CHAPTER 5:

FINANCIAL
FEASIBILITY
5.1 Financial Assumptions

This chapter covers the study's financial aspect. It demonstrates the business's
profitability throughout a five-year period of operation. The enterprise going concern assumption
will be ascertained in this chapter as a result. This area of study is crucial for any new company
before it hits the market like for Bean Bites. It enables businesses to anticipate any scenario that
can arise, which can help business owners make financial decisions.

A. General
❖ Projections of financial statements will be for the years 2024–2028.
B. Pre-Operating
❖ Each partner will contribute ₱400,000.
❖ The dimensions of the leased space total 185.71 square meters. The estimated
cost of renovation is P1,500 per square meter.
❖ The estimated amount for the following items is as follows:

Production Equipment ₱273,032.00

Office and Store Equipment ₱50,217.00
Furniture and Fixtures ₱39,550.00
Delivery Vehicle ₱100,000.00
Leasehold Improvement ₱278,565.00
Supplies ₱13,976.00
Prepaid Rent ₱60,000.00
Organizational Expenses ₱18,110.00 — Prepaid for the Year 2022

C. Income Statement
1. Sales
❖ Sales are based on the volume of production.
❖ All sales are on a cash basis.
❖ Selling Price will increase by 5% annually for the first 5 years.
2. Cost of Sales
❖ Cost of Sales per unit will increase by 3% annually for raw materials.
❖ Direct labor and manufacturing overhead (except rent and depreciation) will
increase by 6% every year
❖ Salaries of Production Supervisor and Production Workers will be charged to
production.
 3. Operating Expenses
❖ Salaries under operating expenses will increase by 2% per year and are
assumed as minimum wage earners.
❖ Telecommunication and Internet Expense: ₱2,099 monthly.
❖ Repair and maintenance is estimated to be ₱20,000 yearly.
❖ The Accountant will not receive a salary but a monthly professional fee of
₱5,000.
4. Other Expenses
❖ Contributions are based on the updated table of SSS (Social Security System),
HDMF (Home Development Mutual Fund), and PHIC (Philippine Health
Insurance)
❖ Rent is ₱15,000 monthly. Two months advance and one month deposit is
required. 80% of the rental space/rent expense is estimated to be used in
production while 20% is to be allocated to the office and selling department.
❖ Electricity and Water Monthly expense is estimated to be ₱12,000 and ₱2,600
respectively. 90% of the utilities are estimated to be used in production while the
remaining 10% is to be allocated for administrative purposes. Utilities expense
used by selling and administrative offices will increase by 3% yearly.
❖ 13th month pay is equal to one month's salary.
❖ The applicable tax rate for the entity is 20% tax rate. According to RA 11534
(CREATE LAW), starting July 1, 2020, the regular domestic corporate tax is 25%
for those entities that exceed P5 M net taxable income and 100M in total assets
except land and 20% for those entities that did not reach the threshold.
❖ Miscellaneous expenses for the year 2024 onwards are computed on Note 4.
D. Balance Sheet
1. Current Assets
a. Inventory
❖ The ending raw materials inventory will be equal to 5% next month raw
materials.
b. Supplies
❖ The beginning supplies are equal to last month's purchase.
❖ The supplies purchased for the year will increase by 5%.
2. Non-Current Assets
a. Property, Plant and Equipment
 ❖ Straight line method of depreciation will be used to depreciate PPEs.
❖ Depreciation for leasehold improvement, furniture and fixtures, production
equipment, office and store equipment, and delivery vehicle are
computed on 10 years estimated useful life with no salvage value.
❖ Production tools will be depreciated using the retirement method and it
will be retired after 5 years.
3. Current Liabilities
a. Accrued Payables
❖ All purchases for the year are 90% paid
❖ The contributions and utilities will be paid in the following month.
b. Income Tax Payable
❖ VAT shall be accrued at the month-end and reconciled every quarter for
transaction purposes.
❖ Income Tax will be paid quarterly.
4. Equity
❖ All capital sources are from partners' cash contributions.
❖ Share in the net income of a partner is equal to their original contribution.
❖ Each partner withdraws 100,000 each after 3 years of operation.
❖ The Managing Partner will be given P30,000 monthly as salary.

