Professional Documents
Culture Documents
EXECUTIVE SUMMARY
The proponents are preparing to put up their own alkaline water refilling
station. The two resourceful proponents are Mr. Donald R. Fabros, 20 years old,
living at Aguilar Pangasinan and Mr. Edward P. Molano, 20 years old, who lives
at Bugallon, Pangasinan. Both are graduating students with a degree in bachelor
of Science in Accountancy.
Rationale
from the first name of the proponents, Donald and Edward. Second,
WATERrific, a compound of water and terrific, which is the depiction of the main
product the business, is offering. Lastly, Spring, a body of water and a source of
natural water.
Being the
Chapter II
MARKETING PLAN
Price
P 25
Service
Delivery
Packaging
Kind of Water
Daily hours of
Operation
Weekly days of
Operation
Competitors
A
B
C
D
E
P 25
P 25
P 25
P 25
P 25
Sell & Sell & Sell & Sell & Sell &
Refill
Refill Refill
Refill
Refill
Free
Free
Free
Free
Free
Sealed Sealed Sealed Sealed Sealed
Purified Purified Purified Purified Purified
12
11
10
10
10
6.5
6.5
6.5
6.5
6.5
Location
The business is strategically located at M. J. Amancio Building, Romulo
Highway, Poblacion, Aguilar, Pangasinan.
Market Area
The proposed business covers the whole of the Municipality of Aguilar
with a population of 39,633 persons and composing of 7,733 households (2011
population). The business also covers nearby schools, canteens, and other
establishments.
Main Customers
The target customers of the proposed business are the families residing in
the Municipality of Aguilar.
Demand Analysis
Table 2.2
Percentage Distribution of the Respondents Who Buys Water Refill
Factor
Yes
No
Total
Responses
29
71
100
Percentage
29
71
100
Table 2.3
Weighted Analysis of the Average Number of Container Refills
being Purchased in a Week
No. of Purchases
No. of Purchasers
1
0
2
4
3
8
4
11
5
2
6
3
7
1
Total
29
Divided by
Weighted Average of Refills (Weekly)
Weighted Count
0
8
24
44
10
18
7
111
29
3.83/4
Table 2.4
Historical Demand
Year
Total
Demand
Population
2009
2010
2011
2012
2013
456,768
461,552
466,544
471,536
476,528
38,805
39,208
39,633
40,061
40,494
Wtd. Ave
No, of
No. of
% of
No. of
of
Weekly Weeks in
Household Purchasers Demanders Demanded Demand a Year
Refill
7,571
7,650
7,733
7,817
7,901
29
29
29
29
29
2,196
2,219
2,243
2,267
2,291
4
4
4
4
4
8,784
8,876
8,972
9,068
9,164
52
52
52
52
52
Table 2.4 presents the demand for the water refill and the population of
Aguilar for the years 2009-2013.
Figure 2.1
Historical Demand Graph
480000
476528
Water Refills
475000
471536
470000
466544
465000
460000
461552
456768
455000
450000
445000
2009
Historical Demand
2010
2011
2012
2013
Y e a r
Figure 2.1 presents the graph of the previous years from 2009-2013. The
line is straight and because of the constantly increasing trend of the line graph,
the Arithmetic Straight Line Method was used to present the projections.
Table 2.4
Projected Demand
Year
Projected Demand
(in containers)
2014
2015
2016
2017
2018
481,468
486,408
491,348
496,288
501,228
Computation
476,528
481,468
486,408
491,348
496,288
+
+
+
+
+
4,940
4,940
4,940
4,940
4,940
5-1
= 4,940 containers
Table 2.4 indicates the projected demand for the years by 2014-2018. It
shows that the projected demand increases by 4,940 containers every year. The
projected demands are 481,468; 486,408; 491,348; 496,288 and 501,228 for the
years 2014-2018, respectively.
10
Figure 2.2
Projected Demand Graph
505000
501228
Water Refills
500000
496288
495000
491348
490000
485000
486408
481468
480000
475000
470000
2009
Projected Demand
2010
2011
2012
2013
Y e a r
11
Supply Analysis
Table 2.5
Historical Supply
Year
Total Supply
No. of
Suppliers
Ave. No. of
Refills Sold
Daily
2009
2010
2011
2012
2013
174,070
175,760
177,450
179,140
180,830
5
5
5
5
5
103
104
105
106
107
No of
Ave. No. of
Days Operating Weeks in a
in a Week
Year
6.5
6.5
6.5
6.5
6.5
52
52
52
52
52
Table 2.5 presents the historical supply for the years 2009-2013. Historical
supply was obtained from the unstructured interview conducted by the
proponents to the owner of the water station along the area, the competitors
provided the proponents of the estimated daily average of containers sold for the
years 2009 to 2013.
