SHAMBERERE TECHNICAL TRAINING INSTITUTE.
BUSINESS PLAN
NAME: SAMSON NDENGU
EMAIL: samsonndengu563@gmail.com
INDEX: 6141010324
COURSE: CAE II
COURSE CODE: 1503
CENTER: SHAMBERERE TECHNICAL TRAINING INSTITUTE.
PRESENTS TO: KENYA NATIONAL EXAMINATION COUNCIL
(KNEC) AS FULFIL FOR THE AWARD OF CRAFT
CERTIFICATE IN AUTOMOTIVE ENGINEERING.
SUPERVISOR: MR. ALEX PICHO.
DECLARATION
I declare that this Business plan is my own work based on what I was taught by Mr. Alex
Picho, and it has never been presented by anybody to the Kenya National Examination
Centre.
i
DEDICATION
I would like to dedicate this business plan to my parents, brothers, and sisters without
forgetting my business plan trainer Mr. Alex Picho for making sure that I at school and doing
the correct thing for the betterment of my future life.
ii
ACKNOWLEDGEMENT
Am acknowledging Mr. Alex Picho Business Plan trainer for ensuring that I write the correct
business plan chapter by chapter. I can’t take this for granted thanks once more. Be blessed.
iii
EXECUTIVE SUMMARY
1.0 Business Description
My name is Samson Ndengu doing craft certificate in Automotive Engineering. My proposed
business plan shall have the name NDENGU’S MOTOR VEHICLE GENERAL REPAIR
AND SPARE PARTS dealing with selling of vehicles. It will be located in Busia County, a
sole proprietorship. Startup type of a business selling quality products and giving out 10%
discount to customers.
2.0 Marketing plan
The proposed business plan will expect different customers including individual customers
and Institutional customers, it will have more strength than other competitors on the market
operating the same type of business. This will be achieved through advertising on local radio
stations and posters, setting up local fair prices and indirectly our products and services to
customers.
3.0 Management Plan
The business will have a manager with his assistant and other personnel each having different
roles to play, recruitment and promotions will be done in a good way free from corruption.
The county government of BUSIA will provide us with a business License and permit to
allow us to operate in a safe environment. Our business official bank will be Kenya
Commercial Bank (KCB).
4.0 Production Plan
The business will have enough facilities, high quality and quantity, highly trained personnel
and enough capital from its account and credit facilities. It will be operating from 7:30 AM to
6:00 PM. Health, safety and environmental regulations will be strictly followed.
5.0 Financial Plan
Cost that will be spent by the business before it starts will be 1,055,000/=, fixed assets will
cost about Ksh.965,000/=. The business will be financed by Ksh. 1,798,000. Expenses, cost
of goods, Net sales and revenue will cost around 1,287,000/=, 130,000/=, 1,468,000/= and
52,000/= respectively and the Net profit of the proposed business have Ksh. 103,000/=
iv
Table of Contents
DECLARATION....................................................................................................................................i
DEDICATION.......................................................................................................................................ii
ACKNOWLEDGEMENT....................................................................................................................iii
EXECUTIVE SUMMARY...................................................................................................................iv
CHAPTER ONE....................................................................................................................................1
1.0 BUSINESS DESCRIPTION........................................................................................................1
1.1 Background of the Owner............................................................................................................1
1.2 Business Name.............................................................................................................................1
1.3 Business Logo..............................................................................................................................1
1.4 Business Location and Address....................................................................................................2
1.5 Form of Business Ownership.......................................................................................................3
1.6 Type of Business..........................................................................................................................3
1.7 Product and Services....................................................................................................................3
1.7.1 Products................................................................................................................................3
1.7.2 Services.................................................................................................................................3
1.8 Justification of the Opportunity....................................................................................................4
1.9 Goals and Objectives of the business...........................................................................................4
1.9.1 Goals of the business.............................................................................................................4
1.9.2 Objectives of the business.....................................................................................................4
1.10 Entry and growth strategy..........................................................................................................4
1.10.1 Entry...................................................................................................................................4
1.10.2 Growth strategy...................................................................................................................4
CHAPTER TWO...................................................................................................................................5
2.0 Marketing Plan.............................................................................................................................5
2.1 Customers....................................................................................................................................5
2.1.1 Individual Customers............................................................................................................5
2.1.2 Institutional Customers.........................................................................................................5
2.2 Market Share................................................................................................................................6
2.3 COMPETITION..........................................................................................................................7
