CHAPTER-1

INTRODUCTION

1.1 Entrepreneurs

The dictionary meaning of the word Entrepreneur is given as a person ‘who start a
business.’ It also acts that an Entrepreneur is a person ‘who starts an enterprise,
business or a firm.’ An Entrepreneur is an individual who organizes or operates a
business or businesses, taking on financial risk to do so. An Entrepreneur works for
himself and also provides employment to others.
The Entrepreneur is commonly seen as an innovator, a designer of new ideas and
business processes. The Entrepreneur rather than working as an employee, run a
small business and assumes all the risks and rewards of a given business venture,
idea, or good/service offered for sale. An Entrepreneur supplies risk capital as a risk
taker and monitors and controls the business activities. The Entrepreneur is usually a
sole proprietor, a partner, or the own who owns the majority of shares incorporated
venture.

Definition of Entrepreneur
According to J.A. Schumpeter defines Entrepreneur as “An Entrepreneur is one who
always searcher for change, respond to it and exploits it as an opportunity
innovation is the basic total of Entrepreneur, the means by which they exploit
change as an opportunity for a different business or service.”

1
Qualities of Successful Entrepreneur
• Capacity to take risk
• Capacity to work hard
• Energetic
• Drive
• Self confidence
• Intelligence and knowledge
• Ability to foresee future
• Willingness to change
• Ability to mobilize resources
• Ability to build
Organization and administer
• Ability to take decisions
• Willingness to take
responsibility
• Information seeking
• Monitoring
• Persuasion
• Innovativeness
• Desire for high achievement
• Capacity to solve problem
• Using feedback
• Taking initiative
• Handling failures
• Locus of Control
• Tolerance of uncertainty
• Flexibility
up • Guarding business secrets
• Quality conscious
• Tactful
• Have vision
• Welfare Orientation
• Systematic planning
2
COMMON TRAITS:

• Motivation:
• Creativity:
• Persuasiveness:
• Vision:
• Collaboration
• Versatility:
• Risk tolerance:
• Flexibility:
• Decisiveness

BEHAVIOR PATTERNS OF ENTREPRENEUR:

• They Plan Their Day In Advance

• They Get Proper Nutrition And Exercise
• They Position Themselves To Serve
• They Set Clear Goals
• They Take Calculated Risks
• They Know Their Strengths And Weakness
• They Hire A-Team Players
• They Are Constantly Learning

3
1.2 ENTREPRENEURSHIP

Entrepreneurship is the process of starting a business, typically a startup company

offering an innovative product, process or service. The Entrepreneur perceives an
opportunity and often exhibits biases in taking the decision to exploit the
opportunity. The exploitation of Entrepreneurial opportunities includes design
actions to develop a business plan, acquire the human, financial and other required
resources, and to be responsible for its success or failure. Entrepreneurship may
operate within an Entrepreneurship ecosystem which includes Government
programs and services that support entrepreneurs, entrepreneurship resources (e.g.,
Business incubators and seed accelerators), entrepreneurship education and training
and financing (e.g., loans, venture capital financing, and grants).

Entrepreneurial activities differ substantially depending on the type of

Organization and creativity involved. Entrepreneurship ranges in-scale from solo,
part time projects to large-scale undertakings that create many jobs. Many “high
value” entrepreneurial ventures seek venture capital or angel funding (seed money)
in order to raise capital for building the business.

DEFINITION
According to J.A. Schumpeter, “Entrepreneurship is essentially a creative
activity. It consists of doing such things as are generally not done in ordinary course
of business. An Entrepreneur is one who innovates, i.e. carries out new
combinations or enterprise”.

4
1.3 INTRAPRENEURS:

Intrapreneurship is the act of behaving like an entrepreneur while working

within a large Organization. Intrapreneurship is known as the practice of a corporate
management style that integrates risk-taking and innovation approaches, as well as
the reward and motivational techniques that are more traditionally thought of as
being the province of Entrepreneurship.
In big enterprises, the top level executives are encouraged to generate new
ideas and convert them into products through research and developmental activities
within the framework of an Organization. Most of these persons achieved great
success in their new ventures. These persons who turned to Entrepreneurs came to
be known as “Intrapreneurs”.

