Senior High School

Business Enterprise Simulation

Quarter 3 - Module 8:
Financial Plan

Writer:
ELSA A. LAQUINDANUM
Master Teacher-I San Isidro HS
Bacolor South
Editors:
JANE P. VALENCIA, EdD – Math/ABM Supervisor
CHAIRMAN
SHEILA MARIE ANN M. GALURA – Teacher II
SHARINETTE R. CORONEL – Teacher II
 What I Need to Know

This module was designed and written with you in mind. It is here to help
you master the crafting of Enterprise Business Plan. The scope of this module
permits it to be used in many different learning situations. The language used
recognizes the diverse vocabulary level of students. The lessons are arranged to
follow the standard sequence of the course. But the order in which you read them
can be changed to correspond with the textbook you are now using.

This module titled “Financial Plan” is composed of one lesson with sub-topics,
namely:
 Lesson 1 – Financial Plan
o Financial plan
o Financial statements
o Financial analysis

After going through this module, you are expected to:

1. Craft a financial plan, the inputs of which are from the results of the
marketing plan (sales) and operations plan (operating costs)
2. Craft a financial plan which will define the financial goals that will be
his/her target upon eventual execution;
 What I
Know

Multiple Choice. Encircle the letter of the correct answer.

1. A ___________________ projects how much start-up capital is needed, sources
of capital, returns on investment, and other financial considerations.
A. Operational plan
B. Financial plan
C. Management plan
D. Marketing plan
2. It refers to the number of employees x wage rate per period x period covered.
A. Materials expenses
B. Supplies expenses
C. Salaries and wages
D. Utilities expenses
3. _________________ measures the gain or return on the owner’s equity or
investment.
A. Profitability
B. Ratio Analysis
C. Vertical Analysis
D. Horizontal Analysis
4. It is also called the profit and loss statement
A. Balance sheet
B. Statement of Cash Flow
C. Statement of Retained Earnings
D. Income Statement
5. It refers to the left to right comparison of performance for comparative
periods.
A. Profitability
B. Ratio Analysis
C. Vertical Analysis
D. Horizontal Analysis
 6. A financial plan projects how much __________________ is needed, sources of
capital, returns on investment, and other financial considerations.

A. Start-up expenses

B. Start-up capital

C. Periodic capital

D. Periodic expenses

7. It refers to the gas expense, vehicle hired and/or vehicle fares.

A. Materials expenses

B. Supplies expenses

C. Transportation expenses

D. Utilities expenses

8. It refers limited to profitability ratios which measures the capability of the

enterprise to earn profits from their operations.

A. Ratio Analysis C. Vertical Analysis

B. Leverage Analysis D. Horizontal Analysis

9. It is also called the profit and loss statement

A. Balance sheet

B. Statement of Cash Flow

C. Statement of Retained Earnings

D. Income Statement

10.It refers to the left to right comparison of performance for comparative

periods.

A. Profitability C. Vertical Analysis

B. Ratio Analysis D. Horizontal Analysis

II. Taking Stock of Expenses. Write A if the expense belongs to start-up expenses
and write B if the expenses belongs to operating expenses
1. Business registration fees __________
2. Salaries (including your own) __________
3. Telecommunication expenses __________
4. Business licensing and permits __________
5. Rent deposits __________
6.
Hooray! You have completed the Pre-
Assessment Test. Now, let us get
ready for the activities as we review
your previous lessons.
Lesson
Financial Plan
1

As you proceed to this module, you will understand the sixth section
of an enterprise business plan. Do you see yourself being handling the
financial aspect of your own dream business? If given such opportunity to do
so, how are you going to accomplish it? How will you handle the financial
aspect of your dream business?
The financial plan section of your business plan determines whether
or not your business idea is viable and will be the focus of any investors who
may be attracted to your business idea. The financial plan section is
composed of three financial statements: the income statement, the cash flow
projection, and the balance sheet. It also should include a brief explanation
and analysis of these three statements.

