Every formula behind your DPR.
Published, not asserted.
Calibrated to the Income Tax Act's depreciation rates, the Tandon Committee's working-capital norms, and RBI / SIDBI banker thresholds. If you disagree with the model, argue with the math.
For the scoring engine's methodology (24-rule consistency checker, 4-dimension scoring, consistency rules table), see /methodology.
How to read a Foundalyze DPR
A Foundalyze DPR is a financial projection prepared from founder-supplied inputs, formatted for banker review. It is intended as a decision-support document for bank loan / government scheme applications — not as audited or CA-certified financials. Final sanction is at the bank's discretion. We recommend a Chartered Accountant reviews the figures and assumptions against your filing position before submission.
1. Inputs collected
The intake form at /dpr/intake collects every input the engine needs. Inputs are grouped to minimise re-asking and to let a non-finance founder complete the form with sensible defaults.
| Group | Fields collected |
|---|---|
| Project basics | Project type (greenfield / expansion), business name, entity type, sector, target bank, target scheme |
| Applicant & promoter | Incorporation date, registered + unit address, city, state, GST / Udyam / PAN (optional), promoter name, qualification, experience |
| Business | Sector (9 published), product / service description, installed capacity, capacity unit, premises ownership |
| Project cost (capex) | Land · Building & civil works · Plant & machinery · Furniture & fixtures · Preliminary & pre-operative · Contingency · Margin money for working capital |
| Means of finance | Promoter contribution (equity) · Term loan from bank · Capital subsidy · Unsecured loans |
| Term-loan terms | Amount · Interest rate % · Tenure (years) · Moratorium (months) · Repayment method (equal annual principal in Phase 1) |
| Revenue assumptions | Y1 turnover (or price-per-unit × capacity × utilisation), 5-year capacity-utilisation ramp, annual price growth % |
| Cost assumptions | Raw material as % of sales, direct labour, power & fuel, other manufacturing overheads, admin & selling, annual cost inflation % |
| Working-capital cycle | Debtor days, creditor days, raw-material inventory days, finished-goods inventory days |
| Tax & depreciation | Applicable tax rate, depreciation method (WDV default), per-asset-class rates |
2. Smart defaults
Every default below is editable in the intake. Defaults exist so a non-finance founder can complete the form without researching each rate; a CA should confirm them against the filing position before submission.
Tax rate by entity type (FY 2024-25)
| Entity | Default rate | Rationale |
|---|---|---|
| Private Limited Company | 25.17% | Section 115BAA — 22% + 10% surcharge + 4% cess. The dominant choice for new Pvt Ltd companies. |
| Proprietorship / Partnership / LLP | 30% | Conservative — banks prefer slightly conservative tax assumptions in projections. |
| New manufacturing (Sec 115BAB) | 17.16% | Concession for domestic manufacturing set up after Oct 2019. Edit per case. |
WDV depreciation rates by asset class
| Asset class | Default WDV rate | Treatment |
|---|---|---|
| Building & civil works | 10% | WDV; factory building rate. |
| Plant & machinery | 15% | WDV; general P&M rate. |
| Furniture & fixtures | 10% | WDV. |
| Preliminary & contingency | 20% SLM | Section 35D — amortised straight-line over 5 years. |
| Land | 0% | Land does not depreciate. |
Capacity utilisation ramp
Default Year-1 to Year-5 ramp: 50 → 65 → 75 → 85 → 90 %. Editable per project. Reflects typical greenfield manufacturing ramp; service / SaaS projects often want a steeper or smoother curve.
DSCR sector thresholds
| Sector class | DSCR threshold | Sectors |
|---|---|---|
| Manufacturing-like | ≥ 1.50 | Manufacturing, Agri-Foodtech, Food & Beverage, Healthcare |
| Services / trade | ≥ 1.25 | Tech / SaaS, Fintech, EdTech, Logistics, Retail / D2C |
3. Term-loan repayment formula
Phase 1 supports the equal annual principal method (the default in most PSU bank IBA formats). EMI is a Phase-2 add-on. Moratorium semantics: interest accrues during moratorium years; principal starts after.
principal_per_year = total_principal / (tenure_years − floor(moratorium_years))year y interest = opening_balance_y × interest_rateyear y principal = 0 if year y is within moratorium, else principal_per_yearyear y closing = opening_balance_y − year_y_principalFor y in 1..tenure: opening_balance_y = closing_balance_(y−1) (opening_balance_1 = total_principal)4. Five-year projections (P&L, BS, CF)
For each of years 1–5 the engine derives revenue, costs, depreciation, interest, tax, PAT, and a full balance sheet + cash flow.
