FEASIBILITY STUDY
FOR 3 COMPANIES
GROUP 4
Members:
1. Ralph Matthew A. Ong (M997Z245)
2. Ha Phuoc Vu (M997Z244)
3. Tran Khai Khuong (M997Z212)
4. Melva Hermayanty Saragih (M997Z227)
5. Pham Dinh Chien (M997Z201)
Health & Fitness Club
EXECUTIVE SUMMARY
Health & Fitness Club will provide health care and body workout services.
Health & Fitness Club will offer low cost services to all segments of customer.
Owners are experienced and dedicated towards health care services.
Health care market is on the boom in USA.
Market volume is expected to reach $69.8 billion by the year 2012.
A large segment of market is still untapped.
Heart disease and obesity are on record high causing increase in health club
demand.
Low income market segment is ignored by key competitors.
Health & Fitness Club market is competitive in USA but provides equal growth
opportunities.
Increasing awareness, obesity and heart disease are the driving forces for
market growth.
Health & Fitness C lu b will have their own training facility with state of the art
health care equipment from quality manufacturers.
Good health habits are very important at any age and it is never too late to change
habits in ways that will improve health. One of the key factors for increasing
health is exercise. A regular program of exercise can:

Aid in weight management

Lower risk of heart disease and certain types of cancer

Increase life span and quality of life

Helps control hypertension and diabetes

Increase and maintain flexibility

Reduces muscles tension

Promotes increased circulation

Aids in relaxation, stress reduction

Develops body awareness
PART I: CONCEPT STATEMENT
1. Description of the product/service offered:
 Products:
 Aerobics
 Cycling
 Boxing
 Yoga
 Gymnasium
 Exercise halls
 Services:
 A health and fitness club provides services to its members to
improve their physical condition or appearance through exercise.
 The proposed health and fitness club will provide indoor facilities of
Gymnasium, Exercise halls, and a Gym shop & Cafe to male and
female members and will offer services of personal training by
qualified instructors.
 Health and fitness club should be centrally located within a
residential town to provide easy access to the inhabitants.
2. The benefits of product/service

Convenience
 For new fitness clubs to be a success, it has to be conveniently
located. People are more likely to use a facility if it is close to home
or work. Also the fitness facility should have hours and class times
that work within client’s busy schedule.
 Personal qualified trainers to help our members achieving results
without wasting much time.

Type of Facility
 State of the art facility with latest equipment from quality
manufacturers
 There are many different types of fitness facilities, each being the
perfect motivational tool for a specific type of person.

