FINANCIAL STUDY

I. INTRODUCTION

Finance is the lifeblood of every business firms and is vital in

reaching the company’s goals. Finance is needed for the operation, financing and

investment transaction of the company.

Financial study is an assessment of the financial aspect. It projects

how much start-up capital is needed, sources of capital, returns on investment, and

other financial considerations. It looks at how much cash is needed, where it will

come from and how it will be spent. It is also where the information gathered and

processed in accounting is communicated to users. It is the basis of proponents in

evaluating whether the proposed business will be profitable or not from the

information about the overall projected results of the company operation and its

financial ratio computation.

The project may be feasible and marketable but without enough

money to sustain the business, the project will only be a myth. This aspect is

important in the study since it will greatly determine the possibility of putting up of

the projected profitability of the study. The company will be financed by the

investments of the six partners.

The Monetary events are then translated into a feasibility study

that is based on assumptions gathered data. The feasibility is the main output of

this aspect which contains information regardless the financial position, Financial

Performance and statement of cash flows of the project which can be used by users

for decision making. Details regarding the monetary information accumulated and
processed assess the projects liquidity, solvency, financial structures and capability

of adoption.

This aspect shall contain the major assumption, accounting policies

and estimates, projected costs and revenues, and projected financial statements

can be found. It also contains the monetary considerations in the proposed business

and matching principle which shows the relationship of cost with respect to the

profit generated in conducting the business. This aspect must be carefully based on

realistic data and assumption to arrive at nearest actual results.

II. MAJOR ASSUMPTIONS

In formulating financial projections, assumptions serve as the

foundation for estimating the future expenditures and revenues of the business as

accurately as possible. The proponents also use approximation in computing the

projected financial statements such as statement of financial position,

comprehensive income, changes in equity and cash flows. This statement is useful

in determining the financial position and performance of the business in a given

period of time.

Fruittee Coffee will operate under calendar year and operation will

start at 9am and it will end at 6pm.

1. The estimated amount to be reflected in the financial statements would be

expressed in Philippine Currency (Php).

2. The Financial Sources in putting up and operating the business would be coming

from the partner’s capital contribution.

3. Projected sales are computed by multiplying the normal capacity (in units) by the

selling price of the item.

4. The Advertising expense for the first year is at the highest level since it must be

massive to attract customer. On the second and third year the amount for

advertisement shall be decrease. However during the fourth and fifth year, it was

assumed that the business had already gained familiarity since there are only few

coffee shops in the area.

5. There are six capitalists partners and would contribute Php 250,000.00 each. All

the profit or loss shall be equally shared by the partners.

6. The purchase for the food supplies or ingredients will be every 2-3 days. While for

the store supplies (cups, straw,etc.) will be every month.

Current Assets

Cash and other resources that are expected to be converted into

cash or to be used up within one year of the balance sheet date.

a. Cash

This shall compose of cash in hand and cash in bank. The beginning

balance was computed by deducting the pre-operating expenses from the total cash

contribution of the partners. Cash on hand are the monies that are within the office

of the business and the cash in bank includes the money that is in a time deposit for

future and fortuitous vents.

b. Inventory
 The method of inventory valuation that will be used is First-in First –

out (FIFO) method.

c. Store Supplies

The estimated cost for this is not more than Php 15,000.00

Non-Current Assets

A noncurrent asset is an asset that is not likely to turn to

unrestricted cash within one year of the balance sheet date.

a. Machinery and Equipment

The machineries and equipment used in production will be

depreciated over its estimated useful life with no residual value using the straight

line method.

b. Furniture and Fixtures

The Furniture and Fixtures shall be depreciated over its useful life

with no residual value using the straight line method.

Current Liablities

A current liability is an obligation that is payable within one year.

 The current liabilities include short term obligations like salaries

payable, withholding taxes, Phil Health payable, HDMF, SSS payable, income tax

payable and VAT payable. Purchases will be paid in cash immediately upon the

arrival.

Partner’s Equity

Equity is the residual interest in the assets of the entity after

deducting all the liabilities

a. Capital Contribution

Each partner will contribute Php 250,000.00 with a total of Php

1,500,000.00 for putting up and operating the business.

b. Net Income

The profit or loss of the partners will be shared equally. Hence, the

net income will be equally distributed to the partners.

