FINANCIAL 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.

Major Assumptions
1. Sales Annual growth is 5%.
2. Raw materials used in the production, will increased by 5% of the total cost
production annually.
3. The total project cost is P1,000,000.00 only.
4. Depreciation expense is computed using Straight-line Method.
5. Advertising Expenses, Store supply, Office Supplies, Utility Expenses, and Repairs
and Maintenance will increase by 5% every year.

86
Opening of Financial Statements

GARDEN OF EDEN
Projected Statement of Financial Performance (5 years)
For the period Ended

Pre-Op Year Year 1 Year 2 Year 3 Year 4 Year 5

Notes
2022 2023 2024 2025 2026 2027
Sales 1 - 3,104,400.00 3,259,620.00 3,422,601.00 3,593,731.05 3,773,417.60
Total Revenue
Less: Cost of Goods Sold 2 1,775,280.00 1,864,044.00 1,957,246.20 2,055,108.51 2,157,863.94
Gross Operating Profit 1,329,120.00 1,395,576.00 1,465,354.80 1,538,622.54 1,615,553.67
Less: Adminstrative Expenses
Salaries and Wages 3 720,000.00 720,000.00 720,000.00 720,000.00 720,000.00
13th Month Pay 4 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00
Christmas Bonus 4 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00
SSS Contributions Expense 5 62,160.00 62,160.00 62,160.00 62,160.00 62,160.00
PAG-IBIG Contributions Expense 5 21,600.00 21,600.00 21,600.00 21,600.00 21,600.00
PHIC Contributions Expense 5 14,400.00 14,400.00 14,400.00 14,400.00 14,400.00
Supplies Expense - Office Supplies 6 14,472.00 15,195.60 15,955.38 16,753.15 17,590.81
Supplies Expense - Store floral supplies 7 32,044.00 33,646.20 35,328.51 37,094.94 38,949.68
Utility Expense 8 36,000.00 37,800.00 39,690.00 41,674.50 43,758.23
Business permits and licenses 9 7,190.00 6,690.00 6,690.00 6,690.00 6,690.00 7,190.00
Advertising Expenses 10 3,000.00 3,000.00 3,150.00 3,307.50 3,472.88 3,646.52
Repairs and Maintenance Expenses 11 15,000.00 15,750.00 16,537.50 17,364.38 18,232.59
Interest Expense 42,000.00 34,800.00 27,600.00 20,400.00 13,200.00
Depreciation Expense
Building 12 24,400.00 24,400.00 24,400.00 24,400.00 24,400.00
Machinery and Equipment 13 5,988.00 5,988.00 5,988.00 5,988.00 5,988.00
Furniture and Fixtures 14 708.00 708.00 708.00 708.00 708.00
Total Expense 10,190.00 1,088,462.00 1,086,287.80 1,084,364.89 1,082,705.83 1,081,823.83
Net Income (10,190.00) 240,658.00 309,288.20 380,989.91 455,916.71 533,729.84

Table 42. Statement of Financial Performance

87
 GARDEN OF EDEN
Projected Statement of Financial Position (5 years)
As of December 31

Pre-Op Year Year 1 Year 2 Year 3 Year 4 Year 5

Notes
2022 2023 2024 2025 2026 2027
ASSET
Curent Assets
Cash and Cash Equivalent ₱ 505,200.00 ₱ 746,954.00 ₱ 1,057,338.20 ₱ 1,439,424.11 ₱ 1,896,436.82 ₱ 2,431,262.66
Inventory 15 40,330.00 40,330.00 40,330.00 40,330.00 40,330.00 40,330.00
Total Curent Assets 545,530.00 787,284.00 1,097,668.20 1,479,754.11 1,936,766.82 2,471,592.66

Non-Curent Assets (Net of Depreciation)

Property, Plant and Equipment
Land 165,000.00 165,000.00 165,000.00 165,000.00 165,000.00 165,000.00
Building 16 244,000.00 219,600.00 195,200.00 170,800.00 146,400.00 122,000.00
Machinery and Equipment 17 29,940.00 23,952.00 17,964.00 11,976.00 5,988.00 -
Furniture and Fixtures 18 5,340.00 4,632.00 3,924.00 3,216.00 2,508.00 1,800.00
Total Non-Curent Assets 444,280.00 413,184.00 382,088.00 350,992.00 319,896.00 288,800.00
TOTAL ASSETS ₱ 989,810.00 ₱ 1,200,468.00 ₱ 1,479,756.20 ₱ 1,830,746.11 2,256,662.82 2,760,392.66

