv. Fixed assets:

Tangible assets 12 1,06,750

v. Current assets :

Inventories 21 21,200

Cash and cash equivalents 23 1,94,600

Other current assets 25 60,000

Total 3,82,550

36
 Note To Projected Balance Sheet

Note no Particulars Amount Amount

1.LIABILITIES
1 Capital employed:
Capital from own source 2,00,000
2 Reserve and surplus:
Net profit 36,550
4 Long term borrowing:
Bank loan 1,00,000
9 Trade payable:
Creditors 30,000
Bills payable 11,000 46,000
11.ASSETS:
12 Tangible assets:
Fixed assets:
Equipments 45,000 1,06,750
Less: depreciation 2,250 42,750
Furniture 20,000
Less: depreciation 1,000 19,000
Building 50,000
Less: depreciation 5,000 45,000
21 Inventories:
Closing stock 21,200
23 Cash and cash equivalents:
Bank account 1,94,600
25 Other non-current assets:
Preliminary expenses 25,000 20,000
Less: depreciation 5,000
Debtors 40,000

Note:
• Preliminary expenses written off 5 years.
• Depreciation on Furniture of 5%.
• Depreciation on Buildings of 10%.
• Depreciation on Equipment purchased of 5%.

37
 4.4 Ratio Analysis
4.4.1Gross profit:

Gross profit is the revenue left over after you deduct the costs of making a
product or providing a service. You can find the gross profit by subtracting
the cost of goods sold.

Formula:

gross profit
Gross Profit Ratio = ──────────── X 100
sales

Gross profit ratio for the year:

94,800
Gross profit ratio = ────────── X 100
1,85,800
= 51.02%

Reference:

The gross profit ratio is high. It is impossible to pass the judgement on

adequacy or otherwise of this percentage unless we know the gross profit ratio of
other business in the same field.

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4.4.2 Net profit ratio:
Net profit ratio expresses the relationship between net profit after taxes and
scales. This ratio is measures of the overall profitability net profit is arrived at
after taking into account both the operating and non operating items of incomes
and expenses. The ratio includes what portion of the net sales is left for the
owner after all expenses have been met.

Formula:

Net profit
Net profit ratio = ────────── X 100
Sales

Net profit ratio for the year:

36,550
Net profit = ──────────X 100
1,85,800
= 19.6%

Reference:

The net profit ratio of the company is very low. The sale has to be increased
and a new strategy can be followed to increase its profit.

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 4.4.3 Return on investment:
Return on investment is a performance measure used to evaluate the efficiency
of an investment or compare the efficiency of a number of different investments.
ROI tries to directly measure the amount of return on a particular investment,
relative to the investment cost.

Formula:

Net income
Return on investment = ───────────── X 100
Cost of investment

Return on investment for the year:

36,550
Return on investment = ────────── X 100
2,00,000
= 18.3%

Reference:

The return on investment of the company is very low. Capital employed is

Rs.2,00,000 but NP 36,550 is very low. Adequate measures must be take to
increase the profit.

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4.4.4Current ratio:

The current ratio is a liquidity ratio that measures a company's ability to pay
short-term obligations or those due within one year. It tells investors and
analysts how a company can maximize the current assets on its balance sheet to
satisfy its current debt and other payables.

Formula:

Current assets
Current ratio = ─────────────
Current liabilities

Current ratio for the year:

2,15,800
Current ratio = ──────
1,41,000
= 1.5 times

Reference:
The current ratio in the company is low it indicates its financial help of
company. It minimizes the liquidity of the current asset to settle debt and
payables.

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4.4.5 Working capital turnover ratio:
Working capital turnover is a ratio that measures how efficiently a company is
using its working capital to support a given level of sales. Also referred to as net
sales to working capital, work capital turnover shows the relationship between
the funds used to finance a company's operations and the revenues a company
generates as a result.

Formula:

Sales
Working capital turnover ratio = ──────────────
Net working capital

Working capital turnover for the year:

1,85,800
Working capital turnover ratio = ─────────
1,29,800
= 1.4times

Reference:
This ratio is purely based on cost of sales. if we increase the cost of sales in
every year then the working capital ratio will increase. However from the above
interpretation the company has shown decreases in the working capital ratio. The
company has to take necessary measure to increase it.

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4.4.6 Fixed assets turnover ratio:
The fixed asset turnover ratio (FAT) is, in general, used by analysts to measure
operating performance. This efficiency ratio compares net sales (income
statement) to fixed assets (balance sheet) and measures a company's ability to
generate net sales from its fixed-asset investments, namely property, plant, and
equipment.