All revenues will be based on cash basis of accounting. The principal

source of business revenue will be those generated from the selling of Fruittee

Coffee.

d. Drawing
 According to the Articles of Partnership, the drawings of each

partner must not exceed 75% of each initial contributed capital.

Expenses

These are decreases in assets or increases in liabilities arising from

business operations during an accounting period that result to the decrease in

owner’s equity.

It includes all the expenses related to the services and those are the

ff:

a. Salaries and Wages

All of the employees will receive salary in accordance with their

minimum wage rate by the government. Salaries shall be paid every 15 th and 30th

day of the month.

The partners of the business will operate the business and will

manage the day-to-day operation of the business. Partners will receive salaries

based on the agreements of the partners.

b. Taxes and Licenses

This includes local business taxes and real property taxes to be paid

in accordance with the requirement set by the laws. During the operation period of

the business, expenses on Taxes and Licences will cover the cost of renewing the

business permits annually.

c. Utilities Expense

The Utilities Expense will be based on the amount used during an

accounting period, and is included as part of operating expenses in the income

statement of the business.

d. Advertising Expense

The business would advertise the product through radio and

newspaper, flyers, free taste, Facebook page and through Word of Mouth which will

all be accounted for the first year.

e. Rent expense

The cost incurred by the business to utilize property. Business can

take rent expenses as a tax deduction, provided that the property is used for

business purposes, the cost is reasonable, and no equity or ownership in the

property is accumulated from the rental payments. Property taxes paid on the rental

property can also be deducted as rent expense.

PROJECT COST
Pre-Operating Cost

Expenses Amount
Advertising Expense 9,000.00
Organizational Cost 8,400.00
Taxes & Licenses 1,000.00
Total Pre-Operating
Cost 18,400.00

BEGINNING FINANCIAL STATEMENTS

Statement of Comprehensive Income

FRUITTEE COFFEE
Statement of Comprehensive Income
For the year ended December 31, 2018
Sales
Less: Cost of Sales
Rent Expense
Advertising Expense 9,000.00
Salaries & Wages
PhilHealth
HDMF
SSS
13th Month Pay
Professional fee
Organizational Cost 8,400.00
Taxes & Licenses 1,000.00
Miscellaneous Expense
Depreciation Expense
Utilities Expense
Maintenance Tools
Kitchenwares
Total Expenses 18,400.00
Income before Tax
Income Tax Expense
Net Income after
Tax (18,400.00)
Statement Cash Flows
 FRUITTEE COFFEE
Projected Statement Cash Flows
As of the year ending December 31, 2018
Operating Activities
(18,4
Net Income (Loss) 00.00)
Depreciation
Net Cash provided by (18,4
Operating 00.00)
Investing Activities
67,80
Manufacturing Equipment 0.00
Net Cash provided by (67,8
Investing 00.00)
Financing Activities
Initial Investment 1,500,000.00

Drawings
Net Cash provided by
1,500,000.00
Financing
Increase in Cash 1,413,800.00

Cash Balance, beginning

Cash Balance, end 1,413,800.00

Statement of Financial Position

FRUITTEE COFFEE
Projected Statement of Financial Position
As of the year ending December 31, 2018
ASSETS
Current Assets
1,412,05
Cash 0.00
1,412,05
Total CA 0.00

Non-Current Assets
Manufacturing 67,80
Equipment 0.00
67,80
Total NCA 0.00
1,479,85
TOTAL ASSETS 0.00
LIABILITIES
Total Liabilities
PARTNER'S EQUITY
Angel, Capital 246,64
 1.67
246,64
Bayangan, Capital 1.67
246,64
Donato, Capital 1.67
246,64
Linggon, Capital 1.67
246,64
Macaraeg, Capital 1.67
246,64
Mangaoang, Capital 1.67
1,479,85
Total Equity 0.02
TOTAL LIABILITIES & 1,479,85
EQUITY 0.00

INITIAL WORKING CAPITAL

Current Assets 1412050

Less: Current Liabilities -
Initial Working Capital 1412050

SOURCES OF FINANCING THE PROJECT

The partners of the project are the people responsible in providing

the funds for the business.

