FINANCIAL FEASIBILITY STUDY

This chapter discusses the financial aspects of the proposed business that evaluates
economic viability by analyzing the start-up cost, operating expenses, cash flow to
forecast the future performance of the organization. This section determines the proposed
subject to become financially feasible and projects the rate of invested capital.

CAPITAL REQUIREMENT

The business will be financed by various investor who are willing to put up
₱1,500,000.00; which will be used to acquire resources such as equipment, machineries,
rental fee for the commercial space and its leasehold improvements, supplies,
promotional costs; and for the payment for permits, licenses, and fees to legally operate
the business. Estimated projects cost is presented hereunder:

Project Cost Amount

Leaasehold Improvements 233,952.75
Purchase of Kitchen Tools and Equipment 98,900.00
Purchase of Office Equipment 58,765.00
Purchase of Security and Emergency Equipment 23,575.00
Purchase of Delivery Equipment 920,000.00
Purchase of Initial Packaging Materials 14,486.50
Purchase of Initial Raw Materials 22,689.50
Rent Expenses 38,000.00
Business permits and licenses 7,190.00
Cash for Pre-operating Expenses - Cash on Hand Beg. of Opearations82,441.25
Total 1,500,000.00

Table 22: Capital Requirement

INCOME AND COST ANALYSIS

Major Assumptions
1. The proposed business capital of ₱ 1,500,000.00.
2. All Property, Plant and Equipment are depreciated using Straight-line Method
with an estimated useful life of 5 years.
3. Sales increase is estimated around 5% annually.
4. Basically, the business provides employees benefits, such as SSS, PAG-IBIG
and Phil-health that calculated according their salaries and position and
continuously in succeeding years.
5. Office Supplies, Medical Supplies, and Cleaning Supplies are estimated to
increase 5% annually.
FINANCIAL STATEMENTS FOR THE NEXT 3 YEARS

Income Statement
GaKasarap
Projected Statement of Financial Performance
For the period Ended December 31

Notes
Pre-Op Year 0 Year 1 Year 2 Year 3
Sales Revenue 1 5,868,450.00 6,161,872.50 6,469,966.13
Less: Cost of Goods Sold 2 1,751,324.02 1,838,851.37 1,930,793.94
Gross Operating Profit - 4,117,125.98 4,323,021.13 4,539,172.19
Less: Adminstrative Expenses
Salaries and Wages 3 2,911,200.00 2,911,200.00 2,911,200.00
PHIC Contrib. Expense - Employer Share 4 58,224.00 58,224.00 58,224.00
PAG-IBIG Contrib. Expense - Employer Share 4 87,336.00 87,336.00 87,336.00
SSS Contrib. Expense - Employer Share 4 258,960.00 258,960.00 258,960.00
Rent Expenses 5 38,000.00 456,000.00 456,000.00 456,000.00
Office Supplies 6 4,995.50 5,245.28 5,507.54
Medical Supplies 7 8,504.50 8,929.73 9,376.21
Cleaning Supplies 8 7,468.50 7,841.93 8,234.02
Business permits and licenses 9 7,190.00 6,690.00 6,690.00 6,690.00
Depreciation Expense
Leasehold Improvements 10 46,790.55 46,790.55 46,790.55
Security and Emergency Equipment 11 4,715.00 4,715.00 4,715.00
Kitchen Tools and Equipment 12 19,780.00 19,780.00 19,780.00
Delivery Equipment 92,000.00 92,000.00 92,000.00
Office Equipment 13 11,728.24 11,728.24 11,728.24
Total Expense 45,190.00 3,974,392.29 3,975,440.71 3,976,541.56
Net Income (45,190.00) 142,733.70 347,580.42 562,630.63
Balance Sheet
GaKasarap
Projected Statement of Financial Position
As of December 31

Notes Pre-Op Year 0 Year 1 Year 2 Year 3

ASSET
Curent Assets
Cash and Cash Equivalent ₱ 82,441.25 ₱ 400,188.73 ₱ 922,782.94 ₱ 1,660,427.36
Raw Materials Inventory 37,176.00 37,176.00 37,176.00 37,176.00
Total Curent Assets 119,617.25 437,364.73 959,958.94 1,697,603.36

Non-Curent Assets (Net of Depreciation)