5.2. Pre-Operating Statement

BEAN BITES COMPANY

Pre-Operating Statement
Initial Project Cost
Production Equipment ₱273,032.00
Office Equipment 50,217.00
Furniture and Fixtures 39,550.00
Delivery Vehicle 100,000.00
Leasehold Improvement 278,565.00
Supplies 13,976.00
Prepaid Rent 60,000.00
Organizational Expenses 18,110.00
TOTAL PROJECT COST ₱833,450.00

Capital to be contributed by partners

Ang, Capital 400,000.00
Banal, Capital 400,000.00
Buensuceso, Capital 400,000.00
Peña, Capital 400,000.00
Villegas, Capital 400,000.00
TOTAL CAPITAL ₱2,000,000.00

Total Capital 2,000,000.00

Less: Project Cost 833,450.00
CASH BEGINNING ₱1,166,550.00

5.3. Statement of Financial Position

BEAN BITES COMPANY

Notes PROJECTED STATEMENT OF FINANCIAL POSITION (With Pre-Operation)

As of 2024 - 2028

Pre-Operating 2024 2025 2026 2027 2028

Current Assets

1 Cash ₱ 1,166,550.00 4,038,181.09 6,542,156.46 9,305,339.92 11,929,753.75 14,961,084.33

2 Inventory - 24,442.13 25,175.39 25,930.66 26,708.57 27,509.83

3 Supplies 13,976.00 13,976.00 14,674.80 15,408.54 16,178.97 16,987.92

Prepaid Rent 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00

Prepaid Expenses 18,110.00 - - - - -

Total Current Assets ₱ 1,258,636.00 4,136,599.22 6,642,006.65 9,406,679.12 12,032,641.29 15,065,582.08

Non-Current Assets

5 Leasehold Improvement 278,565.00 250,708.50 222,852.00 194,995.50 167,139.00 139,282.50

6 Furnitures and Fixtures 39,550.00 35,595.00 31,640.00 27,685.00 23,730.00 19,775.00

7 Production Equipment 273,032.00 245,728.80 218,425.60 191,122.40 163,819.20 136,516.00

8 Office Equipment 50,217.00 45,195.30 40,173.60 35,151.90 30,130.20 25,108.50

Delivery Vehicle 100,000.00 90,000.00 80,000.00 70,000.00 60,000.00 50,000.00

Total Non-Current Assets 741,364.00 667,227.60 593,091.20 518,954.80 444,818.40 370,682.00

TOTAL ASSETS ₱ 2,000,000.00 4,803,826.82 7,235,097.85 9,925,633.92 12,477,459.69 15,436,264.08

Current Liabilities

9 Accounts Payable - 571,969.56 646,325.61 671,435.07 692,150.09 712,971.79

17 Contribution Payable - 9,198.15 10,148.63 10,415.47 10,629.11 10,842.13

 18 Utilities Payable - 16,699.00 18,591.55 19,265.27 19,852.89 20,449.28

VAT Payable - 95,618.62 110,529.23 121,866.18 134,365.55 148,146.51

16 Income Taxes Payable - 124,137.73 174,108.82 207,276.07 238,481.79 271,517.72

Total Liabilities ₱817,623.07 959,703.84 1,030,258.06 1,095,479.43 1,163,927.44

Capital

Ang, Capital 400,000.00 797,240.75 1,255,078.80 1,779,075.17 2,276,396.05 2,854,467.33

Banal, Capital 400,000.00 797,240.75 1,255,078.80 1,779,075.17 2,276,396.05 2,854,467.33

Buensuceso, Capital 400,000.00 797,240.75 1,255,078.80 1,779,075.17 2,276,396.05 2,854,467.33

Peña, Capital 400,000.00 797,240.75 1,255,078.80 1,779,075.17 2,276,396.05 2,854,467.33

Villegas, Capital 400,000.00 797,240.75 1,255,078.80 1,779,075.17 2,276,396.05 2,854,467.33

Total Capital ₱ 2,000,000.00 3,986,203.75 6,275,394.01 8,895,375.86 11,381,980.26 14,272,336.65

