Investment Office ANRS

Project Profile on the Establishment

of Wild Life Parks and Sanctuaries

Development Studies
Associates (DSA)

October 2008
Addis Ababa

Table of Contents
1.Executive Summary..............................................................................................3
2.Product Description and Application.................................................................3
3.Market Study, Plant Capacity and Production Program.................................4
3.1Market Size.............................................................................................................................4
3.1.1Present Demand and Supply............................................................................................4
3.1.2Projected Demand............................................................................................................5
3.1.3Pricing..............................................................................................................................6
3.2Capacity..................................................................................................................................6
3.3Production Program................................................................................................................6

4.Raw Materials and Utilities.................................................................................6

4.1Availability and Source of Raw Materials..............................................................................6
4.2Annual Requirement and Cost of Raw Materials and Utilities...............................................7

5Location and Site...................................................................................................7

6Technology and Engineering ...............................................................................7
6.1Service Process.......................................................................................................................7
6.2Auxiliary Facilities..................................................................................................................8
6.3Civil Engineering Cost............................................................................................................8

7Human Resource and Training Requirement.....................................................9

7.1Human Resource ....................................................................................................................9
7.2Training Requirement.............................................................................................................9

8Financial Analysis................................................................................................10
8.1Underlying Assumption .......................................................................................................10
8.2Investment.............................................................................................................................11
8.3Production Costs...................................................................................................................12
8.4Financial Evaluation.............................................................................................................12

9Economic and Social Benefit and Justification.................................................13

ANNEXES..............................................................................................................15

1. Executive Summary
This project profile deals with the establishment of establishment of wild life parks and
sanctuaries in Amhara National Regional State. The following presents the main findings of the
study
Demand projection divulges that the domestic demand for wild life sanctuaries is substantial and
is increasing with time. Accordingly, the planned plant is set to serve 4000 tourist annually. The
total investment cost of the project including working capital is estimated at birr 5.58 million and
creates job opportunity for 30 citizens.
The financial result indicates that the project will generate profit beginning from the first year of
operation. Moreover, the project will break even at 12.60% of capacity utilization and it will
payback fully the initial investment less working capital in third year. The result further shows
that the calculated IRR of the project is 61.3%; the NPV at 18% annual discount rate is Birr
11.95 million.
In addition to this, the proposed project possesses wide range of economic and social benefits
such as increasing the level of investment, tax revenue, employment creation, environmental,
protection and positive image building.
Generally the project is technically feasible, financially and commercially viable as well as
socially and economically acceptable. Hence the project is worth implementing.

2. Product Description and Application

There are eighty four developed and operating destinations in the Amhara National Regional
State. Of these fifteen are Eco-tourism or nature-based sites.
There is consensus that these attractions have been, and are, greatly under-commercialized. This
has not been only undermining the impact of tourism on the economy of the surrounding
communities, but also the objective to optimize spending from the visitors has been
compromised.
3

This project aims at addressing this problem by establishing a wild life park on private business
initiative.

3. Market Study, Plant Capacity and Production Program

3.1

Market Size
3.1.1 Present Demand and Supply

The number of tourists who visit the region has been increasing; the number of international
tourists who visit the region counts in hundreds of thousands. The following table shows the
number of tourists visited the region and the future forecast.
Table 1: Tourist Arrivals in ANRS

Year
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Total
117900
172212
246550
343891
467212
619491
803704
1022829
1279844
1577726

Domestic International
57720
76872
103021
137254
180657
234319
299326
376765
467725
573291

60180
95340
143529
206637
286555
385172
504378
646064
812119
1004434

Source: Tourism Potential Report

The Semen Mountains National Park (SMNP) is the only developed, wildlife-based park serving
as a tourism destination. It was declared a national park in 1969 and as reiterated above
UNESCO named it a World Heritage Natural Site in 1978. The park was established based on
the criteria set by the International Union for the Conservation of Nature and Natural Resources
of Wild Flora and Fauna (IUCN), World Conservation Strategy (WCS), and the national
Conservation Strategy of 1997.