Property, Plant and Equipment
Leasehold Improvements 233,952.75 187,162.20 140,371.65 93,581.10
Security and Emergency Equipment 23,575.00 18,860.00 14,145.00 9,430.00
Kitchen Tools and Equipment 98,900.00 79,120.00 59,340.00 39,560.00
Delivery Equipment 920,000.00 828,000.00 736,000.00 644,000.00
Office Equipment 58,765.00 47,036.76 35,308.53 23,580.29
Total Non-Curent Assets 1,335,192.75 1,160,178.96 985,165.18 810,151.39
TOTAL ASSETS ₱ 1,454,810.00 ₱ 1,597,543.70 ₱ 1,945,124.12 ₱ 2,507,754.75

LIABILITIES AND OWNER'S EQUITY

Current Liabilities
Accounts Payable ₱ - ₱ - ₱ - ₱ -
Total Curent Liabilities - - - -

Non-Current Liabilities
Other Payables - - - -
Total Non-Curent Liabilities - - - -
TOTAL LIABILITIES - - - -

OWNER'S EQUITY
Owner's Equity, Beg. 1,500,000.00 1,454,810.00 1,597,543.70 1,945,124.12
Add (Less):
Income / (Loss) (45,190.00) 142,733.70 347,580.42 562,630.63
Owner's Equity, End. 1,454,810.00 1,597,543.70 1,945,124.12 2,507,754.75
TOTAL LIABILITIES AND OWNER'S EQUITY ₱ 1,454,810.00 ₱ 1,597,543.70 ₱ 1,945,124.12 ₱ 2,507,754.75
Cash Flows
GaKasarap
Projected Statement of Cash Flows
For the Period ended December 31

Pre-Op Year 0 Year 1 Year 2 Year 3

Cash Flow from Operating Activities:
Cash Inflows:
Collection from Sales - 5,868,450.00 6,161,872.50 6,469,966.13
Total Cash Inflows - 5,868,450.00 6,161,872.50 6,469,966.13
Cash Outflows:
Purchase of Raw Materials 37,176.00 1,751,324.02 1,838,851.37 1,930,793.94
Payment of Salaries and Wages - 2,581,230.00 2,581,230.00 2,581,230.00
PHIC Contributions - 116,448.00 116,448.00 116,448.00
PAG-IBIG Contributions - 174,672.00 174,672.00 174,672.00
SSS Contributions - 443,370.00 443,370.00 443,370.00
Rent Expenses 38,000.00 456,000.00 456,000.00 456,000.00
Office Supplies - 4,995.50 5,245.28 5,507.54
Medical Supplies 8,504.50 8,929.73 9,376.21
Cleaning Supplies - 7,468.50 7,841.93 8,234.02
Business permits and licenses 7,190.00 6,690.00 6,690.00 6,690.00
Total Cash Outflows 82,366.00 5,550,702.52 5,639,278.29 5,732,321.71
Net Cash Provided(Used) from Operating Activities (82,366.00) 317,747.48 522,594.21 737,644.42
Cash Flows from Investing Activities:
Cash Inflows:
Proceeds from sale of assets 0.00 0.00 0.00 0.00
Total cash Inflows 0.00 0.00 0.00 0.00
Cash Outflows:
Purchase of Property, Plant and equipment
Leaasehold Improvements 233,952.75 0.00 0.00 0.00
Purchase of Kitchen Tools and Equipment 98,900.00 0.00 0.00 0.00
Purchase of Office Equipment 58,765.00 0.00 0.00 0.00
Purchase of Delivery Equipment 920,000.00
Purchase of Security and Emergency Equipment 23,575.00 0.00 0.00 0.00
Total Cash Outflows 1,335,192.75 0.00 0.00 0.00
Net Cash Provided(Used) from Investing Activities (1,335,192.75) 0.00 0.00 0.00
Cash Flows from Financing Activities
Cash Inflows:
Investments 1,500,000.00 0.00 0.00 0.00
Total Cash inflows 1,500,000.00 0.00 0.00 0.00
Cash Outflows:
Withdrawals 0.00 0.00 0.00 0.00
Total Cash Outflows 0.00 0.00 0.00 0.00
Net Cash Provided(Used) from Financing Activities 1,500,000.00 0.00 0.00 0.00
Cash provided(used) by Operating, Investing and Financing Activities 82,441.25 317,747.48 522,594.21 737,644.42
Add: Cash Balance, Beg. - 82,441.25 400,188.73 922,782.94
Cash Balance, End 82,441.25 400,188.73 922,782.94 1,660,427.36
Statement of Changes in Owners’ Equity
GaKasarap
Projected Statement of Changes in Owner's Equity
As of December 31

