ABM

A C C O U N T A N C Y
B U S I N E S S A N D
M A N A G E M E N T
COSTING
What is Costing?

Costing is the way the entrepreneur

calculates how much individual
product costs to produce or sell.
 PRODUCT
AA

Raw
Price Quantity Quantity Used Cost
Ingredients

Powder ₱26.50 12 sachets 1 sachet ₱2.21

Milk ₱79.50 1000 mL 120 mL ₱10.00

1 kilo (128
Sugar ₱100.00 2 tbsp ₱1.57
tbsp)

1000 mL (203
Vanilla Syrup ₱135.00 1 tsp ₱0.67
tsp)

Ice ₱2.00 1 pack 1/2 pack ₱1.00

      Total ₱15.45
       Total ₱15.45

      Labor Cost 25.00%

        ₱3.86

      Mark Up 30.00%

        ₱4.64

      Total: ₱23.95

Container ₱116.00 50 1 ₱2.32

Sticker ₱4.00 1 1 ₱4.00

      TOTAL ₱30.27
ACTIVITY TIME
ACTIVITY
Raw
Price Quantity Quantity Used Cost
Ingredients

Ice Cream ₱300.00 4 L (135 ounces) 5 ounces ₱11.

Chocolate Bar ₱65.00 1 pack (10 pcs) 1 pc ₱6.50

Sprinkle ₱15.00 1 pack  1/4 pack ₱3.75

      Total ₱21.36
       Labor Cost 15.00%

        ₱3.20

      Mark Up 25.00%

        ₱5.34

      Total: ₱29.90

Spoon ₱12.00 1 pc 1 ₱0.48

Cup ₱36.00 1 pc 1 ₱0.72

      TOTAL ₱31.10
PROJECT COST
What is Project Cost ?
Project costs are the funds required to perform a
planned business endeavor, and they are a primary subject
in project budgeting and cost management.

Process of estimating, budgeting and controlling costs

throughout the project life cycle, with the objective of
keeping expenditures within the approved budget.
PROJECT COST contains the following:
Capital of the business
How does the company plan to use the capital

PROJECT COST
aims to maintain strong profit margins
ensure project profitability
prevent any cost overruns

Overall, the section of the business plan outlines the estimated

expenses associated with a particular project. It is a tool to track
expenses and ensure that the project stays within budget.
FINANCIAL PLAN AND
LOAN REQUIREMENT
Financial Plan
Establishes, prioritizes, and organizes your financial goals.
It then describes the measures you must follow to reach
those goals.

It Includes your projected revenues, costs, anticipated

return on investment, and any financial resources you have
at your disposal to attract investors, lenders and determine
whether or not this is a good idea.

The Financial Plan describes a business’s historical financial

state (if applicable) and future financial projections.
The Financial Plan is composed of:
1. Assumptions - (used for projections)
2. Three financial statements - [(income statement, balance
3. Break-even analysis sheet, cash flow statement) and
4. Funding request projections made for these
statements]
5. Exit strategy
- If you are just starting up, include your startup expenses and assets to fund.

- If your business is already established include income statements, balance

sheets, and cash flow statements for the last three years.

- Provide a prospective financial outlook for the next three to five years.
Include forecasted income statements, balance sheets, cash flow statements
and capital expenditure budgets.
A Financial Plan is an essential planning
tool for your financial well-being, now and
into the future. It involves setting down
the current state of your finances, your
various financial goals, and methods that
can help you achieve them.
Loan Requirements
This refers to the different types of loans taken out by your
company. Most of the time, they are requested from banks or
credit institutions and can include business start-up loans or
interest-free loans. All of these elements must be included in your
financial plan.

Requirements such as personal, professional, and financial

information for a number of things, so that you are required to
loan.
SECURITY LOAN
What is Security Loan ?

A security loan is a type of business loan that requires collateral to

be pledged by the borrower. When signing a contract, borrowers
must comprehend all of the terms of a security loan.

