BUSINESS FINANCE

CONCEPT AND APPLICATION

Presented to the Faculty of the Senior High School

Bestlink College of the Philippines Bulacan Inc.

In Partial Fulfilment
Of the Requirement for the Subject
Business Finance

By:

CRISELDA S. PAPA

NOVEMBER , 2019
 COMPANY PROFILE
COMPANY PROFILE

Company Name : ROSE REPAIR AND

. ACCESSORIES SHOP
Form of Business : partnership
Type of Business : DISTRIBUTOR
Address : BULACAN
Contact Number :
SMART09100176072/09480131010
Email :ropergamali843@gail.com
Website :http.//ropergamalicorporation.org

SOURCE OF FINANCING : Sales of Property (land) and

borrowed money from a brother

–in-law

PROJECT COST : 1 000,000.00

NO OF EMPLOYEE : 30

MAIN PRODUCT

RAW MATERIALS
FINISHED PRODUCT

VISITED PERSON

Name : MR. ROPERT T. GAMALI

Designation : General Manager

COMPANY AND PRODUCT OVERVIEW

 Roper Merchandise is a general trading firm specializing in
sourcing and marketing of various raw materials and finished products.
The company has various multinational clients in the industry sector such
as food, agro-industry, petro chemicals and packaging materials which
they distribute their raw materials and finished food.

The company imports directly and sells to their clients. They also
distribute their products in various areas all over the country.

SOURCE OF SUPPLY AND IMPORT FROM

China and Vietnam

TEAM ORGANIZATIONAL CHART

Board of Directors

Chief Executive Officer

(CEO)

Marketing Manager Chief Financial Officer Production and Operation

(CFO) Manager

Treasurer Purchaser Controller

MISION

“To achieve sustainable growth, we have established a vision with

clear goals: Maximizing return to shareholders while being mindful of our
overall responsibilities”

GOAL AND DUTIES OF THE CHIEF FINANCIAL MANAGER

 The goal of the financial manager must be consistent with the
mission of the firm.

“To maximize firm value shareholder’s wealth (as measured by share

prices).”

DUTIES :

1. Oversee financial planning

2. Firm strategic plan

3. Control firm cash flow

DUTIES AND RESPONSIBILITIES OF THE BOARD OF DIRECTOR

1. Layout the firm strategic plan

2. Formulate firm ethics

3. Appoint the senior management

DUTIES OF THE SHAREHOLDERS

1. Elect the firm Board of Directors

DUTIES OF THE MANAGER

“To cater to all the stakeholders (such as consumers, employees,

suppliers etc.), they need to pay particular attention to the owners of the
corporation, i.e., shareholders.” If managers fail to pursue shareholder
wealth maximization, they will lose the support of investors and lenders.
The business may cease to exist and ultimately, the managers will lose
their jobs!

DUTIES OF THE TREASURER

 1. Cash management

2. Credit management

3. Capital expenditures

4. Raising capital

5. Financial planning

6. Management of foreign currencies

7. Taxes

8. Financial statement

9. Cost accounting

10. Data processing

DEFINATION OF TERMS

FINANCIAL STATEMENTS FOR PARTNERSHIPS

Partnership agreement

In order to prevent conflicts, partners need to agree on important issues

beforehand and put them in a partnership agreement.

1. Capital contribution by each partner

2. Profit and loss sharing ratio

3. Rate of interest on capital

4. Rate of interest on drawings

5. Salaries to partners

If there is no agreement of any type (verbal or written) the provisions of

the Philippines Law in a partnership agreement apply.

Profit and loss appropriation account

The profit and loss that will be shared by the partners is not the balance
in the profit and loss accounts because we have to make some
appropriation adjustments (Interest on capital interest on drawings and
partners’ salaries). Therefore, the balance of the profit and loss account
will first be transferred to an account called the profit and loss
appropriation account (appropriation account). This account records all the
appropriation adjustments. Finally, the balance in the profit and loss
appropriation account will be shared by the partners according to the
agree profit and loss sharing ratio (see Profit and Loss Appropriation table
technical financial study)

Open a capital account for each partner

For a partnerships a capital account is opened for each partner to
record the amount of capital contributed the profit and loss shared the
amount of drawings made and also the appropriations such as the interest
on capital the interest on drawings and the salary to the partner. ( see Profit
and Loss Appropriation table technical financial study)

Fluctuating and fixed capital accounts table

It is quite common to open an additional account called a current
account for each partner, that records recurrent items such as the profit or
loss shared the amount of drawings made the interest on capital the
interest on drawings and the salary to the partner.
As a result, the capital account shows only the amount of capital
contributed. This type of capital account is known as a fixed capital
account while the type of capital account that records all the above items
in it is known as a fluctuating capital account.

Capital account
Capital contributed
+ Capital
Current account (+/ ) Profit/loss shared
(+/ ) Profit/loss shared ( ) Drawings
( ) Drawings (+) Interest on capital
(+) Interest on capital ( ) Interest on drawings
( ) Interest on drawings (+) Partner’s salary
(+) Partner’s salary

(a) Fixed capital account with current account (b)Fluctuating capital account

Fluctuating capital accounts

The required double entries for appropriation adjustments are as follows:

Profit and Loss Appropriation table

FINANCIAL STUDY
A. Total Project Cost
The total cost of the project is Php1000,000.00. included in the amount
the is the appraised value of the existing building and lad for the use of the
project is the amount of P311,000.00 and he initial cash of P497,994.25 is
budgeted for the following expenses.

Cost of Construction …………………….

Office equipment ……………………..
Office supplies ……………………..
Stockroom Equipment …………………….
Supplies …………………….
Kitchen utensils ……………………………
Dining Utensils …………………………….
Furniture and fixture ………………………
Other expenses …………………………..

Add
Land ………………………….
Cash on Hand ………………………….

Building Lay-out and Design

Floor area
Building Construction

Equipment and Facilities

Office Equipment
Office Supplies
Stockroom Equipment
Kitchen Utensils and Equipment
Dining Utensils
Furniture and Fixture
Supplies
Raw Materials

Labor Requirements

Other Operating Expenses

Permit and Licences Fee (annually)
Health Certificate
Sanitary Certificate
Business Clearance
Mayors Business Permit
Building Permit
Signboard Fee
Building Insurance (Annually)
Clothing Allowance
Advertising (opening / anniversary sales)
Billboards
Radio
Facebook Page

Gas, Electricity and Water (Monthly)

Gas
Electricity
Water

Transformation Expense
Repair and Maintenance
Staff Meals

Taxes

Depreciation

SEAT TURN OVER / SALES ESTIMATE

MAJOR ASSUMPTION

FINANCIAL RATIONS
1. Summary of Projected Annual Sales and Net Income
2. Profitability Test
3. Payback Period (PBP)
4. Return of Investment (ROI)
 FIRM STRATEGIC PLAN
LONG TERM PLAN (Anniversary sales / promotion / special occation or
events e.g valentines day, Christmas/ holly week/ )

MONTHLY PROJECTED INCOME STATEMENT

ROPER MERCHANDISE
Projected Income Statement
For the Month Ended 2019

YEARLY PROJECTED INCOME STATEMENT

ROPER MERCHANDISE
Projected Income Statement
For the Year Ended 2019
PROJECTED BALANCE SHEET
For the Year 2019 - 2024
ACKNOWLEDGMENT