MERCY'S FISH FARM ENTERPRISE

DOCUMENT: BUSINESS PLAN

PRESENTED BY: MERCY CHEPNGENO

INDEX NO. : 5401010067

COURSE CODE: 540101

SUPERVISOR: MR KILEL

CENTRE: KAIBOI TECHNICAL TRAINING INSTITUTE

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL

IN PARTIAL FULFILLMENT FOR THE AWARD
OF CERTIFICATE IN GENERAL
AGRICULTURE

SERIES: NOVEMBER 2021

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DECLARATION
I undersigned declare that this Business plan is my own original work and has not been
presented by any other institution other than kaiboi technical training Institute for academic
purpose.

Student Name: Mercy Chepngeno

Signature: ………………………………………………………

Date ………………………………………………………

This business plan has been submitted for examination with my approval as the supervisor.

Supervisor: …Mr Kilel……………………………………….

Signature: ……………………………………………………….

Date …………………………………………………………

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 ACKNOWLEDGEMENT

I acknowledge the support of my Supervisor who dedicated his time to go through my

Business plan and corrected my work as he encouraged me. My sincere thanks goes to my
Mother for the financial support throughout my course. I also acknowledge the moral support
of my classmates who constantly encouraged me.

May God Bless you abundantly.

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 DEDICATION

This business plan is dedicated to my mum and the entire family members and friends who
provided assistance in completing this business plan and my course. To all I extend my
sincere gratitude for their support. May almighty God bless you all.

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EXECUTIVE SUMMARY

BUSINESS DESCRIPTION

The business will mainly deal with fish rearing of different types of fingerlings taking care of
them and then selling them to various customers after they have matured.

MARKETING PLAN

The potential customers will range from learning institutes, individuals, offices, health
facilities, churches and business organizations. The enterprise will create awareness to its
customers through advertisement and promotion strategies.

ORGANIZATION PLAN

The proposed business shall have one manager who will be the general controller of the
business activities.

PRODUCTION PLAN

The business will ensure that they will deliver high quality services to its esteemed
customers.This will be achieved through good resource management.

FINANCIAL PLAN

The capital required for the business is Ksh 800000 to gather for preoperational costs as well
as payment of salaries and other expenses.

1.0 Executive Summary

1.1 Business Description

The proposed business will operate under the name ‘MERCY'S Fish Farm. It will mainly deal
with fish rearing of different types of fingerlings taking care of them and then selling them to
various customers after they have matured. The ownership of the business will be a sole
proprietorship form of business being owned by one individual.

1.2 Marketing Plan

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The potential customers will range from learning institutions, individuals, offices, health
facilities, churches and business organizations. The enterprise will create awareness to its
customers through advertisement and promotion strategies.

1.3 Organization Plan and Management

The proposed business shall have one manager who will be the general controller of the
business activities. Each employee shall have defined roles and duties. Recruitment of new
employees shall be done through advertisement.

1.4 Production and Operation Plan

The business will ensure that it delivers high quality services to its esteemed customers. This
will be achieved through good resources management. All the production facilities and
equipments required for the service delivery should be acquired to avoid inconveniences.

1.5 Financial Plan

The capital required for the business is Ksh. 800,000 to gather for pre-operational costs as
well as payments of salaries and other expenses.

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 TABLE OF CONTENTS
DECLARATION..................................................................................................................................ii
ACKNOWLEDGEMENT....................................................................................................................iii
DEDICATION.....................................................................................................................................iv
EXECUTIVE SUMMARY.................................................................................................................vii
CHAPTER ONE...................................................................................................................................1
1.0 Business Description.......................................................................................................................1
1.1 Business Name............................................................................................................................1
1.2 Business Location and Address...................................................................................................1
1.3 Business Ownership....................................................................................................................2
1.3.1 Form of Ownership..................................................................................................................2
1.3.2 Proprietors Profile....................................................................................................................3
1.4 Type of Business.........................................................................................................................3
1.5 Product / Service.........................................................................................................................3
1.6 Justification of the study..............................................................................................................3
1.7 Industry.......................................................................................................................................3
1.8 Goal of the Business....................................................................................................................4
1.8.1 Long Term Goals......................................................................................................................4
CHAPTER TWO..................................................................................................................................5
2.0 Marketing Plan............................................................................................................................5
2.1 Market Share...............................................................................................................................5
Table 2.1 showing market share........................................................................................................6
2.2 Competition.................................................................................................................................6
2.3 Promotion and Advertisement.....................................................................................................7
2.3.1 Promotion.................................................................................................................................7
2.4 Pricing Strategy...........................................................................................................................7
2.5 Sales Tactics................................................................................................................................7
CHAPTER THREE...............................................................................................................................9
ORGANIZATIONAL AND MANAGEMENT PLAN.....................................................................9
3.1 Organizational Structure..............................................................................................................9
3.2 Key Management Personnel........................................................................................................9
3.2.1 General Manager......................................................................................................................9
4.2 Management, Compensation and Ownership................................................................................11