TOTAL LIABILITIES AND CAPITAL ₱ 2,000,000.00 4,803,826.82 7,235,097.85 9,925,633.92 12,477,459.69 15,436,264.08

5.4. Statement of Financial Performance

BEAN BITES COMPANY

Notes PROJECTED STATEMENT OF FINANCIAL PERFORMANCE

As of 2024 - 2028

2024 2025 2026 2027 2028

10 Sales 10,038,637.20 11,067,597.51 12,202,026.25 13,452,733.94 14,831,639.17

11 Cost of Sales 6,274,256.70 6,917,003.69 7,626,843.62 8,407,867.89 9,270,362.91
Gross Profit 3,764,380.49 4,150,593.82 4,575,182.63 5,044,866.06 5,561,276.27
Operating Expenses 1,281,625.80 1,289,106.00 1,300,205.32 1,311,610.56 1,323,330.79
Income Before Tax 2,482,754.69 2,861,487.83 3,274,977.31 3,733,255.50 4,237,945.48
16 Income Tax (20%) 496,550.94 572,297.57 654,995.46 746,651.10 847,589.10
Net Income ₱1,986,203.75 2,289,190.26 2,619,981.85 2,986,604.40 3,390,356.38

5.5. Operating Expenses

BEAN BITES COMPANY

Notes PROJECTED OPERATING EXPENSES

As of 2024 - 2028

2024 2025 2026 2027 2028

12 Salaries ₱ 651,600.00 664,632.00 677,924.64 691,483.13 705,312.80

13th Month Pay 94,210.00 96,094.20 98,016.08 99,976.41 101,975.93

12 Contributions 110,377.80 112,585.36 114,837.06 117,133.80 119,476.48

2 Supplies Expense 13,976.00 14,674.80 15,408.54 16,178.97 16,987.92

 Rent Expense 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00

4 Organizational Expenses 18,110.00 14,788.00 14,788.00 14,788.00 14,788.00

13 Advertising Expense 23,200.00 23,200.00 23,200.00 23,200.00 23,200.00

14 Utilities Expense 200,388.00 206,399.64 212,591.63 218,969.38 225,538.46

Repair and Maintenance Expense 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00

15 Depreciation - Leasehold Improvement 278,565.00 278,565.00 278,565.00 278,565.00 278,565.00

15 Depreciation - Furnitures and Fixtures 39,550.00 39,550.00 39,550.00 39,550.00 39,550.00

15 Depreciation - Production Equipment 273,032.00 273,032.00 273,032.00 273,032.00 273,032.00

15 Depreciation - Office Equipment 50,217.00 50,217.00 50,217.00 50,217.00 50,217.00

15 Depreciation - Delivery Vehicle 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00

TOTAL ₱ 1,281,625.80 1,289,106.00 1,300,205.32 1,311,610.56 1,323,330.79

5.6. Statement of Cash Flows

BEAN BITES COMPANY

PROJECTED STATEMENT OF CASH FLOW
As of 2024 - 2028
2024 2025 2026 2027 2028

Cash Beginning - 4,038,181.09 6,542,156.46 9,305,339.93 11,929,753.75

Add Inflows: (Cash Sales) 10,038,637.20 11,067,597.51 12,202,026.25 13,452,733.94 14,831,639.17
Output VAT 1,147,423.46 1,326,350.72 1,462,394.13 1,612,386.60 1,777,758.15
Total Cash Available 11,186,060.66 16,432,129.32 20,206,576.84 24,370,460.47 28,539,151.07

Less Outflows:
Payment of Accounts Payable 571,969.56 646,325.61 671,435.07 692,150.09 712,971.79
Cost of Sales 3,987,138.31 6,294,075.76 7,030,946.57 7,793,574.15 8,633,863.58
Salaries 651,600.00 664,632.00 677,924.64 691,483.13 705,312.80
13th Month Pay 94,210.00 96,094.20 98,016.08 99,976.41 101,975.93
Contributions 101,179.65 111,634.88 114,570.21 116,920.17 119,263.45
Supplies Expense 13,976.00 14,674.80 15,408.54 16,178.97 16,987.92
Rent Expense 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00
Advertising Expense 23,200.00 23,200.00 23,200.00 23,200.00 23,200.00
Utilities Expense 200,388.00 206,399.64 212,591.63 218,969.38 225,538.46
Miscellaneous - 14,788.00 14,788.00 14,788.00 14,788.00
Repair and Maintenance Expense 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
Partners' Withdrawals - - - 500,000.00 500,000.00
VAT Payments 1,051,804.84 1,215,821.50 1,340,527.95 1,478,021.05 1,629,611.64
Income Tax 372,413.20 522,326.47 621,828.22 715,445.38 814,553.17
Total Outflows 7,147,879.57 9,889,972.86 10,901,236.91 12,440,706.72 13,578,066.74

