1

Chapter VI

FINANCIAL ASPECT

This chapter will discuss the investment cost, financial forecast and

assumptions, projected financial statements, and financial ratio analysis.

Investment Cost

An investment is a monetary asset purchased or invested with the idea

that the asset will provide income in the future or appreciate and sold at a higher

price. The proposed business will have a capitalization of Php 2,058,785.00

The table below shows the breakdown of the total amount of capital for the

proposed Bakery shop.

Table 7

Investment Cost

INVESTMENT COST
Particulars Cost
Leashold Improvement 714,700.00
Equipment 709,600.00
Furnitures and Fixtures 227,500.00
Prepaid Rent 90,000.00
Working Capital 316,985.00
Total Investment Cost 2,058,785.00

Financial Forecast

and Assumptions

The following are formulated assumptions that the researcher used in

planning the business's financial statements for five (5) years in a row. This

should be the foundation for all of the business' operations.

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1. The business will be formed as a sole proprietorship, with an initial

investment of 2,058,785.00

2. Every year, sales revenue will rise by 15%

3. Utilities, such as water and electricity, as well as supplies, Permits and

Licenses are expected to rise by 3%.

4. The equipment would be depreciated using the straight line method.

5. Purchases will account for about 35% of total revenue.

6. Rent expense, depreciation, SSS/PHIC/HDMF and salaries and wages

will remain constant for 5yrs.

7. Ending Inventory will be 10% of Goods available for Sale.

8. Tax rate is 15%

Projected Financial Statements

This shows the Projected Income Statement, Balance Sheet, Statement of

Cash Flows, and Statement of Changes in the capital of the proposed business

for the five consecutive years.

Statement of Comprehensive Income

Which is previously known as income statement is a financial statement

that shows the “results of operations” of the business for a given period of time. It

consists of three (3) sections which are the revenue or income, expenses and

profit, or loss. (Lopez Jr, 2018)

On page 54 shows the Projected Income Statement of the proposed

business for five (5) consecutive years.

Balance sheet
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Also known as the statement of financial position, the balance sheet

provides the amount for the various assets, liabilities, and owner’s capital

accounts. The assets are presented first, followed by the liabilities and equity. To

show that the capital accounting equations is satisfied, the total assets and the

total liabilities and owner’s capital should be highlighted to be of equal amount.

(Florendo, 2016).

On page 55 shows the Projected Balance Sheet of the proposed business

for five (5) consecutive years.

Statement of Cash Flows

The Statement of Cash Flows summarizes the cash receipts and cash

disbursements for the accounting period. It summarizes the cash activities of the

business by classifying cash inflows (receipts) and cash outflows (payments) into

operating, investing, and financing activities. (Ong and Mendoza, 2017).

Operating Activities – The cash inflows (receipts) and the cash outflows

(payments) arising from the normal operations of the business. (Ong and

Mendoza, 2017).

Investing Activities - The cash inflows (receipts) cash outflows

(payments) from the purchase and sale property and equipment, investment in

debt or trading securities, lending money and collection of the principal amount of

the money loaded. (Ong and Mendoza, 2017).

Financing Activities - The cash inflows (receipts) cash outflows

(payments) from the owners and creditors of the business. (Ong and Mendoza,

2017).
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On page 56 shows the Projected Cash Flow Statement of the proposed

business for five (5) consecutive years.

Statement of Changes in Owner’s Equity

The statement of Changes in Equity shows the changes in the Capital or

Owner’s equity as a result of additional investment or withdrawals by the owner,

plus or minus the net income or net loss for the year. (Ong and Mendoza, 2017).

On page 57 shows the Projected Statement of Partner’s Equity of the

proposed business for five (5) consecutive years.

