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Comfort Jeans

Prepared by
Lalitsingh Jodha (section B)
Vandana singh (section B)

✔ ACADEMIC YEAR-- 2009-2011


✔ PROGRAM – PGPM
✔ UNITED WORLD SCHOOL OF BUSINESS (AHMEDABAD)
Sub
mitted to
Gauta

m shukhla

 Name of the firm 

Comfort Jeans

 Address of the company 

“Comfort Jeans”,

Sector 28, G- 1875 GIDC

Gandhinagar (Gujarat)

 Scale of the organization 

Small scale industry

 Nature of the product 


Garments (Jeans)

 Estimated cost of the project 

60,41,500

 Market Area 

Limited to Gujarat

 Raw Material:

The main raw materials required to produce the Jeans are


Denim & cotton clothes, thread, button, rivet, zip, stickers.

 Product & its use:

The popularity and the demand of Jeans are increasing


day by day. Jeans have left behind the tailor made cloth. Consumer
can wear Jeans casually with shirt or short shirts & T-shirts. Today,
consumers wear Jeans even with blazers. Even in villages people have
started wearing Jeans. Each & every class of people wears Jeans. So,
we can say that it can be matched in any style and it can be change
your style.

Generally, the raw material of Jeans is available from outside


Gujarat.

Sr.
Material Sources
no.
1 Denim Cloth Mumbai
Ahmedaba
2 Cotton Cloth
d
3 Thread Sirmour
4 Button Delhi
5 Rivet Delhi
6 Zip Delhi
Ahmedaba
7 Stickers
d
Ahmedaba
8 Plastic
d
Ahmedaba
9 Washing acid
d

INPUTS OUTPUTS

Materials

Labour Products

Capital Service

Energy Information
PRODUCTION
FUNCTION

Cutting Process

Produces the Jeans in the following


steps ocess
Over lock

Embroidery Work

Stitching Process

Fitting

Washing

Ironing

Folding

Packing

Storing
I take maximum one and half year to implement this type of
project the time required for completing each activity of the
project till commercial production is as follows:

No. Activity Completi


on Time
1 Preparation of Project 1 month
2 Selection of a site 2 months
3 Registration of SSI 1 month
4 Availability of finance 3 months
5 Construction of building 6 month
6 Arrangement of machines & 1 month
equipments
7 Erection & commissioning 1 month
including electrification
8 Recruitment of personnel & 2 month
Labour
Details of Land & Building
No. Particulars Area Rate Total
1 Land 1400 yards 321 4,50,000
2 Building 2000 sq. ft. 350 7,00,000

Total 11,50,000

Details of Plant & Machinery


No. Particulars Qty. Amount (Rs)
1 Simple stitch machine 10 2,00,000
2 Chain stitch machine 6 4,80,000
3 Folding machine 1 1,50,000
4 Stain removing machine 1 70,000
5 Washing machine 2 3,00,000
6 Cutting machine 1 2,00,000
7 Fitting machine 1 1,00,000
8 Embroidery machine 2 1,00,000
9 Iron 1 25,000
10 Printing machine 1 75,000
11 Over lock machine 2 1,00,000
12 Logo-making machine 1 25,000
13 Handling equipment - 75,000
Total 19,00,000

Other Fixed Assets


No. Particulars Qty. Amount (Rs)
1 Delivery Van 2 5,00,000

2 Furniture - 3,50,000

3 Computer 2 50000

Total 9,00,000

Preliminary, Pre-operative & miscellaneous expenses Rs.