LIABILITIES AND OWNER'S EQUITY

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

Non-Current Liabilities
Loans Payable 175,000.00 145,000.00 115,000.00 85,000.00 55,000.00 25,000.00
Total Non-Curent Liabilities 175,000.00 145,000.00 115,000.00 85,000.00 55,000.00 25,000.00
TOTAL LIABILITIES 175,000.00 145,000.00 115,000.00 85,000.00 55,000.00 25,000.00

EQUITY
Partner's Equity, Beg. 825,000.00 814,810.00 1,055,468.00 1,364,756.20 1,745,746.11 2,201,662.82
Add (Less):
Income / (Loss) (10,190.00) 240,658.00 309,288.20 380,989.91 455,916.71 533,729.84
Partner's Equity, End. 814,810.00 1,055,468.00 1,364,756.20 1,745,746.11 2,201,662.82 2,735,392.66
TOTAL LIABILITIES AND EQUITY ₱ 989,810.00 ₱ 1,200,468.00 ₱ 1,479,756.20 ₱ 1,830,746.11 ₱ 2,256,662.82 ₱ 2,760,392.66

Table 43. Statement of Financial Position

88
 GARDEN OF EDEN
Projected Statement of Cash Flows (5 years)
For the Period ended December 31

Pre-Op Year Year 1 Year 2 Year 3 Year 4 Year 5

2022 2023 2024 2025 2026 2027
Cash Flow from Operating Activities:
Cash Inflows:
Collection from Sales 3,104,400.00 3,259,620.00 3,422,601.00 3,593,731.05 3,773,417.60
Total Cash Inflows - 3,104,400.00 3,259,620.00 3,422,601.00 3,593,731.05 3,773,417.60
Cash Outflows:
Payment for Purchase of Raw Materials 40,330.00 1,775,280.00 1,864,044.00 1,957,246.20 2,055,108.51 2,157,863.94
Payment of Salaries and Wages 651,600.00 651,600.00 651,600.00 651,600.00 651,600.00
Payment of 13th Month Pay 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00
Payment of Christmas Bonus 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00
SSS Contributions 94,560.00 94,560.00 94,560.00 94,560.00 94,560.00
PAG-IBIG Contributions 43,200.00 28,800.00 28,800.00 28,800.00 28,800.00
PHIC Contributions 28,800.00 43,200.00 43,200.00 43,200.00 43,200.00
Supplies Expense - Office Supplies - 14,472.00 15,195.60 15,955.38 16,753.15 17,590.81
Supplies Expense - Store floral supplies - 32,044.00 33,646.20 35,328.51 37,094.94 38,949.68
Utility Expense - 36,000.00 37,800.00 39,690.00 41,674.50 43,758.23
Business permits and licenses 7,190.00 6,690.00 6,690.00 6,690.00 6,690.00 7,190.00
Advertising Expenses 3,000.00 3,000.00 3,150.00 3,307.50 3,472.88 3,646.52
Repairs and Maintenance Expenses - 15,000.00 15,750.00 16,537.50 17,364.38 18,232.59
Total Cash Outflows 50,520.00 2,790,646.00 2,884,435.80 2,982,915.09 3,086,318.34 3,195,391.76
Net Cash Provided(Used) from Operating Activities (50,520.00) 313,754.00 375,184.20 439,685.91 507,412.71 578,025.84
Cash Flows from Investing Activities:
Cash Inflows:
Proceeds from sale of assets 0.00 0.00 0.00 0.00 0.00 0.00
Total cash Inflows 0.00 0.00 0.00 0.00 0.00 0.00
Cash Outflows:
Purchase of Property, Plant and equipment
Construction of Building 244,000.00
Purchase of Machinery and Equipment 29,940.00
Purchase of Furniture and Fixtures 5,340.00
Total Cash Outflows 279,280.00 - 0.00 0.00 0.00 0.00
Net Cash Provided(Used) from Investing Activities (279,280.00) - 0.00 0.00 0.00 0.00
Cash Flows from Financing Activities
Cash Inflows:
Initial Inventment 660,000.00 0.00 0.00 0.00 0.00 0.00
Loan Proceeds 175,000.00 0.00 0.00 0.00 0.00 0.00
Total Cash inflows 835,000.00 0.00 0.00 0.00 0.00 0.00
Cash Outflows:
Payment of loans - 72,000.00 64,800.00 57,600.00 50,400.00 43,200.00
Total Cash Outflows - 72,000.00 64,800.00 57,600.00 50,400.00 43,200.00
Net Cash Provided(Used) from Financing Activities 835,000.00 (72,000.00) (64,800.00) (57,600.00) (50,400.00) (43,200.00)
505,200.00
Cash provided(used) by Operating, Investing and Financing Activities 241,754.00 310,384.20 382,085.91 457,012.71 534,825.84
Add: Cash Balance, Beg. - 505,200.00 746,954.00 1,057,338.20 1,439,424.11 1,896,436.82
Cash Balance, End 505,200.00 746,954.00 1,057,338.20 1,439,424.11 1,896,436.82 2,431,262.66