Pre-Op Year 0 Year 1 Year 2 Year 3

Owner's Equity, Beg. 1,500,000.00 1,454,810.00 1,597,543.70 1,945,124.12

Add: Retained Operating Surplus
Net Income (45,190.00) 142,733.70 347,580.42 562,630.63
Total
Add/Deduct:
Additional Investment - - - -
Withdrawals - - - -
Owner's Equity, End. 1,454,810.00 1,597,543.70 1,945,124.12 2,507,754.75

Notes to Financial Statements

Note 1. Sales Revenue

Yearly
% Monthly Monthly
Sales Selling Price Anuual Sales
Preference Sales (QTY) Sales
(QTY)
Powdered Soy Sauce 25%
Kraft Puoch (15pcs teabags @ 28.3g) 607.5 7,290 90.00 54,675.00 656,100.00
Bottle @ 250ml 607.5 7,290 100.00 60,750.00 729,000.00
Powdered ToyoMansi 35%
Kraft Puoch (15pcs teabags @ 28.3g) 850.5 10,206 95.00 80,797.50 969,570.00
Bottle @ 250ml 850.5 10,206 110.00 93,555.00 1,122,660.00
Powdered Spicy Toyo 40%
Kraft Puoch (15pcs teabags @ 28.3g) 972 11,664 95.00 92,340.00 1,108,080.00
Bottle @ 250ml 972 11,664 110.00 106,920.00 1,283,040.00
Total 100% 4860 58320 5,868,450.00

Particaulars Sales % Increase

Year 1 5,868,450.00
Year 2 6,161,872.50 5%
Year 3 6,469,966.13 5%
 Note 2. Cost of Goods Sold
Yearly Raw
Monthly Monthly
Sales materials per Anuual Sales
Sales (QTY) Sales
(QTY) Unit
Powdered Soy Sauce
Kraft Puoch (15pcs teabags @ 28.3g) 607.5 7290 29.14 17,703.16 212,437.89
Bottle @ 250ml 607.5 7290 29.72 18,052.47 216,629.64
Powdered ToyoMansi
Kraft Puoch (15pcs teabags @ 28.3g) 850.5 10206 30.29 25,762.50 309,149.95
Bottle @ 250ml 850.5 10206 29.83 25,369.09 304,429.05
Powdered Spicy Toyo
Kraft Puoch (15pcs teabags @ 28.3g) 972 11664 30.87 30,001.75 360,021.02
Bottle @ 250ml 972 11664 29.89 29,051.62 348,619.46
Total 1,751,287.02

Particaulars Sales % Increase

Year 1 1,751,287.02
Year 2 1,838,851.37 5%
. Year 3 1,930,793.94 5%

Note 3. Salaries and Wages

Number of
Employees Monthly Rate Annual Rate Total Cost Direct Labor Admin Cost
Employees
General Manager 25,000.00 300,000.00 1 300,000.00 300,000.00
Production Manager 25,000.00 300,000.00 1 300,000.00 300,000.00
Marketing Manager 25,000.00 300,000.00 1 300,000.00 300,000.00
Sales and Distribution Manager 25,000.00 300,000.00 1 300,000.00 300,000.00
Quality Control Supervisor 20,000.00 240,000.00 1 240,000.00 240,000.00
Production Team Members 11,400.00 136,800.00 5 684,000.00 684,000.00
Sales Representatives 11,400.00 136,800.00 2 273,600.00 273,600.00
Administrative Assistant 20,000.00 240,000.00 1 240,000.00 240,000.00
Delivery Drivers 11,400.00 136,800.00 2 273,600.00 273,600.00
Total 174,200.00 2,090,400.00 15 2,911,200.00 984,000.00 1,927,200.00

Philhealth PAG-IBIG SSS

Gross pay Total
Net Take Home
Position CY 2023-2027 Mandatory
Employee Share Employee Share Employee Share Pay
(Jan-Dec) Deductions

