The document analyzes the financial feasibility of Hair Care Pvt. Ltd., a company that manufactures hair products. It details the company's capital structure, projected costs and sales over 6 years, and calculates key financial ratios. The company takes a loan of Rs. 6 crore at 11% interest to fund 55% of its Rs. 11 crore project cost. Financial projections show the company will be profitable by year 3 and generate adequate cash flows to repay debt obligations on time, with all key ratios meeting industry standards by years 4-6. This indicates the company's business plan is financially viable.

1. SUBJECT:-
SPECIAL STUDIES IN FINANCE
TOPIC:-
HAIR CARE PVT. LTD.
CHETANA’S
H.S.COLLEGE OF COM. AND
ECO.
&
SMT. KUSUMTAI CHAUDHARI
COLLEGE OF ARTS
CSFC SECTION

2. Name Roll No
Bhoodevi Tadkapelly 3154
Swethesh Thale 3245
Girija Hirve 3122
Santoh Gupta 3120
Anuj Usare 3248
Akash Gupta 3119
Sneha mali 3132

4. •Name of the company:- Hair Care Pvt. Ltd.
•Term loan amount:- Rs 6 cr. Borrowed from Kotak
Mahindra bank at 11% interest.
•Cost of project: - Rs 11 cr.

5. Means of financing
Owned
fund
Borrowed
fund
Tax is 29 % ( after 5 years).

6. TECHNICAL FEASIBILITY:-
LOCATION LAND AND BUILDING
PLANT & MACHINERY
TECHNICAL COMPETENCE
Geetha Nagar, Dr A.S.Rao
Nagar, secunderabad, Andhra
Pradesh.
2000 sq. Ft. It includes
warehouse, parking, canteen,
rest rooms, play ground.
Required for repairs 1 main
machinery and maintenance.
Tools and others spare parts.
Experiences Engineers who will train
other 10 Engineers and those 10 will train
our 100 employees.

7. sales are increasing 5% every year
5 years tax free benefit

8. MANAGERIAL COMPETENCE
MARKET APPARAISAL
The Engineers that we are hiring are 15 years of
experience in this field. The employees are well
trained before they start working on the
machine and we, as the entrepreneurs have
planned out this whole layout.
Increase 5% in demand every year on the
product from the previous year. Our location
is such that the temple, the bank, and water
transportation is nearby. Basically we come
under SEZ and the exportation process is
carried out by the government.

10. Particular Amount
(Rs.)
Cost Per
Unit
(2,55,000)
Fixed Cost
 Land
 Machinery
 EVP (Training, Medical, Education)
 Safety
 Registration
25,00,000
2,50,00,000
23,00,000
45,000
5000
9.80
98.039
9.01
0.17
0.019
Veribal Cost
 Raw Material (Hairs, Chemical, Net)
 Water
 Electrics
 Advertising
 Transportation (2 Trip In A Week)
 Salary
25,20,000
50,000
60,00,000
50,00,000
3,60,000
1,50,92,000
9.88
0.19
23.52
19.607
1.4117
59.10
Instalment Cost
 Construction Cost
 Machine Instalment
4,00,00,000
1,00,00,000
156.86
39.21
Total Cost 10,88,72,000 426.91

11. Calculation Of Term Loan
Year Amount Interest@11% Instalment Total
1 6,00,00,000 66,00,000 1,00,00,000 1,66,00,000
2 5,66,00,000 62,26,000 1,00,00,000 1,62,26,000
3 5,28,26,000 58,10,860 1,00,00,000 1,58,10,680
4 4,86,36,860 53,50,054.6 1,00,00,000 1,53,50,054.6
5 3,86,36,860 42,50,054.6 1,00,00,000 1,42,50,054.6
6 2,86,36,860 31,50,054.6 1,00,00,000 1,31,50,054.6
Capital investment: 11cr.
Loan amount: 6cr. @ 11% interest and repayable with
installments at the end of each year.
Depreciation equal for 6 year.
Tax rate: 29% with tax free for first 5 year.

12. 85,000 unit
100 gram
85,000 unit
200 gram
85,000 unit
500 gram
Small Hair
Rs.240
Medium
Hair
Rs.360
Long Hair
Rs.600
Overall Production
2,55,000 unit
Selling price = 10,20,00,000

13. Year
1 2 3 4 5 6
Sale 10,20,00,000 10,71,00000 11,24,55,000 11,80,77,750 12,39,81,637 13,01,80,719
(-)V.C. 1,39,30,000 1,46,26,500 1,53,57,825 1,61,25,716 1,69,32,001 1,77,78,601
Con. 8,80,70,000 9,24,73,500 9,70,97,175 10,19,52,034 10,70,49,636 11,24,02,118
(-)F.C. 9,49,42,000 9,49,42,000 9,49,42,000 9,49,42,000 9,49,42,000 9,49,42,000
EBIT (68,72,000) (24,68,500) 21,55,175 70,10,034 1,21,07,636 1,74,60,118
(-)Int. (66,00,000) (62,26,000) 58,10,860 53,50,054.6 42,50,054.6 31,50,054.6
EBT -1,34,72,000 (86,94,500) (36,55,685) 16,59,979.4 78,57,581.4 1,43,10,063.4
(-)Tax - - - - - 41,49,918.3
EAT -1,34,74,000 (86,94,500) (36,55,685) 16,59,979.4 78,57,581.4 1,01,60,145.1
(+)Int. 66,00,000 62,26,000 58,10,860 53,50,054.6 42,50,054.6 31,50,054.6
(68,72,000) (24,68,500) 21,55,175 1,70,10,084 1,21,07,636 1,33,10,199.7
(+)Depn. 25,00,000 25,00,000 25,00,000 25,00,000 25,00,000 25,00,000
Actual
Earning
(43,72,000) 31,500 46,55,175 95,10,034 1,46,07,636 1,58,10,199.7

14. •Debt Equity Ratio = Debt ÷ Equity
= 6,00,00,000 ÷ 5000,00,000
= 1.2:1
Recommendation
As debt equity ratio is below to the
standard ratio that is 2:1 which indicate
Hair Care Pvt. Ltd. Company will
sustain in a market.

15. Interest Coverage Ratio = PBIT ÷ Interest
Year 1 2 3 4 5 6
Ratio -1.04 -0.39 0.37 1.37 2.84 5.54

16. Interest Repayment Ratio = PBIT ÷ Interest + Instalment
Year 1 2 3 4 5 6
Ratio -0.41 -0.15 0.13 0.45 0.84 1.32

17. Debt service coverage ratio = PBIT + Deprn. -Tax ÷ Interest + Instalment
Year 1 2 3 4 5 6
Ratio -0.26 0.0019 2.94 0.61 1.02 1.20