Cash Ending ₱4,038,181.09 6,542,156.46 9,305,339.93 11,929,753.75 14,961,084.34

5.7. Statement of Changes in Partners’ Equity

BEAN BITES COMPANY

PROJECTED STATEMENT OF CHANGES IN PARTNER'S EQUITY

As of 2024 - 2028

Ang Banal Buensuceso Peña Villegas TOTAL

Initial Capital ₱ 400,000.00 400,000.00 400,000.00 400,000.00 400,000.00 ₱2,000,000.00

Partner's Salary 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 150,000.00

Share in Profits 367,240.75 367,240.75 367,240.75 367,240.75 367,240.75 1,836,203.75

Drawings - - - - - 0.00

Year Ended December 2024 ₱ 797,240.75 797,240.75 797,240.75 797,240.75 797,240.75 ₱3,986,203.75

Partner's Salary 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 150,000.00

Share in Profits 427,838.05 427,838.05 427,838.05 427,838.05 427,838.05 2,139,190.26

Drawings - - - - - 0.00

Year Ended December 2025 ₱ 1,255,078.80 1,255,078.80 1,255,078.80 1,255,078.80 1,255,078.80 ₱6,275,394.01

Partner's Salary 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 150,000.00

Share in Profits 493,996.37 493,996.37 493,996.37 493,996.37 493,996.37 2,469,981.85

Drawings - - - - - 0.00

Year Ended December 2026 ₱ 1,779,075.17 1,779,075.17 1,779,075.17 1,779,075.17 1,779,075.17 ₱8,895,375.86

Partner's Salary 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 150,000.00

Share in Profits 567,320.88 567,320.88 567,320.88 567,320.88 567,320.88 2,836,604.40

Drawings 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 500,000.00

Year Ended December 2027 ₱ 2,276,396.05 2,276,396.05 2,276,396.05 2,276,396.05 2,276,396.05 ₱11,381,980.26

Partner's Salary 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 150,000.00

Share in Profits 648,071.28 648,071.28 648,071.28 648,071.28 648,071.28 3,240,356.38

Drawings 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 500,000.00

Year Ended December 2028 ₱ 2,854,467.33 2,854,467.33 2,854,467.33 2,854,467.33 2,854,467.33 ₱14,272,336.65

5.8. Notes to Financial Statements

Note 1: Cash

Note 1: Cash
Total Capital 2,000,000.00
Less: Project Cost 833,450.00
Cash Beginning 1,166,550.00

Note 2: Inventory
Note 2: Inventories
2024 2025 2026 2027 2028

Raw Materials

Cost of Direct Materials (next year) 5,695,253.50 5,866,111.11 6,042,094.44 6,223,357.27 6,410,057.99 6,602,359.73

Number of months a year 12 12 12 12 12

Rate of ending Raw Mat based on next month data 0.05 0.05 0.05 0.05 0.05

Total Raw Materials Inventory 24,442.13 25,175.39 25,930.66 26,708.57 27,509.83

Note 3: Supplies

2024 2025 2026 2027 2028

Supplies, Beginning ₱13,976.00 ₱14,674.80 ₱15,408.54 ₱16,178.97 ₱16,987.92
Add: Purchase of Supplies 14,674.80 15,408.54 16,178.97 16,987.92 17,837.31

Total Supplies ₱28,650.80 ₱30,083.34 ₱31,587.51 ₱33,166.88 ₱34,825.23

Less: Supplies, Ending 14,674.80 15,408.54 16,178.97 16,987.92 17,837.31

Supplies Expense for the Year ₱13,976.00 ₱14,674.80 ₱15,408.54 ₱16,178.97 ₱16,987.92