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Roselicious Bakery
Projected Income Statement
for the year ended Dec. 31, 20A, 20B, 20C, 20D, 20E
20A 20B 20C 20D 20E
Sales 4,344,600.00 4,996,290.00 5,745,733.50 6,607,593.53 7,598,732.55
Cost of Sales 1,368,549.00 1,710,686.25 1,980,974.68 2,279,489.43 2,621,549.70
GROSS PROFIT 2,976,051.00 3,285,603.75 3,764,758.82 4,328,104.10 4,977,182.86

Operating Expenses
Salaries and Wages 756,000.00 756,000.00 756,000.00 756,000.00 756,000.00
SSS/PHIC/HDMF 9,749.00 9,749.00 9,749.00 9,749.00 9,749.00
Utilities Expense 204,000.00 214,200.00 224,910.00 236,155.50 247,963.28
Rent Expense 360,000.00 360,000.00 360,000.00 360,000.00 360,000.00
Depreciation 267,290.00 267,290.00 267,290.00 267,290.00 267,290.00
Operational Supplies Expense 46,500.00 46,500.00 46,500.00 46,500.00 46,500.00
Advertising Expense 10,300.00 10,300.00 10,300.00 10,300.00 10,300.00
Repairs and Maintenance Expense 10,000.00 10,500.00 11,550.00 12,705.00 13,975.50
Permits and Licenses 18,300.00 18,300.00 18,300.00 18,300.00 18,300.00
Total Operation Expenses 1,682,139.00 1,692,839.00 1,704,599.00 1,716,999.50 1,730,077.78
Net income before tax 1,293,912.00 1,592,764.75 2,060,159.82 2,611,104.60 3,247,105.08
Provision for Income Tax 194,086.80 238,914.71 309,023.97 391,665.69 487,065.76
Net Income 1,099,825.20 1,353,850.04 1,751,135.85 2,219,438.91 2,760,039.32
 6

Roselicious Bakery
Comparative Balance Sheet
for the year ended Dec. 31, 20A, 20B, 20C, 20D, 20E
20A 20B 20C 20D 20E
Assets
Current assets
Cash 1,560,625.00 3,188,577.70 5,247,080.76 7,783,283.08 10,868,005.78
Inventory 152,061.00 190,076.25 220,108.30 253,276.60 291,283.30
Prepaid Rent 90,000.00 90,000.00 90,000.00 90,000.00 90,000.00
Total Current Assets 1,802,686.00 3,468,653.95 5,557,189.06 8,126,559.68 11,249,289.08
Fixed Assets
Leasehold Improvement 714,700.00 714,700.00 714,700.00 714,700.00 714,700.00
Equipments 751,600.00 751,600.00 751,600.00 751,600.00 751,600.00
Furniture and fixtures 227,500.00 227,500.00 227,500.00 227,500.00 227,500.00
Kitchenware & Tableware 175,250.00 175,250.00 175,250.00 175,250.00 175,250.00
Less: Acc Depreciation 267,290.00 534,580.00 801,870.00 1,069,160.00 1,336,450.00
Total Fixed Assets 1,601,760.00 1,334,470.00 1,067,180.00 799,890.00 532,600.00
Total Assets 3,404,446.00 4,803,123.95 6,624,369.06 8,926,449.68 11,781,889.08
Liabilities and Owner's Equity
Current Liabilities
Income Tax Payable 194,086.80 238,914.71 309,023.97 391,665.69 487,065.76
SSS/PHIC/HDMF Payable 9,749.00 9,749.00 9,749.00 9,749.00 9,749.00
Total Liabilities 203,835.80 248,663.71 318,772.97 401,414.69 496,814.76
Owner's equity
Pasaje, Capital 1,600,305.10 2,277,230.12 3,152,798.04 4,262,517.50 5,642,537.16
Total Capital 3,200,610.20 4,554,460.24 6,305,596.09 8,525,034.99 11,285,074.31

Total Liabilities and Owner's Equity 3,404,446.00 4,803,123.95 6,624,369.06 8,926,449.68 11,781,889.08
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Roselicious Bakery
Projected Statement of Cash flow
for the year ended Dec. 31, 20A, 20B, 20C, 20D, 20E
20A 20B 20C 20D 20E
Cash Flows From Operation Activities