DEFINITION
According to Gifford Pinchot III, “Intrapreneurs are the persons who
resigned from their well-paid executive positions to launch their own ventures”.

5
1.4 Difference Between Entrepreneur And Intrapreneur

S.no Dimension Entrepreneur Intrapreneur

1. Dependency An Entrepreneur is An Intrapreneur is

independent in his dependent on the
operations. Entrepreneur.
2. Raising of An Entrepreneur himself Funds are not raised by
funds raises funds required for the Intrapreneur.
an Enterprise.
3. Risk taking Entrepreneur bears the Intrapreneur does not
entire risk involved in the bear the risk at all.
business.
4. Operations An Entrepreneur operates An Intrapreneur operates
from outside the from within the
Organization. Organization.
5. Profit Entrepreneur enjoys the Intrapreneur does not
profit of the business. take profit out of his
innovations. However, he
gets a lot of perquisites
for his innovations.

6. Ownership Entrepreneur is the real Intrapreneur is not the

owner of the business. owner of the business.
But he works for the
business.

7. Nature of work Entrepreneur converts the Intrapreneur creates

innovative ideas of innovation.
Intrapreneur into viable
opportunities.

6
1.5 Benefits Of Being An Entrepreneur

There are many rewards associated with being an entrepreneur. They are as below:
Benefits of Entrepreneur are given below:
✓ Control: You choose the work you like to do and that makes the most of your
strengths and skills. The result can be more job satisfaction.
✓ Excitement: Entrepreneurship can be exciting and many entrepreneurs
consider their work highly enjoyable. Each day is filled with new
opportunities to challenge your abilities, skills, and determination.
✓ Flexibility: Entrepreneurs can schedule their work hours around other
commitments, including spending quality time with their families.
✓ Freedom: Freedom to work whenever they want, wherever they want, and
however they want draws many to Entrepreneurship. Most Entrepreneurs
don’t consider their work actual work because they are doing something they
love.
✓ Rational Salary: As an Entrepreneur, your income is directly related to your
efforts and the success of your business.

7
 CHAPTER-2
WOMEN ENTREPRENEUR

2.1 Meaning

Traditionally, an entrepreneur has been defined as "a person who organizes

and manages any enterprise, especially a business, usually with considerable
initiative and risk". Rather than working as an employee, an entrepreneur runs
a small business and assumes all the risk and reward of a given business venture,
idea, or good or service offered for sale. The entrepreneur is commonly seen as a
business leader and innovator of new ideas and business processes."

Entrepreneurship plays an imperative role in the growth of any society.

Development of entrepreneurship culture and qualitative business development
services are the major requirements for industrial growth. Entrepreneurship emerges
from an individual’s creative spirit into long-term business ownership, employment
creation, capital formation and economic security. Entrepreneurial skills are
essential for industrialisation and for alleviation of mass unemployment and
poverty. As technology speeds up lives, women are an emerging economic force,
which cannot be neglected by the policy makers. The world’s modern democratic
economy depends on the participation of both sexes. Irene Natividad has observed
that “Global markets and women are not often used in the same sentence, but
increasingly, statistics show that women have economic cloutmost visibly as
entrepreneurs and most powerfully as consumers”.

8
Importance of women entrepreneurship

This development has become a subject of great concern and serious discussion in
recent times. Women in the present day have been recognized as an indivisible part
of the global struggle for a stable economy. Same is the case in India where women
have recently become the symbol of changes.
Reasons that motivate women’s entry in commerce vary but despite all of their
variations in socioeconomic backgrounds, they have proved their worth time and
again. They have taken risks in businesses and managed to make them pay off. Over
and over, Indian women have competed with men and proven to be equal in every
race, including entrepreneurship.

In the closing years of the 21st century, multi- skilled, productive and innovative
women entrepreneurs are inextricable for achieving sustained economic growth.
Globalisation of industrial production and economic interdependence have become
the torch-bearers for all international cooperations. In the dynamic world which is
experiencing the effects of globalisation, privatisation and liberalisation, women
entrepreneurs are likely to become an even more important part of the global quest
for sustained economic growth and social development.

