Pagdagusan Ayan da Nanang

“A Home away from Home”

Mary Cesarius R. Dumalanta
III. Introduction:

Filipinos are fun of exploring the world from time to time. They go from
one place to another. After a very tiring day, they need to find a place where they can stay and
rest for a day or more. A place where they can feel the feeling of being at home, even thou they
are away from their own homes.

Being Filipinos, we are very much delighted to be in a place where you will not
worry of anything but to just make yourself chill out and take the rest of the time with you. With
how we preserve the culture of hospitability, we are famous in making our visitors as part of our
families as well. Because of this, houses of the Filipinos are known to be, A Home away from
Home. As we go and be part of their families, we have with us the sense of love, respect and the
feeling of belongingness.

Business Concept:

Pagdagasan Ayan da Nanang is a transient house intended to become anyone’s home

where there is family by heart and by soul. It is not just a four-cornered room where you can lay
down and take a rest all day long. It is more of a place, where you can see how a
Nanang(mother) takes good care of her children in the sense of a helpful hand and a soft heart.

This house gives more than what is needed by the people; the Filipino way. As you
become part of it, you’re already included as part of the family. The family whom you can tap
and you can be with. Being in this transient house for a day or more, could make you love the
feeling of being a Filipino.

To the extent, this transient house was designed to give a quality, safe and
comfortable place to stay in. Ensuring the security and satisfaction of every member is the
priority, starting from the materials of the buildings, surroundings or environment where it was
constructed and the safety in terms of the belongings of the people.
Business Model:

Activities Customer Relationships

-Adopt a child -Personal Interactions
-Cleaning Program -Family Interrelation
towards Environmental
Awareness
-Build a house for the
Cost Structure
needy
-100,000 per unit

Revenue Model Channel of Resources

-Promotions Communication -construction
-Investments -Phone cards lumber and
-Additional businesses like -Telephones hardware
carinderia or stores -Wifi -skilled people
-

Business Goals:

Vision:

Pagdagusan Ayanda Nanang paves its way towards domestic, international and
global society as part of Filipinos’ way of cultural preservation on the values and
concept of a family. Building branches all over the Philippines with flying colors in the
field of quality houses and in the business world. Extending the hands to the people who
are in need of shelter belonging them as part of the family. In the years to come, the
business will be an inspiration of Filipino family way of living as part of the
community’s way of cultural showmanship.
 Mission:

To construct safe, comfortable and quality houses with the sense of belongingness
as part of Filipinos well-known way of living and satisfaction. To create a big family
with members of different status of life an unending communication within the place or
even outside. To extend a hand without waiting for anything in return.

Objectives:

1. To satisfy the customers with high quality houses

2. To maintain the centered vision and mission of the business
3. To earn more amount of money and return of owners and stakeholders
4. To begin a foundation in the market place here in the Philippines and other countries

Objectives Key Result Areas

1. To satisfy the customers with high 1a. Recognition and awards given by the
quality houses government for quality and excellence
service
1b. Increase of members
1c. Percentage of repeating people
2. To maintain the centered vision and 2a. Bonus for the staff and working group
mission of the business 2b. Management and employment turn over
2c. Increase in the job applicants
2d. Less unemployed din the place
3. To earn more amount of money and 3a. Return of Investments (ROI)
return of owners and stakeholders 3b. Return of Budget
3c. Return on Equity (ROE)

4. To begin a foundation in the market 4a. Number of houses constructed in the

place here in the Philippines and other Philippines and other countries
countries 4b. Expansion of land areas
4c. Top list of well known transient house
in the market place
 Key Result Areas Performance Indicators

2017 2018 2023

(Now) (One Year (Five
Later) Years
Later)
1a. Recognition and awards given by the None Two awards 10
government for quality and excellence service awards
1b. Increase of members 5% 40 %
1c. Percentage of repeating people 10 % 50 % 85 %
101%
2a. Bonus for the staff and working group P 1000 bonus P 1500 bonus P 4500
each each bonus
2b. Management and employment turn over None 6 % increase each
2c. Increase in the job applicants 3 % increase 11 % increase 15 %
2d. Less unemployed in the place 1% 5% increase
25%
increase
9%
3a. Return of Investments (ROI) 2% 3% 6%
3b. Return of Budget 3% 4% 8%
3c. Return on Equity (ROE) 2% 6% 9%
4a. Number of houses constructed in the 3 % increase 5 % increase of 10 %
Philippines and other countries of branch branch locally increase
4b. Expansion of land areas locally and of branch
4c. Top list of well known transient house in the internationally locally,
market place internatio
nally and
globally
Business Proponents

