FINANCIAL

A. Statement of Financial Assumptions

Proper utilization of the financial resources plays an important role in

the success of the business. Financial aspect shows all the costs involved

in operating the business and provides information regarding the financial

position, performance and expected cash flows of the proposed business

for five years. The data shown are useful to a wide range of users in

making economic decisions relating to the viability of the proposed

business undertaking. This chapter presents the financial projections for

three years together with its supporting schedules to test if the proposed

project will be feasible or not. The period of time to recover the investment

will also be determined. Financial analysis is also included and will be of

great use as basic for future decision making.

The following assumptions are used in making the projected financial

statements:

1. It is expected that the business will operate seven days a week from

9:00 am – 12:00 noon and 1:00 – 6:00 pm every Monday-Sunday.

2. Selling price of each container will be based on the computed price

and will have a mark-up of 80% for the pick-up and 100% for delivery

price.
 3. Supplies, and salaries and wages have an increase based on the

computed inflation rate and performance evaluation.

4. It is assumed that there is an annual increase of 5% to the rent of the

leased space.

5. Straight-line method is used in computing for the depreciation of

assets and no salvage value is considered. Estimated useful life of

the non-current assets are:

Furniture and Fixtures- 5 Years

Store Equipment- 5 years

Delivery Vehicle- 8 years

Water Purification Equipment- 5 years

Water Purification Facilities- 7 years

6. Unforeseen cost of 10% has been allocated in computing the total

project cost.

7. Uniform expense, grand opening expense, miscellaneous expense,

research and study cost and promotional expense will be expenses

outright during the first year of operation. 

EXECUTIVE SUMMARY

The total project cost of Aqua Fresh Purified Water Refilling Station is

Php 1,468,556.45 to start the business.

 The total investment of the company is also equivalent to the total

project cost.

The business will be owned by a sole proprietor.

The net income after tax for the first year of operation in 2023 is Php

767,723.10.

The pre-operating expenses will include the research and study cost,

supplies expense, depreciation expense, promotional expense,

permits and licenses, benefits contribution, 13th month pay, delivery

expense, miscellaneous expense, repair and maintenance expense,

grand opening expense and holiday pay.

The percentage of return on investment is 87% which results in a net

gain.

The payback period of the proposed project is 5 months and 26 days.

B. Total Projected Cost

Table 42

Total Projected Cost

ESTIMATED PROJECT COST

Pre-operating Cost: Note
Permits and Licenses 1 4,950.50 

Working Capital:
Salaries and Wages 2 10,504.00
Office Supplies 3 570.00
 Cleaning Supplies 4 10,128.00
Delivery Expense 5 9,650.00
Water Purification Supplies 6 265,390
Utilities Expense 7 80,388.00
Promotional Expense 8 8,840.00
Grand Opening Expense 9 5,920.00
Repair & Maintenance 10 9,135.00
SSS Contribution 11 42,759.36
Pag-ibig Contribution 12 7,200.00
Philhealth Contribution 13 12,216.96

Property, Plant and Equipment

Furnitures and Fixtures 14 9,135.00
Store Equipment  15 42,235.00
Delivery Equipment 16 535,000.00
Water Purification Facilities 17 10,850.00
Water Purification Equipment 18 275,700.00

Unforeseen cost (10%) 133,505.132

TOTAL  1468556.452

C. Source of Financing

The financing of the project will be determined by considering the

type of business and the estimated cost and expenses incurred before

the business commences. The project will need an initial capital of ₱

1,468,556.452 in order to realize the proposed business.

The business activity will be owned by a proprietor, the initial capital

requirements will be from his own savings and part of which are from
 bank loans or institutional loans. The statement on the next page

presents the estimated project cost.