Table 2: Endemic Mammals of the SMNP

1
2
3
4
5
6

Spp.Common Name
Walia Ibex
Semien Fox (Jackal)
Gelada Baboon
Abyssinian Hare
Giant Mole-rat
Meneliks Bush-buck

Scientific Name
Capra walie
Canis seminesis
Thercopithicus gelada
Lepus abyssinicus
Tachyoryctes macrocephalus
Tragelaphus scriptus meniliki

Source: SMNP

Table 3: Endemic Bird Species of the SMNP

Spp. Common Name

1 Rougets Rail
2 White-Collared Pigeon
3 Black-winged Love Bird
4 Thick-billed Raven
5 Blue-winged Goose
6 Abyssinian Long-Claw

Scientific Name
Rougettus rougetii
Columba albitorques
Corvus crassirostris
Cyanochen Cyanoptera
Heruundo megaelensis

Source: SMNP
This project envisages forming other smaller parks based on private business initiatives.

3.1.2 Projected Demand

If we assume that only 5% of the domestic tourists and 20% of the international tourist are
willing to visit the wild life parks, then the projected demand will be as shown in Table below.
Note that, this project envisages only 4000 visitors in a year.

Table 4: Projected Demand

No. Tourists Willing

Year
to Visit Wild Life Park
Domestic International Total
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018

9,033

57,311

66,344

11,716

77,034

88,750

14,966

100,876

115,842

18,838

129,213

148,051

23,386

162,424

185,810

28,665

200,887

229,551

30,098

210,931

241,029

31,603

221,478

253,080

33,183

232,552

265,734

34,842

244,179

279,021

3.1.3 Pricing
The major objective in pricing was to make it affordable and attractive to international tourists.
Thus, it is set at Birr 2000 (approximately USD 200) per person. Further studies on pricing,
especially with regards to domestic tourists should be carried out by the project implementer.

3.2

Capacity

The envisage park plans to serve 4000 international tourists in year.

3.3

Production Program

The production program should take the seasonal nature of the market into consideration. During
the first year of operation it will operate at 60%, 70%, 80% and 90% of its capacity during the
1st, 2nd, 3rd and 4th year. Starting from the 5th year, it will attain full capacity. This consideration is
developed based on the assumption that market requires intensive promotion and experience.

4. Raw Materials and Utilities

4.1

Availability and Source of Raw Materials

All the required raw materials are available in region.

6

4.2

Annual Requirement and Cost of Raw Materials

and Utilities

The annual raw material and utility requirement and the associated cost for the envisaged plant
are listed in Tables 4 and 5 here under.
Table 5: Raw material Requirement at Full Capacity

No.
1

Material
Animal fodder
Total

Qty
10 tons

Price
Unit
50000

Local
500,000
500,000

Total
500,000
500,000

Table 6: Utilities Requirement at Full Capacity

Item
Electricity
Water (for the animals, lodges )
Office Rent
Miscellaneous Costs

Total
2000 kw
20000 m3

1,100
53,000

5000/m X 12

60,000
500,000
614,100

5 Location and Site

The appropriate locations for the envisaged project in view of the availability of the wildlife, and
infrastructure as well as market for the service are the Nothern and western parts of the region.

6 Technology and Engineering

6.1

Service Process

A survey has to be undertaken to determine which localities in the Region have the highest
potential of becoming wild life parks. Main criteria for the first phase evaluation will be the
presence of wild life (animals) in the area, absence of human settlement and agricultural
activities around the potential areas. Once these areas are identified, additional criteria will be
developed to select one or two sites where wild life parks will be developed. The development of
7

the sites will entail the protection of the sites from human interference, provision of adequate
water and food supplies within the parks establishing observation center in the sites, if necessary
bringing in some wild animals from other areas of similar climatic conditions.
Alternatives:
1. State owned national parks.
2. Traditional do-it-yourself game by unlicensed hunters.