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 3.3 Human Resource Strategies.......................................................................................................11
3.4 Recruitment Training and Promotion........................................................................................14
3.4.1 Recruitment............................................................................................................................14
3.4.2Training...................................................................................................................................14
3.4.3 Promotion...............................................................................................................................14
3.5 Remuneration and Incentives....................................................................................................14
3.6 Support Service.........................................................................................................................15
CHAPTER FOUR...................................................................................................................................16
4.0 Operational Plan........................................................................................................................16
4.1 Production Facility....................................................................................................................16
4.2 Production Process....................................................................................................................17
4.3 Production Strategy...................................................................................................................17
4.3.1 Monthly materials required....................................................................................................17
4.3.2 Cost of monthly labour...........................................................................................................17
4.4 Monthly Production and Overheads..........................................................................................18
4.5 Regulation Affecting Production...............................................................................................18
CHAPTER FIVE.................................................................................................................................19
5.0 Financial Plans Section..............................................................................................................19
5.1 Pre-Operation Cost....................................................................................................................19
5.2.1 First Year Fund Flow..............................................................................................................20
5.2 Fund flow 2nd year.....................................................................................................................22
5.3 Income Statement......................................................................................................................24
5.4.3 Expected Profitability Ratios......................................................................................................26
5.5 Proposed Capitalization.................................................................................................................26

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EXECUTIVE SUMMARY

CHAPTER ONE
1.0 Business Description
The proposed business will be located in a strategic place to ensure that its potential
customers easily reach and access the services and the products offered. The proposed
business will also enhance efficient customer care services to ensure that the
customers are satisfied all the time with the services and the products so as to
maintain them. It will also adopt an efficient name that will be easily to pronounce
and remember among the customers.

1.1 Business Name

The proposed business will be called MERCY'S fish farming. This is derived with
convenience however it gives a corporate image which is clued to access a bank loan
for running and expanding the business. The initial capital to start the business is
approximately 600,000. The business will resume on 1 st January 2022. The capital
was personal saving contribution from friend and bank loan.

1.2 Business Location and Address

The business venture will be located in Kebeneti along Kericho-Kisumu highway.
This is the best place to locate the business because it is near the road and the people
of Kebeneti lack fish meat. The following will be the address.

MERCY'S FISH FARMING

P.O.BOX 32-20200

KERICHO

TEL. 0759217899

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 The map below can be used showing the location of the business

Kericho To Kisumu

MERCY'S FISH BOND

To Tegat factory

1.3 Business Ownership

The ownership of the proposed business will be owned by mercy chepngeno being the
boss of the business.

1.3.1 Form of Ownership

The business will be that of sole proprietorship. The reason below was considered by
the proprietor secret of business are well kept , decision making is easy and profits
generated by the business is enjoyed by her proprietor flexibility in management
direct contact with customer by the owner.

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1.3.2 Proprietors Profile
The owner of the proposed business will be mercy chepngeno currently pursuing
certificate course in general agriculture at kaiboi technical training Institute.

The proprietor technical and managerial skills will pave way for her in so far as
market share is concerned. The proprietor is ready incure loses make profits and face
any predicaments.

1.4 Type of Business

The proposed business will be fish farming venture in production of sale of fish meat.
The owner will ensure that the fish meat produced of high quality feeding the fish
alternate food.

1.5 Product / Service

The product of the firm is mainly fish meat. It contains high quality meat proteins
giving food. It is also used as medicine to produce medicine like seven seas which is
used by children. The owner has to ensure that the product is of high quality by
ensuring that they are under a undesirable conditions which will enable to make more
profit. This could be an advantage to the owner over the competitors.

1.6 Justification of the study

Due to vast knowledge and experience of the owner in the field of animal production
the business is bond to prospects. Fish farming will also contribute a lot to the
economy of the country by creating job opportunities among the members of the
society by advertising job opportunities and using technology and modern way of
communication coupled with that the sales and marketing techniques acquired by the
proprietor will give the business art upper hand over the other. The road is well
tarmacked to allow smooth floor of products and also people this ensure smooth
running of fish farming.

