Checklist Requirements

For the Financial Plan

Alejandro, Xyran Aerielle

Arce, Renz Christian

Sabio, April Chan

Mauro, Christina May

De Guzman, Mikaela

Esteban, Princess

A Financial Output Presented to the Faculty of STI College San Jose, Nueva Ecija Philippines

In Partial Fulfillment of the Requirements for the Subject

Business Finance SY1819

Rosemarie Ancheta

Instructor

August 2018
 I. 01 Introduction to the Business

The Company
From its modest beginnings, CKSC Foods Company’s entry into the market as a single
proprietorship “mom and pop” enterprise broke ground in 2012. It has since evolved into a full-
fledged food business corporation operating 3 food lines with their respective registered
trademarks as CKSC Holdings Group Inc.

Starting with Dafort’s Sisig on the Spot, brainchild of CKSC owner.

Mr. Cayetano R. Escuadra III, at present has 1 company Store and 41 franchises, but
developed and marketed as a fast food item, and was followed by the the birth of Fries Pa More,
a more affordable snack food line made readily available through in-line stores has expanded
into over a hundred (100) franchise outlets nationwide and 2 company stores, and the recent
entry Watermelon a freshly squeezed lemonade beverage that has 2 branches in Metro Manila
and 1 in San Pedro Laguna for openers. All told CKSC Holdings Group, Incorporated has full
proprietary interests in 3 company owned stores and 144 franchisees, and still growing.

Mission

CKSC Holdings Group Incorporated, seeks to develop a responsive central control and
on-line information system for corporate decision making and management of in-house
businesses and the growing number of franchise outlets through judicious and timely allocation
of financial, material and manpower resources among these units, vital to the profitability of the
Holding company primarily and that of its franchise stakeholders.

Our main goal is to be one of the most successful fast food outlets in Philippines,
Friespamore will strive to be a premier local fast food brand in the local marketplace. We want
our customers to have the total experience when visiting our outlet(s) as they will learn about this
fascinating new concept. Our main focus will be serving high-quality food at a great value.

Vision

To be a world-class Company for the resolute quality of its food lines complemented by
impeccable service as hallmarks for customer preference and patronage.

Source: http://www.pinoy-entrepreneur.com/2017/09/17/friespamore/
http://ckscfoods.com/
 04 Financial Ratios

1. Liquidity Ratios

a) Current Ratio

current asset
=
current liabilities

48,000
=
11,000
= 4.36
b) Quick Ratio

current assets−inventory −prepaid utilities

=
current liabilities

56,000−5,000−10,500
=
11,000

= 3.36

2. Leverage Ratios

a) Debt Ratio

total liabilities
=
total assets

11,000
=
56,000

= 19.64%
 b) Equity Ratio

total equity
= x 100
total assets

45,000
= x 100
56,000

= 80.36%

c) Times Interest Earned Ratio

operating income
=
interest expense

39,500
=
5,000

= 7.9

3. Profitability Ratios

a) Gross Profit

gross profit
=
net sales

70,000
=
150,000

= 0.45 or 46%

b) Operating Profit Margin

operating profit
=
net sales

39,500
=
150,000

= 0.26 or 26%
 c) Net Profit Margin

net income
=
net sales

28,500
=
150,000

= 0.19 or 19%

05 Trends that will affect the Business

1. Authenticity

Today’s consumers are savvy and sophisticated and they can see through
inauthentic advertising instantly. Companies, brands and small businesses that use
honest marketing, real customer testimonials and have a genuine connection with
their audience are the ones set to thrive in the year ahead.

2. Digital Payments

Going cashless is great for small business. It streamlines bookkeeping, creates a

safer business environment, and gives customers more payment options. It's how
customers want to pay. Fortunately, cashless payments are getting easier. From Apple
Pay to Square to QuickBooks GoPayment, you now have a plethora of options if you
want to explore digital transactions. And you should: Come 2018, more customers than
ever will expect digital payment options from businesses of all sizes.
 3. The gig economy

As more and more people become disenchanted with the nine to five, we’re
seeing people using their former career and corporate skills to become service providers.
They are increasingly looking for creative ways to be their own boss by either becoming
freelancers or creating their own team of service providers and starting innovative and
collaborative small businesses.

Sources: https://insidesmallbusiness.com.au/growth-development/six-trends-that-will-impact-
small-businesses-in-2018
https://www.inc.com/alex-chriss/starting-a-business-in-new-year-keep-an-eye-on-
these-5-trends.html

06 Operating Cycle and Cash Conversion Cycle

Operating Cycle

1. Inventory Period

365
=
inventory turnover
365
=
16
= 22.812

2. Accounts Receivable

365
=
receivable turnover
 365
=
60

= 6.083

3. Operating Cycle

= inventory period +accounts receivable

= 22.812 + 6.083

= 28.895 or 29 days

Cash Conversion Cycle

1. Accounts Payable Turnover

cost of goods sold

= ( beginning+ ending payable )
2

80,000
= ( 4,000+6,000 )
2

80,000
=
5,000

= 16

2. Accounts Payable Period

365
=
accounts payable turnover
 365
=
16

= 22.81

3. Cash Conversion Cycle

= operating cycle−accounts payable period

= 29−22.81

= 6.1

II. Financial Goals

a. How can the business improve its financial situation?