Net Income 1,099,825.20 1,353,850.04 1,751,135.85 2,219,438.91 2,760,039.32

Adjustments:
Add: Depreciation 267,290.00 267,290.00 267,290.00 267,290.00 267,290.00
Increase in Prepaid Rent 90,000.00 - - - -
Increase in Inventory 152,061.00 38,015.25 30,032.05 33,168.31 38,006.70
Increase in Income tax Payable 194,086.80 44,827.91 70,109.26 82,641.72 95,400.07
Increase in SSS/PHIC/HDMF 9,749.00 - - - -
Cashflow provided by operating activities 1,328,890.00 1,627,952.70 2,058,503.06 2,536,202.32 3,084,722.70
Cashflow from investing activities
Leasehold Improvement -714,700.00 - - - -
Equipment -751,600.00 - - - -
Furnitures and Fixtures -227,500.00 - - - -
Kitchentool and Utensils -175,250.00
Net Cash used in Investing Activities -1,869,050.00 - - - -
Cashflow from financing activities
Capital 2,100,785.00 - - - -

Total Cash Flows from Financing Acitvities 2,100,785.00

Net Increase in cash 1,560,625.00 1,627,952.70 2,058,503.06 2,536,202.32 3,084,722.70
Cash balance beggining - 1,560,625.00 3,188,577.70 5,247,080.76 7,783,283.08
Cash balance end 1,560,625.00 3,188,577.70 5,247,080.76 7,783,283.08 10,868,005.78
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Roselicious Bakery
Statement of Changes in Owners Equity
for the year ended Dec. 31, 20A, 20B, 20C, 20D, 20E
20A 20B 20C 20D 20E
Paid in Capital
Pasaje, Capital 2,100,785.00 3,200,610.20 4,554,460.24 6,305,596.09 8,525,034.99

Total Paid in Capital 2,100,785.00 3,200,610.20 4,554,460.24 6,305,596.09 8,525,034.99

Pasaje, Income 1,099,825.20 1,353,850.04 1,751,135.85 2,219,438.91 2,760,039.32

Total Net Income 1,099,825.20 1,353,850.04 1,751,135.85 2,219,438.91 2,760,039.32

Total Owner's Equity 3,200,610.20 4,554,460.24 6,305,596.09 8,525,034.99 11,285,074.31

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Financial Ratio Analysis

This part discusses the ratio analysis which includes the profitability ratio

analysis, liquidity ratio analysis, and solvency/stability ratio analysis, and the

payback period which evaluate the progress made by the business in the past as

a guide to the future operations.

Profitability Ratio Analysis

The following are the ratios under profitability ratio analysis. Return on

total Asset- calculated by dividing net income by total asset and Return on

Common Equity- calculated by dividing net income by common equity.

Return on Total Asset

Rate of return on total assets is an indicator of how profitable a company

is relative to its total assets. It gives an idea on how efficient is the management

in using its assets to generate its earnings.

The figure below shows the rate of return on total assets analysis of

the proposed business for five (5) years

Table 7

Return on Total Asset

Year Net Income Total Asset ROA

20A 1,099,825.20 3,404,446.00 32%
20B 1,353,850.04 4,803,123.95 28%
20C 1,751,135.85 6,624,369.06 26%
20D 2,219,438.91 8,926,449.68 25%
20E 2,760,039.32 11,781,889.08 23%

Return on Owners Equity

The return on equity (ROE) measures how the profitability of a corporation

in relation to stockholders’ equity.

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Table 8

Return on Owners Equity

Year Net Income Owner's Equity ROE

20A 1,099,825.20 3,200,610.20 34%
20B 1,353,850.04 4,554,460.24 30%
20C 1,751,135.85 6,305,596.09 28%
20D 2,219,438.91 8,525,034.99 26%
20E 2,760,039.32 11,285,074.31 24%

Return on Revenue (ROR)

Also known as net profit margin, measures the percentage of net income

earned from net sales after all other income has been added and all operating

expenses and other expenses including income taxes have been paid.

