Financial evaluation of dried onion industry in Fayoum Governorate

Abstract

: The research aimed to study the financial evaluation of drying fresh onions enterprise in Fayoum Governorate “A case study of Green Land Factory”, through using discounting and non-discounted Financial Evaluation measurements. The Results showed that the value of the internal rate of return was about 25%, and this is considered a rate of return that exceeds the rate of lending in commercial banks, which indicates that the project is financially feasible, also the ratio of benefits to costs was about 1.06 pounds, and this indicates that every pound spent gives net benefits estimated at about 0.06 pounds, and this is also considered a good indicator for investment, as the return on investment reached about 10%, meaning that every pound invested in the project achieves a net return estimated at about 10 cent, while the net return to revenue ratio was about 10%, which indicates that the total revenue covers the total costs with a surplus, and the capital recovery period is about four years. And by using sensitivity analysis, it was found that an increase in the price of a ton of fresh raw onions by 5% leads to a decrease in the internal rate of return from 25% to 18%, with an estimated decrease of about 26%, and the increase in labor wages by 10% leads to a decrease in the internal rate of return from 25% to 22 % by an estimated decrease of 9%, and the increase in the packaging cost by 20% leads to a decrease in the internal rate of return from 25% to 24% with a decrease rate estimated at 4%, and the increase in gas costs by 10% leads to a decrease in the internal rate of return from 25% to 24%, with estimated decrease about 2%, and the increase in water costs by 20% leads to a decrease in the internal rate of return from 25% to 24%, with decrease estimated about 2%, and the increase in dried onion ton price by 2.5% and increasing the costs by 5% lead to a decrease in the internal rate of return from 25% to 19%, with a decrease about 23%. The research recommends mainly to pay more attention to current dried onion enterprises by providing many production and marketing capabilities, in addition to providing more investment opportunities in establishing new enterprises in this sector.