I. Resource Mobilizers and financial backers

1. Banco de Oro or BDO
Tagline: “WE Find Ways”

BDO is a full-service universal bank in the Philippines. It provides a complete array of

industry-leading products and services including Lending (corporate and consumer), Deposit-
taking, Foreign Exchange, Brokering, Trust and Investments, Credit Cards, Corporate Cash
Management and Remittances in the Philippines. Through its local subsidiaries, the Bank offers
Leasing and Financing, Investment Banking, Private Banking, Rural Banking, Life Insurance,
Insurance Brokerage and Stock Brokerage services.

BDO’s day-to-day operations are handled by a team of professional managers and bank
officers. Further, the Bank has one of the industry’s strongest Board of Directors composed of
professionals with extensive experience in various fields that include banking, accounting,
finance, law, bank regulations and risk management, strategy formulation and merchandise
marketing.

It is of great help on the business where it came up to be one of the top banks here in the
Philippines. Ensuring the safe coordination of in money matters takes a lot of way towards
success and development.

2. Bank of Philippine Island or BPI

Founded in 1851, Bank of the Philippine Islands is the first bank in the Philippines
and in the Southeast Asian region. BPI is a universal bank and together with its subsidiaries and
affiliates, it offers a wide range of financial products and solutions that serve both retail and
corporate clients.

BPI's services include consumer banking and lending, asset management, insurance,
securities brokerage and distribution, foreign exchange, leasing, and corporate and investment
banking. The bank has a network of over 800 branches in the Philippines, Hong Kong and
Europe, and close to 3,000 ATMs and CDMs (cash deposit machines).
 This bank is linked into the international world and it would be easy to
have another branch which can be of great way to promote the business in the market
place.

II. Technology Providers and Applicators

1. PLDT

PLDT is the leading telecommunications and digital services provider in the

Philippines. Through its principal business groups – fixed line, wireless and others –
PLDT offers a wide range of telecommunications and digital services across the
Philippines’ most extensive fiber optic backbone, and fixed line and cellular networks.
PLDT has one of the largest market capitalizations among Philippine listed companies.

2. Alto Broadcasting System – Chronicle Broadcasting Network or ABS-CBN

ABS-CBN, is the largest multimedia network in the country. From its humble
beginnings to its undeniable successes, the Company has over 60 years of stories to
tell. In the face of changing governments, despite natural disasters, and amidst rapidly
evolving technologies, ABS-CBN remains steadfast in its commitment to serve the
Filipino. The organization is continuously evolving to provide better service through
radio, free TV, digital terrestrial TV, cable TV, film, movie, music, publishing, online,
events, licensed products, cash remittance, and various advocacies.
3. Mike's Department Store or MDS
Mikes is where everything you need is under one roof, where shopping is always
a pleasure, where surprises and excitement never end. It is located or found at Vigan City
Ilocos Sur. It is an advantage to be partners with them, where they can be the company or
store to provide the needed security like cctv cameras and equipment and other things
inside the room as personal need of the customer.

III. Governance and top management

1. Bureau of Fore Protection or BFP

The Bureau of Fire Protection (BFP) of the Philippines is a government agency

whose role is to suppress and prevent the outbreak of destructive fires, enforce relevant laws,
 and provide or help provide emergency medical and rescue services. But the BFP
faces an uphill struggle in the performance of its duties in a conflagration-prone
nation such as the Philippines.

It is no stretch to say that consequently, the BFP has its work cut out for it. However,
much effort has also been expended over the years to bring the BFP to the level of competence
and professionalism it needs in order to properly discharge its duties.

This is to secure the matters about fire as part of the disastrous happening nowadays.
2. Philippine National Police or PNP

The PNP is the armed, civilian national police force of the Philippines. Local Police
officers are operationally controlled by municipal mayors DILG, on the other hand,
organizes, trains and equips the PNP for the performance of police functions as a police force
that is national in scope and civilian in character.