D. Notes and Schedules

Schedule 1

PROJECTED SALES
2023 2024 2025
Containers Sold per Year 30,412.80 36,495.36 49,794.43
x Price per Container (Pick up) ₱ 15.00 ₱ 15.00 ₱ 15.00
Projected Sales 456,192 547,430.4 746,916.45
Containers Sold per Year 96,302.40 111,562.88 133,875.456
x Price per Container ₱ 25.00 ₱ 25.00 ₱ 25.00
(Delivery)
Projected Sales 2,407,560.00 2,789,072.00 3,346,886.40
Total Projected Sales ₱ ₱ ₱ 4,093,802.85
2,863,752.00 3,336,502.40

Schedule 2

COST OF SALES
Schedule 2023 2024 2025
Direct Material 4&5 ₱ 73,640.00 ₱ 82,229.47 ₱ 184,573.5

Direct Labor 6 210,080.00 210,080.00 210,080.00

Overhead 7 351,493.14 351,493.14 351,493.14

Total ₱ 635,213.18 ₱ 643,802.586 ₱ 764,146.64

Schedule 3
 Schedule 4

DIRECT MATERIALS (Pick up)

2023 2024 2025
Container Sold per year for Pick 30,412.80 36,495.36 49,794.43
up
x Cubic meter / Container .00 .005 .005
5
Total Cubic Meter for the 152.06 182.48 248.97
finished Product
x 2 2 2
Total Cubic Meter for the 304.12 364.95 569.94
Production Process
Divided by no. of months 12 12 12
Cubic meter per month 25.34 30.41 47.50
Consumption Bracket
Rate/Cubic Meter  
First 10 Cubic Meter charge ₱ 243.20 ₱ 243.20 ₱ 243.20
11 to 20 P 16.80 336 336 336
21 to 30 P 19.77 500.97 601.21 593.1
31 to up P 48.40 - - 2,299.00
Water Expenses per month 1,080.17 1,180.41 3,471.3
1
x Number of Months
12 2 12
Water expense per year ₱ 12,962.04 ₱ 14,164.87 ₱
41,655.60
 SCHEDULE 5

DIRECT MATERIALS (Delivery)

2023 2024 2025
Container Sold per year for Pick up 96,302.40 111,562.88 133,875.456
x Cubic meter / Container .005 .005 .005
Total Cubic Meter for the finished 481.51 557.81 669.38
Product
x 2 2 2
Total Cubic Meter for the Production 963.02 1,115.63 1,338.75
Process
Divided by no. of months 12 12 12
Cubic meter per month 80.25 92.97 111.56
Consumption Bracket Rate/Cubic
Meter  
First 10 Cubic Meter charge ₱ 243.20 ₱ 243.20 ₱ 243.20
11 to 20 P 16.80 336 336 336
21 to 30 P 19.77 593.1 593.1 593.1
31 to up P 48.40 3,884.2 4,499.748 5,399.63
Water Expenses per month 5,056.5 5,672.048 11,909.83
x No. of Months 12 12 12
Water expense per year ₱ ₱ 68,064.576 ₱ 142,917.90
60,678.00

SCHEDULE 6

DIRECT LABOR
No. Daily 2023 2024 2025
Production Crew 2 ₱ 404.00 ₱ 808.00 ₱ 808.00 ₱808.00
Total X 260 days in a year 210,080.00 210,080.00 210,080.00
 SCHEDULE 7

OVERHEAD COST
Utilities Expense
Description Monthly 2023 2024 2025
Electric Bill ₱ 7,000.00 84,000.00 84,000.00 84,000.00
Total ₱ ₱ ₱
84,000.00 84,000.00 84,000.00
Rent Expense
Description Monthly 2 months Advance 2023 2024 2025
Acquired 18,000 36,000 ₱ 162,000.00 162,000.00 162,000.00
Space
Total 216,000.00 162,000.00 162,000.00
Depreciation Expense
Description Cost Useful Life Allocation
Furniture and Fixture 9,135.00 5 ₱ 1,827.00
Delivery Vehicle 535,000.00 5 107,000.00
Store Equipment 42,235.00 5 8,447.00
Water Purification 10,850.00 5 2,170.00
Facilities
Water Purification 276,739.00 7 39,534.14
Equipment
Total 51,493.14
Total Overhead Cost ₱ 351,493.14
 SCHEDULE 8

