DECLARATION

I hereby declare that this project report titled Preparation of Projected

Financial Statements for loan Proposal of Royal-The Motel is submitted
towards the fulfillment of BBA (FINANCE) III Year UNIVERSITY OF
PUNE and is an original work done by me.

Mahendra Dalal
Date: - / /2012
Place: Pune

ACKNOWLEDGEMENT

I wish to express deep sense of gratitude to Mr. Chandrakant Mendhe who

was project guide during the project. I thank him for his personal
involvement in my project for finding and helping me through the thick and
thin of various aspect of project.
I am also thankful to Dr. Sampada Joshi who is our Principal for giving me
this opportunity to make this project a success.
Last but not the least, I wish to express heartfelt gratitude towards my
friends and all others who helped me a lot during my project period.

Mahendra R. Dalal
Date: - / /2012
Place: Pune

CERTIFICATE

This is to certify that project report titled Preparation of Projected Financial

Statements for loan Proposal of Royal-The Motel is a bonafide work carried out by
Mahendra R. Dalal of BBA(Finance) III Year of UNIVERSITY OF PUNE. He has
worked under our guidance and direction.

Dr. Sampada Joshi

(Principal)
Date:Place:- Pune

Mr. Chandrakant Mendhe

(External Examiner)

(Internal Examiner)

Table Of Contents
Sr. No

Particulars

Page No.

Introduction

1-2

Objectives Of The Project

Purpose of Loan

Research Methodology

5-6

Cost Of Capital & Means Of Finance

7-9

Revenue Statements

10

Expenditure Statements

11-12

Profitability Statements

13

Depreciation Of Assets

14

10

Schedule Balance sheet

15

11

Loan Repayment

16-19

12

Debt Service Coverage Ratio

20-21

13

Bibliography

22

Brief Profile

Firm Name

: - Royal- The Motel

Proposed Address : - Mumbai - Pune Highway

Behind Siddharth Motors, Kasarwadi
Pune
Constitution

: - Proprietorship Firm

Proprietor

: - Mr. Mohit Shah

Contact Details

: - 020 - 4073 1111

I.

HISTORY

Royal- The Motel is a firm established under proprietorship of Mr. Mohit Shah and
is supposed to be engaged in the business of motel basically Mr. Mohit Shah is in
the business of petrol pumps in Rajkot. He is also the owner of Shiv Restaurant in
Rajkot. Hence he has an experience of business in hotel management and is now
seeking towards entering into motel business at Rajkot.

II.

PRESENT

Presently Mr. Mohit Shah has achieved a good level of success in all the lines
of business in Rajkot and hence he wants to expand his business on the similar
lines of his motel. After analyzing the demand for a cool hang out joint, He has
planned to start up with a motel Rajkot.

OBJECTIVES OF THE PROJECT

. To learn deep analysis of financial statements.

To get the knowledge about the loan procedure.
To get the knowledge about the prevailing tax rates.
To get experience of effective and efficient working of the enterprise.
To know about the financial charges that a firm needs to bear when it
takes a loan.

PURPOSE OF LOAN

The firm Royal- The Motel, a proprietorship firm needs loan for the purpose of
starting up a new firm.

The loan amount is stated Rs. 30000000/- The loan will be repaid within 5
Years. The interest on loan is charged @ 12% P.A. The loan installment is paid
on monthly basis.

The loan is required for the solo motto of established of the hotel covering all
the major costs like Rooms, Restaurant, Interiors & enquipments etc.

The purpose is also to know the projection of the statements and hence
repayments of the same.

RESEARCH METODOLOGY

In any research methodology used is very important because it is one which really
led to success. While doing research following steps are to be followed.
1.
2.
3.
4.
5.
6.

Define the research problem

Specifying the research objectives.
Preparing the list of information needed.
Designing the data collection for the project.
Collect the data.
Interpret the data.

Research methodology includes various steps. There should be systematic way of

collection of data and presentation of the project report. Proper decision has to be
taken based on the data collected. A researcher may select any of the following
data.
1. Primary data.
2. Secondary data

Primary data
Primary methods are the method which uses, primary data in other words
when data are collected a fresh and for the first time and thus happen to be original
in character. There are various methods by which data can be collected. The
important once are:
Observation method
Interview method
Questionnaire method

Secondary data
The study has used secondary data that was taken from secondary sources like
companys website, Companys balance sheet and profit and loss account and
various internal reports published by Royal- The motel

The study comprising of loan proposal of the company Royal-The motel has been
analyzed and studied. By undertaking the existing system, analyzing, analysis and
inferences were made on there efficiency and effectiveness

The data has been analyzed with the help of some selected ratios and percentage
method. The ratios are compared on basis of trend analysis and a comparative
analysis has been done.

