Professional Documents
Culture Documents
ANALYSIS
• relationship among the various financial factors in a business
Creditors
• interested in the business enterprise’s debt paying ability
Investors
interested in the current and future level of return
(earnings) and risk(liquidity, debt and activity).
THE VALUE OF FINANCIAL STATEMENT INFORMATION
• valuable information about a company’s economic performance and financial condition.
Users typically evaluate this information along three dimensions:
LIQUIDITY- Banks and financial institutions concern if a corporation can repay loans and notes.
• Convert assets into cash, which is called liquidity
SOLVENCY-Long-term creditors, such as bondholders, loan money for long periods of time
• ability to make its periodic interest payments and repay the face amount of debt at
maturity, which is called solvency.
PROFITABILITY-potential for the price of the company’s stock to increase.
• ability to generate earnings
TECHNIQUES IN ANALYZING FINANCIAL STATEMENTS
Analytical methods -changes in the amount and percentage of financial statement items within
and across periods.
Ratios -percentage of another financial statement item, measure an important economic
relationship as a single number.
Transfer Taxes
Value Added Tax
• CONSUMPTION
• sale, barter, exchange or lease of goods or properties or importation of goods in the
Philippines
• a person or entity that has business is subject to VAT, if the aggregate amount of actual
gross sales or receipts exceed Three Million Pesos (Php3,000,000.00).
Cross border Doctrine
• no VAT imposed for consumption outside the territorial border of the Philippine Taxing
Authority.
Value Added Tax
PISO
Purchases – Input tax
Sale – Output tax
ZERO-RATED TRANSACTIONS
The following sales by VAT-registered persons shall be subject to zero percent (0%) rate:
Export sale
• The sale and actual shipment of goods from the Philippines to a foreign country,
• The sale of raw materials or packaging materials to a non-resident buyer for delivery to
as a resident local export-oriented
• The sale of raw materials or packaging materials to an export-oriented enterprise
• Transactions considered export sales under Executive Order No. 226, otherwise known
as the Omnibus Investments Code of 1987
• The sale of goods, supplies, equipment and fuel to persons engaged in international
shipping or international air transport operations;
• Sales to Persons or Entities Deemed Tax-exempt
• Sale of goods or property to persons or entities who are tax-exempt under special laws
• Sale of power or fuel generated through renewable sources of energy such as, but not
limited to, biomass, solar, wind, hydropower, geothermal and steam, ocean energy, and
other shipping sources u
The following services performed in the Philippines by VAT- registered person shall be subject
to zero percent (0%) ra
• Processing, manufacturing or repacking goods are exported paid from foreign currency
• Services other than processing, manufacturing, or repackaging rendered to a person
engaged in business outside the Philippines or to a non-resident engaged in business
who is outside the Philippines when the services are performed, for which the
consideration is paid in acceptable foreign currency and accounted for in accordance
with BSP rules.
• Services rendered to persons or businesses exempt under special laws or international
agreements signed by the Philippines are taxed at 0%.
• Services rendered to persons engaged in international shipping or air transport
operations,
• Services performed by subcontractors and/or contractors in processing, converting, or
manufacturing goods for an enterpris
• Passengers and cargo transported by Philippine air or sea to a foreign country. Gross
receipts of international air carriers and international sea carriers doing business in the
Philippines from transporting passengers and cargo from the Philippines to another
country are exempt from VAT; however, they are still liable to a 3% tax on gross receipts
from transporting cargo from the Philippines to another country as provided in Sec. 118
of the Tax Code, as amended.
• ´ Sale or importation of agricultural and marine food products in their original state,
• Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn, livestock
and poultry feeds,
• Importation of personal and household effects belonging to Filipinos returning from
abroad and nonresidents resettling in the Philippines; Provided such products are free
from custom duties under the Philippines' Tariff and Customs Code.
