CHAPTER V

FINANCIAL ASPECT

This chapter provides an overview of the financial aspect of the business. Moreover, this chapter

discusses the viability of the business to complete the project and its capacity to generate income.

The total project cost, financial assumption, income statement, changes in financial position,

partner’s equity, cash flow, and ratios are illustrated and further discussed in this chapter.

Total Project Cost

Project Cost Notes Amount

Land 8 ₱ 800,000.00
Building 7 2,580,000.00
Office and Facilities and
1 154,745.00
Equipment
Office supplies 3 1,098.00
Cleaning supplies 4 10,959.00
Furniture and fixture 2 130,658.00
Utilities expense 6 7,844.29
Advertising Expense 10 11,550.00
Licensing And Permits 5 2,780.00
Total ₱ 3,699,634.29

Source of Financing

Partners Initial Investment

Esteves, Reylyn Grace B. ₱ 475,000.00
Estopace, Marianne C. ₱ 475,000.00
Magalona, Cassandra May L. ₱ 475,000.00
Molina, Kaye Marie S. ₱ 475,000.00
Ochoa, Chrischelle C. ₱ 475,000.00
Parcon, Mayravelle B. ₱ 475,000.00
Tuazon, Valerie L. ₱ 475,000.00
Vinzon, Allen Marie F. ₱ 475,000.00
 Total ₱ 3,800,000.00

Financial Assumptions

1. The partners will contribute ₱3,800,000 to open the business.

2. The business will start to operate January with a calendar year ending in December.

3. The partners will acquire land with an area of 800 m² for the total cost of ₱800,000.

4. All the capital needed, and other operating expenses, supplies and advertising expense are
finance from the Partner’s capital contribution.

5. Revenue from rents estimated to increase by 10%.

6. The partners share on income and losses are based on the ratio of capital contributed to
asset and of the current business since they contributed the same amount of capital, they
will share the same profit.

7. Salaries and wages are based on dole wage schedule and expected to increase annually.
Employees shall enjoy SSS and PhilHealth as mandated benefits.

8. Machinery, office equipment and furniture and fixtures have an estimated useful life of 5
to 15 years and building which have 25 years useful life and 20% salvage value of its
actual cost and they will depreciate using straight line model.

9. Utilities are estimated to increase by 10% annually starting calendar year 2026.

10. Supplies are treated as an expense annually and estimated to increase 10% annually.

11. Advertising expense and visual displays will expect to increase 1% annually starting the
calendar year 2026.

12. Permits and licensing are based on the Office of Business Permit and Licensing Officer-
Municipality of Isabela.

13. Income earned by a partnership business is subject to income tax at 30%.

14. Salaries are paid every two (2) weeks or twice a month at intervals not exceeding sixteen
(16) days.

15. Utilities are paid every month.

 16. Maintenance is increase 5% annually starting year 2026.

A. Financial Statements
Note 1. Office and

Office and
Equipment
Desktop
Printer 1 6, 790 6,790.00
Pool supply set 1 5,247.00 5,247.00
Stand fan 3 3,619.00 10,857.00
Aircon 2 19,998.00 39,996.00
Fire Extinguisher 2 1,100.00 2,200.00
CCTV Camera 5 1,582.00 7,910.00
Generator 1 18,499.00 18,499.00
Emergency Light 10 1,150.00 11,500.00
Water Dispenser 1 2,450.00 2,720.00
Water Bottle 3 110.00 330.00
Projector 1 20,950.00 20,950.00
Screen Projector 1 3,487.00 3,487.00
Total ₱ 154,745.00

Note 2. Furniture and Fixtures

# of Price per
Furniture and Fixture Total Price
unit unit
Folding Lounge Chair 1 4,782.00 ₱ 4,782.00
Picnic table With Umbrella 2 5,410.00 10,820.00
Chandelier 1 17,205.00 17,205.00
Curtain 2 1,074.50 2,149.00
Plastic Chair 100 395.00 39,500.00
Plastic Round Table 30 1,395.00 41,850.00
Bbq. Grill 2 310.00 620.00
Long Table 4 1,599.00 6,396.00
LED wall Light 4 449.00 1,796.00
Pool Light 4 1,385.00 5,540.00
Total ₱ 130,658.00
Note 3 Office Supplies
Price per
Office supplies # of unit Total price
unit
Bond paper 1 210 ₱ 210.00
Stapler and staples 1 59 59
Scissor 2 55 110
Calculator 1 279 279
First aid kit 1 325 325
Record book 1 115 115
Total ₱ 1,098.00

Note 4. Cleaning Supplies

Price per
Cleaning supplies # of unit Total price
unit
Garbage bag 5 29.00 ₱ 145.00
Trashbin 2 149.00 298.00
Wet mop 2 199.00 398.00
Cleaning gloves 2 126.00 252.00
Broom and dustpan 2 145.00 290.00
Pool brush 2 1,328.00 2,656.00
Chlorine 2 2,800.00 5,600.00
Toilet tuff cleaner 2 285.00 570.00
Trash bin ( tri colour) 3 250.00 750.00
Total ₱ 10,959.00

Note 5. Licensing and Permits

License and Permits Amount
Mayor Permit ₱ 1,000.00
DTI certification 500.00
Barangay Certification 150.00
 Assessors Certification 50.00
Treasurer Clearance 50.00
Bureau of Internal Revenue 500.00
Documentary Stamp Tax (DST) 30.00
Fire Safety Inspection
500.00
Certification
Total ₱ 2,780.00

Note 6. Cost of Building

Cost of building Amount
Swimming Pool (20×20) ₱ 285,000.00
Event Place Include Electricity and plumbing
2,295,000.00
(800sqm)
Total ₱ 2,580,000.00