General Manager 300,000.00 6,000.00 9,000.00 13,500.00 28,500.00 271,500.00

Production Manager 300,000.00 6,000.00 9,000.00 13,500.00 28,500.00 271,500.00
Marketing Manager 300,000.00 6,000.00 9,000.00 13,500.00 28,500.00 271,500.00
Sales and Distribution Manager 300,000.00 6,000.00 9,000.00 13,500.00 28,500.00 271,500.00
Quality Control Supervisor 240,000.00 4,800.00 7,200.00 10,800.00 22,800.00 217,200.00
Production Team Members 684,000.00 13,680.00 20,520.00 60,450.00 94,650.00 589,350.00
Sales Representatives 273,600.00 5,472.00 8,208.00 24,180.00 37,860.00 235,740.00
Administrative Assistant 240,000.00 4,800.00 7,200.00 10,800.00 22,800.00 217,200.00
Delivery Drivers 273,600.00 5,472.00 8,208.00 24,180.00 37,860.00 235,740.00
Total 2,911,200.00 58,224.00 87,336.00 184,410.00 329,970.00 2,581,230.00
 Note 4. PHIC, PAG-IBIG, and SSS Contributions
Philhealth PAG-IBIG SSS
Gross pay
Position CY 2023-2027
Employer Share Employer Share Employer Share
(Jan-Dec)

General Manager 300,000.00 6,000.00 9,000.00 28,860.00

Production Manager 300,000.00 6,000.00 9,000.00 28,860.00
Marketing Manager 300,000.00 6,000.00 9,000.00 28,860.00
Sales and Distribution Manager 300,000.00 6,000.00 9,000.00 28,860.00
Quality Control Supervisor 240,000.00 4,800.00 7,200.00 23,160.00
Production Team Members 684,000.00 13,680.00 20,520.00 54,000.00
Sales Representatives 273,600.00 5,472.00 8,208.00 21,600.00
Administrative Assistant 240,000.00 4,800.00 7,200.00 23,160.00
Delivery Drivers 273,600.00 5,472.00 8,208.00 21,600.00
Total 2,911,200.00 58,224.00 87,336.00 258,960.00

Note 5. Rent Expenses

Rental Expense Monthly Year 0 Year 1 Year 2 Year 3
Rent Expense 38,000.00 38,000.00 456,000.00 456,000.00 456,000.00
Total 38,000.00 38,000.00 456,000.00 456,000.00 456,000.00
Note 6. Office Supplies
Office Supplies Unit Cost QTY Total Cost Year 1 Year 2 Year 3
Printer ink (black) 460.00 1 460.00 460.00 483.00 507.15
Printer ink (colored) 575.00 1 575.00 575.00 603.75 633.94
Stapler 230.00 1 230.00 230.00 241.50 253.58
Staple wire per box 115.00 1 115.00 115.00 120.75 126.79
Push pins per box 57.00 1 57.00 57.00 59.85 62.84
Index card 115.00 1 115.00 115.00 120.75 126.79
Scissor 172.50 1 172.50 172.50 181.13 190.18
Puncher 230.00 1 230.00 230.00 241.50 253.58
Ruler 115.00 1 115.00 115.00 120.75 126.79
Ballpen 23.00 10 230.00 230.00 241.50 253.58
Pencil 11.50 10 115.00 115.00 120.75 126.79
Pencil sharpener 57.00 1 57.00 57.00 59.85 62.84
Marker 172.50 1 172.50 172.50 181.13 190.18
Correction tape 57.00 1 57.00 57.00 59.85 62.84
Record book 115.00 1 115.00 115.00 120.75 126.79
Calculator 575.00 1 575.00 575.00 603.75 633.94
Double sided tape 115.00 1 115.00 115.00 120.75 126.79
Scotch tape 57.00 1 57.00 57.00 59.85 62.84
File folder 57.00 10 570.00 570.00 598.50 628.43
Glue 115.00 1 115.00 115.00 120.75 126.79
Highlighter 172.50 1 172.50 172.50 181.13 190.18
Short bond paper per rim 172.50 1 172.50 172.50 181.13 190.18
Long bond paper per rim 230.00 1 230.00 230.00 241.50 253.58
A4 bond paper per rim 172.50 1 172.50 172.50 181.13 190.18
Total 4,172.00 4,995.50 4,995.50 5,245.28 5,507.54
 Note 7. Medical Supplies
Medical Supplies Unit Cost QTY Total Cost Year 1 Year 2 Year 3
Alcohol 115.00 10 1,150.00 1,150.00 1,207.50 1,267.88
Facemask 57.00 10 570.00 570.00 598.50 628.43
Body thermometer 575.00 1 575.00 575.00 603.75 633.94
Blood pressure apparatus 1,725.00 1 1,725.00 1,725.00 1,811.25 1,901.81
Stretcher 2,300.00 1 2,300.00 2,300.00 2,415.00 2,535.75
Bandage scissors 230.00 2 460.00 460.00 483.00 507.15
Betadine wound solution 172.50 1 172.50 172.50 181.13 190.18
Cotton 115.00 1 115.00 115.00 120.75 126.79
Gauze 57.00 1 57.00 57.00 59.85 62.84
Hydrogen peroxide 115.00 1 115.00 115.00 120.75 126.79
Sterile gloves 230.00 1 230.00 230.00 241.50 253.58
Paracetamol pack 11.50 10 115.00 115.00 120.75 126.79
Mefenamic acid pack 17.25 10 172.50 172.50 181.13 190.18
Loperamide pack 17.25 10 172.50 172.50 181.13 190.18
Kremil S pack 34.50 10 345.00 345.00 362.25 380.36
Warm/cold compress 115.00 2 230.00 230.00 241.50 253.58
Total 5,887.00 8,504.50 8,504.50 8,929.73 9,376.21