As part of the society we all know that this powerful agency is already part of ones lives.
They place a vital role in terms of security and comfort towards the people in a specific
community.

3. The Department of Public Works and Highways

DPWH, is the executive department of the Philippine government solely vested with
the Mandate to “be the State's engineering and construction arm” and, as such, it is “tasked to
carry out the policy” of the State to “maintain an engineering and construction arm and
continuously develop its technology, for the purposes of ensuring the safety of all
infrastructure facilities and securing for all public works and highways the highest efficiency
and the most appropriate quality in construction” and shall be responsible for the planning,
design, construction and maintenance of infrastructure facilities, especially national
highways, flood control and water resources development systems, and other public works in
accordance with national development objectives,” provided that, the exercise of which
“shall be decentralized to the fullest extent feasible.”

Since it is more on the construction part of this business, this could be a great
pavement towards the success and continuing braches of the business.
 IV. Operating and Support Team

1. Local Government Unit or LGU

It is the part of the government closest to the people and is in charge of delivering basic
services and facilities to its constituents.

LGUs have four classifications: the barangays (villages), municipalities, cities and
provinces, and the autonomous regions (although there is only one existing, the Autonomous
Region in Muslim Mindanao). They are considered independent from the national government:
each LGU has the right and the power to regulate its affairs—political, economic, social, and
administrative—in its given territory, consistent with the national policies.

IV. EXECUTIVE SUMMARY:

Pagdagasan Ayan da Nanang is a transient house intended to become anyone’s home

where there is family by heart and by soul. It is not just a four-cornered room where you can lay
down and take a rest all day long. It is more of a place, where you can see how a
Nanang(mother) takes good care of her children in the sense of a helpful hand and a soft heart.

This house gives more than what is needed by the people; the Filipino way. As you
become part of it, you’re already included as part of the family. The family whom you can tap
and you can be with. Being in this transient house for a day or more, could make you love the
feeling of being a Filipino.

To the extent, this transient house was designed to give a quality, safe and
comfortable place to stay in. Ensuring the security and satisfaction of every member is the
priority, starting from the materials of the buildings, surroundings or environment where it was
constructed and the safety in terms of the belongings of the people.

The activities were; adopt a child, cleaning program towards environmental

awareness, build a house for the needy. For customer relationships; personal interactions and
family interrelation. The cost structure will be100,000 per unit with revenue model involving
promotions , investments and additional businesses like carinderia or stores For the channel of
communication, phone cards, telephones and wifi. With resources, construction
lumber and hardware also with skilled people and manpower.

On the vision, “Pagdagusan Ayanda Nanang paves its way towards domestic,
international and global society as part of Filipinos’ way of cultural preservation on the values
and concept of a family. Building branches all over the Philippines with flying colors in the field
of quality houses and in the business world. Extending the hands to the people who are in need
of shelter belonging them as part of the family. In the years to come, the business will be an
inspiration of Filipino family way of living as part of the community’s way of cultural
showmanship.”

On the mission, “To construct safe, comfortable and quality houses with the sense of
belongingness as part of Filipinos well-known way of living and satisfaction. To create a big
family with members of different status of life an unending communication within the place or
even outside. To extend a hand without waiting for anything in return.”

On the objectives, first, to satisfy the customers with high quality houses, second, to
maintain the centered vision and mission of the business, third, to earn more amount of money
and return of owners and stakeholders and fourth, to begin a foundation in the market place here
in the Philippines and other countries.

On the Business Proponents for resource mobilizers and financial backers, Banco de
Oro or BDO with the tagline: “WE Find Ways” wherein it is of great help on the business where
it came up to be one of the top banks here in the Philippines. Ensuring the safe coordination of in
money matters takes a lot of way towards success and development.; and Bank of Philippine
Island or BPI whereas, this bank is linked into the international world and it would be easy to
have another branch which can be of great way to promote the business in the market place.

On technology providers and applicators; PLDT, Alto Broadcasting System –

Chronicle Broadcasting Network or ABS-CBN and Mike's Department Store or MDS. On
governance and top management, Bureau of Fire Protection or BFP, Philippine National Police
or PNP and the Department of Public Works and Highways or DPWH. On operating and
support team, Local Government Unit or LGU
 The primary target and the main value proposition are travelers and
adventurous people, students and workers and open to all people. The size and
location of PTM is located in the city area. The owner made sure that the rooms are of the feel
and want of the people as the modern technology is already arising. It is located in the city
proper which the transportation is very convenient.