Table 44. Statement of Cash Flows

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 GARDEN OF EDEN
Projected Statement of Changes in Partner's Equity (5 years)
As of December 31

Pre-Op Year Year 1 Year 2 Year 3 Year 4 Year 5

2022 2023 2024 2025 2026 2027

Partner's Equity, Beginning 825,000.00 814,810.00 1,055,468.00 1,364,756.20 1,745,746.11 2,201,662.82

Add: Retained Operating Surplus
Net Income (10,190.00) 240,658.00 309,288.20 380,989.91 455,916.71 533,729.84
Total
Add/Deduct:
Additional Investment - - - -
Withdrawals - - - -
Partner's Equity, End 814,810.00 1,055,468.00 1,364,756.20 1,745,746.11 2,201,662.82 2,735,392.66

Table 45. Statement of Changes in Partner’s Equity

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Notes to Financial Statements
Note 1 – Sales Revenue
Qty Sold per Qty Sold per Qty Sold Monthly
Products Price Annual Sales
Day Month per Year Sales
Bouquet
Ordinary 3 78 936 500.00 39,000.00 468,000.00
Small Bunch 6 156 1,872 350.00 54,600.00 655,200.00
Medium Bunch 4 104 1,248 450.00 46,800.00 561,600.00
Large Bunch 3 78 936 550.00 42,900.00 514,800.00
Burial
Simple 3 78 936 300.00 23,400.00 280,800.00
Burial with Stand 2 52 624 1,000.00 52,000.00 624,000.00
Total 546 6,552 258,700.00 3,104,400.00

Year Total Sales % Increase

Year 1 3,104,400.00 0%
Year 2 3,259,620.00 5%
Year 3 3,422,601.00 5%
Year 4 3,593,731.05 5%
Year 5 3,773,417.60 5%

Note 2 – Cost of Goods Sold

Qty Sold per Qty Sold per Qty Sold per
Products Unit Cost Monthly Cost Annual Cost
Day Month Year
Bouquet
Ordinary 3 78 936 254.00 19,812.00 237,744.00
Small Bunch 6 156 1,872 198.00 30,888.00 370,656.00
Medium Bunch 4 104 1,248 248.00 25,792.00 309,504.00
Large Bunch 3 78 936 298.00 23,244.00 278,928.00
Burial
Simple 3 78 936 198.00 15,444.00 185,328.00
Burial with Stand 2 52 624 630.00 32,760.00 393,120.00
Total 546 6,552 147,940.00 1,775,280.00

Cost of Goods
Year % Inrcrease
Sold
Year 1 1,775,280.00 0%
Year 2 1,864,044.00 5%
Year 3 1,957,246.20 5%
Year 4 2,055,108.51 5%
Year 5 2,157,863.94 5%

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Note 3 – Salaries and Wages

Rate per Day Number of Days Gross pay

Employees No. of Employee/s Monthly
(Php) (on-Duty) (Jan-Dec)
Manager 1 576.92 26 15,000.00 180,000.00
Cashier 1 346.15 26 9,000.00 108,000.00
Floral Arranger 2 346.15 26 18,000.00 216,000.00
Sales Representative 2 346.15 26 18,000.00 216,000.00
Total 6 1,615.38 60,000.00 720,000.00
SSS PAG-IBIG Philhealth
Gross pay
Total Mandatory Net Take Home
Position Year1-Year 5 (Jan-
Employee Share Employee Share Employee Share Deductions Pay
Dec)

Manager 180,000.00 8,100.00 5,400.00 3,600.00 17,100.00 162,900.00

Cashier 108,000.00 4,860.00 3,240.00 2,160.00 10,260.00 97,740.00
Floral Arranger 216,000.00 9,720.00 6,480.00 4,320.00 20,520.00 195,480.00
Sales Representative 216,000.00 9,720.00 6,480.00 4,320.00 20,520.00 195,480.00
Total 720,000.00 32,400.00 21,600.00 14,400.00 68,400.00 651,600.00

