Cost and Return of Financial Analysis on Indigo Dyed Fabric Weaving of Community Enterprise at Sakon Nakhon Province

Abstract

Background and Aims: A financial cost-benefit analysis is important because it allows organizations to compare the potential financial returns of a project to its costs, resulting in more informed decision-making and resource allocation. It also determines whether the benefits of an investment outweigh the costs, which helps guide strategic planning and maximize profitability. Thus, this research aimed to study the cost of weaving indigo-dyed fabrics. Study the rewards of weaving indigo-dyed fabrics. An analysis of costs and returns from weaving indigo-dyed fabrics of community enterprises in Sakon Nakhon Province.

Methodology: The research method was conducted using in-depth interviews. Indigo-dyed Weaving Community Enterprise Group in Sakon Nakhon Province A total of 44 groups, with key informants being the group chairman or the vice president of the community enterprise group. For data analysis, results are shown with frequency distribution, percentage, cost, return, and financial ratio.

Results: Investment in tools and equipment totaled 100,685 baht. The total cost of weaving indigo-dyed fabrics was 150.74 baht per meter, which consisted of: The cost of raw materials was 64 baht, the labor cost was 68 baht, the variable production cost was 0.93 baht, the production cost was fixed at 4.48 baht, and the selling and administrative expenses were 13.33 baht. Average indigo dyed fabric per month found that the average monthly sales of indigo-dyed woven fabrics were 27,500 baht per month, with a total cost of 22,122.375 baht per month, with a profit of 5,377.625 baht per month, Net Profit Margin was 19.56%. The Return on Investment (ROI) was equal to 5.34%  Net Present Value (NPV) equals 1,255, 290.48 baht. The Internal Rate of Return (IRR) is 46.96%.

Conclusion: The business operation of the indigo weaving community enterprise in Sakon Nakhon Province of the entrepreneurs has a higher internal rate of return than the interest rate of the Government Savings Bank's loan type, community enterprise loan, indicating that the investment yields more profit.