2.4 Methods of the Production and Advertisement Method of Promotion.........................................8
2.5 Pricing Strategy............................................................................................................................8
2.6 Sales Tactics.................................................................................................................................8
2.7 Distribution Strategy....................................................................................................................8
CHAPTER THREE...............................................................................................................................9
3.0 MANAGEMENT PLAN.............................................................................................................9
v
3.1 MANAGEMENT TEAM.............................................................................................................9
3.1.1 MANAGER..........................................................................................................................9
3.1.2 ASSISTANT MANAGER.....................................................................................................9
3.2 OTHER PERSONNEL..............................................................................................................10
3.3 RECRUTMENT, TRAINING AND PROMOTION..................................................................11
3.3.1 RECRUTMENT..................................................................................................................11
3.3.2 TRAINING.............................................................................................................................11
3.3.3 PROMOTION.....................................................................................................................11
3.4 REMUNERATION AND INCENTIVES...................................................................................11
3.4.1 REMUNERATION.............................................................................................................11
3.4.2 INCENTIVES.....................................................................................................................12
3.5 LICENSES AND PERMIT........................................................................................................12
3.5.1 LICENSES..........................................................................................................................12
3.5.2 PERMIT..............................................................................................................................12
3.6 SUPPORT SERVICES...............................................................................................................12
3.6.1 BANKING SERVICES.......................................................................................................12
3.6.2 INSURANCE SERVICES..................................................................................................12
3.6.3 CONSULTANT SERVICE..................................................................................................12
3.6.4 LEGAL SERVICES............................................................................................................13
CHAPTER FOUR...............................................................................................................................14
4.0 PRODUCTION PLAN..............................................................................................................14
4.1 PRODUCT FACILITIES & CAPACITIES................................................................................14
4.2 PRODUCTION STRATEGY.....................................................................................................15
4.3 PRODUCTION PROCESS........................................................................................................15
4.4.1 HEALTH REGULATIONS.................................................................................................15
4.4.2 SAFETY REGULATIONS.................................................................................................15
4.4.3 ENVIRONMENTAL REGULATIONS...............................................................................16
CHAPTER 5........................................................................................................................................17
5.0 PRE-OPERATIONAL COST.....................................................................................................17
5.2 PRO-FORMA BALANCE SHEET............................................................................................17
5.3 Working Capital.........................................................................................................................19
5.4 Cash flow projection..................................................................................................................19
5.5 Income statement.......................................................................................................................20
5.6 Profitable ratio...........................................................................................................................21
vi
CHAPTER ONE
1.0 BUSINESS DESCRIPTION
1.1 Background of the Owner
My name is SAMSON NDENGU I am 25 years old currently single; my email address is
samsonndengu563@gmail.com, student at Shamberere Technical Training Institute doing a
craft certificate in Automotive Engineering, Tel: 0707678322.
1.2 Business Name.
The proposed business shall have the name Ndengu’s Motor Vehicle General Repair and
Spare Parts.
This was selected from the business proposer’s official name “NDENGU” and because it will
be dealing with all concerning Automotive Filed including selling of automotive spare parts
and repairing of vehicles it was proposed to be called so.
1.3 Business Logo
NDENGU’S MOTOR VEHICLE
GENERAL REPAIR AND SPARE PARTS
1
1.4 Business Location and Address.
The proposed business shall be located at BUSIA town opposite complex Stadum, along
Busia Marachi Road so that can be identified easily.
BUSIA STADIUM
ROUND-ABOUT
FROM KISUMU BUSIA-UGANDA
BUSIA HOSPITAL NDENGU’S MOTOR VEHICLE
BUSIA POLICE STATION GENERAL REPAIR AND SPARE
PARTS
2
1.5 Form of Business Ownership
The proposed business shall be a retail under a sole proprietorship, because with this type of a
business ownership, it is simple to make decisions, keep business records/ secrets, profit, and
losses in condition to management and policies concerning the business will be handled by
the owner samson Ndengu.
1.6 Type of Business
The business shall be a startup, most activities which will be carried out in NDENGU’S
Motor Vehicle General Repair and Spare Parts will be repairing and selling vehicle spare
parts.
1.7 Product and Services
1.7.1 Products
The proposed business will be dealing with repairing of vehicles on the following systems.