Partner’s Name Contribution

Angel, Rayca Php 250,000.00
Bayangan, Rustom 250,000.00
Donato, Jaybriel Joy 250,000.00
Linggon, Darynn 250,000.00
Macaraeg, Jessica 250,000.00
Mangaoang, Jenny 250,000.00
TOTAL PHP 1,500,000.00
PRO-FORMA FINANCIAL STATEMENTS

Projected Statement of Comprehensive Income

FRUITTEE COFFEE
Statement of Comprehensive Income
For the Year ended December 31, 2019 - 2023
Pre-Op
Note 2019 2020 2021 2022 2023
2018
2,516,184.0
2,805,079.20 3,093,974.40 3,425,737.92 3,800,369.76
Sales 0
1,380,230.6
1,415,134.16 1,451,168.40 1,486,258.29 1,526,840.30
Less: Cost of Sales 4
1,135,953. 2,273,529.4
1,389,945.04 1,642,806.00 1,939,479.63
Gross Income 36 6
Less:
Operating Expenses
Rent Expense 144,000.00 144,000.00 144,000.00 144,000.00 144,000.00

Advertising Expense 9,000.00 9,000.00 9,000.00 9,000.00 9,000.00 9,000.00

Salaries & Wages 216,240.00 216,240.00 216,240.00 216,240.00 216,240.00

PhilHealth 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00

HDMF 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00

SSS 16,152.00 16,152.00 16,152.00 16,152.00 16,152.00

13th Month Pay 23,055.00 23,055.00 23,055.00 23,055.00 23,055.00

Professional fee 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00

Organizational Cost 8,400.00 8,400.00 8,400.00 8,400.00 8,400.00 8,400.00

Taxes & Licenses 2,750.00 3,250.00 4,750.00 3,250.00 4,750.00 3,250.00

Miscellaneous Expense 495.00 495.00 495.00 495.00 495.00

Depreciation Expense 11,965.71 11,965.71 11,965.71 11,965.71 11,965.71

Utilities Expense 25,200.00 25,200.00 25,200.00 25,200.00 25,200.00

Maintenance Tools 2,848.50 3,133.35 3,161.84 3,164.68 3,164.97

Kitchenwares 2,304.00 2,534.40 2,557.44 2,559.74 2,559.97
Total Expenses 20,150.00 524,957.71 526,457.71 524,957.71 526,457.71 524,957.71

Income before Tax 610,995.64 863,487.33 1,117,848.29 1,413,021.91 1,748,571.74

Income Tax Expense 183,298.69 259,046.20 335,354.49 423,906.57 524,571.52

- 1,224,000.2
427,696.95 604,441.13 782,493.80 989,115.34
Net Income after Tax 20,150.00 2
Projected Statement of Partner’s Equity

FRUITTEE COFFEE
Projected Statement of Partner's Equity
For Calendar Year ending December 31, 2018 ( Pre - Op)
Angel Bayangan Donato Linggon Macaraeg Mangaoang
Beginning Balance 250,000.00 250,000.00 250,000.00 250,000.00 250,000.00 250,000.00
Net Income (Loss) (3,358.33) (3,358.33) (3,358.33) (3,358.33 ) (3,358.33) (3,358.33)
Additional
Investments
Drawings
Ending Balance 246,641.67 246,641.67 246,641.67 246,641.67 246,641.67 246,641.67

FRUITTEE COFFEE
Projected Statement of Partner's Equity
For Calendar Year ending December 31, 2019
Angel Bayangan Donato Linggon Macaraeg Mangaoang
Beginning Balance 246,641.67 246,641.67 246,641.67 246,641.67 246,641.67 246,641.67
Net Income (Loss) 71,282.82 71,282.82 71,282.82 71,282.82 71,282.82 71,282.82
Additional
Investments
Drawings
Ending Balance 317,924.49 317,924.49 317,924.49 317,924.49 317,924.49 317,924.49
 FRUITTEE COFFEE
Projected Statement of Partner's Equity
For Calendar Year ending December 31, 2020
Angel Bayangan Donato Linggon Macaraeg Mangaoang
Beginning Balance 317,924.49 317,924.49 317,924.49 317,924.49 317,924.49 317,924.49
Net Income (Loss) 100,740.19 100,740.19 100,740.19 100,740.19 100,740.19 100,740.19
Additional
Investments
Drawings
Ending Balance 418,664.68 418,664.68 418,664.68 418,664.68 418,664.68 418,664.68

