Table 28

Projected Income Statement

PROJECTED INCOME STATEMENT

Description 2020 2021 2022 2023 2024
Net Sales ₱4,367,791 ₱4,839,668 ₱5,287,060 ₱5,702,659 ₱6,205,287
Less: Cost of Goods Sold 3,014,426 3,426,767 3,659,107 3,862,687 4,142,251
Gross Profit 1,353,365 1,412,901 1,627,953 1,839,972 2,063,036
Less: Operating Expenses:
Rent Expenses 225,000 229,500 234,090 238,772 243,547
Depreciation Expenses 57,044 57,044 57,044 57,044 57,044
Promotional Expenses 10,000 10,200 10,404 10,612 10,824
Advertising Expense 5,500 5,610 5,610 5,610 5,610
Utilities Expense 124,768 127,263 129,808 132,404 135,053
Supplies Expense 9,450 9,639 9,832 10,028 10,229
Permits and licenses 4,371 4,458 4,548 4,639 4,731
Salaries & Wages 358,692 365,866 373,183 380,646 388,259
Employer's Contribution 21,353 21,924 22,257 22,351 22,928
Total 816,177 831,503 846,775 862,107 878,225
Net Income before Tax 537,188 581,398 781,178 977,866 1,184,810
Less: Income Tax Due 64,297 75,349 125,294 183,360 245,443
Net Income after Tax ₱472,891 ₱506,048 ₱655,883 ₱794,506 ₱939,367

1
 Table 30

Sales Distribution

Year Product Normal Production Annual Sale Sales Price per unit Sales
Furniture:
Cabinet 23 22 Php26,999.00 593,978
Sala set 31 30 Php24,999.00 749,970
Bed - Single 28 27 Php18,999.00 512,973
2020
Bed - Twin 19 18 Php19,999.00 359,982
Dining table 47 45 Php20,999.00 944,955
Coffee table 70 67 Php17,999.00 1,205,933
218 209 4,367,791
Furniture:
Cabinet 25 24 Php27,538.98 660,936
Sala set 34 33 Php25,498.98 841,466
Bed - Single 31 30 Php19,378.98 581,369
2021
Bed - Twin 20 19 Php20,398.98 387,581
Dining table 50 48 Php21,418.98 1,028,111
Coffee table 76 73 Php18,358.98 1,340,206
236 227 4,839,668
Furniture:
Cabinet 27 26 Php28,089.76 730,334
Sala set 36 35 Php26,008.96 910,314
Bed - Single 32 31 Php19,766.56 612,763
2022
Bed - Twin 22 21 Php20,806.96 436,946
Dining table 54 52 Php21,847.36 1,136,063
Coffee table 81 78 Php18,726.16 1,460,640
252 243 5,287,060

2
 Furniture:
Cabinet 29 28 Php28,651.55 802,244
Sala set 38 36 Php26,529.14 955,049
Bed - Single 34 32 Php20,161.89 645,181
2023
Bed - Twin 23 22 Php21,223.10 466,908
Dining table 58 56 Php22,284.31 1,247,921
Coffee table 86 83 Php19,100.68 1,585,357
268 257 5,702,659
Furniture:
Cabinet 31 30 Php29,224.59 876,738
Sala set 41 39 Php27,059.72 1,055,329
Bed - Single 37 35 Php20,565.13 719,780
2024
Bed - Twin 24 23 Php21,647.56 497,894
Dining table 61 59 Php22,729.99 1,341,070
Coffee table 92 88 Php19,482.70 1,714,477
286 274 6,205,287

3
 I. Statement of Owner's Equity

The statement of changes in equity is a formal statement

that shows the movements in the elements or components of the

shareholder’s equity. It shows the comprehensive income for

the period, the effect of changes in accounting policies and

correction of errors, a reconciliation between the carrying

amount at the beginning and the end of the period, and

separately disclosing changes from profit or loss, each item

of other comprehensive income and the transactions with

owners in their capacity as owners showing separately

contributions by and distributions to owners.