6.2

Auxiliary Facilities

The service requires the following auxiliary facilities. Water points should be preserved to the
animals; otherwise, they will not survive the dry seasons or migrate. In addition, mini lodges
should be made available so that tourists get refreshments.

Table 7 shows the items and their

estimated costs.
Table 7: Auxiliary Facilities

No
1
2

Items

Cost
(Birr)

Building water points for the animals

200,000
Establishing mini restaurants*
2,000,000
Total
2,400,000

*They are assumed to be autonomous business entities and therefore the human
resources and working capital requirement to run them is not included this
project profile.

6.3

Civil Engineering Cost

The civil engineering costs are shown in Table 8.

Table 8: Civil Engineering Costs

No
1
2

Item
Constructing feeder roads
Constructing foot paths for visitors

Cost
(Birr)
1,000,000
200,000
1,200,000

7 Human Resource and Training Requirement

7.1

Human Resource

Table 9 depicts the human resource requirements for the proposed wild life sanctuary.
Table 9: Human Resource Requirements

Salary/Wage (Birr)

Job Title
1
2
3
4
5
6
7
8
9
1
0
1
1

No.

General Manager
Secretary
Accountant
Casher
Clerks
Tour Guides
Receptionists
Drivers
Security

1
1
1
1
3
5
3
5
10

Clerks

Monthly
Annual
4,000
48,000
850
10,200
1,500
18,000
850
10,200
700
25,200
1,500
90,000
1,000
36,000
1,000
60,000
500
60,000
0

Genitor
Total
Employment Benefits 20% of Annual
Salary

7.2

30

0
357,600
71,520
429,120

Training Requirement

Periodic trainings are essential, especially in areas of preservation of nature and wild life, and
customer handling. An annual budget of Birr 70,000 is allocated in working capital for this
purpose.

8 Financial Analysis
8.1

Underlying Assumption

The financial analysis is based on the data provided in the preceding chapters and the following
assumptions.
A. Construction and Finance

Construction period

2 year

Source of finance

40% equity and 60% loan

Tax holidays

2 years

Bank interest rate

12%

Discount for cash flow

18%

Value of land

Based on lease rate of ANRS

Spare Parts, Repair & Maintenance

3% of fixed investment

B. Depreciation
Building

5%

Machinery and equipment

10%

Office furniture

10%

Vehicles

20%

Pre-production (amortization)

20%

10

C. Working Capital (Minimum Days of Coverage)

Raw Material-Local

30

Raw Material-Foreign

120

Factory Supplies in Stock

30

Spare Parts in Stock and Maintenance

30

Work in Progress
Finished Products
Accounts Receivable
Cash in Hand
Accounts Payable

10
15
30
30
30

8.2

Investment

The total investment cost of the project including working capital at full capacity is estimated at
Birr 5.58 million as shown in Table below. The Owner shall contribute 40% of the finance in the
form of equity while the remaining 60% is to be financed by bank loan.
Table 10: Total Initial Investment and Working Capital

Total Initial Investment

Item
Royalty Fee
Civil Engineering Costs
Office equipment
Vehicles

Cost (Birr)
3,000.00
1,200,000.00
100,000.00
1,250,000.00

Construction of Auxiliary Facilities

Total Fixed Investment
Pre production capital expenditure
Total Initial Investment
Working capital at full capacity

2,400,000.00
4,953,000.00
247,650.00
5,200,650.00
375,363.10

Total

5,576,013.10
*Pre-production capital expenditure includes - all expenses for pre-investment
studies, consultancy fee during construction and expenses for companys
establishment, project administration expenses, commission expenses, preproduction
marketing and interest expenses during construction.