Table 9

Return on Revenue

Year Net Income Net Revenue ROR

20A 1,099,825.20 4,344,600.00 25%
20B 1,353,850.04 4,996,290.00 27%
20C 1,751,135.85 5,745,733.50 30%
20D 2,219,438.91 6,607,593.53 34%
20E 2,760,039.32 7,598,732.55 36%

Liquidity Ratio Analysis

The liquidity ratio calculates the company’s current or quick assets against

its outstanding liabilities. Generally, a high ration indicates that the company has

low risk of defaulting payment. (Ong and Mendoza, 2017).

Current Ratio

Current Ratio performance is used to evaluate the efficiency of

investment. It compares the magnitude and timing of gains from investment

directly to the magnitude and timing of investment costs. It is one of most

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commonly used approaches for evaluating the financial consequences of

business investments, decisions, or actions (Ballada, 2017).

Table 10

Current Ratio

Year Current Assets Current Liability Current ratio

20A 1,802,686.00 203,835.80 8.84
20B 3,468,653.95 248,663.71 13.95
20C 5,557,189.06 318,772.97 17.43
20D 8,126,559.68 401,414.69 20.24
20E 11,249,289.08 496,814.76 22.64

Quick or Acid Test Ratio

Quick asset ratio is a financial ratio that measures liquidity using the more

liquid types of current assets. Quick assets (cash and cash equivalents,

marketable securities, and short-term receivables) are current assets that can be

converted very easily into cash. Hence, companies with good quick ratios are

favored by creditors.

Table 11

Quick Acid Test Ratio

Quick Asset Quick

Year Current Liability
(Cash) Asset ratio
20A 1,560,625.00 203,835.80 7.66
20B 3,188,577.70 248,663.71 12.82
20C 5,247,080.76 318,772.97 16.46
20D 7,783,283.08 401,414.69 19.39
20E 10,868,005.78 496,814.76 21.88

Solvency Ratio Analysis

Solvency Ratios are the ratios that are calculated to judge the financial

position of the organization from a long-term solvency point of view. These ratios

measure the firm’s ability to satisfy its long-term obligations and are closely
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tracked by investors to understand and appreciate the ability of the business to

meet its long-term liabilities and help them in decision making for long-term

investment of their funds in the business. (Thakur, 2021)

Debts to Assets Ratio

The debt-to-total-assets ratio shows how much of a business is owned by

creditors (people it has borrowed money from) compared with how much of the

company’s assets are owned by shareholders.

The figure below shows the debt-to-total-assets Analysis of the proposed

business.

Table 12

Debt to Total Assets Ratio

Year Total Debt Total Assets Debt ratio

20A 203,835.80 3,404,446.00 5.99%
20B 248,663.71 4,803,123.95 5.18%
20C 318,772.97 6,624,369.06 4.81%
20D 401,414.69 8,926,449.68 4.50%
20E 496,814.76 11,781,889.08 4.22%

Equity Ratio

Equity Ratio shows how much of a business or company's assets are

funded by issuing stock rather than borrowing money. It is ideal for the business

to maintain a higher equity ratio to prevent the business or company to have a

higher debt that can lead to bankruptcy in the future. it is good for the proposed

business to maintain this kind of equity ratio because having this level of equity

ratio will help the performance of the business in the future.

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Table 13

Equity Ratio

Year Equity Total Assets Equity ratio

20A 3,200,610.20 3,404,446.00 94.01%
20B 4,554,460.24 4,803,123.95 94.82%
20C 6,305,596.09 6,624,369.06 95.19%
20D 8,525,034.99 8,926,449.68 95.50%
20E 11,285,074.31 11,781,889.08 95.78%

Debt – Equity Ratio

Debt – Equity Ratio reflects the ability of shareholder equity to cover all

outstanding debts in the event of a business downturn. It is somewhat risky if a

business or company maintains a high debt to equity ratio because it indicates

that a business or a company has been aggressive in financing its growth with

debt. Maintaining a higher or lower debt to equity ratio depends on what type of

business you have. In relation to the proposed business, it is ideal for the

proposed business to maintain a lower debt to equity ratio, which is 0.13, since it

is a food type of business.