12
Figure 2.3
Historical Supply Graph
182000
180830
Water Refills
180000
179140
177450
178000
175760
176000
174070
174000
172000
170000
2009
Historical Supply
2010
2011
2012
2013
Y e a r
Figure 2.3 shows the line graph of historical supply for 2009 2013. The
line shows consistent increase, so the method of projection used is the Arithmetic
Straight Line method.
13
Table 2.6
Projected Supply
Year
Projected Supply
(in containers)
Computation
2014
2015
2016
2017
2018
182,520
184,210
185,900
187,590
189,280
180,830 + 1,690
182,520 + 1,690
184,210 + 1,690
185,900 + 1,690
187,590 + 1,690
Year
Computation
containers)
= Supply 2013 - Supply 2009 =(in
180,830
174,070 = 6,760
No. of Years 1
51
2014
182,520
180,830 + 1,690
= 1,690 containers
2015
184,210
182,520 + 1,690
Table 2.6 presents the projected supply for the years 2014-2018. It shows
2016
185,900
184,210 + 1,690
2017 average187,590
1,690 year,
that there are 1,690 containers
annual increase 185,900
in supply+ every
2018
189,280
187,590 + 1,690
with the use of the formula Supply 2013 less Supply 2009 over number of years
less 1.
14
Figure 2.4
Projected Supplies Graph
189280
190000
187590
Water Refills
188000
185900
186000
184210
184000
182520
182000
180000
178000
2009
2010
Projected Supply
2011
2012
2013
Y e a r
Figure 2.4 shows the projected supplies line graph. It indicates the
progressive increase of supplies by year.
15
Market Share
Table 2.7
Demand Supply Analysis
Year
2014
2015
2016
2017
2018
Demand Supply
481,468
486,408
491,348
496,288
501,228
182,520
184,210
185,900
187,590
189,280
Demand
Percentage
Supply Unsatisfied
Gap
298,948
62
302,198
62
305,448
62
308,698
62
311,948
62
Total
33,864
34,492
35,119
35,746
36,373
Market Share
Quantity
Target
Allowance
Sales
33,696
168
34,320
172
34,944
175
35,568
178
36,192
181
%
11
11
11
12
12
With the previously computed projected demand (Table 2.4) and projected
supply (Table 2.6), the gap between the two variables are analyzed and laid out
in the above table.
In able to arrive for the figures of demandsupply gap, the proponents have
subtracted the figures of supply column from the figures in the demand column
with respect to the year indicated.
(demand-supply gap) will become the dividend, and the demand will stand as the
divisor to get the percentage unsatisfied of each year.
The assigning of Figures for market share was both agreed upon by the
proponents, where they opt to make their assumptions rational and away from
having high risk of business loss.
Allowance is set at one half percent of the target sales quantity.
16
33,696
34,320
34,944
35,568
36,192
Gross
Sales
(Pesos)
846,600
862,300
983,332
1,000,888
1,127,563
Allow
ance
Target
Sales
(Pesos)
4,200 842,400
4,300 858,000
4,900 978,432
4,984 995,904
5,611 1,121,952
Table 2.8 exhibits the proposed selling price and sales forecast of the
business from 2014-2018 for water refill. Initially for the first two years, price is
set at P 25 per refill. Price increase proposal is set at P 3/ refill every two years.
17
Table 2.9
Sales Price and Sales Forecast
(Containers)
Year
2014
2015
2016
2017
2018
Container
Type
Slim
Round
Total
Sales
Quantity
Price
P 215
150
225
50
Sales
P
P
Slim
Round
Total
215
225
Slim
Round
Total
220
230
Slim
Round
Total
220
230
Slim
Round
Total
225
235
150
50
P
P
150
50
P
P
150
50
P
P
150
50
P
P
32,250
11,250
43,500
32,250
11,250
43,500
33,000
11,500
44,500
33,000
11,500
44,500
33,750
11,750
45,500
Table 2.9 exhibits the proposed selling price and sales forecast of the
business in terms of the container type: (a) slim type is set at a selling price of
P 215 and a quantity of 150 pieces, and (b) round is set at a selling
price
of
P 225 and a quantity of 50 pieces for the first two years. Price is projected to
increase by P 5 per container every two years. Purchase of a container already
includes a fill of 5 gallon alkaline water.
