CHAPTER 9: FINANCIAL PROJECTIONS (5 YEARS)

A. Sources of Funds
The capitalization (This includes the Working capital, the source of funds, and how are you going
to collect/ capitalize to begin the business. Are you going to obtain a loan or funding from
private entities?)

B. Financial Assumption

Financial Assumptions include the projections of the sales, including the total cost of goods, the
supplies. These Assumptions are usually in a form of a schedules table. Explain each schedule
according to your projections example:

 Cost of Food and Beverage Sales is 55% of the Total Sales.

 The hotel building has a useful life of 15 years.
 Land Improvement has a useful life of 50 years.
 Tools and Utensils are depreciated over their 5-year useful life.
 Salvage Value of the Equipment, Furniture, and Fixtures is 6% and divided by 5 years of
useful life as recommended by the Architect.
 Straight line method was used in the computation for depreciation of property, plant,
and equipment.
 100,000.00 worth of supplies are purchased every year-end starting in 2019 and 80%
are used every year.
 All expenses are assumptions based on the information gathered by the group
throughout the study.
 Prepaid advertising is good for 5 years.
  The profit and loss distribution of the partners is on an equal basis because the
proposed hotel is in a general partnership where all the partners general.

Example of Schedule:

SALES PROJECTIONS

*Include the seasonal sales where there is a peak month of days using a table. For example,
January is the peak month with 90% Feb is only 50%, and so on. High, Medium, and Low.

DEPRECIATION SCHEDULE:
SCHEDULE OF ACCOUNT RECEIVABLE (IF ANY)

SCHEDULE OF ACCOUNTS PAYABLE (IF ANY)

COST OF SALES
SUPPLIES SCHEDULE

OPERATION EXPENSES (ADVERTISEMENT, UTILITIES AND ETC.)

INCOME STATEMENT

BALANCE SHEET

CASH FLOW

RATIO ANALYSIS