• Steering System
• Braking System
• Suspension System
• Wheel and Tires
The product which will be sold include:
• Hydraulic fluids
• Tires of different sizes
• Fuel filters
• Oil filters
• Clutch plates
• Tractor headlights and indicators
• Brake linings
• Light vehicle headlights and indicators
• Different bolts and nuts
• Rims of different sizes and of different vehicles
• Stator Motors.
• Wires of different sizes and colours.
1.7.2 Services
For any customer who will need me as the owner to repair his/her car which cannot reach my
operating environment he/she can contact me via the mobile number provided under the
background of the owner and I will repair for him from anywhere. In addition, for any
customer who will spend fifty thousand Kenya shillings and above on repairing his/her car in
my garage, I will offer him/her a 10% discount.
3
1.8 Justification of the Opportunity
I proposed to start this type of business because there is a ready market from Busia Referral
out growers who have many vehicles with faults occurring now and then. There is also
market from the local residents who look for spare parts from as far as Busia Town. There is
also enough security from the National Police Services who always patrol day and night all
over Busia Market.
1.9 Goals and Objectives of the business.
1.9.1 Goals of the business
The proposed business’ major objective is to expand to other areas of Busia County Including
Matayos, Nambale and Bumala among other towns, it will also be offering attachment to the
students from various Colleges.
1.9.2 Objectives of the business.
The business’ objective will be to maximize profit created from our products and services in
order to create job opportunities to the people around it.
1.10 Entry and growth strategy.
1.10.1 Entry
The proposed business shall have enough manpower than any other competitor who don’t
have, it will also have enough space to hold as many vehicles as possible compared to my
competitors who always operate along the roads. My Business will have enough spare parts
which will help me not move from my operating area to other shops to purchase spare parts to
manage time effectively.
1.10.2 Growth strategy.
The product that will be sold from my garage will be of high quality as well as services. The
10% discount which will be offered to customers who will be spending more than fifty
thousand Kenya shillings (50,000/=) on products and services from my business will make
those customers to visit my business every time they need my help as a result, it will have
attracted them.
4
CHAPTER TWO
2.0 Marketing Plan
2.1 Customers
The proposed business expects different customers which include.
a. Individual Customers
b. Institutional Customers.
2.1.1 Individual Customers.
This will be a comprise of people around Busia Market at large and nearby places. These
people comprise of adults who mostly work in Busia hospital, those who work in police
station and those working within. These customers include those who are salaried and self-
employed.
There is a high need of highly trained mechanic who can repair and even sell to them the
spare parts for their motorbikes, cars and even tractors who get faults while they are at work
or going to work.
2.1.2 Institutional Customers
The proposed business will be comprising of public and private institutions located near
Busia Market.
They include.
I. Public institutions Busia Referral hospital
This is a government managed institution which deals with public services, this institute has a
lot of machines and vehicles thus I prefer them as my best customers in terms of buying spare
parts.
II. Private Institutions
Busia Sugar Company
These are private managed institutions that actively deal with cane transportation to Busia
Sugar Company. They will be my major customers in terms of repairing and replacement of
their vehicle faults.
5
2.2 Market Share
MARKET SHARE
20%
NDENGU'S MOTOR VEHICLE REPAIR
AND SPARE PARTS
JOHN'S AUTO GARAGE
50%
TONY GENERAL VEHICLE REPAIR
30%
6
2.3 COMPETITION
The following are information concerning competition of Automotive Engineering promises
on Busia Market.
COMPETITOR STRENGTH WEAKNESS
Ndengu’s Motor ✓ Well trained in automotive engineering ✓ Short Working
Vehicle Repair and ✓ Enough spare parts experience.
Spare Parts
✓ Enough space holds a large number of
vehicles for repair
✓ Enough people to advertise and sell the
business services
✓ Affordable prices for spare parts and
services.
John’s Auto Garage ➢ Has well and advanced equipment and ➢ High prices for
tools for vehicle repair. their services.
➢ Small space for
holding vehicles.
➢ Poor
advertisement of
their services.
➢ Inadequate well-
trained personnel.
➢ No new spare
parts.
Tony Auto General • Long working experience in vehicle • High prices for
Vehicle Repair repair. their services.
• Well known within the people of Busia • No advertisement
market of their products
and services.
• Poor relationship
with customers.
