LYCEUM OF ALABANG

College of Business Management Education

Bachelor of Science in Marketing Management

Chapter 5

Financial Aspect

In this chapter, the proponents of the study provide the financial

environment of the proposed business when established in a statistical,

projected aspect. This chapter also aims to provide analytical answers

whether the proposed business is feasible.

Financial Assumptions

1. 5% increase in revenue after the first year of operation

2. Labor, Utilities and supplies expenses to increase 1% yearly.

3. A provisionary of 30% Income Tax.

4. Office equipment, furniture and fixtures depreciate 10% of its price every

year.

5. All sales will be on a cash basis

6. 100% cash collection at the end of fiscal year.

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

Capital Requirement

Initial Capital Requirement

Since the JAPIC gaming hub will operate as partnership, the capital

requirement for this business will be borne equally by each business partners.

The business’ project cost is P 555,664.30. It will be divided into five (5)

since there are 5 business partners in this study. Below are the tables

showing the breakdown of the capital share and the project cost.

JAPIC Gaming Hub

Capital Share
Partners Share
Aquino, Aaron Harold P 110,932.86
Del Monte, Charles Jeremy 110,932.86
Ponce, Kevin. 110,932.86
Soriano, Ian Christian D. 110,932.86
Villanueva, Ervin Jasper 110,932.86
Total P 554,664.30
Table 15: Capital Share

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

Project Cost

JAPIC Gaming Hub Project Cost

Office Equipment 339,980.00
Furniture and Fixture 20,478.00
Working Capital for 3 months
Labor 35594.3
Contributions
SSS 12690
Philhealth 3150
Pag-Ibig 3000 18840
Utilities
Electric 45,000.00
Water 6,000.00
Internet 8,697.00
MS Office 8,800.00
Antivirus 2,240.00 70,737.00
Supplies 39,470.00
Space Rental 24,000.00
Pre Operating Expenses
Business Licenses
Business Tax 3,640.00
Mayors Permit 350.00
Application Form 20.00
Business Plate 150.00
Business Sticker 15.00
Police Clearance 150.00
Inspection Fee 360.00
Occupation Permit 310.00
DTI Registration 550.00
BIR Registration 510.00
Filing of By-Laws 510.00 6,565.00
Total Project Cost 555,664.30
Table 16: Project Cost

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

COST AND EXPENSE SCHEDULE

Office Equipment

Office Equipment
Item Qty Unit Price Total
Computer Package (Gaming) 20 13,499.00 269,980.00
Computer (Counter) 2 15,000.00 30,000.00
Printer (Scanner, Photocopy, Printer) 1 5,000.00 5,000.00
Aircon (Split type) 1 35,000.00 35,000.00
339,980.00
Table 17: Office Equipment

Furniture and Fixture

Furniture and Fixture

Item Qty Unit Price Total
Long Computer Table 8mX.3mX.8m 2 5,000.00 10,000.00
Lobby Table/Cabinet/Counter 1 3,000.00 3,000.00
Monoblock Chair 22 249.00 5,478.00
Lobby Waiting Bench 1 2,000.00 2,000.00
20,478.00
Table 18: Furniture and Fixture

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

Supplies

Supplies
Item Qty Unit Price Total
Short Bond Paper 50 rims 220.00 11,000.00
Long Bond Paper 50 rims 270.00 13,500.00
Printer Ink 30 cartridges 499.00 14,970.00
39,470.00
Table 19: Supplies Expense
Utilities

Utilities
Item Monthly Annually
Electricity 15,000.00 180,000.00
Water 2,000.00 24,000.00
Internet 2,899.00 34,788.00
MS Office Business (20 units/annually) 8,800.00
Antivirus (Mcafee) (20 units/annually) 2,240.00
249,828.00
Table 20: Utilities Expense
Advertising

Advertising
Description Monthly Annually
Business Card 150.00 1,800.00
Flyers 150.00 1,800.00
Tarpaulin 2x4 160.00 1,920.00
FB Boost 240.00 2,880.00
8,400.00
Table 21: Advertising Expenses

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

Rent

Rent
Description Monthly Annually
Commercial Space 8,000.00 96,000.00
Table 22: Rent Expense

Business licenses and Permits

Business Licenses
Business Tax 3,640.00
Mayors Permit 350.00
Application Form 20.00
Business Plate 150.00
Business Sticker 15.00
Police Clearance 150.00
Inspection Fee 360.00
Occupation Permit 310.00
DTI Registration 550.00
BIR Registration 510.00
Filing of By-Laws 510.00
6,565.00
Table 23: Business Licenses and Permits

