Chapter 5

CHAPTER V
FINANCIAL ASPECT
The financial aspect of the study shows the financial standing of the business
and its viability in the market. This chapter helps the proponents to determine and
forecast life of the proposed business for the next five years through preparing different
financial statements. Its includes the projected statement of cost of goods sold,
statement of comprehensive income, statement of changes in owner’s equity, statement
of financial condition, and statement of cash flow, as well as financial ratios.
Objectives;
 To discuss the needed capital
 To state the projected income of the proposed business
 To determine the amount of expenses and cost of goods sold
 To identify the number of years it will take to recover the investments
 To evaluate the project using the following ratios and its implications to the
proposed project;
a) Liquidity ratio
b) Profitability ratio
c) Over-all efficiency
Financial Assumptions;
1. Selling Price of Saha Chips ( All Flavors)
SELLING PRICE
Saha Chips Php 65.00
2. Sales increase by 5% yearly

3. Raw materials and packaging increase by 3% per year
4. Salary of employees and other expenses increased by 2% every 2 years.
5. Property, plant and equipment and food cart have an estimated life of ten (10)
years, while utensils have estimated life of two (2) years and sanitary materials
have estimated life of one (1) year, depreciation is computed under the straight
line method, likewise amortization of pre-operating expenses is computed using
the straight-line method.
Initial Capital Requirements
Saha chips have operated as a sole proprietorship, since the company begins as
small enterprise with small amount of capital. Only one person is responsible for funding
the company’s operations in this type of business. The owner must finance the following
expenses during the first year of the operation, which are considered part of the
business capital.
ASSESTS
Property Plan Equipment ₱ 11,020.00

Utensils 915.00
Sanitary Materials 596.00
Food Cart 10,000.00
Purchases (Raw Materials) 166,549.72

Direct materials (Packaging) 88,578.00
Freight In 7,800.00
Pre-operating Expense 12,969.00
SAHA CHIPS CAPITAL ₱ 298,427.72
Cost and Expense Schedule
SCHEDULE 1
PURCHASED OF RAW MATERIALS
Items Quantity For Monthly Quantity For Yearly Unit Price Amount
Production Production
Saha 194.25 kilograms 2331 kilograms ₱ 4.00 ₱ 9,324.00
Crispy Fry 97.13 packs 1165.5 packs 16.00 18,648.00
Cornstarch 24.28 kilograms 291.37 kilograms 46.00 13,403.02
Oil 48.56 liters 582.75 liters 100.00 58,275.00
Flour 97.13 kilograms 1165.5 kilograms 35.00 40,792.50
Flavor 1554 tablespoon 18648 tablespoon 1.40 26,107.20
Total Total ₱ 202.40 ₱ 166,549.72
SCHEDULE 2
PURCHASED OF DIRECT MATERIALS
Items Quantity For Monthly Quantity For Yearly Unit Price Amount
Production Production
Packagin 1554 pcs 18648 pcs ₱ 3.75 ₱ 69,930.00
g
Stickers 1554 pcs 18648 pcs 1.00 18,648.00
Total Total ₱ 4.75 ₱ 88,578.00
SCHEDULE 3
DIRECT LABOR
POSITION MONTHLY COST ANNUAL COST
Cook 1 ₱ 7,000.00 ₱ 84,000.00
Cook 2 7,000.00 84,000.00
Total ₱ 14,000.00 ₱ 168,000.00
SCHEDULE 4
SALARIES AND WAGES
POSITION MONTHLY COST ANNUAL COST
Manager ₱ 10,000.00 ₱ 120,000.00
Sales Lady 1 5,000.00 60,000.00
Total 15,000.00 180,000.00
SCHEDULE 5
STORE SUPPLIES
ITEM QUANTITY FOR: UNIT PRICE ANNUAL COST
MONTHLY USED ANNUAL USED
Ball pen 2 24 ₱ 14.00 ₱ 336.00