Table 14

Debt to Equity Ratio

Debt to
Year Total Debt Equity
Equity ratio
20A 203,835.80 3,200,610.20 6.37%
20B 248,663.71 4,554,460.24 5.46%
20C 318,772.97 6,305,596.09 5.06%
20D 401,414.69 8,525,034.99 4.71%
20E 496,814.76 11,285,074.31 4.40%

Equity Multiplier

Equity Multiplier measures how much of a company's assets are financed

through stockholders' equity. It is ideal for a business or company to maintain a

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lower multiplier to have a lower debt burden. However, having a higher or lower

equity multiplier will also depend on what type of business or company you will

invest to. With this equity multiplier of 1.00, it is good for the proposed business

to have this lower equity multiplier because the proposed business is a food

business. Food businesses tends to use its equity to finance the assets of the

business than incurring debt because the operation of food business is faster

than any kind of business. The proposed business has lower equity multiplier

because the business tends to maintain lower financial leverage as it will bring

good result to the business in the near future.

Table 15

Equity Multiplier

Year Total Assets Equity Equity Multiplier

20A 3,404,446.00 3,200,610.20 1.00

20B 4,803,123.95 4,554,460.24 1.00
20C 6,624,369.06 6,305,596.09 1.05
20D 8,926,449.68 8,525,034.99 1.05
20E 11,781,889.08 11,285,074.31 1.04

Capital Budgeting Decision

Capital investments are long-term investments in which the assets

involved have useful lives of multiple years. For example, constructing a new

production facility and investing in machinery and equipment are capital

investments. Capital budgeting is a method of estimating the financial viability of

a capital investment over the life of the investment. (Hofstrand, 2013).

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Net Present Value

The proposed business has a positive Net Present Value. With this result,

it indicates that the business can have a positive result. According to Fernando,

J. (2021), a positive net present value indicates that the projected earnings

generated by a project or investment - in present dollars - exceeds the

anticipated costs, also in present dollars. It is assumed that an investment with a

positive NPV will be profitable, and an investment with a negative NPV will result

in a net loss. This concept is the basis for the Net Present Value Rule, which

dictates that only investments with positive NPV values should be considered.

Table 16

Net Present Value

Year Free Cash Flows Present Value Factor at 12% Present value
20A 1,367,115.20 0.893 1,220,638.57
20B 1,621,140.04 0.797 1,292,362.91
20C 2,018,425.85 0.712 1,436,675.65
20D 2,486,728.91 0.636 1,580,370.58
20E 3,027,329.32 0.567 1,718,121.07
Total Present Value 7,248,168.78
Investment 2,100,785.00
Net Present Value 5,147,383.78

Payback Period

The payback period refers to the amount of time it takes to recover the

cost of an investment or how long it takes for an investor to reach breakeven.

The payback period of the proposed business is shorter; this means that it is

ideal because the business tends to reach its break-even-point and recover its

investment in a short period of time. According to Kagan, J. (2020), the shorter

the payback, the more desirable the investment.

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Table 17

Payback Period

Year Annual Free Cash Flows Accumulated Cash Inflows

Investment 2,100,785.00
20A 1,367,115.20 1,367,115.20
20B 1,621,140.04 2,988,255.24
20C 2,018,425.85
Payback Period 1.45 years

Financial Statements Supporting Schedule

The financial statements presentation of the proposed business is

supported with schedules that will show the proper derivations of amounts

reflected in the financial statements. Below are the following schedules of the

proposed business.
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Schedule 1

Projected Sales Income (Breads)