Revenue
Y1 revenue = (price_per_unit × installed_capacity × Y1_utilisation%) OR Y1_turnover (explicit)Year y revenue = Y1_revenue × (utilisation_y / utilisation_Y1) × (1 + annual_price_growth)^(y−1)Costs
raw_material_y = revenue_y × (raw_material_pct_of_sales / 100)direct_labour_y = direct_labour × utilisation_y × (1 + cost_inflation)^(y−1) (scales with utilisation)power_fuel_y = power_fuel × utilisation_y × (1 + cost_inflation)^(y−1)other_mfg_overheads_y = other_mfg × (1 + cost_inflation)^(y−1) (fixed; inflation only)admin_selling_y = admin_selling × (1 + cost_inflation)^(y−1)total_variable_y = raw_material_y + direct_labour_y + power_fuel_ytotal_fixed_y = other_mfg_overheads_y + admin_selling_yP&L
gross_profit_y = revenue_y − total_variable_yEBITDA_y = gross_profit_y − total_fixed_ydepreciation_y = sum of WDV depreciation across asset classes (preliminary amortised SLM 5y)EBIT_y = EBITDA_y − depreciation_yinterest_y = interest from repayment schedule, year yPBT_y = EBIT_y − interest_ytax_y = max(0, PBT_y) × tax_ratePAT_y = PBT_y − tax_ycash_accrual_y = PAT_y + depreciation_y (drives DSCR + IRR)Working-capital figures (from the cycle)
debtors_y = revenue_y × debtor_days / 365raw_mat_inv_y = raw_material_y × inventory_days_RM / 365finished_goods_y = total_variable_y × inventory_days_FG / 365creditors_y = raw_material_y × creditor_days / 365net_WC_y = debtors_y + raw_mat_inv_y + finished_goods_y − creditors_yBalance sheet (Y0 setup + 5 year-ends)
Y0 fixed_assets_gross = land + building + P&M + furniture + preliminary + contingencyY0 cash = margin_money_for_WCY0 total_assets = Y0 fixed_assets_gross + Y0 cash (= Total Project Cost)Y0 total_L+E = promoter_equity + term_loan + subsidy + unsecured_loans (= Means of Finance)Year y net_fixed_assets = previous_net − depreciation_yYear y reserves = previous_reserves + PAT_yYear y term_loan = closing_balance_y (from repayment schedule)Year y current_assets = closing_cash_y + debtors_y + raw_mat_inv_y + finished_goods_yYear y current_liab = creditors_y + other_CL (other_CL = 0 in Phase 1)Cash flow (operating + investing + financing)
cash_from_ops_y = PAT_y + depreciation_y + interest_y − ΔWC_ycash_from_inv_y = −capex (Year 0 only; 0 in operating years)cash_from_fin_y = −principal_repayment_y − interest_payment_ynet_CF_y = cash_from_ops_y + cash_from_inv_y + cash_from_fin_yclosing_cash_y = opening_cash_y + net_CF_y5. Viability ratios
DSCR (year-by-year + weighted average)
DSCR_year y = (PAT_y + depreciation_y + interest_y) / (interest_y + principal_y)Average DSCR = Σ_y (PAT_y + Dep_y + Int_y) / Σ_y (Int_y + Principal_y)flagged if Average DSCR < threshold for sector (1.50 mfg / 1.25 services)Project IRR
cash_flow_series = [ −Total_Project_Cost, cash_accrual_1, cash_accrual_2, cash_accrual_3, cash_accrual_4, cash_accrual_5 + terminal_value ]terminal_value = Y5 net_fixed_assets + Y5 net_working_capital + Y5 cashIRR = discount rate r where Σ CF_i / (1+r)^i = 0 (bisection solver in [−99%, 1000%])Break-even (at full capacity)
full_capacity_sales = Y1_revenue / Y1_utilisation%full_capacity_variable = Y1_variable / Y1_utilisation%fixed = Y1 (other_mfg + admin_selling + depreciation + interest)contribution = full_capacity_sales − full_capacity_variableBEP_% capacity = fixed / contribution × 100BEP_₹ = fixed / (contribution / full_capacity_sales)flagged if BEP_% capacity > 75 (healthy band: 40–60%)Debt-equity
debt_equity = total_term_debt / (promoter_equity + reserves) (computed at project setup; reserves = 0)flagged if > 2.0 (some banks allow up to 3.0)Current ratio (Y1)
