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Telefax No. 086-214-4221
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CHAPTER 8

FINANCIAL ASPECT

This chapter contains the financial aspect of the product such as; Capital Strategy, Sales

Forecast, Sources of Financing, Financial statement and also the financial analysis.

A. Capital Requirements and Strategies

The capital will be 200,000, which will cover the pre-operational expenses up to the

support for the purchase of the start-up raw materials. It will also be used to fund the food

cart and other non-current assets of the company.

B. Sales Forecast.

Uni
Product t Quantity Price Daily Sales Weekly Sales Monthly Sales Annual Sales
Ube turon PCS 200 ₱ 5.00 ₱ 1,000.00 ₱ 6,000.00 ₱ 24,000.00 ₱ 288,000.00
1,200 28,800.0
Kutsinta PCS 240 5.00 .00 7,200.00 0 345,600.00
Puto 1,300 31,200.0
cheese PCS 260 5.00 .00 7,800.00 0 374,400.00
Pitchipitch 60 14,400.0
i PCS 120 5.00 0.00 3,600.00 0 172,800.00
1,000 24,000.0
Butchi PCS 100 10.00 .00 6,000.00 0 288,000.00
TOTAL       ₱ 5,100.00 ₱ 30,600.00 ₱ 122,400.00 ₱ 1,468,800.00

C. Sources of Financing

Partnership financing, which has similar concept with venture capital, refers to the

equitable sharing of risks and profits between the client and bank. Partners will share profit
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and losses equally by this the partners will also be obliged to invest an equal amount of

financing in the business for the start up of the business. This generally mean that the

partners will have an equal share on 200,000 start up capital.

D. Financial Statements

Projected Comprehensive Income

KAKANIN FOOD CART

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR 2022 TO 2026
ACCOUNT TITLES YEAR
  2022 2023 2024 2025 2026
Sales ₱ 1,468,800.00 ₱ 1,615,680.00 ₱ 1,777,248.00 ₱ 1,954,972.80 ₱ 2,150,470.08
Cost of sales 945,716.00 1,040,287.60 1,144,316.36 1,258,748.00 1,384,622.80
Gross Profit 523,084.00 575,392.40 632,931.64 696,224.80 765,847.28
LESS: EXPENSES          
Overhead Expense 30,000.00 33,000.00 36,300.00 39,930.00 43,923.00
Administrative Expenses 319,680.00 351,648.00 386,812.80 425,494.08 468,043.49
Utility Expenses 20,400.00 22,440.00 24,684.00 27,152.40 29,867.64
Fringe Benefits 68,703.60 75,573.96 83,131.36 91,444.49 100,588.94
Licenses   4,245.00 4,669.50 5,136.45 5,650.10
Pre-operating expense 4,245.00        
Depreciation Expenses 13,621.50 13,621.50 13,621.50 13,621.50 13,621.50
Net income ₱ 66,433.90 ₱ 74,863.94 ₱ 83,712.48 ₱ 93,445.88 ₱ 104,152.62
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Projected Cash Flow

KAKANIN FOOD CART

CASH FLOW
FOR THE FIVE YEAR PERIOD JANUARY 2022- DECEMBER 2026
Cash Flow from
Operating Activities Year
  1 2 3 4 5
Cash Inflows:          
Cash Received from
Customer ₱ 1,468,800.00 ₱ 1,615,680.00 ₱ 1,777,248.00 ₱ 1,954,972.80 ₱ 2,150,470.08
Cash Out Flows:          
945,716. 1,040,287. 1,144,316. 1,258,748. 1,384,622.
Cost of sales 00 60 36 00 80
4,245.0
Pre-Operating Expenses 0        
4,245.0 4,669.5 5,136.4 5,650.1
Licenses   0 0 5 0
30,000.0 33,000.0 36,300.0 39,930.0 43,923.0
Overhead expenses 0 0 0 0 0
20,400.0 22,440.0 24,684.0 27,152.4 29,867.6
Utility Expenses 0 0 0 0 4
319,680. 351,648. 386,812. 425,494. 468,043.
Administrative Expenses 00 00 80 08 49
68,703.6 75,573.9 83,131.3 91,444.4 100,588.
Fringe Benefits 0 6 6 9 94
1,388,744. 1,527,194. 1,679,914. 1,847,905. 2,032,695.
Total Cash Outflow: 60 56 02 42 96
Net Cash Flow from
Operating Activities 80,055.40 88,485.44 97,333.98 107,067.38 117,774.12
Cash Flow from Investing
Activities          
82,262.0
Food cart 0        
18,998.0
Furniture and Fixtures 0        
34,955.0
Machineries and equipment 0        
2,832.0
Supplies 0        
18,587.0
Utensils 0        
Others Supply and 2,371.0
Materials 0        
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Net Cash Flow from