5, 00,000

Total Fixed Assets


No. Particulars Amount (Rs)
1 Land & Building 11,50,000
2 Plant & Machinery 19,00,000

3 Other Fixed Assets 9,00,000

4 Preliminary & miscellaneous Exps. 5,00,000

Total 44,50,000

Raw Material Requirements

No. Particulars Qty. Rate Monthly Annually


1 Denim cloth 3000 m 80 2,40,000 28,80,000
2 Cotton cloth 1500 m 60 1,20,000 14,40,000
3 Thread - 15,000 1,80,000
4 Button 6000 0.7 4,200 50,400
5 Zip 5000 4.8 24,000 2,88,000
6 Stickers 7000 1.5 10,500 1,26,000
Pocketing
7 500 m 8 4,000 48,000
Clothes
8 Plastic Box 2700 2 5,400 64,800
Washing
9 500 lt 20 10,000 1,20,000
Acid
Total 4,33,100 51,97,200
Utility
No. Particulars Qty. Rate Monthly Annually
1 Electricity 1000KWH 5 10,000 1,20,000
2 Water - - 1,500 18,000
Total 11,500 1,38,000

Man Power Requirements

TOP LEVEL
No. Particulars No. of Monthly Yearly
Salary
Employees Salary
1 Manager 2 14,000 1,68,000
2 Accountant 1 5,000 60,000
3 Designers 1 5,000 60,000
Total 24,000 2,88,000
MIDDLE LEVEL
No. Particulars No. of Monthly Yearly
Salary
Emp. Salary
1 Salesman 5 15,000 1,80,000
2 Clerk & computer 1 2,500 30,000
operator
3 Store keeper 2 3,000 36,000
Total 20,500 2,46,000
Other Administrative Expenses
Lower Level
No. Particulars No. of Monthly Yearly
Emp.
Salary Salary

1 Stain stitch machine 6 15,000 1,80,000


Operator

2 Simple stitch machine 10 20,000 2,40,000


Operator

3 Folding machine Operator 1 1,500 2,40,000


4 Washing machine Operator 1 1,200 18,000
5 Cutting & Fitting machine 1 1,500 14,400
Operator

6 Embroidery machine 2 3,000 36,000


Operator

7 Over Lock machine 1 1,500 18,000


Operator
Level Of Management
8 Levels
PrintingOf Management
machine Operator Monthly
1 1,500Annual18,000
Salary Salary
9 Iron Machine Operator 1 1,200 14,400
Top Level 24,000 2,88,000
10 Packing machine Operator 1 1,200 14,400
Middle Level 20,500 2,46,000
11 Watchman 2 2,900 34,800
Lower Level 50,500 6,06,000
Total 50,500 606000
Total 95,100 11,40,000
Total Working Capital
No. Particular Monthly Annually
1 Telephone 1,500 18,000
2 Postage & stamp Duty 500 6,000
3 Advertising & Marketing 7,000 84,000
4 Consumer stores 1,200 14,400
5 Miscellaneous 1,000 12,000
Total 11,200 1,34,400

No. Particular Monthly Annually


1 Raw Material 4,17,700 50,12,400
2 Utility 11,500 1,38,000
3 Wages & salary 95,100 11,41,200
4 Administrative Exp. 11,200 1,34,400
5 Other contingencies 3,000 36,000
Total 5,30,500 64,26,000
Total Cost of Project

No. Particulars Amt. (Rs.)


1 Total Fixed Capital 44,00,000

2 Total Working Capital 17,28,000

Total 61,28,000

Sources of Fund

No. Particulars Percentage Amt. (Rs.)


1 Owned Capital 60 % 36,24,900

2 Borrowed Capital 40 % 24,51,200

Total 60,41,500

Interest
No. Particulars Percentage Amt. (Rs.)
1 Owned 9.5 % 3,44,365
2 Borrowed Loan (SBS) 12.5 % 3,02,075
Total 6,43,498

Depreciation

Maintenance & Repair


No. Particular Value Rate Amt.
1 Building 11,50,000 15% 1,72,500
2 Machinery 19,00,000 20% 3,80,000
3 Other Fixed Assets 8,50,000 15% 1,27,500
4 Computer 50,000 20% 10,000
Total 6,90,000
No. Particulars Amt. (Rs.)