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

Salary

Salary
Personnel Salary Annual
Shop Head 10,000.00 120,000.00
Shop Assistant 8,000.00 96,000.00
Shop Assistant 8,000.00 96,000.00
Maintenance Personnel 6,000.00 72,000.00
Maintenance Personnel 6,000.00 72,000.00
38,000.00 456,000.00
Table 24: Salary Expense

Contributions

SSS

SSS Employer - Employee Share

Employer Share Employee Share
Personnel Monthly Annual Monthly Annual
Shop Head 746.70 8,960.40 363.30 4,359.60
Shop Assistant 599.30 7,191.60 290.70 3,488.40
Shop Assistant 599.30 7,191.60 290.70 3,488.40
Maintenance Personnel 452.00 5,424.00 218.00 2,616.00
Maintenance Personnel 452.00 5,424.00 218.00 2,616.00
2,849.30 34,191.60 1,380.70 16,568.40
Table 25: SSS Share

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

Philhealth

Philhealth Employer - Employee Share

Employer Share Employee Share
Personnel Monthly Annual Monthly Annual
Shop Head 125.00 1,500.00 125.00 1,500.00
Shop Assistant 100.00 1,200.00 100.00 1,200.00
Shop Assistant 100.00 1,200.00 100.00 1,200.00
Maintenance Personnel 100.00 1,200.00 100.00 1,200.00
Maintenance Personnel 100.00 1,200.00 100.00 1,200.00
525.00 6,300.00 525.00 6,300.00
Table 26: Philhealth Share

Pag-Ibig

Pag-Ibig Employer - Employee Share

Employer Share Employee Share
Personnel Monthly Annual Monthly Annual
Shop Head 100.00 1,200.00 100.00 1,200.00
Shop Assistant 100.00 1,200.00 100.00 1,200.00
Shop Assistant 100.00 1,200.00 100.00 1,200.00
Maintenance Personnel 100.00 1,200.00 100.00 1,200.00
Maintenance Personnel 100.00 1,200.00 100.00 1,200.00
500.00 6,000.00 500.00 6,000.00
Table 27: Pag-Ibig Share

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

Depreciation

Office Equipment

Annual Depreciation/Office Equipment

Item Qty Life Span Unit Price Total Depreciation
Computer Package 20 10 years 13,499.00 269,980.00 26,998.00
(Gaming)
Computer (Counter) 2 10 years 15,000.00 30,000.00 3,000.00
Printer (Scanner, 1 10 years 5,000.00 5,000.00 500.00
Photocopy, Printer)
Aircon (Split type) 1 10 years 35,000.00 35,000.00 3,500.00
33,998.00
Table 28: Office Equipment Depreciation

Furniture and Fixture

Annual Depreciation/Office Equipment

Item Qty Life Span Unit Price Total Depreciation
Long Computer Table 2 10 years 5,000.00 10,000.00 1,000.00
8mX.3mX.8m
Lobby 1 10 years 3,000.00 3,000.00 300.00
Table/Cabinet/Counter
Monoblock Chair 22 10 years 249.00 5,478.00 547.80
Lobby Waiting Bench 1 10 years 2,000.00 2,000.00 200.00
2,047.80
Table 29: Furniture and Fixture Depreciation

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

Income Schedule

Income Breakdown
Rate Hourly Daily Weekly Monthly Annually
PC Rental (20
12.00 240.00 4,080.00 24,480.00 97,920.00 1,175,040.00
units)
B&W Print -
1.00 1.00 17.00 102.00 408.00 4,896.00
short
B&W Print -
2.00 2.00 34.00 204.00 816.00 9,792.00
long
Colored Print
10.00 10.00 170.00 1,020.00 4,080.00 48,960.00
- 1/4 page
Colored Print
20.00 20.00 340.00 2,040.00 8,160.00 97,920.00
- 1/2 page
Colored Print
40.00 40.00 680.00 4,080.00 16,320.00 195,840.00
- whole page
Photocopy -
1.00 1.00 17.00 102.00 408.00 4,896.00
short
Photocopy -
2.00 2.00 34.00 204.00 816.00 9,792.00
long
1,547,136.00
Table 30: Income Schedule