11

8.3

Production Costs

The total production cost at full capacity operation is estimated at Birr 2.7 million as detailed in
table 11 below.
Table 11: Total Production Costs

Total Production Cost at Full Capacity

Items
Cost
1. Raw materials

500,000.00

2. Utilities

614,100.00

3. Wages and Salaries

429,120.00

4. Spares and Maintenance

148,590.00

Factory costs
5. Depreciation
6. Financial costs

Total Production Cost

8.4
I.

1,691,810.00
609,530.00
401,472.94
2,702,812.94

Financial Evaluation

Profitability

According to the projected income statement attached in the annex part (see annex 3) the project
will generate profit beginning from the first year of operation. Ratios such as the percentage of
net profit to total sales, return on equity and return on total investment are 47.92%, 58.97% and
103.12% in the first year and are gradually rising to 75.91%, 76.24%, and 190.59%. Annual
profit starts at Birr 2.3 million and reach Birr 4.25 million. The profit generates a total profit of
Birr 37 million during 10 years period. Furthermore, the income statement and other profitability
indicators show that the project is viable.
II.

Breakeven Analysis

The breakeven point of the project is estimated by using income statement projection.
Accordingly, the project will break even at 12.60% of capacity utilization.
III.

Payback Period
12

Investment cost and income statement projection are used in estimating the project payback
period. The projects will payback fully the initial investment less working capital in three years.
IV.

Simple Rate of Return

For the envisaged plant the simple rate of return equals to 73.6%.
V.

Internal Rate of Return and Net Present Value

Based on cash flow statement described in the annex part, the calculated IRR of the project is
61.3% and the net present value at 18 % discount is Birr 11.53 million.
VI.

Sensitivity Analysis

The sensitivity analysis shows that the mild shock in cost or number of customers will not make
the business infeasible. For instance, if a 10% increment in prices is observed, the business
remains to viable will a total profit of Birr 36 million; a 10 reduction in number of customer
Birr 31,000.

9 Economic and Social Benefit and Justification

The envisaged project possesses wide range of benefits where it promotes the socio-economic
goals and objectives stated in the strategic plan of the Amhara National Regional State. These
benefits are listed as follows
A. Profit Generation
The project is found to be financially viable and Birr 37 million within the project life. Such
result induces the project promoters to reinvest the profit which, therefore, increases the
investment magnitude in the region.
B. Tax Revenue
In the project life under consideration, the region will collect about Birr 13.42 million from
corporate tax payment alone (i.e. excluding income tax, sales tax and VAT). Such result create
additional fund for the regional government that will be used in expanding social and other basic
services in the region.
C. Employment and Income Generation
13

The proposed project is expected to create employment opportunity to several citizens of the
region. That is, it will provide permanent employment to 30 professionals as well as support
staffs.
D. Diversification of the Economy
This project diversifies the region economy by utilizing untapped opportunity.
E. Preservation of Nature
The projects augments to the on going efforts to preserve the nations natural resources,
especially the wild life.

F. Creating Better Image

The project can play an important role in changing the present poor image of the country.

14

ANNEXES

15

Annex 1: Total Net Working Capital Requirements (in Birr)

CONSTRUCTION

Capacity Utilization (%)

1. Total Inventory

PRODUCTION

Year 1

Year 2

60%

70%

80%

90%

189,662

221,272

252,882

284,492

32,727

38,182

43,636

49,091

Raw Material-Local

32,727

38,182

43,636

49,091

Raw Material-Foreign

Factory Supplies in Stock

1,506

1,757

2,008

2,259

Spare Parts in Stock and Maintenance

9,726

11,347

12,968

14,589

Work in Progress

37,658

43,935

50,211

56,487

Finished Products

75,317

87,869

100,422

112,975

2. Accounts Receivable

523,636

610,909

698,182

785,455

3. Cash in Hand

68,283

79,664

91,045

102,425

748,854

873,663

998,472

1,123,281

4. Current Liabilities

523,636

610,909

698,182

785,455

Accounts Payable

523,636

610,909

698,182

785,455

TOTAL NET WORKING CAPITAL REQUIREMENTS

225,218

262,754

300,290

337,827

INCREASE IN NET WORKING CAPITAL

225,218

37,536

37,536

37,536

Raw Materials in Stock- Total

CURRENT ASSETS

Annex 1: Total Net Working Capital Requirements (in Birr)

