PROJECT REPORT

AND ITS IMPORTANCE

Prepared by
ANUSREE B A
 PROJECT REPORT

A project report is a document wherein all the details obtained from technical
analysis, financial analysis, profitability analysis, economic analysis etc. are put
together. A project report may be defined as a document with respect to any
investment proposal based on certain information & factual data for the
purpose of appraising the project.
 Significance / Importance of Project Report:
Project report is an important cornerstone for setting up an enterprise.
It is a business plan to convert a business idea into a productive venture. It is
like a blue print for any construction activity without which one would land in
confusion or chaos at a later stage.
 THE SIGNIFICANCE OF A PROJECT REPORT

 Serves as a Master Plan-For successful management, effective planning is

absolutely essential. A project report serves as a business plan indicating the
objectives or goals of the enterprise & states in detail how these objectives are
going to be achieved at various stages of the enterprise.
 Describes Direction / Road Map- A project report is like a road map. It
describes the direction in which the enterprise should go & how to reach the
goal. Without well defined goals & operational methods as stated in the report,
most enterprises land in troubled waters & flounder on the rocks of hard times.
 Shows Feasibility- A project report also shows the feasibility of the proposed
project & the probability of achieving profit. Whether a project is feasible from
different angles- economic, financial, commercial, social etc. can be
ascertained while preparing a project report.
 Foresees requirements- A project report enables an entrepreneur to realize
what he needs for implementing the project well in advance. It also gives a
general idea of his various resource requirements like raw materials, manpower,
finance, infrastructure facilities etc. and also the means of procuring them. Thus,
it enables an entrepreneur to foresee his requirements in advance & helps him
to take suitable decisions accordingly.
 Indicates Profitability- It gives an indication of likely & benefits which a prospective
entrepreneur can get from his venture. This profitability indication will help an
entrepreneur to take an important investment decision. Thus, the financial rewards
can be visualized in advance.
 Helps in Decision Making- Crucial decisions have to be made at various stages of
production. How much to produce to achieve Break-Even-Level? How to fix the
repayment schedule? Such important decisions can be taken with the help of a
project report prepared well in advance. It also anticipates problems in advance
so that suitable decisions can be taken then & there to solve those problems. Thus,
it helps to visualize action tasks also.
 Paves way for Financial Assistance- The preparation of a project report is
absolutely essential for those enterprises which apply for financial assistance from
different financial institutions & banks. It is on the basis of project report, that the
financial institutions could be given or not. In most cases, the quality of the firms
project report weighs heavily in taking lending decisions. Thus, it paves the way for
financial assistance which is the life blood of an enterprise.
 Ensures Survival- The survival of any business depends upon the marketability of its
products. The project report projects the demand & supply position, competitor’s
position in the market, expected price etc. and thus ensures the survival of the
business unit.
 To Plan Expected Performance- A project report is prepared to plan in advance
about the fulfillment of expected performance in various areas like technology,
marketing, finance, personnel, production, customer satisfaction & social
endowment.
 To know expected Inputs & Outputs- A project report enables an entrepreneur to
know how much money, manpower & material would be required to set up the
project, type of machine & technology required & the economic gains from the
project.
 To Evaluate Organisational Goals- A project report helps to evaluate the
organization objectives, to what extent they are achievable. For this purpose, an
entrepreneur is expected to consider the input data, analyse the data, predict
outcome, choose best alternatives, take action, measure results with predictions.
 To Quantify Objectives- Project report helps to quantify the objectives. It makes
them to be measurable, tangible, verifiable & attainable.
 To gain Financial Support- Project report ensures to avail financial support from the
financial institutions. This report helps to evaluate the desirability of financing the
project.
 Government Authorities-A project report is of importance to government
authorities to provide subsidies, tax exemptions, deductions, incentives,
concessions, government clearance from Pollution Control Boards.
 PROJECT REPORT FORMAT
When preparing a report for financial institutions, it's important to follow a structured format
1) Title Page
 Report Title
 Subtitle (if any)
 Prepared for: [Name of the financial institution]
 Prepared by: [Your Name/Company Name]
 Date of Submission

2) Table of Contents
 List of sections and page numbers for easy navigation.

3) Executive Summary
 A brief overview of the report’s purpose, key findings, conclusions, and
recommendations.
4) Introduction
 Purpose of the report.
 Background information on the project or business.
 Scope of the report.
5) Project Description
 Detailed description of the project or business idea.
 Objectives and goals.
 Target market and audience analysis.
6) Financial Analysis
 Funding Requirements: Total amount needed, and how it will be used.
 Projected Financial Statements:
 Income Statement
 Cash Flow Statement
 Balance Sheet
 Break-even Analysis: When the project is expected to become profitable.
 Financial Ratios: Key metrics relevant to the project.
7) Market Analysis
 Overview of the industry.
 Competitive analysis.
 Market trends and opportunities.
8) Risk Assessment
 Identification of potential risks.
 Impact analysis and mitigation strategies.
9) Conclusion
 Summary of key points.
 Final thoughts on the project’s viability.
10) Recommendations
 Suggested actions for stakeholders or financial institutions.
PROJECT APPRAISEL