Record Book 1 12 70.00 840.00
Journal 1 12 35.00 420.00
Ledger 1 12 35.00 420.00
Battery 1 set 12 sets 49.00 588.00
Plastic Eco Bag 1 set 12 sets 35.00 420.00
Total ₱ 238.00 ₱ 3,024.00
SCHEDULE 6
SANITARY SUPPLIES
ITEM QUANTITY FOR: UNIT COST ANNUAL COST
MONTHLY USED ANNUAL USED
Sponge 2 24 ₱ 5.00 ₱ 120.00

Hairnet 3 36 5.00 180.00
Dishwashing 1 12 40.00 480.00
Gloves 1 box 12 boxes 10.00 120.00
Garbage Bag 1 roll 12 rolls 35.00 420.00
Pot Holder 2 24 5.00 120.00
Powder Soap 1 pack 12 packs 60.00 720.00
Total 160.00 2,160.00
SCHEDULE 7
SANITARY MATERIALS
ITEM QUANTITY UNIT PRICE AMOUNT
Broom 1 ₱ 90.00 ₱ 90.00

Dust Pan 1 50.00 50.00
Dipper 2 15.00 30.00
Trash Bin 3 116.00 348.00
Mop 1 78.00 78.00
Total ₱ 349.00 ₱ 596.00
SCHEDULE 8
UTENSILS
Measuring Cups 1 ₱ 120.00 ₱ 120.00

Plastic Strainer 2 20.00 40.00
Wok Pan 1 250.00 250.00
Chopping Board 2 30.00 60.00
Knife 3 20.00 60.00
Tong 2 25.00 50.00
Set of Spoon 1 75.00 75.00
Basin 2 100.00 200.00
Wide Plate 4 15.00 60.00
Total ₱ 655.00 ₱ 915.00
SCHEDULE 9
PROPERTY PLAN AND EQUIPMENT
MATERIALS Heavy Duty Gas Stove 1 ₱ 700.00 ₱ 700.00

Gas tank 1 1,800.00 1,800.00
AND Weighing Scale 1 150.00 150.00
EQUIPMENT Drum 1 950.00 950.00
Calculator 1 180.00 180.00
FURNITURES Wooden Cabinet 1 2,000.00 2,000.00

Table 1 800.00 800.00
Table with Drawers 1 1,500.00 1,500.00
AND Wall Fan 1 700.00 700.00
Light Bulb 2 120.00 240.00
FIXTURES Display Case Glass 1 600.00 600.00
Chair 4 350.00 1,400.00
Total ₱ 9,850.00 ₱ 11,020.00
SCHEDULE 10
AMORTIZATION SCHEDULE
Pre-Operating Cost
YEAR AMORTIZATION ₱ 12,969.00
2022 ₱ 2,593.80 10,375.20
2023 2,593.80 7,781.40
2024 2,593.80 5,187.60
2025 2,593.80 2,593.80
2026 2,593.80 -
SCHEDULE 11
UTENSILS DEPRECIATION EXPENSE (2022-2023)
ITEM COST YEARLY DEPRECIATION ACCUMULATED BOOK VALUE
EXPENSE DEPRECIATION
UTENSILS 9 2022 4 4 4
15.00 57.50 57.50 57.50
2023 4 9
57.50 15.00 -
SCHEDULE 11.A
UTENSILS 9 2024 4 4 4
33.30 66.65 66.65 66.65
2025 4 9
66.65 33.30 -
SCHEDULE 11.B
UTENSIL 9 2026 4 4 4
S 52.00 76.00 76.00 76.00
2027 4 9
76.00 52.00 -
SCHEDULE 12
PROPERTY PLANT EQUIPMENT DEPRECIATION EXPENSE
PROPERTY ₱ 11,020.00 2022 ₱ 1,102.00 ₱ 1,102.00 ₱ 9,918.00
PLANT 2023 1,102.00 2,204.00 8,816.00
2024 1,102.00 3,306.00 7,714.00
2025 1,102.00 4,408.00 6,612.00
AND 2026 1,102.00 5,510.00 5,510.00
2027 1,102.00 6,612.00 4,408.00
2028 1,102.00 7,714.00 3,306.00
EQUIPMENT 2029 1,102.00 8,816.00 2,204.00
2030 1,102.00 9,918.00 1,102.00
2031 1,102.00 11,020.00 -
SCHEDULE 13
SANITARY MATERIALS DEPRECIATION EXPENSE (2022)
Sanitary ₱ 596.00 2022 ₱ 596.00 ₱ 596.00 ₱ -
Materials - 2023 - - -
SCHEDULE 13. A
ITEM COST YEARL DEPRECIATIO ACCUMULATE BOOK VALUE
Y N D
SANITARY 607.92 2024 607.92 607.92 -
MATERIALS - 2025 - - -
SCHEDULE 13. B
ITEM COST YEARL DEPRECIATION ACCUMULATE BOOK VALUE
Y D
SANITARY 620.08 2026 620.08 620.08 -
MATERIALS
SCHEDULE 14
FOOD CART DEPRECIATION EXPENSE
ITEM COST YEARL DEPRECIATION ACCUMULATED BOOK VALUE
Y EXPENSE DEPRECIATION
Food ₱ 10,000.00 2022 ₱ 1,000.00 ₱ 1,000.00 ₱ 9,000.00
Cart 2023 1,000.00 2,000.00 8,000.00
2024 1,000.00 3,000.00 7,000.00
2025 1,000.00 4,000.00 6,000.00
2026 1,000.00 5,000.00 5,000.00
2027 1,000.00 6,000.00 4,000.00
2028 1,000.00 7,000.00 3,000.00
2029 1,000.00 8,000.00 2,000.00
2030 1,000.00 9,000.00 1,000.00
2031 1,000.00 10,000.00 -
SCHEDULE 15
SSS CONTRIBUTION
2022 2023 2024 2025 2026

