financial aspect revised gdxwdad

8/13/2019 Financial Aspect REVISED Gdxwdad

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CHAPTER IV

FINANCIAL ASPECT

Financial aspect is the vital part of feasibility study, which needs a critical

analysis. The primary objective of every entrepreneur for investing his/her capital

is to gain profit. This chapter will give them the benefits of forecasting the

success of the business.

Objectives

The main objective of this chapter is to evaluate the output of the

operation thru the use of financial ratios. These ratios will determine the financial

status of the business. After determining the financial status, the proponent could

conclude the advisable starting number of buses to acquire. Moreover, the

proponents could conclude if the business is feasible or not.

Major Assumptions

The proponents used the following assumptions:

a. Method of Depreciation

The proponents used the straight line method to compute the fixed

assets depreciation. It is calculated by deducting the salvage value which is 10%

of the investment cost then divided by the life remaining years.


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b. Operating Accounts

The operating accounts will use the following assumptions:

1. Fringe benefits is 25% of the Wages and Salaries of selected

employees.

2. Repair and Maintenance is 5% of the Total Fixed Assets.

3. Advertising and Promotion, Office Supplies, Telephone, Fax and

Postage, Licenses, Utilities, and Miscellaneous Expenses will increase 5%

annually.

c. Fixed Assets

The proponents will acquire bus after 5 years of operation to

sustain the growing demand for transportation.

d. Labor and Management Compensation

The employees will expect an increase in their compensation of at

least Php 20.00 yearly as prescribed by the Department of Labor and

Employment (DOLE). Also, a 13th

month pay will be provided on time annually.


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e. SSS, PhilHealth, and Pag-ibig Contributions

The contributions will be withhold from the salaries and wages of

the employees and will form an Contribution Payable at the Liabilities part of the

companys balance sheet.

f. Sales Forecast

The Sales Forecast that is summarized can be found at Table 5.1.

g. Cash to be stored at Bank

Whatever cash that will exceed on the starting balance on cash

before the date of operation will be deposited in the bank to grow by means of

interest.

h. Revenue Cost

The cost of revenue is 28% of each services as figured below:

Depreciation Expense 6% Utilities 1%

Fuel, Oil, and Break Fluids 7% Compensation 11%

Repair and Maintenance 2% Toll Fee 1%


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Capital Formation

The incorporators shall furnish an equal amount of contribution for the

preliminary capital formation. Below is the listing of incorporators and their

percentage of contributions for the business equity:

Edzel Jose 7.00%

Melody Araza 7.00%

Darlene Guelas 7.00%

Jasper John Abunyawan 7.00%

Reyman Delgado 7.00%

John Ronald Kevin Galeon 7.00%

Leovin Licop 7.00%


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Table 5.1

SALES FORECAST

SALES FORECAST

Year Sales

LESS ALLOWANCE

FOR DEC. IN

SALES

TOTAL SALES

Units

Starting 10 units2014 10 79,027,200 3,841,600 75,185,600

2015 10 79,027,200 3,841,600 75,185,600

2016 10 79,027,200 3,841,600 75,185,600

2017 10 79,027,200 3,841,600 75,185,600

2018 10 79,027,200 3,841,600 75,185,600

This table shows the sales forecast of the proposed business. The

proponents computed for total sales by deducting the allowance for December

sales to the whole year sales. The two weeks sales for the month of December is

deducted


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Table 5.2

Salaries and Wages Schedule

Position Manpower Salary Monthly Yearly 13th

Month

Manager 3 27,000 81,000 972,000 1,053,000

Chief Accountant 1 18,000 18,000 216,000 234,000

Repair and

Maintenance

12 349.50 109,044 1,308,528 1,417,572

Receiving 1 349.50 9,087 109,044 118,131

Security 6

3

349.50

628.50

54,522

49,023

654,264

588,276

708,786

637,299

Inventory Clerk 6 349.50 54,522 654,264 708,786

General/Payroll/Purchase

Accounting Clerk

3 349.50 27,261 327,132 354,393

Ticket Sales Clerk 6 349.50 54,522 654,264 708,786

Sales Accounting Clerk 6 349.50 54,522 654,264 708,786

Cash Receipts/Disburse 6 369.50 57,642 691,704 749,346

Inspector 6 369.50 57,642 691,704 749,346

Dispatcher 3-Laguna

3-NCR

369,.50

486.00

28,821

37,908

345,852

454,896

374,673

492,804

Driver 10 1,080 250,800 3,369,600 3,650,400

Conductor 10 848 220,480 2,645,760 2,866,240

Utilities 3

3

349.50

349.50

27,261

27,261

327,132

327,132

354,393

354,393

Total Gross pay yearlywith 13thmonth pay 16,241,134.00


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Table 5.3

PhilHealth Schedule of Contribution

Position Salary ER EETotal

Contribution

Manager 27,000 337.50 337.50 675

Chief Accountant 18,000 225 225 450

Repair andMaintenance

9,087 112.50 112.50 225

Receiving 9,087 112.50 112.50 225

Security 9,08715,084

112.50187.50

112.50187.50

225375

Inventory Clerk 9,524 112.50 112.50 225


Accounting Clerk

9,524 112.50 112.50 225

Ticket Sales Clerk 9,087 112.50 112.50 225

Sales AccountingClerk

9,087 112.50 112.50 225

CashReceipts/Disburse

9,524 112.50 112.50 225

Inspector 9,524 112.50 112.50 225

Dispatcher 9,08712,649

112.50150

112.50150

225300

Driver 28,080 350 350 700Conductor 22,048 275 275 550

Utilities 9,087 112.50 112.50 225

Total 2762.50 2762.50 5,525


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Table 5.4

SSS Schedule of Contribution

Position Salary ER EE TotalContribution

Manager 27,000 1,060 500 1560

Chief Accountant 18,000 636 500 1560

Repair and Maintenance 9,087 636 300 936

Receiving 9,087 636 300 936

Security 9,087

15,084

636

1,060

300

500

936

1560

Inventory Clerk 9,524 671.30 316.20 988


Accounting Clerk

9,524 671.30 316.20 988

Ticket Sales Clerk 9,087 636 300 936

Sales Accounting Clerk 9,087 636 300 936

Cash Receipts/Disburse 9,524 671.30 316.70 988

Inspector 9,524 671.30 316.70 988

Dispatcher 9,087

12,649

636

883.30

300

416.70

936

1300

Driver 28,080 1,060 500 1560

Conductor 22,048 1,060 500 1560

Utilities 9,087

9,087

636

636

300

300

936

936

Total 13,956 6583.50 20,540

financial aspect revised gdxwdad

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