(continued)

PRODUCTION
5

10

Capacity Utilization (%)

100%

100%

100%

100%

100%

100%

1. Total Inventory

316,103

316,103

316,103

316,103

316,103

316,103

54,545

54,545

54,545

54,545

54,545

54,545

54,545

54,545

54,545

54,545

54,545

54,545

2,511

2,511

2,511

2,511

2,511

2,511

Spare Parts in Stock and Maintenance

16,210

16,210

16,210

16,210

16,210

16,210

Work in Progress

62,764

62,764

62,764

62,764

62,764

62,764

Finished Products

125,528

125,528

125,528

125,528

125,528

125,528

2. Accounts Receivable

872,727

872,727

872,727

872,727

872,727

872,727

3. Cash in Hand

113,806

113,806

113,806

113,806

113,806

113,806

1,248,090

1,248,090

1,248,090

1,248,090

1,248,090

1,248,090

4. Current Liabilities

872,727

872,727

872,727

872,727

872,727

872,727

Accounts Payable

872,727

872,727

872,727

872,727

872,727

872,727

TOTAL NET WORKING CAPITAL REQUIREMENTS

375,363

375,363

375,363

375,363

375,363

375,363

37,536

Raw Materials in Stock-Total

Raw Material-Local
Raw Material-Foreign
Factory Supplies in Stock

CURRENT ASSETS

INCREASE IN NET WORKING CAPITAL

Annex 2: Cash Flow Statement (in Birr)

CONSTRUCTION

PRODUCTION

Year 1

Year 2

2,600,325

2,975,688

5,323,636

5,687,273

6,487,273

7,287,273

2,600,325

2,975,688

523,636

87,273

87,273

87,273

Total Equity

1,040,130

1,190,275

Total Long Term Loan

1,560,195

1,785,413

523,636

87,273

87,273

87,273

2. Inflow Operation

4,800,000

5,600,000

6,400,000

7,200,000

Sales Revenue

4,800,000

5,600,000

6,400,000

7,200,000

Interest on Securities

TOTAL CASH OUTFLOW

2,600,325

2,600,325

2,639,304

2,231,202

3,566,503

3,869,301

4. Increase In Fixed Assets

2,600,325

2,600,325

2,476,500

2,476,500

123,825

123,825

5. Increase in Current Assets

748,854

124,809

124,809

124,809

6. Operating Costs

990,695

1,147,318

1,303,942

1,460,565

7. Corporate Tax Paid

1,245,590

1,458,677

8. Interest Paid

899,755

401,473

334,561

267,649

9.Loan Repayments

557,601

557,601

557,601

10.Dividends Paid

Surplus (Deficit)

