MY THINK, FEEL AND DO PROFILE

MIND

HEART
HAND
HAND
 MY THINK, FEEL AND DO PROFILE

TIME: 2 MINUTES
INSTRUCTION
1. Write your group name at the left most part of your
profile sheet
2. Put inside the Mind what you know in applying the
ratio, proportion and percentage on business.
3. Put inside the Heart you feel in applying the ratio,
proportion and percentage on business.
4. Put inside the Hands how you can apply the ratio,
proportion and percentage on business.
Lesson Objectives:
At the end of the lesson you should be able
to:
1. Solve partnership problems
2. Solve tax problem
3. Perform vertical analysis of financial
statements
4. Perform Horizontal analysis of financial
statements and
5. Perform ratio analysis.
Lesson Pre-assessment
1. The agreed capitalization of the
MaSaGana Partenership is ph400,000.00
It was agreed that De Oño, Belen, Opeña
and Dela Cruz will contribute capital in
ratio of 1:1:2:2. How much should De
Oño, Belen, Opeña and Dela Cruz
contribute?
Lesson Pre-assessment
2. The corporate tax ratde is 35%. If the
corporation realized a net profit of
Ph150 000, how much income tax should
the corporation pay?
Let’s start:
Partnership problems

1. Partnership A, B and C share profits and losses:

20% to A, 30% to B and 50% to C. Compute the share of
each if the partnership earned a net income of
Ph15000.
Given:
Net Income
Find: share of A,B and C
Partnership problems

2. Partners Alanquilan and Maghirang agreed to share

profits and losses in their capital ratio. If the total
capital is ph24 000.00
and Maghirang’s capitla is ph16 000.00, what part of
the profit or loss is her share?
Tax problems

1. A corporation earned ph 36 800.00 I net income

before tax. If the corporation’s income tax is 35%,
compute for the net income after tax.
(NIAT=NIBT-Income Tax)

2. Jalos paid ph 3 687.40 for and article which included

ph 107.40 as sales tax. What is the tax rate?
Vertical Analysis problems
1. Convert the following Income Statement to a
common-size statement:
*Common size statements are financial statements
expressed in percent.
Ramos Enterprises
Income Statement
For the Month ended June 30, 2019
Net Sales…………………………………………P150 000.00
Less: Cost of Sales…………………………… 90 000.00
Gross Profit…………………………………….. 60 000.00
Less: Operating expenses………………… 35 000.00
Net Income…………………………………….P 25 000.00
MAKE IT CLEAR
Partnership problems – involve
the use of percentage and ratio
and proportion. Determining the
partners’s share in profit/loss
and determining the capital
contribution of partners.
1. Partnership A, B and C share profits and losses:
20% to A, 30% to B and 50% to C. Compute the share of
each if the partnership earned a net income of
Ph15000.
Given: P/L ratio A= 20%, B = 30%, C = 50%
Net Income: P15 000.00
Find: share of A,B and C
Equation: P=BR, Net Income = Summation of P= BR
Solution:
A = P15 000.00 x 20 % = P3 000.00
B = P15 000.00 x 30 % = 4 500.00
C = P15 000.00 x 50 % = 7 500.00
Net Income = P15 000.00
2. Partners Alanquilan and Maghirang agreed to share
profits and losses in their capital ratio. If the total
capital is ph24 000.00
and Maghirang’s capital is ph16 000.00, what part of
the profit or loss is her share?
Given: Total Capital = P24 000.00
Maghirang’s capital = 16 000.00
Find: Rate of Maghirang’s profit/loss
Equation: R=P/B
Solution:
Rate of Maghirang’s profit/loss
= P16 000.00
P24 000.00
= 2/3 or 66.67%
Tax problems
1. A corporation earned ph 36 800.00 I net income
before tax. If the corporation’s income tax is 35%,
compute for the net income after tax.
(NIAT=NIBT-Income Tax)
Given: Net Income before tax (NIBT) = P36 800.00
Income tax rate = 35%
Find: Net Income after tax NIAT
Equation: NIAT=NIBT-Income Tax
Solution:
NIAT= P36 800.00 – (P36 800.00 x 35%)
P36 800.00 – P12 880.00
NIAT= P23 920.00
2. Jalos paid ph 3 687.40 for and article which included
ph 107.40 as sales tax. What is the tax rate?
Given: Price including tax = P3 687.40
Tax = P107.40
Find: Tax Rate
Equation: R=P/B
Solution:
Price including tax = P3 687.40
Tax = - 107.40
Price excluding tax = P3 580.00
Tax Rate = P/B= Tax____ = P107.40
Price without tax P3 580.00
= .03
= 30%
Vertical Analysis problems
Ramos Enterprises
Common – Size Income Statement
For the Month ended June 30, 2019
Net Sales…………………………………………100.00 %
Less: Cost of Sales(90/150)……………… 60.00%
Gross Profit(60/150)………………………. 40.00%
Less: Operating expenses(35/150…… 23.33
Net Income(25/150)………………………. 16.67%
Let’s share ideas:
1. Group activity: Assume you are to form a
partnership. Think what business you are to put up
and plan on setting up the partnership by investing
on it. Apply also tax and vertical analysis in your
presentation