Pricing
 Low cost with monthly, quarterly and annual subscription plans
 Price levels should be set at affordable levels considering income
brackets of people who live in the vicinity and also after considering
the competitor’s price levels.
PART II: FEASIBILITY ANALYSIS
1. Industry attractiveness
A Health & Fitness club can be descried as a service facility that is intended to
provide physical health care exercises with the help of specialized equipment.
It normally serves both male and female customers but in some cases females
are provided special attention by providing them female only health clubs in
which all staff including trainers are also females. Normally, the environment is
made casual to provide customers comfortable experience that helps them
performing bodybuilding and other exercises with ease.
Commercial Health club industry is emerging as one of the good business ventures
in USA. People are getting conscious and aware about their health and feel the
importance of exercise in the busy life. Currently health club industry is
segmented and unorganized excluding few health clubs. There is neither an
association of these clubs which is working actively for the development of this
industry nor government or health department/ministry has collected any data
about the quantity and quality of these clubs.
Neither have the authorities set any quality standards for such clubs like in
developed countries. A lot of people are venturing into this trade, as it is a
flourishing business. Competition is healthy but these gyms do not cater to health
needs that can be a risk. A lot of people after discontinue the gyms after having
complaints of joint pain and other related health issues.
2. Target market attractiveness
The target customers for health clubs are the population of big cities having age
group of 18 to 50 years. Health & Fitness club will start by targeting low
income segment of market downtown area. They will convince people about
the benefits and needs of wellness programs. This will be accomplished by
aggressively pursuing interaction and relationships with peoples in public health
awareness programs and by sending newsletters and emails through website.
The market for health clubs in USA has been developing steadily over the last
decade and a mushroom growth of Gym and clubs is being observed in all the
cities. But still a good potential exists for quality health clubs. Location and
amenities are some of the most vital factors in the success of a health club.
Health care club market in USA is getting more and more demanding with the
passage of time. Following are the common demands that have arise in recent past.
 Customization: People who already have membership or those who are
willing to have one, are interested in subscribing to a customized health
care plan according to their requirements or as per the recommendation of
medical expert.
 Ease of Service: People are looking for exercises that are easy to adopt
and are performed by expert trainers.
 Effectiveness of Exercise: Members are very demanding over results of
the exercises which they are performing. An expert trainer can be helpful
in setting a proper exercise plan for the members so they can work out
accordingly.
Huge market is available for new health clubs to enter. It is only the matter of
creating awareness for which media is playing a positive role.
3. Market timeliness
Health & Fitness Club will follow this service execution model to enter in the
health club market.
Execution Period
Task
January
Choosing location
Website
development
Hiring,
training
and admin staff
Advertising
Opening of Health
& Fitness Club
February
March
April
May
June
√
√
July
√
√
√
√
√
4. Organizational feasibility
The total human resource requirement of the health and fitness club is 17. Skilled
instructors are easily available at competitive salaries. Number of workers required
for each department is as follows:
Annual
Department/Positions
Number
Salary/Month USD USD
Manager
1
510
6010
Instructors (Male/Female)
4
310
14410
Gym Helpers
4
140
6250
Admin/Accountant
1
210
2410
General physician
1
310
3610
Cleaners
4
140
6250