Note 8. Cleaning Supplies

Cleaning Supplies Unit Cost QTY Total Cost Year 1 Year 2 Year 3
Vacuum cleaner 3,450.00 1 3,450.00 3,450.00 3,622.50 3,803.63
Floor mop 575.00 1 575.00 575.00 603.75 633.94
Trash bin 345.00 2 690.00 690.00 724.50 760.73
Dustpan 115.00 1 115.00 115.00 120.75 126.79
Stick broom 115.00 1 115.00 115.00 120.75 126.79
Broom 230.00 1 230.00 230.00 241.50 253.58
Toilet brush 57.00 1 57.00 57.00 59.85 62.84
Bleach 115.00 1 115.00 115.00 120.75 126.79
Squeegee 172.50 1 172.50 172.50 181.13 190.18
Condiments container 57.00 2 114.00 114.00 119.70 125.69
Garbage bags 57.00 10 570.00 570.00 598.50 628.43
Rag 11.50 10 115.00 115.00 120.75 126.79
Spray bottle 115.00 1 115.00 115.00 120.75 126.79
Soap dispenser 230.00 1 230.00 230.00 241.50 253.58
Steel wool 115.00 1 115.00 115.00 120.75 126.79
Bucket 172.50 2 345.00 345.00 362.25 380.36
Air freshener 115.00 1 115.00 115.00 120.75 126.79
Detergent 115.00 1 115.00 115.00 120.75 126.79
All-purpose cleaner 115.00 1 115.00 115.00 120.75 126.79
Total 6,277.50 7,468.50 7,468.50 7,841.93 8,234.02
 Note 9. Business Permits and Licenses

Business permits and licenses Cost

Year 0 Year 1 Year 2 Year 3
Department of Trade and Industry 500.00 500.00
Mayor’s Permit 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00
Garbage Charges 300.00 300.00 300.00 300.00 300.00
Sanitary Certificate 500.00 500.00 500.00 500.00 500.00
Zoning Fee 300.00 300.00 300.00 300.00 300.00
Business Plate 500.00 500.00 500.00 500.00 500.00
Bureau of Internal Revenue 500.00 500.00 500.00 500.00 500.00
Fire Evaluation and Inspection Certificate 340.00 340.00 340.00 340.00 340.00
Community Tax Certificate / CEDULA 400.00 400.00 400.00 400.00 400.00
Business Permits 500.00 500.00 500.00 500.00 500.00
Barangay Business Clearance 150.00 150.00 150.00 150.00 150.00
Philippine National Police Clearance 200.00 200.00 200.00 200.00 200.00
TOTAL 7,190.00 7,190.00 6,690.00 6,690.00 6,690.00

Note 10. Depreciation - Leasehold Improvements

Estimated
Monthly Annual
Particulars Unit Cost QTY Total Cost Useful Life
Depreciation Depreciation
(months)
Leasehold Improvements 233,952.75 1 233,952.75 60 3,899.21 46,790.55
Total 233,952.75 233,952.75 3,899.21 46,790.55

