Chapter V

Financial Aspect

This chapter talks about the Cost of the Project, Source of Investment,
Financial Assumptions, Balance Sheet, Cash Flow Statement, Income Statements,
Financial Analysis and Interpretation, Return on investment and Payback Period

ActivEscape
Project Cost

Land 2,101,800.00 2,101,800.00

Building 1,268,200.00 1,268,200.00
Machine, Tools, and Equpment 637,785.00 637,785.00
Business permit and licenses 13,730.00 13,730.00

Operational, Selling, and Administrative Expenses

Utilities 710,058.84 177,514.71
Salaries and Wages 1,752,000.00 438,000.00
13th month 146,000.00 146,000.00
SSS, Philhealth, Pag-ibig 60,988.00 15,247.00
Total 6,930,561.84 2,756,476.71
Add Contingency (10%) 693,056.18 275,647.67
Total Project Cost 7,623,618.02 3,032,124.38
Number of Partners 3.00
Share by Each Partner 1,010,708.13

Source of Investment

The source of investment will come from the proponents own money

Financial Assumptions

The following assumptioms will serve as the basis for the preparation of financial statements:

1 Selling price will increase by 3.74% based on inflation rate.

2 Straight line method of depreciation shall be used
3 Cost are shared 60% factory and 40% office
4 Salary will increase by 3.74%
5 Profits and losses will be divided equally among the partners.
 ActivEscape
Schedule for Property, Plant, and Equipment

Building 1,268,200.00 Life

25 Years

1 2 3
Cost 1,268,200.00 1,268,200.00 1,268,200.00
Accumulated Depreciation 50,728.00 101,456.00 152,184.00
Net Book Value 1,217,472.00 1,166,744.00 1,116,016.00

Allocation of Depreciation
Factory 30,436.80 30,436.80 30,436.80
Office 20,291.20 20,291.20 20,291.20

Machine, Tools, and Equpment 637,785.00 Life

Vat Rate 1.12 5 Years
Machine Tools and Equipment 569,450.89

1 2 3
Cost 569,450.89 569,450.89 569,450.89
Accumulated Depreciation 113,890.18 227,780.36 341,670.54
Net Book Value 455,560.71 341,670.54 227,780.36

Office Furniture and Fixtures 45,164.50 Life

Vat Rate 1.12 10 Years
Transpor Equipment (Net) 40,325.45

Cost 40,325.45 40,325.45 40,325.45

Accumulated Depreciation 4,032.54 8,065.09 12,097.63
Net Book Value 36,292.90 32,260.36 28,227.81
Depreciation
50,728.00

4 5
1,268,200.00 1,268,200.00
202,912.00 253,640.00
1,065,288.00 1,014,560.00

30,436.80 30,436.80
20,291.20 20,291.20

Depreciation
113,890.18

4 5
569,450.89 569,450.89
455,560.71 569,450.89
113,890.18 -

Depreciation
4,032.54

40,325.45 40,325.45
16,130.18 20,162.72
24,195.27 20,162.72
 1 2 3
ActivEscape
Schedule for VAT

Sales 5,318,200.00 6,594,452.79 8,180,540.82

Sales (Net) 4,748,392.86 5,887,904.28 7,304,054.30
Output Tax 569,807.14 706,548.51 876,486.52

Machine, Tools, and Equpment 637,785.00

Machine Tools and Equpment (Net) 569,450.89
Input Tax 68,334.11

Marketing/Advertising Expense 240,000.00 248,976.00 258,287.70

Marketing/Advertising Expense (Net) 214,285.71 222,300.00 230,614.02
Input Tax 25,714.29 26,676.00 27,673.68

1 2 3
Output Tax 569,807.14 706,548.51 876,486.52
Input Tax 94,048.39 26,676.00 27,673.68
Vat Payable 475,758.75 679,872.51 848,812.83

Payment 436,112.19 662,863.03 834,734.47

Payable 39,646.56 56,656.04 70,734.40
 4 5

10,152,415.42 12,603,851.72
9,064,656.62 11,253,439.03
1,087,758.79 1,350,412.68

267,947.66 277,968.91
239,238.98 248,186.52
28,708.68 29,782.38

4 5
1,087,758.79 1,350,412.68
28,708.68 29,782.38
1,059,050.12 1,320,630.30

1,041,530.34 1,298,831.95
88,254.18 110,052.53
 ActivEscape
Revenue Schedule

1 2 3
Annual Service by Room 7,905 9,486 11,383
Service Fee 400.00 414.96 430.48
Total Sales in Peso 3,162,000.00 3,936,310.56 4,900,148.19
Vat rate 1.12 1.12 1.12
Sales (Exluding output tax) 2,823,214.29 3,514,563.00 4,375,132.32