Security guard
2
150
3370
Total
17
42310
salary
5. Financial feasibility
Capital investment for purchase of equipment is the major component of total
start-up cash needed of a Health and Fitness club. Following table shows the detail
of the Total start-up cash needed:
Capital Investment
Equipment
Air conditioners
Computer with UPS
Furniture & fixtures
Printer
Sound system
Water dispenser
Generator
Refrigerator
Pre-operating costs
Total Capital Costs
Units
Cost per unit
10
2
710
710
1
2
1
1
2
250
610
310
18,510
710
 Operating expenses
Operating Expenses
Administrative Salaries
Rent
Legal & Audit Fee
Entertainment
Telephone, Fax and Postage
Electricity
Generator Cost
Advertisement
Repair of equip
Traveling conveyance
Printing and stationery
Depreciation
Amortization
USD
42,260
29,180
510
1,250
1,250
31,590
6,850
3,750
2,390
630
630
7,940
2,850
131,080
USD
42,350
7,100
1,420
6,010
250
1,220
310
18,510
1,420
14,210
92,800
6. Exercise Equipment Requirement.
Description
Slimming, Warm up & Waist
Electric jogger power fit
Cost per unit
Units Total Cost
1,610
4
6440
6440
Exercise Bicycle
Air Resistance Dual Action
Heavy Duty Dual Action
210
310
2
2
420
620
1040
Stepper
Mini Stepper With handles
290
2
580
580
310
170
2
1
620
170
Twister
Twister- Double with handles
Twister- Single
Belt Massager
Crunch
Vertical Knee Raise
Roman Chair
Hyper Extension (Adjustable)
Sit-up Bench
Abdominal Board with stand
(Multi and Adjustable)
330
250
270
250
250
100
510
1
1
1
1
1
2
330
250
270
250
250
200
2
1020
2570
2
2
1
400
400
200
1
650
2
2
1220
1820
1
1
710
710
1
970
7080
1
710
Total
Chest Exercise
Bench Press (with plate holder)
Incline Press (with plate holder)
Decline Press (with plate holder)
Butter fly Machine (with 60 Kg
weight)
Sitting Bench Press Machine
(with 50 Kg weight)
200
200
200
650
610
Multi Smith machine Bench
Press
Flying Machine (with 60 kg)
910
710
Pull Over Machine
Cable cross over Machine with chinup bar (with 100 kg)
710
970
Total
Leg Extension(with 60 Kg weight)
710
Hack Squarts
Power line leg press
Leg Curl Machine(with 50 Kg
weight)
Leg Stand
Standing calves machine(with 100
Kg weight)
1,010
1,010
910
Sitting calves machine
Total
410
Arm Exercise
Preacher Curl Bench(manual)
Preacher Curl Bench (machine)
Bent Over Lever row: T-Bar
Standing Curl Stand
Triceps Dip
Shoulder Press Machine (with 50 kg
weight)
1
1
1010
1010
1
910
1
1
310
410
1
1
1
1
1
250
710
370
90
170
1
710
1
1310
1
2510
310
250
710
370
90
170
710
Total
Multi Gymnasium
Multi four Station65,000 (200 Kg
weight) with Cable rowing, Lat pull,
Twister & T- bar extension
1,310
Total
Multi Six Station125,000
(350 Kg weight) with Cable
rowing, Peck deck, Triceps
extension, Lat pull, Chin up bar,
Preacher cable machine
Rods Dumbles and Weights
Rods (Chrome Coated)
Olympic rod(6 Ft)
Curling rod(4 Ft)
Rod 5-feet
EZ Curl Bar
Rod 7-feet
Total
Dumbles
Chrome Coated @ Rs. 250 per
Kg:
6 kg1,500
2,510
80
60
70
90
90
3
2
2
2
1
240
120
140
180
90
310
10
3100
8 kg2,000
10 kg2,500
12 kg3,000
14 kg3,500
16 kg4,000
18 kg4,500
20 kg5,000
24 kg6,000
28 kg7,000
32 kg8,000
40 kg10,000
Total
Weights
Chrome Coated @ Rs. 250 per
Kg:
2.5 kg
5 kg
10 kg
15 kg
20 kg
Total
Dumble and weight racks
Multi Dumble Rack
Multi Weight Rack
Total
Yoga & Pilates equipment
Yoga mats
Pilates Equipment
Total
TOTAL
410
310
370
430
330
370
610
490
290
330
410
4,550
10
6
6
6
4
4
6
4
2
2
2
4100
1860
2220
2580
1320
1480
3660
1960
580
660
820
20
30
60
80
110
10
12
12
12
12
200
360
720
960
1320
310
210
0
0
0
0
110
2
2
15
620
420
0
0
0
0
1650
42350
Feasibility Analysis
LOTUS RESTAURANT
INTRODUCTION
Restaurants play an especially important role in many small communities. In
addition to providing a place to obtain food service, these establishments can be a focal
point to facilitate an exchange of ideas and an opportunity to build social capital.
Consequently, having a restaurant on main streets benefits both the owner and the
community.
We have all had meals in a variety of restaurants. The level of service provided,
location, range of menu prices, and selection all add unique dimensions to a restaurant.
The types of restaurant can be classified into 3 broad groups:

Quick-Service or fast-food restaurants typically have limited menus, serve food prepared
quickly for eat-in or takeout dining, and often offer drive-up service at a relatively
inexpensive price.

Mid-scale restaurants generally offer full service meals at a perceived value. Variations
of midscale restaurants offer somewhat limited service with customers ordering at the
counter and food served at tables. Another variation of mid-scale restaurants is a small
town cafe. A cafe or coffee shop typically has limited hours and a limited menu;
however, meals are often flavored with local news or seasoned over casual business. The
cafe may also be a community gathering or meeting place in lieu of a meeting hall.

Upscale restaurants offer fine dining with full table service, focusing on quality rather
than on price. These restaurants may also include specialties such as Chinese, French, and
other foreign or ethnic foods. Upscale restaurants are often used for special occasions
such as birthdays and anniversaries. If the facility is large enough to accommodate
banquets or special events, receptions and meetings are also scheduled in these
restaurants.
PART 1: CONCEPT STATEMENT
1. A description of the product being offered
The restaurant we intend to build is a mid-scale restaurant. It will offer the meals
for a family but the menu is limited and the price is acceptable. The products of restaurant
will be food and beverages with a high quality services. We also supply the service for a
small party such as birthdays, small meetings, etc. The restaurant is decorated with a
warm atmosphere, suitable for a meal family and all the members of the family can talk
together. Here is some information we intend:
The Name of Restaurant:
LOTUS RESTAURANT
Size of Restaurant:
Mid-Scale Restaurant
Location:
BinhThanh District – Ho Chi Minh City – Viet Nam
2. The intended target market

Families want to hang out for a meal.

Companies want to celebrate medium parties (the number of participants is less
than 300).

Customers are in the middle class. They do not need to pay a lot of money for a
good meal or party.
3. The benefits of product
The restaurant offers:
 High quality food to the customers.
 Better services to the customers.
 Better sitting facility to the customers.
 Better environment to the customers.
 Better waiting facility to the customers.
 Best price for a meal.
 A clean, comfortable environment especially suited for families.
The mission of restaurant is to achieve the economies of scale to minimize costs
while maximizing value to Customers. It can make our restaurant can be different with
other restaurants.
4. A brief description of the company’s management team
Mr. Ha Phuoc Vu – General Manager
 BA in Accounting and Auditing – The University of Danang, Danang, Vietnam
(2009).
 Master Degree in Business Administration – Southern Taiwan University (2011).
Ms. Nguyen Tran Thao Bien – Sale Manager
 BA in International Business – Lac Hong University, Vietnam (2010).
 Master Degree in Business Administration – Southern Taiwan University (2011).
Mr. Huynh Tan Tai – Human Resource Manager
 BA in Human Resource Management – Ho Chi Minh University of Economics,
Vietnam (2010).
 Master Degree in Business Administration – Southern Taiwan University (2011).
Besides that, the staff team of restaurant consists of the experienced and dedicated
staffs, who work in a team spirit to achieve common goals. In our pursuit for overall
excellence, we have evolved pro-active mechanisms and work culture with introducing
new food and beverages to satisfy customer and attract new customers.
PART 2: FEASIBILITY ANALYSIS
1. Product/Service feasibility analysis
After the concept statement is developed, we showed this to 100 people who
usually use the service of the Mid-scale restaurant to receive the feedback about how
likely would you be to buy the product or service of our restaurant? And here is the result:
Definitely would buy
45
Probably would buy
36
Might or might not to buy
14
Probably would not buy
5
Definitely would not buy
0
Total
100
2. Industry/Target market feasibility analysis
Currently, there are some certain restaurants in the city, including:

-
King
-
Phoenix
-
Ngon
-
Viet
-
VipVuon
-
Truc Lam Vien
But in the surrounding 2 – 5k.m.s of area, from the region choosen,there is no availability
even of any restaurant.

King and Phoenix are, a very popular and good restaurant, onceupon a time has suffered a
lot due to the inconsistency in terms of product and service quality.

Due to Phoenix lost quality people are looking forward for that quality to come back into
the market.

People want a place where they can get everything “from fun to rest.”