Manager ₱ 860.00 ₱ 960.00 ₱ 979.00 ₱ 1,030.00 ₱ 1,050.40
Cook 1 605.00 675.00 688.30 724.00 738.28
Cook 2 605.00 675.00 688.30 724.00 738.28
Sales Lady 435.00 485.00 494.50 520.00 530.20
Monthly 2,505.00 2,795.00 2,850.10 2,998.00 3,057.16
Salary
Yearly ₱ 30,060.00 ₱ 33,540.00 ₱ 34,201.20 ₱ 35,976.00 ₱ 36,685.92
Salary(*12)
SCHEDULE 14
PHILHEALTH CONTRIBUTION
2022 2023 2024 2025 2026

Manager ₱ 200.00 ₱ 225.00 ₱ 250.00 ₱ 250.00 ₱ 250.00
Cook 1 200.00 225.00 250.00 250.00 250.00
Cook 2 200.00 225.00 250.00 250.00 250.00
Sales Lady 200.00 225.00 250.00 250.00 250.00
Monthly 800.00 900.00 1,000.00 1,000.00 1,000.00
Salary
Yearly ₱ 9,600.00 ₱ 10,800.00 ₱ 12,000.00 ₱ 12,000.00 ₱ 12,000.00
Salary(*12)
SCHEDULE 15
PAG-IBIG CONTRIBUTION
2022-2026
Manager ₱ 200.00
Cook 1 140.00
Cook 2 140.00
Sales Lady 100.00

Monthly Salary 580.00
Yearly Salary(*12) ₱ 6,960.00

PROJECTED DEMAND AND SALES
FOR THE YEAR 2022
No. of Purchases No. of Respondent Weekly Sales Monthly Sales Annual sales
per Week (packs) (peso) (packs) (peso) (packs) (pesos)
5 packs 4 20 1,300 80 5,200 960 62,400
4 packs 170 680 *65 44,200 *4 2,720 *65 176,800 *12 32,640 *65 2,121,600
3 packs 110 330 Unit 21,450 Weeks 1,320 Unit 85,800 Months 15,840 Unit 1,029,600
2 packs 20 40 Price 2,600 160 Price 10,400 1,920 Price 124,800
1 pack 40 40 2,600 160 10,400 1,920 124,800
Total 344 1,110 72,150 4,440 288,600 53,280 3,463,200
NOTE:
Saha Chips can produce 53,280 units annually, which is equivalent to 3,463,200
pesos according to a survey of annual projected demand and sales. Only 35% of this
demand can bet met by the proposed business. The 35% of total production, which
totals 53,280 units, is 18, 648 units or 1, 212,120 pesos.
¿ 53 , 280units × 35 %
= 18, 648 units × 65 (unit price)
= ₱ 1,212,120 annual sales

