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Production Process

There are several publications locally available on bamboo farming based


on researches by academic and government institutions in the Philippines.
One of these is the study on Bamboo Production in the Philippines by Dr.
Felizardo D. Virtucio and Cristina A. Roxas that present steps in bamboo
plantation establishment, maintenance and protection as follows:

1. Nursery

The Monograph on Production and Utilization of Philippine Bamboos


published by Forest Products Research and Development Institute in Los
Banos, Laguna identifies the following steps in bamboo nursery establishment
and maintenance:

1. Species and Site Selection


2. Selection of Propagation method
3. Preparation of Propagation bed
4. Acquisition and preparation of materials
5. Planting
6. Watering, fertilizer application and Maintenance

There are several publications locally available on bamboo farming based


on researches by academic and government institutions in the Philippines.
One of these is the study on Bamboo Production in the Philippines by Dr.
Felizardo D. Virtucio and Cristina A. Roxas that present steps in bamboo
plantation establishment, maintenance and protection as follows:

2. Plantation
1. Species and site selection
2. Preparation of Plantation site
2.1. Sketching
2.2. Staking
2.3. Field layout
2.4. Clearing of weeds
2.5. Digging of planting holes
3. Transport of Propagules
4. Planting
5. Fertilization at Planting Time
6. Plantation Maintenance
6.1. Replacement of mortality
6.2. Weed control
6.3. Watering
6.4. Silvi-cultural treatments
6.5. Protection
7. Harvesting
3. Production
a. Node

The Cottage Industry Technology Center [CITC] presents the following steps
for node and hub operation:

PRIMARY PROCESSING

K T

N R Treated

O Bamboo E
P
T A
O Cutting Splitting Treated
R T
L
E
M Weaving
Tadtad
E M Crushing Sawali
E
O
Slivers/Spoke N
V Slivering
A T
Round Poles Treated
L

b. Hub
MILLING AND COMPOSING

D U

Floor Boards
R E A P
Slats
Y A
S R Floor Tiles
Rough Milling P Finish Milling
I P S E
Tadtad
L
N I E S Furniture Components

C
Sawali
A M S
G T
I Sawali Boards
B I
O
N
L N

Y G
COMPOSING
It should be noted that the Node performs primary processing while the Hub carries
out the milling or composing functions. In some cases, the Hub performs some or
all of the Node functions due to the lack of reliable Node or because of the
preference of the Hub to carry out the Node functions to gain more share in the
distribution of income.

Aside from CITC, the Mariano Marcos State University [MMSU] presents the
production process in producing bamboo tiles, one of the by-products of a hub as
outlined below:

MMSU Model: Bamboo Tiles

Fresh or Pole cross- Kiln Drying


partially dried cutting to
bamboo poles 8 ft

Boilin
g

20-30 mm Manual Thickness sizing Strips sides jointing


width separation
sizing of slats

Color matching Manual gluing Clamping or Re-jointing


hydraulic and
pressing squatting

Thickness planing Sanding Finishing coat Quality control

Finished products
The Forest Product Research and Development Institute [FPRDI] has also
outlined the basic processes in producing bamboo veneer, another potential by-
product of a hub as presented below:

FPRDI Model: Bamboo Veneer

Cutting into Boiling of Centering of


0.5m long bamboo bamboo bolt
bolts bolts in lathe

Air drying Preservative Veneering


of treatment of
veneers veneers

Raw Material Requirement

The raw material requirements for Nursery, Plantation, Node and Hub are enumerated
below:

Nursery
Raw Material Description Requirement Cos
Bamboo branch or part of a culm 1 t
P3.00/pie
branch/culm from a healthy bamboo piece/seedlin ce
clump g.
Polythene bag container used in raising 1 P0.50/ba
bamboo seedling bag/seedlin g
g
Fertilizer chemical and natural 0.78/seedli 13.50/k
compost ng g
used in nourishing or 780 kgs. P10,53
250 seedlings per hectare

250 X 100 = 25,000 seedlings needed X P 3.00 = P 75,000


25,000 X .50 = 12,500
25,000 x .78 = 19,500 kg X P 13.50 = 263,250
Total cost of raw materials P 350,750
Plantation
Raw Material Description Requirement Cost [Php]
Bamboo seedling also termed as propagule 1 P25.00/pie
or piece/clump ce
potted cuttings, 4-6
months old depending or 250 seedlings for 625,00
on the method and 1 ha. 0
specie Plantatio
Fertilizer chemical and natural 1.2 13.50/k
fertilizers used in kgs/clump/year g
nourishing the clump
or 250 kgs/year or
for 200 3,240
250 seedling x 100 ha. = 25,000 x P25.00 = P 625,000
P 3240 x 125 = 405,000
Total Cost of raw materials P 1,030,000

Production
Node
Raw Material Description Requirement/sl Cos
Bamboo pole bamboo stem that is at 50 t
P25/pol
not poles/day e
less than 3 year old or 15,000 P375,00
Treatment Material chemical added to poles
2.5grams/sl 0
P170/k
water at g
and used in or 1,200 kgs. for or P204,000
treating 480,000 slats for
st
bamboo [on the 1 480,000