Away from city area. Generally people like to have a peaceful and different place for the
parties
Based on the survey, this place where our restaurant located the need of families
wants to hang out for a meal is at high level. This place is also near the buildings where
many companies located. We can attract the customers from the staffs of companies by
offering good lunch, dinner, small party (birthdays, anniversaries, etc).
3. Organizational feasibility Analysis
The total human resource requirement of restaurant is 38, including officers
(managers, accountant, booking staffs), chefs, service staffs, and security guard. For
officers, chefs and security guard, we pay the salary every month (not depend on the
number of hours they work). But for service staffs, most of them are part-time staffs so,
we pay them base on the number of hours they work. In the “hot” season, we can hire
more part-time job staffs and they will be paid based on the number of hours they work.
Officers
7 persons
Chefs
2 persons
Service Staffs
27 persons
Morning
6 persons
Afternoon
10 persons
Evening
11 persons
Security Guard
2 persons
Total
38 persons
4. Financial Feasibility Analysis
In this part, the expected profit and loss account for the 1st business year and some
more detail information can be supplied to make sure that the plan of this business can
make profit.
THE EXPECTED PROFIT AND LOSS ACCOUNT FOR THE 1ST YEAR
Debit
650,000.00
Food and Beverages
Credit
650,000.00
Sale of Food,
Consumed
62,100.00
Salaries
120,720.00
Fixed (monthly) Salary
62,400.00
Hourly Salary
58,320.00
Electricity Expense
16,000.00
Telephone Expense
2,755.00
Beverages
650,000.00
Administrative Expenses
1,558.00
Maintenance and Repairs
11,070.00
Gas
12,000.00
Newspaper
810.00
Decoration
11,910.00
Depreciation
272,832.00
Building
121,392.00
Equipment
64,380.00
Furniture
87,060.00
Interest On Loan
Net Profit
40,000.00
98,245.00
The Net Profit of the 1st business year is 98,245 US$ (8,187 US$/month). That is
the good result for this plan.
More detail information about Salary per month:
Monthly Salary
Hourly Salary
No of
No of
Staffs
US$/person/month
Amount
US$ per
hours
hour
per
Amount (30
working days
in a month)
shift
Manager
3
700
2100
Accountant
2
400
800
Booking Staffs
2
400
800
Chefs
2
550
1100
Service Staffs
27
Morning
6
1.5
4
1080
Afternoon
10
1.5
4
1800
Evening
11
1.5
4
1980
Security
2
Guard
Total
38
200
400
5200
4860
Capital Investment:
Time of
Capital investment
Amount (US$)
Building
Equipment
Kitchen Cost
1,213,920.00
depreciation
10 years
321,900.00
211,200.00
5 years
Gas connection
72,600.00
5 years
Telephone Connection
19,200.00
5 years
Computer
18,900.00
5 years
50,785.00
7years
Furniture
More detail about depreciation:
per month
Building
Equipment
10,116.00
121,392.00
5,365.00
64,380.00
Kitchen Cost
3,520.00
Gas connection
1,210.00
Telephone Connection
320.00
Computer
315.00
Furniture
7,255.00
Overall Potential
Part 1:
Strength of Business Idea
High potential
Part 2:
Industry-Related Issues
High potential
Part 3:
Target market and Customer-Related Issues
per year
Moderate potential
Part 4
Founder- (or founders-) Related Issues
Moderate potential
Part 5:
Financial Issues
Moderate potential
Overall Assessment
Moderate potential
87,060.00
LUCKY DISTRO
(Feasibility Analysis)
Introduction
A fresh, alternative option in shopping for clothing lines such as t-shirts, jackets,
bags and accessories is distro-shopping. Distribution Outlets or people in
Indonesia usually called “Distro” is a shop which sells stylish product that made
by local designers. In the early 2000s, many youths got creative by designing their
own t-shirts. Learn how to use computer graphic design programs, make a deal
with a good printmaker and voila, an eye-catching t-shirt with whatever it is you
want to put on it. Not satisfied with t-shirts, they would also make bags, pants,
belts and other fashion items, making a whole clothing line. The products were
sold in a small shop (called ‘distro’), which usually also sells CDs from aspiring
young musicians. The clothing line business went to a boom and with the passing
time the good clothing line makers survive and distros are no longer the small