Along the customer survey there is an increase of percentage checking in the transient
houses On the customer observation, the location is very good. It’s so calm inside the room and
you can rest along the terrace, hearing the sound of the birds along the backyard. There will be a
free service along the Poblacion area is free using Kalesa.

On the main value proposition, this business is open to anyone especially to the travellers,
students/workers and the all the people. There are a lot of customers since it lies on the city
proper with beautiful spots and destinations near the place and even around it. Since the target
are more into the travellers, students and workers, it’s of advantage since they are already
assured that they have enough money to pay for the expenses. The rent of 24-hour stay or less is
350 pesos for single room and 650 for double bedroom. It is affordable, a nature like atmosphere
with filipino lifestyle and culture theme with modernized twist adopting technology.

On market demand and supply, industry dynamics and macro environmental factors, the
business will indicate the lowest price of rental fee, ranging to 450-500 per room depending of
the type or room with opportunities and chances along the personal needs and wants of the
people. Credit card machines are located where it takes an advantage within the cash transaction.
Live bands as sort of entertainments deals into the wants of the people along the conditions on
personal aspect.

On the market demand along the facilities on the needs of people in physical aspect,
there is an assurance on the rooms to stay for the mean time or a span of days, it is a safe place to
stay during disasters like typhoon and earthquake and also highly elevated rooms. For the
technological aspect and demands in modern environment, there are internet connections and
technological gadgets or devices and also access on the current happening with the use of
televisions and radios. On the satisfaction along the environment, it is located along the city
proper , the ambiance is cold and has a fresh air. And ofcourse, the ambiance must
be refreshing and such a satisfaction.

For the market supply, facilities along the needs of people in physical aspect involves
the rooms to stay for the mean time or a span of days with low cost per day , also the promos are
being offered, it is such a safe place to stay during disasters like typhoon and earthquake since
its materials are earthquake proof and highly elevated rooms with safe and dry pathways going to
the rooms. Along the technological aspect and demands in modern environment, the internet
connections are offered in every floor for fast connectivity, the technological gadgets or devices
are also at the stand by like laptop and computers in case of emergency and also the access on
the current happening with the use of televisions and radios for each room. For the satisfaction
along the environment, it is located along the city proper, cold and has a fresh air along the
terrace of the rooms and the ambiance is refreshing and a satisfaction to the people with all ages.

The total net profit for the first year is P 142, 998. The second year with P187,511
was increased by P44,513 which is 31 percent of the net profit for the first year. On the third
year, the total net profit ended up with P211, 597, an increase of P24,086 which is 13 percent of
the net profit for the second year.

The total operating cash balance for the first year is P 281, 900. The second year with
P589, 350 was increased by P 307, 450 which is 109 percent of the operating cash balance for
the first year. On the third year, the total operating cash balance ended up with P 939, 100 an
increase of P 349,750 which is 60 percent of the net profit for the second year.

The total liabilities and owner’s equity for the first year is P 5,906,700 which is
balanced with the total assets for the first year. The second year with P 5,874,000 was decreased
by P 32, 700. On the third year, the total liabilities and owner’s equity ended up with P 5,883,550
an increase of P 9, 550.

V. THE PRIMARY TARGET AND THE MAIN VALUE PROPOSITION

1. CUSTOMERS
A. TRAVELERS AND ADVENTUROUS PEOPLE
a. Customer Profile
-They are in need of a place to stay for the mean time. The want a
comfortable one where they can rest and they can consider as their own house even
for a day more only. The owners desire the make them feel comfortable, they made
sure that the needs and wants of the customers are given.
b. Demographics
-The age bracket are for everyone with those who have an income of P1000 and
above. This is non-sectarian and are open for everyone. Likewise with the occupation,
it is not required. They are living in other places.
c. Psychographics
-In order to motivate the customers, the room type is designed as a friendly room
since the culture of Filipinos can be seen; a simple yet an artistic one. The needs and
wants are found here. After travelling the whole day, you can stay there as long as
you want. The location of the transient house which is along the city proper. You
must be a nature lover. The attitudes of the person must be simple, filipino like maybe
not by blood but by heart and soul.
d. Technographic
-The facilities can be used by anyone with care and responsibility. Technological
matters like wifi is free.

