MObile shop

1. 1
FEASIBILITY REPORT ON
OPENING MOBILE PHONE
SHOP IN TALWANDI SABO
SUBMITTED TO:- SUBMITTED BY:-
Mrs.SHASHI AGGARWAL MANDEEP SINGH
( Lecturer) CLASS:-MBA(IC)9thSEM
ROLL NO:-627
SECTION:-B
PUNJABI UNIVERSITY
UNIVERSITY SCHOOLOF BUSINESS STUDIES
TALWANDI SABO

2. 2
INTRODUCTION :-
Now a these days people want to keep in touch with each other when times are touch and
opening a mobile phone shop in the market is the best opportunity to earn the profit. I am going
to open a mobile phone shop in Talwandi Sabo, because in this area the transportation facility is
good. I also studied about the target customer so people want to buy smart phones. In the mobile
shop business I also provide other facilities to the customer like recharging, lamination and our
shop provide excellent customer services.
FEASIBILITY REPORT:-
OBJECTIVE:- To starting a mobile phone shop business
CITY:- I am going to start a mobile shop business in Talwandi Sabo.
LOCATION:-
REASON FOR SELECTING TALWANDI SABO:-
 Good transportation facility in this area.
 Large strength of target customer
 Cheap rate of land
 Presently there is no mobile phone shop near this area
FEASIBILITY STUDY:-
Feasibility study is done to check whether the project which I am doing is worthwhile or not,
means whether or not it earn the profit. For analyzing this various analysis are done. So
feasibility study consists of basically three type of analysis.

3. 3
FEASIBILITY STUDY CONSISTS OF BASICALLY THREE TYPE OF
ANALYSIS:-
1. MARKET ANALYSIS
2. TECHNICAL ANALYSIS
3. FINANCIAL ANALYSIS
Now, we discuss in detail these three type of analysis
1. MARKET ANALYSIS:-
i. Present scenario of mobile phone shop in Talwandi sabo
ii. Present scenario of mobile phone shop in Talwandi Sabo.
MARKET SURVEY:-
 Survey of market location
 Survey of potential of sale
 Outcome of market Analysis
For estimating the current market scenario, a survey was conducted. I included in my survey
there are three people who already do this business.
According to them the prospect of mobile phone shop is good as they provide the product to
the customer according to their choice or need. The mobile shop also provide other facility to
the customer like recharging, lamination etc.
Types and Quality of products:-
Customer can buy a product according to their choice and in this shop also provide other
products like headphones, phone cover, charger and also provide other facility to the
customer satisfaction like recharging, lamination and phone reparation facility.

4. 4
INVESTMENT REQUIREMENT:-
Majority of them said that this is up to you how much big business you want to establish and
for setting up a small unit that included the small shop you need around Rs. 5-6 Lac.
LABOR REQUIREMENT:- In the mobile shop at least two person are needed and they
should have a good communication skill that how to talk with customer and they should have
knowledge about the phone reparation and other services that are provide by the mobile
phone shop.
LOAN:-
We can get loan from any bank at 8% interest-
PRICING:- They said that the price of the mobile phone and other products depends up on
the features and the kind of the brand or company .
2. TECHNICAL ANALYSIS:-
Technical analysis is mainly concerned with:
Location and site:-
I am going to start a van transportation business in Talwandi Sabo.
Servicing Process:- If any businessman man want to a good return from their business,
then he should make the plan for their business that how many products are needed in the
mobile shop business and how many employees are needed in the mobile shop.
Labor Requirements:-
From the servicing process chart it is already clear that what of employees are required for van
transportation business.

5. 5
3. FINANCIAL ANALYSIS:-
PROJECTED INCOME STATEMENT
Capital invested = 4 lacs Furniture purchase – 125000
Bank loan 8% = 2 lacs Other equipments-50000
Machinery – 200000
Cash - 125000
1st year 2nd year 3rd year 4th year 5th year
Sales 420000 600000 780000 1050000 1200000
Closing stock 40000 60000 80000 100000 140000
Total 460000 660000 860000 1150000 1340000
Expenses 20000 280000 360000 450000 60000
Opening stock Nil 40000 60000 80000 100000
Raw material
purchases
400000 540000 680000 860000 930000
Rent of
building
25000 250000 25000 25000 25000
Electricity Bill
Fixed 2000 2000 2000 2000 2000
Variable 6000 8077 10154 12231 16154
Telephone
charges
Fixed 1000 1000 1000 1000 1000
Variable 3500 3500 3500 3500 3500
Insurance
charges
5000 5000 5000 5000 5000

6. 6
Opening
profits
103000 99211 199923 207634 496423
Dep on
furniture
6250 5938 5641 5358 5091
Dep on Motor
Vehicle
15000 13500 12150 10935 9841
Dep on plant
and
machinery
30000 27000 24300 21870 19683
Profits before
interest &
taxes
51250 64773 157832 169471 461808
Interest on
loan
16000 16000 8000 4000 Nil
Profit before
tax
35250 48773 149832 165471 461808
Tax @ 35% 12338 17071 52441 57915 161633
Variable expenses varies on Sales.
Rent of Building 20000
Depreciation on Furniture is 5% on W.D.V. basis
Deprecation on plant and machinery is 10% on W.D.V
PROJECTED BALANCE SHEET
1st year 2nd year 3rd year 4th year 5th year
CURRENT
ASSETS