1.7 Industry
The proposed business fall under a service industry and it will be of high quality and
to the customers’ standard. The size of the enterprise will be medium and the prices
will be pegged on normal profit. Seasonal factors that tamper with the business in this
industry include lack of raw materials. Climatically factors since there is lack of

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machines small number of workers will be employed. The intended business will be
able to attract many clients due to its strategic central location. The danger posed to
the suggested firm is government policies in terms of licenses and competition from
other businesses.

1.8 Goal of the Business

The business will operate under the following goals and objectives.

1.8.1 Long Term Goals

The business is looking forward to achieve its long term goals. This goal is intended
to be achieved because it will serve; its customers will a lot of diligence and respect.
The enterprise is hoping to attract customers by all means and retain them as long as
the MERCY'S Fish Farming

CHAPTER TWO
2.0 Marketing Plan
The potential customers for MERCY'S fish farming center will be:

i. Learning institutions

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 ii. Individuals
iii. Hotels
iv. Health facilities

Learning institutions

The institution targeted by the entrepreneur includes Kebeneti Secondary School,

Kipsigis Girls High School. The institutes will be using fish both as food for students
and as practical in biological sciences.

Individuals

Individuals this are customers which will be solely targeted by the entrepreneur and
include villagers and residents of Kericho town.

Hotels

The hotels within the town which will be targeted by Samaki fish farm include
Mwanainchi hotel, exotic, sunshine Famous gate, Makuti and others

Health facilities

The health facilities which will be targeted in the area are Kericho District Hospital,
Siloam Hospital and Kericho Home Nursing at the centre of the town. These health
institutions will be using fish products to provide food nutrients to their staff and
patients.

2.1 Market Share

The consumption of fish products in the current society is increasing rapidly and this
has led to entry to the market by many entrepreneurs. To offer fish products, Mercy
fish farm will capture a large share in the market since it offers a modern fish
products. The approximate number of people who will require the products from the
intended business will be 700 daily. The competitors to the business in the town are
Suser fish farm, Agi aquatic products, Victoria fisheries and Oliver fish farm. The
percentage proportion of the potential customers of the business is 60% while the
remaining 40% is to be shared among the competitors in the ratio of 2:3:1.

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Table 2.1 showing market share

Market Share

merc
Samaki
Suser
Agi
Victoria

60

2.2 Competition
Mercy fish farm will expect competition for their fish products from three competitors
which are Suser, Agi and Victoria fish farms. The business will enjoy the benefits of
monopoly since it’s the only one with modern Fish products. During the market
survey, the entrepreneur will use the proper analysis to be able to capitalize on the
weakness of the existing competitors. The following are the strength and weakness of
the competitors.

Strength

i. The competitors have gained experience

ii. They are the pioneers
iii. Others have government offices oriented

Weakness

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 i. Lack of quality computers and printers
ii. Slow services offered
iii. High prices
iv. Congestion in most of the cyber due to limited space
v. Presents of outdated computers

2.3 Promotion and Advertisement

2.3.1 Promotion
The customers who buy fish in large quantities will be given a percentage discount

During the introduction stage on the market, the entrepreneur will advertise and
promote the business by:

a. Advertising the business using Daily Nation and Standard Newspaper which
are commonly read in the town.
b. Advertising the business using radio station e.g. Chamge Fm, Radio Taifa and
other
c. Printing and painting the premise with bright attractive colours.
d. Advertising using posters, notices etc placed on strategic points
e. Sales promotions to potential customers e.g. offering of calendars free of
charge

2.4 Pricing Strategy

The prices of services offered will be determined by calculating the expenses incurred
by the business during its operation and adding the profit required. The business
expenses will include electricity, employees salaries and self payments etc. The
business competitor’s prices will also enable the entrepreneur set her own prices
which would be lower than those of the competitors in a manner that the customers
will feel value of their money.