FRUITTEE COFFEE
Projected Statement of Partner's Equity
For Calendar Year ending December 31, 2021
Angel Bayangan Donato Linggon Macaraeg Mangaoang
Beginning Balance 418,664.68 418,664.68 418,664.68 418,664.68 418,664.68 418,664.68
Net Income (Loss) 130,415.63 130,415.63 130,415.63 130,415.63 130,415.63 130,415.63
Additional
Investments
Drawings
Ending Balance 549,080.31 549,080.31 549,080.31 549,080.31 549,080.31 549,080.31
 FRUITTEE COFFEE
Projected Statement of Partner's Equity
For Calendar Year ending December 31, 2022
Angel Bayangan Donato Linggon Macaraeg Mangaoang
Beginning Balance 549,080.31 549,080.31 549,080.31 549,080.31 549,080.31 549,080.31
Net Income (Loss) 164,852.56 164,852.56 164,852.56 164,852.56 164,852.56 164,852.56
Additional
Investments
Drawings
Ending Balance 713,932.87 713,932.87 713,932.87 713,932.87 713,932.87 713,932.87

FRUITTEE COFFEE
Projected Statement of Partner's Equity
For Calendar Year ending December 31, 2023
Angel Bayangan Donato Linggon Macaraeg Mangaoang
Beginning Balance 713,932.87 713,932.87 713,932.87 713,932.87 713,932.87 713,932.87
Net Income (Loss) 204,000.04 204,000.04 204,000.04 204,000.04 204,000.04 204,000.04
Additional
Investments
Drawings
Ending Balance 917,932.91 917,932.91 917,932.91 917,932.91 917,932.91 917,932.91
Projected Statement of Cash Flows

FRUITTEE COFFEE
Projected Statement of Cash Flows
As of the year ending December 31, 2018 - 2023
Pre-Op
2019 2020 2021 2022 2023
Operating Activities 2018
1,224,000.2
Net Income (Loss) ( 20,150.00) 427,696.95 604,441.13 782,493.80 989,115.34 2
Inc (Dec) in Maintenance
Tools 316.50 31.65 3.17 0.3165 0.0317
Inc (Dec) in Kitchenwares 256 25.6 2.56 0.2560 0.0256
Inc (Dec) Income Tax
Payable 183,298.69 75,747.51 76,308.29 88,552.09 100,664.95
Depreciation - Mftg Eqpt 11,965.71 11,965.71 11,965.71 11,965.71 11,965.71
Net Cash provided by 1,336,630.8
Operating (20,150.00) 622,388.86 692,097.10 870,762.08 1,089,632.57 3
Investing Activities
Manufacturing Equipment 67,800.00
Net Cash provided by
Investing (67,800.00)
Financing Activities
Initial Investment 1,500,000.00
Drawings
Net Cash provided by
Financing 1,500,000.00
Increase in Cash 1,412,050.00 622,388.86 692,097.10 870,762.08 1,089,632.57 1,336,630.83
Cash Balance, beginning 1,412,050.00 2,034,438.86 2,726,535.95 3,597,298.03 4,686,930.60
6,023,561.4
Cash Balance, end 1,412,050.00 2,034,438.86 2,726,535.95 3,597,298.03 4,686,930.60 2
Projected Statement of Financial Position

FRUITTEE COFFEE
Projected Statement of Financial Position
As of the year ending December 31, 2018 to 2023
Not Pre-Op
2019 2020 2021 2022 2023
e 2018

