Module 3: Micro-enterprise management
Topic 1: Management areas, skills and tools
Activity 1: Introduction to micro-enterprise management
Topic 2: Systematic financial analysis and diagnosis
Annex 1. Visual Aid: 3-1 Management areas and skills
Annex 1. Visual Aid: 3-2 Income and expenditure record
Annex 1. Visual Aid: 3-3 Important learnings in preparing income statements
Annex 1. Visual Aid: 3-4 Analysis chart
Annex 1. Visual Aid: 3-5 Possible weaknesses bakery enterprise
Annex 2. Case: 3-1 Ms. Wang's rabbit raising enterprise
INTRODUCTION
Module 3 addresses the management of micro-enterprises at the implementation stage. It is important for field workers to assist micro-entrepreneurs in problem-solving of their micro-enterprises and offering useful suggestions as a result. This module is designed for participants to acquire the knowledge, skills and attitude in providing technical assistance to micro-entrepreneurs to ensure continued success or growth of their businesses.
OUTPUT OBJECTIVES
At the end of Module 3, participants will be able to:
1. Understand the requirements in micro-enterprise management and the importance of record keeping.
2. Assist women entrepreneurs in keeping financial records and preparing income statements.
3. Carry out financial analysis and diagnosis, and come up with recommendations and options to the micro-entrepreneur.
Background and Rationale
To obtain profit is the main goal why micro-entrepreneurs engage in business. Proper management is the key for success. Field workers have a role in assisting micro-entrepreneurs in improving their management skills.
In this topic the major areas of management and the required management skills of micro-entrepreneurs will be identified, and participants will acquire the knowledge, attitude and skills in preparing and reading financial records and statements.
Output Objectives
At the end of the topic, participants will be able to:
1. Identify the critical areas in management, the common weaknesses of micro-entrepreneurs in business management skills and the importance of record keeping in business management.
2. Prepare, read and explain financial records.
3. Understand why it is important to exchange of business information in the women's group.
Materials
Newsprint, adhesive tape, felt tip pen
Time: 30 minutes
Steps:
1. Facilitator begins this activity by saying that in Module 3 we will focus on the management of micro-enterprises. An enterprise must be properly managed to be successful.
2. Facilitator reminds the participants that in Module I they identified the common weaknesses and constraints of micro-entrepreneurs at both the planning and implementation stages. They also identified the type of assistance field workers need to provide to the micro-entrepreneurs. Through asking questions to the participants the Major factors at the implementation stage are repeated and summarized by the Facilitator, using Visual Aid 1-5 and 1-6, by using questions rather that lecturing.
Visual Aid 1-5 Common Weaknesses and Constraints of Micro-Entrepreneurs |
Visual Aid 1-6 Type of Project Assistance to the Micro-Entrepreneur |
3. Facilitator draws up the diagram of Visual Aid 3-1 and explains that the inner circle in the diagram shows the aspects (production. marketing organization, finance) that have to be managed and the outer circle shows the management skills that are required to manage the aspects properly.
Visual Aid 3-1 Management Areas and Skills |
4. Facilitator points out that in Module 2 we concentrated on the planning stage. In this Module we will especially focus on the skills in controlling the business. A basic reason for difficulties of entrepreneurs such as inability to adjust to market changes and problems in production is a lack of records. Without records it is difficult to recognize changes and problems and it is not clear what the effect of changes and problems are for the income from the business. Unless the entrepreneur has thorough insight in her business, she is not really in control and hence can not take initiatives in problem solving.
5. Facilitator continues by saying that to be fully in control of an enterprise, the entrepreneur needs to be well informed about all aspects of the business. She needs to know how she is down in production, in marketing, in organization and in finance. Most of the information the entrepreneur will know without writing it down. but depending on the type of enterprise, it may be advisable to keep records for certain, aspects. E.g. for a chicken raiser, a daily record of the egg production can be helpful to detect problems with disease, room temperature, etc. For a trader, a daily record of her stock is useful to make sure that she can always serve her clients. For a vegetable grower. it may be beneficial to note down the market prices every day, so that she gets to know what time of the year the demand for certain vegetables is highest.