Formula:

Net sales
Fixed assets turnover ratio = ──────────────
Fixed assets

Fixed assets turnover for the year:

1,85,800
Fixed assets turnover ratio = ──────────
1,30,000
= 1.57times

Reference:
The value of fixed assets turnover ratio shows there is proper utilization of fixed
assets. The fixed asset can be still more use to the maximum extent as possible.

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4.4.7 Inventory turnover ratio:
Inventory turnover is a ratio showing how many times a company has sold and
replaced inventory during a given period. A company can then divide the days in
the period by the inventory turnover formula to calculate the days it takes to sell
the inventory on hand. Calculating inventory turnover can help businesses make
better decisions on pricing, manufacturing, marketing and purchasing new
inventory.

Formula:

Cost of sales
Inventory turnover ratio = ───────────────
Average inventory

Inventory turnover for the year:

50,700
Inventory turnover ratio = ────────
21,200
= 2.3times

Reference:
As the inventory turnover ratio high, its shows the higher utilization of inventory
in hand, there is also enough liquidity of inventory in hand.

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4.4.8 Debtor turnover ratio:
The accounts receivable turnover ratio is an accounting measure used to
quantify a company's effectiveness in collecting its receivables or money owed
by clients. The ratio shows how well a company uses and manages the credit it
extends to customers and how quickly that short-term debt is collected or is paid.
The receivables turnover ratio is also called the accounts receivable turnover
ratio.

Formula:

Net credit sales

Debtors turnover ratio = ─────────────────
Average account receivable

Debtor’s turnover for the year:

40,000
Debtors turnover ratio = ────────────
40,000
= 1 times

Reference:
The debtors to whom the credit sales have made have not paid the balance. If
they pay the balance the ratio will decrease and how it is equal to 1 as the
balance is not received.

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4.4.9 Creditor’s turnover ratio:
The accounts payable turnover ratio, also known as the payables turnover or the
creditor’s turnover ratio, is a liquidity ratio that measures how many times a
company pays its creditors over an accounting period. The accounts payable
turnover ratio is a measure of short-term liquidity, with a higher payable
turnover ratio being more favorable.

Formula:

Net credit purchase

Creditors turnover ratio = ────────────────
Average account payable

Creditors turnover ratio for the year:

30,000
Creditors turnover ratio = ─────────
30,000
= 1 times

Reference:
There are no other liabilities is the company other than credit purchases of stock
to be sold the creditors balance is yet to be paid and that is why the ratio is equal
to 1. The creditors have to be settled soon.

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4.4.10 Return on assets:
Return on assets (ROA) is an indicator of how profitable a company is relative
to its total assets. ROA gives a manager, investor, or analyst an idea as to how
efficient a company's management is at using its assets to generate earnings.
Return on assets is displayed as a percentage.

Formula:

Net profit
Return on assets = ───────────── X 100
Total assets

Return on assets for the year:

36,550
Return on assets = ─────── X 100
3,87,550
= 9.4%

Reference:
The return on asset is low. The company must take effective measure to prevent
loss and increase its return on assets.

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 CHAPTER-5

FINDINGS:
• The capital that is being invested in the firm is quite low, therefore it
lead to restrictions in taking risk that many lead to effective outcomes.
• As the firm has opted to rent the building for business purposes, it has
to pay a high amount of expense in the form of rent.
• There are only limited numbers of vacancies produced by the firm.
• The Source of income are only from the hand of the proprietor.
• The amount of net profit obtained is less due to high credit sales.
• The rate of return is very low.
• The short term solvency of the firm is very high.
• The return of asset is low.
• There is decrease in the working capital ratio.
• The prices of the product Offered by the firm are quite high compared
to the competitive firms.
• The Customers interest and preference may keep on change.

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SUGGESTIONS:
• As the period of business is not limited, the firm can purchased a
building for business purpose which will reduce the expense.
• The firm cal also produce various new models of design.
• Research and development program can be done to get knowledge on
competitive market conditions.
• The demand of consumers can be increased by advertising the
offerings of the firm.
• The idle funds can be invested in various instruments.
• The fixed assets can be still more used to the maximum extent
possible.
• A provision of doubtful debts can be made as the firm is providing
credit sales.
• The company must take effective measure to prevent loss and increase
its return on assets.
• The firm can provide offers and discounts to consumers at the end of
accounting year to reduce closing stock.
• The firm can provide services to consumers to increase the firm
reputation.

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CONCLUSION:
I conclude that the firm is having rising operating and manufacturing
expenses which affects the firm to earn the handsome profit. The project
report helped me to get the knowledge on the control over the operating and
non- operating expenses for better maintenance of the firm.

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 CHAPTER-6
BIBILOGRAPHY

Website
www.google.com
www.wikipedia.com

Books
• “Entrepreneurial development” – Jayashree Suresh.
• “Entrepreneurial development” – DR.C.B.Gupta & DR.N.P.Srinivasan.

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