2.5 Sales Tactics

The business will use the following tactic to attract and retain its customers.

a. Offer prices lower than those of competitors for customers to feel the value of
their money
b. Offer quick and sufficient services to the customers

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c. Packing fish products in conspicuous and attractive manner to attract
customers
d. Offer other sales services to the customers with limited credit services.
e. Build good customers relationship such that customers can address their
views and feelings

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 CHAPTER THREE
ORGANIZATIONAL AND MANAGEMENT PLAN
3.1 Organizational Structure
The organizational structure of the fish farm will generally be small with minimal
reporting relationships due to its size. This will ensure effective flow of
communication among all personnel as well as the enhancement of an efficient work-
flow system as indicated on the chart below:

General
Manager

Fish bond Marketing

Manager Manager

Fish bond fish bond fish bond

attendants attendants attendants

3.2 Key Management Personnel

3.2.1 General Manager
Mercy chepngeno is undertaking certificate in general agriculture and is in her senior
year. He has extensive knowledge and applicable skills in aquatic science and small
Organization management as she worked in a fish farm in Kericho during her
industrial attachment. Her role will be to oversee and coordinate all of the fish farm
activities as well as to provide strong leadership and vision to other personnel in order
to achieve the set goals of the organization.

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Mr. Sang

Fish bond Manager

Mrs. Sang holds a Bachelor’s Degree in animal husbandry from the University of
Nairobi. She however, has an additional knowledge and skill pertaining to the aquatic
animals. His experience and knowledge will prove valuable to the farms success but
his major task will be overseeing all the day to day operational aspects of the fish
bonds while ensuring that it is meeting its primary objectives.

Mr. John Tonui

Marketing Manager

Mrs. Tonui holds a Bachelor of Science Degree in International Business

Administration with a minor in Marketing from university of Eldoret. His experience
will be applied in the marketing aspects of the fish products to ensure that the market
position of the fish products remains favorable and that demand for the fish products
and services increases.

Support staff

Fish bond attendants

Qualifications: certificate in any agriculture course with an experience of 2years and

above in a similar position preferably in a hotel or hospitality industry.

The farm will bank with Co-operative Bank – Kenya because of the longstanding
customer- bank relationship the key management personnel has with the bank and
also because it operates government-assisted programs. Other services that the farm
will require include legal services- to handle possible claims or law suits regarding
poor products and poor service and other services.

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4.2 Management, Compensation and Ownership
The fish will comply with all the legal requirements regarding employee
compensation such as the Compensation Act and Minimum Employee wage. In
addition to the base pay/salary indicated in the personnel plan above and basic
benefits such as : medical, insurance e.t.c, the management team members may be
offered a Flexible Benefits Program/Plan that will allow them to select specific
benefits from a variety of benefits options.

3.3 Human Resource Strategies

Recruitment and Selection:

The recruitment techniques to be used by the management will include: visiting high
schools and hospitality colleges, advertising in the newspapers/magazines and
considering applicant referrals form or by colleagues or former co-workers. Selection
of suitable candidates will be achieved through rigorous interviewing and testing
(Aptitude and job-related) sessions.

Manager

The business manager will be Mercy Chepngeno

Criteria for qualifying to be a manager will be based on:

1. Have a Kenya certificate of secondary education with a mean grade of D

2. Be reliable and hardworking
3. Have a working experience in restaurant for at least one year.

Responsibilities and duties

1. Recruit business personnel

2. Oversee business financial experience
3. Set business long term goals
4. Receive and bank returns
5. receive profit and budget for item
6. source for business capital
7. Ensure that all workers perform their specific.

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Supervisor

He will be overseeing the day to day operations of the business and reporting to the
manager.

To qualify for this position, one must display high skills in business management
he/she must;

1. Have a Kenya certificate of secondary education (K.C.S.E)

2. Have a professional certificate in business management.
3. Have a working experience of at least one year.
4. Reliable and hardworking.

Duties and responsibilities

1. Oversee day to day running of the business.

2. Supplying inputs such as food.
3. Ensure that there is harmony among workers.
4. Reanimate workers at the end of the month.
5. Forward workers grievances to the manager.
6. Oversee the serving of the food and drinks.
7. Forwarding sales return to the manager for banking
8. Updating workers with information from the manager.

Other business personnel

The business operational management level will comprise of personnel. It will have
females and two male personnel of the being a security guard.

Grounds personnel

It comprise of three personnel. They should meet the following condition;

1. Must be aged between 20-30years.

2. Completed an O level with a mean grade of D
3. Must be a team worker.
4. must have a working experience of at least one year and above in a busy
restaurant environment

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Duties and responsibilities

Welcoming and receiving of customers.

1. Preparation of the meal.

2. Serving of the customers.
3. Maintaining and creating of the restaurant.
4. Make sure that food and drinks are always available.
5. Reporting to the supervisor in case of any irregularity of suggestions as per his
work.