6. Keeping financial records is important for all entrepreneurs, since this keeps tract of the income in particular, which is a sign whether the business is successful or not.
7. Keeping records enhances the business conciousness and self-reliance of entrepreneurs. Field workers should encourage the exchange of information in the women's group. It will help each one to improve her own management skills and business results. Besides, for common problems (e.g. with pig feed from the same supplier, payment problems with buyers, lack of technical advisory service) the entrepreneurs together can take more forceful action than individually.
8. For field workers to be able to assist the entrepreneur in record keeping and in evaluating her business results, it is important to be familiar with the preparation and analysis of financial records and statements. In the next activities, we will practice these skills.
Time: 45 minutes
Steps:
1. Facilitator tells that there are two major tools in financial record keeping: (a) the Cash Record, and (b) the Income Statement. Since these are important tools, they are part of the field workers set of Worksheets (2 and 3).
Worksheet 2 Cash Record |
Worksheet 3 Income Statement |
Visual Aid 3-2 Cash Record |
2. Facilitator uses Visual Aid 3-2 (from manual Group Formation) to illustrate the principle of the Cash Record. Facilitator asks several participants why the Cash Record and Income Statement are important.
Entrepreneurs, who conscientiously keep a cash-book will notice fluctuations in production or the market quickly. E.g. a pig raiser who keeps a cash-book will notice changes in prices of pigs and pig feed. From regular computation of the income over a certain period or production cycle, the entrepreneur will furthermore become more aware of the impact of these fluctuations on her income. The pig raiser for example will learn from subsequent income statements that a difference of a few mao per jin of pig feed makes a big difference for her income.
3. To ensure that participants know how to prepare cash records correctly, facilitator asks participants for each of the following sample transactions whether it is (a) an inflow; (b) an outflow or (c) not recorded in cash record:
Transaction |
Answer |
1. loan from the group |
Inflow |
2. repaid loan to the group |
Outflow |
3. bought equipment |
Outflow |
4. bought materials |
Outflow |
5. husband paid back money he borrowed from the enterprise |
Inflow |
6. deposit additional savings to group |
Outflow |
7. goods consumed by husband |
Not recorded, not a cash transaction |
8. harvest reduced by half |
Not a cash transaction, not recorded |
4. Facilitator tells participants that in her experience micro-entrepreneurs who start to keep the Cash Record often need assistance regarding the three points below. Participants are asked to think about how they will explain/help the micro-entrepreneur. Divide the participants in sub-groups of about 5 persons and give 15 minutes for discussion.
(a). What is the beginning balance?
(b). Why is it important to separate the enterprise account from the household account and accounts of other enterprises? Eg. when part of the raw materials or finished products or goods are used for own consumption, how should it be recorded?
(c). Illiterates often are able or can learn easily to read and write numbers. Do you have suggestions on how they can keep the Cash Record?
5. Sub-groups are asked to write their outputs on newsprint. Each sub-group is asked to present. Sub-groups are encouraged to comment on each other's outputs. There are different ways in answering the questions and it is important for participants to hear as many ways as possible.
6 Facilitator summarizes by using participant's explanations and emphasizing the important points below.
Important Points
· The beginning, balance is the cash status at the beginning of the period for which the record will be kept. For a starting enterprise, this is the amount of savings (her own capital! that the entrepreneur will invest in her new enterprise. In an on-going enterprise, the beginning balance is the remaining balance at the end of the previous recording period.
· If the enterprise's account is mixed with other accounts, it is very difficult to compute the enterprise's income. Eg. in a grocery shop, the household may use some of the goods. It is important that these goods are treated as goods sold to the household. Otherwise we charge the business for the living expenses of the household and the income from the business will come out low, while it is the household which has less expenditures than it would have if we did not have the shop.