The economic status of woman is now accepted as an indication of the society’s

stage of development. Women (especially rural women) are vital development
agents who can play a significant role in the economic development of a nation, but
they should have an equal access to productive resources, opportunities and public
services. It has also been realised in the last few years that the widespread poverty
and stunted economic growth can be overcome only by gainful and sustainable
economic participation of women. National development will be sluggish, if the
economic 11. T.T Gurumoorthy, ‘Self-Help Groups Empower Rural Women’,
Kurukshetra, Vol.48 (5), 2007 engine operates only at half power.

9
Women entrepreneurship in India

Indian Government defines woman owned business as an entity where a

woman or a group of women owns at least “51% of the capital” and give 51% of
generated employment to women. Women are 48% of Indian population but their
participation is still below par as only 34% of Indian women are engaged in
financial and economic activities, many of which are unpaid or underpaid workers.
With gender-bias problems in some regions of India, women have also become
victims of unemployment.

This bias has proven to be advantageous to certain extent as women have

taken up entrepreneurship to fill the void and prove their critics wrong. In India,
women constitute half of the total population (495.74 million), but their
participation in the economic activity is very low. The Female Work Participation
Rate was 25.7 per cent in 2001.

In India, women are relatively powerless with little or no control over

resources and little decision making power. Women in the informal sector are found
to be home-based workers, engaged in the petty manufacture of goods, either on
piece rate basis or on own account, petty traders and petty shopkeepers or service
specialists. Studies reveal that 89 per cent of India’s women workers toil in the
informal sectors in sub-human conditions. Over 2/3 of the enterprises are selfowned
and have a fixed capital of less than Rs.50/- . Over 4/5 of the women workers in this
sector earn less than Rs.500/-p.m. The income earned by women in this sector is
said to be about ¼ of that of a woman in the organised sector”

10
Schemes for women entrepreneurs

Government banks and financial institutions have introduced different schemes for
the development of women entrepreneur in India. Of them importance schemes are
described below:

1. Development of women and children in rural area (DWCRA).

2. Scheme of IDBI.
• Interest subsidy.
• Refinance facility.
• Mahila Udyam Nihi (MUN).
• Mahila Vikas Nidhi (MVN).
3. Scheme of Karnataka SFC.
4. Scheme of IFCI.
5. Rajasthan finance corporation’s scheme.
6. SBIS stree Shakti package.
7. SIDBIS assistance.
8. BOI priyadharshini yojana.

Requirements of women entrepreneurship

There are five reasons why India needs more women entrepreneurs. They are below:

i. Economic growth
ii. Narrowing gender gap
iii. Company culture and safety at workplace
iv. Funding/investment to women led startups
v. Social change

11
 2.2 WOMEN ENTREPRENEUR IN CURRENT SCENARIO

HUDA KATTAN

LIFE HISTORY

Huda was born on October 2, 1983 in Oklahoma, as one of four children. Her
parents are both from Iraq. The family later moved to Cookeville, Tennessee, and
then to Dartmouth, Massachusetts. Huda attended the University of Michigan–
Dearborn where she majored in finance.

12
\

CARRER

In 2006, Huda moved to Dubai, since her father was offered a teaching position
there. A few years later, Huda moved to Los Angeles, where she studied makeup.
Among her clients were celebrities such as Eva Longoria and Richie. Huda then
returned to Dubai where she became employed by Revlon as a makeup artist. In
April 2010, upon the advice of one of her sisters, Huda started a beauty- related
Word Press blog which she named "Huda Beauty" on which she would post makeup
tutorials and tips.

Huda achieved popularity on Instagram, attaining more than 35 million followers as

of 2019.Huda is ranked #1 on the "2017 Influencer Instagram Rich List", earning
$18,000 for each post of sponsored content. Huda has been described as "a Kim
Kardashian West of the beauty influencer economy”, and was declared one of the
"ten most powerful influencers in the world of beauty" by Forbes magazine. She
was chosen as one of "The 25 Most Influential People on the Internet" by Time
magazine in 2017.