Project appraisal is the structured process of assessing the viability of a project or

proposal. It involves calculating the feasibility of the project before committing
resources to it. It is a tool that company’s use for choosing the best project that
would help them to attain their goal. Project appraisal often involves making
comparison between various options and this done by making use of any
decision technique or economic appraisal technique.
Project appraisal is a tool which is also used by companies to review the projects
completed by it. This is done to know the effect of each project on the
company. This means that the project appraisal is done to know, how much the
company has invested on the project and in return how much it is gaining from
it.
 Steps of Project Appraisal
Project appraisal is the process of assessing the feasibility, viability, and potential
impact of a proposed project. It involves a systematic analysis of various aspects of
the project, such as its objectives, scope, benefits, costs, risks, and potential
outcomes. The following are the steps involved in project appraisal:
 Project identification: This involves identifying and defining the project, including its
objectives, scope, and key stakeholders.
 Project screening: This step involves assessing the project's alignment with the
organization's strategic goals, resource availability, and overall feasibility.
 Project scoping: This step involves defining the project's boundaries, deliverables,
timelines, and resource requirements.
 Market and demand analysis: This step involves analyzing the market and
demand for the project's output or services, including potential customers,
competitors, and market trends.
 Technical analysis: This step involves assessing the project's technical feasibility,
including the availability of technology, expertise, and other resources required for
the project.
 Financial analysis: This step involves assessing the project's financial viability,
including the costs, revenues, profits, and cash flows associated with the
project.
 Economic analysis: This step involves assessing the project's economic
impact, including its contribution to economic growth, employment, and
social welfare.
 Risk analysis: This step involves assessing the project's risks, including its
vulnerability to external factors, such as market fluctuations, natural
disasters, and political instability.
 Environmental and social impact analysis: This step involves assessing the
project's potential impact on the environment and society, including the
potential risks and benefits associated with the project.
 Project appraisal report: This step involves compiling all the information
gathered from the above steps and presenting it in a comprehensive
project appraisal report. The report should provide a clear
recommendation on whether the project should be approved, modified, or
rejected.
MARKET FEASIBILITY

 Market feasibility is a process that assesses a market's ability to support a

product, service, or business. It's a crucial step in the business planning
process, especially when: Introducing a new product or service, Entering a
new market, Making significant investments, and Allocating resources.
 A market feasibility study helps businesses determine if there's enough
demand for their product or service to make a venture successful. It can
also help businesses: Evaluate the likelihood of success, Identify potential
pitfalls, Study competition, and Establish if demand is sufficient.
 A market feasibility study typically includes: A market analysis, A market
competition breakdown, Sales projections, and Stakeholder interviews.
TECHNICAL FEASIBILTY

 Technical feasibility refers to the evaluation of whether the resources

available, including staff, hardware, and software, can meet the technical
requirements for a digitization project.
 Technical feasibility in entrepreneurship is the process of assessing whether
a product or service can be developed and implemented using available
resources and technology. It's a crucial step in the product development
process that helps ensure a product is viable and can be produced within
an organization's constraints.
 A technical feasibility study helps entrepreneurs make informed decisions
about production and manage risks early in the product life cycle. It
involves:
It involves :
 Researching available resources: Designers and manufacturers should research
the technology and resources that are available to them.
 Evaluating technical requirements: The study should consider the technical
requirements, constraints, and capabilities of the proposed solution.
 Assessing the manufacturing process: The study should assess the
manufacturing process and ensure that the latest developments are used.
 Identifying required equipment: The study should identify the machinery and
equipment that will be needed.
 Creating project charts and layouts: The study should create project charts and
layouts.
 Providing design alternatives: The study should provide design alternatives and
cost estimates for different technical options.
FINANCIAL FEASIBILITY AND ECONOMIC
FEASIBILITY
Financial feasibility and economic feasibility are both used to determine the
profitability of a project, but they measure different types of profit:
 Financial feasibility
 Determines if a project can be funded and completed. It focuses on the
income generated by the project and whether it can recoup the
investment. Financial feasibility analysis can include methods like the payback
method, net present value method, and internal rate of return method.
 Economic feasibility
 Determines if a project is a net benefit to society as a whole. It focuses on the
project's contribution to the country's socio-economic goals. Economic
feasibility analysis compares the benefits and costs of the project over its
lifetime.
 BREAK EVEN ANALYSIS
 Break-even analysis is a crucial tool in entrepreneurship that helps determine
when a business will be able to cover its costs and start generating a profit.
 reak-even analysis is a tool that helps entrepreneurs and business owners
determine when their business will be profitable. It's a calculation that determines
the point at which a business's total revenue equals its total costs, resulting in
neither a profit nor a loss
 The formula for break-even analysis is as follows:
 Break-Even Quantity = Fixed Costs / (Sales Price per Unit – Variable Cost Per Unit)
where:
 Fixed Costs are costs that do not change with varying output (e.g., salary, rent,
building machinery)
 Sales Price per Unit is the selling price per unit
 Variable Cost per Unit is the variable cost incurred to create a unit