• Inadequate trained
personnel
7
2.4 Methods of the Production and Advertisement Method of Promotion.
In order to create awareness to customers, the proposed business will advertise its new spare
parts and services through local radio stations and posters, the posters will have the services
we offer, occur telephone numbers and the products and services we offer. On the hand, local
radio that we will use the Mulembe FM, and advertisement will contain the business phone
number, location of our business and the products and services we offer, this advertisement
will be done on every Friday from one part.
There will be a ten percent (10%) discount on everyone who will spend one fifty thousand
(Ksh. 150,000) and above on products and services from the proposed business.
2.5 Pricing Strategy
The price will be set according to time spent while repairing our customer’s vehicle and the
production cost.
Factors that will be considered while setting the price of the products and services
will be. I. Competition.
The prices of products and services from Ndengu’s Motor Vehicle Repair and spare parts will
be set according to how the competition are selling theirs but this proposed business intends
to sell its products and services at an affordable price compared to its competitors.
II. Profit.
The products and services prices will be also according to the profit it expects to get to avoid
more loses and that may arise.
2.6 Sales Tactics
This business will sell directly to its customers who will be visiting its premises whenever
they need to change worn out vehicle parts.
The business will also use agents who will be travelling around Busia Market and nearby
places with a mobile workshop van which will be having all tools and equipment and spare
parts so as to reach our customers wherever they are.
2.7 Distribution Strategy
Many businesses will also employ qualified personnel to distribute products to customers
who will have purchased in large quantity.
8
CHAPTER THREE
3.0 MANAGEMENT PLAN
3.1 MANAGEMENT TEAM
The business management will consist of a manager and an assistant manager. The manager
will be the owner of the business.
3.1.1 MANAGER
DUTIES AND RESPONSIBILITIES IF THE MANAGER
• Establishing goals of the business.
• Motivating business team members.
• Planning for future trends in business.
• Employing qualified personnel.
• Paying employees.
• Directing junior staff.
3.1.2 ASSISTANT MANAGER
DUTIES AND RESPONSIBILITIES OF THE ASSISTANT MANAGER.
✓ Supervising the operation of the business.
✓ Handle issues which relate to customers
✓ Acts as a manager when the manager is not available.
✓ Reports all the activities of the business to the manager.
✓ Ensures the business guidelines are followed. ✓ Assist the manager in planning
strategy.
9
3.2 OTHER PERSONNEL
TITLE NO. QUALIFICATION DUTIES/
RESPONSIBILITIES
ACCOUNT 1 1. Diploma holder in an 1. Maintaining accounting
CLERK accounting from recognized documents.
institution. 2. Record financial
2. Computer literate. transaction on a daily
basis.
3. Prepare bank deposits.
4. Receive cash from
customers.
5. Produce correct
financial reports to the
manager when needed.
TECHNICIAN 4 ✓ Craft certificate holder in ✓ Inspecting the vehicle to
automotive engineering from diagnose faults.
a recognized institution. ✓ Reading car repair
✓ Two-year experience. manuals
✓ Running tests on
vehicle and making
recommendations.
✓ Perform basic car
maintenance functions
such as checking the
level of fluids.
✓ Replacing worn out
parts.
✓ Performing repair to a
customer’s car.
✓ Explain out car
problems to a customer.
SALES- 2 ❖ Certificate holder in sales and ❖ Selling of car’s spare
PERSON marketing from a recognize parts.
institute. ❖ Meeting customers to
❖ One year experience. discuss their needs.
❖ Promoting sales offers.
❖ Answering customer’s
questions concerning
spare parts.
SECURITY 2 ➢ Should be above 18 years. ➢ Providing security in the
OFFICER ➢ A minimum of 2-year business.
experience ➢ Verifying the visitors.
10
3.3 RECRUTMENT, TRAINING AND PROMOTION
3.3.1 RECRUTMENT
The business personnel be recruited through advertisement on the local radio station,
Mulembe FM and posters as mentioned earlier on the methods of promotion and
advertisement, and this mentioned earlier on the level of education and experience.
3.3.2 TRAINING.
The recruited personnel will be trained through on the job training whereby they will gain
skills as they continue working according to the interaction given by the supervisor and how
he is working.
Either employees will be given a chance to attend seminars so that they can gain more skills
and knowledge on automotive engineering.
3.3.3 PROMOTION
Promotion of employees will be done through considering the level of experience an
employee has and the level of education he/she has.