ESTIMATED NO.
PRODUCTS PRICE OF ORDERS. MONTHLY SALES ANNUAL SALES
Loaf Bread 60.00 250 15,000.00 180,000.00
Fiber Loaf Bread 80.00 200 16,000.00 192,000.00
Whole Wheat loaf Bread 100.00 190 19,000.00 228,000.00
Pandesal 5.00 550 2,750.00 33,000.00
Garlic Pandesal 5.00 520 2,600.00 31,200.00
Pandesal with egg 10.00 340 3,400.00 40,800.00
Ensaymada 10.00 240 2,400.00 28,800.00
Pan De Coco 5.00 210 1,050.00 12,600.00
Monay 5.00 180 900.00 10,800.00
Spanish Bread 10.00 150 1,500.00 18,000.00
Cheese Bread 10.00 190 1,900.00 22,800.00
Choco Lanay 10.00 200 2,000.00 24,000.00
Banana Bread 10.00 160 1,600.00 19,200.00
Stone Bread 5.00 170 850.00 10,200.00
Ube Cheese Bread rolls 15.00 195 2,925.00 35,100.00
Pastel Bread rolls 15.00 175 2,625.00 31,500.00
Choco Bread rolls 15.00 220 3,300.00 39,600.00
TOTAL 957,600.00

Schedule 2

Projected Sales Income (Pastries)

ESTIMATED NO.
PRODUCTS PRICE OF ORDERS. MONTHLY SALES ANNUAL SALES
Egg pie 270.00 205 55,350.00 664,200.00
Buko pie 270.00 195 52,650.00 631,800.00
Tart 10.00 230 2,300.00 27,600.00
Donut 20.00 140 2,800.00 33,600.00
Crinkles 10.00 150 1,500.00 18,000.00
Macaroon 10.00 120 1,200.00 14,400.00
Chocolate Chip Cookie 10.00 100 1,000.00 12,000.00
Oat Cookies 20.00 140 2,800.00 33,600.00
Pretzel 20.00 95 1,900.00 22,800.00
Cupcake 20.00 170 3,400.00 40,800.00
Chiffon Cake 180.00 210 37,800.00 453,600.00
Fruit Cake 200.00 80 16,000.00 192,000.00
Cake 250.00 230 57,500.00 690,000.00
TOTAL 2,834,400.00
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Schedule 3

Projected Sales Income (Drinks)

ESTIMATED NO.
PRODUCTS PRICE OF ORDERS. MONTHLY SALES ANNUAL SALES
Bottled Water 20.00 240 4,800.00 57,600.00
Bottled Buko Juice 30.00 210 6,300.00 75,600.00
Bottled Orange Juice 30.00 180 5,400.00 64,800.00
Bottled Soy Milk 25.00 150 3,750.00 45,000.00
Coke Mismo 25.00 250 6,250.00 75,000.00
Royal Mismo 25.00 190 4,750.00 57,000.00
Sprite Mismo 25.00 160 4,000.00 48,000.00
1 liter Coke 45.00 240 10,800.00 129,600.00
TOTAL 552,600.00

Schedule 4

Cost of Sales

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Beginning Inventory - 152,061.00 190,076.25 220,108.30 253,276.60
Purchases 1,520,610.00 1,748,701.50 2,011,006.73 2,312,657.73 2,659,556.39
Goods Available for Sale 1,520,610.00 1,900,762.50 2,201,082.98 2,532,766.03 2,912,833.00
LESS: Ending Inventory 152,061.00 190,076.25 220,108.30 253,276.60 291,283.30
TOTAL 1,368,549.00 1,710,686.25 1,980,974.68 2,279,489.43 2,621,549.70

Schedule 5

Salaries and Wages

Basic
No. of SSS PHIC HDMF Total Yearly
Particulars Monthly
Employees Deduction Pay
Salary
ER EE ER EE ER EE
Manager 1 13,000.00 1,115 585 350 350 260 260 2,920.00 10,080.00
Baker 2 10,000.00 860 900.00 350 350 200 200 2,860.00 7,140.00
Service crew 2 7,500.00 647 337.50 350 350 150 150 1,984.50 5,515.50
Cashier 1 7,500.00 647 337.50 350 350 150 150 1,984.50 5,515.50
TOTAL 6 38,000.00 3,269 2,160 1,400 1,400 760 760 9,749.00 28,251.00