375,363

2,684,332

3,456,071

2,920,770

3,417,972

Cumulative Cash Balance

375,363

3,059,695

6,515,766

9,436,536

12,854,508

TOTAL CASH INFLOW

1. Inflow Funds

Total Short Term Finances

3. Other Income

Fixed Investments
Pre-production Expenditures

Annex 2: Cash Flow Statement (in Birr): Continued

PRODUCTION
5
8,087,273

6
8,000,000

7
8,000,000

8
8,000,000

9
8,000,000

10
8,000,000

87,273

Total Equity

Total Long Term Loan

87,273

2. Inflow Operation

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

Sales Revenue

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

TOTAL CASH OUTFLOW

4,172,099

4,090,310

4,043,472

3,439,032

3,439,032

3,439,032

4. Increase In Fixed Assets

Fixed Investments

Pre-production Expenditures

124,809

6. Operating Costs

1,617,188

1,617,188

1,617,188

1,617,188

1,617,188

1,617,188

7. Corporate Tax Paid

1,671,764

1,781,696

1,801,770

1,821,843

1,821,843

1,821,843

8. Interest Paid

200,736

133,824

66,912

9. Loan Repayments

557,601

557,601

557,601

3,915,174

3,909,690

3,956,528

4,560,968

4,560,968

4,560,968

16,769,682

20,679,372

24,635,900

29,196,868

33,757,836

38,318,804

TOTAL CASH INFLOW

1. Inflow Funds

Total Short Term Finances

Interest on Securities
3. Other Income

5. Increase in Current Assets

10.Dividends Paid
Surplus (Deficit)
Cumulative Cash Balance

Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED

CONSTRUCTION
Year 1

PRODUCTION

Year 2

TOTAL CASH INFLOW

4,800,000

5,600,000

6,400,000

7,200,000

1. Inflow Operation

4,800,000

5,600,000

6,400,000

7,200,000

Sales Revenue

4,800,000

5,600,000

6,400,000

7,200,000

Interest on Securities

TOTAL CASH OUTFLOW

2,600,325

2,600,325

1,215,913

1,184,855

1,341,478

2,956,778

3. Increase in Fixed Assets

2,600,325

2,600,325

Fixed Investments

2,476,500

2,476,500

123,825

123,825

4. Increase in Net Working Capital

225,218

37,536

37,536

37,536

5. Operating Costs

990,695

1,147,318

1,303,942

1,460,565

6. Corporate Tax Paid

1,458,677

NET CASH FLOW

-2,600,325

-2,600,325

3,584,087

4,415,145

5,058,522

4,243,222

CUMULATIVE NET CASH FLOW

-2,600,325

-5,200,650

-1,616,563

2,798,582

7,857,104

12,100,326

Net Present Value (at 18%)

-2,600,325

-2,203,665

2,574,036

2,687,194

2,609,129

1,854,751

Cumulative Net present Value

-2,600,325

-4,803,990

-2,229,955

457,239

3,066,368

4,921,120

2. Other Income

Pre-production Expenditures

Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED

(Continued)

PRODUCTION
5

10

TOTAL CASH INFLOW

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

1. Inflow Operation

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

Sales Revenue

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

3,326,488

3,398,885

3,418,958

3,439,032

3,439,032

3,439,032

3. Increase in Fixed Assets

Fixed Investments

Pre-production Expenditures

37,536

5. Operating Costs

1,617,188

1,617,188

1,617,188

1,617,188

1,617,188

1,617,188

6. Corporate Tax Paid

1,671,764

1,781,696

1,801,770

1,821,843

1,821,843

1,821,843

NET CASH FLOW

4,673,512

4,601,115

4,581,042

4,560,968

4,560,968

4,560,968

16,773,838

21,374,953

25,955,995

30,516,963

35,077,931

39,638,899

Net Present Value (at 18%)

1,731,216

1,444,405

1,218,732

1,028,298

871,439

738,508

Cumulative Net present Value

6,652,336

8,096,741

9,315,473

10,343,771

11,215,210

11,953,718

Interest on Securities
2. Other Income
TOTAL CASH OUTFLOW

4. Increase in Net Working Capital

CUMULATIVE NET CASH FLOW

Net Present Value (at 18%)

Internal Rate of Return

11,953,717.60

61.3%

Annex 4: NET INCOME STATEMENT ( in Birr)

PRODUCTION
Capacity Utilization (%)
1. Total Income
Sales Revenue

60%

70%

80%

90%

100%

4,800,000

5,600,000

6,400,000

7,200,000

8,000,000

4,800,000

5,600,000

6,400,000

7,200,000

8,000,000

836,751

976,210

1,115,668

1,255,127

1,394,585

3,963,249

4,623,790

5,284,332

5,944,873

6,605,415

Other Income
2. Less Variable Cost
VARIABLE MARGIN
(In % of Total Income)
3. Less Fixed Costs
OPERATIONAL MARGIN
(In % of Total Income)

