Scribd
Upload
38 views1 page

Project Profitability Analysis

The document summarizes the profitability of a project over four years. Sales increased each year from 50 lacs in year 1 to 181.5 lacs in year 4. Cost of production also increased from 30 lacs to 120 lacs over the same period. Despite higher costs, net profit increased from 10 lacs to 41 lacs between years 1 and 4 as sales grew at a higher rate than costs. Key metrics like net profit ratio, rate of return, and break even point all improved over the four years, indicating increased profitability of the project over time.

Uploaded by

Sanjay Malhotra
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
38 views1 page

Project Profitability Analysis

The document summarizes the profitability of a project over four years. Sales increased each year from 50 lacs in year 1 to 181.5 lacs in year 4. Cost of production also increased from 30 lacs to 120 lacs over the same period. Despite higher costs, net profit increased from 10 lacs to 41 lacs between years 1 and 4 as sales grew at a higher rate than costs. Key metrics like net profit ratio, rate of return, and break even point all improved over the four years, indicating increased profitability of the project over time.

Uploaded by

Sanjay Malhotra
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

PROFITIBILITY OF THE PROJECT

(All values in lacs of Rupees)


Year Year Year
A SALES       I Year II III IV
  1 Sales less of Excise     50 78.5 110.5 181.5

                 
B COST OF PRODUCTION              

  2 Raw Material     21.6 35 48 90

  3 Labour Charges     4.2 6 7 8

  4 Administration expenses     4.2 9 11 22


TOTAL COST OF
  PRODUCTION       30 50 66 120
Add opening stock
  5 (WIP+FG)     0 0.5 0.5 1

  6 Deduct closing stock     0.5 0.5 1 1

                 
C COST OF SALES       29.5 50 65.5 120
D GROSS PROFIT       20.5 28.5 45 61.5
E INTEREST @ 18%       6.12 5.04 3.78 2.34
F PROFIT BEFORE TAX       14.38 23.46 41.22 59.16
PROVISION FOR TAX @ 30
G %       4.314 7.038 12.366 17.748
H NET PROFIT       10.066 16.422 28.854 41.412
DEPRECIATION ADDED
I BACK       2.07 2.07 2.07 2.07
J NET CASH ACCRUALS       12.136 18.492 30.924 43.482
20.13
K NET PROFIT RATIO       % 20.92% 26.11% 22.82%
29.61 121.80
L RATE OF RETURN       % 48.30% 84.86% %
M FIXED COST       12.39 13.11 12.85 12.41
55.17
N BREAK EVEN POINT       % 44.39% 30.81% 23.06%
O REPAYMENT OF LOAN       6 7 8 13

You might also like