BANK OF THE PHILIPPINE ISLANDS –FAMILY SAVINGS BANK

Tandang Sora Avenue, Quezon City, Philippines

C R E D I T A P P R O V A L M E M O R A N D U M
CAM No.: 2009-0710026

DATE : 11 May 2009

NAME OF BORROWER : Zest Purified Water Station

101 Yellow Bldg., Himlayan Road, Pasong Tamo,
Tandand Sora, Quezon City

Five Star Car Care Center

DTI accredited: 04-01-09 to 12-31-09

TIN : 108-940-252-001

INDUSTRY CLASSIFICATION : 1554 Manufacture of softdrinks,

Bottling of Mineral waters

5040 Sale, Maintenance & Repair of Motorcycle

DTI NO. : 00409297 DATED: 04012000

MUNICIPAL PERMIT NO. : 6642000 DATED: 04012000

APPLYING FOR:
-A loan line of Php1,500,000.00
-Additional Working Capital of Php2,000,000.00
-Imported Letter of Credit of Php1,000,000.00

TERMS AND CONDITIONS:

-Promissory notes not exceeding 5 years.
-Prevailing Market Rate
-The bank reserves the right to change any condition without prior
notice.

APPRAISAL REPORT:
- Security of a partial of land with TCT no. 4227 with an appraised
value of Php 8,500,000.00. Land improvements have an appraised value
of Php 1,800,000.00.
- Loan value of security is pegged on Php 7,210,000.00, which is 70% of
maximum total appraised value.

FINANCIAL CONDITION:

A. FINANCIAL STAEMENT

A.1. BALANCE SHEET 2009 REMARKS

ASSETS
CASH ON HAND 538,929.72 Poor- the total
INVENTORY 890,941.68 assets is greater than
MACHINERIES AND EQUIPMENTS 550,000.00 the total liabilities
TOTAL ASSETS 1,979,871.40 but the liability is
LIABILITIES AND CAPITAL greater than its
LIABILITIES 1,500,000.00 equity.
CAPITAL 479,871.40
TOTAL LIABILITIES AND CAPITAL 1,979,871.40
A.2 INCOME STATEMENT
SALES 4,500,000.00 Good- the business is
COST OF GOODS SOLD 2,300,000.00 on profit.
GROSS PROFIT 2,000,000.00
ACCOUNT OPERATING EXPENSES 1,800,000.00
NET INCOME BEFORE TAX 400,000.00
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FIVE STAR CAR CARE CENTER
CAM NO.: 2009-0710026

TAX RATE (35%) 140,000.00

NET INCOME AFTER TAX 260,000.00
B. FINANCIAL ANALYSIS

B.1. LIQUIDITY RATIO

WORKING CAPITAL Php70,128.60 Good- the assets
ACID TEST RATIO 0.95 are liquid, they will
CURRENT RATIO 0.95 be able to pay
CURRENT ASSETS TO TOTAL ASSETS 2.60 liabilities with that.
B.2 TURNOVER RATIO
ASSET TURNOVER 2.27 Good- assets and equity
FIXED ASSETS TURNOVER 8.18 used up in the
CURRENT ASSETS TURNOVER 3.14 operations efficiently.
INVESTED CAPITAL TURNOVER 9.38
B.3. LEVERAGE RATIO
DEBT/EQUITY RATIO 3.12 Poor- liability is
DEBT RATIO 0.76 greater than equity.
EQUITY/DEBT RATIO 0.32
B.4. PROFITABILITY RATIO
PROFIT MARGIN 0.05 Good- the business is
RETURN ON ASSETS 0.13 fairly profitable.
RETURN ON EQUITY 0.54
GROSS PROFIT MARGIN 0.44

BANKING RELATIONSHIP:
Zest Purified Water Station/Five Star Car Care Center has existing
relationship with banks as follows:

A. DEPOSITS
Type of Deposit Present Balance
Savings Deposit Php 1,000,000.00
Checking Account 490,000.00
Time Deposit 250,000.00
Foreign Savings $ 2,988.00
TOTAL Php 1,740,000.00;
$ 2,988.00

B. LOANS
Bank Loan Amount Outstanding Balance
China Bank 2,000,000.00 500,000.00
Banco de Oro 200,000.00 Fully Paid
Metro Bank 1,000,000.00 150,000.00
TOTAL Php 3,200,000.00 Php 650,000.00

CREDIT INVESTIGATION REPORT:

As per CIR dated 100109

-The borrower has credit dealings with CMAP/BAP-LIS member banks.

-The borrower has no case filed or pending in any court circuit.
-The borrower does not appear in the watchlist (BCW).

SUMMARY:

The Five Star Car Care Center is in good standing. Its liabilities are
greater than the equity but it has been well used up and actually had
Php260,000.00 profit for the year 2009.
The business has yet other loans in other banks but has good relationship
to these banks.
The collateral of the business is sufficient enough for the loans it is
applying for.

RECOMMENDATION:

Based on the data gathered, I recommend to approve the loan application

of Five Star Car Care Center as follows: Loan line of php1,500,000;
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FIVE STAR CAR CARE CENTER
CAM NO.: 2009-0710026

Additional Working Capital of Php2,000,000; Import Letter of Credit of

Php1,000,000.

BRANCH CREDIT COMMITTEE

Kristina Camille R. Lorenzo Alpha Mae P. Beltran

Khristine Kaye C. Sato

LOAN REVIEW COMMITTEE

Victoria Joy V. Laragan Dahlia M. Santos

Prepared By:
Jessica Clariz Julian
0710026
3-BF2 MW(4:00-5:30)