Note 4 – 13th Month Pay & Christmas Bonus

Employees No. of Employee/s Monthly Rate

Manager 1 15,000.00
Cashier 1 9,000.00
Floral Arranger 2 18,000.00
Sales Representative 2 18,000.00
Total 6 60,000.00

Employees No. of Employee/s Christmas Bonus

Manager 1 5,000.00
Cashier 1 5,000.00
Floral Arranger 2 5,000.00
Sales Representative 2 5,000.00
Sales Representative 6 20,000.00

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Note 5 –SSS, PAG-IBIG and PHILHEALTH Contributions (Employer Share)
SSS PAG-IBIG Philhealth
Gross pay SSS PAG-IBIG PHILHEALTH
Position Year1-Year 5 (Jan- Employer Share- Employer Share- Contribution Contribution Contribution
Employer Share Employer Share
Dec) SSS EC Expense Expense Expense

Manager 180,000.00 15,300.00 360.00 5,400.00 3,600.00 15,660.00 5,400.00 3,600.00

Cashier 108,000.00 9,180.00 120.00 3,240.00 2,160.00 9,300.00 3,240.00 2,160.00
Floral Arranger 216,000.00 18,360.00 240.00 6,480.00 4,320.00 18,600.00 6,480.00 4,320.00
Sales Representative 216,000.00 18,360.00 240.00 6,480.00 4,320.00 18,600.00 6,480.00 4,320.00
Total 720,000.00 61,200.00 960.00 21,600.00 14,400.00 62,160.00 21,600.00 14,400.00

Note 6 – Office Supplies Expense

Amount
Supplies Expense QTY Unit Cost Annual Cost 2023 2024 2025 2026 2027
Monthly
Office Supplies
Pilot Pen 1 45.00 45.00 540.00 540.00 567.00 595.35 625.12 656.37
Calculator 2 380.00 760.00 9,120.00 9,120.00 9,576.00 10,054.80 10,557.54 11,085.42
Bond Paper 1 301.00 301.00 3,612.00 3,612.00 3,792.60 3,982.23 4,181.34 4,390.41
Receipt 1 100.00 100.00 1,200.00 1,200.00 1,260.00 1,323.00 1,389.15 1,458.61
Total 1,206.00 14,472.00 14,472.00 15,195.60 15,955.38 16,753.15 17,590.81