Hub
Raw Material Description Requirement/sq. Cos
Slats bamboo sticks with ft. 6 t
P3.0
dimensions of: slats 0
5mm x 1inch x 4 ft. or 480,000 slats for or P1,440,000
80,000 sq.ft. for
tiles/planks/plyboo/ 80,000 sq.ft.
laminated tiles/planks/plyb
Glue adhesive use in 50 board P130/k
assembling and grams g
laminating bamboo or 4,000kgs or P520,000
slats for for
80,000 sq.ft. 80,000 sq.ft.
tiles/planks/plyb tiles/planks/plyb
Lacquer clear or colored 10 P30/lite
varnish ml r
used for curing or 800 liters or 24,000
bamboo for for
80,000 sq.ft. 80,000 sq.ft.
tiles/planks/plyb tiles/planks/plyb

It should be noted that three [3] bamboo species including botong, tinik and giant
bamboo are highly recommended for manufacturing engineered bamboo
because of its erect nature, strength and abundance.
Labor
Nursery, 1 ha Plantation, 1 ha. Node [50 poles/day Hub [267sq.ft./day
Labor Rate Labor Rate capacity]
Labor Rate capacity]
Labor Rate
[Php]
Supervisor 300/day 2 [Php]
150/day 2 Cutters [Php]
160/day 1 [Php]
300/day
2 Assistant 250/day Farmer 1 Ripper 160/day Supervisor
4 Workers 200/day
[Plantin 1 Utility 150/day
g,
Total labor cost for Nurserywaterin

1 supervisor :P 300 x 240 days = P 72,000


2 assistant :P 250 x 240 days x 2 = 120,000
P 192,000

Total labor cost for Plantation


2 Farmer : P 150 x 240 days x 2 = P 72,000

Machineries, Equipment and Tools

Bamboo nursery and plantation require simple tools in farming such as shovel,

rake and bolo. Machineries and equipment requirement, estimated cost

and life span including its annual


depreciation [using straight line method] for node and hub are listed below:

Node

Est. Annual
Fixed Assets Qty. Cost/Unit Total Costs Life Dep'n

Pole cutter 1 55,000.00 55,000.00 15 3,666.67

Twin rip saw 1 120,000.00 120,000.00 10 12,000.00

Treatment vat 1 45,000.00 45,000.00 15 3,000.00

Shed 1 20,000.00 20,000.00 10 2,000.00

Total 240,000.00 17,000.00

Hub

Est. Annual
Fixed Assets Qty. Cost/Unit Total Costs Life Dep'n

Kiln dryer 1 300,000.00 300,000.00 15 20,000.00

Jointer planer 1 150,000.00 150,000.00 10 15,000.00

Thickness planer 1 200,000.00 200,000.00 10 20,000.00


Single spindle moulder 1 180,000.00 180,000.00 10 18,000.00
Manual rollers with funnel 2 1000.00 2,000.00 3 666.67

Table press with pneumatic press 1 120,000.00 120,000.00 10 12,000.00

Arm saw 1 120,000.00 120,000.00 15 8,000.00

Circular saw sliding table 1 150,000.00 150,000.00 15 10,000.00

Wide belt sander 1 430,000.00 430,000.00 10 43,000.00

Air compressor with spray gun 1 30,000.00 30,000.00 10 3,000.00

Sharpening for circular saw 1 150,000.00 150,000.00 10 15,000.00

Grinder for planer knives 1 150,000.00 150,000.00 10 15,000.00

Tools and other equipment, set 1 28,000.00 28,000.00 5 5,600.00

Building 1 300,000.00 300,000.00 10 30,000.00

Total 2,310,000.00 195,266.67

Majority of the machineries, equipment and tools for the Hub are locally
fabricated and available except for jointer plainer and thickness plainer which are
normally imported from Taiwan or China.

Production Overhead
Nursery
Particul Year 1 Year 2 Year 3
ars
Indirect Materials 1,250.0 2,068.00 2,274.80
Indirect Labor 0 - - -
Transportation 600.00 900.00 900.00
Nursery Maintenance 12,000.0 13,200.0 14,520.00
0 0

Total cash OH 13,850. 16,168.0 17,694.8


Depreciation 00
1,526.6 01,526.67 01,526.67
Total Overhead Costs 7
15,376. 17,694.6 19,221.4
67 7 7
Plantation
Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Indirect Material

Indirect Labor - - - - - -

Transportation 100.00 - - -

Replacement of Mortality 10.00 -

Maintenance cost 600.00 600.00 600.00 600.00 600.00 600.00

Total cash OH 710.00 600.00 600.00 600.00 600.00 600.00


Depreciation 542.00 542.00 542.00 542.00 542.00 542.00

Total Overhead Costs 1,252.00 1,142.00 1,142.00 1,142.00 1,142.00 1,142.00

/Node
Particulars Year 1 Year 2 Year 3
Indirect Materials - - -
Indirect Labor - - -
Transportation 12,000.00 13,200.00 14,520.00
Repairs and Maintenance 5,000.00 5,500.00 6,050.00
Water 3,000.00 3,300.00 3,630.00
Electricity 12,000.00 13,200.00 14,520.00
Total cash OH 32,000.00 35,200.00 38,720.00
Depreciation 17,000.00 17,000.00 17,000.00
Total Overhead Costs 49,000.00 52,200.00 55,720.00

