Financial Analysis and Business Feasibility Study of Cinnamon Jelly Candy

Abstract

The Government of Indonesia is targeting the performance of small and medium-sized industries (IKM) to grow above 10 percent in 2018. One of food products that can be developed in a small-scale industry is seaweed-based jelly candy with cinnamon flavor. The aim of the research is to understand the financial analysis and business feasibility of establishing a small-scale industry of cinnamon jelly candy, as well as developing a production plant layout for the jelly candy industry. The methodology consists of several steps, setting the location and presumptions, analyzing Net Present Value, BenefitCost Ratio, Internal Rate of Return, Pay Back Period and, designing the layout of the production area. The result shows that production of candy jelly in one production batch is 334 packs and the price is Rp. 9,300 per package. The discount factor is 9.75% for a five-year projection. With the Net Present Value is Rp. 47,256,870, the BenefitCost Ratio is 1.09, the Internal Rate of Return is 32.82%, and the Pay Back Period is 2 years 3 months and 21 days. Layout of the production area was adjusted based on the order of the production process using the Activity Relationship Chart method. It is possible to develop small-scale industry of cinnamon jelly candy with 19% profit of the production price. Thus, this will support the growth of small industries in Indonesia.