ENTREPRENEURSHIP MODULE 5: WEEK 6

NAME: Arabella Gracie P. Gonzaga DATE: January 9, 2021

GRADE AND SECTION: 12- FLEMING

LET’S APPLY

BASIC BOOKS NEED FOR BUSINESS RECORDKEEPING

1. Planning & Budgeting - Create a fixed
budget for a specific period (typically one year).
Monitor the month-to-month execution of the plan,
including revenue and expenses, expected cash flow
and debt reduction. Adjust plan based on actual
performance and other developments.
3. Management Reporting - Pull together
monthly, quarterly and annual reports on
budget vs. actual and cash flow. Aggregate and
analyze financial and operational data to glean
insights that direct decision-making. Present reports
to executives and/or Board of Directors.

2. Ad-Hoc Reporting & Analysis - Quickly gather
data for ad-hoc analysis and reporting throughout
the year. Make recommendations to management
based on findings.
4. Forecasting - Use historical data to
forecast financial performance over the next
4-12 quarters. Re-forecast the next 12
months at the end of each quarter for rolling
forecast.

LET’S ANALYZE

TALLI DWELLINGS SENSITIVITY ANALYSIS

Important Assumptions:
The financial plan depends on important assumptions, most of which are shown in the following
table as annual assumptions. The monthly assumptions are included in the appendix. From the beginning,
we recognize that collection days are critical, but not a factor we can influence easily. Interest rates, tax
rates, and personnel burden are based on conservative assumptions. Some of the more important
underlying assumptions are:

 Property price range from P1,000,000 – P500,000,000

 We assume a strong economy, without major recession.
 We assume that there are no unforeseen changes in the economy that would change our
estimations.
 The company will be located at Legazpi Village, Makati, Metro Manila.
Capital Requirement

Particulars Total Amount

Legal Php 45,000

Catherine P. Gonzaga Jesril A. Gonzaga

Mother Father
 ENTREPRENEURSHIP MODULE 5: WEEK 6

NAME: Arabella Gracie P. Gonzaga DATE: January 9, 2021

GRADE AND SECTION: 12- FLEMING
Stationery 25,000
Brochures 50,000
Advertising 125,000
Insurance 10,000
Rent 150,000
Answering Service 10,000
Utilities Start Up 12,500
Office Furnishings 50,000
Office Supplies 25,000
Php 272,000.00

Fixed Cost

Particulars Total Amount

Office Building Construction and Lot Php 8,000,000

Office Furnishings 50,000

Expensed Equipment 150,000

Business Software 100,000

Php 8,300,000.00

a. Break – Even Point

Formula for Break – Even Point (BEP) on Circuit Breakers:
¿
Break – Even Point =Total ¿ Cost
Price−Varaible Cost
₱ 8,300,000
500,000−272,000
Break – Even Point=36 properties

Interpretation:

Catherine P. Gonzaga Jesril A. Gonzaga

Mother Father
 ENTREPRENEURSHIP MODULE 5: WEEK 6

NAME: Arabella Gracie P. Gonzaga DATE: January 9, 2021

GRADE AND SECTION: 12- FLEMING
Computed results shows that Talli Dwelings must sell a total of 36 properties in order to break
even. This is a case wherein total cost is equal to total expenses, thus, there is no registered profit for the
company.

b. The Payback Period

Formula for the Payback Period (PP):
Cost of Project / Investment
𝑃𝑎𝑦𝑏𝑎𝑐𝑘 𝑃𝑒𝑟𝑖𝑜𝑑 =
Annual Cash Inflow
272,000.00
228,000
Payback Period =1 year∧2 mos
Interpretation:
Computed results shows that Talli Dwellings. need to operate for 1 year and 2 months in order to
cover its investments. This was based on the assumption that projected cash inflow (including cash or
other cash equivalents, receivables) is correct.

c. Return on Investment
Formula for Return on Investment (ROI):
Net Income x 100
Return of Investment =
Total Invested Capita l
₱ 228,000 x 100
500,000

Return on Investment =45.6 %

Interpretation:
 Computed results shows that the return on investment for Talli Dwellings, is 42.05%.

Overall Assessment
Talli Dwellings is a viable and prospective business to embark based on the estimated ratios.

Catherine P. Gonzaga Jesril A. Gonzaga

Mother Father
 ENTREPRENEURSHIP MODULE 5: WEEK 6

NAME: Arabella Gracie P. Gonzaga DATE: January 9, 2021

GRADE AND SECTION: 12- FLEMING
LET’S TRY

1. A
2. B
3. C
4. C
5. A
6. C
7. C
8. D
9. C
10. B

Catherine P. Gonzaga Jesril A. Gonzaga

Mother Father