Financial Analysis

Chapter VI

FINANCIAL STUDY

A. Total Project Cost

Schedule 2. Total Project Cost

Particulars | To be Acquired Equity | Total Project Cost |

Fixed Assets | | |

Land | 100,000.00 | |

Building | 30,000.00 | |

Light and Power | 200.00 | |

Furniture and Fixtures | 1,000.00 | |

*Equipments | | |

Kilns | 1,800.00 | |

Shovel | 350.00 | |

Wheel Borrow | 2,000.00 | |

Weighing Scale | 4,000.00 | |

Knitted Basket | 400.00 | |

Head Lights | 700.00 | |

Subtotal | | 140,450.00 |

Working Capital: | | |

Direct Labor | 4,800.00 | |

Permits and Licenses | 1,500.00 | |

Office Supplies | 410.00 | |

Subtotal | | 6,710.00 |

Total | | 147,160.00 |

B. Source of Financing

The owner is assumed to invest an amount of Php 200, 000.00 cash on hand as an initial capital for the HATCHER Coco Charcoal Venture business.

C. Projected Financial Statement

a. Financial Assumptions

* The owner is assumed to invest a beginning capital amounting to Php200, 000.00

* The Direct Labor is assumed to be a fixed charge.

* The repairs and maintenance as well as the cleaning supplies and utilities are assumed to be a fixed charge from year 11 to year 5.

* The sales is assumed to increase by 5% from year 3 to year 5.

* The allowance for damages on production is assumed 30%.

* The formula used for depreciation expense below was used in this study:

Depreciation per annum | = | ( Cost   −   Residual Value ) |

| | Useful Life |

b. Projected Income Statement

HACHER Coco Charcoal Venture

Income Statement

For the Years ending Dec. 31

Particulars | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |

Sales | 736,957.20 | 1,001,280.00 | 1,051,344.00 | 1,103,911.20 | 1,159,106.76 |

Less: Cost of Goods Sold | 233,546.50 | 247,940.00 | 263,880.00 | 273,969.00 | 278,914.45 |

Gross Operating Profit | 503,410.70 | 753,340.00 | 787,464.00 | 829,942.20 | 880,192.31 |

Less: Income Tax Due |...