Note 3: Supplies
Unit Price Quantity Price
OFFICE SUPPLIES
Bond Paper 202.00 5 1,010.00
Folder 13.00 20 260.00
File Organizer 69.00 5 345.00
Carbon Paper 69.00 2 138.00
Ballpen 168.00 3 504.00
Correction Tape 29.00 5 145.00
Pencil 119.00 3 357.00
Rotary Pencil Sharpener 189.00 2 378.00
Stapler 131.00 2 262.00
Stapler Wire 32.00 5 160.00
Ink 260.00 3 780.00
Log book 106.00 2 212.00
Ledger 44.00 1 44.00
Journal 44.00 1 44.00
Scotch Tape 13.00 3 39.00
Receipt Pad 15.00 3 45.00
Scissor 39.00 2 78.00
Double Paper Clip 26.00 1 26.00
Calculator 75.00 2 150.00
CLEANING SUPPLIES
Trash Can 64.00 4 256.00
Rags 5.00 50 250.00
Mop 193.00 3 579.00
Garbage Bag 279.00 1 279.00
Broom 147.00 5 735.00
Hand Soap 100.00 5 500.00
Dishwashing Soap 25.00 10 250.00
Sponge 5.00 5 25.00
Rubber Gloves 15.00 4 60.00
PRODUCTION SUPPLIES
Gloves 49.00 5 245.00
Transparent Sanitary Mask 109.00 5 545.00
Hairnet 30.00 10 300.00
Apron 89.00 10 890.00
Measuring Cup 129.00 5 645.00
Weighing Scale 400.00 3 1,200.00
Mixing Bowl 180.00 5 900.00
Strainer 179.00 5 895.00
Spatula 89.00 5 445.00
TOTAL 13,976.00

Note 4: Organizational Expenses

Note 4: ORGANIZATIONAL EXPENSES

TAXES, LICENSE AND CLEARANCES Pre-operating 2024 2025 2026 2027 2028
Business Permit ₱3,750.00 - ₱3,750.00 ₱3,750.00 ₱3,750.00 ₱3,750.00
Barangay Permit 500.00 - 500.00 500.00 500.00 500.00
Mayor's Permit 5,000.00 - 5,000.00 5,000.00 5,000.00 5,000.00
Sanitary Permit 90.00 - 90.00 90.00 90.00 90.00
Health Certificate Fee 600.00 - 600.00 600.00 600.00 600.00
Fire Clearance Fee 649.00 - 649.00 649.00 649.00 649.00
Metal Plate 349.00 - 349.00 349.00 349.00 349.00
Signboard Fee 200.00 - 200.00 200.00 200.00 200.00
Garbage Fee 1,200.00 - 1,200.00 1,200.00 1,200.00 1,200.00
Environmental Management Fee 1,500.00 - 1,500.00 1,500.00 1,500.00 1,500.00
Environmental Inspection Fee 50.00 - 50.00 50.00 50.00 50.00
Occupational Clearance 50.00 - 50.00 50.00 50.00 50.00
Zoning Clearance 50.00 - 50.00 50.00 50.00 50.00
Right of Ways -
DTI Registration 2,000.00 - - - - -
SEC Registration 1,322.00 - - - - -
BIR Registration 800.00 - 800.00 800.00 800.00 800.00
TOTAL ₱18,110.00 - ₱14,788.00 ₱14,788.00 ₱14,788.00 ₱14,788.00

Note 5: Leasehold Improvement

Note 5: Leasehold Improvement

The dimension of the leased space has a total of 185.71 square meters.
Estimated cost of renovation is P1,500 per square meter.
₱1,500 x 185.71 sqm ₱278,565.00

Note 6: Furniture and Fixtures

Note 6: Furnitures and Fixtures

Quantity Unit Price Total
Table and Chair Set set 1 10,798.00 10,798.00
Locker piece 1 7,500.00 7,500.00
Office Desk piece 2 1,759.00 3,518.00
Office Chair piece 2 1,599.00 3,198.00
Store Racks piece 4 945.00 3,780.00
Sofa Set set 1 7,800.00 7,800.00
Water Dispenser piece 2 1,478.00 2,956.00
Furnitures and Fixtures ₱39,550.00

Note 7: Production Equipment and Tools

Note 7: Production Equipment

Quantity Unit Price Total
Big Shear Mixer piece 2 62,800.00 125,600.00
Cooking Gas Range piece 2 71,717.00 143,434.00
Kitchen Table piece 2 1,999.00 3,998.00
Production Equipment ₱273,032.00

Note 8: Office and Store Equipment

Note 8: Office and Store Equipment

 Quantity Unit Price Total
Desktop/Computer set 2 14,999.00 29,998.00
Printer piece 1 5,495.00 5,495.00
Aircon piece 1 8,988.00 8,988.00
CCTV piece 4 1,259.00 5,036.00
Telephone piece 1 700.00 700.00
Office and Store Equipment ₱50,217.00