Schedule of Increase
Projected Sales
Year Sales
2022 1,212,120.00
2023 1,272,726.00
2024 1,336,362.30
2025 1,403,180.42
2026 1,473,339.44
Note: Sales will increase 5% yearly
Purchase of Raw Materials
Year Amount
2022 166,549.72
2023 171,546.21
2024 176,692.60
2025 181,993.38
2026 187,453.18
Note: Purchase of raw materials will increased 3% yearly

Purchase of Direct Materials (Packaging)
Year Amount
2022 88,578.00
2023 91,235.34
2024 93,972.40
2025 96,791.57
2026 99,695.32
Note: Purchase of Direct materials will increased 3% yearly
Freight in
Year Amount
2022 7,800.00
2023 7,800.00
2024 7,956.00
2025 7,956.00
2026 8,115.12
Note: Freight in will increased 2% every two (2) years

Direct Labor
Year Amount
2022 168,000.00
2023 168,000.00
2024 171,360.00
2025 171,360.00
2026 174,787.20
Note: Direct Labor will increased 2% every two (2) years.
Salaries and Wages
Year Amount
2022 180,000.00
2023 180,000.00
2024 183,600.00
2025 183,600.00
2026 187,272.00
Note: Salaries and Wages will increase 2% every two (2) years
13th Month Pay
Year Amount
2022 29,000.00
2023 29,000.00
2024 29,580.00
2025 29,580.00
2026 30,171.60
Note: 13th Month Pay will increased 2% every two (2) years
Utilities
Year Amount
2022 13,704.00
2023 13,704.00
2024 13,978.08
2025 13,978.08
2026 14,257.64
Note: Utilities will increase 2% every two (2) years

Store Supplies
Year Amount
2022 3,024.00
2023 3,024.00
2024 3,084.48
2025 3,084.48
2026 3,146.17
Note: Store Supplies will increase 2% every two (2) years
Sanitary Supplies
Year Amount
2022 2,160.00
2023 2,160.00
2024 2,203.20
2025 2,203.20
2026 2,247.26
Note: Sanitary Supplies will increase 2% every two (2) years

Sanitary Materials
Year Amount
2022 596.00
2023 -
2024 607.92
2025 -
2026 620.08
Note: Sanitary Materials depreciated as 1 year even the useful life is two years;
however it will also increase 2% every two (2) years
Utensils
Year Amount
2022 915.00
2023 915.00
2024 933.30
2025 933.30
2026 951.97 or 952
Note: Utensils will increase 2% every two (2) years
Financial Ratio
A. Ratio Assets to Total Assets Ratio of Current Assets to Total