Let us recall and freshen up your

What’s In memory by identifying the 7
components of the business plan. Grab
a pen and let’s begin!

Recall of the past lesson. The letters of the words below are jumbled.
Figure out what the word is and write the word on the blank line provided.

1. CIFCIPES SPECIFIC
2. LYEMIT _______________________________
3. EUS-ELSING _______________________________
4. TIONOCAL _______________________________
5. ELNNOSREP _______________________________
CLUES:
 1. Be clear on what you want employees to achieve.
2. Provide a deadline so everyone has a date they are working towards.
3. Plans address only the current period or a specific problem an employee’s
voluntary decision to leave the organization.
4. Where are employees working.
5. Who is in charge of making sure department tasks are completed?

Notes to the Teacher

The teacher must consider the prerequisite skills needed in the development
of this competency including the schema or background knowledge which may
reinforce learning. This module will help the learners bridge the gap of learning to
attain mastery of the lesson in its spiral progression.

As a facilitator you are expected to orient the learners on how to use this
module. You also need to keep track of the learner’s progress while allowing them
to manage their own learning. Furthermore, you are expected encourage and assist
the learners as they do the tasks included in the module.

Have you ever wondered what a

planner does? Let’s try to elevate your
financial planning skills by filling out
What’s New the table below. Grab a pen and let’s
begin!

RAISE YOUR LEVEL OF FINANCIAL PLANNING SKILLS

If you are going to be in charge of the financial aspect of your own business,
identify what expenses your business incurred under the following category:
CATEGORY EXPENSES
1. Salaries and Wages Monthly salary, Taxes and Benefits
2. Materials Expenses
3. Supplies Expenses
4. Marketing Expenses
5. Transportation Expenses
 6. Communication Expenses
7. Utilities Expenses
8. Registration, Permits and
Licenses
9. Representation Expenses
10. Miscellaneous Expenses

What is It

Now that you know what your expenses are being called, are you now ready
for your financial plans. Do not be lost when you think of financial plans my dear,
because these are the records and analysis of the status of your business. Let us
discover them one by one as we go along with this module.
Financial Plan
 Projects how much start-up capital is needed, sources of capital,
returns on investment, and other financial considerations
 Involves forecasting the cash financing requirement of the enterprise such as
cash budgets, cash receipts, cash disbursements and working capital
 Estimates of proprietor’s equity involve: salaries and wages, materials
expense, supplies expenses, marketing expenses, transportation expenses,
communication expenses, utilities, electric and water charges for the period
covered, registration, taxes and licenses and representation expenses
Financial Analysis Concepts
 Profitability – measures the gain or return on the owner’s equity or
investment
 Vertical Analysis – matches the amounts or accounts in a common size
financial statement through the use of percentages of a common base
 Horizontal Analysis – involves matching accounts in the financial statements
through percentage change calculations for two or more consecutive periods.
Financial Statements
The income statement shows your revenues, expenses, and profit for a particular
period—a snapshot of your business that shows whether or not your business is
profitable. Subtract expenses from your revenue to determine your profit or loss.
The CASH FLOW PROJECTION shows how cash is expected to flow in and out of
your business. It will show how much capital investment your business idea needs.
There are three parts to the cash flow projection:
 Cash revenues: Enter your estimated sales figures for each month. Only
enter the sales that are collectible in cash during each month you are
detailing.
 Cash disbursements: Take the various expense categories from your ledger
and list the cash expenditures you actually expect to pay for each month.
 Reconciliation of cash revenues to cash disbursements: This section shows
an opening balance, which is the carryover from the previous month's
operations. The current month's revenues are added to this balance, the
current month's disbursements are subtracted, and the adjusted cash flow
balance is carried over to the next month. The balance sheet reports your
business's net worth at a particular point in time. It summarizes all the
financial data about your business in three categories:
 Assets: Tangible objects of financial value that are owned by the
company.
 Liabilities: Debt owed to a creditor of the company.
 Equity: The net difference when the total liabilities are
subtracted from the total assets.
 The relationship between these elements of financial data is expressed
with the equation: Assets = Liabilities + Equity.
Financial Analysis
 Horizontal analysis – left to right comparison of performance for comparative
periods
 Vertical analysis – evaluates financial statement accounts with each account
expressed as a percentage of the base account
 Ratio analysis – limited to profitability ratios which measures the capability of the
enterprise to earn profits from their operations
o Ratio of gross profit to net sales = gross profit/net sales – shows if the gross
profit is enough to cover all business expenses and earns income for the owner.
o Ratio of net income to net sales = net income/net sales – measures profitability
for every peso sale
o Operating ratio = cost of sales + operating expenses/net sales – is useful in
evaluating the efficiency of operations
Other Profitability Ratios
1. Ratio of income to owner’s equity = net income for the period/average
owner’s equity
2. Ratio of net income to total assets = net income/total assets
3. Ratio of net sales to total assets = net sales/total assets
 Hey buddy! More activities are
What’s More waiting for you. It’s okay to take
a break, but only for a while.
Then go back to learning. Ready?

