FINANCIAL PLAN

Important Assumption

1. We have prepared this plan with the assumption that the economy will remain
steady with the standard number of players in the industry. Growing Demand for
Mechanical Engineering Education: Assume that there is a consistent and growing
demand for mechanical engineering education and learning materials. This assumption
implies that there is a sustained interest in the field, leading to a continuous need for
educational resources and tools among students, professionals, and enthusiasts.

Brake-even Analysis

Monthly Units Break-even Php5530

Monthly Revenue Break-even Php4000

Assumptions:

Average Per-Unit Revenue Php800

Average Per-Unit Variable Cost Php200

Estimated Monthly Fixed Cost Php8000

Projected Profit and Loss

Year 1 Year 2 Year 3

Sales Php96,000 Php103,000 Php112,000

Direct Cost of Sales Php15 100 Php19 153 Php23 206

Other 0 0 0

TOTAL COST OF SALES Php111 100 Php122 153 Php135 206

Gross Margin Php293 969 Php366 781 Php439 593

Gross Margin % 94,98% 94,72% 94,46%

Expenses

Payroll Php138 036 Php162 898 Php187 760

Sales and Marketing and Other Expenses Php1 850 Php2 000 Php2 150

Depreciation Php2 070 Php2 070 Php2 070

Leased Equipment 0 0 0
 Utilities Php4 000 Php 4 250 Php 4 500

Insurance Php 1 800 Php 1 800 Php 1 800

Rent Php 6 500 Php 7 000 Php 7 500

Year 1 Year 2 Year 3

Payroll Taxes Php 34 510 Php 40 726 Php 46 942

Other 0 0 0

Total Operating Expenses Php188 766 Php 220 744 Php252 722

Profit Before Interest and Taxes Php105 205 Php 146 040 Php 186 875

EBITDA Php 107 275 Php 148 110 Php 188 945

Interest Expense 0 0 0

Taxes Incurred Php 26 838 Php 37 315 Php 792

Net Profit Php 78 367 Php 108 725 Php 139 083

Net Profit/Sales 30,00% 39,32% 48,64%

Profit Yearly
 Profit

15.00k

10.00k

5.00k

Year1 Year2 Year3

Financial Year Profit

Year1 251,000

Year2 220,053

Year3 314000

Gross Margin Yearly

 Gross Margin

15.00k

10.00k

5.00k

Year1 Year2 Year3

Financial Year Gross Margin

Year1 186000

Year2 112000

Year3 214000

Projected Cash Flow

Cash Received Year 1 Year 2 Year 3

Cash from Operations

Php40 Php
Cash Sales 124 45 046 Php 50 068

Cash from Receivables Php 7 023 Php 8 610 Php 9 297

Php 47 Php 53
SUBTOTAL CASH FROM OPERATIONS 143 651 Php 59 359

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0 0 0

0 0 0

New Current Borrowing 0 0 0

0 0 0

New Other Liabilities (interest-free) 0 0 0

0 0 0

New Long-term Liabilities 0 0 0

0 0 0

Sales of Other Current Assets 0 0 0

0 0 0

Sales of Long-term Assets 0 0 0

 Cash Received Year 1 Year 2 Year 3

New Investment Received 0 0 0

SUBTOTAL CASH RECEIVED 47 143 53 651 55 359

Expenditures from Operations

Cash Spending 21 647 24 204 26 951

Bill Payments 13 539 15 385 170 631

SUBTOTAL SPENT ON OPERATIONS 35 296 39 549 43 582

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out 0 0 0

Principal Repayment of Current Borrowing 0 0 0

Other Liabilities Principal Repayment 0 0 0

Long-term Liabilities Principal Repayment 0 0 0

Purchase Other Current Assets 0 0 0

