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    Total Project Cost Fixed Assets/ Capital Investments

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    Lorna Baclig
    The document provides projected financial statements for a new cake business from pre-operation in 2018 through 2022. It includes a projected cash flow statement showing increasing cash inflows from sales and cash outflows for expenses. It also includes a projected income statement with gross income increasing each year and net income projections. Finally, it includes a projected balance sheet showing assets like cash and inventory and increasing retained earnings over the years.

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    Total Project Cost Fixed Assets/ Capital Investments

    Uploaded by

    Lorna Baclig
    58 views8 pages
    The document provides projected financial statements for a new cake business from pre-operation in 2018 through 2022. It includes a projected cash flow statement showing increasing cash inflows from sales and cash outflows for expenses. It also includes a projected income statement with gross income increasing each year and net income projections. Finally, it includes a projected balance sheet showing assets like cash and inventory and increasing retained earnings over the years.

    Original Title

    FINANCIAL PLAN

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    The document provides projected financial statements for a new cake business from pre-operation in 2018 through 2022. It includes a projected cash flow statement showing increasing cash inflows from sales and cash outflows for expenses. It also includes a projected income statement with gross income increasing each year and net income projections. Finally, it includes a projected balance sheet showing assets like cash and inventory and increasing retained earnings over the years.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    58 views8 pages

    Total Project Cost Fixed Assets/ Capital Investments

    Uploaded by

    Lorna Baclig
    The document provides projected financial statements for a new cake business from pre-operation in 2018 through 2022. It includes a projected cash flow statement showing increasing cash inflows from sales and cash outflows for expenses. It also includes a projected income statement with gross income increasing each year and net income projections. Finally, it includes a projected balance sheet showing assets like cash and inventory and increasing retained earnings over the years.

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    of 8

    IV.

    FINANCIAL PLAN

    A. Total Projected Cost

    TOTAL PROJECT COST

    Fixed Assets/ Capital investments


    Leasehold/ building improvements 300,000
    Equipment 45,000
    Furniture and fixtures 30,000

    Pre-operating Expenses
    Permits and licenses 2,500
    Advance rental and deposits 40,000
    Purchases- Mdse inventory 25,000
    Office supplies 10,000

    Operating expenses
    Salaries 30,000
    482,500

    Add: 20% contingency 96,500

    TOTAL PROJECT COST 579,000

    B. Sources of Financing

    The owner of the company would use debt finance as a source of

    starting capital to support the business. The starting capital would be divided

    into two: the equity and the liability, both would share equal parts – 50%. The

    projected starting capital is ₱708,600.00, meaning the owner and the lender

    would contribute ₱354,300.00 each. Since the business needs to be fully

    managed by the owner, this type of financial source is the best one to be used.

    Besides, the other advantages of using debt finance in business are:

    1. Retain control. It means that when an owner agree to debt


    financing from a lending institution, the lender has no say in how

    the owner manage his own company. The owner makes all the

    decisions. The business relationship ends once the owner have

    repaid the loan in full and as the business owner, you do not have

    to answer to investors.

    2. Tax advantage. It implies that the amount the owner pay in

    interest is tax deductible, effectively reducing the owner’s net

    obligation.

    3. Easier planning. It means that the owner know well in advance

    exactly how much principal and interest the owner will pay back

    each month. This makes it easier to budget and make financial

    plans.

    4. Retaining profits. It implies that the owner’s obligation to his

    lender is only making repayments within agreed time frames. The

    owner do not have to share your business profits.


    C. Projected Financial Statement
    Cake Bites
    Projected Cash Flow
    Projected Cash Flow
    Statement
    Pre-Operating (2018) 2019 (2018, 2019, 2020,
    2020 2021, 2022) 2021 2022
    CASH INFLOWS
    Capital, beginning 579,000.00 - - -
    Sales - 880,000.00 950,000.00 1,250,500.00 1,345,500.0
    Total 579,000.00 880,000.00 950,000.00 1,250,500.00 1,345,500.0
    CASH OUTFLOWS:
    Leasehold/Building
    Improvements 220,000.00
    Machines 120,000.00
    Equipments 65,000.00
    Furniture and 40,000.00
    Fixture
    Purchases 20,000.00 200,000.00 290,000.00 310,000.00 350,000.00
    Permits and licenses 2,350.00 - 8,000.00 9,000.00 10,000.00
    Advance rental and 25,000.00 70,000.00 100,000.00 105,000.00 110,000.00
    deposits
    Office supplies 1,000 10,000.00 11,000.00 12,000.00 13,000.00
    Salaries 20,000 220,000.00 230,000.00 250,000.00 270,000.00
    Electricity - 34,000.00 37,000.00 40,000.00 45,000.00
    Water - 5,000.00 6,000.00 6,500.00 7,000.00
    Communications - 12,000.00 13,000.00 15,000.00 18,000.00
    Transportation - 20,000.00 22,000.00 25,000.00 30,000.00
    Miscellaneous - 10,000.00 10,000.00 10,000.00 10.000.00
    Total 495,350.00 561,000.00 727,000.00 782,500.00 863,000.00
    NET CASH FLOW 83,650.00 250,000.00 260,000.00 290,000.00 320,000.00
    Add: Cash balance, - 83,650.00 333,650.00 593,000.00 883,000.00
    beginning
    CASH BALANCE, 83,650.00 333,650.00 593,650.00 883,000.00 1,203,000
    END
    The table above shows the projected cash flow statement of the

    business from 2018 to 2022. It involves cash inflows and cash outflows. In the

    cash inflow, it involves capital, beginning and sales. For the year 2018, the capital

    beginning is about P579, 000.00 and no sales because this is in the process on pre-

    operational. The total cash inflows are increasing in the year 2019, 2020, 2021 and