My research emphasis on the loan proposal of the companys last five years and I
analyzed and conclude it from my view.

COST OF CAPITAL OF THE PROJECT

Sr.no Particulers
1.

Rooms

Non

Rate

Total

P.M

P.A

a.

A C Single

24

2000

48000

b.

A C Double

40

2500

c.

Suite

40000

10000
0
32000

d.

Room services

72

200

14400

14400
00
30000
00
96000
0
43200
0

172800
00
360000
00
115200
00
518400 6998 699840
0
4000 00

2.

RESTURANT
Particulars

Rate

P.A

P.A

Total

600

15000

45000
0
22500
00
56250
0
60000
0

540000
0
270000
000
675000
0
720000
0

a.

Lunch

Tabl
e
25

b.

Dinner

125

600

75000

c.

Outdoor catering

75

250

18750

d.

Pool party

50

400

20000

3.

BANQUET
Particulars

Tabl
e

Rate

Total

Rent-50000

50000

a.

Large party

400

400

b.

Small party

200

300

16000
0
60000

c.
d.

Corporate
Board meet

200
25

150
250

30000
6250

4.

Theater
Particulers

a.

Seat-90

Gues Rate
t

Total

90

13500

150

Total Total
of
Receipt

3240
0000

1395 463500
0000 00

Nos.of P.A
Total
party
50
250000
0
10
160000
0
20
120000
0
20
600000
20
125000 6025 602500
000 0
Nos.
of
Days
365

P.A

Total

492750 4927
0
5004
9275

00
b.

Spa
Paticulers

a.

Spa

b.

Rent Income

Particulars

Gues Rate
t
20
800

No
of
shop
s
2
1

a.
b.

Shop
Saloon

c.

Gym
Particulars

NO.

a.

Gym Members

125

b.

Gym Diet
Treatment
Total

50

c.

Total
16000

Nos.
of
365

P.A

584000 5840 584000

0
000 0

Rate
Total
Per
Month

Nos.
P.A
of
Month

10000
12000

12
12

20000
12000
5
Total

Rate
Per
Month
1000
12500
0
1000
50000
5

Total

Total

240000
140000 3840 384000
00

No.
P.A
Total
Of
Month
12
150000
0
12
600000 2100 210000
000 0
135610
500

MEANS OF FINANCE

Sr.No Particulars

Amount(RS/-)

1.

Owners contribution

24%

8000000

2.

Banks Finance

76%

30000000

Total

100%

38000000

Expenditure For The Year 2011-12

Sr. No.

1
2
3
4
5
6

1
2
3
4
5
6
7
8
9
10
11
12

SALARY
HEAD

2011-12
MENS

Salary For
Rooms
Salary For
Restaurant
Salary For
Banquet
Salary For
Theatre
Salary For
Gym
Salary For
Security
Services
Salary For
Others

36

TOTAL
SALARY
119000

39

133500

1602000

8500

102000

25500

306000

46000

552000

20000

240000

10

50000

600000

TOTAL

113

402500

4830000

EXPENSES

TOTAL

Electricity
Expenses
Advertisement
Expenses
Stationary
Postage &
Courier
Legal Fees
Conveyance &
Travelling
House Keeping
Laundry
Expenses
Repair &
Maintenance
Misc.
Expenses
Commission
For Guest
Transportation

600000

1428000

PER
MONTH
600000

7200000

100000

1200000

0
0

250000
100000

0
0

250000
1200000
900000
3200000

1800000

800000

180000

800000

13
14
15
16
17

18
19
20

Diesel For
Generator
Workers
Welfare
Expenses Of
Theatre
Decorators
Charges
Restaurant
Franchisee
Fees
Raw Material
Rest.
Raw Material
For Banquet
Raw Material
For Spa
TOTAL

10000

120000
120000

2400000

1200000
2850000

20000000
1500000
1400000
0
600000

0
710000

47470000

Calculation Of Revenue For The Projected Period

Sr. Particul 2011-12
N ars
o.
1
Rooms 6998400
0
2
Restaur 4635000
ant &
0
Caterin
g
3
Banque 6025000
t
4
Theatre 4927500