Hub
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Indirect Materials - - - - -
Indirect Labor - - - - -
Transportation 48,000.00 52,800.00 58,080.00 63,888.00 70,276.80
Repairs and Maintenance 12,000.00 13,200.00 14,520.00 15,972.00 17,569.20
Water 3,000.00 3,300.00 3,630.00 3,993.00 4,392.30
Electricity 48,000.00 52,800.00 58,080.00 63,888.00 70,276.80
Total cash OH 111,000.00 122,100.00 134,310.00 147,741.00 162,515.10
Depreciation 195,266.67 195,266.67 195,266.67 195,266.67 195,266.67
Total Overhead Costs 306,266.67 317,366.67 329,576.67 343,007.67 357,781.77

III. Financial
Aspect
A. Financial Assumptions
1. An average of 6 poles per year in every bamboo clump can be harvested.
2. It requires 12.25 hectares of plantation with 7x7 meter area per clump to
produce 15,000 poles per year.
3. It requires 25 hectares of plantation with 10x10 meter area per clump to
produce 15,000 poles
per
year.
4. Average cost of hauling is P8.00/bamboo pole.
5. Cost of transport of propagule from the nursery to the plantation is
P0.50/seedling.
6. Cost of propagule is P20.00/seedling. A total of 240 propagule is required per
hectare.
7. A clump requires 300g of chemical fertilizer with equal amount of
nitrogen, phosphorus and potassium every 3 months or 1.2 kgs/year.
8. A kilogram of fertilizer is valued at P13.50/kg.
9. Labor cost for weeding P300/hectare/year.
10. Replacement of mortality is assumed at 20% of the total propagules planted.
11. Planting, watering and maintenance cost is estimated at 48 days during the
first year with labor cost of P150/day.
12. Harvesting cost is P4.00/bamboo pole.
13. It will take two months to prepare the site for nursery.
14. It will take an average of 5 months for the nursery to prepare and make
available for sale the bamboo seedlings.
th
15. Sales from bamboo seedlings will start on the 7 month of Year 1 operation
onwards.
16. A half-hectare nursery can produce 10,000 bamboo seedlings with 2 cycles
during the first year and 15,000 seedlings during the succeeding years.
17. Shading materials is estimated at P10.00 per 100 propagules.
18. Transportation cost in hauling materials is P300 per 6,000 propagules.
19. Cost of nursery maintenance is assumed at P1,000 per month.
20. Cost of fertilizer is P3.51/propagule.
th
21. An average of 6 poles per year per clump can be harvested starting 4 year.
22. One gallon of treatment material, e.g. Woodtech can treat 2,000 slats.
23. Two-week raw material inventory is allocated for the node.
24. The number of slats extracted from one bamboo pole depends on the
specie as follows: Tinik: 4 cuts of 4ft length x 8 slats = 32 slats
Botong and Giant bamboo: 6 cuts of 4ft. length x
8 slats = 48
25. Fifty [50] bamboo poles of varied species can yield an average of 1,600 slats.
26. An average of .05kg of glue per square foot of tile, plank and laminated board is
needed.
27. An average of 10ml of lacquer per square foot of tile, plank laminated board is
needed

28. One square foot of tile, plank, plybo and laminated board with inch thickness
requires 6 slats of 5mm X 1 inch x 4 ft.
29. With 1,600 slats [or 267 sq.ft./day] for 25 days operation per month in 12
months, a hub can
produce 80,000 sq.ft. of bamboo tiles/planks/plybo/laminated board with
inch thickness.
B. Total Project Cost, Nursery, Plantation, Node and Hub
Particulars Nursery Plantation Node
Hub
1. FIXED ASSETS
1.1 Land 50,000.00 100,000.00 50,000.00 100,000.00
1.2 Bamboo seedlings 10,000.00 4,800.00 20,000.00 300,000.00
1.3 Dug well and Tools 700.00 5,900.00 220,000.00 2,410,000.00
1.4 Ofice Equipment and Fixtures 5,000.00 - - -
Sub-total Fixed Assets 65,700.00 110,700.00 290,000.00 2,810,000.00

2. WORKING CAPITAL [2 months]


2.1 Direct Costs - - -
2.1.1 Direct Materials 42,060.00 10,724.40 121,500.00 354,791.92
2.1.2 Direct Labor 18,600.00 15,324.00 31,500.00 55,000.00
2.2 Production Overhead 6,925.00 2,700.00 5,333.33 55,500.00
2.3 Operating Expenses - - - -
2.3.1 Marketing Expenses 500.00 - 4,833.33 21,666.67
2.3.2 Gen. & Admin. Exps. 1,000.00 - 17,000.00 36,000.00
Sub-total Working Capital 69,085.00 28,748.40 180,166.67 522,958.58

3. PRE-OPERATING EXPENSES
3.1 Business Permit and Licensing 500.00 500.00 8,000.00 10,000.00
3.2 Trial Production 500.00 1,500.00 5,000.00 10,000.00
3.3 Business Planning &Organizing 500.00 - 5,000.00 20,000.00
3.4 Canvassing 2,000.00 - 2,000.00 5,000.00
3.5 Building construction - 2,000.00 20,000.00
Sub-total Pre-Operating Expenses 3,500.00 2,000.00 22,000.00
65,000.00

