CHAPTER IX

THE FINANCIAL PLAN

9.1 Statement of Comprehensive Income

A financial plan helps to determine the K-Siete Tilapia Farm business if the

business idea is sustainable, and keeps the business on track to its financial health as K-

Siete Tilapia Farm business matures. It is also an integral part to an overall business plan.

The K-Siete Tilapia Farm projected 9,000, 10,000, and 11,000 fingerlings per

month for the years 2023, 2024, and 2025, respectively. The quantity of fingerlings each

piece will be multiplied to obtain the overall cost, which will then be multiplied by 12 to

obtain the annual cost of the fingerlings per year. The table below shows the K-Siete

Tilapia Costing for Fingerlings:

Table 9.1 K-Siete Tilapia Farm Projected Costing for Fingerlings

FINGERLINGS COSTING
QUANTITY PRICE PER PC X MONTHS TOTAL COST
2023 9,000 3 12 324,000
2024 10,000 3 12 360,000
2025 11,000 3 12 396,000

The revenue a company projects generating in the future is represented by its

projected sales. To get the total kilo, divide the annual quantity of fingerlings required by

6; the firm estimates that there will be 6 pieces per kilo. After that, the projected annual

sales will be multiplied by the fresh tilapia per-kilo price. The table below shows the

projected sales of K-Siete Tilapia Farm:

Table 9.2 The Projected Sales of K-Siete Tilapia Farm

PROJECTED SALES OF K-SIETE TILAPIA FARM
2023 2024 2025
Annual Cost of Fingerlings 324,000 360,000 396,000
Quantity 108,000 120,000 132,000
/ (6 pcs per kilo) 18,000 20,000 22,000
Projected Sales ( 156 per kilo) 2,808,000 3,120,000 3,432,000
 The direct cost of producing a company's goods is known as cost of goods sold. It

is a crucial line on income statement that can reveal a lot K-Siete Tilapia Farm efficiency,

profitability, and financial performance. The table below shows the cost of goods sold of

K-Siete Tilapia Farm:

Table 9.3 K-Siete Tilapia Farm Cost of Goods Sold

2023 2024 2025
Beginning Inventory 500,000 600,000 700,000
Add: Purchases 186,000 210,000 256,325
Available for sale 686,000 810,000 956,325
Less: Ending Inventory 80,000 100,000 120,000
Cost of Goods Sold 606,000 710,000 836,325

The table below shows the K-Siete Tilapia Farm Statement of Comprehensive

Income:

Table 9.4 The Statement of Comprehensive Income of K-Siete Tilapia Farm

K-Siete Tilapia Farm
PROJECTED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR 2023-2025
2023 2024 2025
SALES 2,808,000.00 3,120,000.00 3,432,000.00
COST OF GOODS SOLDS 606,000.00 710,000.00 836,325.00
GROSS INCOME 2,202,000.00 2,410,000.00 2,595,675.00
LESS: OPERATING EXPENSE
PERMIT AND LICENSES 3,465.00 5,520.00 7,485.05
SALARIES AND WAGES 420,000.00 479,000.00 530,000.00
 RENTAL EXPENSE 150,000.00 200,000.00 300,000.00
REPAIR AND MAINTENANCE 33,000.00 43,126.02 53,045.00
OFFICE SUPPLIES 30,503.00 38,129.32 45,189.36
UTILITY EXPENSE 28,013.00 39,654.51 40,005.05
TOTAL OPERATING EXPENSE 691,371.00 837,479.85 1,016,749.46
OPERATING INCOME 1,510,629.00 1,572,520.15 1,578,925.54
22,500.00 25,125.12 30,050.36
1,488,129.00 1,547,395.03 1,548,875.18

9.2 Statement of Changes in Equity

A statement of change in equity or also referred to as statement of retained

earnings, is a business' financial statement that measures the changes in owners' equity

throughout a specific accounting period.

Table 9.5 The Statement of Changes in Equity of K-Siete Tilapia Farm

K-SIETE TILAPIA FARM
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR 2023
PARTNER 1 PARTNER 2 PARTNER 3
Beginning Balance 500,000.00 500,000.00 500,000.00
Add: Income 496,043.00 496,043.00 496,043.00
Less: Withdrawals 55,000.00 50,000.00 60,000.00
Ending Balance 941,043.00 946,043.00 936,043.00

K-SIETE TILAPIA FARM

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR 2024
PARTNER 1 PARTNER 2 PARTNER 3
Beginning Balance 941,043.00 946,043.00 936,043.00
Add: Income 515,798.34 515,798.34 515,798.34
Less: Withdrawals 60,000.00 60,000.00 60,000.00
Ending Balance 1,396,841.34 1,401,841.34 1,391,841.34
Table 9.6 Summary of K-Siete Tilapia Farm Statement of Changes in Equity
K-SIETE TILAPIA FARM
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR 2023-2025
2023 2024 2025
Beginning Balance 1,500,000.00 2,405,688.30 3,351,754.49
Add: Income 1,488,129.00 1,547,395.02 1,548,875.19
Less: Withdrawals 165,000.00 180,000.00 80,000.00
Ending Balance 2,823,129.00 3,773,083.32 4,820,629.68

9.3 Statement of Cash flow

The purpose of the cash flow statement is to provide a detailed picture of what

happened to a business's cash specifically the K-Siete Tilapia Farm during a specific

period or the accounting period. The sample below will give a better picture of the

projected cash flow of the business for the year 2023-2025.