Table 47

Projected Statement of Owner's Equity

PROJECTED STATEMENT OF CHANGES IN OWNER'S EQUITY

Description Year 1 Year 2 Year 3 Year 4 Year 5
Beginning Capital 1,316,434 1,569,458 1,897,400 2,294,653
Add: Investment 1,079,989 - - - -
Net Income 472,891 506,048 655,883 794,506 939,367
Less: Withdrawals (236,445) (253,024) (327,942) (397,253) (469,684)
ENDING CAPITAL (PHP) 1,316,434 1,569,458 1,897,400 2,294,653 2,764,336

This table shows the projected statement of owner's equity

for five years. There is no beginning capital for the first

year, while the ending capital of the preceding years will

4
 Table 50

Projected Statement of Cash Flows

PROJECTED STATEMENT OF CASH FLOWS

Description Year 1 Year 2 Year 3 Year 4 Year 5
Net Income (Loss) 472,891 506,048 655,883 794,506 939,367
Add:
Depreciation - Building Improvements 5,476 5,476 5,476 5,476 5,476
Depreciation - Tools and Utensils 2,981 2,981 2,981 2,981 2,981
Depreciation - Machinery and Equipment 14,308 14,308 14,308 14,308 14,308
Depreciation - Furniture and Fixture 8,784 8,784 8,784 8,784 8,784
Depreciation - Delivery Vehicle 33,300 33,300 33,300 33,300 33,300
Increase in Raw Materials Inventory (10,810) 3,458 (2,746) (13,284) 482
Increase in Finished Goods Inventory (128,582) - - (30,183) (13,503)
Cash provided (used) by Operating Activities 398,348 574,355 717,986 815,888 991,195

INVESTING ACTIVITIES
Building improvements (30,420)
Tools and Utensils (16,561)
Machinery and Equipment (79,490)
Furniture and Fixtures (48,800)
Delivery Vehicle (370,000)
Rent Deposit and Advance (100,000)
Cash provided (used) by Investing Activities (645,271)

FINANCING ACTIVITIES
Withdrawals (236,445) (253,024) (327,942) (397,253) (469,684)
Investments 1,079,989
Cash provided (used) by Financing Activities 843,543 (253,024) (327,942) (397,253) (469,684)

NET CASH PROVIDED 596,620 321,331 390,045 418,635 521,511

Beginning Cash - 596,620 917,951 1,307,995 1,726,631
ENDING CASH BALANCE ₱596,620 ₱917,951 ₱1,307,995 ₱1,726,631 ₱2,248,142

5
 Table 51

Projected Statement of Financial Position

PROJECTED STATEMENT OF FINANCIAL POSITION

Description Year 1 Year 2 Year 3 Year 4 Year 5
ASSETS
Current Assets:
Cash 596,620 917,951 1,307,995 1,726,631 2,248,142
Inventories
Finished Goods Inventory, end 128,582 128,582 128,582 158,764 172,267
Raw Materials Inventory, end 10,810 7,352 10,098 23,382 22,900
Total Current Assets 736,012 1,053,885 1,446,675 1,908,777 2,443,309

Noncurrent Assets:
Rent Deposit 100,000 100,000 100,000 100,000 100,000
Building Improvements 24,944 19,469 13,993 8,518 3,042
Tools and Utensils 13,580 10,599 7,618 4,637 1,656
Furniture and Fixtures 40,016 31,232 22,448 13,664 4,880
Machinery And Equipment 65,182 50,874 36,565 22,257 7,949
Delivery Vehicle 336,700 303,400 270,100 236,800 203,500
Total Noncurrent Assets (net) 580,422 515,574 450,725 385,876 321,027
TOTAL ASSETS (PHP) 1,316,434 1,569,458 1,897,400 2,294,653 2,764,336
LIABILITIES AND EQUITY
Capital 1,316,434 1,569,458 1,897,400 2,294,653 2,764,336
TOTAL LIABILITIES AND EQUITY (PHP) 1,316,434 1,569,458 1,897,400 2,294,653 2,764,336

This table shows the projected statement of financial position for five years.

It is composed of asset, liabilities and equity.

6
B. Financial Statements Analysis

I. Payback Period

Payback is the length express in years to recover the

initial cost of investment. The shorter the payback period,

other things held constant, the greater the projects

liquidity. The payback period is often used as an indicator

of the project’s riskiness. The shorter the payback period

the lesser the risk on investment, hence more favorable.

Table 52
Payback Period

Payback Period
Year Annual Cash Flows Initial Investment Payback Period
0 - 1,079,989
2020 398,348 1.00
2021 574,355 1.00
2022 717,986 0.15
2023 815,888
2024 991,195
Payback Period 2.15

The payback period shows the investment of the business

maybe recovered for less than a year, .40 to be exact. The

computed payback period is a good indicator of investing in

7
the project as a longer period are typically undesirable for

investments.