ASSETS
Current Assets
Cash 1,412,050.00 2,034,438.86 2,726,535.95 3,597,298.03 4,686,930.60 6,023,561.42
Kitchenwares 256 281.60 284.16 284.42 284.44
Maintenance Tools 316.50 348.15 351.32 351.63 351.66
Total CA 1,412,050.00 2,035,011.36 2,727,165.70 3,597,933.51 4,687,566.65 6,024,197.53
Non-Current Assets
Manufacturing Equipment 67,800.00 67,800.00 67,800.00 67,800.00 67,800.00 67,800.00
Accum. Dep'n.-Mftg Eqpt 11,965.71 55,834.29 43,868.57 31,902.86 21,803.81
Total NCA 67,800.00 55,834.29 11,965.71 23,931.43 35,897.14 45,996.19
2,090,845.6 2,739,131.4 3,621,864.9 6,070,193.7
TOTAL ASSETS 1,479,850.00 4 2 3 4,723,463.79 2
LIABILITIES
Income Tax Payable 183,298.69 259,046.20 335,354.49 423,906.57 524,571.52
Total Liabilities 183,298.69 259,046.20 335,354.49 423,906.57 524,571.52
PARTNER'S EQUITY
Angel, Capital 246,641.67 317,924.49 418,664.68 549,080.31 713,932.87 917,932.91
Bayangan, Capital 246,641.67 317,924.49 418,664.68 549,080.31 713,932.87 917,932.91
Donato, Capital 246,641.67 317,924.49 418,664.68 549,080.31 713,932.87 917,932.91
Linggon, Capital 246,641.67 317,924.49 418,664.68 549,080.31 713,932.87 917,932.91
 Macaraeg, Capital 246,641.67 317,924.49 418,664.68 549,080.31 713,932.87 917,932.91
Mangaoang, Capital 246,641.67 317,924.49 418,664.68 549,080.31 713,932.87 917,932.91
Total Equity 1,479,850.00 1,907,546.95 2,511,988.08 3,294,481.88 4,283,597.21 5,507,597.43
TOTAL LIABILITIES & 2,090,845.6 2,771,034.2 3,629,836.3 6,032,168.9
EQUITY 1,479,850.00 4 7 6 4,707,503.79 6

Notes to Financial Statements

1. Sales

2019 2020
12 oz 16 oz 22 oz 12 oz 16 oz 22 oz
Demand per
58 54 4 64 60 5
day
Days of
353 353 353 353 353 353
Operation
Demand per
20,474.00 19,062.00 1,412.00 22,592.00 21,180.00 1,765.00
year
Unit Price 60.00 78.00 102.00 60.00 78.00 102.00
1,228,440. 1,486,836. 144,024. 1,355,520.0 1,652,040.
180,030.00
Sales 00 00 00 0 00
Output VAT 17,282.8
147,412.80 178,420.32 162,662.40 198,244.80 21,603.60
(12%) 8
1,081,027. 1,308,415. 126,741. 1,192,857.6 1,453,795.
158,426.40
Net Sales 20 68 12 0 20
Total Net
2,516,184.00 2,805,079.20
Sales
 2021 2022
12 oz 16 oz 22 oz 12 oz 16 oz 22 oz

Demand per day 70 66 6 77 73 7

Days of
353 353 353 353 353 353
Operation
Demand per year 24,710.00 23,298.00 2,118.00 27,181.00 25,769.00 2,471.00
1,482,600.0 1,817,244.0 216,036. 1,630,860. 2,009,982.0 252,042.
Sales 0 0 00 00 0 00
Output VAT 25,924.3 30,245.0
177,912.00 218,069.28 195,703.20 241,197.84
(12%) 2 4
1,304,688.0 1,599,174.7 190,111. 1,435,156. 1,768,784.1 221,796.
Net Sales 0 2 68 80 6 96
Total Net Sales 3,093,974.40 3,425,737.92

2023
12 oz 16 oz 22 oz
Demand per day 85 81 8
Days of
353 353 353
Operation
Demand per
30,005.00 28,593.00 2,824.00
year
Unit Price 60.00 78.00 102.00
288,048.
1,800,300.00 2,230,254.00
Sales 00
Output VAT 34,565.7
216,036.00 267,630.48
(12%) 6
253,482.
1,584,264.00 1,962,623.52
Net Sales 24
Total Net
Sales 3,800,369.76
 2. Cost of Sales

Normal
12 oz 16 oz 22 oz
Capacity
60 56 4
Days of
Operation 353 353 353
21,180.00 19,768.00 1,412.00
Total 42,360.00
Direct Labor
288,895.20
Cost
Manufacturing
Overhead
Utilities 2,100.00
Depreciation 11,965.71
Maintenance 600.00
Rent 12,000.00
Operating
Supplies 13,500.00
Total 40,165.71
2019 2020
12 oz 16 oz 22 oz 12 oz 16 oz 22 oz
Normal Capacity per year 21,180.00 19,768.00 1,412.00 21,180.00 19,768.00 1,412.00
Direct Material Cost per
23.50 34.00 49.25 24.25 35.09 50.83
unit
513,615.0
Direct Material Cost 497,730.00 672,112.00 69,541.00 0 693,659.12 71,771.96
Allocation Rate 0.50 0.47 0.03 0.50 0.47 0.03
144,447.6
Direct Labor Cost 144,447.60 134,817.76 9,629.84 0 134,817.76 9,629.84
Manufacturing Overhead 20,082.86 18,744.00 1,338.86 20,082.86 18,744.00 1,338.86
678,145.4
Total Product Cost 662,260.46 825,673.76 80,509.70 6 847,220.88 82,740.66
1,568,443.91 1,608,107.00
Less: Input VAT (12%) 188213.27 192972.84
Total COS, net 1,380,230.64 1,415,134.16