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

7698240
0
4866750
0

8468064
0
5110087
5

9314870
4
5365591
9

1043265
48
5633871
5

9314870
4
5365591
9

1043265
48
5633871
5

1168457
34
5915565
0

6507000

7027560

7589765

8196946

7589765

8196946

9016641

5124600

5329584

5542767

9764478

5542767

5764478

5995057

5
6

Spa
5840000
Rent
384000
From
Shop &
Saloon

6073600
384000

6316544
384000

6569206
384000

6897666
384000

6569206
384000

6897666
384000

7242549
384000

Gym

2100000

2100000

2100000

2310000

2541000

2310000

2541000

2795100

TOTA
L

1356105
00

1458391
00

1569392
03

1692003
61

1844493
53

1692003
61

1844493
53

2014347
32

Assumed Working Notes:

Room for the rent grew at 10% for first three years till 2014-15, post the
revenue grew at 12%
Revenue from restaurant & catering grew at 5% p.a.
Revenue from Banquet operations grew at 8% till 2015-16,post it by 10%
Revenue from Theatre grew by 4% till 2017-18
Revenue from SPA Operations grew at 4% till 2014-15, post it grew at 5%
Revenue from rent from shop & saloon stays constant
Revenue from operations had no change till 2013-14, then it grew at 10%
P.A.

Total annual expenditure during the projected period

Sr.N SALARY
2012-3
o
HEAD
1.
Salary For Rooms 149940
0
2.
Salary For
165006
Restaurant
0
3.
Salary For
104040
Banquet
4.
Salary For
312120
Theatre
5.
Salary For Gym
568560
6.
Salary For
247200
Security Service
7.
Salary For Others 612000
Total
499338
0
EXPENSES
1
Electricity
756000
Expanses
0
2
Advertisement
123600
Expanses
0
3
Stationary
252500
4
Postage&courier 102000
5
Legal fees
257500
6
Conveyance&
123600
travelling
0
7
House keeping
927000

2013-14 2014-15 2015-16 2016-17

8
9
10
11
12
13
14

Laundry
Expanses
Maintance&repai
ring
Misc expanses
Commission For
Guest
Transportation
charges
Diesel For
Genator
Workers Welfare

157437
0
169956
2
106121

165308
9
175054
9
108243

176880
5
175054
9
108244

189262
1
183807
7
111491

318362

324730

331224

337849

585617
254616

603185
262254

603186
272745

627314
283654

624240
516288
8

636725
533877
5

655827
549057
9

675501
576650
7

793800
0
127308
0
255025
104040
265225
127308
0
954810

849366
0
133673
4
260126
106121
273182
131127
2
983454

329600
0
183600
0
816000
183600

339488
0
189108
0
840480
187272

349672
6
194781
2
865694
191017

908821
6
140357
1
265328
107182
284109
136372
3
102279
2
363659
5
200624
7
891665
196748

972439
1
150182
1
267981
108254
295473
141827
2
106370
4
378205
9
206643
4
918415
202650

816000

840480

865694

891665

918415

122400

124848

127345

133712

122400

124848

127345

129892

140309
8
132490

15
16
17
18
19
20

Expenses Of
Theatre
Decoraters
Charges
Restaurant
Franchise Fees
Raw Material For
Rest
Raw Material For
Banquet
Raw Material For
SPA
Total

244800
0
122400
0
290700
0
204000
00
153000
0
142800
0
487004
00

249696
0
124848
0
296514
0
208080
00
156060
0
145656
0
499947
28

254689
9
127345
0
302444
3
212241
60
159181
2
148569
1
506835
91

259783
7
129891
9
314542
1
220731
26
167140
3
155997
6
528936
08

264794
132489
7
327123
7
229560
51
177549
73
163797
5
552349
31

Working Notes:
Assuming
Now the expanses for salary paid to Room have increased to5% in 201315& in 2015-16 it has increased to 7%
The expanses for salary paid to Restaurant have rised to3% in 2013-15 & in
2015-16 it rises to 5%
The expanses for salary paid to banquet have rised 2% till 2015-16
Gym have rised by 3% in 2013-15,from 2015-16 it rises to 4%
The expanses for salary paid to security services rised by 3% till 2012-15 &
2015-16 rised to 4%
The expanses for salary paid to others rised by 2% till 2013-15 & from
2015-16 it rises to3%
The expanses for Electricity increases 5% till 2013-14&2014-16 had raised
7%
The expanses for advertisement expanses increases 3% till 2013-14&201416 had raised 5%
The expanses for stationary&postage&couriers have only in raised to2%
till2015-16&decrease to 1% in 2015-16
The expanses for Legal Fees,conveyance& Travelling, Housekeeping&
laundry expanses have raised to3%in 2013-15