18
Promotional Measures
The proposed business will make use of freebies as a promotional
measure in order to attract initial customers.
As promotion, the first one hundred (100) customers buying a container
with water fill will get a foldable fan as freebie in the first year of operations.
Marketing Strategy
In order for customers to be aware of the product and the business, the
following marketing strategies shall be utilized:
One week before its operations, flyers advertising the business and its
product, with essential information regarding the product shall be given to
the households of Municipality of Aguilar.
And lastly, the business will be promoted through word of mouth of the
customers who have tried and tested the product.
19
Marketing Budget
Table 2.10
Marketing Budget
Year
2014
Particular
Tarpaulin (3'x4')
Flyers
Freebies
Promoters
compensation
Uniforms
Total
2015
2016
2017
2018
Quantity
3 pcs
500 pcs
100 pcs
Unit Price
Total Amount
P
180 P
540
2
1,000
25
2,500
300
600
6 pcs
120
720
5,360
3,500
3,500
3,500
3,500
P
P
P
P
P
Table 2.10 shows the marketing budget of the proposed business on the
first year of operations. In the succeeding years, the business will only utilize
P 3,500 budget for marketing.
20
Chapter III
PRODUCTION PLAN
Production Process
Figure 3.1
Flow of the Production Process
Water Source
(Nawasa)
Sediment Filter
Multimedia Filter
Stainless
Alkaline Processor
2500
Carbon Filter
Distribution
Finished Product
Figure 3.1, describes the flow of the production process in order to
produce alkaline water.
The water to be used in producing the product is from the Aguilar Rural
Waterwork and Sanitation, Inc.
21
The first process is the Pre-filtration stage, the water passes through three
pre-filters. First, is the sedimentation filter, here, water is filtered to reduce solid
particles such as rust flakes from water pipes, sand grains, small pieces of
organic matter, clay particles, or any other small particles in the water. Next is the
multimedia filter, in here the water is being filtered further to remove small
particles of 30 microns rating. Lastly, the water goes to the carbon filter, where it
removes any foul taste, odor and color caused by organic chemicals in the water
and eliminates sediments of 5 micron rating. Carbon filters are most effective at
removing chlorine, sediment, and volatile organic compounds (VOCs) from
water. Automatic backwashing system removes the trapped contaminants or
sediments within the filter beds and washes them down the drain.
After the Pre-filtration stage, comes next is the Filtration stage.
Through the use of new technology advancement, the Stainless Alkaline
Processor 2500, water is filtered in 20 stages of filtration system with advanced
filters and UV Germicidal Lamp which produces high quality, safe, sterilized
natural alkaline water.
Subsequent to the Filtration stage is the Refilling and Sealing stage,
where the water filtered is filled in containers and sealed as finished products.
Lastly, is the Distribution where the products are served directly to
customers who purchased directly at the station or delivered to their respective
residence or location.
22
Fixed Assets
Building
The store building to be used by the proposed business will be leased out
on a monthly basis, with a lease amounting to P 4,000 monthly. The lease is
included in the administrative expenses to be tackled in Chapter IV, Organization
and Management Plan.
The leased unit is furnished of electrical and water installations.
The lease contract requires advance payment of one year term. The
succeeding payments will be made monthly every end of the month.
Table 3.1
Lease
Particular
Lease
Total
Monthly
Annually
P
4,000 P
48,000
P
4,000 P
48,000
Table 3.1 shows the annual lease of the building amounting to P 48,000
for the years 2014 2018.
23
Production Equipment
Table 3.2
Production Equipment
Particular
Reference
Salvage
Annual
Value
Depreciation
96,500 P
P
9,800
55,000
5,500
4,950
151,500 P
5,500 P
14,750
Amount
Store Equipment
Ch. 3, Tab. 3.2.1 P
Delivery Equipment Ch. 3, Tab. 3.2.2
Total
P
Table 3.2 shows the schedule of fixed assets and their respective
depreciation expense per year.
Table 3.2.1
Store Equipment
Paricular
SAP 2500 Starter Business
Package
Industrial air blower
Total
Amount
Est. Useful
Annual
Life
Depreciation
(Years)
95,000
10
5
1,500
96,500
9,500
300
9,800
Table 3.2.1 shows the total cost of the store equipment which is
composed of SAP 2500 Starter Business Package amounting to P 95,000 with
an annual depreciation of P 9,500 in 10 years, and air blower for P 1,500 with an
annual depreciation of P 300 in 5 years. Depreciation is computed using the
Straight line method.