Based from the given data of the financial statement analysis of the business, it can easily
be concluded that this is a small business and that little time will be taken into account in not
only maintaining the financial wellness but also improving it. In other words, smaller businesses
are easier to manage. Given these simple yet effective solution will provide options for sourcing
funding internally for the business:

1. To recover any outstanding debt that the business had so it will not intervene

in the future.

2. Analyzing all the expenses and figuring out which of these expenses can be

rearranged or reduced.

3. Selling unwanted assets to get some cash and reduce your storage costs.

4. Applying markdowns to full-price products or services to attract sales and

shift surplus stock or discontinued products. 

5. Increase in prices when facing rising costs.

 6. Using new marketing techniques so that the business will not go out of date or

fall behind the other businesses.

7. Keeping track of the cash flow which will help the business plan ahead and

make sure it can cover its expenses.

8. Coping whatever changes in the cash flow.

b. Which areas in the financial management (i.e. paying debts, managing expenses)

needs to be improved?

The business heavily falls on paying debts when it comes to improvement, although a
small business, the business struggles to pay outstanding debt on time. In order to prevent debt,
is to create a good invoicing system for the business, which will remind the business of its debt.
The business also suffers from the lack of attention in the media, therefore advertising can be
recommended

c. Opportunities for the business

Through opportunities, a business can drastically improve its profits and make the
financial situation of the business more stable thus creating a financially sound business. These
opportunities are instant game changers for the business however hard to catch. In this case,
Fries Pa More is a small business so there would not be that much opportunities for the business,
however there are some. Offering additional payment options such as credit, e-commerce, or
additional payment systems (e.g. BPAY, BillPay or PayPal), can open up different markets and
improve its bottom line. Another is to look for government grants, with this, a business may be
eligible for a grant in certain circumstances, such as business expansion, research and
development, innovation or exporting. Another is to expand the number of stores the business
has in different locations.
 III. Alternatives to Achieving Financial Goals

a. Alternatives

1. In recovering outstanding debts of the business, is to consider outsourcing

debt collection with a reputable debt collection agency. Before making a sale,

always make sure that the business is in a condition of sale agreement in

writing that outlines your terms and conditions. Including how long the

debtors have to settle the debt and any percentages applied for overdue

payments. If the case is that the business is the one that is in debt, an effective

solution is to put a good invoicing system that will remind the business of its

debts and the debts of other business or even consumers towards the business.

2. In analyzing expenses, Some options include; arranging a deferred or periodic

payment plan for larger expenses; switching insurance companies, banks or

suppliers to get a better deal; modifying the quantity and/or timing of

your stock purchases to coincide with higher cash flow periods; switching to

cheaper alternatives for consumables such as managing your energy use and

etc.

3. When selling assets, you could also consider leasing your main assets to help

spread the cost over a longer period.

 4. Increasing prices can be a valid option for businesses facing rising costs, even

if it's not popular with customers. If you consider this option, ensure your

prices always comply with pricing legislation.

5. Using the internet and social media can be a cheaper and smarter way of

getting your message across.

6. In improving cash flow making sure you send a correctly formatted invoice at

the time of purchase, following up on outstanding customer payments as soon

as you care, reducing your expenses – you could try finding cheaper suppliers

or consolidating your debts for a better rate. Options include organizing a

periodic payment plan for larger expenses.

b. Financing

2018 2019 2020 2021

Users Php 80,000 Php 90,000 Php 102,000 Php 105,000
Revenues
Net Revenue Php 150,000 Php 200,000 Php 245,000 Php 270,000
Operating Cost
Invoice System Php 3,000 Php 3,000 Php 3,000 Php 3,000
Sales and Marketing Php 1,000 Php 2,000 Php 3,000 Php 4,000
Internet Connection Php, 999 Php 999 Php 999 Php 999
Research and Php 2,000 Php 2,500 Php 3,000 Php, 3500
Development
Total Cost Php 6,999 Php 8,499 Php 9,999 Php 10,499
Net Income Php 28,500 Php 37,500 Php 50,000 Php 76,000

IV. Financial Plan

 Using the SMART format, the researchers have chosen the best alternative to generate

more income and attract more consumers for the benefit of the business. This is to use the

internet and social media to promote and advocate the business or internet marketing. With the

given alternative, the business will be able to:

1. The very first benefit of Internet Marketing is the capacity to highlight your brand

beyond your local area and reach out to your target audience.

2. With conventional marketing methods, you hope that your targeted audience see your

promotions. But with internet marketing, you draw in target customers, who as of

now need what you have.

3. A frequently upgraded site with engaging content indicates the customers how you

support and offer the best incentives to them. Advantages of internet marketing

ensure this quite efficiently and let your marketing campaign run 24/7 with

efficiency.

4. Internet Marketing is Cost Effective & Time Effective

5. Everything is measurable and well – automated using the internet as an advertising

medium.

6. Online advertising can create a big fan base thus having more consumers.

7. The company is in control of the advertisements in the internet

V. Evaluation

With the chosen alternative, this can benefit the business in every way possible, from

time and expenses. It will not only help the business reduce its costs, but will also gain an
incredible amount of profit once the alternative is put into action. These simple steps are huge for

a small business as it will lead to a maximum guaranteed profit.