Security personnel

For one to be security personnel, he should meet the following;

1. Should be aged 20-35 years old

2. Should be a male.
3. Should be physically fit.
4. Experienced from a recognized security firm will be an added advantage.
5. Should be able to work under minimal supervision.
6. One should posses a certificate of good conduct.
7. He should posses an o level education with at least D (plain)

Duties and responsibilities

1. Guarding the business premises.

2. Reporting to supervisors in case of any irregularity or suggestion as per his
work.
3. Maintaining law and order within the organization.

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3.4 Recruitment Training and Promotion
3.4.1 Recruitment
The recruitment training and promotion will be done by the business basing on the
individual performance and qualifications. Those who will do their duties well and
achieve the set targets will have to undergo training and then promoted to the next
step.

The recruitment of staff will depend on the qualification and will be advertised to the
scope of financial to problems; the management team will be allowed to go for
seminar in order to have quality management.

3.4.2Training
The manager shall offer training opportunity to the personnel to improve their
working and development skills and have full competence of their respective roles
assigned. The company shall also offer seminar and conduct exhibition with other
related business enterprise and invite professional who have expertise to train and test
employee on how to conduct themselves while being at the work place.

3.4.3 Promotion
The manger shall be offering promotion to his working team according to their
capability and strength of competence and giving them award in two times a year.
They can either get a job promotion or receive a gift for being the best employee in
the company.

3.5 Remuneration and Incentives

The remuneration and incentives for employees will be based on qualification and the
level of authority in this case; those in the top management will earn more than those
below a sit shown.

Incentives

In addition to monetary reward inform of salaries, the proposed business will offer the
following incentive to employees.

a. Sick leave with pay

b. Maternity leave with pay
c. Salary advances

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 d. Tea in office

Table 4.1 showing salary and wages

Position/ Role Number of Salary paid Allowances Payment per

workers given annum

Manager 1 15,000 1,500 198,000

Assistance manager 1 10,000 1,000 132,000

Accountant 1 9,000 1,000 120,000

Secretary 1 8,000 1,000 108,000

Marketing officer 1 6,000 500 78,000

Machine operator 1 5,000 500 66,000

1 6,000 500 78,000

Security 2 3,000 1,000 45000

Total 9 70,000 6,000 828,000

3.6 Support Service

The business shall receive and have support service from other organizations
including bank services which shall assist the business acquire support of loan for
further development and expansion of the business. The business shall also benefit
from insurance companies. It provide with policy cover that shall insure business
property in case of risks and disaster that may arise unexpectedly. The company is
also planning to hire Security Company to provide security services within the
company.

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CHAPTER FOUR
4.0 Operational Plan
Mercy's fish farm will ensure that it delivers high quality service to its esteemed
customers. This will be achieved through proper time and resource management and
good human skills in the delivery of the services. This will enable it become the
customers first choice. The entrepreneur will ensure that basic facilities and
equipment required for the service delivery are acquired to avoid inconveniences.

4.1 Production Facility

No Total implementation Quality Unit cost Total cost
1. Water pump complete 2 15000 30,000
2. Fork jembe 2 200 400
3. Water tank 1 6,000 6,000
4. Pipes 25 350 8,750
5. Fencing posts 30 70 2,100
6. Cement 10 Bags 600 6,000
7. Bricks 1000 4 4,000
8. Barbed wire 2 3,000 6,000
9. Shallow 1 1,000 1,000
10. Fingerlings 5000 10 50,000
11. Fish food 10 3,400 34,000
12. Total 148,250

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4.2 Production Process
The procedure is

4.3 Production Strategy

4.3.1 Monthly materials required
Items No Cost Total cost

Fish food 20 bags 3,400 68,000

Drugs 5 litres 2,500 125,000

Parking cartoons 50 200 10,000

Water 50,000 2 100,000

Fish nets 12 2,500 30,000

4.3.2 Cost of monthly labour

Position No. of personnel Basic Monthly allowance Gross monthly
salary pay
Manager 1 11,000 1,000 12,000
Secretary 1 9,000 500 9,500
Asst. Manager 1 8,000 200 8,200
Sales person 2 7,000 200 14,400
Watchman 1 5,000 200 5,200
Total 6 47,000 2,100 49,300

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4.4 Monthly Production and Overheads
SERVICES COST INVOLVED
Salaries and wages 49,300
Rent 3,500
Electricity 3,000
Telephone bills and postage 400
Insurance 1,500
License 2,000
Repairs and maintenance 1,000
Advertisement 1,200
Transport bills 1,500
Water 700
Total 64,100

4.5 Regulation Affecting Production

The regulation which affects the business include insurance which helps to safeguard
the premise equipment in case of theft furthermore employee who is injured while
working will be compensated. The complains and approvals necessary before the
commencement of the business is the trading licence. This will be obtained at a cost
of kshs.12,000 annually.