1 2 3
Annual Service in Lobby 39,524.00 47,429.00 56,915.00
Selling Price 50.00 51.87 53.81
Total Sales in Peso 1,976,200.00 2,460,142.23 3,062,592.62
Vat rate 1.12 1.12 1.12
Sales (Exluding output tax) 1,764,464.29 2,196,555.56 2,734,457.70

1 2 3
Rent Income 180,000.00 198,000.00 217,800.00
Vat rate 1.12 1.12 1.12
Sales (Exluding output tax) 160,714.29 176,785.71 194,464.29

Total Net Sales 4,748,392.86 5,887,904.28 7,304,054.30

Total Gross Sales 5,318,200.00 6,594,452.79 8,180,540.82
 4 5
13,660 16,392
446.58 463.28
6,100,275.12 7,594,110.49
1.12 1.12
5,446,674.21 6,780,455.79

4 5
68,298.00 81,958.00
55.82 57.91
3,812,560.30 4,746,203.23
1.12 1.12
3,404,071.70 4,237,681.46

4 5
239,580.00 263,538.00
1.12 1.12
213,910.71 235,301.79

9,064,656.62 11,253,439.03
10,152,415.42 12,603,851.72
 ActivEscape
Schedule of Cost of Goods Sold

1 2 3 4
Direct Materials Beg - - -
Add: Purchases - - - -
Total Materials Available for Use - - - -
Less: Direct Materials Ending - - - -
Direct Materials Used - - - -
Direct Labor - - - -
Overhead 854,385.82 880,942.02 908,491.42 937,071.17
Total Manufacturing Cost 854,385.82 880,942.02 908,491.42 937,071.17
Finished Goods Beginning - - -
Total Goods Available for Sale 854,385.82 880,942.02 908,491.42 937,071.17
Finished Goods Ending - - - -
Cost of Goods Sold 854,385.82 880,942.02 908,491.42 937,071.17

Production in units
1 2 3 4
Sales in Units 7,905 9,486 11,383 13,660
Ending Inventory
Total units available 7,905 9,486 11,383 13,660
Beginning - - -
Total Production Required 7,905 9,486 11,383 13,660

Total manufacturing Costs 854,385.82 880,942.02 908,491.42 937,071.17

Total Production Required 7,905.00 9,486.00 11,383.00 13,660.00
Unit Cost 108.08 92.87 79.81 68.60
 5
-
-
-
-
-
-
966,719.80 Do Not Print
966,719.80
-
966,719.80
-
966,719.80

5
16,392

16,392
-
16,392

966,719.80
16,392.00
58.98
 ActivEscape
Schedule for Cost of Service

1 2 3 4
Utilities 710,058.84 736,615.04 764,164.44 792,744.19
Depreciation - Building 30,436.80 30,436.80 30,436.80 30,436.80
Depreciation - Equipment 113,890.18 113,890.18 113,890.18 113,890.18
Total 854,385.82 880,942.02 908,491.42 937,071.17
 5
822,392.83
30,436.80
113,890.18
966,719.80
 ActivEscape
Income Statement

1.00 2.00 3.00 4.00

Sales 4,748,392.86 5,887,904.28 7,304,054.30 9,064,656.62
Cost of Service 854,385.82 880,942.02 908,491.42 937,071.17
Gross Profit 3,894,007.04 5,006,962.26 6,395,562.88 8,127,585.45

Operating Expenses
Business Permit & Licenses 13,730.00 14,243.50 14,776.21 15,328.84
Salaries and Wages 1,752,000.00 1,817,524.80 1,885,500.23 1,956,017.94
13th Month Pay 146,000.00 151,460.40 157,125.02 163,001.49
Employee Benefits 60,988.00 63,268.95 65,635.21 68,089.97
Advertising Expense 214,285.71 222,300.00 230,614.02 239,238.98
Depreciation Expense 24,323.74 24,323.74 24,323.74 24,323.74
Total 2,211,327.46 2,293,121.40 2,377,974.43 2,466,000.97

Net Income Before Tax 1,682,679.58 2,713,840.86 4,017,588.45 5,661,584.49

Tax 504,803.87 814,152.26 1,205,276.53 1,698,475.35
Net Income After Tax 1,177,875.71 1,899,688.60 2,812,311.91 3,963,109.14

