Chapter Xi. Financial Aspect: 1. Total Project Cost

CHAPTER XI.
FINANCIAL ASPECT
1. Total Project Cost
Machineries and Equipment PhP 12,800.00

Production Supplies PhP 3,360.00
Permit and Licenses PhP 9,150.00
Office Supplies / Equipment PhP 5,000.00
Furniture and Fixtures PhP 5,000.00
Prepaid Rent PhP 60,000.00
Signboards PhP
500.00
Promotion Expenses PhP 2,000.00
TOTAL PROJECT COST PhP

97,810.00
2. Financing Scheme
Initial Capitalization
The study shows that in order to establish a malunggay polvoron

manufacturing and selling business, the proponent must have a working
capital requirement of PhP 100,000.00. This working capital of PhP 100,000.00
is the initial capital investment of the owner.
3. Sales Projection (Five Years)
Malunggay Polvoron
Year Annual Units Selling Sales

Capacity* Sold** Price***
2015 48,000 43,200 PhP 10.00 PhP
432,000.00
2016 52,800 47,520 PhP 11.00 PhP
522,720.00
2017 58,080 52,272 PhP 12.10 PhP
632,491.20
2018 63,888 57,500 PhP 13.30 PhP
764,750.00
2019 70,277 63,250 PhP 14.65 PhP
926,612.00
* There will be a ten percent (10%) increase on production capacity/output of the

products every year after the first year.
** These are based on assumption that for the product 90% units are sold and 10%
are left unsold.
*** Selling price of the product will increase by ten percent (10%) every year after the
first year.
4. Financial Statement
a. Income Statement
PROJECTED INCOME STATEMENT

For the year end of December 31, 2015
Sales PhP
432,000.00
Less: Cost of Goods
Raw Materials 39,360.00
Direct Labor 1 worker with a total of 108,000.00
2,304 hours/year
Overhead Electricity, Gas and 48,000.00
Water @Php
4,000/month
Total Cost of Goods PhP
Manufactured 195,360.00
Gross Profit PhP

236,640.00
Less: Operating
Expenses
Salaries and 1 sales/cashier with a 108,000.00
total of 2,304
Wages
hours/year
Stall Rental @P 5,000.00 / month 60,000.00
Fees
Supplies 2,000.00
Expenses
Advertising 2,000.00
Permits and 9,150.00
Licenses
Total Operating PhP
Expenses 181,150.00
Net Income PhP

55,490.00
b. Balance Sheet
BALANCE SHEET STATEMENT

For the year end of December 31, 2015
Current Asset
Cash 2,190.00
Unsold Inventory 48,000.00
Prepaid Rent 60,000.00
Total Current Asset PhP 110,190.00
Fixed Assets
Machineries and Equipment PhP 12,800.00
Less: Accumulated 2,560.00
Depreciation
PhP 10,240.00
Furniture and Fixtures PhP 5,000.00

Depreciation
PhP 4,000.00
Office Supplies/Equipment PhP 5,000.00

Depreciation
PhP 4,000.00
Total Fixed Assets PhP 18,240.00
TOTAL ASSET PhP

128,430.00
5. Financial Evaluation
a. Ratio Analysis
Rate Return on Sales = 55,490.00 / 432,000.00
= 0.1285
= 12.85%
b. Test For Variability
c. Break Even Analysis

CHAPTER XII. SOCIO-ECONOMIC ASPECT
Business, no matter the scale, has always been an important factor in the
economic and social development of its communities and country. It is an integral
part of a community and strives to operate in a responsible and sustainable manner,
making sure that it performs its duties and obligations to their customers,
community, and to the government.
The role of business in the economy is undeniably essential, especially SMEs

or Small and Medium Enterprises. SMES in the Philippines comprise the very
backbone of our economy as they generate income growth, stimulate spirit of
entrepreneurship and innovation, promote expansion and diversification of markets,
increase rate and investment base, alleviate threats for survival of the poor and
promote a pluralist society. The business will make sure that it contributes to this by
paying the correct taxes on time.
Despite of its small nature, the business being in it start-up stage will
recognize its responsibility in alleviating fast-growing unemployment rate.
Specifically, the lowest positions available dont have rigid and complex requirements
to be filled in. The business has decided not to require comprehensive requirements
in these various positions to give opportunities to those who weren't fortunate
enough to attain higher education.
CHAPTER XIII. ENVIRONMENT ASPECT
The business will be responsible enough to the environment by assuring that

the process of manufacturing and selling the product will be environmentally friendly.
Wastes generated during production are mostly organic, so this may not give any
problems to the environment, the community and the health of the residents near
the site of production.
CONCLUSION
After studying all the aspects of the business from start-up to management,
we found out that the business is feasible because of the following:
- The business has great market acceptability.

- The location of the business is readily accessible to meet a diverse range
of possible customers.
- The product being offered is known to the majority of potential customers.
- The product is widely accepted because of it being nutritious even though
it is considered a dessert or snack.
- The price of the product is considered affordable enough to meet the
customers purchasing power and at the same time can cover the owners
expenses that would result to net profit.
- Raw materials needed for production are readily available at nearby
markets or groceries.
- The business does not require a huge capital investment and still insures a
satisfactory net profit.
APPENDICES
Machineries and Equipment

Refrigerator PhP 9,000.00
Polvoron Molder (Large Oval, 6 pcs.) 900.00
Electric Mixer (2 pcs.) 1,000.00
Beater (2 pc.) 200.00
Gas Stove (2 burner) 1,000.00
Boiling Pan (2 pcs.) 400.00
Mixing Bowl (2 pcs.) 300.00
PhP 12,800.00
Production Supplies
Apron (2 pcs.) PhP 160.00
Hand Gloves (4 pcs.) 60.00
Hair Net (2 pcs.) 30.00
Face Mask (2 pcs.) 30.00
PhP 280.00 x 12 PhP 3,360.00
Permit and Licenses

DTI Permit PhP 500.00
Mayors Permit 6,000.00
BIR Registration 500.00
Community Permit 1,200.00
Sanitary Permit 200.00
Garbage Inspection Fee 750.00
PhP 9,150.00
Raw Materials
Malunggay
Flour
Powdered Milk
Sugar
Butter
Cellophane
PhP 39,360.00

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CHAPTER XI.

1. Total Project Cost

Machineries and Equipment PhP 12,800.00

TOTAL PROJECT COST PhP

The study shows that in order to establish a malunggay polvoron

Year Annual Units Selling Sales

* There will be a ten percent (10%) increase on production capacity/output of the

PROJECTED INCOME STATEMENT

Gross Profit PhP

Net Income PhP

BALANCE SHEET STATEMENT

Furniture and Fixtures PhP 5,000.00

Office Supplies/Equipment PhP 5,000.00

TOTAL ASSET PhP

b. Test For Variability

c. Break Even Analysis

The role of business in the economy is undeniably essential, especially SMEs

CHAPTER XIII. ENVIRONMENT ASPECT

The business will be responsible enough to the environment by assuring that

- The business has great market acceptability.

Machineries and Equipment

Permit and Licenses

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