The expanses for maintaince & repairing,misc expanses, commission for

guest, transportation charges, diesel for genetor haverised to 2% till 2013-15,
from 2015-16 it raised to 3%
The expanses for workers welfare, expanses of theater, dectors

STATEMENT OF PROFITABILITY FOR THE

PROJECTED PERIOD

PARTICULERS

201112

201213

201314

201415

201516

201617

REVENUE from
hotel

135610 145839 156939 169200 184449 201434

500
100
203
361
353
732

Less:Expendituer
For hotel

523000 536937 551576 568546 592414 618844

00
16
86
77
46
80

Hence,profit before 883105 921453 101781 112345 125207 139550

interest,depreciatio 00
20
587
675
876
286
n&income tax
Less:Bank Loan
Interest
Less:depreciation
of assets

334929
4
638677
1

275845
4
567752
8

209267
8
557479
5

134246 497111
8
494008 475042
1
4

Hence,profit before 883105 973606 843598 766747 628254 524753

tax (PBT)
00
5
2
3
9
5
Less:income tax

272879 300844 260671 236924 194130 162148

45
4
8
9
8
8

Net Profit/Loss

610225 672762 582926 529822 434124 362604

55
1
4
4
1
7

INCOME TAX RATE ASSUMED AS 30.9%

CALCULATION OF DEPRECIATION ON FIXED ASSETS

PARTICULA
RS

RATE
%

3/31/20
11

3/31/20
12

OPENING
W.D.V.
Air
conditioner
Computer

15%

3640119 3,640,11
9
3640119 3,640,11
9
-

Furniture

15%

Motor car

10%

Building

15%

Health club
Equipment
Tata mobile
phone
Ele
installation
Water cooler
system
TOTAL

15%

3/31/20
13

3/31/20
14

3/31/20
15

3/31/20
16

15%

3,094,10 2,629,98 2,23548

1
6
8
3,094,10
1
8,565,80 7,709,22
5
5
10,575,0 10,575,0 9,517,56
68
68
1
31,735,3 28,561,8
79
41
39,179,4 39,179,4 35,261,5 6,046,37 5,139,42
80
80
32
9
2
3,524,40 3,524,40 2,995,74
0
0
0
192,616 163,724

15%

266,597

266,597

226,607

15%

546,018

464,115

394,498

335,323

397,525

60%
10%
15%

856,581
-

770,922
-

728,830
-

Building

10%

Healh club
Equipment
Tata mobile
phone
Ele
installation
Water cooler
system

15%

15%

951,756
1,057,50
7
3,526,15
3
3,917,94 449,361
8
528,600
-

15%

15%

296,649

DEPRECIAT
ION FOR
THE YEAR
Air
conditioner
computer
furniture
Motor car

TOTAL

60%
10%

15%

2650165
7,288,30
2
26,205,6
57
5,118,50
9
389,165

1,428,86 1,214,53 1,182,35

0
1
1
1,997,66 1,997,66 1,681,01
1
1
2
59,163,3 59,163,3 52,776,5 50,599,0 45,024,2 42,834,1
25
25
54
25
31
49

3,173,53 2,856,18 2,620,56

8
4
6
906,957 770,913 767,776
-

33,991

28,892

24,559

58,375

252,152

214,329

182,180

177,353

59,163,3 6,386,77 5,677,52 5,574,79 4,940,08 4,750,42

25
1
8
5
1
4

CLOSING
W.D.V.

59,163,3 52,776,5 47,099,0 45,024,2 40,084,1 38,083,7

25
54
25
31
49
25

BALANCE SHEET FOR THE PROJECTED PERIOD

LIABILITIES
Propreitors
capital
Add: Net
profit
Less:Drawings

2011-12
8000000

2012-13
10000000

2013-14
12500000

2014-15
15625000

2015-16
19531250

2016-17
24414063

61022555

6727621

5829264

5298224

4341241

3626047

500000

600000

800000

900000

950000

1000000

Own capital

68022555

16127621

17529264

20023224

22922491

27040110

Bank Loan
Total
Liabilities

30000000
98022555

25341293
58796535

20091745

14176422
56022870

7510889
55255871

0
56740846

56750273

ASSETS
Fixed assets

59163325

52776554

47099025

45024231

40084149

38083725

Current Assets 38859230

6019981

9651248

1099839

15171721

18657121

Total Assets

58796535

56750273

56022870

55255871

56740846

98022555

Current Assets include cash, cash at Bank, Prepaid Expanses.