• Importation of professional instruments and implements, tools of trade, occupation or
employment, wearing apparel, domestic animals, and personal and household effects
• Services by agricultural contract growers and milling for others of palay into rice, corn
into grits, and sugar cane into raw sugar
• Medical, dental, hospital and veterinary services except those rendered by
professionals;
• Medical, dental, hospital and veterinary services except those rendered by
professionals;
• ´ Services rendered by individuals pursuant to an employer-employee relationship;
• Services rendered by regional or area headquarters established in the Philippines by
multinational corporations w
• Transactions which are exempt under international agreements
• Sales by agricultural cooperatives duly registered and in good standing with the
Cooperative Development Authority (CDA)
• ´ Gross receipts from lending activities by credit or multi-purpose cooperatives
• Sales by non-agricultural, non-electric and non-credit cooperatives duly registered with
and in good standing with CDA
• ´ Export sales by persons who are not VAT-registered;
Price is the future of the product, acceptability of customers, return and profitability
Pricing decisions determines profit margin on products
IMPORTANCE OF PRICING
• Determine the return or earn profit
• IT DETERMINES DEMAND, SALES VOLUME AND MARKET SHARE- Price is the most
flexible tool
• COUNTERING COMPETITION
• BUILDS PRODUCT IMAGE
• A TOOL OF SALES PROMOTION
PRICING SCHEME
A. COST-BASED PRICING-cost
of production calculated based
on certain accumulation of the
accounting data a mark-up is
added
COST BEHAVIOR-relationship
between cost and activity
ILLUSTRATIVE EXAMPLE OF COST BASED PRICING
B. COMPETITION-BASED PRICING-the prices are set by the service providers.
B.1 DEMAND-BASED PRICING-The demand curve displays the price-quantity relationship in
economics. Higher prices decrease demand, and vice versa.
B.2 QUANTITY DIFFERENTIAL PRICING-Several service providers provide quantity
differential pricing to reward loyal high-volume consumers.
B.3 SEASONAL DIFFERENTIAL PRICING-Monsoons affect beach resorts and hotels. To
maximize capacity, several hotels offer discounted off-season rates to entice new customers.
C. VALUE-BASED PRICING-perceived benefits for the total cost of acquisition
C.1PRICE DISCOUNTING-a lower price on the same service increases its value. Using a
health magazine coupon, a buyer might get a discount on the first month's gym membership.
C.2 ODD PRICING-Services are priced just below the rounded sum. A big pizza may cost 199
instead than 200. Customers feel they've paid less than $200.
C.3 PENETRATION PRICING-used to build large volumes. first introduction offer is low-priced
C.4 BUNDLED PRICING-giving more for less’. Bundled price allows clients focus on the
advantages of a whole meal rather than paying over $200.
C.5 PRESTIGE PRICING-pay high fee , the higher the price, the higher the demand.market is
usually limited.
C.6 LEADERSHIP PRICING-basic or fundamental services are priced at quite a low level to
attract customer base.
PAYROLL ACCOUNTING
LABOR AND SOCIAL LEGISLATION
• Labor Code of the Philippines known as Presidential Decree No. 442, governs all
employee-employer relations, their rights and obligations.
• Payroll Salary Compensation and Benefits
WAGE AND WAGE-RELATED BENEFITS
MINIMUM WAGE
• Wage Rationalization Act, Republic Act No. 6727 sets minimum wage rates
• minimum wage of non-agricultural workers in Metro Manila is PHP 570 and PHP 537 for
agricultural workers
OVERTIME PAY
• a work week of 40 hours or 8 hours per day
• 60 minute mandatory lunch break is not included in the 8 hour work
• Overtime pay rates pay regular work day, holiday, rest day, or night (between the hours
of 10pm to 6am).
Overtime Rates
• Regular work day: plus 25% of the hourly pay rate.
• Rest day, regular/special holiday: plus 30% of the hourly rate on said day
NIGHT SHIFT DIFFERENTIAL
• Night Shift Differential (NSD) adds 10% to the usual hourly wage for labor performed
between 10pm and 6am.
• Per Hour Rate X 10% = NSD ´
• Per Hour Rate X 1.10 = Total Per Hour Rate with NSD
2 types of Holidays: REGULAR & SPECIAL HOLIDAYS
Regular Holidays-fixed dates
Special Holidays- more flexible dates and declared by the President
PREMIUM PAY ´ Premium pay is given on non-working days (rest days/special holidays) (RA
10966
SPECIAL NON WORKING HOLIDAYS
PREMIUM PAY
Premium Pay Rates
• On a rest day or special holiday, an employee is entitled to an additional 30% of his daily
basic rate, or a total of 130%. (Basic x 1.30)
• rest day or special holiday additional 30% of his daily basic rate, or a total of 130%.
(Basic x 1.30)
• “no work, no pay” principle applies during special non-working days and such other
special days
Exceptions to Coverage of Benefits granted under the provisions on Overtime, Premium,
Holiday, Night Shift Differential Pays and Service Charges
1. Government employees.
2. Workers of retail and service establishments regularly employing less than 10 workers.
3. Managerial employees and officers or members of a managerial staff.
4. House helpers and persons in the personal service of another.
5. Workers who are paid by results/output “pakyawan”.
6. Field personnel if they regularly perform their duties away from the office or place of business