Particulars Pre-Op Year 0 Year 1 Year 2 Year 3

Accumulated Net Carrying Accumulated Net Carrying Accumulated Net Carrying Accumulated Net Carrying
Leasehold Improvements Book Value Book Value Book Value Book Value
Depreciation Amount Depreciation Amount Depreciation Amount Depreciation Amount
Total 233,952.75 - 233,952.75 233,952.75 46,790.55 187,162.20 233,952.75 93,581.10 140,371.65 233,952.75 140,371.65 93,581.10

Note 11. Depreciation - Security and Emergency Equipment

Security and Emergency Useful Life Monthly Annual

Unit Cost QTY Total Cost
Equipment (months) Depreciation Depreciation
Fire extinguisher 1,150.00 1 1,150.00 60 19.17 230.00
Fire alarm 575.00 1 575.00 60 9.58 115.00
CCTV camera 1,725.00 2 3,450.00 60 57.50 690.00
CCTV monitor 1,150.00 2 2,300.00 60 38.33 460.00
Smoke detector 575.00 1 575.00 60 9.58 115.00
Water sprinkle 1,150.00 1 1,150.00 60 19.17 230.00
Walkie talkie 575.00 2 1,150.00 60 19.17 230.00
Emergency light 575.00 1 575.00 60 9.58 115.00
Generator 11,500.00 1 11,500.00 60 191.67 2,300.00
Flashlight 1,150.00 1 1,150.00 60 19.17 230.00
Total 23,575.00 392.92 4,715.00
 Pre-Op Year 0 Year 1 Year 2 Year 3
Security and Emergency
Accumulated Net Carrying Accumulated Net Carrying Accumulated Net Carrying Accumulated Net Carrying
Equipment Book Value Book Value Book Value Book Value
Depreciation Amount Depreciation Amount Depreciation Amount Depreciation Amount
Fire extinguisher 1,150.00 - 1,150.00 1,150.00 230.00 920.00 1,150.00 460.00 690.00 1,150.00 690.00 460.00
Fire alarm 575.00 - 575.00 575.00 115.00 460.00 575.00 230.00 345.00 575.00 345.00 230.00
CCTV camera 3,450.00 - 3,450.00 3,450.00 690.00 2,760.00 3,450.00 1,380.00 2,070.00 3,450.00 2,070.00 1,380.00
CCTV monitor 2,300.00 - 2,300.00 2,300.00 460.00 1,840.00 2,300.00 920.00 1,380.00 2,300.00 1,380.00 920.00
Smoke detector 575.00 - 575.00 575.00 115.00 460.00 575.00 230.00 345.00 575.00 345.00 230.00
Water sprinkle 1,150.00 - 1,150.00 1,150.00 230.00 920.00 1,150.00 460.00 690.00 1,150.00 690.00 460.00
Walkie talkie 1,150.00 - 1,150.00 1,150.00 230.00 920.00 1,150.00 460.00 690.00 1,150.00 690.00 460.00
Emergency light 575.00 - 575.00 575.00 115.00 460.00 575.00 230.00 345.00 575.00 345.00 230.00
Generator 11,500.00 - 11,500.00 11,500.00 2,300.00 9,200.00 11,500.00 4,600.00 6,900.00 11,500.00 6,900.00 4,600.00
Flashlight 1,150.00 - 1,150.00 1,150.00 230.00 920.00 1,150.00 460.00 690.00 1,150.00 690.00 460.00
Total 23,575.00 - 23,575.00 23,575.00 4,715.00 18,860.00 23,575.00 9,430.00 14,145.00 23,575.00 14,145.00 9,430.00

Note 12. Depreciation – Kitchen Tools and Equipment

Cost Useful Life Monthly Annual

Kitchen Tools and Equipment QTY Total Cost
Projected (months) Depreciation Depreciation
Industrial hydrator 17,250.00 3 51,750.00 60 862.50 10,350.00
Shredder 2,875.00 3 8,625.00 60 143.75 1,725.00
Refrigerator 23,000.00 1 23,000.00 60 383.33 4,600.00
Liquid measuring cup 575.00 2 1,150.00 60 19.17 230.00
Measuring spoon 230.00 10 2,300.00 60 38.33 460.00
Mixing bowl 575.00 3 1,725.00 60 28.75 345.00
Containers 230.00 5 1,150.00 60 19.17 230.00
Digital scale 1,150.00 1 1,150.00 60 19.17 230.00
Towels 230.00 10 2,300.00 60 38.33 460.00
Kitchen cabinet 5,750.00 1 5,750.00 60 95.83 1,150.00
Total 98,900.00 1,648.33 19,780.00