TOTAL PROJECT COSTS 138,285.00 141,448.40 492,166.67 3,397,958.58


Projected Balance Sheet, NURSERY

Pre-Op. Year 1 Year 2 Year 3


1.0 ASSETS
1.1 Current Assets

1.1.1 Cash 69,085.00 130,915.00 258,420.75 398,767.08


1.1.2 Accounts Receivables - - - -
1.1.3 Raw Mat. Inventory -
1.1.4 WP Inventory - - - -
1.1.5 FG Inventory - - - -
1.1.6 Notes Receivbles - - - -

Total Current Assets 69,085.00 130,915.00 258,420.75 398,767.08

1.2 Fixed Assets

1.2.1 Land 50,000.00 50,000.00 50,000.00 50,000.00

1.2.2 Shed 10,000.00 10,000.00 10,000.00 10,000.00


Less: Accum. Dep'n - 1,000.00 2,000.00 3,000.00

Net Book Value 10,000.00 9,000.00 8,000.00 7,000.00

1.2.3 Dugwell 5,000.00 5,000.00 5,000.00 5,000.00


Less: Accum. Dep'n 333.33 666.67 1,000.00

Net Book Value 5,000.00 4,666.67 4,333.33 4,000.00

1.2.4 Tools 700.00 700.00 700.00 700.00


Less: Accum. Dep'n 193.33 386.67 580.00

Net Book Value 700.00 506.67 313.33 120.00


1.2.5 Off. Fur. & Fixtures
Less: Accum. Dep'n - - -
Net Book Value

Total Fixed Assets 65,700.00 64,173.33 62,646.67 61,120.00

1.3 Intangible Assets

1.3.1 Pre-Op. Expenses 3,500.00 - - -


Allow. For other exps.

Total Intagible Assets 3,500.00 - - -

TOTAL ASSETS 138,285.00 195,088.33 321,067.42 459,887.08

2.0 LIABILITIES & OWNER'S EQUITY


2.1 Current Liabilities
2.1.1 Accounts Payable -
2.1.2 Loans Payable - -
2.1.3 Income Taxes Pay'ble - - - -
Total Current Liabilities - - - -
2.2 Long-Term Liabilities
2.2.1 Notes Payable
2.2.2 Long-Term Loans Pay. - -
Total Long-Term Liabilities - - - -
Sub-Total Liabilities - - - -

3.0 Owner's Equity

3.1 Capital beg. 138,285.00 138,285.00 195,088.33 321,067.42


3.2 Add: Net Income - 56,803.33 125,979.08 138,819.66
3.3 Less: Withdrawals - - - -

Net Equity 138,285.00 195,088.33 321,067.42 459,887.08

TOTAL LIABILITIES AND

OWNER'S EQUITY 138,285.00 195,088.33 321,067.42 459,887.08


Projected Income Statement, PLANTATION

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

1.0 GROSS SALES - - - 42,000.00 46,200.00 50,820.00


1.1 Less:

1.1.1 Sales Discounts - - - - - -

1.1.2 Sales Returns and Allowances - - - - - -


1.1.3 Total

NET SALES - - - 42,000.00 46,200.00 50,820.00

2.0 Less: Cost of Goods Sold


2.1 Direct Material Used
2.1.1 Raw Materials Inventory,
Beg. - - - - -

2.1.2 Add: Purchases 3,240.00 3,564.00 3,920.40 4,312.44 4,743.68 5,218.05


2.1.3 Total RM Available for
Use 3,240.00 3,564.00 3,920.40 4,312.44 4,743.68 5,218.05

2.1.4 Less: RM Inventory, End - - - - - -

2.1.5 Raw Materials Used 3,240.00 3,564.00 3,920.40 4,312.44 4,743.68 5,218.05

2.2 Direct Labor 7,800.00 4,620.00 2,904.00 5,199.30 5,719.23 6,291.15

2.3 Manufacturing Overhead 2,048.00 1,148.00 1,148.00 1,148.00 1,148.00 1,148.00

2.4 Total Manufacturing Costs 13,088.00 9,332.00 7,972.40 10,659.74 11,610.91 12,657.21

2.5 Add: Work-in-Process beg. - - - - - -

2.6 Less: Work-in-Process end - - - - - -


2.7 Total Costs of Goods
Manufactured 13,088.00 9,332.00 7,972.40 10,659.74 11,610.91 12,657.21
2.8 Add: Finished Goods
Inventory beg. - - - - - -

2.9 Total Goods Available for Sale 13,088.00 9,332.00 7,972.40 10,659.74 11,610.91 12,657.21
2.10 Less: Finished Goods
Inventory end - - - - - -

COST OF GOODS SOLD 13,088.00 9,332.00 7,972.40 10,659.74 11,610.91 12,657.21

3.0 GROSS PROFIT

4.0 LESS: OPERATING EXPENSES

4.1 Marketing Expenses - - - 9,600.00 10,560.00 11,616.00

4.2 Gen. and Admin. Expenses - - - - - -

Total Operating Expenses - - - 9,600.00 10,560.00 11,616.00


5.0 NET OPERATING PROFIT (13,088.00) (9,332.00) (7,972.40) 21,740.26 24,029.09 26,546.79

6.0 Add: Other Income - - - - - -


7.0 Less: Other Expenses

Pre-Operating Expenses 2,000.00 - - - - -


Interest/Other Unforeseen
Exps. - - - - - -

8.0 NET PROFIT BEFORE TAX (15,088.00) (9,332.00) (7,972.40) 21,740.26 24,029.09 26,546.79

9.0 Less: Taxes - - - - - -

10. NET PROFIT AFTER TAX (15,088.00) (9,332.00) (7,972.40) 21,740.26 24,029.09 26,546.79
Projected Cash Flow Statement, PLANTATION

