The financial study proves that the business is financially feasible.

It shows how
profitable and effective the business is, its liquidity in meeting obligations and its ability to grow
and expand. Through the financial statements reports and financial ratios that will be provided, it
will help the people to have an understanding on the way the business operates financially.
Major Assumptions
1. Income will be derived from the daily/monthly sales of the Gloss Shoe Shine.

2. The employees shall have the following basic salary

Personnel No. of personnels Monthly salary

Manager 1 Php 10,000
Sales Personnel 2 12,000
Production Staff 4 24,000
Total Monthly salary Php 46,000

3. Office supplies shall consist of the daily use items such as coupon bonds, fastener, paper clips
etc. Purchase of office supplies shall be fixed at P7,500.00. The office supplies used shall be
90% of the total office supplies available for use.

4. Fringe benefits shall include the following:

SSS Contribution
Philhealth Contribution
PAG-IBIG Contribution
Rice subsidy Php18,000/year/employee
Christmas Bonus Php 2,500/employee
13th month Php 6,000 (Manager); Php 4,000 (Sales Personnel & Production Staff)

5. Utilities required shall consist of Electricity, Water and Telecommunications. It is assumed

that the electricity rate shall be Php 8.6959/KWh based on the current rate of BENECO and
water is charged Php 35.60/cubic meter. The cost for telecommunications will be at
P1,000.00/month. The electricity consumption is assumed to be 1800 KWh annually and Water
consumption is assumed to be 1800 cum. The inflation rate shall increase by 5% applicable to all
utilities.
6. Business and Licenses are composed of SEC registration fee, City government’s permit,
community tax permit, business name registration, BIR clearance certification and business tax
fee.

7. Depreciation Expense
Charcoal Crushing Machine 10 years
Large Frying Pan & Containers 8 years
Computer Set 5 years
Cabinet 5 years
Tables & Chairs 5 years
Waste Bins 5 years

8. Repairs and Maintenance for office equipment and furniture shall include the small repairs of
bulbs, computers, etc and assumed to have an average cost of Php 2,000.00 per year.

9. Licenses and Business Taxes shall be based on the prevailing rates.

10. The partners’ drawing is assumed to be 10% of prior years share in net income.

Total Project Cost

Items Projected/estimated costs
Capitalization Php 50,000.00
Equipment 143,600.00
Rent 25,000.00
Registration Expenses(permits and licenses) 30,000.00
Utility expenses 7,691.29
Research and Development 50,000.00

Totals Php 306,291.29

SOURCE OF FINANCING
In order to achieve the construction and the operating costs, the partners shall finance the project.
The 4 partners of the business will contribute cash amounting to Php 80,000.00 each as their
initial investment. The total investment would be Php 320,000.00.

FINANCIAL STATEMENTS
The following financial statements provide an overview of the business’ financial condition in
both short and long term. All the relevant information of the business enterprise is presented in
order for the interested users understand the business operations. Financial Statements of the
business is presented in the succeeding pages.