B. STUDENTS AND WORKERS

a. Customer Profile
-They are in need of a place to stay for a long time since they are studying for the
students and the people are working. They want a comfortable one where they can rest
and they can consider as their own house for a longer period depending on the years of
schooling and working. The owners desire to make
them feel comfortable, they made sure that the needs and wants of the customers are
given.

b. Demographics
 -The age bracket are for students and those who have works and
also those who have an income of P300 and above. This is non-sectarian
and are open for everyone. Likewise with the occupation, it is not required. They must be
are living from other places who are working and studying near the location of the
transient house.

c. Psychographics

-The motivation would be, the room type is designed as a friendly room since the
culture of Filipinos can be seen; a simple yet an artistic one. The needs and wants are
found here. After travelling the whole day, you can stay there as long as you want. The
location of the transient house which is along the city proper. They should be nature lover
and artistic. The attitudes must be simple, Filipino like maybe not by blood but by heart
and soul, responsible enough in handling the facilities

d. Technographic

-The facilities can be used by anyone with care and responsibility. Technological
matters like wifi is free.

C. OPEN TO ALL PEOPLE

a. Customer Profile

-They are in need of a place to stay. They want a comfortable one where they can
rest and they can consider as their own house for a long time or even for a day more only.
The owners desire the make them feel comfortable, they made sure that the needs and
wants of the customers are given. All people can be a member of the family.

b. Demographics

-The age bracket are for everyone with those who have an income of P300 and
above. This is non-sectarian and are open for everyone. Likewise with the occupation, it
is not required. They are living in other places.

c. Psychographics
 -In order to motivate the customers, the room type is designed as a
friendly room since the culture of Filipinos can be seen; a simple yet an
artistic one. The needs and wants are found here. After travelling the whole day, you can
stay there as long as you want. The location of the transient house which is along the city
proper. You must be a nature lover. The attitudes of the person must be simple, filipino
like maybe not by blood but by heart and soul.

d. Technographic

-The facilities can be used by anyone with care and responsibility. Technological
matters like wifi is free.

2. SIZE AND LOCATION OF PTM

Secondary data: There will be enough target market since we are located in the city area.
-The owner made sure that the rooms are of the feel and want of the people as the
modern technology is already arising.
Where are they located?
-They are in the city proper which the transportation is very convenient.
Next resort is to resort to first hand research

Along the customer survey there is an increase of percentage checking in the transient houses On
the customer observation, the location is very good. It’s so calm inside the room and you can
rest along the terrace, hearing the sound of the birds along the backyard. There will be a free
service along the Poblacion area is free using Kalesa

3. MAIN VALUE PROPOSITION

1. Captive Market- this business is open to anyone especially to the travellers,
students/workers and the all the people. There are a lot of customers since it
lies on the city proper with beautiful spots and destinations near the place and
even around it.
 2. Affordability- since the target are more into the travellers,
students and workers, it’s of advantage since they are already
assured that they have enough money to pay for the expenses.
3. Real Value for the Customer- the rent of 24-hour stay or less is 350 pesos for
single room and 650 for double bedroom.
4. Uniqueness and Differentiation- It is affordable, a nature like atmosphere with
Filipino lifestyle and culture theme with modernized twist adopting
technology.

Captive Market Uniqueness and Real Value for Affordability

Differentiation the Customer

This business is It is affordable, a The rent of 24- This business is for

open to anyone nature like hour stay or less is everyone, but since
especially to the atmosphere with 350 pesos for the target are more
travellers, Filipino lifestyle single room and into the travellers,
students/workers and culture theme 650 for double students and
and the all the with modernized bedroom. The workers, it’s of
people near the twist adopting promos are really advantage since
area. There are a technology. they are already
lot of customers assured that they
since it lies on the have enough
city proper with money to pay for
beautiful spots and the expenses.
destinations near
the place and even
around it.
 VI. MARKET DEMAND AND SUPPLY, INDUSTRY DYNAMICS AND
MACRO ENVIRONMENTAL FACTORS

The business will indicate the lowest price of rental fee, ranging to 450-500 per room
depending of the type or room with opportunities and chances along the personal needs and
wants of the people. Credit card machines are located where it takes an advantage within the
cash transaction. Live bands as sort of entertainments deals into the wants of the people along the
conditions on personal aspect.