OPERATING EXPENSE
Working Capital: Note
Salaries and Wages 1 10,504.00
Office Supplies 2 570.00 
Cleaning Supplies 3 10,128.00
Delivery Expense 4 9,650.00
Water Purification Supplies 5 265,390
Miscellaneous Expense 6 60,850.00
Utilities Expense 7 80,388.00
Promotional Expense 8 8,840.00
Grand Opening Expense 9 5,920.00
Repair & Maintenance 10 9,135.00
SSS Contribution 11 42,759.36
Pag-ibig Contribution 12 7,200.00
Philhealth Contribution 13 12,216.96
TOTAL  ₱ 522,981.32

NOTE 1

SALARIES AND WAGES

NO. OF
NO. OF DAILY WORKING MONTHLY
EMPLOYEES EMPLOYEES WAGES DAYS SALARY
Delivery Crew 1 ₱ 404 26     ₱    10,504.00
Total X 12 MONTHS     ₱    126,048.00
 NOTE 2

OFFICE SUPPLIES
Item Quantity Unit Unit Cost Amount
Ballpen 12 pcs. ₱    5.00  ₱           60.00 
Folder 10 pcs.         5.00                50.00 
Stapler 1 unit       40.00                40.00 
Staple Wire 1 box       20.00                20.00 
Receipts 4 stubs       30.00              120.00 
Scissors 1 unit       40.00                40.00 
Journal 1 pad       30.00                30.00 
Ledger 1 pad       30.00                30.00 
Bond paper 1 ream     140.00              140.00 
Columnar
Book 1 pad       40.00                40.00 
Total X 12 Months ₱         6,840.00

NOTE 3

CLEANING SUPPLIES
Item Quantity Unit Unit Cost Amount
Soft Broom 1 piece ₱  20.00 ₱      20.00
Broomstick 1 piece 10.00 10.00
Rags 10 pcs. 1.00 10.00
Dustpan 1 piece 99.00 99.00
Trashcan 3 piece 75.00 225.00
Mop 1 piece 300.00 300.00
Joy Dishwashing Liquid
3 pcs 149.00 447.00
Kalamansi 600 ml
Doormat 1 piece 40.00 40.00
Cleaning Brushes 1 pcs. 40.00 40.00
Cap 3 pcs. 10.00 30.00 
Gloves 3 pair 200.00 600.00
Total X 12 Months ₱    10,128.00

NOTE 4
 DELIVERY EXPENSE
Quantit
Item y Unit Unit Cost Amount
Grease 5 liters ₱   250.00  ₱   1,250.00 
    
Diesoline 280 liters 30.00        8,400.00 
Total X 12 Months ₱   9,650.00 

NOTE 5
WATER PURIFICATION SUPPLIES
Item Quantity Unit Unit Cost Amount
5-Gallon Container 200 pc. 100 20,000
5-Gallon Caps Non-spill 126,715.2 pc. 1.75 221,751.60
0
5-Gallon Caps Non-spill 126,715.2 pc. .145 18,373.704
seal 0
Salt 2 sack 509.00 1,018.00
Joy Dishwashing Liquid 3 pcs. 149.00 447.00
Kalamansi 600 ml
Caustic Soda 2 sack 1,900.00 3,800.00
TOTAL 265,390.00

NOTE 6
UTILITIES EXPENSE
Description Monthly Amount
1,699.00
Monthly Internet Bill 20,388.00
Monthly Water Bill 5,000           60,000.00
Total ₱       80,388.00
 NOTE 7

PROMOTIONAL EXPENSE
Quantit
Description Unit Unit Cost Amount
y
₱   
Flyers/Brochure 500 pcs. ₱      250.00
0.50
Sticker for Delivery Vehicle 30 sq. ft. 80.00 2,400.00
Panaflex 18 sq. ft. 80.00 1,440.00
Calling Cards 500 pcs. 2.00 1,000.00
Total       ₱  8,840.00 

NOTE 8

GRAND OPENING EXPENSE

Description Quantity Unit Unit Cost Amount
Coupon 100 pcs. ₱        2.00  ₱     200.00
Free Refills 100 4.5 gallons     10.00          1,000.00
container
Arch Balloon 1 pcs. 1,500             1,500
Flower Stand 1 pcs. 1250         1250.00
Blessing     1,500 1,500.00
Total       ₱   5,920.00
 NOTE 9