BUILDING A COMMUNITY

Launched by award-winning beauty blogger Huda Kattan in 2013, Huda Beauty is

one of the world's fastest-growing beauty brands. Beginning as a blog in 2010, Huda
Beauty has fast become the number 1 Beauty Instagram account in the world with
over 26 million followers and counting! A lifelong passion for beauty lead Huda to
enroll at a prestigious makeup training school in Los Angeles, cultivating a roster of
clientele including A-list celebrities and members of a royal family. Soon after,
Huda set up her beauty blog HUDABEAUTY.COM and later launched a YouTube
channel and an Instagram account by the same name.

13
ABOUT BUSINESS

It may have started as a false lash business, but Huda Beauty has developed into so
much more. That false lash launch a sellout success helped super influencer Huda
Kattan lay the groundwork for what was to come next: a full makeup line. Over the
past few years, she’s rolled out a full line of lip products, including metallic Lip
Strobes and liquid lipsticks, plus highlighters and eye shadow. Those launches have
included the vision that Kattan, a makeup artist and the biggest beauty blogger in the
world (if you judge from Instagram followers, at least), has personally infused into
the products. In late 2017, Huda Beauty landed its first big deal a private equity
investment from TSG Consumer Partners. That transaction made it the first
influencer brand to land traditional

14
funding. It also valued the company at $1.2 billion. With that backing in place,
Huda Beauty got to work in 2018, making key hires like Nathalie Kristo from NYX
to run the U.S. and Helena Sampson from Kendo to

oversee Europe. The business also ramped up its launch cadence, putting out even
more eye shadow palettes and delving deeper into complexion with FauxFilter
Foundation, Easy Bake Loose Baking & Setting Powder and Overachiever High
Coverage Concealer. Not content with makeup domination, the business also
expanded its purview with its first subbrand, Kayali, a fragrance line. So far, so
good: Sources report Huda Beauty will double in size this year to $400 million in
retail sales. lastingpower

INNOVATION & INSPIRATION

2013 was the turning point for Huda as she and her sisters Mona and Alya worked
together to create a collection of false eyelashes under the Huda Beauty brand name,
which would later launch at Sephora in Dubai Mall. Huda’s experience in the beauty
industry has allowed her to expand the range to include liquid lipsticks, lip contour
pencils, textured eye shadow palettes and complexion products - all of which have
been instant best-sellers across the globe.

15
2.3 Problem Faced By Women Entrepreneur

Some of the challenges and problems faced by women entrepreneurs are discussed
below.

1. Family restriction: Women are expected to spend more time with their family
members. They do not encourage women to travel extensively for exploiting
business opportunities.

2. Lack of Finance: Family members do not encourage women entrepreneurs.

They hesitate to invest money in the business venture initiated by women
entrepreneur

3. Lack of Education: Women are generally denied of higher education, especially

in rural areas and under developed countries.

4. Role Conflict: Marriage and family life are given more importance than career
and social life in Indian society.

5. Unfavorable Environment: The society is dominated by males. Many business

men are not interested to have business relationship with women entrepreneurs.
Male generally do not encourage women entrepreneurs.

7. Lack of Mental strength: Business involves risk. Women entrepreneurs get

upset very easily when loss arises in business.

8.Lack of Information: Women entrepreneurs are not generally aware of the

subsidies and incentives available for them. Lack of knowledge may prevent them
from availing the special schemes.

16
9. Stiff Competition: Women face lot of competition from men. Due to limited
mobility they find difficult to compete with men.

10. Mobility: Moving in and around the market, is again a tough job for Middle
Class Women Entrepreneurs in Indian Social system.

11. Male-Dominated Sciety: Male chauvinism is still the order of the day in India.
The Constitution of India speaks of equality between sexes.

Suggestion To Overcome That Problem Faced By Women

Entrepreneurs In India:

The problems women face pose a challenge for government and the authorities to
tackle, but with the right approach and some time, they can be solved. Everyone
must understand the importance of women entrepreneurship. On top of all, women
need motivation and any discouragement must be dealt with.