CALCULATION OF EQUATED MONTHLY

INSTALLMENTS

(Assuming loan repayments in 5 years)

Loan Amount
No Of Installment

MONTH
1
2
3
4
5
6
7
8
9
10
11
12

30000000
60

Interest
EMI

12%
667333

PRINCIPLE
30000000
29632667
29261660
28886943
28508579
281262230
27740159
27350227
26956396
26558627
26156880
25751115

INTEREST
300000
296327
292617
288869
285085
281262
277402
273502
269564
265586
261569
257511

EMI
667333
667333
667333
667333
667333
667333
667333
667333
667333
667333
667333
667333

CL.BAL
22309632667
29261660
28886943
28508479
28126230
27740159
27350227
26956396
26558627
26156880
25751115
25341293

13
14
15
16
17
18
19
20
21
22
23
24

25341293
24927372
24509312
24087072
23660609
23229882
22794847
22355463
21911684
21463467
21010768
20553543

253413
249274
245093
240871
236606
232299
227948
223555
219117
214635
210108
205535

667333
667333
667333
667333
667333
667333
667333
667333
667333
667333
667333
667333

24927372
24509312
24087072
23660609
23229882
22794847
22355463
21911684
21463467
21010768
20553543
20091745

25
26
27
28
29

20091745
19625329
19154248
18678458
18597909

200917
196253
191542
186785
181979

667333
667333
667333
667333
667333

19625329
19154248
18678458
18197909
17712554

30
31
32
33
34
35
36

17712554
17222346
16727736
16227175
15722114
15212001
14696788

177126
172223
167272
162272
157221
152120
146968

667333
667333
667333
667333
667333
667333
667333

17222346
16727736
16227175
15722114
15212001
14696788
14176422

37
38
39
40
41
42
43
44
45
46
47
48

14176422
13650853
13120028
12583895
12042401
11495491
10943113
10385211
9821799
9252613
8677806
8097250

141764
136509
131200
125839
120424
114955
109431
103852
98217
92526
86778
80973

667333
667333
667333
667333
667333
667333
667333
667333
667333
667333
667333
667333

13650853
13120028
12583895
12042401
11495491
10943113
10385211
9821729
9252613
8677806
8097250
7510889

49
50
51
52
53
54
55
56
57
58
59
60

7510889
6918665
6320518
5716390
5106220
4489949
3867515
3238857
2603912
1962618
1314910
660726

75109
69187
63205
57164
51062
44899
38675
32389
26039
19626
13149
6607

667333
667333
667333
667333
667333
667333
667333
667333
667333
667333
667333
667333

6918665
6320518
5716390
5106220
4489949
3867515
3238857
2603912
1962618
1314910
660726
0

FINANCIAL CHARGES FOR TERM LOAN

YEAR
2012-13
2013-14
2014-15
2015-16
2016-17

Interest Charges
3349294
2758454
2092678
1342468
497111

Debt Service Coverage Ratio

Year Profit
After
Tax(1)
2012 672762
-13
1
2013 582926
-14
4
2014 529822
-15
4
2015 434124
-16
1
2016 362604
-17
7

Interest(
2)

Depreciation( Total(1+2+
3)
3)

3349294

52776554

62853469

Bank
DSC
Installmen R
ts With
667333
24.6

2758454

47099025

55686743

667333

21.3

2092678

45024231

52415133

667333

19.4

1342468

40084149

45767858

667333

15.9

497111

38083725

42206883

667333

13.2

DSCR= Profit After Tax + Depreciation + Int on Debt/ Loan

Repayment in a Year

Debt Services Coverage Ratio

Graphical Representation
YEAR
DSCR

2012-13
24.6

2013-14
21.3

2014-15
19.4

2015-16
15.9

2016-17
13.2

DSCR
30
25
20
15

DSCR

10
5
0
2012-13

2013-14

2014-15

2015-16

2016-17

BIBLIOGRAPHY

1. www.google.com
2. www.hotelroyalpark.co.in
3. financial management- N.Kulkarni
4. financial management-Pandey