Security loan contains the following:

Security loan is not relevant if there is no loan in the business
Security loan is relevant if there is a loan in the business
PROFIT AND LOSS STATEMENT
(Statement Of Comprehensive Income)
What is Statement of Comprehensive Income?
A statement that shows the result of operations for a given
period. It consists of the Revenue, Cost, and Expenses. This is
where the business will determine whether they are having a
net loss or net profit.
What is Net Profit or Net Loss?

It is the difference between the gross profit or loss and the

total indirect income/expenses of a business. If the difference
is a positive value, it's Net Profit, and if the difference is
negative, then it's Net Loss for a business during a particular
accounting period.
Throughout the seven-week business operation, Sugarbesh
gained a net profit amounting to 7,410.70 which is acquired
out from the total sales reach of 90,620.00 deducted with
the cost of goods sold and operating expenses that sums to
83,209.30. From a hundred percentage of total sales,
91,82% composes the total expenses and 8.18% represents
the net profit generate by the business. This infers that, total
expenses is relatively higher than the profit gained. This may
also be caused by the business ethics stipulated in one of
Sugarbesh’s ventures which is distributing a product line
that requires reslling it in suggested retail price.
ACTIVITY TIME
 MERCATO DE POUNDS
Statement of Comprehensive Income
For the Period Ended June 30, 2021

Sales ₱43,337.00

Less: Cost of Goods Sold

₱27,903.00
(COGS)

Gross Profit ₱15,434.00

Less: Operating Expenses

Marketing Expense ₱1,800.00

Utilities Expense ₱2,150.00

Miscellaneous Expenses ₱859.00

Transportation Expense ₱1,910.00 ₱6,719.00

Net Profit/Net Loss ₱8,715.00

CASH FLOW STATEMENT
 What is Statement of Cash
Flow?
- summarizes the movement of cash and cash
equivalents (CCE) that come in and go out of a
company

- its purpose is to provide a detailed picture of what

happened to a business's cash during an accounting
period
 WHAT ARE THE 3 MAJOR
ACTIVITIES RELATED TO CASH
FLOW?
 Operating Activities
- activities of an entity related to their main
revenue or expense generating activities of
providing goods and services
- NET INCOME ACTIVITIES
 Operating Activities
Receipts
- acknowledgement of the amount of cash received during a
transaction
ex: receivables, refunds from suppliers

Payments
- acknowledgement of the amount of cash paid for goods, debt,
and services
ex: payments to suppliers, payments of operating expenses,
payment for interest expenses, charity contributions, cash refund
to customers
 Investing Activities

- activities of an entity related to sales and

purchase of long-term assets and other
investments
- NONCURRENT ASSETS ACTIVITIES
 Investing Activities
Receipts
Ex: cash proceeds from selling productive assets (PPE)
and cash proceeds from selling investments in equity
securities of other companies
Payments
Ex: payments for the purchase of PPE and payments to
acquire investments in equity securities
 Financing Activities
-Activities of a entity related to
acquisition of funding for the use of the
entity
-NONCURRENT LIABILITIES AND
EQUITY ACTIVITIES
 Financing Activities
Receipts
Ex: Cash investments by owner. cash proceeds from
issuance of share capital , and cash proceeds from
long-term borrowing

Payments
Ex: cash withdrawal by the owner, payments of cash
dividends to shareholders, payments of long-term
borrowing
 HOW DO YOU MAKE A
CASH FLOW STATEMENT?
ACTIVITY TIME
Additional Information: The beginning capital of MERCATO DE POUNDS
is exactly ₱1,000
MERKATO DE POUNDSStatement of Cash Flows For
the Period Ended June 30, 2021