Assets= Current Assets
Formula 2022 2023 2024 2025 2026

=(430,927.72+280,257.30)/ =(438,581.55+284,341.30)/ =(449,981+291,377.33)/ =(458,100.95+292,544.21)/ =(470,050.82+298,532.47)/
=(𝐶𝑜𝑠𝑡 𝑜𝑓 𝑆𝑎𝑙𝑒𝑠 𝑎𝑛𝑑 1,212,120 1,272,726 1,336,362.30 1,403,180.42 1,473,339.44
𝑒𝑠𝑝𝑒𝑛𝑠𝑒𝑠)/(𝑁𝑒𝑇 𝑆𝑎𝑙𝑒𝑠)
59% 57% 55% 53% 52%
SCHEDULE 2
Evaluation of Profitablity
(Ability to Earn Profit)
Ratio of Current Assets to Total Assets measures the overall liquidity of the assets.
Liquidity ratio of a business is its ability to pay off its debt’s obligations. A good liquidity
ratio is anything greater than 1. It indicates that the company is in good financial health
and likely to face financial hardships (N/A.2000)
As shown on the data, the proposed business in 2023-2026 increasing this means that is
still good because of having enough liquid assets.
Schedule 2: Evaluation of Profitability
(ability to earn adequate profits)
A. Gross Margin Ratio
Gross Margin
Gross Margin Ratio=
Net sales
B. Operating Ratio
Formula 2022 2023 2024 2025 2026
=(430,927.72+280,257.30)/ =(438,581.55+284,341.30)/ =(449,981+291,377.33)/ =(458,100.95+292,544.21)/ =(470,050.82+298,532.47)/
=(𝐶𝑜𝑠𝑡 𝑜𝑓 𝑆𝑎𝑙𝑒𝑠 𝑎𝑛𝑑 1,212,120 1,272,726 1,336,362.30 1,403,180.42 1,473,339.44
59% 57% 55% 53% 52%
SCHEDULE 2
Evaluation of Profitablity
The Gross Margin Ratio of Saha Chips in the year 2022, reveals that the company
retains 68% of its nets sales after paying the Cost of Goods Sold. This also means that
32% of the net sales has been contemplated as cost of goods sold, while the remaining
percentage could be used to pay back all the expenses and taxes. This is goods signs
that the business is gaining profitability on its first- year operation given that it has more
than half of its sales to use for all the expenses. An increasing rate of ratio from 2022 to
2026 shows a good probability of the company
B. Operating Ratio
Cost of Sales∧Expenses
Operating Ratio=
Net Sales
B. Operating Ratio
Formula 2022 2023 2024 2025 2026
=(430,927.72+280,257.30)/ =(438,581.55+284,341.30)/ =(449,981+291,377.33)/ =(458,100.95+292,544.21)/ =(470,050.82+298,532.47)/
=(𝐶𝑜𝑠𝑡 𝑜𝑓 𝑆𝑎𝑙𝑒𝑠 𝑎𝑛𝑑 1,212,120 1,272,726 1,336,362.30 1,403,180.42 1,473,339.44
59% 57% 55% 53% 52%
The Operating Ratio of Saha Chips in 2022 illustrates that 59% of the Net Sales is used
to pay the Operating Expenses and Cost of Goods Sold. This ratio illustrates comparison
on the amount of total expenses and net sales. The data from 2022 to 2026 shows that
the decreasing rate of the ratio, it specifies that the company generates more than the
actual value of total expenses, and that is efficiently used its nets sales in paying its
expenditures.
C. Return on Sales
Net Income
Return on Sales =
Net Sales
A.2 Gross Margin Ratio ( based on Net Sales)
Formula 2022 2023 2024 2025 2026
Gross Sale ₱ 781,192.28 ₱ 834,144.45 ₱ 886,381.30 ₱ 945,079.47 ₱ 1,003,288.62
Net Sales ₱ 1,212,120.00 ₱ 1,272,726.00 ₱ 1,336,362.30 ₱ 1,403,180.42 ₱ 1,473,339.44
64% 66% 66% 67% 68%
From the table, its shows that 2022, 37% of their nets sales is actually counted a
company’s profit. It also means that Saha Chips has saved almost 1/3 of its sales as
profit. Since the ratio indicates profitability and efficiency, this ratio shows that Saha
Chips operates efficiently with an increasing profit given the 2022 to 2026 data. The
company also saves while establishing the ability to pay future debts.
D. Return on Current Assets
Net income
Return on Current Assets =
Average Current Assets
A.1 Ratio of Current Assest to Total Assets

Formula 2022 2023 2024 2025 2026
Current Assets ₱ 724,753.45 ₱ 1,224,655.47 ₱ 1,759,794.00 ₱ 2,341,890.86 ₱ 2,964,821.78
Total Assets ₱ 744,128.95 ₱ 1,241,471.47 ₱ 1,774,974.65 ₱ 2,354,502.86 ₱ 2,975,807.78
97% 99% 99% 99% 100%
In year 2022 to 2023 the return on Current Asset Ratio of Saha Chips shows that 61% of
the income is produced from its current assets. It means that the company is efficiently
used its current assets to render a good number of profits for the initial year. But since
the company has no other cost to spread with its current assets, its increase overtime
resulting to lower ratio to net income. A 51% on 2023 to 23% on 2026 is still not a
terrible ratio for five years, the company will then try to use its current assets to generate
good profit after five years of initial observation.