Purchase Long-term Assets 0 0 0

Dividends 0 0 0

SUBTOTAL CASH SPENT 35 296 35 489 43 882

Net Cash Flow 11 551 13 167 15 683

Cash Balance 21 823 22 381 28 239

Projected Balance Sheet

Assets Year 1 Year 2 Year 3

Current Assets

Cash 184 666 218 525 252 384

Accounts Receivable 12 613 14 493 16 373

Inventory 2 980 3 450 3 920

Other Current Assets 1 000 1 000 1 000

TOTAL CURRENT ASSETS 201 259 237 468 273 677

Long-term Assets

Long-term Assets 10 000 10 000 10 000

Assets Year 1 Year 2 Year 3

Accumulated Depreciation 12 420 14 490 16 560

TOTAL LONG-TERM ASSETS 980 610 240

TOTAL ASSETS 198 839 132 978 167 117

Current Liabilities

Accounts Payable 9 482 10 792 12 102

Current Borrowing 0 0 0

Other Current Liabilities 0 0 0

SUBTOTAL CURRENT LIABILITIES 9 482 10 792 12 102

Long-term Liabilities 0 0 0

TOTAL LIABILITIES 9 482 10 792 12 102

Paid-in Capital 30 000 30 000 30 000

Retained Earnings 48 651 72 636 96 621

Earnings 100 709 119 555 138 401

TOTAL CAPITAL 189 360 222 190 255 020

TOTAL LIABILITIES AND CAPITAL 198 839 232 978 267 117

Net Worth 182 060 226 240 270 420

Business Ratios

Year 1 Year 2 Year 3 Industry Profile

Sales Growth 4,35% 30,82% 63,29% 4,00%

Percent of Total Assets

Accounts Receivable 5,61% 4,71% 3,81% 9,70%

Inventory 1,85% 1,82% 1,79% 9,80%

Other Current Assets 1,75% 2,02% 2,29% 27,40%

Total Current Assets 138,53% 150,99% 163,45% 54,60%

Long-term Assets -9,47% -21,01% -32,55% 58,40%

TOTAL ASSETS 100,00% 100,00% 100,00% 100,00%

Current Liabilities 4,68% 3,04% 2,76% 27,30%

 Year 1 Year 2 Year 3 Industry Profile

Long-term Liabilities 0,00% 0,00% 0,00% 25,80%

Total Liabilities 4,68% 3,04% 2,76% 54,10%

NET WORTH 99,32% 101,04% 102,76% 44,90%

Percent of Sales

Sales 100,00% 100,00% 100,00% 100,00%

Gross Margin 94,18% 93,85% 93,52% 0,00%

Selling, General & Administrative Expenses 74,29% 71,83% 69,37% 65,20%

Advertising Expenses 2,06% 1,11% 0,28% 1,40%

Profit Before Interest and Taxes 26,47% 29,30% 32,13% 2,86%

Main Ratios

Current 25,86 29,39 32,92 1,63

Quick 25,4 28,88 32,36 0,84

Total Debt to Total Assets 2,68% 1,04% 0,76% 67,10%

Pre-tax Return on Net Worth 66,83% 71,26% 75,69% 4,40%

Pre-tax Return on Assets 64,88% 69,75% 74,62% 9,00%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 19,20% 21,16% 23,12% N.A.

Return on Equity 47,79% 50,53% 53,27% N.A.

Activity Ratios

Accounts Receivable Turnover 4,56 4,56 4,56 N.A.

Collection Days 92 99 106 N.A.

Inventory Turnover 19,7 22,55 25,4 N.A.

Accounts Payable Turnover 14,17 14,67 15,17 N.A.

Payment Days 27 27 27 N.A.

Total Asset Turnover 1,84 1,55 1,26 N.A.

Debt Ratios

Debt to Net Worth 0 -0,02 -0,04 N.A.

Current Liab. to Liab. 1 1 1 N.A.

Liquidity Ratios
 Year 1 Year 2 Year 3 Industry Profile

Net Working Capital 120 943 140 664 160 385 N.A.

Interest Coverage 0 0 0 N.A.

Additional Ratios

Assets to Sales 0,45 0,48 0,51 N.A.

Current Debt/Total Assets 4% 3% 2% N.A.

Acid Test 23,66 27,01 30,36 N.A.

Sales/Net Worth 1,68 1,29 0,9 N.A.

Dividend Payout 0 0 0 N.A.