Chapter V

FINANCIAL ASPECT

5.1 Objective of the Study

• To know the financial requirements of the proposed business.

• To consider and evaluate the financial status of the customer.

• To find out the total contribution to be invest in establishing to proposed business.

5.2 Financial Description

The financial study involves the skillful coordination of the various information of all the factors that are
pertinent to an intended venture having established the existence of the sample market. The
investigation moves in the study of finance cost showing the three important accounting states such
income, cash flow, and balance sheet. A financial study also projects how much startup capital is
needed, source of capital, returns on investment, and other financial consideration. It looks at how
much cash is needed, where it will come from and how it will be spent. The financial study is an
assessment of the financial aspects of something if this case for starting a running business.

5.2.1 Total Project Cost – for Ones a Month

Fixed Assets
Office Equipment and Furniture -
Factory Equipment and Furniture -
Store Equipment
Leasehold Improvements-Factory -
Total
Working Capital for Two Months
Direct Materials
Direct Labor
Factory Overhead
Indirect Materials
Rent Expense – Factory
Utilities Expense – Factory
Maintenance Expense -- Factory
Supplies – Factory
SSS Contribution – Workers 633.00
Philhealth Contribution – Workers 1000.00
Administrative Expenses
Rent Expense – Office -
Utilities Expense – Office -
Maintenance Expense – Office -
Supplies – Office -
Maintenance Expense Office -
Legal Fees and Licenses -
Selling Expense
 Salaries – Salesman
Delivery Expense -
Advertising Expense
Maintenance Expense – Store -
SSS Contribution – Salesman 633.00
Philhealth Contribution – Salesman 1000.00
Rent Expense – Stall - 18,500.00
Total Project Cost
Cash on Hand
Capital Investment 500,000.00

5.2.2 Initial Capital Requirements

Table 5.1

Initial Capital

Partners Capital Contribution

Tenorio, Paulo H. Php 100,000
Labay, Jezrev Daniel R. Php 100,000
Penalosa, Rendel B. Php 100,000
Tacla, Lawrence Andrei P. Php 100,000
San Jose, Chester M. Php 100,000

VEGGIE BITE PARTNERSHIP

PROJECTED STATEMENT OF FINANCIAL POSITION

ASSETS 2022 2023 2024 2025 2026

Current Assets
Cash 521,519.79 660,487.57 813,722.50 978,268.21 1,155,046.03
Accounts Receivable, Net 12, 829.99 16,389.38 17,561.08 18,512.80 19,521.76
Inventory 62, 875.95 76,664.43 83,098.78 89,471.97 96,536.60
Total Current Assets 597,225.73 753,541.38 914,382.36 1,086,252.98 1,271,104.59
Non Current Assets
Property, Plant and 18,692.86 14,019.645 9346.43 4673.215 -
Equip.
Total Non Current 18,692.86 14,019.645 9346.43 4673.215 -
Assets

TOTAL ASSETS 615,918.59 767,561.025 923,728.79 1,090,926.185 1,271,104.59

LIABILITIES & PARTNERS
EQUITY
 Current Liabilities
Accounts Payable 22,564.56 48,731.24 76,856.53 107,758.16 140,877.28
Vat Payable 5,847.51 7,059.41 7,639.93 7,954.54 8,324.97
Total Current Liabilities 28,412.07 55,790.65 84,496.46 115,712.70 149,202.25
Partner’s Equity
Partner 1(MP) 140,609.34 187,626.88 235,569.04 285,617.69 338,076.65
Partner 2(MP) 113,609.34 133,626.88 154,569.04 177,617.69 203,076.65
Partner 3 113,609.34 133,626.88 154,569.04 177,617.69 203,076.65
Partner 4 113,609.34 133,626.88 154,569.04 177,617.69 203,076.65
Total Partner’s Equity 481,437.36 588,507.51 699,276.17 818,470.74 947,306.62
TOTAL LIABILITIES & 509,849.43 644,298.16 783,772.63 922,083.44 1,075,328.87
EQUITY