2021 2022
12 oz 16 oz 22 oz 12 oz 16 oz 22 oz
Normal Capacity per year 21,180.00 19,768.00 1,412.00 21,180.00 19,768.00 1,412.00
Direct Material Cost per unit 25.03 36.21 52.45 25.83 37.37 52.45
Direct Material Cost 530,135.40 715,799.28 74,059.40 547,079.40 738,730.16 74,059.40
Allocation Rate 0.50 0.47 0.03 0.50 0.47 0.03
Direct Labor Cost 144,447.60 134,817.76 9,629.84 144,447.60 134,817.76 9,629.84
Manufacturing Overhead 20,082.86 18,744.00 1,338.86 20,082.86 18,744.00 1,338.86
Total Product Cost 694,665.86 869,361.04 85,028.10 711,609.86 892,291.92 85,028.10
1,649,055.00 1,688,929.88
Less: Input VAT (12%) 197886.60 202671.59
Total COS, net 1,451,168.40 1,486,258.29

2023
12 oz 16 oz 22 oz
Normal Capacity per year 21,180.00 19,768.00 1,412.00
Direct Material Cost per
26.66 38.57 55.86
unit
762,451.7
Direct Material Cost 564,658.80 6 78,874.32
Allocation Rate 0.50 0.47 0.03
134,817.7
Direct Labor Cost 144,447.60 6 9,629.84
Manufacturing Overhead 20,082.86 18,744.00 1,338.86
 916,013.5
Total Product Cost 729,189.26 2 89,843.02
1,735,045.80
Less: Input VAT (12%) 208205.50
Total COS, net 1,526,840.30

3. Rent expense

2019 2020 2021 2022 2023

Cost per month 12,000.00 12,000.00 12,000.00 12,000.00 12,000.00
No. of Months in a year 12 12 12 12 12
Total 144,000.00 144,000.00 144,000.00 144,000.00 144,000.00

4. Advertising Expense

2018 2019 2020 2021 2022 2023

Flyers 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
Newspapers & Tarpaulins 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Free Taste 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
9,000.0
Total 9,000.00 9,000.00 9,000.00 9,000.00 0 9,000.00
 5. Salaries & Wages

Deductions
Daily
Monthly Weekly PhilHeal Total Net Pay
Rate SSS HDMF
th
Employee 1 7,420.00 1,855.00 265.00 272.50 100.00 100.00 472.50 6,947.50
Employee 2 7,420.00 1,855.00 265.00 272.50 100.00 100.00 472.50 6,947.50
Employee 3 3,180.00 795.00 265.00 109.00 100.00 100.00 309.00 2,871.00
Monthly Total 18,020.00 654.00 300.00 300.00 1,254.00 16,766.00
No. of Months /year 12 12 12 12 12 12
Annual Salaries & 216,240. 3,600.0 15,048.0 201,192.
Wages 00 7,848.00 0 3,600.00 0 00

*Assumption: The workers have not incurred absences and overtime during the year.

6. Employer's Contribution

Deductions
Position SSS PhilHealth HDMF
 Employee 1 562.50 100.00 100.00
Employee 2 562.50 100.00 100.00
Employee 3 221.00 100.00 100.00
Monthly Total 1,346.00 300.00 300.00
Annual Employer's
Contribution 16,152.00 3,600.00 3,600.00

7. 13th Month Pay

2019 2020 2021 2022 2023

Employee 1 7,685.00 7,685.00 7,685.00 7,685.00 7,685.00
Employee 2 7,685.00 7,685.00 7,685.00 7,685.00 7,685.00
Employee 3 7,685.00 7,685.00 7,685.00 7,685.00 7,685.00
Total 23,055.00 23,055.00 23,055.00 23,055.00 23,055.00