Investing Activity 160,005.00        
Cash Flow from
Financing Activities          
200,000.
Owner's Capital 00        
Net Cash Flow from
Financing Activity 200,000.00        
Net Changes in Cash 120,050.40 88,485.44 97,333.98 107,067.38 117,774.12
120,050. 208,535. 305,869. 412,937.
Add:
Cash, Beginning   40 84 82 21
Total Cash Flow Activities ₱ 120,050.40 ₱ 208,535.84 ₱ 305,869.82 ₱ 412,937.21 ₱ 530,711.33
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Projected Balance Sheet

KAKANIN FOOD CART

STATEMENT OF FINACIAL POSITION
AS OF JANUARY TO DECEMBER 2022
Year
Account Titles 1 2 3 4 5
Assets          
Current Asset  
Cash ₱ 120,050.40 ₱ 208,535.84 ₱ 305,869.82 ₱ 412,937.21 ₱ 530,711.33
Non-Current Asset  
Food cart 82,262.00 74,035.80 65,809.60 57,583.40 49,357.20
less: Accum. Dept. 8,226.20 8,226.20 8,226.20 8,226.20 8,226.20
Net 74,035.80 65,809.60 57,583.40 49,357.20 41,131.00
Furniture and Fixtures 18,998.00 17,098.20 15,198.40 13,298.60 11,398.80
less: Accum. Dept. 1,899.80 1,899.80 1,899.80 1,899.80 1,899.80
Net 17,098.20 15,198.40 13,298.60 11,398.80 9,499.00
Machineries and equipment 34,955.00 31,459.50 27,964.00 24,468.50 20,973.00
less: Accum. Dept. 3,495.50 3,495.50 3,495.50 3,495.50 3,495.50
Net 31,459.50 27,964.00 24,468.50 20,973.00 17,477.50
Supplies 2,832.00 2,832.00 2,832.00 2,832.00 2,832.00
Utensils 18,587.00 18,587.00 18,587.00 18,587.00 18,587.00
Others Supply and Materials 2,371.00 2,371.00 2,371.00 2,371.00 2,371.00
Total Non-current Asset 146,383.50 132,762.00 119,140.50 105,519.00 91,897.50
Total Asset ₱ 266,433.90 ₱ 341,297.84 ₱ 425,010.32 ₱ 518,456.21 ₱ 622,608.83
Owner's, Beginning Capital ₱ 200,000.00 ₱ 266,433.90 ₱ 341,297.84 ₱ 425,010.32 ₱ 518,456.21
Net Income
66,433.90 74,863.94 83,712.48 93,445.88 104,152.62
Total Liabilities and
₱ 266,433.90 ₱ 341,297.84 ₱ 425,010.32 ₱ 518,456.21 ₱ 622,608.83
Owner’s Equity
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Financial Analysis

Financial Ratios

Gross Profit Margin Gross Profit/Sales

Year Gross Profit Sales Income Gross Profit Margin
₱ ₱
1 523,084.00 1,468,800.00 35.61%
1,615,680.0
2 575,392.40 0 35.61%
1,777,248.0
3 632,931.64 0 35.61%
1,954,972.8
4 696,224.80 0 35.61%
1,954,972.8
5 765,847.28 0 39.17%
TOTA ₱ ₱
L 3,193,480.13 8,771,673.60 36.41%

Net Profit Margin Net Income/Sales

Year Net Income Sales Income Net Profit Margin
₱ ₱
1 66,433.90 1,468,800.00 4.52%
74,863.9
2 4 1,615,680.00 4.63%
83,712.4
3 8 1,777,248.00 4.71%
93,445.8
4 8 1,954,972.80 4.78%
104,152.6
5 2 1,954,972.80 5.33%
TOTA ₱ ₱
L 422,608.83 8,771,673.60 4.82%
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Return on Equity Net Income/Partner's Equity

Year Net Income Partner's Equity Return on Equity
₱ ₱
1 66,433.90 666,433.90 9.97%

2 74,863.94 741,297.84 10.10%

3 83,712.48 825,010.32 10.15%

4 93,445.88 918,456.21 10.17%

5 104,152.62 1,022,608.83 10.18%

TOTA ₱ ₱
L 422,608.83 4,173,807.10 10.13%
 

Return of Investment Net Income /Total Asset

Year Net Income Total Asset ROI
₱ ₱ 24.9
1 66,433.90 266,433.90 3
21.9
2 74,863.94 341,297.84 4
19.7
3 83,712.48 425,010.32 0
18.0
4 93,445.88 518,456.21 2
16.7
5 104,152.62 622,608.83 3
TOTA ₱ ₱ 19.4
L 422,608.83 2,173,807.10 4