24
Table 3.2.2
Service Vehicle
Particular
Motorcycle
Carrier
Total
Amount
P
47,500
7,500
55,000
10
10
P
P
5,000
500
5,500
Annual
Depreciation
P
P
4,250
700
4,950
Particular
Maintenance and
repairs expense
Total
2014
2015
2016
2017
2018
7,575 P
7,802 P
8,036 P
8,277
7,575 P
7,802 P
8,036 P
8,277
Table 3.3 shows the annual maintenance and repairs expense of the
proposed business for the years 2015 to 2018. No maintenance and repairs
expense is to be recognized for the equipments used in the production.
Maintenance and repairs are to be computed five percent of the acquisition cost
of the equipments, starting on the succeeding the year of acquisition. This
amount is to increase by three percent every succeeding year.
25
Particulars
Quantity
40
20
Est.
Unit
Total
Useful Salvage
Life
Price
Amount
Value
(Years)
3
P
125 P 5,000
P
500
3
135
2,700
300
P 7,700
P
800
Annual
Depreciation
P
P
1,500
800
2,300
Table 3.4 shows the other non-current assets of the proposed business
amounting to P 7,700, with residual value after four years of estimated useful of
P 800, and its annual depreciation of P 2,300. These are the containers to be
used in serving the customers not intended to be sold but as exchange
containers for the refilled containers.
Particular
SAP 2500 Starter
Business Package
Indutrial air blower
Motorcycle
Carrier
Containers
Source
Establishment Name
Location
Quezon City
AYCOM Waterworks
Peer Marketing
P. G. Aviles Trading
GMP Capseal
Lingayen, Pangasinan
Lingayen, Pangasinan
Bugallon, Pangasinan
Dagupan City
Table 3.5 shows the sources of the fixed assets to be utilized by the
proposed business in carrying out its operations.
26
Raw Materials
Table 3.6
Raw Materials
Year
2014
2015
2016
2017
2018
Particular
Source
Potable Water
Potable Water
Potable Water
Potable Water
Potable Water
AGRUWASA, Inc
AGRUWASA, Inc
AGRUWASA, Inc
AGRUWASA, Inc
AGRUWASA, Inc
Unit
Unit Price
cubic meter P
cubic meter
cubic meter
cubic meter
cubic meter
44.67
45.56
46.47
47.40
48.35
Annual
Total Amount
Quantity
641
P 28,633.47
652
29,705.12
665
30,902.55
677
32,089.80
688
33,264.80
27
Year
2014
2015
2016
2017
2018
Annual
Sales
Quantity
33,864
34,492
35,119
35,746
36,373
Conversion
to Liters
X
X
X
X
X
18.92706
18.92706
18.92706
18.92706
18.92706
Quantity
( in Liters)
=
=
=
=
=
640,945.96
652,832.15
664,699.42
676,566.69
688,433.95
Conversion
to Cu. Mtrs
/
/
/
/
/
1000
1000
1000
1000
1000
Quantity
(in Cu. Mtrs.)
=
=
=
=
=
641
652
665
677
688
Table 3.7
Merchandise Inventories - Containers
Year
2014
2015
2016
2017
2018
Particulars
Slim type container
Round container
Total
Slim type container
Round container
Total
Slim type container
Round container
Total
Slim type container
Round container
Total
Slim type container
Round container
Total
Source
Quantity Unit Price Total Amount
GMP Capseal
150
P
125 P
18,750
GMP Capseal
50
135
6,750
P 25,500
GMP Capseal
150
P
125 P
18,750
GMP Capseal
50
135
6,750
P 25,500
GMP Capseal
150
P
125 P
18,750
GMP Capseal
50
135
6,750
P 25,500
GMP Capseal
150
P
125 P
18,750
GMP Capseal
50
135
6,750
P 25,500
GMP Capseal
150
P
125 P
18,750
GMP Capseal
50
135
6,750
P 25,500
Cost of Labor
Table 3.8
Cost of Labor
Particulars
Production Personnel Salaries
SSS, PhilHealth, Pag-Ibig Contributions
Total
Reference
Ch. 3, Tab. 3.8.1 P
Ch. 3, Tab. 3.8.2
P
Amount
117,000.00
12,792.00
129,792.00
Table 3.8 shows the annual cost of labor to be incurred by the business
amounting to P 130,783.20 in total for the years 2014 2018. This amount
comprises the salary of the refiller and delivery man annually including the
thirteenth month pay, and the SSS, PhilHealth, Pag-Ibig contributions.