Let us study the sample Financial Plan section of a standard business plan to
help you craft your own business plan. Analyze carefully those ideas that can
be interchange with your own ideas of the dream business venture you have in
mind.
FINANCIAL PLAN

Independent Activity 1: Crafting of the Expenses Items

트와이스시대 ’s Korean-Pop Collectibles Shopaholic Store expects to raise

the amount of ₱ 80,000 of its own capital, and to borrow ₱50,000 guaranteed
by the SBA as a five-year loan with a 2% interest monthly. This provides the
bulk of the current financing required.

Expenses Items
a. Salaries and wages
The owner/proprietor will be ______________to oversee the store
operations during the __________________. The salesclerk will also be
_________________________. The salary of the salesclerk will be Php
_______/_____.
b. Materials expenses
The materials bought will depend on the _________like ________, _______,
_______ and _______. The cost of product 1 is _________, product 2 is__________
etc.

c. Supplies expenses
The supplies bought consists of ____________ and ___________ to be used
in the selling of products and services.

d. Marketing expenses
___________, _________, and _________ to be used in promoting the
business.

e. Transportation expenses
_______________________, ____________ used in line with business
activities.
 f. Communication expenses
__________, __________________________ used in line with business
activities
g. Utilities
__________, ____________ and ____________ for the period covered. Rental
is _________, water bill is _____________ and electric bill is ______________.

h. Registration, taxes and Licenses

Fees for licenses is _______________________ and taxes
___________________.
i. Representation expenses
Expenses during the ______________ store ______________ will be
launching.

Independent Activity 2: Crafting of the Balance Sheet

YOUR COMPANY NAME

BALANCE SHEET as of March 2021
ASSETS
Current Assets
Cash in Bank

Cash on Hand
Inventory
Total Current Assets
Equipment
Less Depreciation
Net Equipment
TOTAL ASSETS
LIABILITIES
Current Liabilities
Loans Payable
Income Tax Payable
Worker’s Compensation Payable
Total Current liabilities
Long-term Liabilities
 Long-term Loans
Total Long-term Liabilities
TOTAL LIABILITIES
EQUITY EARNING
Owner’s Equity-Capital
Owner-Draws Retained Earnings
Current Earnings
Total Earnings
TOTAL EQUITY
LIABILITIES AND EQUITY

Independent Activity 3: Crafting of the Income Statement

트와이스시대’s Korean-Pop Collectibles Shopaholic

Income Statement for the 1st quarter  Jan  Feb   Mar   Total 
of (year)

REVENUE

  Products

    Product 1

    Product 2

Product 3

Product 4

  Total Products

TOTAL REVENUE

EXPENSES

  Direct Costs

    Materials

    Salary (Owner)

    Wages

Workers' Compensation Expense

   Total Direct Costs

  General and Administration (G&A)