current_ratio = Y1 current_assets / Y1 current_liabilitiesflagged if < 1.33 (Tandon norm)TOL / TNW
TOL = term_loan + unsecured_loans + Y1 current_liabilitiesTNW = promoter_equity + reserves (no intangibles in Phase 1)flagged if TOL/TNW > 3.0Payback period
cumulative_y = Σ_(i=1..y) cash_accrual_ipayback = years to first y where cumulative_y ≥ Total Project Cost (with linear interpolation across the partial year)MPBF — Tandon Method I & II
computed at Y5 (peak operating year)CA = Y5 total current assetsOCL = Y5 current liabilities excluding bank borrowing (= total CL in Phase 1)Method I = 0.75 × (CA − OCL)Method II = 0.75 × CA − OCL (primary — what most PSU banks use)6. Reconciliation — the five non-negotiables
Before any PDF leaves the engine, the projection is checked against five non-negotiable invariants. If any check fails, the DPR is refused with the issue list — no half-formed report is ever released.
| # | Check | Rationale |
|---|---|---|
| 1 | Means of Finance total = Total Project Cost | Sources of funds must equal uses of funds. A mismatch is a unit / typo error. |
| 2 | Balance sheet balances every year (Assets = Liab + Equity) | The double-entry invariant. If it fails, the bookkeeping is broken. |
| 3 | Cash-flow closing cash ties to BS cash every year | The two statements must agree on cash — they're different views of the same number. |
| 4 | P&L depreciation = change in accumulated depreciation | Confirms the P&L expense matches the fixed-asset schedule. No hidden depreciation. |
| 5 | P&L interest = interest from term-loan repayment schedule | Confirms the P&L expense matches the actual term-loan schedule. No hidden interest. |
7. Scheme rules built in
PMEGP — Prime Minister's Employment Generation Programme
| Area | General | Special category |
|---|---|---|
| Urban | 15% subsidy | 25% subsidy |
| Rural | 25% subsidy | 35% subsidy |
Project-cost cap. Manufacturing units: ₹50 Lakh. Services / trading units: ₹20 Lakh. Beyond the cap PMEGP cannot be the sole instrument.
First-generation entrepreneur. The promoter must not already operate another PMEGP-financed unit. The DPR surfaces this as a checklist item to confirm at submission.
Special category. SC / ST / OBC / Minorities / Women / Physically handicapped / Ex-servicemen / NER / Hilly areas — proof of category required at submission.
Mudra — Shishu / Kishor / Tarun
| Tier | Loan band |
|---|---|
| Shishu | up to ₹50,000 |
| Kishor | ₹50,000 – ₹5 Lakh |
| Tarun | ₹5 Lakh – ₹10 Lakh |
Mudra is collateral-free term loan — there is no subsidy component; the credit-guarantee fee is borne by the Government of India.
Stand-Up India
Composite loans of ₹10 L – ₹1 Cr to SC / ST and women entrepreneurs setting up greenfield enterprises. At least one promoter must belong to SC / ST or be a woman, with ownership ≥ 51% (for single founders). Promoter margin: 25% of project cost. CGTMSE guarantee cover available.
CGTMSE — Credit Guarantee for MSEs
CGTMSE provides a credit-guarantee cover (up to 85%) for collateral-free loans to Micro & Small Enterprises from member lending institutions. No subsidy is given to the borrower; the cover protects the lender. Guarantee fee is borne by the borrower.
8. Sources & references
For the scoring engine's methodology (24-rule consistency checker, 4-dimension scoring, sector-conditional weights, consistency rules table), see /methodology. To start generating a DPR, go to /dpr/intake.