29
Table 3.8.1
Production Personnel Salaries
Monthly Thirteenth
Annual
Employees
Salary
Month Pay
Salary
Refiller
P
4,500 P
4,500 P
58,500
Delivery man
4,500
4,500
58,500
Total
P 117,000
Table 3.8.1 shows the annual salary of the production personnel, inclusive
of their thirteenth month pay amounting to P 117,000 for the years 2014-2018.
Table 3.8.2
SSS, PhilHealth, Pag-Ibig Contributions
(Production Personnel)
Employees
Refiller
Delivery Man
Total
328 P
328
105 P
105
Monthly
Contributions
100 P
100
Annual
Contributions
533 P
533
P
6,396
6,396
12,792
Labor Availability
Personnel of D n E WATERrific Spring are not available throughout the
year due to the special holidays. Employees work at a maximum of 26 days a
month because every Sunday is their day-off.
30
Labor Productivity
The employees receive 13th month pay as incentive for their productivity.
Particulars
Maintenance and Repairs
Electricity
Consumables
Cleaning Supplies
Depreciation expense
Total
Reference
2014
Ch. 3, Tab. 3.3 P
- P
Ch. 3, Tab. 3.9.1
29,015
Ch. 3, Tab. 3.9.2
26,180
Ch. 3, Tab. 3.9.3
1,920
Ch. 3, Tab. 3.9.4
17,050
P 74,165 P
2015
7,575 P
30,487
26,950
1,980
17,050
84,042 P
2016
7,802 P
32,027
26,950
2,040
17,050
85,869 P
2017
8,036 P
33,650
27,720
2,100
17,050
88,556 P
2018
8,277
35,357
27,720
2,160
17,050
90,564
31
Table 3.9.1
Electricity
Year
2014
2015
2016
2017
2018
Unit
Cost per
Unit
Kilowatt P 10.2818
Kilowatt
10.4874
Kilowatt
10.6971
Kilowatt
10.9110
Kilowatt
11.1292
Annual
Total
Quantity
Amount
Consumed
2,822
P 29,015
2,907
30,487
2,994
32,027
3,084
33,650
3,177
35,357
32
Table 3.9.2
Consumables
Year
Particulars
Quantity
(in a Year)
34,000 pcs
34,000 pcs
34,000 pcs
34,000 pcs
0.25 P
0.25
0.10
0.17
P
8,500
8,500
3,400
5,780
26,180
35,000 pcs
35,000 pcs
35,000 pcs
35,000 pcs
0.25 P
0.25
0.10
0.17
P
8,750
8,750
3,500
5,950
26,950
35,000 pcs
35,000 pcs
35,000 pcs
35,000 pcs
0.25 P
0.25
0.10
0.17
P
8,750
8,750
3,500
5,950
26,950
36,000 pcs
36,000 pcs
36,000 pcs
36,000 pcs
0.25 P
0.25
0.10
0.17
P
9,000
9,000
3,600
6,120
27,720
36,000 pcs
36,000 pcs
36,000 pcs
36,000 pcs
0.25 P
0.25
0.10
0.17
P
9,000
9,000
3,600
6,120
27,720
33
Table 3.9.3
Cleaning Supplies
Year
Particulars
Quantity
2014
Hair net
Hand Gloves
Unscented Liquid Soap
Mask
Apron
Total
6 pcs
6 pairs
18 liters
6 pcs
6 pcs
2015
Hair net
Hand Gloves
Unscented Liquid Soap
Mask
Apron
Total
6 pcs
6 pairs
18 liters
6 pcs
6 pcs
2016
Hair net
Hand Gloves
Unscented Liquid Soap
Mask
Apron
Total
6 pcs
6 pairs
18 liters
6 pcs
6 pcs
2017
Hair net
Hand Gloves
Unscented Liquid Soap
Mask
Apron
Total
2018
Hair net
Hand Gloves
Unscented Liquid Soap
Mask
Apron
Total
Unit
Total
Price Amount
P
20 P
120
30
180
65
1,170
30
180
45
270
P 1,920
P 21
31
67
31
46
126
186
1,206
186
276
P 1,980
22
32
69
32
47
132
192
1,242
192
282
P 2,040
6 pcs
6 pairs
18 liters
6 pcs
6 pcs
23
33
71
33
48
138
198
1,278
198
288
P 2,100
6 pcs
6 pairs
18 liters
6 pcs
6 pcs