3.4 REMUNERATION AND INCENTIVES.
3.4.1 REMUNERATION.
TITTLE NUMBER ALLOWANCES BASIC TOTAL
SALARY
ACCOUNT 1 2000/= 20,000/= 22,000/=
CLERK
TECHNICIAN 4 6000/= 60,000/= 66,000/=
SALESPERSON 2 2000/= 28,000/= 30,000/=
SECURITY 2 2,400/= 18,000/= 20,400/=
OFFICER
3.4.2 INCENTIVES
Lunch and tea breaks will be offered to employees to avoid them going out for meals, this
will save on time, either allowance or overtime money will be paid to customers at date 5th of
every new month.
11
3.5 LICENSES AND PERMIT
3.5.1 LICENSES
The licenses for the operation of the business legally will be obtained from registrar of motor
vehicles Busia County, this will help me to start the business and it will cost around 14, 000/=
Kenya shillings.
3.5.2 PERMIT
I will strictly follow the county government of Busia legal requirements for the peaceful and
safe operation of the business.
These legal requirements include.
1. Well disposal of wastes.
2. Business should be well ventilated.
3. Safe working with chemical and products.
4. Employees should wear personal protective clothes.
5. Safe working with chemicals and products.
3.6 SUPPORT SERVICES.
3.6.1 BANKING SERVICES
The business official bank will be KCB bank. This bank is not far from my proposed business
thus saving and withdrawals of the business money will be done easily, loans to support the
business will also be found in this bank, it will also offer security to the money belonging to
the business.
3.6.2 INSURANCE SERVICES
The business will use “MUA INSURANCE” company which will insure the business
facilities against fire, theft and also insure the business vehicle and employees against
accident.
3.6.3 CONSULTANT SERVICE
The business will need to consultants who are known in this type of business, this will include
experienced technicians, mechanics and those who have excelled in advertisement and
marketing and selling of automotive engineering goods and services.
3.6.4 LEGAL SERVICES
The business legal services will be provided by qualified people in terms of legal
representation, this will ensure equity before the law because they will be interpreting
contracts that will be covering our work.
12
CHAPTER FOUR
4.0 PRODUCTION PLAN
4.1 PRODUCT FACILITIES & CAPACITIES
The business will require the following facilities, toilets, bathrooms, furniture and workshop
which will cost about 121,000/= Kenyan shillings, it will also require equipment and
machines such as toolbox, jacks, battery charger, strut compressor, presser, diagnostic tools,
fire extinguisher, mobile workshop van and a brake lathe which will cost about 844,000/=
Kenya Shillings.
The business will also require a partitioned plan office layout as shown below.
Security
office
Toilet 1
Sales Toilet 2
Workshop Technician’s Tools and
person
store office machinery
Bathroom 1
room
Bathroom 2
Manager’s Assistant
Account Vehicle
office Manager’s
clerk office repair
office
workshop
PRODUCTION CAPACITY
13
ITEM QUALITY COST CAPACITY
ELECTRICTY TWO PHASES 60KW
MACHINES AND 9 844,000/= Can work up to 3
EQUIPMENT customers at ago but
according to the
needs of the
customers.
OFFICE ROOMS 10 121,000/= Each room can host
up to four people
except vehicle repair
workshop which can
host up to six light
vehicles
4.2 PRODUCTION STRATEGY.
The business will provide high quality spare parts and high-quality services to the vehicles
that our customers will have provided to us, those will come from high trained personnel
which will be available in our premises.
The capacity that will finance our business will come from bank loans, loans from family
members and my own capital and the sources of this business idea came from my hobby,
customer’s complaints, and the surveyors that I did on Busia Town.
4.3 PRODUCTION PROCESS
The business operation will start from 7:30 AM to 6:00 PM from Monday to Friday. The
products and services that will be offering everyday will depend on the demand of our
customers each day but there will be a constant supply of spare parts.
Our production will be affected by the number of employees we have, skills, tools, and
equipment we have and the demand on the market.
4.4.1 HEALTH REGULATIONS.
Our employees will wear correct attire according to the work they will have employees do,
our toilets will be cleaned, waste products will be disposed appropriately, and others will be
sold recycling.
4.4.2 SAFETY REGULATIONS.
Our employees will be first priority when it comes to matters concerning safety because we
will make sure they access to aprons, dust coats, safety gears and gloves fire extinguishers
will be installed around our building entrance doors. This will be used for easy control of fire
when it outbreaks.
14
4.4.3 ENVIRONMENTAL REGULATIONS
Our business will work friendly with environment so that we can’t affect our environment
negatively. This will be achieved through working closely with the environmental
management authority.