Note 7. Utilities

Utilities Amount
Electricity ₱ 4,651.45
Water 1,493.84
Internet 1,699.00
Total ₱ 7,844.29

Note 8. Land
Land Amount
Land 800sqm. @ 1,000 per
₱ 800,000.00
sqm

Note 9. Depreciation Expense- Office

 Equipment and Facilities Equipment
Machinery
Salvage Usefu
and Cost Dep. Cost Depreciation
Value l Life
Equipment
₱1,21 ₱23,046.0
Desktop ₱ 24,259.00 5 ₱ 4,609.21
2.95 5
Printer 6,790.00 339.50 6,450.50 5 1,290.10
Pool supply
5,247.00 262.35 4,984.65 5 996.93
set
Stand fan 10,857.00 542.85 10,314.15 5 2,062.83
Aircon 39,996.00 1,999.80 37,996.20 10 3,799.62
Fire
Extinguishe 2,200.00 110.00 2,090.00 10 209.00
r
CCTV
7,910.00 395.50 7,514.50 5 1,502.90
Camera
Generator 18,499.00 924.95 17,574.05 15 1,171.60
Emergency
11,500.00 575.00 10,925.00 5 2,185.00
Light
Water
2,450.00 122.50 2,327.50 5 465.50
Dispenser
Water
330.00 16.50 313.50 5 62.70
Bottle
Projector 20,950.00 1,047.50 19,902.50 5 3,980.50
Screen
3,487.00 174.35 3,312.65 5 662.53
Projector
₱7,723.7
Total ₱154,745.00 ₱147,021.25 ₱22,705.52
5

Note 10. Advertising Expense

Advertising Amount
Tarpaulin ₱ 1,050.00
Pamphlets and brochures 500.00
1 day voucher 10,000.00
Total ₱ 11,550.00
 Note 11. Depreciation Expense-
Furniture and Fixtures
Furniture Salvage Depreciation Useful
Cost Depreciation
and fixture value cost Life
Folding
Lounge ₱4,782.00 ₱239.10 ₱4,542.90 5 ₱ 908.58
Chair
Picnic table
10,82 5 10,27
With 5 2,055.80
0.00 41.00 9.00
Umbrella
17,20 8 16,34
Chandelier 5 3,268.95
5.00 60.25 4.75
2,14 1 2,04
Curtain 5 408.31
9.00 07.45 1.55
Plastic 39,50 1,9 37,52
5 7,505.00
Chair 0.00 75.00 5.00
Plastic
41,85 2,0 39,75
Round 5 7,951.50
0.00 92.50 7.50
Table
62 58
Bbq. Grill 5 117.80
0.00 31.00 9.00
6,39 3 6,07
Long Table 5 1,215.24
6.00 19.80 6.20
LED wall 1,79 1,70
5 341.24
Light 6.00 89.80 6.20
5,54 2 5,26
Pool Light 5 1,052.60
0.00 77.00 3.00
Total ₱130,658.00 ₱6,532.90 ₱124,125.10 ₱ 24,282.05
Note 12. Depreciation
Expense- Building
Descriptio Depreciation
Cost Salvage value Life Depreciation
n cost
Building ₱ 2,580,000.00 ₱ 129,000.00 ₱2,451,000.00 25 ₱ 98,040.00

Note 13. Repair and Maintenance

Repair and Maintenance Amount
Electricity Line
₱ 5,000.00
Maintenance
Plumbing Maintenance 5,000.00
Equipment Maintenance 5,000.00
Swimming Pool
5,000.00
Maintenance
Total ₱ 20,000.00

Note 14. Salaries and Wages

Rat
Position Qty. Hour Monthly Salary Annual Salary
e

Manager 1 510 8 ₱ 13,260.00 ₱ 159,120.00

Receptionist 1 450 8 11,700.00 140,400.00
Utility Worker 1 1 380 8 9,880.00 118,560.00
Utility Worker 2 1 380 8 9,880.00 118, 560.00
Total ₱ 44,720.00 ₱ 536,640.00

Qty 2029
Position 2025 2026 2027 2028
.

Manager 1 ₱13,525.2 ₱13,795.7 ₱14,071.61 ₱14,353.03 ₱14,640.09

Receptionis 12,917.74
1 11,934.00 12,172.68 12,416.13 12,664.45
t

Utility
1 10,077.6 10,279.15 10,484.73 10,694.42
Worker 1
10,698.62
Utility
1 7,425.60 7,574.11 7,725.59 7,880.11
Worker 2
₱48,955.07
Total
₱45,614.4 ₱46,526.68 ₱47,457.2 ₱48,406.32
Monthly
 Total ₱558,320.0 ₱580,875.8 ₱587,460.8
₱547,332 ₱569,486.4
Annually 0 4 4

Note
15.
Service

Revenue

Note
16.
Other
Income
 Note 17.
SSS and

Philhealth Contribution Computation

A. Financial Ratios and Analysis

A. Ratios Analysis
Solvency Ratios

Debt to Equity Ratio

2025 2026 2027 2028 2029
Total 32,323. 54,377. 22,495.2 22,945.0 21,276.6
Liabilities 60 68 0 8 8
4,413,091. 5,143,974. 5,995,220.9 6,979,821.6 7,732,094.7
Total Equity
05 65 0 2 8
Debt to 0.73 1.06 0.38 0.33 0.28
Equity
Ratio
Debt to Asset Ratio
2025 2026 2027 2028 2029
Total 32,323. 54,377. 22,495.2 22,945.0 21,276.6
Liabilities 60 68 0 8 8
4,445,414. 5,198,352. 6,017,716.1 6,622,766.7 7,373,371.4
Total Asset
65 33 0 0 6
Debt to 0.73 1.05 0.37 0.35 0.29