SSS CONTRIBUTION
Year Position No. of Monthly Employer's Employer's
Employees Salary Monthly Annual
Contribution Contribution
2023 Production 2 8,484.00 1,187.76 28,506.24
Personnel
Delivery 1 8,484.00 1,187.76 14,253.12
Crew
Total 3,563.28 42,759.36
2024 Production 2 8,484.00 1,187.76 28,506.24
Personnel
Delivery 1 8,484.00 1,187.76 14,253.12
Crew
Total 3,563.28 42,759.36
2025 Production 2 8,484.00 1,187.76 28,506.24
Personnel
Delivery 1 8,484.00 1,187.76 14,253.12
Crew
Total 3,563.28 42,759.36

NOTE 10

PAG-IBIG CONTRIBUTION
Year Position No. of Monthly Employer's Employer's
Employees Salary Monthly Annual
Contribution Contribution
2023 Production 2 8,484.00 400.00 4,800
Personnel
Delivery 1 8,484.00 200.00 2,400
Crew
Total 600.00 7,200
2024 Production 2 8,484.00 400.00 4,800
Personnel
Delivery 1 8,484.00 200.00 2,400
Crew
Total 600.00 7,200
2025 Production 2 8,484.00 400.00 4,800
Personnel
Delivery 1 8,484.00 200.00 2,400
Crew
 Total 600.00 7,200

NOTE 11

PHILHEALTH CONTRIBUTION
Year Position No. of Monthly Employer's Employer's
Employees Salary Monthly Annual
Contributio Contribution
n
2023 Production 2 8,484.00 678.72 8,144.64
Personnel
Delivery 1 8,484.00 339.36 4,072.32
Crew
Total 1,018.08 12,216.96
2024 Production 2 8,484.00 678.72 8,144.64
Personnel
Delivery 1 8,484.00 339.36 4,072.32
Crew
Total 1,018.08 12,216.96
2025 Production 2 8,484.00 678.72 8,144.64
Personnel
Delivery 1 8,484.00 339.36 4,072.32
Crew
Total 1,018.08 12,216.96

NOTE 12

FURNITURE AND FIXTURES

Item Quantity Unit Unit Cost Amount
Uratex Monoblock 101 2 pc. ₱   489.00 ₱      978.00
Plastic Chair 3 seaters 2 pcs 1,579.00 3,158.00
 
5 Tier Wooden Utility Cabinet 2 pcs 1,800.00       3,600.00
 
Penina Hapi-Betty Office Table 1 pc 5,295.00       1,399.00
Total       ₱  9,135.00

NOTE 13

STORE EQUIPMENT
Item Quantity Unit Unit Cost Amount
PowerGen 5500 Portable 1 unit 27,300.00 27,300.00
Generator
Exhaust Fan 3 unit 1,210.00 3,630.00
Tornado Industrial Fan 1 unit 5,795.00 5,795.00
CCTV 1 unit 5,510.00 5,510.00
Total ₱   42,235.00

NOTE 14

DELIVERY EQUIPMENT
Item Quantity Unit Unit Cost Amount
Mitsubishi L300 Cab
(Secondhand) 1 unit ₱ 535,000.00 ₱ 535,000.00
Total       ₱ 535,000.00

NOTE 15

WATER PURIFICATION FACILITIES

Uni
Item Quantity Unit Cost Amount
t
Heat Gun 1 unit ₱     1,350.00  ₱     1,350.00 
Coin-Operated
Machine  1 unit       9,500.00        9,500.00 
Total       ₱   10,850.00 
 NOTE 16