E. Return on Fixed Assets
Net Income
Return on Fixed Assets =
A.1 Ratio of Current Assest to Total Assets

Formula 2022 2023 2024 2025 2026
Current Assets ₱ 724,753.45 ₱ 1,224,655.47 ₱ 1,759,794.00 ₱ 2,341,890.86 ₱ 2,964,821.78
Total Assets ₱ 744,128.95 ₱ 1,241,471.47 ₱ 1,774,974.65 ₱ 2,354,502.86 ₱ 2,975,807.78
97% 99% 99% 99% 100%
In 2022 to 2023, Saha Chips has 23% and 27% of Return on Fixed Asset (RoFA) ratio,
this means that a great number of net income is generated from fixed asset invested.
Over time, the ratio increases, it indicates that the fixed assets invested is efficiently over
time since its yields an increasing member of profits in five years. The longer the year
the fixed are used, the more efficient it is an generating income for the company.
F. Return on Equity
Net Income
Return on Equity =
Average Own e' s Equity
D.Return on Current Assets

Formula 2022 2023 2024 2025 2026
Net Income ₱ 445,701.23 ₱ 497,342.52 ₱ 533,503.18 ₱ 579,528.21 ₱ 621,304.92
Ave. Current Asset ₱ 724,753.45 ₱ 974,704.46 ₱ 1,492,224.74 ₱ 2,050,842.43 ₱ 2,653,356.32
61% 51% 36% 28% 23%
The ratio of Return on Equity in 2022 -2023 reveals that Saha Chips investment yields
60% of the income generated. However, it is seen on the data that the ratio decreases
within five years, the result comes from the decisions of the company not to reinvest its
earnings for the first five years. From the data, the Saha Chips needs to carefully asses
its equity and will resolve this decreasing rate by considering any reinvestment in the
near future.
G. Return on Investment
Net Income
Return on Investment =
Initial Capital
Ave. Fixed Asset ₱ 19,375.50 ₱ 18,095.75 ₱ 15,998.33 ₱ 13,896.33 ₱ 11,799.00

23 27 33 41 52
F.Return on Equity
Formula 2022 2023 2024 2025 2026
Return on Investment is a metric used to understand the profitability of an investment. It
helps to understand how much profit or loss you investment has earned(Birken &
Curry,2021).
As indicated on the data, there are 149% of return on investment for the year 2022 while
on the consecutive year has 167%. Hence ROI of the proposed business increased 18%
for the year 2023. Consequently, it indicates that the business will certainly grow profits
year after year and had a positive return.
Schedule 3: Evaluation of the Overall Efficiency
Net Sales
A. Asset Turnover =
Average Total Assets
G. Return of Investment
Formula 2022 2023 2024 2025 2026
Net Income ₱ 445,701.23 ₱ 497,342.52 ₱ 533,503.18 ₱ 579,528.21 ₱ 621,304.92
Total Assets ₱ 298,427.72 ₱ 298,427.72 ₱ 298,427.72 ₱ 298,427.72 ₱ 298,427.72
149% 167% 179% 194% 208%
SCHEDULE 3
This ratio that the company generates 2.91 sales in every PHP in investment made in
total asset in 2023, this can be seen as 2:91:1. Again, because Saha Chips is a new
business, it did not consider investing on its asset yet for five years resulting to the
decreasing rate of asset turnover in five years. Having this data, on the other side, the
proponents might study any possible investment on third to fifth year of the business.
A. Current Assets Turnover
Cost Of Sales∧Expenses
Current Assets Turnover =
G. Return of Investment
Formula 2022 2023 2024 2025 2026
Net Income ₱ 445,701.23 ₱ 497,342.52 ₱ 533,503.18 ₱ 579,528.21 ₱ 621,304.92
Total Assets ₱ 298,427.72 ₱ 298,427.72 ₱ 298,427.72 ₱ 298,427.72 ₱ 298,427.72
Current Assets Turnover ratio indicates that the currents are turned over in the form of
sales more number of items. A high current assets turnover ratio indicated the capability
of the organization to achieve maximum sales with the minimum investment in current
assets(N/A).
Illustrated from the table above, there is a decreasing rate of the current assets, that
means the proposed business had allotted a higher investment in current assets and no
debt to paid off. Basically, it affects the overall turnover of current assets to sales. As an
action to increase the current asset turnover value, the proponents will invest on fixed
assets while keeping current assets to a minimum.
B. Equity Turnover
Net sales
Equity Turnover =
Average Owne r ' s Equity
Cost of Sales and Expenses ₱ 711,185.02 ₱ 722,922.85 ₱ 741,358.33 ₱ 750,645.16 ₱ 768,583.29