Cash Flow from

Operating Activities

Receipts

Sales  ₱43,337.00

Payments

Cost of Goods Sold ₱27,903.00

Marketing Expense ₱1,800.00

Utilities Expense ₱2,150.00

Miscellaneous Expense ₱859.00

Transportation Expense ₱1,910.00

Net Cash from Operating

₱8,715.00
Activities
Cash Flows from Investing Activities

Receipts

Payments

Net Cash from Investing Activities

Cash Flows from Financing Activities

Receipts

Payments

Net Cash from Financing Activities

Net Increase/Decrease
₱8,715.00
in Cash 

Beginning Cash
₱1000.00
Balance

Ending Cash Balance ₱9,715.00

 BALANCE SHEET
(Statement of Financial Position)
What is Statement of Financial
Position?
A statement of financial position is a financial
statement that summarizes a company's assets
(what it owns), liabilities (what it owes), and
owner's equity (assets less liabilities) on a
particular date- usually at the end of a financial
month or financial year.
 NORMAL BALANCE:

= +

ASSETS LIABILITIES OWNER'S

EQUITY
 Importance of Statement of
Financial Position:
It helps to evaluate and analyze the business's
performance, and flow of cash.
 Assets

any resources that a business

owns or controls
includes cash, inventory, etc.
 Liabilities

debts or other obligations in

which your business owes
money
includes loans and payables
 Owner's Equity
the proportion of the total value
of a company's assets that can
be claimed by its owners
includes capital and retained
earnings
 SUGARBESH
Statement of Financial Position
As of June 30, 2021

Assets  

Cash ₱9,010.70

Total Assets ₱9,010.70

Liability & Owner's Equity  

   Paid in Capital ₱1,600.00

   Retained Earnings ₱7,410.71

Total Liability and Owner's Equity ₱9,010.70

ACTIVITY TIME
 MERCATO DE POUNDS
Statement of Financial Position
As of June 30, 2021

Assets  

Cash ₱9,715.00

Total Assets ₱9,715.00

Liability & Owner's Equity  

    Paid in Capital ₱1,000.00

    Retained Earnings ₱8,715.00

Total Liability and Owner's Liability ₱9,715.00

RETURN ON INVESTMENT
 Return of Investment
is a performance measure used
to evaluate the efficiency or
profitability of an investment or
compare the efficiency of a
number of different investments
Components of ROI
Week
Gain on Investment
Cost of Investment
Profit
Percentage of ROI
Formula in Computing ROI
WEEK GAIN ON INVESTMENT COST OF INVESTMENT PROFIT PERCENTAGE OF ROI

1 ₱ 8,985.00 ₱ 7,964.70 ₱ 1,020.30 12.81%

2 ₱ 12, 635.00 ₱ 11,411.30 ₱ 1,223.70 10.72%

3 ₱ 10, 325.00 ₱ 9,339.70 ₱ 985.30 10.55%

4 ₱ 25, 260.00 ₱ 23,802.60 ₱ 1,457.40 6.12%

5 ₱ 16, 160.00 ₱ 15,060.20 ₱ 1,099.80 7.30%

6 ₱ 5,440.00 ₱ 4,751.10 ₱ 688.90 14.50%

7 ₱ 11,815.00 ₱ 10,879.70 ₱ 935.30 8.60%

TOTAL ₱ 90, 620.00 ₱ 83,209.30 ₱ 7,410.70 8.90%

91.82% 7.88%
ACTIVITY TIME
FINANCIAL ANALYSIS
 Vertical Analysis or
otherwise known as
Common-size Analysis
 Helps the management to
analyze the components of
the total assets as well as
the components of the total
liabilities and owner's
equity
 In the income statement,
vertical analysis helps the
management analyze the
components of the income
statement in relation to its
revenue account which is
Sales
ACTIVITY
FORECAST FOR
THREE YEARS
 This will present the
performance of the business for
the next years through
assumptions formulated using
computed data
QUESTION?
 ABM
A C C O U N T A N C Y
B U S I N E S S A N D
M A N A G E M E N T