Following are some measures that can be taken to make women empowered
so that they can continue their business activities as confidently as Indian men.

• Creating better education opportunities.

• Making provisions for personality development and training.
• Improving communication skills.
• Institutions where women can learn entrepreneurial skills and risk taking
abilities.
• Measures to change the attitude of society concerning women and women
entrepreneurs in India.

17
2.4 Reason To Become A Women Entrepreneur

Here, then, are seven advantages of being a female entrepreneur.

• The stats on women entrepreneurs are on your side.

• Female entrepreneurs focus more on collaboration than competition.
• Women business owners have more mentors and role models than
ever before.
• Women's strength in emotional intelligence is a competitive
advantage.
• The parenting experience has its entrepreneurial benefits.
• Women make great leaders.
• Female entrepreneurs have the ability to create a women-friendly
corporate culture.

18
 CHAPTER-3

Profile of the Proposed Entrepreneurship Organization

3.1 Background
Pickles have been around for thousands of years, dating as far back as 2030 BC
when cucumbers from their native India were pickled in the Tigris valley . The
word pickle comes from Dutch pekel or northern German pokel, meaning salt or
brine two very important components in the pickling process.

Pickle shop
Vision
Pickle is a global, customers – driven leader of authentic quality; Fun foods
provide innovation, service and value with integrity, manufacture and market food
products on a sustainable basis catering to all segments of the society at affordable
prices and increase the intrinsic values for all stakeholders with the highest
corporate governance Standards.

Mission

• Develop our brands, execute our plans and leverage our heritage,
• Maintain quality products,
• Diversify our customer and product portfolios and
• Exceed customer expectations without compromising our ethical and moral
standards.

19
Company name

Company logo

The original love is eating homemade pickle…

20
Company slogan

Service offered to the customers

▪ Parties order
▪ Different varieties of pickles
▪ Summer offers
▪ Buy 1 kg of pickle get 3oo gm pickle free.

21
DIFFERENT VARITIES OF PICKLES
AMLA PICKLE

TOMATO THOKKU PICKLE

LEMON PICKLE

22
MANGO PICKLE

MIXED VEG PICKLE

GREEN CHILLI PICKLE

23
CARROT PICKLE

GREEN APPLE PICKLE

24
 3.2 Projected Business Proposal

BUSINESS PROPOSED
Our Capital Is Rs.3, 00, 000. Out Of Which Rs 2, 00,000 We Obtained From
Our Savings And Rs 1, 00,000 From Bank Loan At 5%Interest. The List Of Our
Initial Investments And Expenses Done To Start This Venture Has Been Listed
Below:

A. Capital Employed

Particulars Amount
1.Capital (Own Source) 2,00,000

2.Bank Loan 1,00,000

Total 3,00,000

B. Start Up Expenses
Particulars Amount
1.Legal Expenses(For License) 1,000
2.Insurance 4,000
3.Name Board Charges 1,000
4.Advance For Land 20,000
5.Telephone Connection Charges 500
6.Registration Charges 1,000
Total 27,500

25
C. Fixed Assets Purchased
Particulars Amount
1.Land And Building 1,00,000
2.Furniture And Fittings 25,000
3.Refirgerators 15,000
Total 1,40,000

D. Equipment Required For Pickle Shop

Particulars Amount
1.Containers 7,000
2. Pet Jars 20,000
3. Vegetable Mixture 10,000
4.Peeler 3,000
5.Vegetables Cutters/Chopper 5,750
6.Burners 5,000
7.Kettles 7,000
TOTAL 57,750

E. Administration Expenses
Particulars Amount
1.Helping Girl 3,000
2.Maintenance Charge 2,000
Total 5,000

F. Utilities
Particulars Amount
1.Electricity 4,000
2.Water 2,000
Total 6,000

26
G. Contingent Expenses
Particulars Amount
1.Repairs And Maintenance 3,000
2.Telephone 1,000
3.Advertisement 5,000
4.Transport 1,000
Total 10,000