    Accounting and Legal Fees

    Advertising and Promotion

    Office Rent

    Telephone/Wifi

    Utilities

  Total G&A

TOTAL EXPENSES

NET INCOME BEFORE INCOME TAXES

INCOME TAXES

NET INCOME

Independent Activity 4: Crafting of the Cash Flow Projections

트와이스시대’s Korean-Pop Collectibles Shopaholic

CASH FLOW PROJECTIONS  Jan  Feb   Mar 
CASH REVENUE

  Revenue from Product Sales

TOTAL CASH REVENUES

CASH DISBURSEMENTS

  Cash Payments to Trade Suppliers

Salary (Owner)

  Salaries and Wages

Promotion Expense Paid

Accounting and Legal Fees

  Benefits Paid

  Rent/Mortgage Payments

  Telecommunications Payment

  Utilities Payments

Taxes

TOTAL CASH DISBURSEMENTS

CASH FLOW

OPENING CASH BALANCE

CLOSING CASH BALANCE

 Let us now check what you have
learned from this module by
What I answering the questions below. Are
Have Learned you ready? Grab a pen and let’s begin!

1. What does financial plan projects?

_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
______________________________________________.
2. What is financial analysis?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
______________________________________________.

Think of what all of these

What I Can Do
concepts can do to your life.
How would they help you?

With all the many information you have learned and acquired in this module, let us
make an evaluation on how important the lesson will be for your future. Answer
concisely what is being asked.
1. Why do you think you need to plan the financial details of your dream
business? And how will the planning of these will help the business?
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
2. Considering your answer to number one, how will you apply these in your
dream venture in the future?
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
 Assessment

Multiple Choice. Encircle the letter of the correct answer.

1. A ___________________ projects how much start-up capital is needed, sources
of capital, returns on investment, and other financial considerations.
A. Operational plan
B. Financial plan
C. Management plan
D. Marketing plan
2. It refers to the number of employees x wage rate per period x period covered.
A. Materials expenses
B. Supplies expenses
C. Salaries and wages
D. Utilities expenses
3. _________________ measures the gain or return on the owner’s equity or
investment.
A. Profitability
B. Ratio Analysis
C. Vertical Analysis
D. Horizontal Analysis
4. It is also called the profit and loss statement
A. Balance sheet
B. Statement of Cash Flow
C. Statement of Retained Earnings
D. Income Statement
5. It refers to the left to right comparison of performance for comparative
periods.
A. Profitability
B. Ratio Analysis
C. Vertical Analysis
D. Horizontal Analysis
 6. A financial plan projects how much __________________ is needed, sources of
capital, returns on investment, and other financial considerations.

A. Start-up expenses

B. Start-up capital

C. Periodic capital

D. Periodic expenses

7. It refers to the gas expense, vehicle hired and/or vehicle fares.

A. Materials expenses C. Transportation expenses

B. Supplies expenses D. Utilities expenses

8. It refers limited to profitability ratios which measures the capability of the

enterprise to earn profits from their operations.

A. Ratio Analysis C. Vertical Analysis

B. Leverage Analysis D. Horizontal Analysis

9. It is also called the profit and loss statement

A. Balance sheet

B. Statement of Cash Flow

C. Statement of Retained Earnings

D. Income Statement

10.It refers to the left to right comparison of performance for comparative

periods.

