CONTENT/ELEMENTS

OF BUSINESS PLAN

Prepared by:

Mary Mildred P. de Jesus

SHS Teacher
 PROFIT AND LOSS
STATEMENT
 Assessment of ability to “make money”
 Summary of Activity to date
 Different versions
o Management accounts
o Financial vs. Tax accounts
o Budget
o Annual vs. Monthly
 SIMPLE P&L STATEMENT
BlankCo Trading Profit & Loss Statement
Dated 30th November 2019
Sales
Less: Cost of Sales (COGS)
Gross Profit

Less: General Expenses (Overheads)

Net Profit
 COST OF SALES (COGS)
 Often proportional to Sales
o If so calculate in the same spreadsheet
o Calculate by product type / revenue
type (not client)
o Design for amendments to establish
B/E costs
o Transfer totals to P&L
 PARTS OF COGS
 Direct Materials
 Direct Labour
 All costs that are related to the
production of goods.
 PARTS OF OVERHEADS
 Indirect Expenses
o that is not classified in the direct
labour and direct materials.
o Ex. Rent expense, Utilities
expense.
 THE BALANCE
SHEET
 is a statement of the financial
position of a business that lists
the assets, liability and owner’s
equity at a particular point in
time.
 THE BALANCE
SHEET
 Value of everything
owned minus
everything owed.
 PARTS OF BALANCE
 SHEET
Assets – those that are cash or
easily converted into cash.
Everything owned that has
monetary value. Ex. Cash, Land,
Building, Equipment, A/R, etc.
Items owned
 PARTS OF BALANCE
SHEET
 Liability – are funds owed
by the business (debt). Ex.
A/P, Ioan payable, etc.
Items owed
 PARTS OF BALANCE
 SHEET
Owner’s Equity – also known
as the shareholder’s equity, is
that which remains after
subtracting the liabilities form
the assets.
PRO FORMA OF BALANCE
SHEET
Assets =


Liability +
Owner’s Equity
 PRO FORMA OF BALANCE
SHEET
Assets
 Current Assets
 Fixed Assets
 Intangible Assets
 Other assets
 PRO FORMA OF BALANCE
 Liability
SHEET
 Current Liability
 Long-term liability
 Owner’s Equity
 Paid-in Capital
 Retained Earnings
 Accumulated other Comprehensive income
 Treasury stock
 Account Form format
Company Name
Balance Sheet
As of December 31, 2018

Current Assets: Current Liabilities:

Cash P 500 Accounts Payable P 100
Accounts Receivable 200 Tax liability 100
Inventory 100 Bank Overdraft 100

Total Current Assets 800 Total Current Liability 300

Fixed (Non-current) Assets: Non- Current Liabilities:

Plant & Equipment P 1000 Loan Payable 2 yrs 1000
less: Depreciation -100 900

Vehicles 2000 Total Non-Current liability 1300

less: Depreciation -200 1800
Owner's Equity
Total Non-Current Assets 2700 Capital P 3000
Less: withdrawal 200
Net Capital 2800
Add: Net loss 600 2200

Less/Add: Net income/loss

Total Assets P 3500 Total Liabilities & Owner's Equity P 3500

Report Form format
Company Name
Balance Sheet
As of December 31, 2018

Current Assets:
Cash P 500
Accounts Receivable 200
Inventory 100

Total Current Assets 800

Fixed (Non-current) Assets:

Plant & Equipment P 1000
less: Depreciation -100 900
Vehicles 2000
less: Depreciation -200 1800

Total Non-Current Assets 2700

Total Assets: P 3500

Current Liabilities:
Accounts Payable P 100
Tax liability 100
Bank Overdraft 100

Total Current Liability 300

Non- Current Liabilities:

Loan Payable 2 yrs 1000

Total Non-Current liability 1300

 BREAK-EVEN ANALYSIS
The break-even analysis lets you
determine what you need to sell,
monthly or annually, to cover your
costs of doing business — your
break-even point.
 BREAK-EVEN ANALYSIS
Break Even Point
Fixed Costs
Break Even Point in Units =
Sales Price per Unit - Variable Cost per Unit

Since the price per unit minus the variable costs of

product is the definition of the 
contribution margin per unit, you can simply
rephrase the equation by dividing the fixed costs
by the contribution margin.
 BREAK-EVEN ANALYSIS
Break Even Point
Fixed Costs
Break Even Point in Units =
Contribution Margin per Unit

This computes the total number of units that must

be sold in order for the company to generate
enough revenues to cover all of its expenses. Now
we can take that concept and translate it into sales
peso.
 BREAK-EVEN ANALYSIS
Break Even Point
Break Even Point in Peso = Sales price p/unit x Break even points in units

This will give us the total peso amount in sales that will
we need to achieve in order to have zero loss and zero
profit. Now we can take this concept a step further and
compute the total number of units that need to be sold in
order to achieve a certain level profitability with out
break-even calculator.
 BREAK-EVEN ANALYSIS
Break Even Point
Desired Profit in peso + Break Even # of
# of Units to Produce the
Desired Profit = Contribution Margin Units
per unit

First we take the desired peso amount of profit and divide it by the contribution
margin per unit. The computes the number of units we need to sell in order to
produce the profit without taking in consideration the fixed costs. Now we must
add back in the break-even point number of units. Here’s what it looks like.
 CASH FLOW STATEMENT
 Shows the flow of cash in and out
of your business.
 Cash flow projections shows the
cash that is anticipated to be
generated or expanded over a chosen
period of time.
 CASH FLOW STATEMENT
Cash Flow from Operating Activities
(+) Cash received from customers
(+) Other Operating cash receipts (if any)
(-) Cash paid to suppliers (including suppliers
of inventory, insurance, advertising, etc.)
(-) Cash paid to employees
 CASH FLOW STATEMENT
Cash Flow from Operating Activities
(-) interest paid
(-) income taxes paid
(-) other operating payments, if any
(=) Total Net Cash Provided (Used) by
Operating Activities
 CASH FLOW STATEMENT
Cash Flow from Operating Activities
Ex. Net income  P300,000
Depreciation (P10,000)
Accounts Payable (P20,000)
Accounts Receivable P10,000
Net Change (P20,000)
Net Cash From Operations  P280,000
 CASH FLOW STATEMENT
Cash Flows From Investing Activities
Sale of Property P35,000
Equipment Purchase P(15,000)
Net Cash From Investment Activities 
P20,000
 CASH FLOW STATEMENT
Cash Flows From Financing Activities
Loan Payment (P10,000)
• Loan Collection P5,000
• Net Cash From Financing Activities  (P5,000)
• Net Increase in Cash and Cash Equivalents 
P280,000
• Cash and Cash at Beginning of Period 
P256,000
• Cash and Cash at End of Period  P536,000
THANK
YOU!!