15
CHAPTER 5
5.0 PRE-OPERATIONAL COST
The cost which will be included by the business before it starts including:
ITEM COST (KSHS)
Advertisement 13,000
Recruitment 10,000
License 17,000
Insurance 15,000
Machines and equipment 844,000
Office layout (building) 121,000
Electricity 30,000
Permit 5,000
Total 1,055,000
5.2 PRO-FORMA BALANCE SHEET
NDENGU’S MOTOR VEHICLE GENERAL REPAIR AND SPARE PARTS
BALANCE SHEET AS AT 13/07/2023
FIXED ASSETS AMOUNT
Toilet, Bathroom, furniture, and workshop. 121,000
Machines and equipment. 844,000
16
Total Fixed Assets = 965,000/=
CURRENT ASSETS AMOUNT (KSHS)
Cash at hand 50,000
Cash at bank 50,000
Stock 844,000
Total Current Assets 844,000
+ 100,000
944,000/=
CURRENT LIABILITIES AMOUNT (KSHS)
Creditors 61,000
Loan 50,000
Total Current Liabilities 61,000
+ 50,000
111,000/=
Current Assets- Current Liabilities =?
944,000- 111,000= 833,000/=
Add to fixed assets=
833,000 + 965, 000 =1,798,000/=
Financed by.
Capital: 1,798,000/=
5.3 Working Capital
= fixed assets = 965,000
17
5.4 Cash flow projection
Cash paid in
RECEIPTS WEEK 1 WEEK 2 WEEK 3 WEEK 4
Owner 527,500 000 000 000
contribution
Family 363,750 000 000 000
contribution
Loan 276,750 000 000 000
Sub total 1,168,000 000 000 000
Cash paid out.
Receipts Week 1 Week 2 Week 3 Week 4
Recruitment 10,000 000 000 000
Advertisement 13,000 13,000 13,000 13,000
Insurance 15,000 000 000 000
Permit 5,000 000 000 000
Machines and 844,00 000 50,000 000
Equipment
License 17,000 000 000 000
Electricity 30,000 000 000 10,000
Building 121,000 000 000 000
Salaries 000 000 000 138,000
Sub Total 1,055,000 13,000 180,000 161,00
Total cash paid in = 1,168,000
Total cash paid out = 1,409,000
5.5 Income statement
Expenses September
18
Recruitment 5,000
Advertisement 52,000
Insurance 15,000
Permit 5,000
Machines and Equipment 894,000
License 17,000
Electricity 40,000
Building 121,000
Salaries 138,000
Subtotals 1,287,000/=
Cost of goods Week 1 Week 2 Week 3 Week 4
sold
Opening stock 30,000 10,000 10,000 50,000
Purchases 10,000 000 000 000
Closing stock 5,000 3,000 2,000 10,000
Subtotal 45,000 13,000 12,000 60,000
Cost of goods available for sale= 45,000 + 13,000 + 12,000 60,000
=130,000/=
Sales Week 1 Week 2 Week 3 Week 4
Sales 160,000 240,000 660,000 390,000
Return inwards 5,000 3,000 10,000 000
Subtotal 165,000 243,000 670,000 390,000
Net sale 165,000 + 243,000 + 670,000 + 390,000 = Ksh. 1,468,000 /=
Received Week 1 Week 2 Week 3 Week 4
Commission 18,000 11,000 13,000 10,000
Received
19
Net revenue 18,000 11,000 13,000 10,000
subtotals.
Net received = 18,000 + 11, 000 + 13,000 + 10,000 = Ksh. 52,000/=
5.6 Profitable ratio
Gross profit = Net sales – Cost of goods
1,468,000 – 130,000
=Ksh. 1,338,000/=
Net profit ratio = Gross profit + All revenue- All
expenses
= (1,338,000 + 52,000)- 1,2877,000
=Ksh. 103,000
= Net profit ×100
Net profit ratio
Net sales
=103,000×100
1,468,000
=7.02
2575
367
= 2575: 367
Cross ration = Gross profit ×100
Sales
=1,338,000 × 100 = 91.14
1,468,000
=33450: 367
Liquidity ratio = Current assets
Current liabilities
20
=944,000
111,000
=8.505
=944 111
=944: 111
Assets turnover ratio = Total sales
Total assets
=1,468,000
1,909,000
=1468
1909
= 0.769
=1468: 1909
21