· Illiterates can ask family members to keep the records, but there are also alternatives. She can for instance use different colors or symbols for certain types of income and expenditures. ea. a different color or symbol for raw materials. other inputs, fixed assests, labor payments and other expenses.
Time: 3 hours
Steps:
1. Facilitator tells that in this activity, participants will practice in preparing and reading the financial records by reviewing two cases.
2. The first case is about a production type of enterprise: raising of rabbits. Participants are asked to carry out the tasks of Case 3-1 individually (15 minutes).
Case 3-1 |
3. Ask one participant to write the output on newsprint. Ask others to comment, until the computation of Net Profit is complete and understood.
4. Summarize the major learnings of Case 3-1 using Visual Aid 3-3.
Visual Aid 3-3 Important Learnings in preparing Income Statements Case 3-1 and 3-2 |
S. Facilitator then asks participants to carry out the tasks of Case 3-2 individually (15 minutes).
Case 3-2 |
6. Ask one participant to write the output of task 1 on newsprint, ask another one for task 2. Ask others to comment, until the computation of Net Profit is complete and understood.
7. Summarize the major learning of Case 3-2. using Visual Aid 3-3.
Visual Aid 3-3 Important Learnings in preparing Income Statements Case 3-1 and 3-2 |
8. Facilitator tells that in reality the situation often is more complex than the two cases we used here, because the entrepreneur has non-cash income or costs. We will discuss how to deal with those non-cash transactions in preparing an income statement for three common situations. Facilitator presents the situations and asks participants how to deal with it in preparing an income statement.
Situation 1: Goods consumed by the household
This is a situation in which the household consumes some of the products of goods of the business without paying for it, e.g. cigarettes of a grocery shop, beancurd of a beancurd processing enterprise, part of the vegetable consumed by the household.
1. The value of these goods must be treated as income and be added to the net profit.
2. It is advisable to encourage women entrepreneurs that goods borrowed or consumed by household members should be returned or paid for.
Situation 2: Sales on credit
In this situation we can think of a grocery shop, where the entrepreneur sells the goods on credit to certain customers, who then pay later.
1. Credit sales that the entrepreneur thinks can be paid by the buyer should be treated as income.
2. Credit sales that cannot be paid should be treated as a loss and be deducted from the net profit.
Situation 3: Use of own raw materials
Part of the raw materials may be produced by the household of the entrepreneur, e.g. a starch processing entrepreneur may have part of the potatoes from the household and buy part from other villagers.
1. The value of the raw materials should be treated as costs and be deducted from the net profit.
9. Summarize the [earnings in this activity and topic by reviewing the conclusions on newsprint and emphasizing the following important points.
Important Points
· Both the Cash Record and a regular Income Statement are a necessity for every entrepreneur, because:
- it gives the cash position at any time
- it helps the entrepreneur in detecting fluctuations in prices, market demand for goods, and in production
- it enhances the entrepreneurs business consciousness and control over her enterprise
- regular evaluation of the business is important for planning purposes
· The Cash Record should be kept separate from the household and other business accounts.
· The Cash Record should contain specific information such as volumes and prices to be able to prepare the Income Statement and to analyze the results.
· In preparing the income statement, we need to check the data in the cash record carefully, and ask about non-cash transactions as well. Correct inventory cannot be deduced from the cash record alone. A periodic inventory record is also needed.
· The Income Statement covers a logical period such as one production cycle (for production and processing type of enterprise) or a time period (e.g. a month for trade and service type of enterprise).
· From the Income Statement strengths and weaknesses of the business can be identified.
Background and Rationale
Financial records provide information on the strengths and weaknesses in the business operations. This requires thorough analysis and diagnosis in order to be able to come up with realistic recommendations and options for the entrepreneur for further strenthening of the operations.