Payment 378,602.91 736,815.16 1,107,495.47 1,575,175.64

Payable 126,200.97 203,538.06 301,319.13 424,618.84
 5.00
11,253,439.03
966,719.80
10,286,719.23

15,902.14
2,029,173.01
169,097.75
70,636.53
248,186.52
24,323.74
2,557,319.69

7,729,399.54
2,318,819.86
5,410,579.68

2,163,733.73
579,704.97
 ActivEscape
Statement of Financial Position

Year 1 Year 2 Year 3 Year 4

Current Assets
Cash 242,018.98 1,755,899.11 3,920,874.56 6,911,680.09
Inventory - - - -
Total Current Assets 242,018.98 1,755,899.11 3,920,874.56 6,911,680.09

Non Current Assets

Land 2,101,800.00 2,101,800.00 2,101,800.00 2,101,800.00
Building 1,268,200.00 1,268,200.00 1,268,200.00 1,268,200.00
Accumulated Depreciation (168,650.72) (337,301.45) (505,952.17) (674,602.89)
Total Non Current Assets 3,770,800.17 3,602,149.45 3,433,498.72 3,264,848.00

Total Assets 4,012,819.15 5,358,048.56 7,354,373.28 10,176,528.09

Liabilities
Vat Payable 39,646.56 56,656.04 70,734.40 88,254.18
Income Tax 126,200.97 203,538.06 301,319.13 424,618.84
Total 165,847.53 260,194.11 372,053.54 512,873.01

Equity 3,846,971.62 5,097,854.45 6,982,319.74 9,663,655.08

Total Liabilities & Equity 4,012,819.15 5,358,048.56 7,354,373.28 10,176,528.09

- - - -
Year 5

10,940,960.51
-
10,940,960.51

2,101,800.00
1,268,200.00
(843,253.62)
3,096,197.28

14,037,157.78

110,052.53
579,704.97
689,757.49

13,347,400.29

14,037,157.78

-
 ActivEscape
Cash Flow Statement

YEAR
1 2 3
Cash Receipts:
Initial Investment 3,032,124.38
Collections 5,318,200.00 6,594,452.79 8,180,540.82
Total Receipts 8,350,324.38 6,594,452.79 8,180,540.82

Cash Disbursements:
Pre Operating Expense 13,730.00 14,243.50 14,776.21
Utilities Expense 710,058.84 736,615.04 764,164.44
Marketing expense 240,000.00 248,976.00 258,287.70
Salaries Expense 1,752,000.00 1,817,524.80 1,885,500.23
13th Month Pay 146,000.00 151,460.40 157,125.02
Employee Benefits 60,988.00 63,268.95 65,635.21
Land 2,101,800.00
Building 1,268,200.00
Equipment 637,785.00
Income Tax 378,602.91 736,815.16 1,107,495.47
Vat 436,112.19 662,863.03 834,734.47
Total Disbursements 7,745,276.93 4,431,766.89 5,087,718.75

Net Increase (Decrease) in Cash 605,047.45 2,162,685.90 3,092,822.07

Withdrawal 363,028.47 648,805.77 927,846.62
Net 242,018.98 1,513,880.13 2,164,975.45
Cash balance, beginning 242,018.98 1,755,899.11
Cash balance, ending 242,018.98 1,755,899.11 3,920,874.56
 4 5

10,152,415.42 12,603,851.72
10,152,415.42 12,603,851.72

15,328.84 15,902.14
792,744.19 822,392.83
267,947.66 277,968.91
1,956,017.94 2,029,173.01
163,001.49 169,097.75
68,089.97 70,636.53

1,575,175.64 2,163,733.73
1,041,530.34 1,298,831.95
5,879,836.08 6,847,736.84

4,272,579.34 5,756,114.88
1,281,773.80 1,726,834.46
2,990,805.54 4,029,280.41
3,920,874.56 6,911,680.09
6,911,680.09 10,940,960.51
Current Ratio

Year Current Asset Current Liabilities Ratio

1 242,018.98 165,847.53 1.46
2 1,755,899.11 260,194.11 6.75
3 3,920,874.56 372,053.54 10.54
4 6,911,680.09 512,873.01 13.48
5 10,940,960.51 689,757.49 15.86

Interpretation:

For year 1, there is P1.46 available assets to pay every P1 liability while in Year 2, there
It can be concluded that the company through the years is liquid.