7. 7
Cash in hand at
bank
75000 84711 67711 67711 32711
Debtors 131500 114000 206514 287707 686285
Investors 40000 60000 80000 100000 140000
Total Current
Assets
246500 258711 354225 455413 858926
Fixed Assets
Furniture 118750 112812 107171 101813 96712
Motor vehicles 135000 121500 109350 98415 88374
Plant and
machinery
270000 243000 218700 196830 177147
Total Fixed
Assets
523750 477312 435221 397058 362443
Total Assets 770250 736023 789446 852476 1221369
Owner’s Capital
500000 Add
profit 22912
522912 554614 652005 759561 1059736
Provision for
taxation
12338 29409 52441 57915 161633
8% Secured
Loan
200000 100000 50000 Nil Nil
Creditors 35000 52000 35000 35000 Nil
Total 770250 736023 789446 852476 1221369
Repayment of Loan is Rs. 100000 at the end of 2nd year.
Repayment of Loan is Rs. 50000 at the end of 3rd year.
Nil at the fourth year

8. 8
PRESENT VALUE OF CASH INFLOWS
Years Cash inflows P.V. @ 10% Present Value Cumulative Value
1st 74162 .909 67413 67413
2nd 78140 .826 64544 131957
3rd 139482 .751 104751 236708
4th 145719 .683 99526 336234
5th 334790 .621 207904 544138
Present value of cash inflows = Rs. 544138
DISCOUNT PAY BACK PERIOD:-
Payback period as a tool of analysis is often used because it is easy to apply and easy to understand for
most individuals, regardless of academic training or field of endeavor. When used carefully or to compare
similar investments, it can be quite useful. As a stand-alone tool to compare an investment to "doing
nothing," payback period has no explicit criteria for decision-making
The cumulative present value of cash inflows at the end of 4th
year is Rs. 336234 and it is Rs. 544138 at
the end of 5th
year. Hence discounted payback period falls between 4 and 5 years. To be exact,
Discounted payback period = 4 years & 163766/207904
= 4 years and 7 months
LIQUIDITY RATIOS:- It may be defined as the relationship between current assets and
current liabilities. A relative high current is an indication that the firm is liquid and has ability to
pay its current liabilities in time.
Years 1st 2nd 3rd 4th 5th
Current Assets 246500 258711 354225 455418 858926
Current Liabilities 47338 81409 87441 42915 161633
Current Ratios 5.2 3.177 4.05 4.90 5.31

9. 9
ABSOLUTE LIQUID RATIOS:- It include cash in hand at bank.
Years 1st 2nd 3rd 4th 5th
Cash 75000 84711 67711 67711 32711
Current Liabilities 47338 81409 87441 42915 161633
Absolute L.R. 1.58 1.04 .77 .72 .20
LONG TERM FINANCIAL RATIOS
DEBT- EQUITY RATIOS:- It is also known as External-internal funds ratios to measure the
relative of outsides and the owner against the assets of the owner.
Years 1st 2nd 3rd 4th 5th
Outsiders’ funds 200000 100000 500000
Insider’s funds 522912 554612 652005 759561 1059736
Ratio .38 .18 .076
SOLVENCY RATIOS :- This ratios indicates the relationship between the total liabilities to
outside to the total assets of the owner.
Years 1st 2nd 3rd 4th 5th
Total liabilities to
outsides
247338 181409 137441 92915 161633
Total Assets 770250 736023 789446 852476 1221369
Ratios .32 .24 .17 .10 .13
PROFITABILITY RATIOS
Operating profit ratios:- it establishes the relationship between operating profits and sales.
Years 1st 2nd 3rd 4th 5th
Operating profits 102500 94211 199923 207634 496423

10. 10
Net sales 5520000 700000 880000 1060000 1400000
Ratios .19 .13 .22 .19 ..35
NET PROFIT RATIOS:- It establishments the relationship between net profit after taxes and
sales. It indicates the efficiency, higher the ratio, the better is the profitability position.
Years 1st 2nd 3rd 4th 5th
Net profit after tax 22912 31702 97391 107556 300175
Net sales 520000 700000 880000 1060000 1400000
Ratios .04 .04 .11 .10 .21
RETURN ON INVESTMENT: - It shows the relationship between net profit after interest and
taxes and the net worth of the owner.
Years 1st 2nd 3rd 4th 5th
Net profit after
interest & tax
22912 31702 97391 107556 300175
Net worth 522912 554614 652005 759561 1059736
Ratio 0.043 0.057 0.149 0.141 0.228

11. 11
CONCLUSION
At the end I would like to be concluded that opening a mobile phone shop will be a profitable
business. No doubt the project is having some weakness, but if the analysis has been done it
shows that it is profitable business to set the plant there.