Note 9: Accounts Payable

Note 9: Accounts Payable

2024 2025 2026 2027 2028

Accounts Payable, Beginning - 571,969.56 646,325.61 671,435.07 692,150.09 712,971.79

Purchases 5,719,695.63 5,891,286.50 6,068,025.10 6,250,065.85 6,437,567.82 6,602,359.73

Total 5,719,695.63 6,463,256.06 6,714,350.70 6,921,500.92 7,129,717.92 7,315,331.52

Payment 5,147,726.07 5,816,930.46 6,042,915.63 6,229,350.83 6,416,746.12 6,583,798.37

Accounts Payable, Ending 571,969.56 646,325.61 671,435.07 692,150.09 712,971.79 731,533.15

Note 10: Sales

Note 10: Sales

2024 2025 2026 2027 2028

Expected Unit Sales 167,310.62 175,676.15 184,459.96 193,682.96 203,367.10

Selling Price 60.00 63.00 66.15 69.46 72.93
Total Sales 10,038,637.20 11,067,597.51 12,202,026.25 13,452,733.94 14,831,639.17

Note 11: Cost of Sales

Note 11: Cost of Sales

2024 2025 2026 2027 2028

Units Sold 167,310.62 175,676.15 184,459.96 193,682.96 203,367.10

Cost of Materials Per Unit 34.04 35.88 37.82 39.85 41.99

Cost of Direct Materials 5,695,253.50 6,303,260.30 6,976,275.63 7,718,265.81 8,539,384.71

Direct Labor 478,920.00 507,655.20 538,114.51 570,401.38 604,625.47
Manufacturing Overhead 100,083.20 106,088.19 112,453.48 119,200.69 126,352.73
Total Cost of Sales 6,274,256.70 6,917,003.69 7,626,843.62 8,407,867.89 9,270,362.91

Cost per Unit

Cost of Direct Materials 34.04 35.88 37.82 39.85 41.99

Direct Labor 2.86 2.89 2.92 2.95 2.97
Manufacturing Overhead 0.60 0.60 0.61 0.62 0.62
Manufacturing Cost Per Unit 37.50 39.37 41.35 43.41 45.58

Note 12: Salaries, Contribution Expenses, Direct Labor

Note 12: Salaries, Contribution Expenses, Direct Labor

No. of Monthly
Total SSS PAG-IBIG PHILHEALTH
employees Salaries

General Manager 1 18,200.00 18,200.00 819.00 364.00 910.00

Accountant 1 5,000.00 5,000.00 - - -
Production Head 1 14,950.00 14,950.00 672.75 299.00 747.50
Marketing Personnel 1 14,300.00 14,300.00 643.50 286.00 715.00
Cashier 1 13,000.00 13,000.00 585.00 260.00 650.00
Production Worker 2 12,480.00 24,960.00 1,123.20 499.20 624.00
Driver 1 3,800.00 3,800.00 - - -

Total Monthly 94,210.00 3,843.45 1,708.20 3,646.50

Total Yearly 1,130,520.00 46,121.40 20,498.40 43,758.00

Total Contribution 110,377.80

Charged to Production (Production Head and Workers) 478,920.00

Charged to Salaries 651,600.00

Note 13: Advertising

Note 13: Advertising

2024 2025 2026 2027 2028
Tarpaulin 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00
Flyers 1,800.00 1,800.00 1,800.00 1,800.00 1,800.00
Freebies (Calendar) 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
Freebies (Monggo Crackers) 700.00 700.00 700.00 700.00 700.00
Freebies (Umbrella) 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00
PR Package 700.00 700.00 700.00 700.00 700.00
Sponsorship 10,500.00 10,500.00 10,500.00 10,500.00 10,500.00
Total Advertising Expense 23,200.00 23,200.00 23,200.00 23,200.00 23,200.00

Note 14: Utilities Expense

Note 14: Utilities Expenses

2024 2025 2026 2027 2028
Electricity 12,000.00 12,360.00 12,730.80 13,112.72 13,506.11
Water 2,600.00 2,678.00 2,758.34 2,841.09 2,926.32
Telecommunication 2,099.00 2,161.97 2,226.83 2,293.63 2,362.44
Total Monthly 16,699.00 17,199.97 17,715.97 18,247.45 18,794.87
Total Yearly 200,388.00 206,399.64 212,591.63 218,969.38 225,538.46