Note 7 – Floral Supplies Expense

Semi-
Annual
Floral Suplies Quantity Price Monthlty Year 1 Year 2 Year 3 Year 4 Year 5
Supplies
Supplies
Floral Foam 10 box 60.00 600.00 1,200.00 1,200.00 1,260.00 1,323.00 1,389.15 1,458.61
Plastic Roll Bag 2 pack 30.00 60.00 120.00 120.00 126.00 132.30 138.92 145.86
Floral Basket 20 dozen 160.00 3,200.00 6,400.00 6,400.00 6,720.00 7,056.00 7,408.80 7,779.24
Ribbon
Blue 2 pcs 150.00 300.00 600.00 600.00 630.00 661.50 694.58 729.30
White 5 pcs 150.00 750.00 1,500.00 1,500.00 1,575.00 1,653.75 1,736.44 1,823.26
Red 2 pcs 150.00 300.00 600.00 600.00 630.00 661.50 694.58 729.30
Pink 3 pcs 150.00 450.00 900.00 900.00 945.00 992.25 1,041.86 1,093.96
Purple 3 pcs 150.00 450.00 900.00 900.00 945.00 992.25 1,041.86 1,093.96
Orange 2 pcs 150.00 300.00 600.00 600.00 630.00 661.50 694.58 729.30
Yellow 2 pcs 150.00 300.00 600.00 600.00 630.00 661.50 694.58 729.30
Black 1 pc 150.00 150.00 300.00 300.00 315.00 330.75 347.29 364.65
Floral Wire 1 pc 65.00 65.00 130.00 130.00 136.50 143.33 150.49 158.02
Floral Adhesive 1 99.00 99.00 198.00 198.00 207.90 218.30 229.21 240.67
Floral Tape 2 22.00 44.00 88.00 88.00 92.40 97.02 101.87 106.96
Candle
Large 1 dozen 190.00 190.00 380.00 380.00 399.00 418.95 439.90 461.89
Small 1 85.00 85.00 170.00 170.00 178.50 187.43 196.80 206.64
Medium 1 135.00 135.00 270.00 270.00 283.50 297.68 312.56 328.19
X – Large 1 200.00 200.00 400.00 400.00 420.00 441.00 463.05 486.20
Plastic Straw tie 1 roll 150.00 150.00 300.00 300.00 315.00 330.75 347.29 364.65
Tire Wire ½ kilo 88.00 44.00 88.00 88.00 92.40 97.02 101.87 106.96
Bouquet Wrapper
Red 3 dozen 145.00 435.00 870.00 870.00 913.50 959.18 1,007.13 1,057.49
Blue 2 dozen 145.00 290.00 580.00 580.00 609.00 639.45 671.42 704.99
Black 1 dozen 145.00 145.00 290.00 290.00 304.50 319.73 335.71 352.50
Pink 3 dozen 145.00 435.00 870.00 870.00 913.50 959.18 1,007.13 1,057.49
Purple 3 dozen 145.00 435.00 870.00 870.00 913.50 959.18 1,007.13 1,057.49
Orange 2 dozen 145.00 290.00 580.00 580.00 609.00 639.45 671.42 704.99
Yellow 3 dozen 145.00 435.00 870.00 870.00 913.50 959.18 1,007.13 1,057.49
White 2 dozen 145.00 290.00 580.00 580.00 609.00 639.45 671.42 704.99
Doubled Sided Wrapper
93
Doubled Sided Wrapper
Red 2 dozen 179.00 358.00 716.00 716.00 751.80 789.39 828.86 870.30
Blue 2 dozen 179.00 358.00 716.00 716.00 751.80 789.39 828.86 870.30
Black 1 dozen 179.00 179.00 358.00 358.00 375.90 394.70 414.43 435.15
Yellow 2 dozen 179.00 358.00 716.00 716.00 751.80 789.39 828.86 870.30
Orange 1 dozen 179.00 179.00 358.00 358.00 375.90 394.70 414.43 435.15
Pink 2 dozen 179.00 358.00 716.00 716.00 751.80 789.39 828.86 870.30
Purple 2 dozen 179.00 358.00 716.00 716.00 751.80 789.39 828.86 870.30
Cotton Wrapper
Red 1 dozen 123.00 123.00 246.00 246.00 258.30 271.22 284.78 299.01
Pink 1 dozen 123.00 123.00 246.00 246.00 258.30 271.22 284.78 299.01
Orange 1 dozen 123.00 123.00 246.00 246.00 258.30 271.22 284.78 299.01
White 1 dozen 123.00 123.00 246.00 246.00 258.30 271.22 284.78 299.01
Purple 1 dozen 123.00 123.00 246.00 246.00 258.30 271.22 284.78 299.01
Gold Border Wrapper 4 dozen 129.00 516.00 1,032.00 1,032.00 1,083.60 1,137.78 1,194.67 1,254.40
Tissue Wrapper 6 dozen 80.00 480.00 960.00 960.00 1,008.00 1,058.40 1,111.32 1,166.89
Manila Paper 2 packs 125.00 250.00 500.00 500.00 525.00 551.25 578.81 607.75
Sinamay Abaca
Pink 1 pc 110.00 110.00 220.00 220.00 231.00 242.55 254.68 267.41
Orange 1 pc 110.00 110.00 220.00 220.00 231.00 242.55 254.68 267.41
Red 1 pc 110.00 110.00 220.00 220.00 231.00 242.55 254.68 267.41
Brown 1 pc 110.00 110.00 220.00 220.00 231.00 242.55 254.68 267.41
Blue 1 pc 110.00 110.00 220.00 220.00 231.00 242.55 254.68 267.41
Purple 1 pc 110.00 110.00 220.00 220.00 231.00 242.55 254.68 267.41
Mesh Bouquet Wrapper
Pink 1 pc 121.00 121.00 242.00 242.00 254.10 266.81 280.15 294.15
Orange 1 pc 121.00 121.00 242.00 242.00 254.10 266.81 280.15 294.15
Red 1 pc 121.00 121.00 242.00 242.00 254.10 266.81 280.15 294.15
Yellow 1 pc 121.00 121.00 242.00 242.00 254.10 266.81 280.15 294.15
White 1 pc 121.00 121.00 242.00 242.00 254.10 266.81 280.15 294.15
Purple 1 pc 121.00 121.00 242.00 242.00 254.10 266.81 280.15 294.15
Total 32,044.00 33,646.20 35,328.51 37,094.94 38,949.68

