Profitability projections are essential to judge the financial desirability of a project. Profitability analysis focuses on: Cost of Production Working Results Break even level The major components of cost of production are: Material Cost Utilities Cost Labour cost Factory Overhead Cost The most single element of cost,material cost consists of price paid to suppliers, freight expenses and insurance charges. Utilities costs consists of cost of power,water and fuel. Labour costs includes the cost of manpower employed in the factory. Factory overhead cost represents expenses on repairs and maintenance ,light ,rent and taxes, insurance and miscellaneous factory expenses. The statement of working results may reflect the following: Cost of Production Total Administrative Expenses Total Sales Expenses royalty and know-how payable Total Cost of Production Expected Sales Gross Profit before Interest Total financial expenses Depreciation Operating Profit ...