II. Return on Investment.

A performance measure used to evaluate the efficiency of

an investment or to compare the efficiency of a number of

different investments. To calculate ROI, the benefit (return)

of an investment is divided by the cost of the investment;

the result is expressed as a percentage or a ratio.

Table 53
Return on Investment

Return on Initial Investment

Year Net Income Initial Investment ROI
2020 472,891 1,079,989 44%
2021 506,048 1,079,989 47%
2022 655,883 1,079,989 61%
2023 794,506 1,079,989 74%
2024 939,367 1,079,989 87%

This table shows the return on investment. The net income for

each year divided by the initial investment of Php1,079,989.

8
III. Net Present Value

The net present value (NPV) or net present worth (NPW) of a

time series of cash flows, both incoming and outgoing, is

defined as the sum of the present value (PVs) of the

individual cash flows of the same entity less the original

investment.

Table 54

Net Present Value

Net Present Value

Year Source Cash Inflows PV of 1 @ 12% PV of Cash Inflows
2020 Annual Net Cash Return 537,740 0.892857143 480,125
2021 Annual Net Cash Return 570,897 0.797193878 455,116
Dec. in Working Cap – Invty 3,458 0.797193878 2,757
2022 Annual Net Cash Return 720,732 0.711780248 513,003
2023 Annual Net Cash Return 859,355 0.635518078 546,135
2024 Annual Net Cash Return 1,004,216 0.567426856 569,819
Salvage Value – Bldg 3,042 0.567426856 1,726
Salvage Value – Vehicle 37,000 0.567426856 20,995
Salvage Value – Machineries 7,949 0.567426856 4,510
Salvage Value – Tools 1,656 0.567426856 940
Salvage Value – F&F 4,880 0.567426856 2,769
PV of Cash Inflows 2,597,895

Year Source Cash Outflows PV of 1 @ 12% PV of Cash Outflows

2020 Net Initial Investment -1,079,989 1.00 -1,079,989
Inc. in Working Cap – Invty -198,625 0.89 -177,344

2022 -1,257,333

Net Present Value 1,340,562

The present value of all cash outflows has been detected to

the total present value all the cash inflows of the

business for five years.

9
 SCHEDULE OF EMPLOYER'S SHARE YEAR 1
Position SSS PhilHealth PAG-IBIG Total Mo. Er Annual Er
Carpenter 400.00 134.11 100.00 634.11 7,609.30
Driver 380.00 128.81 100.00 608.81 7,305.78
Driver's helper 360.00 125.29 100.00 585.29 7,023.43
Sales Person 360.00 125.29 100.00 585.29 7,023.43
TOTAL (PHP) 1,500.00 PHP 513.49 PHP 400.00 PHP 2,413.49 PHP 28,961.93

SCHEDULE OF EMPLOYER'S SHARE YEAR 2

Position SSS PhilHealth PAG-IBIG Total Mo. Er Annual Er
Carpenter 400.00 136.79 100.00 636.79 7,641.49
Driver 380.00 131.39 100.00 611.39 7,336.69
Driver's helper 380.00 127.79 100.00 607.79 7,293.49
Sales Person 380.00 127.79 100.00 607.79 7,293.49
TOTAL (PHP) 1,540.00 PHP 523.76 PHP 400.00 PHP 2,463.76 PHP 29,565.16

SCHEDULE OF EMPLOYER'S SHARE YEAR 3

Position SSS PhilHealth PAG-IBIG Total Mo. Er Annual Er
Carpenter 400.00 139.53 100.00 639.53 7,674.32
Driver 400.00 134.02 100.00 634.02 7,608.22
Driver's helper 380.00 130.35 100.00 610.35 7,324.16
Sales Person 380.00 130.35 100.00 610.35 7,324.16
TOTAL (PHP) 1,560.00 PHP 534.24 PHP 400.00 PHP 2,494.24 PHP 29,930.87

SCHEDULE OF EMPLOYER'S SHARE YEAR 4

Position SSS PhilHealth PAG-IBIG Total Mo. Er Annual Er
Carpenter 420.00 142.32 100.00 662.32 7,947.80
Driver 400.00 136.70 100.00 636.70 7,640.39
Driver's helper 380.00 132.95 100.00 612.95 7,355.45
Sales Person 380.00 132.95 100.00 612.95 7,355.45
TOTAL (PHP) 1,580.00 PHP 544.92 PHP 400.00 PHP 2,524.92 PHP 30,299.08

10