24
34
73
34
49
144
204
1,314
204
294
P 2,160
34
Table 3.9.4
Depreciation Expenses
Particular
Reference
Store equipment
Ch. 3, Tab. 3.1.1
Delivery Equipment Ch. 3, Tab. 3.1.2
Containers
Ch. 3, Tab. 3.2
Total
Annual
Depreciation
P
9,800
4,950
2,300
P
17,050
Production Cost
Table 3.10
Annual Production Cost
(Water Refill)
2014
Raw Materials
P 28,633.47 P
Cost of Labor
129,792.00
Factory Overhead
74,165.00
Total
P 232,590.47 P
2015
29,705.12 P
129,792.00
84,042.00
243,539.12 P
2016
30,902.55 P
129,792.00
85,869.00
246,563.55 P
2017
32,089.80 P
129,792.00
88,556.00
250,437.80 P
2018
33,264.80
129,792.00
90,564.00
253,620.80
Table 3.10 shows the annual production cost of producing alkaline water
for the years 2014 2018.
35
Table 3.11
Production Cost per Unit
(Water Refill)
2014
2015
2016
2017
2018
Raw Materials
P
0.85 P
0.86 P
0.88 P
0.90 P
0.91
Cost of Labor
3.83
3.76
3.7
3.63
3.57
Factory Overhead
2.19
2.44
2.45
2.47
2.49
Total
P
6.87 P
7.06 P
7.03 P
7.00 P
6.97
Table 3.11 shows the annual production cost per unit of the alkaline water
for the years 2014 2018. Production cost per unit is computed by adding the
cost per unit of the individual components raw materials, cost of labor and
factory overhead. The individual components cost per unit for the years 2014
2018 is obtained by dividing the annual total amount of each component by the
annual gross sales quantity for each of the respective years from 2014 to 2018,
33,864; 34,492; 35,119; 35,746 and 36,373, correspondingly.
Table 3.12
Annual Product Cost
(Containers)
2014
2015
2016
2017
2018
Containers P 25,500 P 25,500 P 25,500 P 25,500 P 25,500
Total P 25,500 P 25,500 P 25,500 P 25,500 P 25,500
Table 3.12 shows the annual production cost of the proposed business for
the years 2014-2018.
36
Table 3.13
Product Cost per Unit
(Containers)
2014
2015
2016
2017
2018
Containers P 127.50 P 127.50 P 127.50 P 127.50 P 127.50
Total P 127.50 P 127.50 P 127.50 P 127.50 P 127.50
Table 3.13 shows the annual product cost per unit for the years 20142018. Product cost per unit was obtained by dividing the annual product cost of
the containers by the estimated 200 containers that can be sold yearly, weighted
average method was used.
Table 3.14
Product Cost per Unit
(Container with Water Refill)
Particulars
Raw Materials
Cost of Labor
Factory Overhead
Containers
Total
2014
2015
2016
2017
2018
P
0.85 P
0.86 P
0.88 P
0.90 P
0.91
3.83
3.76
3.7
3.63
3.57
2.19
2.44
2.45
2.47
2.49
P 127.50 P 127.50 P 127.50 P 127.50 P 127.50
P 134.37 P 134.56 P 134.53 P 134.50 P 134.47
Table 3.14 shows the annual cost per unit of a container inclusive of 5
gallon fill of alkaline water for the 2014 2018.
37
38
Chapter IV
ORGANIZATION AND MANAGEMENT PLAN
Form of Business
Partnership form of business was chosen by the proponents. Specifically,
it is a universal partnership of all present property. Profit and loss shall be divided
equally by the partners.