Note 15: Depreciation Schedule

Note 15: Depreciation Schedule

Estimated Annual
Fixed Asset Cost Charged to:
Useful Life Depreciation

Leasehold Improvement ₱278,565.00 10 27,856.50 Operating Expenses

Furniture and Fixtures ₱39,550.00 10 3,955.00 Operating Expenses
Production Equipment ₱273,032.00 10 27,303.20 Cost of Sales
Office Equipment ₱50,217.00 10 5,021.70 Operating Expenses
Delivery Vehicle 100,000.00 10 10,000.00 Operating Expenses

Note 16: Income Tax Payable

Note 16: Income Tax Payable

2024 2025 2026 2027 2028
Income Payable, Beg 124,137.73 174,108.82 207,276.07 238,481.79
Income Tax Expense 496,550.94 572,297.57 654,995.46 746,651.10 847,589.10
Total 496,550.94 696,435.30 829,104.29 953,927.17 1,086,070.89
Payments 372,413.20 522,326.47 621,828.22 715,445.38 814,553.17
income Tax Payable, end 124,137.73 174,108.82 207,276.07 238,481.79 271,517.72

Note 17: Contribution Payable

Note 17: Contribution Payable

2024 2025 2026 2027 2028
Contribution Payable, Beginning - 9,198.15 10,148.63 10,415.47 10,629.11
Contribution, Expense 110,377.80 112,585.36 114,837.06 117,133.80 119,476.48
Total 110,377.80 121,783.51 124,985.69 127,549.28 130,105.59
Payments 101,179.65 111,634.88 114,570.21 116,920.17 119,263.45
Contribution Payable, Ending 9,198.15 10,148.63 10,415.47 10,629.11 10,842.13

Note 18: Utilities Payable

Note 18: Utilities Payable

 2024 2025 2026 2027 2028
Utilities Payable, Beginning - 16,699.00 18,591.55 19,265.27 19,852.89
Utilities Expense 200,388.00 206,399.64 212,591.63 218,969.38 225,538.46
Total 200,388.00 223,098.64 231,183.18 238,234.64 245,391.35
Payments 183,689.00 204,507.09 211,917.92 218,381.76 224,942.07
Utilities Payable, Ending 16,699.00 18,591.55 19,265.27 19,852.89 20,449.28

Note 19: VAT Payment

Note 19: VAT Payment

2024 2025 2026 2027 2028
Output Tax:
Sales ₱1,204,636.46 ₱1,328,111.70 ₱1,464,243.15 ₱1,614,328.07 ₱1,779,796.70

Input Tax:
Supplies ₱1,677.12 ₱1,760.98 ₱1,849.02 ₱1,941.48 ₱2,038.55
Furniture and Fixtures 4,746.00 - - - -
Production Equipment 32,763.84 - - - -
Office Equipment 6,026.04 - - - -
Delivery Vehicle 12,000.00 - - - -
Raw Materials
Total ₱57,213.00 ₱1,760.98 ₱1,849.02 ₱1,941.48 ₱2,038.55

Output Tax ₱1,204,636.46 ₱1,328,111.70 ₱1,464,243.15 ₱1,614,328.07 ₱1,779,796.70

Less: Input tax ₱57,213.00 ₱1,760.98 ₱1,849.02 ₱1,941.48 ₱2,038.55
VAT Due ₱1,147,423.46 ₱1,326,350.72 ₱1,462,394.13 ₱1,612,386.60 ₱1,777,758.15
VAT Payable 95,618.62 110,529.23 121,866.18 134,365.55 148,146.51

