PRESENTATION ON:-

PROFITABILITY IN E-RETAILING

PRESENTED BY:SONAL PRAJAPATI-29 SOUMITRA DAS -30 KANA BARGOTRA -06 MANSI NAUTIYAL -40

WHAT IS E-RETAILING?
E-retailing, most commonly known as e-tailing is nothing but shopping through the Internet and other media forms. E-tailing is synonymous with business-to-consumer (B2C) transaction. E-tailing began to work for some major corporations and smaller entrepreneurs as early as 1997 when Dell Computer reported multimillion dollar orders taken at its Web site.

BOTTLENECKS FACED BY E-RETAILING IN INDIA:1) Problems with the Payment System

2) Problems with Shipping

3) Offline presence 4) Language Problem

FUTURE OF E-RETAILING IN INDIA:# There are divergent views on the future of e-retailing in India. # Some experts are of the opinion that the giant, big brand retailers would dominate the small ones due to their wider investment capacities. # It would be next to impossible for the small retailers and the kiranas to prove their existence in the battlefield of online retailing. # Another viewpoint is that there would be an exponential growth in the online retailing business in India.

WHAT IS PROFITABILITY?
Ability of a firm to generate net income on a consistent basis. It is often measured by price to earnings ratio.

The efficiency of a company or industry at generating earnings.

PROFITABILITY DEFINED:Profits = Revenues - Costs Profits = (Unit Sales x Price) - Costs

Some examples of profitability ratios are:

Profit Margin Return On Assets And Return On Equity. It is important to note that a little bit of background knowledge is necessary in order to make relevant comparisons when analyzing these ratios.

PROFITABILITY PARADOX:Profits = (# Unit Sales x Price) - Costs

Unit sales somewhat a function of price The lower the price, the more might be sold More units sold = lower production costs Product Price: critical to every part of the profitability Equation
Every $$ over break-even is profit

TRADING ACCOUNT:1. An account similar to a traditional bank account, holding cash and securities, and is administered by an investment dealer. 2. An account held at a financial institution and administered by an investment dealer that the account holder uses to employ a trading strategy rather than a buy-and-hold investment strategy.

3. Though trading accounts are traditionally thought to hold only stocks, a trading account can hold cash, foreign cash, securities and a number of other types of investments.

ITEMS IN TRADING A/C: Opening Stock

Carriage Import Duty Custom Duty Octroi Duty Wages Excise Duty Royalties Purchases Return Inwards Closing Stock Goods Destroyed In Fire Goods Distributed As Free Sample Sales Factory Insurance Returns Outwards Factory Repair

PROFIT AND LOSS ACCOUNT:The purpose of the profit and loss account is to:
Show whether a business has made a PROFIT or LOSS over a financial year. Describe how the profit or loss arose e.g. categorizing costs between cost of sales and operating costs.

A profit and loss account starts with the TRADING ACCOUNT and then takes into account all the other expenses associated with the business

ITEMS IN PROFIT & LOSS A/C: Staff salary General expenses Commission Sundry expenses Printing & stationary Telephone charges Carriage outward Delivery expenses Free sample Advertising Godown rent Discount allowed Bank charges Export duty Commission received Discount received Interest on investment Rent received Royalty received Provision for discount on creditors Miscellaneous income Audit Fee Conveyance Depreciation Provisions For Discount On Debtors Interest On Loan Showroom Expenses Bad Debts And Provisions

BALANCE SHEET?
Balance Sheet (BS) is a financial statement at a given point in time. The BS will show you how the company is funded i.e. in Capital & Reserve by current trading profits and capital invested by the owners, and how the funding is currently being used i.e. stock, debtors, buildings, cash etc.

ITEMS IN BALANCE SHEET: Bills Payable Sundry Creditors Outstanding Expenses Loans Bank Overdraft Drawing Interest On Capital Petty Cash Cash In Hand Cash In Bank Prepaid Expenses Bills Receivables Sundry Debtors Loose Tools Investments Patterns Trade Marks Copy Right Motor Car Furniture & Fixtures Plant & Machinery Land & Building Goodwill Closing Stock Stores & Spare Parts Fictitious Assets