Ave. Current Assets ₱ 724,753.45 ₱ 974,704.46 ₱ 1,492,224.74 ₱ 2,050,842.43 ₱ 2,653,356.32
98% 74% 50% 37% 29%
C.Equity Turnover
Equity turnover measures the effectiveness of the use of capital provided by the owners.
An increased proportion provided by the owners. An increased proportion provides a
positive indication, and a decrease proportion indicates a negative connotation
(Mulhopadhyay). For instance, the business equity investment on the first year of
operation is 1.63% which is negative result as mentioned by the author becaude for the
years 2023-2026, it shows a downfall equity turnover. On this case, the business will not
be able to add an investment to rid a negative outcome.

SAHA CHIPS
TRIAL BALANCE
For the Month of Ended December 31, 2022
Account Name Debit Credit

Cash ₱ 714,378.25
Property Plant Equipment 11,020.00
Property Plant Equipment- Accumulated Depreciation ₱ 1,102.00
Utensils 915.00
Utensils- Accumulated Depreciation 457.50
Saha Chips Capital 298,427.72
Sales 1,212,120.00
Purchases ( Raw materials) 166,549.72
Depreciation Expense of Property Plant Equipment 1,102.00
Depreciation Expense of Utensils 457.50
Store Supplies 3,024.00
Sanitary Supplies 2,160.00
Direct Labor 168,000.00
Direct Materials (Packaging) 88,578.00
Food Cart 10,000.00
Depreciation of Expense- Food Cart 1,000.00
Accumulated Depreciation of Food Cart 1,000.00
Utilities 13,704.00
Salaries and Wages 180,000.00
Amortization Expense 2,593.80
Income Tax 55,233.75
Freight In 7,800.00
SSS 30,060.00
Phil-health 9,600.00
Pag-ibig 6,960.00
13th Month Pay 29,000.00
Depreciation of Supplies Materials 596.00
Accumulated Depreciation of Supplies Materials 596.00
Total ₱ 1,513,703.22 ₱ 1,513,703.22
SAHA CHIPS
TRIAL BALANCE

Cash ₱ 1,216,874.07
Utensils 915.00
Saha Chips Capital 744,128.95
Sales 1,272,726.00
Food Cart 10,000.00
Utilities 13,704.00
Freight In 7,800.00
SSS 33,540.00
Pag-ibig 6,960.00
Sanitary Materials -
Depreciation of Supplies Materials -
Accumulated Depreciation of Supplies Materials -
Total ₱ 2,021,973.95 ₱ 2,021,973.95
SAHA CHIPS
TRIAL BALANCE

Cash ₱ 1,754,606.40
Utensils 933.30
Saha Chips Capital 1,241,471.47
Sales 1,336,362.30
Food Cart 10,000.00
Utilities 13,978.08
Freight In 7,956.00
SSS 34,201.20
Pag-ibig 6,960.00
Total ₱ 2,585,214.34 ₱ 2,585,214.34
SAHA CHIPS
TRIAL BALANCE