H. Raw materials

Particulars Quantity Amount

1.mangoes 50 8,000
2.cucumber 30 3,000
3.garlic 25 4,000
4.lemons 20 5,000
5.red chilli 15 3,000
6.tumeric 25 4,000
7.green chilli 35 2,000
8.jeera 20 1,000
9.saunf 15 3,000
10.vinegar 20 2,000
11.Methi seed 15 3,000
12.oil 50 2,000
13.red chilli powder 10 3,000
14.salt 30 5,000
15.kalonji 15 2000
Total 51,000

I. Service Offered To Customers

Particulars Amount
1.Food Service 2,750
TOTAL 2,750

27
 J. Purchases
Particulars Amount
1.cash purchase 31,500
2.credit purchase 40,000
TOTAL 71,500

K. Sales
particulars Amount
1.cash sales 140000
2.credit sales 60,000
TOTAL 2,00,000

L. Closing stock
Particulars Amount
Oil 500
Vegetables 5,000
chilli powder 1,000
Vinegar 500
Kalonji 1,500
Methi seed 1,000
TOTAL 9,500

28
 4.1 Projected bank statement

Dr Cr
Particulars Amount Particulars Amount

To capital(Own Resource) 2,00,000 By start up Expenses 27,500

To bank 1,00,000 By raw materials 51,000

By fixed assets 1,40,000

By interest on loan 5000

By balance c/d 18,750

3,00,000 3,00,000

To balance b/d 18,750 By Salaries 3,000

To cash sales 1,40,000 By maintenance 2,000

By Electricity charges 4,000
By Water 2,000
By balance c/d 1,47,750
1,58,750 1,58,750

29
 Projected Trading and Profit and Loss Account

S.No Particulars Note No Amount

1 Revenue from operations 1 2,05,800
TOTAL REVENUE(A) 2,05,800
2 EXPENSES:
Cost of goods sold 2 1,13,000
Employee Benefit expenses 3 3,000
Depreciation and Amortization 4 12,500
Other expenses 5 40,000
Total Expenses (B) 1,68,500
Profit before extraordinary items (A- 37,300
B)

Less: Extraordinary items Nil

Tax Nil
Profit for the period 37,300

30
 Notes to Profit and Loss Account

Note Particulars Amount Amount

No
1 Revenue from operations:
Sales 2,05,800
2 Cost of materials consumed
opening stock Nil
Add: Raw materials 51,000
Less: Closing stock 9,500 41,500
3 Employee benefits expenses:
Salaries 3,000
4 Depreciation and amortisation expenses:
Depreciation on:
Land and Building 5,000
Furniture 1,250
Refrigerator 750 7,000
Preliminary expenses written off 5,500
Total 12,500
5 Other Expenses:
Insurance 4,000
Rent 23,000
Advertising 5,000
Transport 1,000
Legal expenses 1,000
Repairs and maintenance 3,000
Electricity 3000 40000

31
 4.3 Projected Balance Sheet

S.No Particulars Note No Amount

I Liabilities:
1 Capital employed:
Capital 1 2,00,000
Revenue and Surplus 2 37,300
2 Noncurrent liability:
Bank loan 3 1,00,000
3 Current Liabilities:
Total payables 4 40,000
Other current liabilities 5 5000
Total 3,82,300
II Assets:
Tangible assets 6 1,33,000
Current asset: 7
Closing stock 9,500
Bank 1,47,750
Trade receivables 8 92,050
Total 3,82,300

32
 Note For Projected Balance Sheet

note Particulars Amount Amount

no
1. Share capital:
Capital (own Source) 2,00,000
2. Revenue & Surplus:
Surplus 37,300
3. Long Term Borrowings:
Bank loan 1,00,000
4. Trade payable :
Creditors 40,000
5. Other Current liabilities
Interest on loan 5,000
6. Tangible asset:
Furniture & Fittings 23,750
Land & buildings 95,000
Refrigerator 14,250 1,33,000
7. Trade Receivables :
Debtors 60,000
Bills receivables 32,050 92,050

33
 4.4 Ratio Analysis
4.4.1Gross profit:

Gross profit is the revenue left over after you deduct the costs of making a
product or providing a service. You can find the gross profit by subtracting the
cost of goods sold.

