Chapter VI

Financial Aspect

This chapter is discusses the financial aspects of the study, in order for a business plan

understand it needs money. In this chapter, accounting and financial expertise is

needed. This includes source of funds, balance sheet, income statement, cost of goods

sold and cost of sales.

6.1 Objectives of the study

 To determine the capital requirement.

 To determine the total project cost.

 To present the projected income statement.

 To analyze cash flow.

 To present balance statement.

6.2 Total project cost ****

Considering all the expenses that the business will occur, the total project cost for our

business will be ₱378,274.

6.3 Initial capital requirement x

₱189,137
Longno, Capital
₱189,137
Bank

₱378,274
6.4 Source of financing

6.4.1 Source selected or proposed both long-term and short term

We select to have an investment of 50% of the total capital with the bank in order

to have a financial help in order to establish the said business.

6.4.2 Alternatives sources

No alternative sources to be used only an investment from the bank will do.

6.4.3 Amount and terms of financing

An amount of₱189,137from both the investment and initial capital requirement of the

said proprietor for the total of ₱378,274. The investment from the bank is going to be

paid within the year.

6.5 Financial statements

6.5.1 Assumptions

Major Financial Assumption

1.    The project is projected for 5 years.
2.    Training and Seminar Expense will increase by P 3,000 every year.
3.    Facilities, Equipment and other fixed assets are depreciated on a straight line basis.
4. All sales are subject to 2% discount
5.    Salaries expense based the salaries and wages of all employees.
6.    Sales are inclusive of VAT.
7. VAT payable shows one month payable in the Statement of financial position
8. Permits and Licenses are expected to increase by 3% annually
9. Withdrawal is almost 90.91% of Net Income
10. Promotional expense is subject to 2% increase anually
11. Interest Expense is fixed at 20% a year
12. Additional purchase of 1500 worth of supplies in the succeeding year
13. Accounts Payable are estimated at 3% of annual sales
14. Tax Expense is subject to Normal tax rate of individual tax payer