In this topic, participants will learn how to systematically analyze income statements and to identify recommendations and options for the micro-entrepreneur.
Output Objectives
At the end of this topic, participants will be able to:
1. Understand how to diagnose problem areas based on a systematic financial analysis.
2. Understand how to make recommendations and offer options to entrepreneurs based on the analysis and diagnosis.
Time: 1 1/2 hours
Steps:
1. Facilitator tells that in the previous topic participants practiced with analysis of financial records and statements. In this activity, a systematic way of analyzing will be introduced.
2. Facilitator hands out Case 3-3 with the Income Statement of a bakery enterprise.
Case 3-3 Income Statement Bakery Enterprise |
3. Facilitator asks sub-groups to discuss the following questions:
- What do you think are the problem areas (major weaknesses) of the enterprise? What is the basis for saying so?
- What are your recommendations'?
4. Sub-groups are given 20 minutes for discussion and are asked to write the outputs on newsprint.
5. After presentation by sub-groups, facilitator discusses the step-by-step process of analysis of the sample income statement.
a. The first item to look at is the bottom line net profit. Is the net profit satisfactory? Is it considered low?
b. If low, then you start probing the causes why this is so. You look at the gross profit Is 12 % gross profit satisfactory for that type of business? If satisfactory, then probably selling and administrative expenses may be high But in the sample statement, these expenses seem to be reasonable at 731 rmb).
c. If the gross profit is considered low, then there are possibly two causes: (a) cost of gods sold (i.e. manufacturing costs) is high: and/or (b) the total income may not have been optimized.
d. If the total income is low, then possible causes are: (a) sales turn-over may be low, and/or (b) sales volume may be low or (c) the selling price is low.
e. If you look at the cost side, you should focus on those items with relative high percentage total costs. In the case, these are definitely the cost of materials (71 %) and labor costs (22 %). Thus, you are able to pin point the particular cost items that should be reduced to improve gross profit.
6. Facilitator then summarizes the assessment, using Visual Aid 3-4 (Analysis Chart). Facilitator checks items found in the case and compares these with the group outputs, focusing on items that have no basis. After that the summary of possible weaknesses is presented (Visual Aid 3-5).
Visual Aid 3-4 Analysis Char' |
Visual Aid 3-5 Possible Weaknesses Bakery Enterprise |
7. Facilitator explains that the next step is to use records and look at operations of the business in conjunction with the above indicative findings to ascertain which are the real and critical areas of weakness. In this case the "inventory turnover is low" explanation can be dismissed because the bread is sold every day and raw materials can last for a month. The other options can be further diagnosed.
8. The next step is to determine the possibility of improving these identified weaknesses (converting them into strengths) considering external factors.
For example:
Identified Weakness |
Can this be converted into strength? |
Is this possible given External Factors? | |
1. High Expense |
Reduce Expenses |
||
· Labor |
Reduce number of workers? |
||
Not possible (all are group members) |
|||
Reduce salary? |
|||
Possible if they all agree. |
|||
· Raw materials |
Reduce prices? Buy wholesale volume? Reduce waste? |
Yes, possible to purchase at township | |
2. Selling Price |
Increase selling price? |
Not possible. Market may no longer buy | |
3. Sales Volume |
Increase production efficiency. (Possible if raw materials are available and capital for purchasing is available.) |
Check if new sales volume can be sold | |
The above provides indications on how the business can be further improved and what concrete solutions to identified problems can be proposed.
9. Facilitator explains that financial analysis and diagnosis amounts to a replanning process, and that a new projected Income Statement can subsequently be created.
Worksheet 1 Business Viability Assessment |
10. Facilitator encourages participants to use Worksheet 1 in drawing final conclusions together with the entrepreneur, who should have a copy.
11. Facilitator stresses that while project officers can make recommendations to micro-entrepreneurs based on the financial analysis and diagnosis, it is up to the women entrepreneurs to decide whether to accept this advice. The role of the project officer is to guide and assist not to dictate decisions to be made.