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

Financial Statements

1. Projected Cash Flow

JAPIC Gaming Hub

Projected Cashflow Statement
Fiscal Year 2019 2020 2021 2022 2023
Cashflow from
Operating Activities
Revenue 1,547,136.00 1,624,492.80 1,705,717.44 1,791,003.31 1,880,553.48
Less: Cash payment
for
Labor 427,131.60 431,402.92 435,716.95 440,074.11 444,474.86
Contributions 75,360.00 75,360.00 75,360.00 75,360.00 75,360.00
Utilities 249,828.00 252,326.28 254,849.54 257,398.04 259,972.02
Space Rental 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00
Supplies 39,470.00 39,864.70 40,263.35 40,665.98 41,072.64
Advertising 8,400.00 8,400.00 8,400.00 8,400.00 8,400.00
Business Licenses 6,565.00 6,565.00 6,565.00 6,565.00 6,565.00
Income Taxes 902,754.60 182,500.68 203,558.43 217,655.04 249,148.31

Cashflow from
Investing Activities
Office Equipments 339,980.00
Furniture and Fixture 20,478.00

Cashflow from
Financing Activities
Capital Contribution 555,664.30
Beginning Cash 839,587.70 1,371,660.92 1,956,665.10 2,605,550.24
Balance
Ending Cash Balance 839,587.70 1,371,660.92 1,956,665.10 2,605,550.24 3,305,110.90
Table 31: Projected Cashflow

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

2. Projected Income Statement

JAPIC Gaming Hub

Projected Income Statement
Fiscal Year 2019 2020 2021 2022 2023
Revenue 1,547,136.00 1,624,492.80 1,705,717.44 1,791,003.31 1,880,553.48
Less: Operating Expenses
Labor 427,131.60 431,402.92 435,716.95 440,074.11 444,474.86
Contributions 75,360.00 75,360.00 75,360.00 75,360.00 75,360.00
Utilities 249,828.00 252,326.28 254,849.54 257,398.04 259,972.02
Space Rental 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00
Supplies 39,470.00 39,864.70 40,263.35 40,665.98 41,072.64
Advertising 8,400.00 8,400.00 8,400.00 8,400.00 8,400.00
Business Licenses 6,565.00 6,565.00 6,565.00 6,565.00 6,565.00
Depreciation 36,045.80 36,045.80 36,045.80 36,045.80 36,045.80
Total Operating Expenses 938,800.40 945,964.70 953,200.63 960,508.93 967,890.31
Net Income Before Tax 608,335.60 678,528.10 752,516.81 830,494.38 912,663.16
Provision for Tax (30%) 182,500.68 203,558.43 225,755.04 249,148.31 273,798.95
Net Income After Tax 425,834.92 474,969.67 526,761.76 581,346.07 638,864.21
Table 32: Projected Income Statement

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

3. Balance Sheet

JAPIC Gaming Hub

Balance Sheet Statement
Fiscal Year 2019 2020 2021 2022 2023
CURRENT ASSETS
CASH 839,587.70 1,371,660.92 1,956,665.10 2,605,550.24 3,305,110.90

FIXED ASSETS
OFFICE EQUIPMENTS 339,980.00 339,980.00 339,980.00 339,980.00 339,980.00
FURNITURE AND 20,478.00 20,478.00 20,478.00 20,478.00 20,478.00
FIXTURE

LESS: ACCUMULATED 36,045.80 72,091.60 108,137.40 144,183.20 180,229.00

DEPRECIATION
TOTAL ASSETS 1,163,999.90 1,660,027.32 2,208,985.70 2,821,825.04 3,485,339.90

LIABILITIES AND
PARTNERS EQUITY
CURRENT LIABILITIES
INCOME TAX 182,500.68 203,558.43 225,755.04 249,148.31 273,798.95
TOTAL LIABILITIES 182,500.68 203,558.43 225,755.04 249,148.31 273,798.95
PARTNERS EQUITY
CAPITAL 555,664.30 981,499.22 1,456,468.89 1,983,230.66 2,564,576.72
CONTRIBUTION
NET PROFIT AFTER TAX 425,834.92 474,969.67 526,761.76 581,346.07 638,864.21
TOTAL LIABILITIES 1,163,999.90 1,660,027.32 2,208,985.70 2,813,725.04 3,485,339.90
AND EQUITY

Table 33: Balance Sheet

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

FINANCIAL ANALYSIS

A. RETURN ON INVESTMENT

Computation:

ROI = (NET INCOME /INVESTMENT) 100

Application:

ROI = (425,834.92/555664.30) 100

ROI = 76.63%

B. PAYBACK PERIOD

Computation:

P.B. = (Total Project Cost/Annual Net Cash Flow)

Application:

P.B. = (555664.30/839,587.70)

P.B. = 0.7 Year

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 LYCEUM OF ALABANG
College of Business Management Education
Bachelor of Science in Marketing Management

Financial Ratio Analysis

Table 34: Financial Ratio Analysis

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