College of business administration-graduate school

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Aviles, Thomas Edison R Feasibility Study
ImpactofAccountingInformationSystemasaManagementToolinOrganisation

Financial Statements

EXCELENS
Statement of Comprehensive Income
Comparative Analysis

	2021	2022	2023
Net Sales	8,320,000	12,480,000	18,720,000
Cost of Services	3,600,000	5,670,000	8,930,250
Gross Profit on Sales	4,720,000	6,810,000	9,789,750
Operating Expenses
Permits and Licenses	15,000	10,000	10,000
Utilities Expense	30,000	45,000	67,500
Rent Expense	150,000	396,000	435,600
Salaries Expense	2,940,000	3,087,000	3,241,350
Supplies Expense	20,000	30,000	45,000
Depreciation Expense	33,500	99,600	128,400
Advertising Expense	30,000	45,000	67,500
Total Operating Expenses	3,218,500	3,712,600	3,995,350
Net Income Before Tax	1,501,500	3,097,400	5,794,400
Income Tax Expense	450,450	929,220	1,738,320
Net Income	1,051,050	2,168,180	4,056,080

EXCELENS
Statement of Cash Flows
Comparative Analysis

	2021	2022	2023
Cash Flows from Operating Activities
Cash Sales	8,320,000	12,480,000	18,720,000
Payment of permits and licenses	(15,000)	(10,000)	(10,000)
Payment of utilities	(30,000)	(45,000)	(67,500)
Payment of rent and deposit	(180,000)	(396,000)	(435,600)
Payment of salaries - cost of services	(2,880,000)	(4,536,000)	(7,144,200)
Payment of salaries - operating	(2,352,000)	(2,469,600)	(2,593,080)
Payment of supplies	(20,000)	(30,000)	(45,000)
Payment of advertisement	(30,000)	(45,000)	(67,500)
Payment of income tax	-	(450,450)	(929,220)
Payment of withholding tax	-	(1,308,000)	(1,751,400)
Net cash provided by operating activities	2,813,000	3,189,950	5,676,500
Cash Flows from Investing Activities
Purchase of office furniture and equipment	(804,000)	(192,000)	(288,000)
Net cash used in investing activities	(804,000)	(192,000)	(288,000)
Cash Flows from Financing Activities
Investment of stockholders	4,000,000	-	-
Net cash used in investing activities	4,000,000	-	-
Net increase in cash	6,009,000	2,997,950	5,388,500
Cash at the beginning of year	-	6,009,000	9,006,950
Cash at the end of year	6,009,000	9,006,950	14,395,450

EXCELENS
Statement of Financial Position
Comparative Analysis

	2021	2022	2023
ASSETS
Current Assets
Cash	6,009,000	9,006,950	14,395,450
Noncurrent Assets
Rent Deposit	30,000	30,000	30,000
Machinery and Equipment	770,500	862,900	1,022,500
Total Noncurrent Assets	800,500	892,900	1,052,500
	6,809,500	9,899,850	15,447,950
LIABILITIES AND EQUITY
Liabilities
Income tax payable	450,450	929,220	1,738,320
Withholding tax payable	1,308,000	1,751,400	2,434,320
Total Liabilities	1,758,450	2,680,620	4,172,640
Equity
Capital Stock - Common	4,000,000	4,000,000	4,000,000
Retained Earnings	1,051,050	3,219,230	7,275,310
Total Equity	5,051,050	7,219,230	11,275,310
	6,809,500	9,899,850	15,447,950

EXCELENS
Statement of Changes in Equity
Comparative Analysis

	2021	2022	2023
Balance, Beginning	-	5,051,050	7,219,230
Investment	4,000,000	-	-
Net Income	1,051,050	2,168,180	4,056,080
Balance, Ending	5,051,050	7,219,230	11,275,310

Financial Analysis

Part I. Financial Ratios

Liquidity Ratios

Current Ratio

	2021	2022	2023
Current Assets	6,009,000	9,006,950	14,395,450
Divided by: Current Liabilities	1,758,450	2,680,620	4,172,640
Current Ratio	3.42	3.36	3.45

Working Capital

	2021	2022	2023
Current Assets	6,009,000	9,006,950	14,395,450
Less: Current Liabilities	1,758,450	2,680,620	4,172,640
Working Capital	4,250,550	6,326,330	10,222,810

Solvency Ratios

Debt to Total Assets Ratio

	2021	2022	2023
Total Liabilities	1,758,450	2,680,620	4,172,640
Divided by: Total Assets	6,809,500	9,899,850	15,447,950
Debt to Total Assets Ratio	0.26	0.27	0.27

Debt to Equity Ratio

	2021	2022	2023
Total Liabilities	1,758,450	2,680,620	4,172,640
Divided by: Equity	5,051,050	7,219,230	11,275,310
Debt to Equity Ratio	0.35	0.37	0.37

