Editchapter5_002.docx

Chapter 5 Financial Plan

A. Major Assumption The project following assumptions to come up with its financial positions. 1. Revenue The revenue of the business will come from the tutoring services. The basis of computation for the service income from group tutorial is the market share of students multiplied by the price of Php 300.00 per hour multiplied by the number of sessions they will avail which is 32 sessions per month for two (2) months. It will increase by 10% thereafter for the succeeding years. 2. Expenses The following assumptions were made regarding expenses incurred. a. Advertising Expense Advertising expense on the first year of

business

which

shall

operations be

for

is

flyers,

Php

1,

000.00

posters,

and

tarpaulins to be handed out to its target market

and

to

schools,

with

proper

26

authorization

to

years

business

of

decrease

the by

Php

post.

500.

On

the

succeeding

operation, 00

to

be

it

will

spent

for

tarpaulins. b. Depreciation

expense

–

Equipment/Furniture

and Fixtures The depreciation of the equipment and furniture and fixture is for 5 years. There will be repurchase of such after it has been fully depreciated. The depreciation expense is to be computed in a straight-line method. c. Rent expense The

rent

expense

is

the

amount

of

monthly rent of Php 7,000.00 multiplied by 12 months to get the rent expense for the year. d. Utilities expense The utilities expense will pertain to the

amount

of

electricity.

The

cost

of

electricity will be computed by the number of kilowatts used multiplied by the price of kilowatt

per

hour

to

get

the

monthly

consumption. The number of total consumption for the month multiplied by the price per

27

kWh

of

Php

10.3077

to

get

the

total

consumption for the month then add the 12% VAT

charge

to

get

the

Electric

bill

per

month. The utilities expense will increase by 10% thereafter per year. e. Office supplies expense The office supplies are purchased monthly and are enough to be used in the operation of the

business.

Office

supplies

are

to

be

purchased if the supplies run out. The expenses for office supplies will increase by 10% every year. f. Salaries expense The

salaries

expense

will

be

the

salaries of the tutors and the staff. The tutor’s salary will be on an hourly basis and the administrative staff’s salary will be on a daily basis. g. SSS Contributions The SSS contribution of the employee is based

on

the

Employer/Employee

Total

Contribution from the Social Security Table of 2018. h. PhilHealth Contributions

28

The

basis

PhilHealth

of

Contribution

Employer/Employee schedule

computation

from

the

is

PhilHealth the

for

the

contribution

PhilHealth

Insurance

Company. i. Pag-IBIG Contribution The

contribution

is

based

on

2%

of

gross pay or PHP 100.00 per month if gross pay is not less than Php 500, both for the employer and employee. j. Business Permits and License Business remain

Permits

constant

for

and the

Licenses

next

five

will years

except for the DTI Registration which will only

be

needed

in

the

first

year

of

operation and shall be renewed after five years. The Community Tax Certificate will be based

on

the

revenue

of

the

proposed

business. k. Taxes Taxes

are

to

be

paid

monthly,

quarterly, and annually. The amount of tax to be paid will be based on the net income of the business.

29

3. Assets a. Cash on hand T Pre-Operating Expense The proposed business’ purchases, expenses, and income will be in the form of cash. b. Equipment/Furniture and Fixtures All equipment and furniture and fixtures are presumed to be depreciated for 5 years. 4. Liabilities a. SSS, Philhealth, Pag-IBIG Contributions Payable Employer contributions are remitted in the next month. b. Percentage Tax Payable Payables for Percentage Tax are remitted in the next month. 5. Owner’s Capital The

proposed

business

will

have

an

investment of Php 100,000.00. The breakdown is shown in Table 5.1.

Table 5.1 Project Cost

30

Permits and Licenses DTI Business Name Registration Application Fee Documentary Stamp Tax Barangay and Business Clearance Police Clearance Mayor’s Clearance Mayor’s Permit Cedula Business Plate Electrical Certificate Fee Fire Inspection Fee BIR Registration Annual Registration Fee Certificate Fee Documentary Stamp Tax

Php 500.00 15.00 200.00 100.00 100.00 110.00 5,005.00 2,500.00 200.00 100.00 200.00 20.00 20.00

Total Organization Cost Fixed Assets Furniture and Fixtures Equipment Total Fixed Assets Working Capital Cash on hand Total Project Cost

Php 9,070.00 Php 18,520.00 Php 67,738.00 Php 86,258.00 Php 4,672.00 Php 100,000.00

B. Mode of Financing The

business

100,000

which

will

have

will

be

an

initial

contributed

capital

by

Jan

of

Micko

Php L.

Nelmida. C. Financial Statements a. Income Statement The

proposed

statements

on

business the

based

Financial

on

the

Statements

financial in

the

succeeding pages has a net income of P80,043.24 in 2018 and is increased to Php 719,967.64 in 2022.

31

b. Statement of Financial Position/Balance Sheet The

financial

position

of

My

GURU

Mathematics

Tutorial Services as of 2018 is Php 188,140.16 and is increased to Php 199,133.76 in 2022. c. Statement of Cash Flows The proposed business has an ending cash balance of Php 109,070.32 from 2018 to 2022. Net cash flow from operating

activities

is

Php

95,328.32

while

from

financing activities is Php 100,000. d. Statement of Changes in Owner’s Equity The

statement

of

owner’s

equity

of

the

proposed

business, the capital on December 31, 2018 is Php 180,043.24 There is an increase of Php 80,043.24 due to the positive result of operation. In 2022, the ending capital of the business is Php, 108,523.18 since withdrawals from 2019 to 2022.