82.57

82.57

82.57

82.57

82.57

763,474

780,639

797,803

814,968

832,133

3,199,775

3,843,152

4,486,528

5,129,905

5,773,282

66.66

68.63

70.10

71.25

72.17

899,755

401,473

334,561

267,649

200,736

2,300,020

3,441,679

4,151,967

4,862,256

5,572,545

1,245,590

1,458,677

1,671,764

2,300,020

3,441,679

2,906,377

3,403,579

3,900,782

Gross Profit/Sales

47.92%

61.46%

64.87%

67.53%

69.66%

Net Profit After Tax/Sales

47.92%

61.46%

45.41%

47.27%

48.76%

Return on Investment

58.97%

70.34%

58.92%

66.29%

73.56%

Return on Equity

103.12%

154.31%

130.31%

152.60%

174.89%

4. Less Cost of Finance

5. GROSS PROFIT
6. Income (Corporate) Tax
7. NET PROFIT
RATIOS (%)

Annex 4: NET INCOME STATEMENT (in Birr): Continued

PRODUCTION
Capacity Utilization (%)
1. Total Income
Sales Revenue

10

100%

100%

100%

100%

100%

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

1,394,585

1,394,585

1,394,585

1,394,585

1,394,585

6,605,415

6,605,415

6,605,415

6,605,415

6,605,415

Other Income
2. Less Variable Cost
VARIABLE MARGIN
(In % of Total Income)
3. Less Fixed Costs
OPERATIONAL MARGIN
(In % of Total Income)

82.57

82.57

82.57

82.57

82.57

532,603

532,603

532,603

532,603

532,603

6,072,812

6,072,812

6,072,812

6,072,812

6,072,812

75.91

75.91

75.91

75.91

75.91

133,824

66,912

5. GROSS PROFIT

5,938,987

6,005,899

6,072,812

6,072,812

6,072,812

6. Income (Corporate) Tax

1,781,696

1,801,770

1,821,843

1,821,843

1,821,843

7. NET PROFIT

4,157,291

4,204,130

4,250,968

4,250,968

4,250,968

Gross Profit/Sales

74.24%

75.07%

75.91%

75.91%

75.91%

Net Profit After Tax/Sales

51.97%

52.55%

53.14%

53.14%

53.14%

Return on Investment

76.96%

76.60%

76.24%

76.24%

76.24%

Return on Equity

186.39%

188.49%

190.59%

190.59%

190.59%

4. Less Cost of Finance

RATIOS (%)

Annex 5: Projected Balance Sheet (in Birr)

CONSTRUCTION
TOTAL ASSETS
1. Total Current Assets
Inventory on Materials and Supplies
Work in Progress
Finished Products in Stock
Accounts Receivable
Cash in Hand
Cash Surplus, Finance Available
Securities
2. Total Fixed Assets, Net of Depreciation
Fixed Investment
Construction in Progress
Pre-Production Expenditure
Less Accumulated Depreciation
3. Accumulated Losses Brought Forward
4. Loss in Current Year
TOTAL LIABILITIES
5. Total Current Liabilities
Accounts Payable
Bank Overdraft
6. Total Long-term Debt
Loan A
Loan B
7. Total Equity Capital
Ordinary Capital
Preference Capital
Subsidies
8. Reserves, Retained Profits Brought Forward
9.Net Profit After Tax
Dividends Payable
Retained Profits

Year 1
2,600,325
0
0
0
0
0
0
0
0
2,600,325
0
2,476,500
123,825
0
0
0
2,600,325
0
0
0
1,560,195
1,560,195
0
1,040,130
1,040,130
0
0
0
0
0
0

Year 2
5,576,013
375,363
0
0
0
0
0
375,363
0
5,200,650
2,476,500
2,476,500
247,650
0
0
0
5,576,013
0
0
0
3,345,608
3,345,608
0
2,230,405
2,230,405
0
0
0
0
0
0

PRODUCTION
1
8,399,669
3,808,549
43,959
37,658
75,317
523,636
68,283
3,059,695
0
4,591,120
4,953,000
0
247,650
609,530
0
0
8,399,669
523,636
523,636
0
3,345,608
3,345,608
0
2,230,405
2,230,405
0
0
0
2,300,020
0
2,300,020