Pre-Op Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

1.0 OPENING BALANCE

2.0 CASH INFLOW

2.1 Cash Sales - - - 42,000.00 46,200.00 50,820.00

2.2 Collections of Rec'bles - - - -

2.3 Cash Equity 41,448.40


2.4 Short-Term Borrowings

2.5 Long-Term Borrowings -

Total Cash Inflow 41,448.40 - - - 42,000.00 46,200.00 50,820.00

3.0 CASH OUTFLOW

3.1 Payments for Raw Materials 3,240.00 3,564.00 3,920.40 4,312.44 4,743.68 5,218.05

3.2 Payments for Labor 7,800.00 4,620.00 2,904.00 5,199.30 5,719.23 6,291.15

3.3 Production Overhead 1,500.00 600.00 600.00 600.00 600.00 600.00

3.4 Marketing Expenses - - - 9,600.00 10,560.00 11,616.00


3.5 Gen. & Admin.
Expenses - - - - - -
3.6 Payment of Fixed
Assets 10,700.00 - - - -

3.7 Payments for Interest - - - - - -

3.8 Payments for Loan - - - - - -

3.9 Payments for Taxes - - - - - -


3.10 Pre-Operating
Expenses 2,000.00 - - - - - -

Total Cash Outflow 12,700.00 12,540.00 8,784.00 7,424.40 19,711.74 21,622.91 23,725.21

4.0 NET CASH FLOW 28,748.40 (12,540.00) (8,784.00) (7,424.40) 22,288.26 24,577.09 27,094.79

5.0 CASH ENDING BALANCE 28,748.40 16,208.40 7,424.40 (0.00) 22,288.26 46,865.35 73,960.14
Projected Balance Sheet, PLANTATION

Pre-Op. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6


1.0 ASSETS
1.1 Current Assets

1.1.1 Cash 28,748.40 16,208.40 7,424.40 (0.00) 22,288.26 46,865.35 73,960.14


1.1.2 Accounts Receivables - - - - - - -
1.1.3 Raw Mat. Inventory - - - - - - -
1.1.4 WP Inventory - - - - - - -
1.1.5 FG Inventory - - - - - - -
1.1.6 Notes Receivbles - - - - - - -

Total Current Assets 28,748.40 16,208.40 7,424.40 (0.00) 22,288.26 46,865.35 73,960.14

1.2 Fixed Assets

1.2.1 Land 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00

1.2.2 Building 4,800.00 4,800.00 4,800.00 4,800.00 4,800.00 4,800.00 4,800.00


Less: Accum. Dep'n - - - - - - -

Net Book Value 4,800.00 4,800.00 4,800.00 4,800.00 4,800.00 4,800.00 4,800.00
1.2.3 Vehicle - - - - - - -
Less: Accum. Dep'n - - - - - -
Net Book Value - - - - - - -

1..2.4 Machinery/Equipment 5,900.00 5,900.00 5,900.00 5,900.00 5,900.00 5,900.00 5,900.00

Less: Accum. Dep'n 548.00 1,096.00 1,644.00 2,192.00 2,740.00 3,288.00

Net Book Value 5,900.00 5,352.00 4,804.00 4,256.00 3,708.00 3,160.00 2,612.00
1.2.5 Off. Fur. & Fixtures - - - - - - -
Less: Accum. Dep'n - - - - - -
Net Book Value - - - - - - -

Total Fixed Assets 110,700.00 110,152.00 109,604.00 109,056.00 108,508.00 107,960.00 107,412.00

1.3 Intangible Assets

1.3.1 Pre-Op. Expenses 2,000.00 - - - - - -


Allow. For other exps.

Total Intagible Assets 2,000.00 - - - - - -

TOTAL ASSETS 141,448.40 126,360.40 117,028.40 109,056.00 130,796.26 154,825.35 181,372.14

2.0 LIABILITIES & OWNER'S EQUITY


2.1 Current Liabilities
2.1.1 Accounts Payable -
2.1.2 Loans Payable - - - - - - -
2.1.3 Income Taxes
Pay'ble - - - - - - -
Total Current Liabilities - - - - - - -

2.2 Long-Term Liabilities


2.2.1 Notes Payable
2.2.2 Long-Term Loans Pay. - - - - -
Total Long-Term Liabilities - - - - - - -
Sub-Total Liabilities - - - - - - -

3.0 Owner's Equity

3.1 Capital beg. 141,448.40 141,448.40 126,360.40 117,028.40 109,056.00 130,796.26 154,825.35

3.2 Add: Net Income - (15,088.00) (9,332.00) (7,972.40) 21,740.26 24,029.09 26,546.79
3.3 Less: Withdrawals - - - - - - -

Net Equity 141,448.40 126,360.40 117,028.40 109,056.00 130,796.26 154,825.35 181,372.14