8. Professional Fee

2019 2020 2021 2022 2023

Bookkeeper 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
No. of Months / year 12 12 12 12 12
60,000.0
Total 0 60,000.00 60,000.00 60,000.00 60,000.00
9. Organizational Cost

Partiulars Amount
SEC Registration 500.00
DTI Business Registration Fee 500.00
BIR/TIN Certificate 500.00
Barangay Business Clearance 300.00
BIR Registration 500.00
SEC-Name Registration 100.00
SEC Filing Fee 1,000.00
SEC Legal Research 1,000.00
Training Fee 4,000.00
Total 8,400.00

10. Taxes & Licenses

 2018 2019 2020 2021 2022 2023
Business Permit 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
BIR Annual Registration 500.00 500.00 500.00 500.00 500.00 500.00
Police Clearance 100.00 100.00 100.00 100.00 100.00 100.00
Tax Clearance Fee 300.00 300.00 300.00 300.00 300.00 300.00
Barangay Clearance 100.00 100.00 100.00 100.00 100.00 100.00
Sanitary Permit 250.00 250.00 250.00 250.00 250.00 250.00
BFAD 1,500.00 1,500.00 1,500.00
2,750.0 3,250.0 4,750.0
Total 0 0 0 3,250.00 4,750.00 3,250.00

11. Utilities Expense

2019 2020 2021 2022 2023

Electricity 8,400.00 8,400.00 8,400.00 8,400.00 8,400.00
Water 9,600.00 9,600.00 9,600.00 9,600.00 9,600.00
LPG 7,200.00 7,200.00 7,200.00 7,200.00 7,200.00
25,200.0 25,200.0 25,200.0 25,200.0
Total 0 0 0 0 25,200.00

12. Depreciation Expense

Annual
Useful Depreciati Carrying Amount of Depreciable Asset
Depreciable Assets Cost Life on
Manufacturing Equipment 2019 2020 2021 2022 2023
 25,00 20,000.0 15,000.0
Cash Register
0 5 5,000.00 0 0 10,000 5,000.00 0.00
30,00 25,714.2 21,428.5 17,142.8 12,857.1
Freezer
0 7 4,285.71 9 7 6 4 8,571.43
Shaker Machine 900 5 180 720 540.00 360 180.00 0.00
Water Dispenser 2,500 5 500.00 2,000.00 1,500.00 1,000 500.00 0.00
Syrup Dispenser 1,500 5 300 1,200 900.00 600 300.00 0.00
Coffee Maker 1,000 5 200.00 800.00 600.00 400 200.00 0.00
Blender 2,000 6 333.33 1,666.67 1,333.33 1,000 666.67 333.33
Gas Range 1,400 3 466.67 933.33 466.67 0.00 1,400.00 933.33
Cup Sealing Machine 3,500 5 700.00 2,800.00 2,100.00 1,400 700.00 0.00
67,8 55,834. 43,868. 31,902. 21,803. 9,838.1
Total 00 11,965.71 29 57 86 81 0
Accumulated 11,965. 23,931. 35,897. 45,996. 57,961.
Depreciation 71 43 14 19 90

13. Maintenance Tools

Unit Total
Cost QTY Cost 2019 2020 2021 2022 2023
Beginning Balance 316.5 348.15 351.32 351.63
Apron 100 3 300 300 300 300 300 300
Hairnet 15 3 45 45 45 45 45 45
Mop 270 1 270 270 270 270 270 270
Dustpan 90 1 90 90 90 90 90 90
Broom 150 1 150 150 150 150 150 150
Dishwashing Soap 90 3 270 270 270 270 270 270
Dishwashing Sponge 15 10 150 150 150 150 150 150
 Hand Soap 30 3 90 90 90 90 90 90
Trash Bin 200 1 200 200 200 200 200 200
Fruit Basket 200 2 400 400 400 400 400 400
Fire Extinguisher 1,200 1 1,200 1,200 1,200 1,200 1,200 1,200
3,513.1 3,516.3 3,516.6
TOTAL 3,165 3,481.5 5 2 3
Ending Inventory 316.5 348.15 351.32 351.63 351.66
3,133.3 3,161.8 3,164.6 3,164.9
Total Expense 2,848.5 5 4 8 7
Increase (Decrease) 316.5 31.65 3.165 0.3165 0.0317