    2022. In the year 2022, the total cash inflows will be about P1,345,500.00.00. On

    the other hand the total cash outflows in the year 2018 is about P495,350.00. It

    involves improvements, machines, equipment, furniture and fixture, purchases,

    permits and licenses, advance rentals and deposits, other supplies, salary

    electricity, water, communications, transportation and miscellaneous. Also, the

    total cash outflows is increasing in the year 2018,2019, 2020, 2021, and 2022. The

    cash balance is the sum of net cash flow and the cash balance.
    Cake Bites
    Projected Income Projected Income Statement
    (2019, 2020, 2021, 2022)

    Year 1 (2019) Year 2 (2020) Year 3 (2021) Year 4 (2022)


    Revenues
    Sales 880,000.00 950,000.00 1,250,500.00 1,345,500.00
    Cost of Sales
    Mdse Invtry, beg. - 12,000.00 25,000.00 35,000.00
    Add: Purchases 220,000.00 290,000.00 310,000.00 350,000.00
    TGAFS 220,000.00 302,000.00 335,000.00 385,000.00
    Less: Mdse Invtry, end 12,000.00 25,000.00 35,000.00 42,000.000
    208,000.00 277,000.00 300,000.00 343,000.00
    Gross Income 579,000.00 660,000.00 750,000.00 800,000.00
    Operating Expenses
    Permits and licenses 2,350.00 8,000.00 9,000.00 10,000.00
    Rental 70,000.00 100,000.00 105,000.00 110,000.00
    Office supplies 11,000.00 11,000.00 12,000.00 13,000.00
    Salaries 220,000.00 230,000.00 250,000.00 270,000.00
    Electricity 34,000.00 37,000.00 40,000.00 45,000.00
    Water 5,000.00 6,000.00 6,500.00 7,000.00
    Communications 12,000.00 13,000.00 15,000.00 18,000.00
    Transportation 20,000.00 22,000.00 25,000.00 30,000.00
    Miscellaneous 10,000.00 10,000.00 10,000.00 10,000.00
    384,350.00 437,000.00 472,500.00 513,000.00
    NET INCOME 185,650.00 223,000.00 277,500.00 287,000.00
    The table above shows the projected income statement of the business.

    It involves the total sales, gross income, and operating expenses. In the year

    2019, the gross income will be P579,000.00, and total operating expenses is

    P384,000.00. The net income is the difference of gross income and operating

    expenses. The net income is increases as the years goes on. In the year 2022,

    the net income is about 287,000.00.


    Projected Balance Sheet
    Pre-Operating (2018) Year 1 (2019) Year 2 (2020) Year 3 (2021) Year 4 (2022)

    CURRENT
    Cash 83,650.00 333,650.00 593,650.00 883,000.00 1,203,000.00
    Mdse Invtry - 12,000.00 25,000.00 35,000.00 40,000.00
    Prepaid Expenses 88,350.00 15,000.00 15,000.00 15,000.00 15,000.00
    Total 172,000.00 360,650.00 633,650.00 933,000.00 1,258,000.00
    NON-CURRENT ASSETS
    Building Improvements 220,000.00 220,000.00 220,000.00 220,000.00 222,000.00
    Less: Accumulated Deprn - 10,000.00 20,000.00 30,000.00 40,000.00
    220,000.00 210,000.00 200,000.00 190,000.00 180,000.00
    Machines 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00
    Less: Accumulated Deprn 12,000.00 25,000.00 35,000.00 42,000.00 45,000.00
    88,000.00 75,000.00 65,000.00 58,000.00 55,000.00
    Equipment 70,000.00 70,000.00 70,000.00 70,000.00 70,000.00
    Less: Accumulated Deprn 11,000.00 25,000.00 38,000.00 40,000.00 44,000.00
    59,000.00 45,000.00 32,000.00 30,000.00 26,000.00
    Furniture and Fixture 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00
    Less: Accumulated Deprn - 4,500.00 9,000.00 13,500.00 18,000.00
    40,000.00 35,500.00 31,000.00 26,500.00 22,000.00
    Total 407,000.00 365,000.00 328,000.00 304,000.00 283,000.00

    TOTAL ASSETS 579,000.00 665,000.00 828,000.00 1,004,000.00 1,183,000.00

    LIABILITIES AND CAPITAL


    LIABILITIES - - - - -
    CAPITAL
    Capital, beginning 579,000.00 579,000.00 579,000.00 579,000.00 579,000.00
    Add: Net Income
    Net Income for the Year - 86,000.00 163,000.00 176,000.00 179,000.00
    Accumulated Net Income - - 86,000.00 249,000.00 425,000.00
    - 86,000.00 249,000.00 425,000.00 604,000.00
    TOTAL LIABILITIES AND 579,000.00 665,000.00 828,000.00 1,004,000.00 1,183,000.00
    CAPITAL
    The table above shows the projected balance sheet of the business. The

    current assets from the year 2028 to 2022 is P172,000.00, P360,650.00,

    P633,650.00, P933,000.00, and P1,258,000.00 respectively. In the total non-

    current assets from 2018 to 2022 is P407,000.00, P365,000.00, P328,000.00,

    P324,000.00, ad P283,000.00 respectively. The total assets from the year

    2018to 2022 is P579,000.00, P665,000.00, P828,000.00, P1,004,000.00 and

    P1,183,000.00 respectively. The total liabilities and capital is the same as the

    total assets. Therefore, total assets is equal to the sum of liabilities and equity

    D. Profitability Indices

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