TOTAL LIABILITIES AND

OWNER'S EQUITY 141,448.40 126,360.40 117,028.40 109,056.00 130,796.26 154,825.35 181,372.14


Projected Income Statement, NODE

Year 1 Year 2 Year 3

1.0 GROSS SALES 1,560,000.00 1,638,000.00 1,801,800.00


1.1 Less:
1.1.1 Sales Discounts - - -
1.1.2 Sales Returns and Allowances - - -
1.1.3 Total
NET SALES 1,560,000.00 1,638,000.00 1,801,800.00

2.0 Less: Cost of Goods Sold


2.1 Direct Material Used
2.1.1 Raw Materials Inventory, Beg. - 28,038.46 32,783.79
2.1.2 Add: Purchases 729,000.00 824,340.00 933,926.40
2.1.3 Total RM Available for Use 729,000.00 852,378.46 966,710.19
2.1.4 Less: RM Inventory, End 28,038.46 32,783.79 37,181.16
2.1.5 Raw Materials Used 700,961.54 819,594.67 929,529.03
2.2 Direct Labor 189,000.00 207,900.00 228,690.00
2.3 Manufacturing Overhead 49,000.00 52,200.00 55,720.00
2.4 Total Manufacturing Costs 938,961.54 1,079,694.67 1,213,939.03
2.5 Add: Work-in-Process beg. - - -
2.6 Less: Work-in-Process end - - -
2.7 Total Costs of Goods Manufactured 938,961.54 1,079,694.67 1,213,939.03
2.8 Add: Finished Goods Inventory beg. - - -
2.9 Total Goods Available for Sale 938,961.54 1,079,694.67 1,213,939.03
2.10 Less: Finished Goods Inventory end - - -
COST OF GOODS SOLD 938,961.54 1,079,694.67 1,213,939.03

3.0 GROSS PROFIT

4.0 LESS: OPERATING EXPENSES


4.1 Marketing Expenses 29,000.00 31,900.00 35,090.00
4.2 Gen. and Admin. Expenses 102,000.00 112,200.00 123,420.00
Total Operating Expenses 131,000.00 144,100.00 158,510.00

5.0 NET OPERATING PROFIT

6.0 Add: Other Income - - -


7.0 Less: Other Expenses
Pre-Operating Expenses 22,000.00 - -
Interest/Other Unforeseen Exps. 53,786.25 33,296.25 12,806.25

8.0 NET PROFIT BEFORE TAX 414,252.21 380,909.08 416,544.72

9.0 Less: Taxes - - -

10. NET PROFIT AFTER TAX 414,252.21 380,909.08 416,544.72


Projected Cash Flow Statement, NODE

Pre-Op Year 1 Year 2 Year 3

1.0 OPENING BALANCE

2.0 CASH INFLOW


2.1 Cash Sales 1,560,000.00 1,638,000.00 1,801,800.00
2.2 Collections of Rec'bles - -
2.3 Cash Equity 100,666.67
2.4 Short-Term Borrowings
2.5 Long-Term Borrowings 341,500.00
Total Cash Inflow 442,166.67 1,560,000.00 1,638,000.00 1,801,800.00

3.0 CASH OUTFLOW


3.1 Payments for Raw Materials 729,000.00 824,340.00 933,926.40
3.2 Payments for Labor 189,000.00 207,900.00 228,690.00
3.3 Manufacturing Overhead 32,000.00 35,200.00 38,720.00
3.4 Marketing Expenses 29,000.00 31,900.00 35,090.00
3.5 Gen. & Admin. Expenses 102,000.00 112,200.00 123,420.00
3.6 Payment of Fixed Assets 240,000.00 - -
3.7 Payments for Interest 53,786.25 33,296.25 12,806.25
3.8 Payments for Loan 113,833.33 113,833.33 113,833.33
3.9 Payments for Taxes - - -
3.10 Pre-Operating Expenses 22,000.00 - - -
Total Cash Outflow 262,000.00 1,248,619.58 1,358,669.58 1,486,485.98

4.0 NET CASH FLOW


180,166.67 311,380.42 279,330.42 315,314.02
5.0 CASH ENDING BALANCE
Projected Balance Sheet, NODE

Pre-Op. Year 1 Year 2 Year 3


1.0 ASSETS
1.1 Current Assets

1.1.1 Cash 180,166.67 491,547.08 770,877.50 1,086,191.52


1.1.2 Accounts Receivables - - - -
1.1.3 Raw Mat. Inventory - 28,038.46 32,783.79 37,181.16
1.1.4 WP Inventory - - - -
1.1.5 FG Inventory - - - -
1.1.6 Notes Receivbles - - - -

Total Current Assets 180,166.67 519,585.54 803,661.29 1,123,372.68

1.2 Fixed Assets

1.2.1 Land 50,000.00 50,000.00 50,000.00 50,000.00

1.2.2 Building 20,000.00 20,000.00 20,000.00 20,000.00


Less: Accum. Dep'n - 2,000.00 4,000.00 6,000.00

Net Book Value 20,000.00 18,000.00 16,000.00 14,000.00


1.2.3 Vehicle - - - -
Less: Accum. Dep'n - - -
Net Book Value - - - -

1.2.4 Machinery/Equipment 220,000.00 220,000.00 220,000.00 220,000.00


Less: Accum. Dep'n 15,000.00 30,000.00 45,000.00

Net Book Value 220,000.00 205,000.00 190,000.00 175,000.00


1.2.5 Off. Fur. & Fixtures - - - -
Less: Accum. Dep'n - - -
Net Book Value - - - -

Total Fixed Assets 290,000.00 273,000.00 256,000.00 239,000.00

1.3 Intangible Assets

1.3.1 Pre-Op. Expenses 22,000.00 - - -


Allow. For other exps.

