MAPUA UNIVERSITY

School of Mechanical and Manufacturing

Engineering

IE103: TECHNOPRENEURSHIP 101

Module 3 – Financial Plan

Aquino, Arthur Jessie K.

Burgos, Elldrscott
Chan, Carl Joseph
Cho, Gunhi

Mary Christy O. Mendoza

Professor
I. Investment / Start-Up Capital Funding Requirement
Table 1. Capital Assets

Capital Assets
Current Assets Amount
Cash ₱1,500,000
Inventory ₱1,250,000
Accounts Receivable ₱2,100,000
Total ₱4,850,000

Fixed Assets
Government Permits ₱50,000
Machines and Equipment ₱1,200,000
Furniture ₱216,000
Building and Land ₱16,000,000
Total ₱17,466,000

Total Assets ₱22,316,000

Table 2. Pre-operating Expenses

Pre-operating Expenses
Expenses Amount
Hiring Expenses ₱20,000
Permits and Licenses ₱25,000
Total ₱45,000
Table 3. Working Capital

Working Capital
Current Assets Amount
Cash ₱1,500,000
Inventory ₱1,250,000
Accounts Receivable ₱2,100,000
Total ₱4,850,000

Current Liabilities Amount

Accounts Payable ₱500,000
Short Term Borrowings ₱175,000
Accrued Liabilities ₱150,000
Total ₱825,000
Working Capital ₱4,025,000

II. Key Assumptions

Table 4. Capital Mix

Capital Mix
Owner's Equity
Aquino, Capital ₱ 100,000,000
Burgos, Capital ₱ 100,000,000
Chan, Capital ₱ 100,000,000
Cho, Capital ₱ 100,000,000
Current Liabilities ₱ 825,000
Capital Mix: ₱ 400,825,000

Table 5. Schedule of Depreciation for Capital Assets

Schedule of Depreciation for Capital Assets Per Year

Depreciation on Physical Assets ₱ 82,000
Depreciation on Machine and Equipment ₱ 300,000
Depreciation on Building and Land ₱ 22,000,000
Total Depreciation: ₱ 22,382,000
 Table 6. Schedule of Long-Term Loan Amortization and Interest Payments

Schedule of Long-Term Loan Amortization and Interest Payments

Year Payment Principal Interest Unpaid Balance
₱ 320,000
1 ₱ 120,000 ₱ 106,667 ₱ 15,500 ₱ 213,333
2 ₱ 120,000 ₱ 106,667 ₱ 12,500 ₱ 106,667
3 ₱ 120,000 ₱ 106,667 ₱ 12,000 0
Total ₱ 360,000 ₱ 320,000 ₱ 40,000

III. Pro-forma 5-year Financial Statements

Table 7. Income Statement
Income Statement
Term Year 1 Year 2 Year 3 Year 4 Year 5
Sales Revenue ₱11,000,000 ₱19,800,000 ₱35,640,000 ₱64,152,000 ₱115,473,600
Cost of Goods ₱8,250,000 ₱14,850,000 ₱26,730,000 ₱48,114,000 ₱8,660,5500
Gross Profit ₱2,750,000 ₱4,950,000 ₱8,910,000 ₱16,038,000 ₱28,868,100
Income Before
Income Tax ₱2,090,000.00 ₱3,762,000.00 ₱6,771,600.00 ₱12,188,880.00 ₱21,939,660.00
Income Tax
Expense ₱220,000.00 ₱396,000.00 ₱712,800.00 ₱1,283,040.00 ₱2,309,448.00
Net Income ₱1,870,000.00 ₱3,366,000.00 ₱6,058,800.00 ₱10,905,840.00 ₱19,630,212.00