Profitability Ratios

Gross Profit

	2021	2022	2023
Gross Profit	4,720,000	6,810,000	9,789,750
Divided by: Net Sales	8,320,000	12,480,000	18,720,000
Gross Profit	0.57	0.55	0.52

Profit Margin

	2021	2022	2023
Net Income	1,051,050	2,168,180	4,056,080
Divided by: Net Sales	8,320,000	12,480,000	18,720,000
Profit Margin	0.13	0.17	0.22

Operating Expense to Sales

	2021	2022	2023
Operating Expenses	3,218,500	3,712,600	3,995,350
Divided by: Net Sales	8,320,000	12,480,000	18,720,000
Operating Expense to Sales	0.39	0.30	0.21

Return on Total Assets

	2021	2022	2023
Net Income	1,051,050	2,168,180	4,056,080
Divided by: Ave. Total Assets	3,404,750	8,354,675	12,673,900
Return on Total Assets	0.31	0.26	0.32

Return on Equity

	2021	2022	2023
Net Income	1,051,050	2,168,180	4,056,080
Divided by: Average Equity	2,525,525	6,135,140	9,247,270
Return on Equity	0.42	0.35	0.44

Asset Turnover

	2021	2022	2023
Net Sales	8,320,000	12,480,000	18,720,000
Divided by: Ave. Total Assets	3,404,750	8,354,675	12,673,900
Asset Turnover	2.44	1.49	1.48

Part II. Economic Evaluation

Payback Period

Shareholders' Initial Investment to the Company	4,000,000
Annual Net Cash Flow from Operation*	3,893,150

Year	Net Cash Flow	Counted Year(s)
0	(4,000,000)	-
1	3,893,150	1
2	106,850	0.03
Payback Period	-	1.03

*Average amount for 3 years

CHAPTER 6

SOCIAL DESIRABILITY ASPECT

The social desirability aspect of this study will discuss the relevance and impact of the business to the society, economy and environment.

Contribution to the Philippine Economy

Every business establishment contributes to the growth and development of the Philippine economy, especially by responsibly performing its duties and obligations to its customers and suppliers, to the government, to the general public and to other stakeholders.

EXCELENS will contribute additional revenue to the Philippine government by paying taxes properly and timely. These taxes will then be used by the government to perform its functions including support and assistance to the businesses and projects for the community such as building infrastructures, public schools and hospitals, strengthening the police and armed forces for the security and protection of the general public and other projects that will benefit the people.

Employment Generation

The business will provide job opportunities to many individuals, especially those in the field of accounting, human resource, procurement, inventory management, information technology, marketing, etc. This will help many individuals to have a source of income that they can use to support their daily needs, raise their children and send them to school, provide decent homes to their families, acquire medical services when needed and contribute to government revenue through the payment of income taxes. Furthermore, EXCELENS will help to lessen the unemployment rate and the number of poor people. The eradication of poverty will help solve social problems such as crimes, juvenile delinquency and malnutrition.

Environment Conservation

EXCELENS will contribute to the sustainability of the environment by ensuring that the processes involved in the business operations will be environmental-friendly. Also, the firm will apply the principle of Corporate Social Responsibilities (CSR) which may include participation in environmental conservation activities such as tree planting, clean-up drive, etc. The business will observer proper waste management and disposal in order to maintain cleanliness and orderliness. This will help to lessen pollution which causes different diseases and health problems to people.

BIBLIOGRAPHY

Acabo, A., Almontero, R.A., Juatco, J.A., et al. (2010). “KALYE OCHO” A Feasibility Study on Street Food Kiosk.

Bhutani, A., Wadhwani, P. (2016). Enterprise Application Market Size By Product (CRM, ERP, SCM, Web Conferencing, Business Intelligence [BI], BPM, CMS, EAM), By End-Use (Manufacturing, BFSI, Healthcare, Retail, Government, Aerospace & Defense, Telecom & IT), By Deployment (On-Premise, Cloud), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2016 – 2024. Global Market Insights. https://www.gminsights.com/industry-analysis/enterprise-application-market

Goenka, T. (2019). Changing digital behaviour and technology adoption of SMEs. The Economic Times. India Times. https://economictimes.indiatimes.com/small-biz/sme-sector/changing-digital-behaviour-and-technology-adoption-of-smes/articleshow/69886442.cms

Grand View Research. (2018). Enterprise Application Market Size, Share & Trends Analysis Report By Product, By End Use (BFSI, Healthcare, Manufacturing, Retail, Telecom & IT), By Deployment, By Region, And Segment Forecasts, 2012 – 2022. https://www.grandviewresearch.com/industry-analysis/enterprise-application-market

Martinez, C.J. (2020). Top 10 Small Business Cloud Accounting Software of 2020. D&V Philippines. https://www.dvphilippines.com/blog/top-10-small-business-cloud-accounting-software-of-2020

Philippine Statistics Authority (PSA). (2017-2019). MSME Statistics. Number of Establishments. https://www.dti.gov.ph/resources/msme-statistics/

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