Formula:

gross profit
Gross Profit Ratio = ──────────── X 100
sales

Gross profit ratio for the year:

92,800
Gross profit ratio = ────────── X 100
2,05,800
= 45.09%

Reference:

The gross profit ratio is high. It is impossible to pass the judgement on adequacy
or otherwise of this percentage unless we know the gross profit ratio of other
business in the same field.

34
4.4.2 Net profit ratio:
Net profit ratio expresses the relationship between net profit after taxes and
scales. This ratio is measures of the overall profitability net profit is arrived at after
taking into account both the operating and non operating items of incomes and
expenses. The ratio includes what portion of the net sales is left for the owner after
all expenses have been met.

Formula:

Net profit
Net profit ratio = ────────── X 100
Sales

Net profit ratio for the year:

37,300
Net profit = ──────────X 100
2,05,800
= 18.1%

Reference:

The net profit ratio of the company is very low. The sale has to be increased and
a new strategy can be followed to increase its profit.

35
 4.4.3 Return on investment:
Return on investment is a performance measure used to evaluate the efficiency of
an investment or compare the efficiency of a number of different investments. ROI
tries to directly measure the amount of return on a particular investment, relative to
the investment cost.

Formula:

Net income
Return on investment = ───────────── X 100
Cost of investment

Return on investment for the year:

37,300
Return on investment = ────────── X 100
3,00,000
= 12.4 %

Reference:

The return on investment of the company is very low. Capital employed is

Rs.2,00,000 but NP 33,550 is very low. Adequate measures must be take to
increase the profit.

36
4.4.5 Working capital turnover ratio:
Working capital turnover is a ratio that measures how efficiently a company is
using its working capital to support a given level of sales. Also referred to as net
sales to working capital, work capital turnover shows the relationship between the
funds used to finance a company's operations and the revenues a company
generates as a result.

Formula:

Sales
Working capital turnover ratio = ──────────────
Net working capital

Working capital turnover for the year:

2,05,800
Working capital turnover ratio = ─────────
2,49,000
= 1.2times

Reference:
This ratio is purely based on cost of sales. if we increase the cost of sales in every
year then the working capital ratio will increase. However from the above
interpretation the company has shown decreases in the working capital ratio. The
company has to take necessary measure to increase it.

37
4.4.6 Fixed assets turnover ratio:
The fixed asset turnover ratio (FAT) is, in general, used by analysts to measure
operating performance. This efficiency ratio compares net sales (income
statement) to fixed assets (balance sheet) and measures a company's ability to
generate net sales from its fixed-asset investments, namely property, plant, and
equipment.

Formula:

Net sales
Fixed assets turnover ratio = ──────────────
Fixed assets

Fixed assets turnover for the year:

2,05,800
Fixed assets turnover ratio = ──────────
1,40,000
= 1.47times

Reference:
The value of fixed assets turnover ratio shows there is proper utilization of fixed
assets. The fixed asset can be still more use to the maximum extent as possible.

38
4.4.7 Inventory turnover ratio:
Inventory turnover is a ratio showing how many times a company has sold and
replaced inventory during a given period. A company can then divide the days in
the period by the inventory turnover formula to calculate the days it takes to sell
the inventory on hand. Calculating inventory turnover can help businesses make
better decisions on pricing, manufacturing, marketing and purchasing new
inventory.

Formula:

Cost of sales
Inventory turnover ratio = ───────────────
Average inventory

Inventory turnover for the year:

1,13,000
Inventory turnover ratio = ────────
40,500
= 2.7times

Reference:
As the inventory turnover ratio high, its shows the higher utilization of inventory
in hand, there is also enough liquidity of inventory in hand.

39
4.4.7 Administration expenses:
The Administration expenses ratio is an efficiency ratio that measures how well a
company is able to manage its non-operating expenses and generate sales during the
normal course of operations. In other words this ratio measures how well the firm is
utilizing its fixed cost to manage its operations smoothly, which should ultimately
reflect in better sales.