A. Profitability C. Vertical Analysis

B. Ratio Analysis D. Horizontal Analysis

Taking Stock of Expenses. Write A if the expense belongs to start-up expenses and
write B if the expenses belongs to operating expenses
1. Business registration fees __________
2. Salaries (including your own) __________
3. Telecommunication expenses __________
4. Business licensing and permits __________
5. Rent deposits __________
 Additional Activities

Kindly fill out on the comments/status section of the table the status of your
enterprise business plan
SIMULATION ACTIVITY 8:
ENTERPRISE BUSINESS PLAN: FINANCIAL PLAN
Indicator Researching Preparing First draft Editing Final
on how to on how formulation of the draft
formulate it to craft it first already
draft
Taking Stock of
Expenses
Business 
registration fees
Business licensing and
permits
Starting inventory
Rent deposits
Down payments on a
property
Down payments on
equipment
Utility setup fees
Salaries (including
your own)
Rental payments
Telecommunication
expenses
Utilities
Raw materials
Storage
Distribution
Promotion
Loan payments
Office supplies
Maintenance
 Answer Key

What I Know
1.
2. B 7. B 12. A
3. C 8. C 13. B
4. A 9. A 14. B
5. D 10. D 15. A
6. D 11.D 16. A
What’s In: Own Plans
1. Specific
2. Timely
3. Single-use
4. Location
5. Personnel
What’s New: Own Expenses from the Business – Sample Answers
CATEGORY EXPENSES
1. Salaries and Wages Salaries
SSS
Philhealth
2. Materials Expenses Paper Pouch
3. Supplies Expenses Supplies needed to assemble products
4. Marketing Expenses Tarpapel
Flyers
5. Transportation Expenses Transpo when purchasing
6. Communication Expenses Loads
7. Utilities Expenses Water and Electric bills
8. Registration, Permits and DTI
Licenses BIR
9. Representation Expenses Snacks
10. Miscellaneous Expenses Help fee when transporting goods

What’s More:
YOUR COMPANY NAME
BALANCE SHEET as of March 2021
ASSETS
Current Assets
Cash in Bank 0.00

Cash on Hand 66,033.00

Inventory 0.00
Total Current Assets 66,033.00
Equipment 53,000.00
Less Depreciation 2,650.00

19
Net Equipment 50,350.00
TOTAL ASSETS 116,383.00
LIABILITIES
Current Liabilities
Loans Payable 5,500.00
Income Tax Payable 2,952.00
Worker’s Compensation Payable 3,600.00
Total Current liabilities 12,052.00
Long-term Liabilities
Long-term Loans 47,500.00
Total Long-term Liabilities 47,500.00
TOTAL LIABILITIES 59,552.00
EQUITY EARNING
Owner’s Equity-Capital 80,000.00
Owner-Draws Retained Earnings -23,169.00
Current Earnings -23,169.00
Total Earnings -23,169.00
TOTAL EQUITY 56,831.00
LIABILITIES AND EQUITY 16,383.00

트와이스시대’s Korean-Pop Collectibles Shopaholic

Income Statement for the 1st quarter of (year)  Jan  Feb   Mar   Total 

REVENUE

  Products

    Product 1 30,000 33,000 36,300 99,300

    Product 2 15,000 16,600 18,150 49,650
Product 3 21,000 23,100 25,410 69,510
Product 4 12,000 13,200 14,520 39,720
  Total Products 78,000 85,900 94,380 258,280
TOTAL REVENUE 78,000 85,900 94,380 258,280
EXPENSES

  Direct Costs

    Materials 35,997 39,643 43,556 119,196

    Salary (Owner) 9,000 9,000 9,000 27,000
    Wages 10,500 10,500 10,500 31,500
Workers' Compensation Expense 1,200 1,200 1,200 3,600
  Total Direct Costs 56,697 60,343 64,256 181,296

20
  General and Administration (G&A)

    Accounting and Legal Fees 500 500 50500 1,500

    Advertising and Promotion 300 300 300 900
    Office Rent 2,500 2,500 2,500 7,500
    Telephone/Wifi 800 800 800 2,400
    Utilities 900 900 900 2,700
  Total G&A 5,000 5,000 5,000 15,000
TOTAL EXPENSES 61,697 65,343 69,256 196,296