WATER PURIFICATION EQUIPMENT

Water Treatment Equipment and
Accessories Amount
Fully Automatic Reverse Osmosis System: ₱     250,000.00 
Package Inclusions:  
2 Units - Stainless Steel Storage Tank  
Raw Water Pump  
High Pressure Pump  
Multi-media Filter  
Activated Carbon Filter  
Water Softener  
Membrane Vessel (plastic end cap)  
RO Membrane  
6GPM UV  
2 set - Goose neck  
Brine Tank (80 liters)  
6 pcs - 20" SL Filter Housing  
3 pcs - 5 microns 20" SL SF  
1 pc - 1 microns 20" SL SF  
2pcs - 20" SL Carbon Filter  
1 RO Frame  
1 lot Pipes and Fittings  
FREE INSTALLATION  
Water Storage Tank (1500 liters)           25,700.00 
Water Booster Pump 1,039.00
Total ₱     275,700.00 
 COST PER UNIT W/ CONTAINER

Items Unit Cost Per Unit Total

5 Gallons Container 1 Container 100 100

Water .01 m3 .11 .0011

Spill cap 1 pc 1.75 1.75

Cap Seal 1 pc .145 .145

Salt .02 kg .41 .0082

Joy Dishwashing liquid 10 ml .24 2.4

Caustic Soda .01 kg .35 .0035

Total Cost     104.31

COST PER UNIT W/O CONTAINER

Items Unit Cost Per Unit Total

Water .01 m3 .11 .0011

Spill cap 1 pc 1.75 1.75

Cap Seal 1 pc .145 .145

Salt .02 kg .41 .0082

Joy Dishwashing liquid 10 ml .24 2.4

Caustic Soda .01 kg .35 .0035

Total Cost     4.31

 SELLING PRICE W/O CONTAINER (PICK UP)

Items Unit Cost Per Unit Total

Water .01 m3 .11 .0011

Spill cap 1 pc 1.75 1.75

Cap Seal 1 pc .145 .145

Salt .02 kg .41 .0082

Joy Dishwashing liquid 10 ml .24 2.4

Caustic Soda .01 kg .35 .0035

Total Cost     4.31

Mark Up (248%) 10.69

Selling Price 15.00

SELLING PRICE W/O CONTAINER (DELIVERY)

Items Unit Cost Per Unit Total

Water .01 m3 .11 .0011

Spill cap 1 pc 1.75 1.75

Cap Seal 1 pc .145 .145

Salt .02 kg .41 .0082

Joy Dishwashing liquid 10 ml .24 2.4

Caustic Soda .01 kg .35 .0035

Total Cost     4.31

 Mark Up (364%) 15.69

Selling Price 20.00

Table 43

Cash Inflows

Cash Inflows Year 1 Year 2 Year 3

Initial Capital 1,468,556.45

Sales 2,863,752.00 3,336,502.40 4.093,802.85

Total Cash Inflows 4,332,308.45 3,336,502.40 4.093,802.85

Cash Outflows

Pre-operating Cost:

Permits and Licenses (4,950.50)

Working Capital:

Salaries and Wages (10,504.00) (10,504.00) (10,504.00)

Office Supplies (570.00) (570.00) (570.00)

Cleaning Supplies (10,128.00) (10,128.00) (10,128.00)

Delivery Expense (9,650.00) (9,650.00) (9,650.00)

Water Purification (265,390) (265,390) (265,390)

Supplies

Utilities Expense (80,388.00) (80,388.00) (80,388.00)

Promotional Expense (8,840.00) (8,840.00) (8,840.00)

Grand Opening Expense (5,920.00) (5,920.00) (5,920.00)

Repair & Maintenance (9,135.00) (9,135.00) (9,135.00)

 SSS Contribution (42,759.36) (42,759.36) (42,759.36)

Pag-ibig Contribution (7,200.00) (7,200.00) (7,200.00)

Philhealth Contribution (12,216.96) (12,216.96) (12,216.96)

Property, Plant and Equipment

Furniture and Fixtures (9,135.00)

Store Equipment (42,235.00)

Delivery Equipment (535,000.00)

Water Purification (10,850.00)

Facilities

Water Purification (275,700.00)