Note 8 – Utility Expenses

Utility Expense Est. Monthly Exp. 2023 2024 2025 2026 2027
Electricity Consumptions 2,000.00 24,000.00 25,200.00 26,460.00 27,783.00 29,172.15
Water Consumptions 1,000.00 12,000.00 12,600.00 13,230.00 13,891.50 14,586.08
Telecommunications 500.00 6,000.00 6,300.00 6,615.00 6,945.75 7,293.04
Total 3,000.00 36,000.00 37,800.00 39,690.00 41,674.50 43,758.23

Note 9 – Business permits and Licenses

Business permits and licenses 2022 2023 2024 2025 2026 2027
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 3,000.00
Garbage Charges 300.00 300.00 300.00 300.00 300.00 300.00
Sanitary Certificate 500.00 500.00 500.00 500.00 500.00 500.00
Zoning Fee 300.00 300.00 300.00 300.00 300.00 300.00
Business Plate 500.00 500.00 500.00 500.00 500.00 500.00
Bureau of Internal Revenue 500.00 500.00 500.00 500.00 500.00 500.00
Fire Evaluation and Inspection Certificate 340.00 340.00 340.00 340.00 340.00 340.00
Community Tax Certificate / CEDULA 400.00 400.00 400.00 400.00 400.00 400.00
Business Permits 500.00 500.00 500.00 500.00 500.00 500.00
Barangay Business Clearance 150.00 150.00 150.00 150.00 150.00 150.00
Philippine National Police Clearance 200.00 200.00 200.00 200.00 200.00 200.00
TOTAL 7,190.00 6,690.00 6,690.00 6,690.00 6,690.00 7,190.00

94
Note 10 – Advertising Expense

Annual
Advertising Expense Monthly 2023 2024 2025 2026 2027
Cost
Flyers 250.00 3,000.00 3,000.00 3,150.00 3,181.50 3,213.32 3,245.45
TOTAL 250.00 3,000.00 3,000.00 3,150.00 3,181.50 3,213.32 3,245.45

Note 11 – Repairs and Maintenance Expense

Particulars Monthly Annual Cost 2023 2024 2025 2026 2027

Repairs and Maintenance Expenses 1,250.00 15,000.00 15,000.00 15,750.00 16,537.50 17,364.38 18,232.59
TOTAL 1,250.00 15,000.00 15,000.00 15,750.00 16,537.50 17,364.38 18,232.59

Note 12 – Depreciation Expenses – Building

Estimated
Monthly Annual
Particulars Unit Cost QTY Total Cost Useful Life
Depreciation Depreciation
(months)
Building 244,000.00 1 244,000.00 120 2,033.33 24,400.00
Total 244,000.00 244,000.00 2,033.33 24,400.00

Note 13 – Depreciation Expenses – Machinery and Equipment

Estimated
Monthly Annual
Machinery and Equipment Unit Cost QTY Total Cost Useful Life
Depreciation Depreciation
(months)
POS System 11,990.00 1 11,990.00 60 199.83 2,398.00
Laptop 17,950.00 1 17,950.00 60 299.17 3,590.00
Total 29,940.00 29,940.00 499.00 5,988.00

Note 14 - Depreciation Expenses – Furniture and Fixtures

Estimated
Monthly Annual
Furniture and Fixtures Unit Cost QTY Total Cost Useful Life
Depreciation Depreciation
(months)
Wooden Table 1,200.00 3 3,600.00 120 30.00 360.00
Monoblock Chair 580.00 3 1,740.00 60 29.00 348.00
Total 1,780.00 5,340.00 59.00 708.00

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Note 15 – Inventory Held for Sale
Weekly
Flowers Quantity Purchse Price
Inventory Stock
Red Roses 20 Dozens 180.00 3,600.00
Red Carnations 20 Dozens 220.00 4,400.00
Gerbera Daisies 20 Dozens 160.00 3,200.00
White Roses 20 Dozens 170.00 3,400.00
Baby's Breath 20 Dozens 100.00 2,000.00
Tulips 20 Dozens 300.00 6,000.00
Carnations 20 Dozens 250.00 5,000.00
Total 27,600.00