TOTAL ANNUAL TOTAL TOTAL TOTAL

SUMMARY ER EE
BASIC SALARY MONTHLY ANNUAL ANNUAL ER
TOTAL
756,000.00 5,429.00 4,320.00 9,749.00 116,988.00 65,148.00
 19

Schedule 6

Utilities Expense

Particulars Monthly Cost Year 1 Year 2 Year 3 Year 4 Year 5

Electric Bill 10,000.00 120,000.00 126,000.00 132,300.00 138,915.00 145,860.75
Water Bill 5,000.00 60,000.00 63,000.00 66,150.00 69,457.50 72,930.38
Internet 2,000.00 24,000.00 25,200.00 26,460.00 27,783.00 29,172.15
TOTAL 17,000.00 204,000.00 214,200.00 224,910.00 236,155.50 247,963.28

Schedule 7

Utilities Expense

Particulars Amount Annual Total

Rent 30,000.00 360,000.00

Schedule 8

Permits and Licenses

PERMITS AND LICENSES

Particulars Year 1
Business Location Clearance 75.00
Sanitary Health Clearance 60.00
Fire Safety Clearance 500.00
CENRO 500.00
Brgy. Clearance 100.00
Purok Clearance 100.00
Garbage Collection Fee 460.00
Community Tax 5,945.00
Permit Fee 10,500.00
Certificate of Tax Payment 30.00
Documentary Tax Stamp 30.00
TOTAL 18,300.00
 20

Schedule 9

Equipment

Particulars/Items Quantity Cost Total

Air Conditioner 2 90,000.00 180,000.00
Computer Set 1 30,000.00 30,000.00
Water Dispenser 1 5,000.00 5,000.00
Refrigerator 1 50,000.00 50,000.00
Oven 2 150,000.00 300,000.00
Generator Set 2 70,000.00 140,000.00
Kitchen Scale 1 600.00 600.00
Stand Mixer 1 4,000.00 4,000.00
Bread Slicer 1 30,000.00 30,000.00
Proofer 1 12,000.00 12,000.00
Total Cost 751,600.00

Schedule 10

Depreciation - Equipment

Particulars Total Cost Useful Life Annual Depreciation

EQUIPMENT 751,600.00 5 150,320.00

Schedule 11

Furnitures and Fixtures

Particulars/Items Quantity Cost Total

Office Table 1 5,000.00 5,000.00
Office Chair 1 3,500.00 3,500.00
Dining Chairs 32 3,500.00 112,000.00
Dining Tables 8 4,000.00 32,000.00
Cabinets 2 5,000.00 10,000.00
Lightings 10 6,000.00 60,000.00
Locker 1 5,000.00 5,000.00
Total Cost 227,500.00

Schedule 12

Depreciation – Furnitures and Fixtures

Particulars Total Cost Useful Life Annual Depreciation

Furnitures and Fixtures 227,500.00 5 45,500.00
 21

Schedule 13

Leasehold Improvement

LEASHOLD IMPROVEMENT
COST ESTIMATE
PROJECT RESTAURANT BUILDING RENOVATION
NO. DESCRIPTION AMOUNT
I GENERAL REQUIERMENTS 30,000.00
II MASONRY WORKS 20,500.00
III TILE WORKS 200,000.00
IV HARDWARE 150,00.00
V PAINTINGS 50,000.00
VI PLUMBING WORKS 90,000.00
VII CEILING 120,000.00
TOTAL MATERIAL COST 510,500.00
LABOR COST (35% OF MATERIAL COST) 178,675.00
CONTINGENCY COT (5% OF MATERIAL COST) 25,525.00

GRAND TOTAL 714,700.00

Schedule 14

Depreciation - Leasehold Improvement

Particulars Total Cost Useful life Annual Depreciation

Leasing Improvements 714,700.00 10 71,470.00

Schedule 15

Utensils
 22

Particulars Quantity Cost Total

Plates 100 200.00 20,000.00
Spoon 100 50.00 5,000.00
Fork 100 50.00 5,000.00
Bowl 100 100.00 10,000.00
Cups 100 290.00 29,000.00
Tray 50 750.00 37,500.00
Scissors 5 100.00 500.00
Kitchen tongs 5 150.00 750.00
Chef's Knife 5 9,100.00 45,500.00
Hand Whisk 5 250.00 1,250.00
Scoopers 10 1300.00 13,000.00
Measuring cup & spoon 10 500.00 5,000.00
Spatulas 5 100.00 500.00
Pastry bag & Piping tips 5 200.00 1,000.00
Mixing bowl 5 250.00 1,250.00
Total 175,250.00