Equipment

Total Cash Outflow (1,335,051.32) -462,131.32 -462,131.32

Net Cash Inflow 2,997,257.13 2,874,371.08 3,631,671.53

Add: Cash Balance Beg. 2,997,257.13 5,871,628.21

Cash Balance, Ending 2,997,257.13 5,871,628.21 9,503,299.74

 Table 43

Projected Income Statement

AQUA FRESH PURIFIED WATER REFILLING STATION

PROJECTED INCOME STATEMENT (in PESOS)
For the years ended 2023-2027
Schedul 2023 2024 2025
e
Total Projected Sales 1 2,863,752.00 2,778,688.00 3,424,425.57
Less: Cost of Sales 2 (635,213.18) ₱ 643,802.586 ₱ 764,146.64
Gross Margin 2,228,538.82 2,134,885.00 2,660,278.93
Less: Operating -462,131.32 -462,131.32 (462,131.320)
Expenses
Net Income Before Tax 1,766,407.50 1,672,753.68 2,198,147.61
Les: Income Tax (517,172.40) (636,106.80) 829,828.08
Net Income After Tax 767,723.10 1,036,646.88 1,368,319.5297

Table 45

Income Tax

INCOME TAX
2023 2024 2025
Total Project Sales 2,863,752.00 2,778,688.00 3,424,425.57
Monthly Sales 238,646.00 231,557.33 285,368.80
Total Deducation 55,135.50 ₱ 53,008.90 ₱ 69,152.34
X 12 Months 661,626.00 636,106.8 829,828.08
 Table 46

Balance Sheet

AQUA FRESH PURIFIED WATER REFILLING STATION

BALANCE SHEET (in PESOS)

2023 2024 2025

ASSETS

Current Asset

Cash 2,863,752.00 4,832,301.81 7,794,596.06

Furniture and Fixtures 9,135.00 7,488.00 5,661.00

Store Equipment 42,235.00 33,788 25,341.00

Delivery Equipment 535,000.00 428,000 321,000

Water Purification Facilities 10,850.00 8,680.00 6,510.00

Water Purification Equipment 275,700.00 237204.86 197,670.72

Less: Accumulated (51,493.14) (51,493.14) (51,493.14)

Depreciation

TOTAL ASSETS 3,685,178.86 4,000,170.12 8,299,285.64

LIABILITIES -

Current Liabilities -

TOTAL LIABILITIES -

OWNER’S EQUITY
 Capital 1,468,556.45 3,203,666.86 5,495,969.53

Add: Net Income from 1,735,110.41 2,292,302.67 2,803,316.11

operation

TOTAL EQUITY 2,216,622.41 5,495,969.53 8,299,285.64

TOTAL LIABILITIES AND 2,216,622.41 5,495,969.53 8,299,285.64

OWNER’S EQUITY

PAYBACK PERIOD
Year Cash Inflows Cash outflows Net Cash flow
1 3,850,796.45 (1,335,051.32) 2,515,745.13
2 2,778,688.00 (462,131.32) 4,832,301.81
3 3,424,425.57 (462,131.32) 4,832,301.81

Pick up

BREAKEVEN POINT = FIXED COST/ CONTRIBUTION MARGIN PER UNIT

= 462,131.32 / 15 – 4.31

= 462,131.32/10.69

=43,230.24 Units

Delivery

BREAKEVEN POINT = FIXED COST/ CONTRIBUTION MARGIN PER UNIT

= 462,131.32 / 20 – 4.31

= 462,131.32/ 15.69

=29,453.88 Units
Profitability Ratios

Gross Profit Margin = Gross Profit / sales x 100

= 1,747,026.82 / 2,382,240.00 x100

= 73.34%

Operating Profit Margin = Operating Profit / Sales x 100

= 1,284,895.50 / 2,382,240.00 x 100

= 53.94 %

Net Profit Margin = Net Income / Sales x 100

= 767,723.10 / 2,382,240.00 x100

= 32.23%

RETURN ON ASSETS = = = 0.24 or 24%

RETURN ON EQUITY = = = 0.24 OR 24%

NET PROFIT MARGIN = = = 0.03 or 3%

RETURN ON INVESTMENT = = = 0.52% or

52%

RETURN ON ASSET = NET INCOME / TOTAL ASSET

= 1,766,407.50 / 3,203,066.86
= 0.55 OR 55%
RETURN ON EQUITY = NET INCOME / OWNER’S EQUITY