NET INCOME BEFORE INCOME TAXES 16,303 20,557 25,124 61,984

INCOME TAXES 776 979 1,196 2,952

NET INCOME 15,527 19,578 23,928 59,032

트와이스시대’s Korean-Pop Collectibles Shopaholic

CASH FLOW PROJECTIONS  Jan  Feb   Mar 
CASH REVENUE

  Revenue from Product Sales 78,000 85,900 94,380

TOTAL CASH REVENUES 78,000 85,900 94,380

CASH DISBURSEMENTS

  Cash Payments to Trade Suppliers 35,997 39,643 43,556

Salary (Owner) 9,000 9,000 9,000

  Salaries and Wages 10,500 10,500 10,500

Promotion Expense Paid 300 300 300

Accounting and Legal Fees 500 500 500

  Benefits Paid 1,200 1,200 1,200

  Rent/Mortgage Payments 2,500 2,500 2,500

  Telecommunications Payment 800 800 800

  Utilities Payments 900 900 900

Taxes 776 979 1,196

TOTAL CASH DISBURSEMENTS 62,473 66,322 70,452

CASH FLOW 15,527 19,578 23,928

OPENING CASH BALANCE 7,000 22,527 42,105

CLOSING CASH BALANCE 22,527 42,105 66,033

21
What I Can Do: own ideas and words on the importance

Assessment
1. B 6. B 11. A
2. C 7. C 12. B
3. A 8. A 13. B
4. D 9. D 14. A
5. D 10. D 15. A
Additional Activities:
ENTERPRISE BUSINESS PLAN: FINANCIAL PLAN
Indicator Researching Preparing First draft Editing Final
on how to on how formulation of the draft
formulate it to craft it first already
draft
Taking Stock of 
Expenses
Business 
registration fees
Business licensing and 
permits
Starting inventory 
Rent deposits 
Down payments on a 
property
Down payments on 
equipment
Utility setup fees 
Salaries (including 
your own)
Rental payments 
Telecommunication 
expenses
Utilities 
Raw materials 
Storage 
Distribution 
Promotion 
Loan payments 
Office supplies 
Maintenance 

22
References

Garalde-Orjalo, V., & Pefianco, E. C. (2017). Business Enterprise Simulation:

Business Incubation and ABM Integration (1st edition.). The Phoenix
Publishing House Inc.

Ward, S. (2019). How to write the financial section of a business plan. The
Balance Small Business. Retrieved from:
https://www.thebalancesmb.com/writing-the-business-plan-section-
8-2947026
Wolfe, L. (2019). Learn how to write a financial feasibility study. The Balance
Careers. Retrieved from: https://www.thebalancecareers.com/writing-
financial-feasibility-study-3515135

Development Team of the Module

Writer: ELSA A. LAQUINDANUM – MT-I San Isidro HS, Bacolor South

Editor: JANE P. VALENCIA, EdD – EPS – Mathematics
Reviewer: JANE P. VALENCIA, EdD – EPS – Mathematics
SHEILA MARIE ANN M. GALURA – T-II San Isidro HS, Bacolor South
SHARINETTE R. CORONEL – T-II FNAS, Florida Blanca
Illustrator: ELSA A. LAQUINDANUM – MT-I San Isidro HS, Bacolor South
Layout Artist: ELSA A. LAQUINDANUM – MT-I San Isidro HS, Bacolor South
SHEILA MARIE ANN M. GALURA – T-II San Isidro HS, Bacolor South
SHARINETTE R. CORONEL – T-II FNAS, Florida Blanca
Language Reviewer:

Management Team

ZENIA G. MOSTOLES, EdD, CESO V, Schools Division Superintendent

LEONARDO C. CANLAS, EdD, CESE. Asst. Schools Division Superintendent
ROWENA T. QUIAMBAO, CESE, Asst. Schools Division Superintendent
CELIA R. LACNALALE, PhD, CID Chief
JANE P. VALENCIA, EdD, Education Program Supervisor, Mathematics
JUNE E. CUNANAN, Education Program Supervisor/ Language Editor
RUBY M. JIMENEZ, PhD., Education Program Supervisor, LRMDS

23