Accomplished Developing Beginner

Presentation 20 15
10
Idea 10 8 5
Cooperation 20 15
10
Let’s continue:
Horizontal Analysis – also known as the
trend analysis. Refers to comparing
figures of financial statement of one
period with the figures of financial
statement of another period. It shows
trends of increasing and decreasing.The
increase and decrease are both in
amounts and in percent.
try:
2019 2018 amount %
(Php) (Php) (Php) R
Net Sales 150 000 125 000
Cost of Sales 90 000 70 000
Gross Profit 60 000 55 000
Operating expenses 35 000 45 000
Income 25 000 10 000
answer:
Equation:
Amount = Q2 – Q1
R = Q2 – Q1
Q1
2019 2018 amount %
(Php) (Php) (Php) R
Net Sales 150 000 125 000 25 000 20%
Cost of Sales 90 000 70 000 20 000 28.57%
Gross Profit 60 000 55 000 5 000 9.09%
Operating expenses 35 000 45 000 (10 000) (22.22%)
Income 25 000 10 000 15 000 150.00%
 Ratio Analysis – is a form of vertical
analysis. It is used to determine certain
ratios important in business decision-
making, like determining profitability
ratios, liquidity ratios, solvency ratios,
asset utilization ratios and etc.
The ff. ratios are often used in business:
Profitability Ratios:
1. Return on Owner’s Investment (ROI)
ROI = Net Profit
Owner’s investment
answer:
If a company earns a net profit of Php100 000.00
and the capital of the owner(s) is Php1 000 000.00 , the
ROI would be: (Show your solution)
 ROI = Net Profit
Owner’s investment
answer:
If a company earns a net profit of Php100 000.00
and the capital of the owner(s) is Php1 000 000.00 , the
ROI would be:
ROI = Php100 000.00
Php1 000 000.00
=1/10
=10%
= 0.1
2. Profit margin or Return on sales (ROS) this ratio is
used to measure the profit generated by the sales
made by the company.
ROI = Net Profit
Net Sales
Answer:
If a company earned a net profit of Php100 000.00
from the generated sales of Php900 000.00, the return
on sales or profit margin would be:(Show your
solution)
2. ROI = Net Profit
Net Sales
Answer:
If a company earned a net profit of Php100 000.00
from the generated sales of Php900 000.00, the return
on sales or profit margin would be:(Show your
solution)
ROS = Php100 000.00
Php900 000.00
=1/9
=11.11%
= 0.1111
 Liquidity Ratios- ratios used to gauge if the company
can meet its current liabilities, those that need to be
paid within the current year
Solvency Ratios – are concerned with meeting the
long-term obligations of the company, those maturing
in more than one year.
1. Currency Ratio- this liquidity ratio shows if the
company has enough current assets to meet its
current liabilities.
Current Ratio = Current assets
Current Liabilities
answer:
If a company Php300 000.00 current assets and
Php100 000.00 current liabilities, its current ratio
would be: (Show your solution)
1. Current Ratio = Current assets
Current Liabilities
answer:
If a company Php300 000.00 current assets and
Php100 000.00 current liabilities, its current ratio
would be:
Current Ratio = Php300 000.00
Php100 000.00
= 3/1
= 3:1
This means that for every php1.00 of liability or debt,
the company has php3.00 to pay it. The creditors are
secured.
2. Debt Ratio- this solvency ratio shows the
relationship between the total liabilities and the total
assets of the firm.
Debt Ratio = Total Liabilities
Total assets
answer:
Assuming a firm with total liabilities of Php450
000.00 and total assets Php900 000.00, the debt ratio
would be: (Show your solution)
2. Debt Ratio = Total Liabilities
Total assets
answer:
Assuming a firm with total liabilities of Php450
000.00 and total assets Php900 000.00, the debt ratio
would be: Debt Ratio = Php450 000.00
Php900 000.00
= 1/2
= 1:2
This means that the firm has php1.00 of liability for php2.00
total asset. The firm is secured, meaning the company can
pay its obligation.