Pre-Op Year 0 Year 1 Year 2 Year 3

Kitchen Tools and Equipment Accumulated Net Carrying Accumulated Net Carrying Accumulated Net Carrying Accumulated Net Carrying
Book Value Book Value Book Value Book Value
Depreciation Amount Depreciation Amount Depreciation Amount Depreciation Amount
Industrial hydrator 51,750.00 - 51,750.00 51,750.00 10,350.00 41,400.00 51,750.00 20,700.00 31,050.00 51,750.00 31,050.00 20,700.00
Shredder 8,625.00 - 8,625.00 8,625.00 1,725.00 6,900.00 8,625.00 3,450.00 5,175.00 8,625.00 5,175.00 3,450.00
Refrigerator 23,000.00 - 23,000.00 23,000.00 4,600.00 18,400.00 23,000.00 9,200.00 13,800.00 23,000.00 13,800.00 9,200.00
Liquid measuring cup 1,150.00 - 1,150.00 1,150.00 230.00 920.00 1,150.00 460.00 690.00 1,150.00 690.00 460.00
Measuring spoon 2,300.00 - 2,300.00 2,300.00 460.00 1,840.00 2,300.00 920.00 1,380.00 2,300.00 1,380.00 920.00
Mixing bowl 1,725.00 - 1,725.00 1,725.00 345.00 1,380.00 1,725.00 690.00 1,035.00 1,725.00 1,035.00 690.00
Containers 1,150.00 - 1,150.00 1,150.00 230.00 920.00 1,150.00 460.00 690.00 1,150.00 690.00 460.00
Digital scale 1,150.00 - 1,150.00 1,150.00 230.00 920.00 1,150.00 460.00 690.00 1,150.00 690.00 460.00
Towels 2,300.00 - 2,300.00 2,300.00 460.00 1,840.00 2,300.00 920.00 1,380.00 2,300.00 1,380.00 920.00
Kitchen cabinet 5,750.00 - 5,750.00 5,750.00 1,150.00 4,600.00 5,750.00 2,300.00 3,450.00 5,750.00 3,450.00 2,300.00
Total 98,900.00 - 98,900.00 98,900.00 19,780.00 79,120.00 98,900.00 39,560.00 59,340.00 98,900.00 59,340.00 39,560.00
 Note 13. Depreciation – Delivery Equipment

Estimated
Cost Monthly Annual
Delivery Equipment Item Cost QTY Total Cost Useful Life
Projected Depreciation Depreciation
(months)
Delivery Truck (L300) 800,000.00 920,000.00 1 920,000.00 120 7,666.67 92,000.00
Total 920,000.00 920,000.00 7,666.67 92,000.00

Delivery Equipment Pre-Op Year 0 Year 1 Year 2 Year 3

Accumulated Net Carrying Accumulated Net Carrying Accumulated Net Carrying Accumulated Net Carrying
Delivery Truck (L300) Book Value Book Value Book Value Book Value
Depreciation Amount Depreciation Amount Depreciation Amount Depreciation Amount
Total 920,000.00 - 920,000.00 920,000.00 92,000.00 828,000.00 920,000.00 184,000.00 736,000.00 920,000.00 276,000.00 644,000.00

Note 14. Depreciation – Office Equipment

Estimated
Monthly Annual
Office Equipment Unit Cost QTY Total Cost Useful Life
Depreciation Depreciation
(months)
Filling cabinet 3,450.00 1 3,450.00 60 57.50 690.00
Office table 1,725.00 2 3,450.00 60 57.50 690.00
Office chair 1,150.00 5 5,750.00 60 95.83 1,150.00
Photocopy machine 11,500.00 1 11,500.00 60 191.67 2,300.00
Wall clock 575.00 1 575.00 60 9.58 115.00
Computer set 23,000.00 1 23,000.00 60 383.33 4,600.00
Printer 4,600.00 1 4,600.00 60 76.67 920.00
Telephone 1,150.00 1 1,150.00 60 19.17 230.00
Total 47,150.00 53,475.00 891.25 10,695.00