Cash ₱ 2,339,297.06
Utensils 933.30
Sales 1,403,180.42
Food Cart 10,000.00
Utilities 13,978.08
Freight In 7,956.00
SSS 35,976.00
Pag-ibig 6,960.00
Sanitary Materials -
Depreciation of Supplies Materials -
Accumulated Depreciation of Supplies Materials -
Total ₱ 3,187,496.37 ₱ 3,187,496.37
SAHA CHIPS
TRIAL BALANCE

Cash ₱ 2,964,821.78
Utensils 952.00
Sales 1,473,339.44
Pre-operating Expense -
Food Cart 10,000.00
Utilities 14,257.64
Freight In 8,115.12
SSS 36,685.92
Pag-ibig 6,960.00
Total ₱ 3,839,448.38 ₱ 3,839,448.38

Chapter 5

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Chapter 5

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CHAPTER V

statement of comprehensive income, statement of changes in owner’s equity, statement

of financial condition, and statement of cash flow, as well as financial ratios.

 To discuss the needed capital

 To state the projected income of the proposed business

 To determine the amount of expenses and cost of goods sold

 To identify the number of years it will take to recover the investments

1. Selling Price of Saha Chips ( All Flavors)

Saha Chips Php 65.00

2. Sales increase by 5% yearly

4. Salary of employees and other expenses increased by 2% every 2 years.

line method, likewise amortization of pre-operating expenses is computed using

the straight-line method.

Initial Capital Requirements

Property Plan Equipment ₱ 11,020.00

Purchases (Raw Materials) 166,549.72

Cook 1 ₱ 7,000.00 ₱ 84,000.00

Cook 2 7,000.00 84,000.00

Total ₱ 14,000.00 ₱ 168,000.00

Ball pen 2 24 ₱ 14.00 ₱ 336.00

Sponge 2 24 ₱ 5.00 ₱ 120.00

Broom 1 ₱ 90.00 ₱ 90.00

Measuring Cups 1 ₱ 120.00 ₱ 120.00

MATERIALS Heavy Duty Gas Stove 1 ₱ 700.00 ₱ 700.00

FURNITURES Wooden Cabinet 1 2,000.00 2,000.00

2022 2023 2024 2025 2026

2022 2023 2024 2025 2026

Sales Lady 100.00

Yearly Salary(*12) ₱ 6,960.00

totals 53,280 units, is 18, 648 units or 1, 212,120 pesos.

= 18, 648 units × 65 (unit price)

= ₱ 1,212,120 annual sales

Note: Sales will increase 5% yearly

Purchase of Raw Materials

Note: Purchase of raw materials will increased 3% yearly

Note: Purchase of Direct materials will increased 3% yearly

Note: Freight in will increased 2% every two (2) years

Note: Direct Labor will increased 2% every two (2) years.

Salaries and Wages

Note: Utilities will increase 2% every two (2) years

Note: Store Supplies will increase 2% every two (2) years

Note: Sanitary Supplies will increase 2% every two (2) years

however it will also increase 2% every two (2) years

2026 951.97 or 952

Note: Utensils will increase 2% every two (2) years

A. Ratio Assets to Total Assets Ratio of Current Assets to Total

Formula 2022 2023 2024 2025 2026

59% 57% 55% 53% 52%

and likely to face financial hardships (N/A.2000)

still good because of having enough liquid assets.

Schedule 2: Evaluation of Profitability

(ability to earn adequate profits)

A. Gross Margin Ratio

59% 57% 55% 53% 52%

2026 shows a good probability of the company

59% 57% 55% 53% 52%

D. Return on Current Assets

A.1 Ratio of Current Assest to Total Assets

good profit after five years of initial observation.

A.1 Ratio of Current Assest to Total Assets

D.Return on Current Assets

Ave. Fixed Asset ₱ 19,375.50 ₱ 18,095.75 ₱ 15,998.33 ₱ 13,896.33 ₱ 11,799.00

Return on Investment is a metric used to understand the profitability of an investment. It