CHAPTER VII

FINANCIAL ASSUMPTIONS

The business estimates the following financial assumption:

⚫ Number of initial services per month: 409 based on the survey.

⚫ All sales transaction made is cash-to-cash basis.

⚫ The average price for cleaning services with VAT inclusion

Cash price

House cleaning: P1,850.00

Deep cleaning: P1,933.00

Kitchen cleaning: P1,258.00

Office cleaning: P1,353.00

Sanitation cleaning: P1,003.00

⚫ Average direct cost and revenue per service

Direct Cost Direct Revenue

House cleaning: P 950.00 P900.00

Deep cleaning: P1,033.00 P900.00

Kitchen cleaning: P658.00 P600.00

Office cleaning: P753.00 P600.00

Sanitation cleaning: P303.00 P700.00

⚫ Sales increase by 5% every year based on the demand for the services

and the survey and as a result of a customer’s good feedback.

⚫ 10% withdrawal of the net income in the first year and 40% of the net

income for the following years and divide it equally to the partners to

mitigate cash outflow

⚫ The depreciation method used is a straight-line method.

⚫ The 30 % Income tax due incurred this year shall be paid on or before

April 15 in the subsequent year covering income for the taxable year.

⚫ Salaries will increase by 5% every year.

⚫ Operating expense – General, selling and administrative expenses

(SG&A) will increase by 5% every year except depreciation expenses,

rent, utilities, taxes and licenses and insurance expenses.

⚫ The estimated life of assets is determined by their classifications

because they serve various functions in the business.

i: Equipment
Particulars Total Cost Scrap Value Useful Life
Vacuum Cleaner 15,000 3000.00 5
Pressure Cleaner 50,600 3162.50 16
Heavy Duty Floor Machine 37,000 9250.00 4
Mopping Combo Pack 10,000 5000.00 2
Mini Van 300,000 30000.00 10
Personal Computer 14,600 3650.00 4
Body Camera 12,000 2400.00 5
Greenfield electric knapsack sprayer 4,000 1000.00 4
Ladder 3750 750.00 5
Washing machine 25,300 5060.00 5
TOTAL 472250 63272.50

ii: Furniture and Fixture

Particulars Total Cost Scrap Value Useful Life
Metal Drawer Filing Cabinet 17,000 1700.00 10
Executive Desk 20,000 2000.00 10
Chair 7,500 1500.00 5
Table 8,000 1600.00 5
Desk Chair 12,000 4000.00 3
TOTAL 64,500 10800.00

iii: Office equipment

Particulars Total Cost Scrap Value Useful Life

Printer 8,000 2000.00 4
Telephone 2,230 2230.00 1
Cash register drawer 3,200 640.00 5
Electric Stand Fan 3,000 750.00 4
water dispenser 5,249 1050.00 5
trash can 900 180.00 5
air condition 14,000 2800.00 5
fire extinguisher 1,800 360.00 5
fire alarm 2,250 450.00 5
40629 10460.00

vi: Leasehold Improvement

Particulars Total Cost Scrap Value Useful Life

Restroom 10,000 333.33 30
Paint 5,000 500.00 10
Ceilings 8,500 340.00 25
Decorations 5,000 1000.00 5
Walls 10,000 333.33 30
Floor Replacements (Tiles) 5,000 200.00 25
Light Settings 4,000 400.00 10
Sinks 2,500 125.00 20
Reception Area 10,000 333.33 30
Office 6,000 300.00 20
Electrical 5,000 277.78 18
Plumbing Additions 10,000 333.33 30
Installing a coffee center for employees 25,000 1562.50 16
Shelving and Countertops 15,000 1875.00 8
Partitioning 24,000 1600.00 15
Built-in displays 20,000 2000.00 10
Installing retail counters 17,500 1166.67 15
CCTV 2,696 449.33 6
185196 13129.61