For the industry, the business will establish the proper construction process with
stability on the building and materials needed. The underlying forces will make sure that the
connectivity along the external industry will be identified as part of the people’s exchange of
interest and demand.

On the Market Demand along the facilities on the needs of people in physical aspect,
there is an assurance on the rooms to stay for the mean time or a span of days, it is a safe place to
stay during disasters like typhoon and earthquake and also highly elevated rooms. For the
technological aspect and demands in modern environment, there are internet connections and
technological gadgets or devices and also access on the current happening with the use of
televisions and radios. On the satisfaction along the environment, it is located along the city
proper , the ambiance is cold and has a fresh air. And ofcourse, the ambiance must be refreshing
and such a satisfaction.

For the market supply, facilities along the needs of people in physical aspect involves
the rooms to stay for the mean time or a span of days with low cost per day , also the promos are
being offered, it is such a safe place to stay during disasters like typhoon and earthquake since
its materials are earthquake proof and highly elevated rooms with safe and dry pathways going to
the rooms. Along the technological aspect and demands in modern environment, the internet
connections are offered in every floor for fast connectivity, the technological gadgets or devices
are also at the stand by like laptop and computers in case of emergency and also the access on
the current happening with the use of televisions and radios for each room. For the satisfaction
along the environment, it is located along the city proper, cold and has a fresh air along the
terrace of the rooms and the ambiance is refreshing and a satisfaction to the people with all ages.
 Pagdagasan ayanda Major Major competitor Major
Nanang competitor 1 2 competitor 3
1.Competitive
Advantage
Product Rental Rooms with Rental Rooms Rental Rooms with Rental Rooms with
sari-sari store, with sari-sari free wifi computer shop
credit card store
machines,
free wifi and
free room service
and assistance
Price Lowest price: P450.00 per P450.00 per room P450.00 per room
P400.00 per room room for 24 for 20 hours for 12 hours
for 24 hours hours
Promotion Through TV and Through TV and Through TV and Through TV and
radio local radio radio
advertisements advertisements advertisements advertisements
Tarpaulin
International
Online Page in
Internet
Placement In a place where Local and Local City
many people are City
seen along the cities
 Location Along the city with Along the CITY 20 meters away Along the barrio
fresh air ambiance from the city
and access on the proper
transportation
2.Strategies Promos Unchanging Promos during Promos during
Discounts Promos seasonal occasions seasonal occasions
Daily Update
Live Band during
weekends
Online Page
3.Technologies FREE Wifi for 24/7 WIFI From 7 am Wifi from 6 am to Wifi from 5 am to
Television in every to 10 PM 10 PM 11 pm
room Television Television Radio
Radio Computer Shop
Online Page
4.Weaknesses Expenses on the There are less Distance far from Distance since it is
staff transportation the city on the Barrio
available Transportation

1. Competitive Advantage

Product : Rental Rooms with sari-sari store, credit card machines, free wifi and free room
service and assistance

-it is very much important that the reantal room should be simple and unique. Even
thou it is on the hospitability theme along the mother care, the modern technologies should also
be considered.

Price: Lowest price: P400.00 per room for 24 hours

 -since the people also consider the price or amount to be paid, it is on
their advantage.

Promotion: Through TV and radio advertisement, Tarpaulin International Promotion and

Online Page in Internet

-we should also adopt the traditional and modern way of promotions. This helps
on the continuous update of the changes on the said business

Placement: In a place where many people are seen along the cities

-the promotions should also be considered so that there will be access

Location: Along the city with fresh air ambiance and access on the transportation

-it is also needed to make sure the availability of the needs and wants of the people.

2. Strategies: Promos, Discounts, Daily Update, Live Band during weekends, Online Page

-there should always be promos and discounts. Live band is also a good avenue The
online page strategies includes the likes, comments or sharing system along the
stability of the business in promotion

3. Technologies: FREE Wifi for 24/7, Television in every room, Radio, Online Page

-it is also an advantage, since the advancement of the technology is already in

demand and are expanding.