Liquidity ratios

Since the business has no projected Liability we can’t compute the liquidity ratios per

formulas.
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Breakeven Analysis

Breakeven Point Total Fixed Cost/Gross Profit Margin %

Year Total Fixed Cost Gross Profit Margin Breakeven Point
1 ₱ 146,383.50 35.61% ₱ 411,039.31
2 132,762.00 35.61% 372,790.65
3 119,140.50 35.61% 334,542.00
4 105,519.00 35.61% 296,293.34
5 91,897.50 39.17% 234,586.08
TOTAL 119,140.50 36.41% ₱ 327,248.50

Payback Ratio Capital Investmet/Net Income

Capital contribution CASH FLOW Payback Period
₱ 200,000.00 ₱ 120,050.40 1.67
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CHAPTER IX

SOCIAL AND ECONOMIC ASPECT

This chapter include the following; Economic significance, Environmental significance,

and Societal Significance.

Economic Significance

The demand for local food has helped to sustain an industry that had been on the decline,

with the number of small farms decreasing and the median age of farmers rising. According to

studies, selling into regional markets has a greater financial impact on fruit and vegetable farms.

Farms of that size that sell in regional markets have been shown to have a higher likelihood of

earning positive net farm income and lower operating expense ratios, resulting in increased farm

viability.

Environmental Significance

Purchasing locally grown food can help to protect local land and wildlife. When we buy

local products, we are supporting our local farmers and assisting them in running a successful

business. When this occurs and farmers are fairly compensated for their products, they are less

likely to sell their land, which is frequently redeveloped for industrial or commercial use. These

uses would produce significantly more greenhouse gas emissions than farming and would further

deplete habitats for wildlife in the surrounding area.

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Societal Significance

Buying locally also contributes to the preservation of local lands and wildlife. By

purchasing locally, you are assisting local farmers and producers. These farms can continue to

operate thanks to your help. The farms are not being sold to local developers because they are

owned and operated by local farmers and producers. Local developers have the potential to

completely transform the land, wreaking havoc on the wildlife that lives there. Alternatively,

large corporations could purchase the farm and implement inhumane and non-eco-friendly

farming practices.

Eating local delicacies benefits the locals. When you buy and consume local delicacies,

you are helping to support the people who work in the often-niche industries that produce these

culinary masterpieces. Archievald enjoys eating local cuisine. Your purchase helps people whose

livelihood is dependent on people purchasing their wares.

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CHAPTER X

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

Findings

Based on the gathered survey the following are the findings:

The respondents' profile is as follows: mostly female, with a majority age range of 18 to

15 years old, and the majority of their funds come from allowances.

The respondents also suggest that the best marketing flatform will be utilizing social

media, and they prefer to buy if it was recommended to them, they also prefer to spend only 5

pesos, and they are interested in the business with 57 percent of the respondents and 36.6 percent

are very interested. They have also been looking forward to the taste because it is the most

important to them, and according to the survey, the boulevard will be the strategic location for

the business. In the aggregate, 100 percent of respondents believe they will patronize the

business.

Based on the gathered information of the study the following are the findings:

In terms of management, the company will require four employees, two of whom

will be production workers and the others will be cashiers and sales representatives. The

company will also be formed as a partnership, so the partners will be in charge of the company's

operational, operational, and marketing activities.

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In terms of technical aspects, the business will sell 5 different kakanin through the food cart, the

machinery and equipment, as well as the utensils, supplies, and other supplies and materials, will

all be brought before the business begins operations.

In terms of finance, the business will be profitable based on the profit shown on the income

statement and the positive results of the ratios shown in Chapter 8 financial ratios.

Conclusion

Based on the finding the business will be feasible, by the percentage rate from the survey

which the respondents are all interest with a high percentage on both interested and highly

interested this just shown a positive demand and in addition is the 100 percent of the respondents

are willing to patronized the product, this just give the business a security in terms of demand.

Furthermore, the business is also profitable with only 1.67 years payback ratio based on cash

flow this give the partners a greater return to their investment through the years.

Recommendation

The business should be maintaining the taste and quality of the product, it should also
venture on other business opportunity related on the business to expand and improved.
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REF

The Economic Impact of Locally Produced Food (stlouisfed.org)

How can buying locally benefit the environment? | UW Food Services | University of Waterloo

(uwaterloo.ca)

The Environmental Benefits of Buying Locally (gogreen.org)

native delicacies economical significance - Bing