CY 2022 Year 1 Year 2 Year 3

Office Equipment Accumulated Net Carrying Accumulated Net Carrying Accumulated Net Carrying Accumulated Net Carrying
Book Value Book Value Book Value Book Value
Depreciation Amount Depreciation Amount Depreciation Amount Depreciation Amount
Filling cabinet 3,450.00 - 3,450.00 3,450.00 690.00 2,760.00 3,450.00 1,380.00 2,070.00 3,450.00 2,070.00 1,380.00
Office table 3,450.00 - 3,450.00 3,450.00 690.00 2,760.00 3,450.00 1,380.00 2,070.00 3,450.00 2,070.00 1,380.00
Office chair 5,750.00 - 5,750.00 5,750.00 1,150.00 4,600.00 5,750.00 2,300.00 3,450.00 5,750.00 3,450.00 2,300.00
Photocopy machine 11,500.00 - 11,500.00 11,500.00 2,300.00 9,200.00 11,500.00 4,600.00 6,900.00 11,500.00 6,900.00 4,600.00
Wall clock 575.00 - 575.00 575.00 115.00 460.00 575.00 230.00 345.00 575.00 345.00 230.00
Computer set 23,000.00 - 23,000.00 23,000.00 4,600.00 18,400.00 23,000.00 9,200.00 13,800.00 23,000.00 13,800.00 9,200.00
Printer 4,600.00 - 4,600.00 4,600.00 920.00 3,680.00 4,600.00 1,840.00 2,760.00 4,600.00 2,760.00 1,840.00
Telephone 1,150.00 - 1,150.00 1,150.00 230.00 920.00 1,150.00 460.00 690.00 1,150.00 690.00 460.00
Total 53,475.00 - 53,475.00 53,475.00 10,695.00 42,780.00 53,475.00 21,390.00 32,085.00 53,475.00 32,085.00 21,390.00
FINANCIAL ANALYSIS
Break Even Analysis
It can be gleaned from the presentation below that the business must have at least a
total sales of approximately P5,725,716.30 annually or P477,143.03 monthly or
P15,904.77 daily on its products for it to have a break-even profit.

Break even point Total Sales

Revenue 5,725,716.30
Less: (Annual Cost)
Cost of Goods Sold 1,751,324.02
Adminstrative Expenses 3,799,378.50
Depreciation 175,013.79
Net Income 0.00

Cost of Goods Sold 1,751,324.02

Administrative Cost 3,799,378.50
Depreciation 175,013.79
5,725,716.30

Business Ratio & Analysis.

Return On Investment

ROI is a performance measure used to evaluate the efficiency of an investment or to

compare the efficiency of a number of different investments. The higher the return
on ROI of a project, the greater the profit earned per peso invested in the operating
assets. The return on investment of the project for the first year is 14.92%. This
means that there is high profit earned per peso invested in the project.
 Net Income Average Net Income Cost of Investment ROI
Year 1 142,733.70 1,500,000.00 9.52%
Year 2 347,580.42 350,981.58 1,500,000.00 23.17%
Year 3 562,630.63 1,500,000.00 37.51%

Return on Investment = Retrurn for 3 Average Net Income

years Cost of Investment

Return on Investment = Retrurn for 3 350,981.58

years 1,500,000.00

Return on Investment = Retrurn for 3

23.3988%
years

Payback Period.

This method refers to the length of time before investment is recovered. It is the

time where the cumulative cash inflows are equal to the cost of investment. If the

payback period is less than or equal to the maximum allowed payback period by the

management, accept; otherwise, reject. Thus, the more quickly the cost of an investment

can be recovered, the more desirable is the investment.

The project financial evaluation regarding payback period showed 1.7315 year.

This means that the project cost could be recovered in less than 3 years. The project is

acceptable and a desirable investment.

Cummulative Cash Investment

Initial Capital Cash Inflow Payback Period
Inflow Balance
Year 1 1,500,000.00 317,747.48 317,747.48 1,182,252.52 1.0000
Year 2 522,594.21 840,341.69 659,658.31 1.0000
Year 3 737,644.42 1,577,986.11 0.8943
Payback Period 2.8943