Note 16 – Building
Estimated CY 2022 CY 2023
Monthly Annual
Particulars Unit Cost QTY Total Cost Useful Life Accumulated Net Carrying Accumulated Net Carrying
Depreciation Depreciation Book Value Book Value
(months) Depreciation Amount Depreciation Amount
Building 244,000.00 1 244,000.00 120 2,033.33 24,400.00 244,000.00 - 244,000.00 244,000.00 24,400.00 219,600.00

CY 2024 CY 2025 CY 2026 CY 2027

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
244,000.00 48,800.00 195,200.00 244,000.00 73,200.00 170,800.00 244,000.00 97,600.00 146,400.00 244,000.00 122,000.00 122,000.00

Note 17 – Machinery and Equipment

Estimated CY 2022 CY 2023
Monthly Annual
Furniture and Fixtures Unit Cost QTY Total Cost Useful Life Accumulated Net Carrying Accumulated Net Carrying
Depreciation Depreciation Book Value Book Value
(months) Depreciation Amount Depreciation Amount
Wooden Table 1,200.00 3 3,600.00 120 30.00 360.00 3,600.00 - 3,600.00 3,600.00 360.00 3,240.00
Monoblock Chair 580.00 3 1,740.00 60 29.00 348.00 1,740.00 1,740.00 1,740.00 348.00 1,392.00
Total 1,780.00 5,340.00 59.00 708.00 5,340.00 - 5,340.00 5,340.00 708.00 4,632.00

CY 2024 CY 2025 CY 2026 CY 2027

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
3,600.00 720.00 2,880.00 3,600.00 1,080.00 2,520.00 3,600.00 1,440.00 2,160.00 3,600.00 1,800.00 1,800.00
1,740.00 696.00 1,044.00 1,740.00 1,044.00 696.00 1,740.00 1,392.00 348.00 1,740.00 1,740.00 -
5,340.00 1,416.00 3,924.00 5,340.00 2,124.00 3,216.00 5,340.00 2,832.00 2,508.00 5,340.00 3,540.00 1,800.00

Note 18 – Furniture and Fixtures

Estimated CY 2022 CY 2023
Monthly Annual
Machinery and Equipment Unit Cost QTY Total Cost Useful Life Accumulated Net Carrying Accumulated Net Carrying
Depreciation Depreciation Book Value Book Value
(months) Depreciation Amount Depreciation Amount
POS System 11,990.00 1 11,990.00 60 199.83 2,398.00 11,990.00 - 11,990.00 11,990.00 2,398.00 9,592.00
Laptop 17,950.00 1 17,950.00 60 299.17 3,590.00 17,950.00 17,950.00 17,950.00 3,590.00 14,360.00
Total 29,940.00 29,940.00 499.00 5,988.00 29,940.00 - 29,940.00 29,940.00 5,988.00 23,952.00

CY 2024 CY 2025 CY 2026 CY 2027

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
11,990.00 4,796.00 7,194.00 11,990.00 7,194.00 4,796.00 11,990.00 9,592.00 2,398.00 11,990.00 11,990.00 -
17,950.00 7,180.00 10,770.00 17,950.00 10,770.00 7,180.00 17,950.00 14,360.00 3,590.00 17,950.00 17,950.00 -
29,940.00 11,976.00 17,964.00 29,940.00 17,964.00 11,976.00 29,940.00 23,952.00 5,988.00 29,940.00 29,940.00 -

96
Break Even Analysis
It can be gleaned from the presentation below that the business must have

approximately of at least a total sales of P2,863,742.00 annually or P238,645.17 monthly

or P7,954.84 daily on its products for it to have a break-even profit.

Break even point Total Sales

Sales 2,863,742.00
Less: Cost of Goods Sold
Raw Materials Used 1,775,280.00
Gross Operating Profit 1,088,462.00
Less:
Admininistrative Cost 1,057,366.00
Depreciation 31,096.00
Income / Loss 0.00

Cost of Goods Sold 1,775,280.00

Admininistrative Cost 1,057,366.00
Depreciation 31,096.00
Total 2,863,742.00

97
Financial 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 24.07%. This means

that there is high profit earned per peso invested in the project.