Formula:

Formula:

Total sales
Administration expenses = ───────────────
Administrative expenses

Administration expenses for the year:

2,05,800
Administration expenses = ────────
5,000
= 41.1times

Reference:
A low administration expenses ratio could imply inherent inefficiencies in the
corporate structure.These inefficiencies could be due to legacy issues like archaic
system and processes,

40
4.4.8 Debtor turnover ratio:
The accounts receivable turnover ratio is an accounting measure used to quantify a
company's effectiveness in collecting its receivables or money owed by clients.
The ratio shows how well a company uses and manages the credit it extends to
customers and how quickly that short-term debt is collected or is paid. The
receivables turnover ratio is also called the accounts receivable turnover ratio.

Formula:

Net credit sales

Debtors turnover ratio = ─────────────────
Average account receivable

Debtor’s turnover for the year:

60,000
Debtors turnover ratio = ────────────
60,000
= 1 times

Reference:
The debtors to whom the credit sales have made have not paid the balance. If they
pay the balance the ratio will decrease and how it is equal to 1 as the balance is not
received.
.

41
4.4.9 Creditor’s turnover ratio:
The accounts payable turnover ratio, also known as the payables turnover or the
creditor’s turnover ratio, is a liquidity ratio that measures how many times a
company pays its creditors over an accounting period. The accounts payable
turnover ratio is a measure of short-term liquidity, with a higher payable turnover
ratio being more favorable.

Formula:

Net credit purchase

Creditors turnover ratio = ────────────────
Average account payable

Creditors turnover ratio for the year:

40,000
Creditors turnover ratio = ─────────
40,000
= 1 times

Reference:
There are no other liabilities is the company other than credit purchases of stock to
be sold the creditors balance is yet to be paid and that is why the ratio is equal to 1.
The creditors have to be settled soon.

42
4.4.10 Return on assets:
Return on assets (ROA) is an indicator of how profitable a company is relative to
its total assets. ROA gives a manager, investor, or analyst an idea as to how
Return
efficient a company's management is at using its assets to generate earnings.
on assets is displayed as a percentage.

Formula:

Net income
Return on assets = ───────────── X 100
Average assets

Return on assets for the year:

37,300
Return on assets = ─────── X 100
382300
= 9.8%

Reference:
The return on asset is low. The company must take effective measure to prevent
loss and increase its return on assets.

43
 CHAPTER-5

FINDINGS:
• The capital that is being invested in the firm is quite low, therefore it
lead to restrictions in taking risk that many lead to effective outcomes.
• As the firm has opted to rent the building for business purposes, it has to
pay a high amount of expense in the form of rent.
• There are only limited numbers of vacancies produced by the firm.
• The Source of income are only from the hand of the proprietor.
• The amount of net profit obtained is less due to high credit sales.
• The rate of return is very low.
• The short term solvency of the firm is very high.
• The return of asset is low.
• There is decrease in the working capital ratio.
• The prices of the product Offered by the firm are quite high compared to
the competitive firms.
• The Customers interest and preference may keep on change.

44
SUGGESTIONS:
• As the period of business is not limited, the firm can purchased a
building for business purpose which will reduce the expense.
• The firm cal also produce various new models of design.
• Research and development program can be done to get knowledge on
competitive market conditions.
• The demand of consumers can be increased by advertising the offerings
of the firm.
• The idle funds can be invested in various instruments.
• The fixed assets can be still more used to the maximum extent possible.
• A provision of doubtful debts can be made as the firm is providing credit
sales.
• The company must take effective measure to prevent loss and increase
its return on assets.
• The firm can provide offers and discounts to consumers at the end of
accounting year to reduce closing stock.
• The firm can provide services to consumers to increase the firm
reputation.

45
CONCLUSION:
I conclude that the firm is having rising operating and manufacturing expenses
which affects the firm to earn the handsome profit. The project report helped
me to get the knowledge on the control over the operating and non- operating
expenses for better maintenance of the firm.

46
 CHAPTER-6
BIBILOGRAPHY

Website
www.google.com
www.wikipedia.com

Books
• “Entrepreneurial development” – Jayashree Suresh.
• “Entrepreneurial development” – DR.C.B.Gupta & DR.N.P.Srinivasan.

47