4. Weaknesses: Expenses on the staff

- since there are a lot of staff and crew which is one of the objectives, to lessen the
unemployed people.

VII. FINANCIAL FORECAST

The table shows the profit and loss of the business for 3 years.
 Table 1
Profit and Loss

Income Year 1 Year 2 Year 3

Rental Property A 530,000 700,000 750,000
Less Vacancy 0 0 0
Gross Margin 500,00 650,000 750,000
Expenses
Total Salaries and Wages 0 0 0
Business Expenses
Advertising 10,000 10,000 10,000
Car and Truck Expense 0 0 0
Credit Card Charges 0 0 0
Taxes and Insurance 205,000 295,000 305,000
Legal and Accounting 4,000 4,000 4,000
Office Expenses 4,500 4,700 4,900
Postage and Shipping 3,000 3,071 3,089
Rent on Business Property 0 0 0
Rent on Equipment 0 0 0
Repairs/ Maintenance 5,500 6,005 7,000
Supplies 0 0 0
Telephone 0 0 0
Contract Services 10,500 10,500 13,000
Utilities 0 0 0
Miscellaneous Expenses 20,100 35,056 34,954
Amortized Start-Up Expenses 0 0 0
Depreciation 65,397 89,372 90,467
Total Business Expenses 327,997 457,704 472,410
Less Interest Expenses
Commercial Loan 0 0 0
Commercial Mortgage 59,005 54,785 65,993
 Line of Credit - - -
Total Interest Expense 59,005 54,785 65,993
Net Operating Income 142,998 187,511
Less Income Taxes 0 0 0
Net Profit 142,998 187,511 211,597

The total net profit for the first year is P 142, 998. The second year with P187,511
was increased by P44,513 which is 31 percent of the net profit for the first year. On the third
year, the total net profit ended up with P211, 597, an increase of P24,086 which is 13 percent of
the net profit for the second year.

The table shows the cash flows of the business for 3 years.

Table 2
Cash Flows

Year 1 Year 2 Year 3

Beginning Cash Balance 75,000 281,900 589,350
Cash Inflows 629, 400
Income from sales 715,000 780,000 819,000
Accounts Receivables
Total Inflows 715,000 780,000 819,000
Total Cash Outflows 1,137,500 472,500 469,250
Operating Cash Balance 281,900 589,350 939,100

The total operating cash balance for the first year is P 281, 900. The second year with
P589, 350 was increased by P 307, 450 which is 109 percent of the operating cash balance for
the first year. On the third year, the total operating cash balance ended up with P 939, 100 an
increase of P 349,750 which is 60 percent of the net profit for the second year.
 The table shows the balance sheet of the business for 3 years.

Table 3
Balance Sheet

Year 1 Year 2 Year 3

Assets
Current Assets
Cash 281,900 589,350 939,100
Accounts Receivable 0 0 0
Inventory 0 0 0
Prepaid Expenses 80,000 80,000 80,000
Other current 10,000 10,000 10,000
Total Current Assets 371,900
Fixed Assets
Improvements 500,000 500,000 500,000
Furniture and Fixtures 0 0 0
Equipment 0 0 0
Real state 0 0 0
Buildings 5,375,000 5,375,000 5,375,000
Other fixed 0 0 0
Total Fixed Assets 5,575,000 5,575,000 5,575,000
Less Accumulated Depreciation 340,200 680,350 1,020,550
Total Assets 5,906,700 5,874,000 5,883,550
Liabilities and Owner’s Equity
Accounts Payable 102,650 118,900 126,550
Notes Payable 0 0 0
Mortgage Payable 2,575,800 2,456,900 2,330,350
Line of Credit Balance 0 0 0
Total Liabilities 2,678,450 2,575,800 2,456,900
Owner’s Equity
Common Stock 3,352,500 3,352,500 3,352,500
Retained Earnings 142,250 54,300 74,150
Total Owner’s Equity 3,228,250 3,298,200 3,426,650
Total Liabilities and Owner’s 5,906,700 5,874,000 5,883,550
Equity

The total liabilities and owner’s equity for the first year is P 5,906,700 which is
balanced with the total assets for the first year. The second year with P 5,874,000 was decreased
by P 32, 700. On the third year, the total liabilities and owner’s equity ended up with P 5,883,550
an increase of P 9, 550.