Net Income Average Net Income Cost of Investment ROI

Year 1 240,658.00 1,000,000.00 24.07%
Year 2 309,288.20 1,000,000.00 30.93%
Year 3 380,989.91 384,116.53 1,000,000.00 38.10%
Year 4 455,916.71 1,000,000.00 45.59%
Year 5 533,729.84 1,000,000.00 53.37%

Return on Investment = Retrurn for Average Net Income

5 years Cost of Investment

Return on Investment = Retrurn for 384,116.53

5 years 1,000,000.00

Return on Investment = Retrurn for

38.4117%
5 years

Gross Profit Margin Ratio

GARDEN OF EDEN
Gross Profit Margin Ratio
For the Year 2022-2026
Year 2023 Year 2024 Year 2025 Year 2026 Year 2027
Gross Profit 1,329,120.00 1,395,576.00 1,465,354.80 1,538,622.54 1,615,553.67
Net Sales 3,104,400.00 3,259,620.00 3,422,601.00 3,593,731.05 3,773,417.60
Gross Profit Margin Ratio 42.81% 42.81% 42.81% 42.81% 42.81%
Average Gross Profit Margin Ratio 42.81%

98
Profit Margin on Sales
GARDEN OF EDEN
Profit Margin on Sales
For the Year 2022-2026
Year 2023 Year 2024 Year 2025 Year 2026 Year 2027
Net Income 240,658.00 309,288.20 380,989.91 455,916.71 533,729.84
Net Sales 3,104,400.00 3,259,620.00 3,422,601.00 3,593,731.05 3,773,417.60
Profit Margin on Sales 7.75% 9.49% 11.13% 12.69% 14.14%
Average Profit Margin on Sales 11.04%

Return on Total Assets

GARDEN OF EDEN
Return on Total Assets
For the Year 2022-2026
Year 2023 Year 2024 Year 2025 Year 2026 Year 2027
Net Income 240,658.00 309,288.20 380,989.91 455,916.71 533,729.84
Total Assets 1,200,468.00 1,479,756.20 1,830,746.11 2,256,662.82 2,760,392.66
Return on Total Assets 20.05% 20.90% 20.81% 20.20% 19.34%
Average Return on Total Assets 20.26%

Return on Equity
GARDEN OF EDEN
Return on Equity
For the Year 2022-2026
Year 2023 Year 2024 Year 2025 Year 2026 Year 2027
Net Income 240,658.00 309,288.20 380,989.91 455,916.71 533,729.84
Total Equity 1,055,468.00 1,364,756.20 1,745,746.11 2,201,662.82 2,735,392.66
Return on Equity 22.80% 22.66% 21.82% 20.71% 19.51%
Average Return on Equity 21.50%

Asset Turn-over Ratio

GARDEN OF EDEN
Asset Turn-over Ratio
For the Year 2022-2026
Year 2023 Year 2024 Year 2025 Year 2026 Year 2027
Net Sales 3,104,400.00 3,259,620.00 3,422,601.00 3,593,731.05 3,773,417.60
Total Assets 1,200,468.00 1,479,756.20 1,830,746.11 2,256,662.82 2,760,392.66
Asset Turn-over Ratio 2.59 2.20 1.87 1.59 1.37
Average Asset Turn-over Ratio 1.92

99
Debt Ratio
GARDEN OF EDEN
Debt Ratio
For the Year 2022-2026
Year 2023 Year 2024 Year 2025 Year 2026 Year 2027
Total Liabilities 145,000.00 115,000.00 85,000.00 55,000.00 25,000.00
Total Assets 1,200,468.00 1,479,756.20 1,830,746.11 2,256,662.82 2,760,392.66
Debt Ratio 0.1208 0.0777 0.0464 0.0244 0.0091
Average Debt Ratio 0.0557

Debt to Equity Ratio

GARDEN OF EDEN
Debt to Equity Ratio
For the Year 2022-2026
Year 2023 Year 2024 Year 2025 Year 2026 Year 2027
Total Liabilities 145,000.00 115,000.00 85,000.00 55,000.00 25,000.00
Total Equity 1,055,468.00 1,364,756.20 1,745,746.11 2,201,662.82 2,735,392.66
Debt to Equity Ratio 0.1374 0.0843 0.0487 0.0250 0.01
Average Debt to Equity Ratio 0.0609

100
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 2.7141 years.

This means that the project cost could be recovered in less than 5 years. The project is

acceptable and a desirable investment.

Cummulative Cash Investment

Initial Capital Cash Inflow Payback Period
Inflow Balance
Year 1 825,000.00 241,754.00 241,754.00 583,246.00 1
Year 2 310,384.20 552,138.20 272,861.80 1
Year 3 382,085.91 934,224.11 0.71
Year 4 457,012.71 1,391,236.82
Year 5 534,825.84 1,926,062.66
Payback Period 2.7141

101