Table 9.7 The Statement of Cash Flows of K-Siete Tilapia Farm

K-SIETE TILAPIA FARM
PROJECTED STATEMENT CASH FLOW
FOR THE YEAR 2023-2025
YEAR BEGINNING 2023 2024 2025
CASH FLOW FROM OPERATING ACTIVITIES:
Cash Inflow from Operating Activities
Cash ollected from sale of goods 1,488,129.00 1,547,395.03 1,548,875.18
Total Cash Inflow from Operating Activities 1,488,129.00 1,547,395.03 1,548,875.18

Cash Outflow From Operating Activities

Payment for employees 420,000 479,000.00 530,000.00
Payment for taxes 22,500.00 25,125.12 30,050.36
Cash Outflow from Financing Activities

Gross and Operating Margins

The Income Statement takes service income and subtracts all the expenses to get

the net income or profit. The result would divide by the service income and multiply by

100 percent to get the net profit margin.

Table 9.8 The Net Profit Margin of K-Siete Tilapia Farm

NET PROFIT 2023 2024 2025
NET INCOME 1,488,129.00 1,547,395.02 1,548,875.19
SALES 2,808,000.00 3,120,000.00 3,432,000.00
NET PROFIT MARGIN 0.53 0.50 0.45
9.4 Statement of Financial Position

The K-Siete Tilapia Farm business balance sheet is important because it serves as

an indicator of the company's financial status because it is used to cover short term

obligations of the company's operations. The figure below is the K-Siete Tilapia Farm

statement of financial position.

Table 9.9 The Statement of Financial Position of K-Siete Tilapia Farm

K-SIETE TILAPIA FARM
PROJECTED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR 2023-2025
PRE- OPERATION 2023 2024 2025
ASSETS
CURRENT ASSETS
CASH 1,140,000.00 2,004,829.00 2,851,208.91 3,742,983.73
INVENTORY 200,000.00 400,000.00 600,000.00
TOTAL CURRENT ASSETS 1,140,000.00 2,204,829.00 3,251,208.91 4,342,983.73
NON-CURRENT ASSETS
BUILDING 1,000,000.00 1,000,000.00 1,000,000
EQUIPMENT 360,000.00 360,000.00 360,000.00 360,000.00
ACCUMULATED DEPRECIATION 15,000.00 25,000.00 35,000.00
TOTAL NON-CURRENT ASSETS 360,000.00 1,345,000.00 1,335,000.00 1,325,000.00
TOTAL ASSETS 1,500,000.00 3,549,829.00 4,586,208.91 5,667,983.73

LIABILITIES
ACCOUNTS PAYABLE 186,000.00 250,000.00 305,256.30
SALARIES PAYABLE 125,000.00 152,663.36 155,036.78
9.5 Financial Ratios

A financial ratio involves taking one number from a company's financial

statements and dividing it by another. The resulting answer will give a metric that the K-

Siete Tilapia Farm can use to compare and evaluate their investment opportunities.

To get the financial ratio, divide the net profit by net assets, and multiply by 100

to compute the ROA (return on assets). Find net profit on the income statement, and use

the balance sheet to compute net assets by taking total assets minus total liabilities. The

higher the ratio, the more efficiently your company is generating profits from its

resources.
Table 9.6 The Summary of Financial Ratio for K-Siete Tilapia Farm
Formula 2023 2024 2025
PROFITABILITY MEASURES:
Percent Return on Net Profit 1,488,129.00 1,547,395.03 1,548,875.18
Net Assets Net Revenue 2,808,000.00 3,120,000.00 3,432,000.00
0.53 0.50 0.45

Ratio of Gross Profit to Net Gross Profit 2,202,000.00 2,410,000.00 2,595,675.00

Sales Net Revenue 2,808,000.00 3,120,000.00 3,432,000.00
0.78 0.77 0.76

Percent Return on Assets Net Profit 1,488,129.00 1,547,395.03 1,548,875.18

Employed Total Assets 3,549,829.00 4,586,208.91 5,667,983.73
0.42 0.34 0.27

Percent Return on Shareholders Net Profit 1,488,129.00 1,547,395.03 1,548,875.18

Equity Equity 3,136,767.64 4,071,788.45 5,088,147.59
0.47 0.38 0.30
LIQUIDITY MEASURES:
Current Ratio Current Assets 2,204,829.00 3,251,208.91 4,342,983.73
Current Liabilities 413,061.36 514,420.46 579,836.14
5.34 6.32 7.49

Quick Ratio Cash 2,004,829.00 2,851,208.91 3,742,983.73

Current Liabilities 413,061.36 514,420.46 579,836.14
4.85 5.54 6.46
ACTIVITY MEASURES:
Inventory Turnover Cost of Goods Sold 606,000.00 710,000.00 836,325.00
Inventory 200,000.00 400,000.00 600,000.00
3.03 1.78 1.39

