FACTS AND ASSUMPTIONS

FACTS

1. Previous year Financial Statements (FS) were not disclosed due to confidentiality, hence,

assumptions were made by the researcher.

2. Transportation services were allowed to operate only in 70% capacity, only, due to pandemic.

3. HM Transport, Inc. has a total of 423 buses in acquisition.

4. Total of 887 employees were retained by the company, while the rest were offered and have

availed early retirement plan.

ASSUMPTIONS

1. Out of 423 buses, only 60% are in operation (shuttle services) while only 5 buses are operating as

public utility bus (PUB).

2. Passengers Revenue and other variables including expenses and other income for each month

were even.

3. Retirement benefit plan beneficiaries have already received the proceeds in year 2020 and in year

2021. Hence, no more retirement benefit plan was foreseen to be incurred in the remain months of

2021 and in the succeeding years of 2022 up to year 2024.

4. For the Direct Expenses – Depreciation and Insurance and Registration will not increase in the

succeeding year.

5. For the Direct Expenses – Fuel, Oil and Lubricants, Maintenance Cost, Salaries and Wages, Sub

Con, Toll Fees, Amortization of Intangibles, Common Carriers Tax and SSS, PHIC, EC, HDMF

Contribution will have an increase of 10% in year 2022, 15% in year 2023 and will remain

constant in year 2024.

6. For the Indirect Expenses – Security Services, Salaries and Wages for the administrative section,

Rental Expense, Depreciation, SSS, PHIC, EC, HDMF Contribution, Taxes and Licenses,
 Communication, Lights and Water, Management and Professional Fee, Injuries, and

Miscellaneous Expense will not increase in the succeeding year.

7. For the Indirect Expenses – Office Supplies, Membership Fee, Injuries, Damages and Medical

Expenses will have an increase of 10% in year 2022, 15% in year 2023 and will remain constant

in year 2024.

8. Interest Income, Interest Expense, Other Income and Other Expenses were held constant in the

succeeding years.

9. HM Transport will not yet return to their operations due to pandemic in the next first year (remain

in 70% of capacity), and will normalize their operations in the succeeding year (100% capacity).

10. Total revenue for the 2022 will increase by 15% due to the increase in allowed capacity in malls,

work places and other essential and non-essential establishments.

11. Total revenue for the year 2023 and 2024 will increase by 20% due to normalization of operations

in all establishments, academic institutions and other markets caused by achievement of at least

75% of vaccination of the citizens of the Philippines, including teenagers.

12. Income tax rate will be held constant as 25% of Net Income Before Tax

13. The relationship of other variables (e.g. expenses and other income) to Passengers Revenue were

held constant.
HM TRANSPORT, INC.
Statement of Income and Expenses YTD 2021 YTD 2021
For the Month Ended : September 30, 2021 as of Sept as of Dec YTD 2022 YTD 2023 YTD 2024
PASSENGERS REVENUE 232,797,985.38 100.00% 310,397,313.84 100.00% 372,476,776.61 100.00% 465,595,970.76 100.00% 581,994,963.45 100.00%

LESS: DIRECT EXPENSES

Fuel, Oil and Lubricants 23,093,531.15 9.92% 30,791,374.87 9.92% 33,870,512.35 9.09% 38,951,089.21 8.37% 38,951,089.21 6.69%
Maintenance Cost 11,652,084.99 5.01% 15,536,113.32 5.01% 17,089,724.65 4.59% 19,653,183.35 4.22% 19,653,183.35 3.38%
Salaries and Wages 68,219,121.45 29.30% 90,958,828.60 29.30% 100,054,711.46 26.86% 115,062,918.18 24.71% 115,062,918.18 19.77%
Subcon 4,902,991.56 2.11% 6,537,322.08 2.11% 7,191,054.29 1.93% 8,269,712.43 1.78% 8,269,712.43 1.42%
Toll Fees 12,074,162.43 5.19% 16,098,883.24 5.19% 17,708,771.56 4.75% 20,365,087.30 4.37% 20,365,087.30 3.50%
Depreciation 41,474,100.31 17.82% 55,298,800.41 17.82% 55,298,800.41 14.85% 55,298,800.41 11.88% 55,298,800.41 9.50%
Amortiation of Intangibles 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00%
Common Carriers Tax 8,452,445.52 3.63% 11,269,927.36 3.63% 12,396,920.10 3.33% 14,256,458.11 3.06% 14,256,458.11 2.45%
Insurance and Registration 526,128.25 0.23% 701,504.33 0.23% 701,504.33 0.19% 701,504.33 0.15% 701,504.33 0.12%
SSS, PHIC, EC, HDMF Contribution 3,984,356.04 1.71% 5,312,474.72 1.71% 5,843,722.19 1.57% 6,720,280.52 1.44% 6,720,280.52 1.15%
174,378,921.70 74.91% 232,505,228.93 74.91% 250,155,721.35 67.16% 279,279,033.84 59.98% 279,279,033.84 47.99%