unused-room-in-a-house-turned-shops but two-storied buildings with proper air
conditioning.
The clothing items and accessories found in a distro typically caters to the youth,
sometimes reminding us of major surfing clothing lines design such as Roxy and
also of popular designs of rock band t-shirts, but their design concepts are
admirable enough. Plus, we can always get a fancy wallet or bag we feel too old
to wear the products in such an overtly manner or if the sizes simply doesn’t fit
us.
Until now distro in Indonesia still flourish and most distros quite successful and
famous. One thing that makes distros stand out from factory outlet is that distros
come from individual designers and young entrepreneurs, while factory outlet
products come from a garment factory.
People like to buy t-shirt, jacket or wallet in distro because their products are
limited, they produce things not in a big amount like factory, so the product is
exclusive and the price is not high.
So these are the characteristics of products that Distro offers and it also
distinguish them from factory outlet:
 The product is exclusive because they produce in limited product.
 Its design is up-date, unique, and fashionable.
 Each distro has an own unique, like a sport distro, a rock distro, a beach
distro, etch.
 Distro is identical with young people
 The price is not high.
 Several distro prepare a local designer as their employee to offer the
customer variety of model. They make some design of products then
display them in the outlet.
PART 1: CONCEPT STATEMENT
1. A description of the product being offered
We intend to build a distro which produces and sells exclusive clothes, caps,
wallets and accessories for young people. We also prepare up-date, unique
and fashionable products with various designs from our young local designer.
Every items of product will be produced in limited edition so they are
exclusive product. The customers who want to buy product also can order the
new designs that display inside outlet or even further they can discuss their
own model with our designer. The distro is decorated with fun and full of art
atmosphere with our professional and friendly young staff inside 2 storiedbuilding.
The name of distro: LUCKY DISTRO
Location: At Dr. Mansyur Street, Medan City, North Sumatera, Indonesia.
2. The intended target market
Young people, teenagers, and families who love exclusive, fashionable, and
unique products.
3. The benefits of product
 Provide good price to the customer
 Introduce a fashion world
 Provide the best service and comfortable outlets
 Provide the interesting place to share and discuss about the model of
product the customer wanted to buy.
PART 2: FEASIBILITY ANALYSIS
1. Industry Attractiveness
Clothing business and distribution outlets (popularly as DISTRO) are
increasingly mushrooming in Indonesia. Today, about 1000 DISTRO are
spreading out in 94 cities and regencies across Indonesia. About 400
clothing business and DISTRO are spreading out in Bandung. The DISTRO
is also mushrooming in Yogyakarta and Jakarta. In the last ten years, the
business clothing and DISTRO are mushrooming quickly. A community
development is a source. This is because the importance of public space.
The turnover of this business reached Rp300 billion annually.
Every DISTRO has special performance. They have special character on the
clothing sold, such as skater, surfer, music etc. Their specialty must be
sustained and we must drive them to do that.
The clothing business and DISTRO are not only textile and fashion industry
but also the creative industry. They are not only selling clothing but also
selling lifestyle. In addition to dress we will find cassette or independent
magazine to be one package. This is why the business can develop rapidly
and the industry is very attractive.
2. Target Market Attractiveness
As we see, the market for distro in Indonesia has been developing steadily
over 10 years and a mushroom growth of variety of distro is being
observed in all the cities. Especially in Medan, North Sumatera around
100 distro has established. But the market is still huge, because the
population of young people, especially teenagers is big in Medan.