Return on Sales

Year Income before tax Net Sales Ratio

1 1,682,679.58 4,748,392.86 0.35
2 2,713,840.86 5,887,904.28 0.46
3 4,017,588.45 9,064,656.62 0.44
4 5,661,584.49 9,064,656.62 0.62
5 7,729,399.54 11,253,439.03 0.69

Interpretation:

As shown in the table above, income before tax comprises 35% of total sales which me
to the realization of income. This means that for every P1 sales, there is a P0.35 that w
and operating expenses. The percentage of income to sakes continues to increase year

Return on equity

Year Income before tax Equity Ratio

1 1,682,679.58 3,846,971.62 0.44
2 2,713,840.86 5,097,854.45 0.53
3 4,017,588.45 6,982,319.74 0.58
4 5,661,584.49 9,663,655.08 0.59
5 7,729,399.54 13,347,400.29 0.58

Interpretation:

The return on equity shows how much income can be realized for every pero investme
will give a return of 44% income.
Payback

Total Investment 3,032,124.38

Year Cash inflow Cash outflow Net Cash Inflow

1 8,350,324.38 7,745,276.93 605,047.45
2 6,594,452.79 4,431,766.89 2,162,685.90
3 8,180,540.82 5,087,718.75 3,092,822.07
4 10,152,415.42 5,879,836.08 4,272,579.34
5 12,603,851.72 6,847,736.84 5,756,114.88
-
Interpretation:

Of the given investment, it will take 2 year and 1 month to recover the said investment
Investment To Be Recovered Year
2,427,076.93 1
264,391.03 1
264,391.03 1 month

s.
 ActivEscape
Statement of Changes in Equity

Year 1 Libang Capital Morada Capital Moncayo Capital

Beginning Capital 1,010,708.13 1,010,708.13 1,010,708.13
Additional Investment
Share in Profit/Loss 392,625.24 392,625.24 392,625.24
Total 1,403,333.36 1,403,333.36 1,403,333.36
Withdrawal 121,009.49 121,009.49 121,009.49
Ending Capital 1,282,323.87 1,282,323.87 1,282,323.87

Year 2 Libang Capital Morada Capital Moncayo Capital

Beginning Capital 1,282,323.87 1,282,323.87 1,282,323.87
Additional Investment
Share in Profit/Loss 633,229.53 633,229.53 633,229.53
Total 1,915,553.41 1,915,553.41 1,915,553.41
Withdrawal 216,268.59 216,268.59 216,268.59
Ending Capital 1,699,284.82 1,699,284.82 1,699,284.82

Year 3 Libang Capital Morada Capital Moncayo Capital

Beginning Capital 1,699,284.82 1,699,284.82 1,699,284.82
Additional Investment
Share in Profit/Loss 937,437.30 937,437.30 937,437.30
Total 2,636,722.12 2,636,722.12 2,636,722.12
Withdrawal 309,282.21 309,282.21 309,282.21
Ending Capital 2,327,439.91 2,327,439.91 2,327,439.91

Year 4 Libang Capital Morada Capital Moncayo Capital

Beginning Capital 2,327,439.91 2,327,439.91 2,327,439.91
Additional Investment
Share in Profit/Loss 1,321,036.38 1,321,036.38 1,321,036.38
Total 3,648,476.29 3,648,476.29 3,648,476.29
Withdrawal 427,257.93 427,257.93 427,257.93
Ending Capital 3,221,218.36 3,221,218.36 3,221,218.36

Year 5 Libang Capital Morada Capital Moncayo Capital

Beginning Capital 3,221,218.36 3,221,218.36 3,221,218.36
Additional Investment
Share in Profit/Loss 1,803,526.56 1,803,526.56 1,803,526.56
Total 5,024,744.92 5,024,744.92 5,024,744.92
Withdrawal 575,611.49 575,611.49 575,611.49
Ending Capital 4,449,133.43 4,449,133.43 4,449,133.43
Total
3,032,124.38

1,177,875.71
4,210,000.09
363,028.47
3,846,971.62

Total
3,846,971.62

1,899,688.60
5,746,660.22
648,805.77
5,097,854.45

Total
5,097,854.45

2,812,311.91
7,910,166.36
927,846.62
6,982,319.74

Total
6,982,319.74

3,963,109.14
10,945,428.88
1,281,773.80
9,663,655.08

Total
9,663,655.08

5,410,579.68
15,074,234.76
1,726,834.46
13,347,400.29