Organizational Structure
Figure 4.1
D n E WATERrific Spring
Organizational Structure
PARTNER/
OWNER
CASHIER
PARTNER/
OWNER
REFILLER
DELIVERY MAN
The proposed
business has the partners (owners), cashier, refiller, and delivery boy. Policies
and objectives will be formulated by the partners but suggestions and
recommendations will be entertained but the partners have the only authority to
39
Owners
Qualifications:
o graduate of any business course preferably B.S. Accountancy
o must have good knowledge about the business
Compensation:
o Half of the net income
40
Cashier
Qualifications:
o a graduate of any business course
o at least 21 but not more than 27 years of age
o female
o of good moral character
o trustworthy
o can work with minimum supervision
o with pleasing personality
Salary:
o P 5,200/month or P 62,400/annually
41
Refiller
Qualifications:
o at least high school graduate
o at least 21 but not more than 27 years of age
o of good moral character
o male
o hardworking
o trustworthy
o can work with minimal supervision
o with pleasing personality
Salary:
o P 4,500/monthly or P 54,000/annually
42
Delivery Man
Qualifications:
o at least high school graduate
o at least 21 but not more than 27 years of age
o of good moral character
o with drivers license and knows how to repair and maintain a
vehicle
o male
o hardworking
o trustworthy
o can work with minimal supervision
o with pleasing personality
Salary:
o P 4,500/monthly or P 54,000/annually
43
Personnel Benefits
Every employee is entitled for the following benefits:
1. SSS contributions;
2. PhilHealth contributions;
3. PAG-IBIG contributions;
4. Thirteenth month pay, and
5. Free two (2) uniforms every year.
Policies to be implemented:
1. The business is to operate six (6) days in a week, from 8:00 am to 12:00
pm; and from 1:00 pm to 6:00 pm with break time.
2. The employees should be at the refilling station at 8:00 am to prepare the
station for operation. The employees are required to record for their time
in and time out.
3. Salaries of the employees will be given every fifteenth (15th) and thirtieth
(30th) day of the month. Employees are not allowed to advance their
salaries.
4. Fighting and commotion between the employees will not be tolerated.
5. Quality and highly satisfactory service should always be given to
customers. Politeness and modesty should be observed on serving the
customers.
6. Always smile.
44
Pre-Operating Activities
Table 4.1
Pre-Operating Activities
November
2013
Wk1
Wk2
Wk3
December
2013
Wk4
Wk1
Wk2
Wk3
January
2014
Wk4
Week 1
Securing business
location
Business registration
Purchase of
equipments and
installation
Hiring of personnel
Purchase of supplies
and inventories
Promotion of business
Start of business
operations
45
Pre-Operating Expenses
Table 4.2
Pre-Operating Expense
Particular
Permits, Taxes and Licences
Mobility Expense
Marketing Expense
Total
Reference
Amount
Ch.4, Tab 4.2.1 P
2,935
Ch.4, Tab 4.2.2
4,950
Ch.2, Tab 2.10
5,360
P
13,425
46
Table 4.2.1
Permits, Taxes and Licenses
Agency
Securities and
Exchange
Commission
Bureau of Internal
Revenue
Amount
P
1,660
TIN
500
Mayor's Permit
450
Community Tax
Certificate
25
Municipal Health
Office - Aguilar
Sanitary Permit
150
Barangay Poblacion
Barangay Permit
50
Municipality of
Aguilar
Garbage fee
Total
100
P
2,935
Table 4.2.1 presents the different government permits, taxes and licenses
that are required for the establishment of the proposed business. The permits
and licenses fees totaled P 2,935.
47
Table 4.2.2
Mobility Expenses
Particular
Securing business location
Amount
P
200
Business registration
1,100
1,250
1,750
Hiring of personnel
250
400
Total
4,950
Table 4.2.2 shows the mobility expenses with the estimated amount of
P 4,950 that covers the securing of business location, business registration,
securing permits and licenses, purchase of equipments and installation, hiring of
personnel and purchase of supplies and inventories.
48
Office Equipment
Table 4.3
Office Equipment
Particulars
Quantity
Air Conditioner
Wall Fan
Exhaust Fan
Desk
Money Box
Monobloc Chair
Wall Clock
Cellphone
Calculator
Total
1
1
1
1
1
4
1
1
1
Unit Price
Total
Amount
10,000
800
700
1,500
400
300
200
1,300
500
10,000
800
700
1,500
400
1,200
200
1,300
500
16,600
Est.
Useful
Annual
Life
Depreciation
(Years)
8
5
5
10
10
4
4
5
5
1,250
160
140
150
40
300
50
260
100
2,450
Table 4.3 shows the office equipment that will be used in the business
amounting to P 16,600 and the annual depreciation expense for these
equipments amounting to P 2,450.