Inventory to Working Capital Inventory 200,000.00 400,000.00 600,000.00

Ratio Inventory- Accounts 14,000.00 150,000.00 294,743.70
Payable 14.29 2.67 2.04

OPERATING MEASURES:
Break-even point Total Operating Expensese 691,371.00 837,479.85 1,016,749.46
NOTES AND ASSUMPTION

GROSS INCOME

PRODUCTS KILO/DAY PRICE MOTHLY INCOME YEARLY INCOME

FRESH TILAPIA 50 156 234,000 2,808,000
DRIED TILAPIA 20 160 96,000 1,152,000
COST OF GOODS SOLD
PRODUCT SALT PACKAGING MARK UP
FRESH TILAPIA 10 1.36
DRIED TILAPIA 4 4 1.26

SALARIES AND WAGES

JOB DESCRIPTION DAILY RATE WORKING DAYS MONTHLY SALARY
OPERATIONAL MANAGER 500 30 15,000
PRODUCTION PERSONNEL 400 30 12,000
MARKETING PERSONNEL 400 30 12,000
HARVESTER 350 30 10,500
DELIVERY PERSONNEL 350 30 10,500

BENEFITS

EMPLOYEES NO. OF WORKERS PHILHEALTH SSS PAG- IBIG

OPERATIONAL MANAGER 1 100 236.25 100
PRODUCTION PERSONNEL 1 100 236.25 100
MARKETING PERSONNEL 1 100 236.25 100
HARVESTER 1 100 236.25 100
DELIVERY PERSONNEL 1 100 236.25 100
TOTAL 5 500 1181.25 500
EMPLOYEES SHARE

OPERATIONAL MANAGER 450 5,400 180,000

PRODUCTION PERSONNEL 450 5,400 144,000
MARKETING PERSONNEL 450 5,400 144,000
HARVESTER 450 5,400 126,000
DELIVERY PERSONNEL 450 5,400 126,000
TOTAL 2250 27,000 720,000

PERMITS AND LICENSES

PERMITS AND LICENSES COST
DTE REGISTRATION 530
BARANGAY CLEARANCE 150
MAYOR'S PERMIT 2470
BIR REGISTRATION 500
BFP PERMIT 100
HEALTH CARDS FOR EMPLOYEES 50
PHILHEALTH AND SSS REGISTRATION 600
TOTAL 4400

UTILITIES EXPENSE
DESCRIPTION MONTHLY ANNUALLY
Electric Bill 3,500 42,000
Water Bill 1,500 18,000
Internet Bill 1,699 20,388
Total 80,388

RENOVATION EXPENSE
RENOVATION EXPENSE QUANTITY PRICE TOTAL
Marine Plywood 2 Pieces 1,000 2,000
Electric Cable 1 roll 1,000 1,000
Nails 1kg 100 100
Floor Mat 1 roll 750 750
Sink 2 pieces 500 1,000
Door Knob 2 pieces 160 320
Design Materials 3,000
TOTAL 8,170
FURNITURE AND FIXTURE

Particulars Quantity Unit Price Total Amount

Table and Chairs 2 Pcs 3,950.00 7,900.00
Storage Cabinet 1 Pcs 4,000.00 4,000.00
Toilet bowl & sink 1 Pcs 4,799.00 4,799.00
Exhaust fan 1 Pcs 1,501.00 1,501.00
Light Bulb 5 Pcs 62 310
Sink 2 Pcs 2,000.00 4,000.00
Total 22,510.00

ASSUMPTIONS

GROSS INCOME

Fresh Tilapia= 50 kilos per day x 156 pesos each kilo x 30 days = 234,000 Monthly

Sales

If we can serve 50 kilos of fresh Tilapia a day multiplied by 156 pesos/kilo equal

to 7,800 daily income multiply it by 30 days is equal to 234,000 our monthly sales.

Dried Tilapia = 20 kilos per day x 160 pesos x 30 days = 96,000

If we can serve a 20 kilos of Dried Tilapia a day multiplied by 160

pesos/kilo equal to 3,200 daily income multiply it by 30 days is equal to 96,000 our

monthly sales.
SALARIES AND WAGES

Daily Income X Working Days = Monthly Salary

Monthly Share X 12 = Annual Share + Annual Salary Expense = Annual Salary Expense

Operational Manager 500 X 30 = 15,000 Monthly Salary

15,000 X 12 = 180,000 + 5,400 Annual Share = 185,400 Annual Salaries Expense

Production Personnel 400 X 30 = 12,000 X 12 = 144,000 + 5,400 Annual Share =

149,400 Annual Salary Expense

Marketing Personnel 400 X 30 = 12,000 X 12 = 144,000 + 5,400 Annual Share =

149,400 Annual Salary Expense

Harvester 350 X 30 = 10,500 X 12 = 126,000 + 5,400 Annual Share = 131,400 Annual

Salary Expense

Delivery Personnel 350 X 30 = 10,500 X 12 = 126,000 + 5,400 Annual Share = 131,400

Annual Salary Expense

TOTAL ANNUAL SALARIES EXPENSE 747,000