OPPORTUNITY SCREENING

Segmenting the market

• demographic segmentation divides the
market into smaller categories based on
demographic factors, such as age,
gender, and income. ... It's also
considered by many businesses to be
the cheapest way to divide a target
market.
 Assessing Competition
• A competitive assessment or competitive
analysis is a business-planning tool that
attempts to account for the presence of
competitors and their potential impact on
business decisions.
 Estimating market Share and Sales
• company's market share is its sales
measured as a percentage of an
industry's total revenues. You can
determine a company's market share by
dividing its total sales or revenues by the
industry's total sales
 Technology Assessment and Operations Viability
1. quantities demanded
2. quality specifications demanded
3. delivery expectations
4. price expectations
 investment requirements and production/servicig costs
1. pre-operating costs
2. production/service facilities investment
3. working capital investment
a. employee salaries, wages, and benefits
b. rent and lease expenses
c. utilities
d. transportation
e. fees and licenses
f. commisions
g. office supplies
 Financial forecast and Determination of
financial feasibility
Four critical financial statement
• income statement
• balance sheet
• cash flow statement
• funds flow statement
 Income Statement
MONTHLY INCOME STATEMENT MANG JUAN'S MANUFACTURING
GROSS SALES 750,600
LESS: COST OF GOODS SOLD 468,487

GROSS PROFIT/MARGIN 282,113

LESS: OPEARTING EXPENSES 166,145

OPERATING PROFIT/MARGIN 115,968

LESS: TAXES 21,392

NET PROFIT AFTER TAXES php 94.576

 BALANCE SHEET
• Assets
• Liabilities
• Equities
 Balance sheets of Mang Juan's Manufacturing
ASSETS LIABILITIES
CURRENT ASSETS CURRENT LIABILITIES
Cash Php100,500 Accounts Payable Php150,000
Accounts receivable 370,200 Income Taxes Payable 20,500
Inventory 405,350 Wages Payable 75,000
FIXED ASSETS
Land 422,100 Short term debt 125,000
Building 200,000 Long Term Liabilities
Vehicles 150,000 Long term debt 777,650
STOCKHOLDERS' EQUITY
Capital 350,000
Retained Earnings 150,000

TOTAL ASSETS Php 1,648,150 TOTAL LIABILITIES & EQUITY Php 1,648,150
 WHAT IS CASHFLOW?
• A cash flow statement is a financial
statement that provides aggregate data
regarding all cash inflows a company
receives from its ongoing operations and
external investment sources. It also
includes all cash outflows that pay for
business activities and investments during
a given period.
 Funds Flow Statement
• A Funds Flow Statement is a financial
document that analyses a company's
Balance Sheet of two years to
validate the movement of funds from
the previous financial year to the
current year.
FINANCIAL RATIOS AND MEASUREMENTS
PAYBACK PERIOD = TOTAL INVESTMENT________
ANNUAL NET INCOME AFTER TAXES

INCOME PAYBACK PERIOD = 1,500,000 = 3YRS.

500,000
 RETURN ON SALES (ROS)
NET PROFIT AFTER TAXES
RETURN ON SALES = SALES

500,000___
= 5,000,000 = 10%
 RETURN ON ASSETS/INVESTMENTS
NET PROFIT AFTER TAXES
ROA/ROI = TOTAL ASSETS/INVESTMENTS

500,000
ROA/ROI = 1,500,000 = 33%
FEASIBILITY STUDY