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Chapter 5

Financial Plan

A. Major Assumption

The project following assumptions to come up with

its financial positions.

1. Revenue

The revenue of the business will come from the

tutoring services. The basis of computation for the

service income from group tutorial is the market

share of students multiplied by the price of Php

300.00 per hour multiplied by the number of sessions

they will avail which is 32 sessions per month for

two (2) months. It will increase by 10% thereafter

for the succeeding years.

2. Expenses

The following assumptions were made regarding

expenses incurred.

a. Advertising Expense

Advertising expense on the first year

of business operations is Php 1, 000.00

which shall be for flyers, posters, and

tarpaulins to be handed out to its target

market and to schools, with proper


authorization to post. On the succeeding

years of the business operation, it will

decrease by Php 500. 00 to be spent for


b. Depreciation expense – Equipment/Furniture

and Fixtures

The depreciation of the equipment and

furniture and fixture is for 5 years. There

will be repurchase of such after it has been

fully depreciated. The depreciation expense

is to be computed in a straight-line method.

c. Rent expense

The rent expense is the amount of

monthly rent of Php 7,000.00 multiplied by

12 months to get the rent expense for the


d. Utilities expense

The utilities expense will pertain to

the amount of electricity. The cost of

electricity will be computed by the number

of kilowatts used multiplied by the price of

kilowatt per hour to get the monthly

consumption. The number of total consumption

for the month multiplied by the price per


kWh of Php 10.3077 to get the total

consumption for the month then add the 12%

VAT charge to get the Electric bill per

month. The utilities expense will increase

by 10% thereafter per year.

e. Office supplies expense

The office supplies are purchased monthly

and are enough to be used in the operation of

the business. Office supplies are to be

purchased if the supplies run out. The expenses

for office supplies will increase by 10% every


f. Salaries expense

The salaries expense will be the

salaries of the tutors and the staff. The

tutor’s salary will be on an hourly basis

and the administrative staff’s salary will

be on a daily basis.

g. SSS Contributions

The SSS contribution of the employee is

based on the Employer/Employee Total

Contribution from the Social Security Table

of 2018.

h. PhilHealth Contributions

The basis of computation for the

PhilHealth Contribution is the

Employer/Employee PhilHealth contribution

schedule from the PhilHealth Insurance


i. Pag-IBIG Contribution

The contribution is based on 2% of

gross pay or PHP 100.00 per month if gross

pay is not less than Php 500, both for the

employer and employee.

j. Business Permits and License

Business Permits and Licenses will

remain constant for the next five years

except for the DTI Registration which will

only be needed in the first year of

operation and shall be renewed after five

years. The Community Tax Certificate will be

based on the revenue of the proposed


k. Taxes

Taxes are to be paid monthly,

quarterly, and annually. The amount of tax

to be paid will be based on the net income

of the business.

3. Assets

a. Cash on hand

Pre-Operating Expense
The proposed business’ purchases, expenses,

and income will be in the form of cash.

b. Equipment/Furniture and Fixtures

All equipment and furniture and fixtures

are presumed to be depreciated for 5 years.

4. Liabilities

a. SSS, Philhealth, Pag-IBIG Contributions Payable

Employer contributions are remitted in the

next month.

b. Percentage Tax Payable

Payables for Percentage Tax are remitted

in the next month.

5. Owner’s Capital

The proposed business will have an

investment of Php 100,000.00. The breakdown is

shown in Table 5.1.

Table 5.1

Project Cost

Permits and Licenses

DTI Business Name Registration
Application Fee Php 500.00
Documentary Stamp Tax 15.00
Barangay and Business Clearance
Police Clearance 200.00
Mayor’s Clearance 100.00
Mayor’s Permit 100.00
Cedula 110.00
Business Plate 5,005.00
Electrical Certificate Fee 2,500.00
Fire Inspection Fee 200.00
BIR Registration 100.00
Annual Registration Fee 200.00
Certificate Fee 20.00
Documentary Stamp Tax 20.00
Total Organization Cost Php 9,070.00
Fixed Assets
Furniture and Fixtures Php 18,520.00
Equipment Php 67,738.00
Total Fixed Assets Php 86,258.00
Working Capital
Cash on hand Php 4,672.00
Total Project Cost Php 100,000.00

B. Mode of Financing

The business will have an initial capital of Php

100,000 which will be contributed by Jan Micko L.


C. Financial Statements

a. Income Statement

The proposed business based on the financial

statements on the Financial Statements in the

succeeding pages has a net income of P80,043.24 in

2018 and is increased to Php 719,967.64 in 2022.


b. Statement of Financial Position/Balance Sheet

The financial position of My GURU Mathematics

Tutorial Services as of 2018 is Php 188,140.16 and

is increased to Php 199,133.76 in 2022.

c. Statement of Cash Flows

The proposed business has an ending cash balance of

Php 109,070.32 from 2018 to 2022. Net cash flow from

operating activities is Php 95,328.32 while from

financing activities is Php 100,000.

d. Statement of Changes in Owner’s Equity

The statement of owner’s equity of the proposed

business, the capital on December 31, 2018 is Php

180,043.24 There is an increase of Php 80,043.24 due

to the positive result of operation. In 2022, the

ending capital of the business is Php, 108,523.18

since withdrawals from 2019 to 2022.