Schedule 16

Operational Supplies Expense

Particulars Quantity Cost Total

Paper Bag 100 100.00 10,000.00
Plastic bag 100 220.00 22,000.00
Tissue 100 140.00 14,000.00
Soap 20 25.00 500.00
TOTAL 46,500.00

Schedule 17

Installation Cost

Particulars Quantity Cost Total Cost

Fire Extinguisher 5 1,000.00 5,000.00
CCTV Camera 5 5,990.00 29,950.00
Total Cost 34,950.00

Schedule 18

Advertising Expense

Particulars Qty Cost No. of months Total Cost

Social Media Promotion 1 3,000.00 3 3,000.00
Tarpaulins (1m x .5m) 20 65.00 1 1,300.00
Flyers 300 20.00 3 6,000.00
Total 10,300.00

Schedule 19

Working Capital
 23

Particulars Cost
Advertising Expense 10,300.00
Permits and Licenses 18,300.00
Installations 34,950.00
Purchase Inventory 253,435.00
TOTAL 316,985.00

Chapter VII

SOCIO-ECONOMIC ASPECT

This chapter contains the benefits of said proposed business venture to

the society and to the economy.

Benefits to the Society

The benefits of the proposed business to the society are the following:

Provide Employment. The venture would provide job opportunities to

those jobless individuals, it will hire 6 employees specifically, the (1) one

manager, (1) one cashier/receptionist, (2) two Service Crews, and (2) two Baker.

Supply the demands of the community. The business will help in terms

of sustaining the demands of the customers by providing them the quality

products and services.

Social Corporate Responsibilities (CSR). The proposed business is

committed to build a culture where the employees and suppliers recognized this

commitment to ensure that the Seafood restaurant operates successfully in the

community to achieve the goal of the company for its long-term commitment.
 24

Investment Opportunities The proposed business will create a new

investment opportunities. This will help promoting the local city and encouraging

more investors to put up a business that will help in the development of the

economy. With the investment, the establishment of Bakery or Bakeshop’s

product and services in General Santos City will create a magnet that will attract

other investors to capitalize in the city slowly creating a progressive economy to

the people of General Santos City.

Quality of life/ Standard way of living If the proposed business will be

realized, this business can touch the standardization of the quality of living in the

society in ways that this business can give benefit by giving some consumers

high innovative products that will surely make them realize that they are now able

to step in the wave of the world of technologies.

Benefits to the Economy

The benefits of the proposed business in the economy are the following:

Provision of Income Tax Before the business will operate legally, the

management will secure business permits and licenses. In processing

requirements, it will require fees and payments to the regulatory agencies which

are authorized to collect the fees and impose taxes. Through the taxes paid, the

government will generate income or revenue. Therefore, the government will use

this fund for the development of the community that can benefit the society and

the people.

Growth of Related Industry If the proposed business will be realized, it

will create a multiplier effect to the related industries wherein the latter will be
 25

linked to other industries through supplying the needs of the proposed business.

As a result, there are lots of transactions that will be happening in the industry

that will result to higher profitability or higher demand. Moreover, as the demand

increases and profitability also increases, stability of the economy will be

achieved.

Creates Job The proposed business will also benefit the economy though

providing employment. Consumer’s income will keep the economy stimulated.

This business will support local workers and alleviate the need for local

employment.

Helps the Government Through this proposed business, the government

can finance their expenditures by imposing taxes and other licenses. The

governments can taxes to encourage and discourage certain economic

decisions. Since the proposed business is established in a partnership, thus

taxes will be coming from the individual tax payments of the employees.
 26

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