Time: 15 minutes
Steps:
1. Facilitator explains that after evaluation of the business results, the entrepreneur has always three options:
a. To continue the existing enterprise, but improve on the identified weak areas by for instance:
· expanding production volume
· improving production efficiency
· improving customer relations
· improving quality of product
The entrepreneur must always look for better ways of improving her business to ensure its continued growth.
b. To diversify into other products or new business. This option can be considered when she is satisfied with her current business. If she decides on this option, she should repeat the process of planning.
c. To discontinue or close the business. This option may be considered if continuing the business would mean greater losses for the entrepreneur, particularly when weaknesses cannot be turned into strengths and/or when there are un-manageable constraints.
Management areas and skills
Beijing Balance |
Income |
Expenditure |
Remaining Balance | |||
Cash at the begining of business |
What is earned by the business what comes in |
What is spent or what goes out |
What is the cash position at a given time |
Case 3-1
· The costs of improving the building are not a production cost since the newly improved facility can be used for more than one production cycle. Thus, this is added to the investment and included in computation of depreciation.
· Depreciation cannot be found from the cash record, because it is a non-cash cost.
· Rabbits that died cannot be found from the cash record. It would have been good if the item description in the cash record is filled up well, ie. indicating quantity and price per rabbit (eg. sold 48 rabbits at 15 rmb).
· It would have been better if the amount and price of feed (ea. 400 jin at 0.5 rmb) also had been specified. This is helpful to check the inventory.
· 31 % profit in 3 months is a good profit. Perhaps experts in rabbit raising have tips to further improve.
Case 3-2
Task 1
· By taking the difference between pairs of shoes sold and the number not yet sold, wee assumed an ending inventory of 190 pairs that are still available for sale. This is not necessarily so, ea. some shoes may have been given as a gift to friends. Losses in inventory cannot be accounted for in the cash record.
· It is Important therefore to have a periodic inventory counting, apart from the cash record. This is particularly Important for trading enterprises.
Task 2
· The Income Statement reflects the results of business operations within a given period.
· To compute the actual net profit within such a period, a beginning and ending inventory level must be determined. This is especially true in on-going projects.
· The overall conclusion is that Ms. Wu's enterprise is very profitable. She has been able to find a good market and seems to have good business skills. Eg. she started carefully and was able to gradually increase her sales volume, while she also was able to negotiate a lower purchase price when her volume increased. Furthermore she reinvests all her earnings in the business.
Analysis chart
Possible weakness |
Basis |
1. High costs of raw materials |
Raw materials cost is 71 % of gross sales |
2. Too many workers |
Costs are 22 % of gross sales |
3. Sales volume not optimized |
Average sales is 9754 breads per month, 325 per day |
4. Selling price low |
0.2 rmb per bread may be low |
5. Inventory turn-over slow |
An inventory of 847 rmb of materials may be too much, since average sales per day only are 65 rmb. |
Ms. Wang has been raising rabbits for quite some time but never kept records or computed her income until she joined the women's group a few months ago. Ms. Wang tells that she has used only half of the 400 jin of feed that she bought and two baby rabbits died. The existing building costed 350 rmb and will last for 10 years. Her Cash Record over the last production cycle is given below.