GROSS PROFIT 58,419,063.68 25.09% 77,892,084.91 25.09% 122,321,055.26 32.84% 186,316,936.92 40.02% 302,715,929.61 52.01%

LESS: INDIRECT EXPENSES

Security Services 878,113.67 0.38% 1,170,818.23 0.38% 1,170,818.23 0.31% 1,170,818.23 0.25% 1,170,818.23 0.20%
Salaries and Wages 13,887,570.25 5.97% 18,516,760.33 5.97% 18,516,760.33 4.97% 18,516,760.33 3.98% 18,516,760.33 3.18%
Retirement Benefit Expense 465,202.72 0.20% 465,202.72 0.15% 0.00 0.00% 0.00 0.00% 0.00 0.00%
Rental Expense 9,957,901.47 4.28% 13,277,201.96 4.28% 13,277,201.96 3.56% 13,277,201.96 2.85% 13,277,201.96 2.28%
Depreciation 263,457.02 0.11% 351,276.03 0.11% 351,276.03 0.09% 351,276.03 0.08% 351,276.03 0.06%
SSS, PHIC, EC, HDMF Contribution 85,455.50 0.04% 113,940.67 0.04% 113,940.67 0.03% 113,940.67 0.02% 113,940.67 0.02%
Taxes and Licenses 316,912.14 0.14% 422,549.52 0.14% 422,549.52 0.11% 422,549.52 0.09% 422,549.52 0.07%
Communication, Lights and Water 277,722.05 0.12% 370,296.07 0.12% 370,296.07 0.10% 370,296.07 0.08% 370,296.07 0.06%
Office Supplies 59,979.01 0.03% 79,972.01 0.03% 87,969.21 0.02% 87,969.21 0.02% 87,969.21 0.02%
Management and Professional Fee 280,544.31 0.12% 374,059.08 0.12% 374,059.08 0.10% 374,059.08 0.08% 374,059.08 0.06%
Membership Fee 56,128.28 0.02% 74,837.71 0.02% 82,321.48 0.02% 82,321.48 0.02% 82,321.48 0.01%
Directors Fee 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00%
Injuries, Damages and Medical Expenses 52,507.90 0.02% 70,010.53 0.02% 77,011.59 0.02% 77,011.59 0.02% 77,011.59 0.01%
Transportation and Travel 25,717.50 0.01% 34,290.00 0.01% 37,719.00 0.01% 37,719.00 0.01% 37,719.00 0.01%
Miscellaneous 30,390.60 0.01% 40,520.80 0.01% 40,520.80 0.01% 40,520.80 0.01% 40,520.80 0.01%
26,637,602.42 11.44% 35,361,735.65 11.39% 34,922,443.96 9.38% 34,922,443.96 7.50% 34,922,443.96 6.00%

NET INCOME BEFORE TAX 31,781,461.26 13.65% 42,530,349.25 13.70% 87,398,611.30 23.46% 151,394,492.96 32.52% 267,793,485.65 46.01%

ADD (LESS)
Interest Income 7,104.45 0.00% 9,472.60 0.00% 9,472.60 0.00% 9,472.60 0.00% 9,472.60 0.00%
Interest Expense -18,507,306.73 -7.95% -24,676,408.97 -7.95% -24,676,408.97 -6.62% -24,676,408.97 -5.30% -24,676,408.97 -4.24%
Other Income (Ads, Rental & Scrap) plus sale of c 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00%
Other Expenses (Maint-ads) 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00%
-18,500,202.28 -7.95% -24,666,936.37 -7.95% -24,666,936.37 -6.62% -24,666,936.37 -5.30% -24,666,936.37 -4.24%

NET INCOME 13,281,258.98 5.71% 17,863,412.88 5.76% 62,731,674.92 16.84% 126,727,556.59 27.22% 243,126,549.28 41.77%

LESS: PROVISION FOR INCOME TAX 3,320,314.74 1.43% 4,465,853.22 1.44% 15,682,918.73 4.21% 31,681,889.15 6.80% 60,781,637.32 10.44%

NET INCOME AFTER TAX 9,960,944.23 4.28% 13,397,559.66 4.32% 47,048,756.19 12.63% 95,045,667.44 20.41% 182,344,911.96 31.33%