Profitability Analysis

Profitability Analysis of Agarbatti Sticks Plant

Profit on Raw Agarbatti
Manufacturing cost of Agarbatti
1kg Premix (Masala) =22/-
1kg Sticks =100/-
Raw Material for 1kg raw Agarbatti
750gm Masala+250gm sticks
Rs. (15+25)
40/- (Raw Material)
Total Product Cost
Raw Mat. + (Labour+Electricity)
40+ (2)
1 kg Raw Agarbatti
Rs.42/kg (We further maximize it to Rs.42/kg Approximate)
Sale Value of Raw Agarbatti
Sale Value on Buy to Arjun Industries = Rs. 55/kg
Net Profit =55-42 =13/kg
Minimum Production =50 kg/day
Net Profit/Day =13 x 50=Rs.650/Day
Monthly Profit from Raw Ag =650 x 26 Days =Rs. 16,900/Month

Sales value of local Market Rs.63 to 90/kg
Net profit= Rs. 20/kg (Average)
Net Profit/Day =20 x 50= Rs.1000/Day
Monthly profit from Raw Ag. = 1000 x 26 days = Rs. 26,000/ Month

Profit On finished Agarbatti after Perfuming and Packing in Boxes
1 kg finished Ag. Cost Price = 50+50+65(Perfuming Packing+ Raw Ag Cost) = Rs.165
Now calculating Selling Price for 1 Kg Finished Ag. In Rs. 10 MRP Box.
No. of Sticks in 1 kg Ag. = 1000 Sticks
No. of Stick per box (Rs.10 box) = 26 Sticks
No. of Boxes made in 1 kg =1000/26 =38.46 i.e. =38 Boxes Approx
1 kg Costing = 3810 = 380/- Retailer/Wholesaler margin, i.e. 30% of 380 = 114/- Lessing Retailer/Wholesaler margin from 1 kg costing = 380-114 =266/- 1 Kg Ag Selling Price Cost Calculation of Rs. 10 Boxes = Rs.266/kg Profit = Selling Price – Cost Price Profit/kg = 266-165 = Rs. 101/kg Profit/Day = 10150 = Rs. 5050/day
Profit/Month = 5050*30 =Rs. 1,51,500/Month

Payment Terms: 100% Full Advance payment (Only cheqes / RTGS/ IMPS)
Delivery Period: 15 Days receipt of the order

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