Table 8. Cash Flow Statement

Vigo-Lock
Cash Flow Statement
Operations Year 1 Year 2 Year 3 Year 4 Year 5
Cash
Received
Customers
11,000,000 19,800,000 35,640,000 64,152,000 64,152,000
Other
₱1,500,000 ₱1,500,000 ₱1,500,000 ₱1,500,000 ₱1,500,000
Operations
Cash Paid
Inventory -₱5,016,000 -₱5,016,000 -₱5,016,000 -₱5,016,000 -₱5,016,000
General
Operating &
-₱600,000 -₱600,000 -₱600,000 -₱600,000 -₱600,000
Administrative
Expenses
 Wage
-₱1,764,000 -₱1,764,000 -₱1,764,000 -₱1,764,000 -₱1,764,000
Expenses
Interest -₱2,000,000 -₱2,025,000 -₱2,050,000 -₱2,075,000 -₱2,100,000
Income Taxes
- - - - -
₱220,000.00 ₱220,000.00 ₱220,000.00 ₱220,000.00 ₱220,000.00
Net Cash
Flow from ₱2,900,000 ₱11,675,000 ₱27,490,000 ₱55,977,000 ₱55,952,000
Operations
Investing
Activities
Cash
Received
Sale of
Property and ₱1,500,000 ₱1,500,000 ₱1,500,000 ₱1,500,000 ₱1,500,000
Equipment
Collection of
Principal on ₱300,000 ₱300,000 ₱300,000 ₱300,000 ₱300,000
Loans
Sale of
Investment ₱200,000 ₱200,000 ₱200,000 ₱200,000 ₱200,000
Securities
Cash Paid
For
Purchase of
Property & -₱500,000 -₱500,000 -₱500,000 -₱500,000 -₱500,000
Equipment
Making Loans -₱150,000 -₱150,000 -₱150,000 -₱150,000 -₱150,000
Purchase of
-₱100,000 -₱100,000 -₱100,000 -₱100,000 -₱100,000
Investments
Net Cash
Flow from
₱1,250,000 ₱1,250,000 ₱1,250,000 ₱1,250,000 ₱1,250,000
Investing
Activities
Financing
Activities
Cash
Received
Issuance of
₱100,000 ₱110,000 ₱120,000 ₱130,000 ₱140,000
Stock
Borrowing ₱90,000 ₱100,000 ₱110,000 ₱120,000 ₱130,000
Cash Paid
Repurchase
-₱80,000 -₱92,000 -₱104,000 -₱116,000 -₱128,000
of Stocks
 Payment of
-₱105,000 -₱115,000 -₱125,000 -₱135,000 -₱145,000
Loans
Dividends -₱120,000 -₱129,000 -₱138,000 -₱147,000 -₱156,000
Net Cash
Flow from
-₱115,000 -₱120,000 -₱125,000 -₱130,000 -₱135,000
Financing
Activities
Net
Increase in ₱4,035,000 ₱12,805,000 ₱28,615,000 ₱57,097,000 ₱57,067,000
Cash

Table 9: Balance Sheet

Balance Sheet
Current Assets Year 1 Year 2 Year 3 Year 4 Year 5
Cash ₱1,500,000 ₱1,575,000 ₱1,650,000 ₱1,725,000 ₱1,800,000
Inventory 1,250,000 1,300,000 1,350,000 1,400,000 1,450,000
Accounts Receivable 2,100,000 2,155,000 2,210,000 2,265,000 2,320,000
Total Current
₱4,850,000 ₱5,030,000 ₱5,210,000 ₱5,390,000 ₱5,570,000
Assets

Fixed Assets
Building and Land ₱16,000,000 ₱16,000,000 ₱16,000,000 ₱16,000,000 ₱16,000,000
Government Permits ₱50,000 ₱50,000 ₱50,000 ₱50,000 ₱50,000
Furniture ₱216,000 ₱216,000 ₱216,000 ₱216,000 ₱216,000
Machines &
₱1,200,000 ₱1,200,000 ₱1,200,000 ₱1,200,000 ₱1,200,000
Equipment
Total Fixed Assets ₱17,466,000 ₱17,466,000 ₱17,466,000 ₱17,466,000 ₱17,466,000

Liabilities & Capital

Accounts Payable ₱500,000 ₱750,000.00 ₱937,500.00 ₱1,171,875.00 ₱1,464,843.75
Short Term
₱175,000.00 ₱218,750.00 ₱240,625.00 ₱264,687.50 ₱291,156.25
Borrowings
Accrued Liabilities ₱150,000 ₱202,500.00 ₱232,875.00 ₱267,806.25 ₱307,977.19
Total Liabilities &
₱825,000 ₱1,171,250 ₱1,411,000 ₱1,704,369 ₱2,063,977
Capital
 IV. Financial Viability Measure

Table 10. Financial Ratios (profitability and growth)

Financial Ratio (Profitability)
Gross Profit Margin 24.99%
Operating Profit Margin 2.06%
Net Profit Margin 16.99%

Financial Ratio (Growth)

Growth Ratio [(Current rev-previous rev)/previous rev] * 10.50
100 %

Table 11. Break-Even analysis

BREAK-EVEN
Year 1 Year 2 Year 3 Year 4 Year 5
Sales ₱11,000,000 ₱19,800,000 ₱35,640,000 ₱64,152,000 ₱115,473,600
Less Variable Cost ₱5,016,000 ₱5,116,000 ₱5,316,000 ₱5,416,000 ₱6,016,000
Marketing and ₱36000 ₱36000 ₱36000 ₱36000 ₱36000
Advertising Expense
Travel Expense ₱48000 ₱48000 ₱48000 ₱48000 ₱48000
Contribution
₱2,900,000 ₱11,500,000 ₱25,490,000 ₱53,977,000 ₱56,95,000
Margin
Less Fixed Cost
Salaries ₱1,500,000 ₱2,500,000 ₱4,000,000 ₱5,575,000 ₱10,000,000
Depreciation ₱22,382,000 ₱22,382,000 ₱22,382,000 ₱22,382,000 ₱22,382,000

CM Ratio 8.75% 9.25% 10.00% 11.53% 12.53%

BEP 2.44 1.70 1.65 1.40 1.21
 Table 12. Payback Period

PAYBACK PERIOD
Project Investment 399,825,000
Year 1 Year 2 Year 3 Year 4 Year 5
Cashflow 230,400,400 227,667,500 224,381,500 224,175,500 223,455,700

Payback Period 1.35

(Year)