5.9. Financial Ratios

CURRENT RATIO

2024 2025 2026 2027 2028

Current Assets 1,258,636.00 4,136,599.22 6,642,006.65 9,406,679.12 12,032,641.29

Current Liabilities 817,623.07 959,703.84 1,030,258.06 1,095,479.43 1,163,927.44

Current Ratio 1.54 4.31 6.45 8.59 10.34

INVENTORY TURNOVER

2024 2025 2026 2027 2028

Cost of Sales 6,274,256.70 6,917,003.69 7,626,843.62 8,407,867.89 9,270,362.91

Average Inventory 24,808.76 25,553.02 26,319.62 27,109.20 27,509.83

Inventory Turnover 252.90 270.69 289.78 310.15 336.98

ASSET TURNOVER

2024 2025 2026 2027 2028

Sales 10,038,637.20 11,067,597.51 12,202,026.25 13,452,733.94 14,831,639.17

Total Assets 4,803,826.82 7,235,097.85 9,925,633.92 12,477,459.69 15,436,264.08

Asset Turnover 2.09 1.53 1.23 1.08 0.96

EQUITY DEBT RATIO

2024 2025 2026 2027 2028

Total Capital 2,000,000.00 3,986,203.75 6,275,394.01 8,895,375.86 11,381,980.26

Total Liabilities 817,623.07 959,703.84 1,030,258.06 1,095,479.43 1,163,927.44

Equity Debt Ratio 2.45 4.15 6.09 8.12 9.78

DEBT RATIO

2024 2025 2026 2027 2028

Total Liabilities 817,623.07 959,703.84 1,030,258.06 1,095,479.43 1,163,927.44

Total Assets 4,803,826.82 7,235,097.85 9,925,633.92 12,477,459.69 15,436,264.08

Debt Ratio 0.17 0.13 0.10 0.09 0.08

GROSS PROFIT MARGIN

2024 2025 2026 2027 2028

Gross Profit 3,764,380.49 4,150,593.82 4,575,182.63 5,044,866.06 5,561,276.27

Sales 10,038,637.20 11,067,597.51 12,202,026.25 13,452,733.94 14,831,639.17

Gross Profit Margin 0.37 0.38 0.37 0.38 0.37

OPERATING PROFIT MARGIN

2024 2025 2026 2027 2028

Operating
2,482,754.69 2,861,487.83 3,274,977.31 3,733,255.50 4,237,945.48
Income

Sales 10,038,637.20 11,067,597.51 12,202,026.25 13,452,733.94 14,831,639.17

Operating Profit Margin 0.25 0.26 0.27 0.28 0.29

NET PROFIT MARGIN

2024 2025 2026 2027 2028

 Net Income 1,986,203.75 2,289,190.26 2,619,981.85 2,986,604.40 3,390,356.38

Sales 10,038,637.20 11,067,597.51 12,202,026.25 13,452,733.94 14,831,639.17

Net Profit Margin 0.20 0.21 0.21 0.22 0.23

RETURN ON ASSETS

2024 2025 2026 2027 2028

Net Income 1,986,203.75 2,289,190.26 2,619,981.85 2,986,604.40 3,390,356.38

Average Total
3,401,913.41 6,019,462.34 8,580,365.88 11,201,546.80 13,956,861.88
Assets

Return on Assets 0.58 0.38 0.31 0.27 0.24

RETURN ON CAPITAL

2024 2025 2026 2027 2028

Net Income 1,986,203.75 2,289,190.26 2,619,981.85 2,986,604.40 3,390,356.38

Average Capital 2,993,101.88 5,130,798.88 7,585,384.94 10,138,678.06 12,827,158.46

Return on Capital 0.66 0.45 0.35 0.29 0.26

PAYBACK PERIOD

Total 2024 2025 2026 2027 2028

Net Income 1,986,203.75 2,289,190.26 2,619,981.85 2,986,604.40 3,390,356.38

Accumulated
1,986,203.75 4,275,394.01 6,895,375.86 9,881,980.26 13,272,336.65
Income

Amount to be
2,000,000.00 2,000,000.00
Recovered:

Recovered for
Payback Period 1st year more than 1
year

BREAK-EVEN POINT

2024 2025 2026 2027 2028

Fixed Cost

Operating Expenses 1,281,625.80 1,289,106.00 1,300,205.32 1,311,610.56 1,323,330.79

Direct Labor 478,920.00 507,655.20 538,114.51 570,401.38 604,625.47

Depreciation -
27,303.20 27,303.20 27,303.20 27,303.20
Factory Equipments 27,303.20

Rent - Production 144,000.00 144,000.00 144,000.00 144,000.00 144,000.00

Total Fixed Cost 1,931,849.00 1,968,064.40 2,009,623.03 2,053,315.14 2,099,259.45

Fixed Cost 1,931,849.00 1,968,064.40 2,009,623.03 2,053,315.14 2,099,259.45

Contribution
25.96 27.12 28.33 29.61 30.94
Margin (Unit)
Break Even Points (Units) 74,416 72,569 70,936 69,351 67,849