Tasks
1. Compute Ms. Wang's Net Profit for this production cycle on Worksheet 3.
2. What questions and advice do you have for Ms. Wang?
Worksheet 2
Cash Record
Name entrepreneur Ms Wang |
Month: |
May-July | |||
Name enterprise: Rabbit Raising |
Year: |
1995 | |||
Beginning Balance (Cash Status) |
Amount: |
600 | |||
Cash In |
Cash Out |
Remaining Balance | |||
Item |
Amount |
Item |
Amount |
Amount |
Date |
Improvement of building |
50 |
550 |
5/1 | ||
(additional investment) |
|||||
Feed |
20 |
350 |
5/2 | ||
50 rabbits at 5 rmb |
250 |
100 |
5/7 | ||
Medicines, water, etc. |
50 |
50 |
6/19 | ||
Rabbits |
720 |
770 |
7/31 | ||
Output
Worksheet 3
Income Statement
Name entrepreneur: Ms. Wang |
Name enterprise: Rabbit Raising | |||
Address: |
Period of Statement: May-July 1995 | |||
Signature: |
Date: August 15,1995 | |||
Gross Sales |
||||
48 rabbits at 15 rmb |
720 rmb | |||
Less: Costs of goods/services sold |
||||
feed |
200 rmb |
|||
rabbits: 50 x 5 rmb |
250 rmb |
|||
medicines, water, etc |
50 rmb |
|||
Total |
500 rmb |
|||
Change in inventory: |
||||
Value at the beginning |
0 rmb |
|||
Minus Value at the end |
100 rmb |
|||
-100 rmb |
||||
Total costs of goods sold |
- |
400 rmb | ||
= Gross profit |
320 rmb | |||
Less: Selling and other expenses |
- |
0 rmb | ||
= Net Cash Income |
320 rmb | |||
Less: Depreciation |
- |
40 rmb | ||
= Net profit |
280 rmb | |||
Return of Investment (900 rmb)* |
31% | |||
*Total investment = 350 (existing building) + 50 (additional cost of building) + 500 (production cost) = 900 rmb
Ms. Wu started trading in shoes in February. She has a loan (2% interest per month) from the women's group and keeps a Cash Record, which is given below.
Tasks
1. Compute Ms. Wu's Net Profit for the period 2/1 to 3/16 on Worksheet 3.
2 Compute Ms. Wu's Net Profit for the period 2/17 to 3/19 on Worksheet 3.
3. Ms. Wu asks for your opinion and advice. Please give.
Worksheet 2
Cash Record
Name entrepreneur: Ms. Wu |
Month: |
Febr.- March | |||
Name enterprise: Shoe Trade |
Year |
1995 | |||
Beginning Balance (Cash Status) |
Amount |
330 rmb | |||
Cash In |
Cash Out |
Remaining Balance | |||
Item |
Amount |
Item |
Amount |
Amount |
Date |
Loan Women's Group |
200 |
530 |
2/1 | ||
Bought 100 pairs of shoes at 5rmb |
500 |
30 |
2/2 | ||
Sold 100 pairs of shoes at 7r |
700 |
Transportation |
30 |
700 |
2/5 |
Bought 120 pairs at 5rmb |
600 |
100 |
2/16 | ||
Sold 100 pairs at 7rmb |
700 |
Stall |
30 |
770 |
2/19 |
Loan Amortization (100rmb + 4rmb intere |
104 |
666 |
3/1 | ||
Bought 120 pairs at 5rmb |
600 |
66 |
3/2 | ||
Sold 120 pairs at 7rmb |
840 |
Tax |
30 |
876 |
3/5 |
Bought 170 pairs at 4.8 rmb |
816 |
60 |
3/16 | ||
Sold 150 pairs at 7rmb |
1050 |
Transportation |
30 |
1080 |
3/19 |
Output Task 1
Gross Sales | |||||
100 pairs x 7rmb |
700 |
(215) |
|||
100 pairs x 7rmb |