1 Raw Material 51,97,200

2 Utilities 1,38,000

3 Manpower 11,40,000

4 Repairs & Maintenance 1,97,500

Total 66,72,700

Cost of Production
No. Particular Value Rate Amt.
1 Building 11,50,000 5% 57,500
2 Machinery 19,00,000 5% 95,000
3 Other Fixed Assets 9,00,000 5% 45,000
Total 1,77,500
Cost Analysis
Particulars Amt. (Rs.) Amt. (Rs.)
Variable Cost
Raw Material
Denim Cloth 28,80,000
Cotton Cloth 14,40,000
Thread 1,80,000
Button 50,400
Zip 2,88,000
Stickers 1,26,000
Pocketing Clothes 48,000
Plastic box 64,800
Washing Acid 1,20,000
Other contingency 36,000 52,33,200
Semi Variable Cost
Utilities 1,38,000
Administrative Exps. 1,34,400
Man Power (Lower Level) 6,06,000 8,78,400
Fixed Cost
Preliminary & Pre-operative expenses 50,000
written off
Man Power (Middle & Top level) 5,34,000
Interest on capital 6,43,498
Depreciation 6,90,000
Repairs & Maintenance 1,97,500 21,14,998

Total Cost 82,26,598


Profitability Analysis

Particulars Amt. (Rs.) Amt. (Rs.)


Sales 88,15,000
(Less) Variable Cost
Raw Material 51,97,200
Utilities 1,38,000
Manpower 6,06,000
Admin. Exp. 1,34,400
Other contingencies 36,000 61,11,600
Contribution 27,03,400

(Less) Fixed Cost


Manpower 5,34,000
Depreciation 6,80,000
Maintenance & Repairs 1,97,500
Insurance 20,000
Int. on loan 6,43,498 20,74,998
Profit Before Tax (PBT) 6,28,402
(Less) 35% Tax 2,19,941
Profit After Tax (PAT) 4,08,461
Break-even analysis is a scientific analysis, which leads producers
towards more systematic and scientific production planning or sales
planning. It is because of break-even analysis that the firm can accordingly
work out the required size of the plant. By break even analysis the small-
scale entrepreneur can get proper guidelines about volume of sales to be
achieved to avoid the danger of loss.

Break-even analysis indicates a point where total revenues are equal


total cost. It means a volume of sales where firm earns neither profit nor

No. Particulars Amt. (Rs.)


1 Sales 88,15,000
2 Variable cost 61,11,600
3 Fixed Cost 20,74,998

suffers loss in called Break-even point.


BEP = Fixed Cost
Contribution
= 20, 74,998 x 60% =
46.05%.
27, 03,400
BEP (Rs.) = Fixed cost x sales
Contribution

= 20, 74,998 x 88, 15,000=67,


65,512 Rs.
27, 03,400

Return on Investment
ROI = EBIT x 100
Project Cost

= 12, 71.900 x 100


60, 41, 500
= 21.05%

EBIT = PBT + TOTAL INTEREST

= 6, 28,402 + 6, 43,498

= 12, 71,900

Net Profit Ratio

NPR = PAT x 100


Sales

= 4, 08,461 x 100
88, 15,000
= 4.63%
Fixed Assets Turnover Ratio

F.A.T.R. = Sales
Fixed Assets

= 88, 15,000 = 2.23%


39, 50,000

Today’s generation is very much conscious about the


garments. The consumption of new fashionable garments
increases day by day especially Jeans.
A Jeans became popular garment in all over the world. So,
the demand increases day by day and the fashion trend changes
every day in jeans. At present take an example of world leading
Jeans producing company Wrangles, Lee, GAP, Flying machine
etc. have launched the range Jeans trend. So, the Jeans is a
forever product in the garments. It indicate that the demand of
the Jeans will increase in India as well as foreign culture the
company has wide spread market.

It indicates future expansion and development of the project according


to proposed project is considered to have better prospects.

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