Financial Plan
List of Financial Assumptions

General * The maximum number of incorporators is 5 members * The term of existence of the company is for 10 months from October 2014 to July 2015. * For 10 months of business operations, 9 months will be used for production / operations and marketing. 1 month for Auditing and Dissolution * Full subcontracting is allowed from the start of business operations * No maximum capital contribution * Accrual Basis of accounting

Project Cost Statement * Cost Covered will be for the first two month of operations * Fixed capital outlay consists of tools, equipment and machines purchased

Budgets * Worker’s wages are P _____ / hour (use the actual worker’s minimum wages – see minimum wage law and should be based on the industry they belong to) * 8 hours of production in a week (if not full subcontract) * Overtime rate is P _____ / hour (+ 25 % of minimum worker’s wages) (If you use P 10 / hour as your worker’s wage, then overtime rate is P 12.50 / hour – if not full subcontract) * Number of group members (partners or incorporators) will remain constant for the entire life of the firm * Inflation rate is ______ (applied to materials or supplies) * If the group would use one of the proponent’s residence as their plant site, the plant site/office site rent is P 300 / month (Inclusive of Utilities). It not, plant site / office site rent is P ____/ month (The group should use the actual rental fee of their plant area). Inclusive of utilities (Note : It should depend upon the contract, if it’s not inclusive, then they have to pay the electricity and water bill.) * Equipment rental fees are P _____ / month. (Use the actual rental cost) * Depreciation expense (if applicable) is computed using the straight line method across 10 months with zero salvage value * Factory overhead consists of plant site / office site rent, equipment rent, depreciation expense, transportation expense (for purchasing materials), and maintenance expense. – Should be consistent with Accounting Manual

Income Statement * PRCENT companies are required to participate in PRCENT Bazaar for PRCENT1 and PRCENT2, PRCENT 3 is optional due to liquidation phase on the last month of business * Administrative salary scale: (Please use the actual minimum administrative salary. Research on real salaries of President, Managers, and Officers of similar sized / same business organizations.) President P ____ / week (minimum P 30 / week) Managers P ____ / week (minimum P 25 / week) Officers P ____ / week (minimum P 20 / week) * Compensation for corporate officers : (if form of ownership adopted is corporation) Chairman of the Board P 15 / board meeting Corporate Secretary P 10 / board meeting Treasurer P 10 / board meeting * Registration Fees : (Please use the fees in actual government registration – Research on figures for application, we should also advise them as to which government office to register given the nature of the business)

Barangay Permit P _______ BFAD P _______ (if food) SEC P 1,670 BIR P 500 Mayor’s Office P 2,997.50 DTI P 165.00 * Auditing fee of <FREE> will be paid in PRCENT3 (on the last month of operations). However, if the group wishes to hire external auditor, they have to pay the compensation of their hired auditor.

* Computation of tax rate is as follows :
GRADUATED INCOME TABLE (For Individual Taxpayers)
INCOME BEFORE TAXES TAX RATE * Over P 500,000 = P 125,000 + 32% of the excess over P 500,000 * Over P 250,000 but not over P 500,000 = P 50,000 + 30% of the excess over P 250,000 * Over P 140,000 but not over P 250,000 = P 22,500 + 25% of the excess over P 140,000 * Over P 70,000 but not over P 140,000 = P 8,500 + 20% of the excess over P 70,000 * Over P 30,000 but not over P 70,000 = P 2,500 + 15% of the excess over P 30,000 * Over P 10,000 but not over P 30,000 = P 500 + 10% of the excess over P 10,000 * Not over P 10,000 = 5% Source: http://www.bir.gov.ph/taxcode/1577.htm

* Taxes will be paid in PRCENT3 (on the last month of operations) * FIFO method shall be used in valuing sales * Bazaar fee (inside DLSU campus) is based on gross sales made during the week * Use actual bazaar fees for external bazaars Gross Sales | Bazaar fee | More than P 49,999 | 6 % of Gross Sales | 40,001 – 49,999 | 5 % of Gross Sales | 30,001 – 40,000 | 4 % of Gross Sales | 20,001 – 30,000 | 3 % of Gross Sales | 10,001 – 20,000 | 2 % of Gross Sales | 5,001 – 10,000 | 1 % of Gross Sales | Less than 5,001 | ½ of 1 % of Gross Sales 0r P 50 whichever is higher |

Cash Flow Statement * All purchases shall be on a cash basis * All expenses are paid in cash when they are incurred

Balance Sheet * No liabilities nor any account receivable shall be incurred * No sources of funds except the incorporators * No dividends shall be declared until dissolution * All profits are retained with the company and used as part of operating capital * The number of owner/stockholders shall remain the same throughout the Practicum * Organization Cost includes : Registration fees, stock certificate, financial books (Accounting Kit), and other expenses incurred establishing the business