700 |
(2/19) |
|||
120 pairs x 7rmb |
840 |
(3/5) |
|||
(320 pairs x 7 rmb: 2240 rmb) |
|||||
Other income |
|||||
Total Income |
2240 rmb | ||||
Less: |
Cost of goods sold |
||||
Materials purchased: |
2516 rmb |
||||
100 pairs |
5 rmb |
500 |
(2/1 ) | ||
120 pairs |
5 rmb |
600 |
(2/16) | ||
120 pairs |
5 rmb |
600 |
(3/2) | ||
170 pairs |
4.8 rmb |
816 |
(3/16) | ||
(510 pairs: |
2516 rmb) |
||||
Labor: |
|||||
Change in inventory:* |
-916 rmb |
||||
Value beginning: |
0 |
||||
Minus |
Value end |
20 pairs x 5rmb = 100 (2/19) |
|||
0 pair x 5 rmb = 0 (3/5) |
|||||
170 pairs x 4.8 rmb = 816 (3/16) |
|||||
(190 pairs. value of 916 rmb) |
|||||
Total Cost of goods sold |
1600 rmb | ||||
Gross Profit |
624 rmb | ||||
Less: |
Other expenses |
90 rmb | |||
Transportation: 30 rmb (2/5) |
|||||
Stall: 30 rmb (2/19) |
|||||
Tax: 30 rmb (3/5) |
|||||
Net Cash Income |
534 rmb | ||||
Less: |
Depreciation |
0 rmb |
|||
Interest |
4 rmb |
4 rmb | |||
Net profit |
530 rmb | ||||
Return on invested capital (630 rmb) |
100% | ||||
Output Task 2
Gross Sales |
|||||
100 pairs x 7rmb |
700 |
(2/19) |
|||
120 pairs x 7rmb |
840 |
(3/5) |
|||
150 pairs x 7rmb |
1050 |
(3/19) |
|||
(370 pairs x 7 rmb: |
2590 rmb) |
||||
Other Income: |
|||||
Total Income |
2590 rmb | ||||
Leas: |
Costs of goods sold |
||||
Materials Purchased: |
1416 rmb |
||||
120 pairs 5 rmb |
600 |
(3/2) |
|||
170 pairs 4.8 rmb |
816 |
(3/16) |
|||
(410 pairs, at |
1416 rmb) |
||||
Labor: | |||||
Change in inventory: |
404 rmb |
||||
Value beginning: |
120 pairs x 5 rmb = 600 (2/16) |
||||
Minus |
value end: |
20 pairs x 5rmb = 100 (2/19) |
|||
0 pair x 5 rmb = 0 (315) |
|||||
20 pairs x 4.8 rmb = 96 (3/19) |
|||||
(40 pairs, value of 196 rmb) |
|||||
Total Cost of goods sold |
1820 rmb | ||||
Gross Profit |
770 rmb | ||||
Less: |
Other expenses |
30 rmb x 3 |
90 rmb | ||
Net Cash Income |
680 rmb | ||||
Leas: |
Depreciation |
0 rmb |
|||
Interest |
4 rmb |
4 rmb | |||
Net profit |
676 rmb | ||||
Name entrepreneur: Shi Xia Group |
Name enterprise: Bakery | ||||
Address: |
Period of Statement: 27 Aug. 1992 | ||||
to 5 May 1993 | |||||
Signature: |
Date: | ||||
Gross Sales | |||||
80,960 breads x 0.20 rmb/bread |
16,192 rmb |
||||
Less: |
Cost of goods sold |
% of Gross Sales | |||
Materials purchased |
11,500 rmb |
71% | |||
Labor |
3,529 rmb |
22% | |||
Total: |
15,029 rmb |
||||
Inventory (raw materials) |
|||||
beginning |
0 rmb |
||||
minus end |
847 rmb |
||||
-847 rmb |
|||||
Total Coat of goods sold |
14,182 rmb |
||||
Gross Profit |
2,010 rmb |
12% | |||
Less: |
Overhead expenses |
327 rmb |
|||
Selling and administration |
404 rmb |
||||
731 rmb |
5% | ||||
Net Cash Income |
1,279 rmb |
8% | |||
Less: |
|||||
Depreciation |
267 rmb |
||||
Interest on loan |
108 rmb |
||||
375 rmb |
|||||
Net profit |
904 rmb |
6% | |||