14. Kitchen Wares

Unit Total
Cost QTY Cost 2019 2020 2021 2022 2023
Beginning Balance 256 281.60 284.16 284.42
Chopping Board 100 3 300 300 300 300 300 300
Knife 90 3 270 270 270 270 270 270
Strainer 250 2 500 500 500 500 500 500
Measuring Cup and Spoon
(set) 300 1 300 300 300 300 300 300
Pot 500 2 1000 1000 1000 1000 1000 1000
Pot Holder 20 2 40 40 40 40 40 40
Hand Towel 25 6 150 150 150 150 150 150
TOTAL 2560 2816 2841.6 2844.16 2844.42
Ending Inventory 256 281.6 284.16 284.42 284.44
Total Expense 2304 2534.40 2557.44 2559.74 2559.97
Increase (Decrease) 256 25.6 2.56 0.2560 0.0256
 FINANCIAL ANALYSES

Financial analyses as part of the financial feasibility of the study gives information

on the comparison of the different accounts on a single financial statement or on

the relationship between accounts on two financial statements. It provides an

assessment of the business’ ability to earn income and sustain growth in both short-

term and long-term basis. The ratio provided would mean that the proposed

business has its ability to increase profitability. Through ratio analysis, users will be

able to measure how profitable the business is, how good it is in short-term and

long-term financial condition and its efficiency in utilizing the resources available to

them. It gives a proof on the firm’s ability to remain in the business in the long run

without having a sustained significant loss in conducting it.

A. Liquidity Ratio

2019 2020 2021 2022 2023

2,035,011.3
Current Assets 6 2,727,165.70 3,597,933.51 4,687,566.65 6,024,197.53
Current Liabilities 183,298.69 259,046.20 335,354.49 423,906.57 524,571.52
Ratio 11.10 10.53 10.73 11.06 11.48

The current ratio expresses the relative relationship between the current assets and

current liabilities. It measures the firm’s ability to pay its short-term debts. The ratio

shown in the table means that the company can pay more than that of the amount

of its debts for the projected five-year period, where a steadily increasing current

ratio indicates that the business is managing its current assets properly.

*Liquidity Ratio/Current Ratio = Current Assets / Current Liabilities

B. Solvency Ratio
 2019 2020 2021 2022 2023
Total Liabilities 183,298.69 259,046.20 335,354.49 423,906.57 524,571.52
4,723,463.7
Total Assets 1,479,850.00 2,090,845.64 2,739,131.42 3,621,864.93 9
Ratio 0.12 0.12 0.12 0.12 0.11

On the other hand, this is concerned with the long-term financial operating structure

of any firm in which the company’s ability to satisfy long-term debt as it becomes

due is being considered.

*Debt Ratio = Total Liabilities / Total Assets

B.1 Equity to Total Assets

2019 2020 2021 2022 2023

Total Equity 1,479,850.00 1,907,546.95 2,511,988.08 3,294,481.88 4,283,597.21
Total Assets 1,479,850.00 2,090,845.64 2,739,131.42 3,621,864.93 4,723,463.79
Ratio 1 0.91 0.92 0.91 0.91

This measures the proportion of the firm’s assets that are provided or claimed by

the shareholders. As shown above, we can say that the firm is not highly leverage

and has a large degree of security since shareholders may be viewed as having a

large contribution to the business.

*Equity to Total Assets = Total Equity / Total Assets

B.2. Return on Total Assets

2019 2020 2021 2022 2023

Beginning Assets 2,090,845.64 2,739,131.42 3,621,864.93 4,723,463.79
Ending Assets 2,090,845.64 2,739,131.42 3,621,864.93 4,723,463.79 6,070,193.72
Net Income 427,696.95 604,441.13 782,493.80 989,115.34 1,224,000.22
Ratio 0.41 0.25 0.25 0.24 0.23

Return on Total Assets reflects the performance of the management in utilizing the

firm’s assets to obtain income. The computed ratio showed that a reasonable return

on funds contributed to the firm as the trend is decreasing. It indicates that the firm

is using the funds wisely in the early years.

*Return on Total Assets = Net Income / (Beginning Assets + Ending Assets)

CONLUSION

Basing from the analysis of the business’ financial state, the product is financially

viable.