2
11,371,020
7,389,430
51,286
43,935
87,869
610,909
79,664
6,515,766
0
3,981,590
4,953,000
0
247,650
1,219,060
0
0
11,371,020
610,909
610,909
0
2,788,007
2,788,007
0
2,230,405
2,230,405
0
0
2,300,020
3,441,679
0
3,441,679

3
13,807,068
10,435,008
58,613
50,211
100,422
698,182
91,045
9,436,536
0
3,372,060
4,953,000
0
247,650
1,828,590
0
0
13,807,068
698,182
698,182
0
2,230,405
2,230,405
0
2,230,405
2,230,405
0
0
5,741,699
2,906,377
0
2,906,377

4
16,740,319
13,977,789
65,939
56,487
112,975
785,455
102,425
12,854,508
0
2,762,530
4,953,000
0
247,650
2,438,120
0
0
16,740,319
785,455
785,455
0
1,672,804
1,672,804
0
2,230,405
2,230,405
0
0
8,648,076
3,403,579
0
3,403,579

Annex 5: Projected Balance Sheet (in Birr):

Continued

PRODUCTION
TOTAL ASSETS
1. Total Current Assets
Inventory on Materials and Supplies
Work in Progress
Finished Products in Stock
Accounts Receivable
Cash in Hand
Cash Surplus, Finance Available
Securities
2. Total Fixed Assets, Net of Depreciation
Fixed Investment
Construction in Progress
Pre-Production Expenditure
Less Accumulated Depreciation
3. Accumulated Losses Brought Forward
4. Loss in Current Year
TOTAL LIABILITIES
5. Total Current Liabilities
Accounts Payable
Bank Overdraft
6. Total Long-term Debt
Loan A
Loan B
7. Total Equity Capital
Ordinary Capital
Preference Capital
Subsidies
8. Reserves, Retained Profits Brought Forward
9. Net Profit After Tax
Dividends Payable
Retained Profits

5
20,170,772
18,017,772
73,266
62,764
125,528
872,727
113,806
16,769,682
0
2,153,000
4,953,000
0
247,650
3,047,650
0
0
20,170,772
872,727
872,727
0
1,115,203
1,115,203
0
2,230,405
2,230,405
0
0
12,051,655
3,900,782
0
3,900,782

6
23,770,462
21,927,462
73,266
62,764
125,528
872,727
113,806
20,679,372
0
1,843,000
4,953,000
0
247,650
3,357,650
0
0
23,770,462
872,727
872,727
0
557,601
557,601
0
2,230,405
2,230,405
0
0
15,952,437
4,157,291
0
4,157,291

7
27,416,990
25,883,990
73,266
62,764
125,528
872,727
113,806
24,635,900
0
1,533,000
4,953,000
0
247,650
3,667,650
0
0
27,416,990
872,727
872,727
0
0
0
0
2,230,405
2,230,405
0
0
20,109,728
4,204,130
0
4,204,130

8
31,667,958
30,444,958
73,266
62,764
125,528
872,727
113,806
29,196,868
0
1,223,000
4,953,000
0
247,650
3,977,650
0
0
31,667,958
872,727
872,727
0
0
0
0
2,230,405
2,230,405
0
0
24,313,858
4,250,968
0
4,250,968

9
35,918,926
35,005,926
73,266
62,764
125,528
872,727
113,806
33,757,836
0
913,000
4,953,000
0
247,650
4,287,650
0
0
35,918,926
872,727
872,727
0
0
0
0
2,230,405
2,230,405
0
0
28,564,826
4,250,968
0
4,250,968

10
40,169,895
39,566,895
73,266
62,764
125,528
872,727
113,806
38,318,804
0
603,000
4,953,000
0
247,650
4,597,650
0
0
40,169,895
872,727
872,727
0
0
0
0
2,230,405
2,230,405
0
0
32,815,794
4,250,968
0
4,250,968

10