Capital balance 100,000.00 140,609.34 187,626.88 235,569.04 285,617.69

beginning
Add: Share in 45,121.49 52,241.71 53,269.07 55,609.60 58,287.74
Operating Income
Less: withdrawal (4,512.15) (5,224.17) (5,326.91) (5,560.96) (5,826.77)
Partner 1(MP) 140,609.34 187,626.88 235,569.04 285,617.69 338,076.65
Capital Balance 100,000.00 113,609.34 133,626.88 154,569.04 177,617.69
Beginning
Add: Share in 15,121.49 22,241.71 23,269.07 25,609.60 28,287.74
Operating Income
Less: withdrawal (1,512.15) (2,224.17) (2,326.91) (2,560.96) (2,828.77)
Partner2 (IP) 113,609.34 133,626.88 154,569.04 177,617.69 203,076.65
Capital balance 100,000.00 113,609.34 133,626.88 154,569.04 177,617.69
beginning
Add: share in 15,121.49 22,241.71 23,269.07 25,609.60 28,287.74
operating in com
Less: withdrawal (1,512.15) (2,224.17) (2,326.91) (2,560.96) (2,828.77)
Partner3 113,609.34 133,626.88 154,569.04 177,617.69 203,076.65
Capital balance 100,000.00 113,609.34 133,626.88 154,569.04 177,617.69
beginning
Add: Share in 15,121.49 22,241.71 23,269.07 25,609.60 28,287.74
Operating Income
Less: withdrawal (1,512.15) (2,224.17) (2,326.91) (2,560.96) (2,828.77)
Partner4 113,609.34 133,626.88 154,569.04 177,617.69 203,076.65

VEGGIE BITE PARTNERSHIP

For the Years Ended 2022-2026

 2019 2020 2021 2022 2023
Cash flow
from
operating Act
Annual cash 98,034.17 126,515.05 130,624.51 139,986.62 150,699.18
return(net
income +dep.)
Add(deduct)
Increase in (12,829.99) (3,559.39) (1,171.70) (951.72) (1,008.96)
accounts
receivable
Increase in (62,875.95) (13,788.48) (6,434.34) (6,373.19) (7,064.83)
inventory
Increase in 22,564.56 26,166.68 28,125.29 30,901.63 33,119.12
accounts
payable
Increase in 5,847.51 1,211.90 580.52 314.61 370.43
VAT payable
Net cash
provided
(used) by
operating
Cash flow 5,847.51 7,059.41 7,639.93 7,954.54 8,324.97
from investing
activity
Acquisition of
fixed asset
Net cash used
by inveting
Cash flow
from financing
Initial
investment
withdrawal
Net cash
provided by
financing
Net increase in
cash
Cash balance
beg
Cash balance
 ending

5.4 Financial statement

Financial statement of the company provides the accouting image of

The financial position and the company’s financial operation over the period of

Time. It has the main objective of providing information about the financial

Position,performance and cash flows of an entity. It is used by the users to

Evaluate the business function with respect to financing, investing and

Operating the activities to arrive at sound economic decisions.

The purpose of financial statement is to enable a business to establish

The result of its operation over a period of time and to determine its worth at a

Specific date. Financial statements are often prepared by businesspeople to

Assist them in evaluating their financial condition

A basic set of financial statement is consisted of an income statement

Which shows the several elements that enter the computation of net profit or

Net loss over a period of time; a statement of financial position which is the

Summary of the assets, liabilities and equity of the business at a specific date

And a statement of cash flows which provides information about cash inflows

And outflows during an accouting period as well as the net change in cash

Flows,the operating, investing and financing activities in a manner that

Reconciles the beginning and ending cash balances.

The performance of the sugar rush partnership is based on the five(5)

Year annual projections and supported by the financial assumptions for the
Figures that needed to be assumed. The income statement of the sugar rush

Partner ship is comprised of revenue, cost of goods sold and operating

Expenses. The level of income earned by the firm through the efficient and

Effective use of its resources is determined. Information about the cash flow is

Useful in order to assess the operating, financing and investing activities of the

Firm during the period.

5.5 Projected income statement

It is a financial statement that shows the profit or loss sustained by a

Partnership during a particular period of time, including all the income and

Expenditures. The sources of revenues and expenses are depicted and

Summarized. Information about the financial performance of the partnership is

Vital to assess the future profitabilitiy of the firm.

Sugar rush partnership shows that the net income is fairly increasing

From the inception up to the fifth year of operation.

5.6 projected statement of financial position

Projected balance sheets shows the assets and liabilities of a company

Or institutions over aperiod of time. It shows that an entity will be stable and

Liquidate in the future years of operation. The partnership as a whole is a

Viewed as performing well in its financial stability.

5.6.1 statement of cash flow

A cash flow is a financial statement that show how changes in

Balance sheets accounts and income affect cash and cash equivalents

And breaks the analysis down to operating investing and financing

Activities. Essentially, the cash flow statement