Chapter 4

Financial Aspect

The financial aspect shows the financial structure of the business which is the
statements that provides information about the financial position, performance and cash
flows of the business. There are three basic financial statements namely; income
statement, statement of cash flows, and balance sheet. The income statement shows
the performance of the business for a given period of time. Statement of cash flows
shows the sources and uses of cash and balance sheet shows the financial position of
the business as of a particular or specific date.
In this chapter, it provides the information that reflects the performance of the
proposed business, its stability and its projected status. It includes the presentation of
the statement and the analysis.
Major Assumption;
1. Market share is assumed to increase by 20%, 23% and 25% in year 1, 2, and 3.
2. Projection is computed using the moving average method.
3. Depreciation is computed using the straight line method.
4. Direct materials are assumed to increase by 5% per year.
5. Salaries expense is assumed to increase by 5% per year.
6. Indirect materials are assumed to increase by 5% per year.
7. Supplies expense is assumed to increase by 5% per year.
8. Rent expense is assumed to increase by 5% per year.

9. Utilities expense is assumed to increase by 5% per year.

10. Transportation expense is assumed to increase by 5% per year.
11. Repair and Maintenance is assumed to increase by 5% per year.
12. Business permit, licenses and taxes are assumed to increase by 5% per year.

Babys Water Refilling

Projected Income Statement
For the Year Ended December 31, 2015

Sales

2016
P556,180.00

2017
P667,402.00

2018
P705,782.00

168,000.00
93,600.00
6,000.00
3,000.00
44,015.00
7,500.00
18,000.00
1,000.00
4,500.00
20,201.50
18,000.00
10,104.00
P393,920.50
P162,259.50

195,300.00
98,280.00
6,300.00
3,150.00
44,015.00
7,875.00
18,900.00
1,050.00
4,725.00
21,212.00
18,900.00
10,104.00
P429,811.00
P247,591.00

213,366.00
103,194.00
6,615.00
3,307.50
44,015.00
8,269.00
19,845.00
1,103.00
4,961.25
22,273.00
19,845.00
10,104.00
P456,897.75
P248,884.25

Less: Operating Expense

Cost of Refill
Salaries Expense
Honorarium
Repair & Maintenance
Depreciation
Utilities Expense
Rent Expense
Promotional Expense
Permit & Licences
Supplies Expense
Transportation
Payroll Taxes
Total Operating Expenses

Net Income

Babys Water Refilling

Projected Statement of Cash Flow
For the Year Ended December 31, 2015
Cash Inflow
Sales

2016
P556,180.00

2017
P677,402.00

2018
P705,782.00

Less: Cash Outflow

Purchase of Refill
Delivery Equipment
Tools and Equipment
Furniture & Fixtures
Transportation
Salaries Expense
Honorarium
Repair & Maintenance
Utilities Expense
Payroll Taxes
Permit & Licenses
Promotional Expense
Drawing (40%)
Rent Expense
Total Cash Outflow
Total Net Cash Flows
Cash Balance Beginning
Cash Balance Ending

168,000.00
75,000.00
54,845.00
2,200.00
18,000.00
93,600.00
6,000.00
3,000.00
7,500.00
10,104.00
4,500.00
1,000.00
64,903.00
18,000.00
P546,854.30
9,325.70
200,000.00
209,325.70

195,300.00
18,900.00
98,280.00
6,300.00
3,150.00
7,875.00
10,104.00
4,725.00
1,050.00
99,036.40
18,900.00
P484,832.40
192,596.60
209,325.57
401,895.30

213,366.00
19,845.00
103,194.00
6,615.00
3,307.50
8,269.00
10,104.00
4,961.25
1,103.00
99,553.70
19,845.00
P512,436.45
193,345.55
401,895.30
595,240.85

Babys Water Refilling

Balance Sheet
As of December 31, 2015
ASSETS
Current Asset-Cash
Non-Current Assets
Tool and Equipment
Furnitures and Fixtures
Delivery Equipment
Total
Less: Accumulated Depreciation
Net Book Value
Total Assets

2016
P209,325.70

2017
P401,895.30

2018
P595,240.85

54,845.00
2,200.00
75,000.00
P132,045.00
44,015.00
88,030.00
P297,355.70

54,845.00
2,200.00
75,000.00
P132,045.00
88,030.00
44,015.00
P445,910.30

54,845.00
2,200.00
75,000.00
P132,045.00
132,045.00
P595,240.85

OWNERS EQUITY
Beginning Capital
Add: Net Income
Total
Less: Drawing
Ending Capital

P200,000.00
162,259.50
362,259.50
64,903.80
P297,355.70

P297,355.70
247,591.00
554,946.70
99,036.40
P445,910.30

P445,591.30
248,884.25
694,794.55
99,553.70
P595,240.85