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CHAPTER FIVE
5.0 Financial Plans Section
5.1 Pre-Operation Cost
This is the cost to be incurred before the business operate to generate profit

Item cost

General item

Fish food 300,000

Fish bond 200,000

Water 25,000

Harvesting 10,000

Transport 9,000 544,000

Administration

Employee salary (month) 180,000

Machine 40,000

Uniform 15,000 235,000

779,018

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 5.2.1 First Year Fund Flow

CASH FLOW Jan Feb March April May June July Aug Sep Oct Nov Dec

Balance B/D - 12000 14000 1000 24000 46000 90000 109500 142500 167500 203500 238,500

Cash sale - 30000 35000 50000 60000 70000 60000 80000 70000 75000 65000 80000

Loan capital 60000 20000 15000 15000 10000 20000 20000 30000 15000 10000 20000 10000

Creditors 3000 4000 3000 3000 4000 6000 5000 5000 4000 3000 4000 3000

Owners capital 100000 - - - - - - - - - - -

Total 180000 66000 67000 78000 98000 14200 165000 194500 231500 255000 292500 331500

Out flow - - - - - - - - - - - -

Purchases 47000 5000 1000 10000 10000 15000 10000 10000 10000 10000 15000 15000

Salaries 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000

Machine and 55000 - - - - - - - - - - -

uniform

Total 162000 65000 61000 70000 70000 76000 70000 70000 700000 70000 75000 75000

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Bal C/D 28000 1000 6000 8000 28000 66000 95000 124500 61500 185000 217500 256500

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 5.2 Fund flow 2nd year

OUTFLOW Jan Feb March April May June July August Sep Oct Nov Dec

Bal B/D 285500 298,500 329500 337,000 363000 385000 41500 411500 43000 461000 492500 509500

Cash sale 80000 90000 85000 95000 80000 75000 95000 85000 85000 90000 95000 100000

Loan capital 10000 20000 15000 15000 10000 20000 25000 15000 2000 14000 10000 15000

Creditors 5000 7000 3000 4000 3000 4000 5000 6000 9000 4000 5000 5000

Total 370000 432500 446500 451000 484000 5365000 536500 544000 569000 603000 602500 630500

OUTFLOW

Purchases 30000 40000 50000 40000 30000 25000 35000 45000 35000 50000 40000 30000

Salaries 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000

Machine and 50000 30000 25000 20000 20000 30000 35000 40000 35000 30000 45000 30000
uniform

Total 140000 130000 135000 120000 110000 115000 13000 145000 130000 140000 145000 120000

Bal B/D 230000 285500 297500 325500 351000 369000 406500 391500 414000 429000 457500 510500

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25
5.3 Income Statement
Sh Sh

Sales 1,055,000

Purchase 168,000

Gross profit 887,000

1,055,000 1,055,000

Gross profit 887,000

EXPENSES

Sh

Salary 423,000

Machine & uniform 72,000 351,000

Net profit 536,000

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 MERCY'S FISH FARMING

BALANCE SHEET STATEMENT

Fixed assets Capital 822,000

Motor car 160,000 Net profit 536,000
Land 120,000 Less drawing 286,000
280000 107,800
Current assets Current liabilities
Cash Creditors 61,000
Bank 132,000 Bank 20,500
Debtor 132,000 106,400 1,344,000
1,344,000

BREAKEVEN LEVEL

It can be calculated as follows

Contribution margin percentage

Current margin x 100

Sale

536,000 x 100 = 51%

1055000

5.4.2 Total fixed cost

351,000- 100,000 = 251,000

Breakeven (sh) fixed cost

Contribution margin

251000 = 4921.57

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51%

5.4.3 Expected Profitability Ratios

i. Expected ration can be calculated as:

Gross profit = 887,000 x 100
Sales 1055000

84%
Return on investment
Net profit x 100
Total investment
536,000 x 100 = 354.97%
151000

5.5 Proposed Capitalization

It provide brief description of proposed capital

Total Investment : 251,000

Owner’s contribution : 100,000

Funds from borrow source : 100,000

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