Commonly they see the product of distro is not same with the mall’s
product. T-shirts, jackets, shoes, in malls or plazas too common and not
follow a demand market of young people. Beside that its prices are also
high. That’s why distro in Medan flourish because young people, such as
student really love the products made by Bandung. Around 80% products
are from Bandung, because the product is good in quality and design and
teenagers searching them mostly.
Almost the location of distros usually near in Campus. Market segment
distributions are student. Therefore design of distro product commonly is
for teenagers.
Until now the most strategic location for this business are in Mansyur
Street, Jamin Ginting St., Setiabudi St., which near to USU (University of
North Sumatera). In addition, Halat Road area also close to campus ITM
(Medan Technical University).
3. Organizational Feasibility
Salary/Month
Annual
Department/Positions
Number
USD
salary USD
General Manager
1
700
8,400
Accounting Manager
1
500
6,000
Sales Manager
1
500
6,000
250
3,000
Accounting
&
1
Administration Staff
Designer
2
350
8,400
Sales Staff
4
150
7,200
Driver
1
150
1,800
Security
2
150
3,600
Cleaner
1
120
1,440
Total
14
2870
45,840
4. Financial feasibility
Projected Sales: Our projected sales are computed annually.
TOTAL
SALES
(US$)
PRODUCTS PRICE
UNIT
SALES
Bags
12.00
6,000.00
72,000.00
Shirts
8.00
12,500.00
100,000.00
Pants
20.00
10,000.00
200,000.00
Wallets
7.00
7,500.00
52,500.00
Caps
5.00
8,000.00
40,000.00
Jackets
11.00
7,500.00
82,500.00
Shoes
25.00
7,000.00
175,000.00
Belts
10.00
4,000.00
40,000.00
Accessories
TOTAL
12.00
25,000.00
300,000.00
1,062,000.00
Capital investment for purchase of equipment is the major component of total
start-up cash needed of the Distro of clothing. Following table shows the detail
of the Total start-up cash needed:
Capital Investment
Building (rent)
Air conditioners
Computer
Printer
Sound system
Water dispenser
Truck (rent)
Pre-operating cost
Total Capital Costs
Units
6
2
1
1
1
2
Cost per unit
600
500
250
600
310
1500
Information Gathered:
Salaries Expenses = US$ 45,840
Rent Expenses (Building) = US$ 8,000 = (5,000 + 3,000)
Light and Water Expenses = US$ 3,910 = (3,600 + 310)
Purchases = US$ 200,000
Office Supplies = US$ 1,850 = (1,000 + 250 + 600)
USD
5,000
3,600
1,000
250
600
310
3,000
45,840
59,600
INCOME STATEMENT:
Net Sales
US$ 1,062,000.00
-) Cost of Sales
-) US$
806,550.00
US$
255,450.00
-) US$
61,026.00
US$
194,424.00
-) US$
19,442.00
US$
174,982.00
Gross Profit
-) Operating Expenses =
(45,840 + 8,000 + 3,910 +1,850+1,426 ) =
Operating Income
-) Income Tax (10%)
NET INCOME
CASH FLOW STATEMENT:
Net Income
174,982
Depreciation
+)
Inventory Increases
-)
Current Liabilities Increases
103,950
+)
Net Cash Flow
+)
Initial Capital
Ending Cash
19,442
91,900
Beginning Inventory
Building Cost
1,426
54,600
59,600
-)
5,000
146,500
BALANCE SHEET:
Assets:
Current Assets:
250,450
Cash
146,500
Inventory
103,950
NonCurrent Assets:
12,334
Net Building
(5,000 x 95%)
4,750
Net Machinery
(3,000 x 80%)
2,400
Net Tools and Equipments
(5,760 x 90%)
5,184
TOTAL ASSETS:
262,784
Liabilities:
Current Liabilities:
Income Tax Payable
19,442
19,442
TOTAL LIABILITIES:
19,442
Capital:
Initial Investment:
59,600
Net Income
174,982
Other Income
8,760
TOTAL CAPITAL:
243,342
TOTAL ASSETS = TOTAL LIABILITIES + TOTAL CAPITAL
262,784 =
19,442
+
243,342
262,784
=
262,784
FINANCIAL RATIOS:
Current Ratio = Current Assets / Current Liabilities = 250,450 / 19442 = 12.88
Quick Ratio = (Current Assets – Inventory)/Current Liabilities = (250,450–
103,950)/19442 = 7.54
Net Working Capital = Current Assets – Current Liabilities = 250,450 – 19,442 =
231,008
Gross Profit Margin = Gross Profit / Sales = 255,450 / 1,062,000 = 0.24
Operating Profit Margin = Operating Income / Sales = 194,424 / 1,062,000 = 0.18
Net Profit Margin = Net Income / Sales = 174,982 / 1,062,000 = 0.16
Total Asset Turnover = Net Sales / Total Assets = 1,062,000 / 262,784 = 4.04
Debt Ratio = Total Liabilities / Total Assets = 19,442 / 262,784 = 0.07
Return on Assets = Net Income / Total Assets = 174,982 / 262,784 = 0.67
Return on Investment = Net Income / Capital Investment = 174,982 / 243,342 = 0.72