Total Intagible Assets 22,000.00 - - -

TOTAL ASSETS 492,166.67 792,585.54 1,059,661.29 1,362,372.68

2.0 LIABILITIES & OWNER'S EQUITY


2.1 Current Liabilities
2.1.1 Accounts Payable -
2.1.2 Loans Payable - 113,833.33 113,833.33 -
2.1.3 Income Taxes Pay'ble - - - -
Total Current Liabilities - 113,833.33 113,833.33 -

2.2 Long-Term Liabilities


2.2.1 Notes Payable

2.2.2 Long-Term Loans Pay. 341,500.00 113,833.33 -

Total Long-Term Liabilities 341,500.00 113,833.33 - -

Sub-Total Liabilities 341,500.00 227,666.67 113,833.33 -

3.0 Owner's Equity

3.1 Capital beg. 150,666.67 150,666.67 564,918.88 945,827.95


3.2 Add: Net Income - 414,252.21 380,909.08 416,544.72
3.3 Less: Withdrawals - - - -

Net Equity 150,666.67 564,918.88 945,827.95 1,362,372.68

TOTAL LIABILITIES AND

OWNER'S EQUITY 492,166.67 792,585.54 1,059,661.29 1,362,372.68

39
Projected Income Statement, HUB

Year 1 Year 2 Year 3 Year 4 Year 5

1.0 GROSS SALES 4,800,000.00 5,808,000.00 7,027,680.00 8,503,492.80 10,289,226.29


1.1 Less:
1.1.1 Sales Discounts - - - - -
1.1.2 Sales Returns and Allowances - - - - -
1.1.3 Total

NET SALES 4,800,000.00 5,808,000.00 7,027,680.00 8,503,492.80 10,289,226.29

2.0 Less: Cost of Goods Sold


2.1 Direct Material Used

2.1.1 Raw Materials Inventory, Beg. 81,875.06 99,811.60 118,153.73 139,953.74

2.1.2 Add: Purchases 2,128,751.50 2,513,226.65 2,972,185.32 3,520,643.41 4,176,707.61

2.1.3 Total RM Available for Use 2,128,751.50 2,595,101.71 3,071,996.92 3,638,797.13 4,316,661.35

2.1.4 Less: RM Inventory, End 81,875.06 99,811.60 118,153.73 139,953.74 166,025.44

2.1.5 Raw Materials Used 2,046,876.44 2,495,290.10 2,953,843.19 3,498,843.40 4,150,635.91

2.2 Direct Labor 330,000.00 363,000.00 399,300.00 439,230.00 483,153.00

2.3 Manufacturing Overhead 306,266.67 317,366.67 329,576.67 343,007.67 357,781.77

2.4 Total Manufacturing Costs 2,683,143.11 3,175,656.77 3,682,719.86 4,281,081.06 4,991,570.68


2.5 Add: Work-in-Process beg. - - - - -
2.6 Less: Work-in-Process end - - - - -

2.7 Total Costs of Goods Manufactured 2,683,143.11 3,175,656.77 3,682,719.86 4,281,081.06 4,991,570.68
2.8 Add: Finished Goods Inventory beg. - - - - -

2.9 Total Goods Available for Sale 2,683,143.11 3,175,656.77 3,682,719.86 4,281,081.06 4,991,570.68
2.10 Less: Finished Goods Inventory end - - - - -

COST OF GOODS SOLD 2,683,143.11 3,175,656.77 3,682,719.86 4,281,081.06 4,991,570.68

3.0 GROSS PROFIT

4.0 LESS: OPERATING EXPENSES

4.1 Marketing Expenses 130,000.00 143,000.00 157,300.00 157,300.00 173,030.00

4.2 Gen. and Admin. Expenses 72,000.00 79,200.00 87,120.00 95,832.00 105,415.20

Total Operating Expenses 202,000.00 222,200.00 244,420.00 253,132.00 278,445.20

5.0 NET OPERATING PROFIT

40
6.0 Add: Other Income - - - - -
7.0 Less: Other Expenses

Pre-Operating Expenses 65,000.00 - - - -

Interest/Other Unforeseen Exps. 460,539.00 360,963.00 261,387.00 161,811.00 62,235.00

8.0 NET PROFIT BEFORE TAX 1,389,317.89 2,049,180.23 2,839,153.14 3,807,468.74 4,956,975.41

9.0 Less: Taxes - - - - -

10. NET PROFIT AFTER TAX 1,389,317.89 2,049,180.23 2,839,153.14 3,807,468.74 4,956,975.41
Projected Cash Flow Statement, HUB

Pre-Op Year 1 Year 2 Year 3 Year 4 Year 5

1.0 OPENING BALANCE

2.0 CASH INFLOW

2.1 Cash Sales 4,800,000.00 5,808,000.00 7,027,680.00 8,503,492.80 10,289,226.29

2.2 Collections of Rec'bles - - - -

2.3 Cash Equity 531,958.58


2.4 Short-Term Borrowings

2.5 Long-Term Borrowings 2,766,000.00

Total Cash Inflow 3,297,958.58 4,800,000.00 5,808,000.00 7,027,680.00 8,503,492.80 10,289,226.29

