CHAPTER V
Financial Aspect
The Financial Aspect determines the profitability of the proposed
Business. It includes the Income Statement, Projected Sales, Cost of Sales, and
Schedule of Expenses. The Financial Aspect also helps the Proponents in
planning how to maximize the Capital and achieving the Desired Net Income.
Objectives:
To compute for the Profitability of the Business.
To compute for the Volume of Goods to be Purchased and Sold.
To compute for the Projected Cost of the Business.
To compute for and understand the overall performance of the Business
through Financial Statements.
Assumptions:
1. All Sales and Purchases will be made on Cash Basis.
2. Expenses such as Salary Expense, PhilHealth, Office Supplies and
Transportation Expense remain constant for three (3) years.
3. Expenses such as Utilities and Permits will increase by 2% yearly.
4. The business will use Calendar Year starting March 1, 2020 and ending
December 31, 2020.
5. The projected annual growth rate annually is 40% percent.
6. The Company is under R.A. no. 9178 of 2002 section 3a, also known as
the Barangay Micro Business Enterprise (BMBE) Law. The Act refers to
any business entity or Enterprise engaged in the Production, Processing,
or Manufacturing of Products or Commodities, including Agro-Processing,
trading and services, whose total assets including those arising from loan
but exclusive of the land on which the particular business entity’s office,
plant and equipment are situated, shall not be more than three million
pesos (Php 3,000,000.00). The business is entitled to the benefits and
incentives of this act. The business is subject to 3% percentage tax based
on Net Sales.
Class, these tables are sample only and may not be accurate.
Project Cost Requirement
Project Cost Requirement
Fixed Assets
Tools and Equipment 50,000
Furniture and Fixtures 10,000
Total Fixed Capital Cost 60,000
Working Capital (3 months)
Supplies Expense 9,000
Rent Expense 15,000
Purchases (Raw Materials/Direct Costs) 45,000
Salaries Expense 60,000
Philhealth, SSS, PAG IBIG 10,000
Utilities Expense 6,000
Total Working Capital 145,000
Pre Operating Activities
Permits and Licenses 3,000
Total Pre Operating Cost 3,000
Add: Contingency Funds 10,000
Total Project Cost Requirement 218,000
Projected Annual Revenue
Monthl Selling Projected Monthy Projected Annual
y Price Revenue Revenue
T-shirt 150 ₱600.00 ₱90,000.00 ₱1,080,000.00
If you have variety,follow the sample below.
Monthl Selling Projected Monthy Projected Annual
y Price Revenue Revenue
T-shirt (Plain) 50 ₱500.00 ₱25,000.00 ₱300,000.00
T-shirt
(Colored) 50 ₱600.00 ₱30,000.00 ₱360,000.00
TOTAL ₱660,000.00
Cost of Sales
Monthl Cost of Sales (per Cost of Sales Projected Annual Cost of
y unit) (Monthly) Sales
T-shirt 150 ₱100.00 ₱15,000.00 ₱180,000.00
Or the following sample if there are varieties.
Monthl Cost of Sales (per Cost of Sales Projected Annual Cost of
y unit) (Monthly) Sales
T-shirt (Plain) 50 ₱100.00 ₱5,000.00 ₱60,000.00
T-shirt
(Colored) 50 ₱100.00 ₱5,000.00 ₱60,000.00
TOTAL ₱120,000.00
Schedule of Expenses
Utilities Expense
Utilities Monthly Yearly 2020 2021 2022
Rent ₱500.00 ₱6,000.00 ₱5,000.00 ₱6,120.00 ₱6,242.40
Water and ₱1,000.0 ₱12,000.0 ₱10,000.0 ₱12,240.0 ₱12,484.8
Electricity 0 0 0 0 0
₱1,500.0 ₱18,000.0 ₱15,000.0 ₱18,360.0 ₱18,727.2
Total
0 0 0 0 0
Note: Utilities increase 2% annually.
Depreciation Expense
Cost per Quantit Total Depreciatio
Item Source
Unit y Cost n
Scissors ₱10 1 pc. ₱10 NOVO ₱3
[Link]
Chair ₱80 2 pcs. ₱160 ₱53
m
[Link]
Table ₱200 5 pcs. ₱1,000 ₱333
m
Calculator ₱50 1 pc. ₱50 NOVO ₱17
Weighing
scale
₱3,629 1 pc. ₱3,629 Lazada ₱1,210
Total ₱3,969 ₱4,849 ₱1,616
Office Supplies Expense
Office Monthl
Yearly
Supplies y
Ball pen 25.00 300.00
Logbook 70.00 840.00
Receipt Pad 15.00 180.00
Plastic straw
300.00 300.00
rope
Total 410.00 4, 920.00
Permits and Licenses
2020 2021 2022
Permits and other
₱1,500 ₱1,530 ₱1,561
fees
Note: Permits increase by 2% annually.
Transportation Expense
March -
2021 2022
December
Truck rented 35, 000.00 42, 000.00 42, 000.00
Allowance Expense
Net
Salary PhilHealth Allowanc
e
Allowance Daily Monthly EE ER
100.0
General Manager 2,000.00 100.00 100.00 1,900.00
0
100.0
Financial Personnel 2,000.00 100.00 100.00 1,900.00
0
100.0
Purchasing Personnel 2,000.00 100.00 100.00 1,900.00
0
100.0
Operational Personnel 2,000.00 100.00 100.00 1,900.00
0
400.0
Total 6,000.00 400.00 400.00 7,600.00
0
Statement of Income
2025 (6
months) 2026 2027
111240 114577
Projected Revenue 540000 0 2
Cost of Sales 90000 181800 183618
Gross Income 450000 930600 962154
Less: Operating
Expenses
Supplies Expense 18000 36360 36723.6
Rent Expense 30000 60600 61206
Salaries Expense 120000 120000 120000
Philhealth, SSS, PAG
IBIG 30,000 30,000 30,000
Utilities Expense 18,000 36360 36723.6
Depreciation Expense 3,500 7000 7000
Permits and Licenses 3,000 3,000 3,000
667500.
Operating Income 227500 637280 8
Less: Taxes
133500.
Income Tax 45500 127456 2
28864.6
Business Tax 13500 27918 2
Net Income 168500 481906 505136
Make sure the assumptions are declared on the first page.