3.0 CASH OUTFLOW

3.1 Payments for Raw Materials 2,128,751.50 2,513,226.65 2,972,185.32 3,520,643.41 4,176,707.61

3.2 Payments for Labor 330,000.00 363,000.00 399,300.00 439,230.00 483,153.00

3.3 Manufacturing Overhead 111,000.00 122,100.00 134,310.00 147,741.00 162,515.10

3.4 Marketing Expenses 130,000.00 143,000.00 157,300.00 157,300.00 173,030.00

3.5 Gen. & Admin. Expenses 72,000.00 79,200.00 87,120.00 95,832.00 105,415.20

3.6 Payment of Fixed Assets 2,710,000.00 - - - -

3.7 Payments for Interest 460,539.00 360,963.00 261,387.00 161,811.00 62,235.00

3.8 Payments for Loan 553,200.00 553,200.00 553,200.00 553,200.00 553,200.00

3.9 Payments for Taxes - - - - -

3.10 Pre-Operating Expenses 65,000.00 - - - - -

Total Cash Outflow 2,775,000.00 3,785,490.50 4,134,689.65 4,564,802.32 5,075,757.41 5,716,255.91

4.0 NET CASH FLOW


522,958.58 1,014,509.50 1,673,310.35 2,462,877.69 3,427,735.39 4,572,970.37
5.0 CASH ENDING
BALANCE
Projected Balance Sheet, HUB

Pre-Op. Year 1 Year 2 Year 3 Year 4 Year 5


1.0 ASSETS
1.1 Current Assets

1.1.1 Cash 522,958.58 1,537,468.08 3,210,778.43 5,673,656.12 9,101,391.51 13,674,361.89


1.1.2 Accounts
Receivables - - - - - -

1.1.3 Raw Mat. Inventory - 81,875.06 99,811.60 118,153.73 139,953.74 166,025.44

1.1.4 WP Inventory - - - - - -

1.1.5 FG Inventory - - - - - -

1.1.6 Notes Receivbles - - - - - -

Total Current Assets 522,958.58 1,619,343.14 3,310,590.04 5,791,809.85 9,241,345.25 13,840,387.32

1.2 Fixed Assets

1.2.1 Land 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00

1.2.2 Building 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00


Less: Accum.
Dep'n - 30,000.00 60,000.00 90,000.00 120,000.00 150,000.00

Net Book Value 300,000.00 270,000.00 240,000.00 210,000.00 180,000.00 150,000.00

1.2.3 Vehicle - - - - - -
Less: Accum.
Dep'n - - - - -

Net Book Value - - - - - -


1.2.4
Machinery/Equipment 2,410,000.00 2,410,000.00 2,410,000.00 2,410,000.00 2,410,000.00 2,410,000.00

Less: Accum. Dep'n 165,266.67 330,533.33 495,800.00 661,066.67 826,333.33

Net Book Value 2,410,000.00 2,244,733.33 2,079,466.67 1,914,200.00 1,748,933.33 1,583,666.67

1.2.5 Off. Fur. & Fixtures - - - - - -

Less: Accum. Dep'n - - - - -

Net Book Value - - - - - -

Total Fixed Assets 2,810,000.00 2,614,733.33 2,419,466.67 2,224,200.00 2,028,933.33 1,833,666.67

1.3 Intangible Assets

1.3.1 Pre-Op. Expenses 65,000.00 - - - - -


Allow. For other
exps.

Total Intagible Assets 65,000.00 - - - - -


TOTAL ASSETS 3,397,958.58 4,234,076.47 5,730,056.70 8,016,009.85 11,270,278.58
15,674,053.99

2.0 LIABILITIES & OWNER'S EQUITY


2.1
Curr
ent
Liabi
lities
2.1.1 Accounts Payable -

2.1.2 Loans Payable - 553,200.00 553,200.00 553,200.00 553,200.00


-
2.1.3 Income Taxes
Pay'ble - - - - -
-

Total Current Liabilities - 553,200.00 553,200.00 553,200.00 553,200.00


-

2.2 Long-Term
Liabilities
2.2.1 Notes Payable
2.2.2 Long-Term Loans
Pay. 2,766,000.00 1,659,600.00 1,106,400.00 553,200.00 -
-
Total Long-Term
Liabilities 2,766,000.00 1,659,600.00 1,106,400.00 553,200.00 - -

Sub-Total Liabilities 2,766,000.00 2,212,800.00 1,659,600.00 1,106,400.00 553,200.00 -

3.0 Owner's Equity

3.1 Capital beg. 631,958.58 631,958.58 2,021,276.47 4,070,456.70 6,909,609.85 10,717,078.58

3.2 Add: Net Income - 1,389,317.89 2,049,180.23 2,839,153.14 3,807,468.74 4,956,975.41

3.3 Less: Withdrawals - - - - - -

Net Equity 631,958.58 2,021,276.47 4,070,456.70 6,909,609.85 10,717,078.58 15,674,053.99

TOTAL LIABILITIES AND

OWNER'S EQUITY 3,397,958.58 4,234,076.47 5,730,056.70 8,016,009.85 11,270,278.58 15,674,053.99