Table 4.4
Lease Improvements
Particulars
Renovation of Leased Unit
Signage
Total
Term Amortization/
(Years) Depreciation
45,000
20
P
2,250
5,000
10
500
50,000
P
2,750
Total Amount
P
P
Table 4.4 shows the total cost of renovation of the unit for P 50,000 with a
term of 20 years with an annual amortization of P 2,750.
49
Particulars
Reference
2013
2014
Lease
Ch. 3, Tab. 3.1 P 48,000.00 P 48,000.00 P
Office Supplies
Ch. 4, Tab. 4.5.1
1,100.00
1,133.00
Cleaning Supplies
Ch. 4, Tab. 4.5.2
1,000.00
1,030.00
Administrative Salaries
Ch. 4, Tab. 4.5.3
67,600.00
67,600.00
SSS, PhilHealth,Pag-Ibig Ch. 4, Tab. 4.5.4
6,891.60
6,891.60
Contributions
Utilities Expense
Ch. 4, Tab. 4.5.5
51,340.00
52,880.00
Depreciation/Amortization Ch. 4, Tab. 4.5.6
5,200.00
5,200.00
Expense Taxes and
Permits,
Ch. 4, Tab. 4.5.7
2,500.00
Licenses -Tax
Renewal
Business
Ch. 4, Tab. 4.5.8
2,670.00
2,717.00
Percentage Tax
Ch. 4, Tab. 4.5.9
26,703.00
27,174.00
Marketing Expense
Ch. 2, Tab. 2.10
3,500.00
Total
P 210,504.60 P 218,625.60 P
2015
2016
48,000.00 P 48,000.00 P
1,167.00
1,202.00
1,061.00
1,093.00
67,600.00
67,600.00
6,891.60
6,891.60
54,466.00
56,100.00
5,200.00
5,200.00
2,500.00
2,500.00
3,083.00
3,136.00
30,835.00
31,362.00
3,500.00
3,500.00
224,303.60 P 226,584.60 P
Table 4.5 shows the total administrative and selling expenses for the
years 2014 2018.
50
2017
48,000.00
1,238.00
1,126.00
67,600.00
6,891.60
57,783.00
5,200.00
2,500.00
3,519.00
35,192.00
3,500.00
232,549.60
Table 4.5.1
Office Supplies
Year
Particulars
Record book
Receipts
2014
Ballpen
Total
Unit
Total
Price Amount
6 pcs
P
25 P
150
30 booklets
30
900
10 pcs
5
50
P 1,100
Quantity
Record book
Receipts
2015
Ballpen
Total
155
927
51
P 1,133
Record book
Receipts
2016
Ballpen
Total
Record book
Receipts
2017
Ballpen
Total
Record book
Receipts
2018
Ballpen
Total
160
955
52
P 1,167
165
984
53
P 1,202
170
1,014
54
P 1,238
Table 4.5.1 shows the office supplies that will be used in the business
amounting to P 1,100 for the first year of operations. This total amount is to
increase by three percent annually, while the number of particulars remains
constant.
51
Table 4.5.2
Cleaning Supplies
Year
Particulars
Quantity
2014
Soft broom
Broom
Mop
Rag
Glass wiper
Powdered soap
Trash bin
Dust pan
Total
2015
Soft broom
Broom
Mop
Rag
Glass wiper
Powdered soap
Trash bin
Dust pan
Total
Soft broom
Broom
Mop
Rag
Glass wiper
Powdered soap
Trash bin
Dust pan
Total
Soft broom
Broom
Mop
Rag
Glass wiper
Powdered soap
Trash bin
Dust pan
Total
Soft broom
Broom
Mop
Rag
Glass wiper
Powdered soap
Trash bin
Dust pan
Total
2016
2017
2018
2 pcs
3 pcs
2 pcs
4 pcs
2 pcs
3 kls
1 pc
2 pcs
Unit
Amount
Price
P
P
70
140
15
45
115
230
30
120
50
100
55
165
120
120
40
80
P 1,000
144
46
237
124
103
170
124
82
1,030
148
47
244
128
106
175
128
85
1,061
153
48
251
132
109
180
132
88
1,093
158
49
259
136
112
185
136
91
1,126
52
2014 2018. The unit price of each particular cleaning supply is to increase by
three percent annually after the first year of operations.
Table 4.5.3
Administrative Salaries
Employees
Cashier
Total
Monthly Thirteenth
Annual
Salary Month pay
Salary
P 5,200 P 5,200 P
67,600
P
67,600
Table 4.5.3 shows the monthly and annual salary of the administrative
employee, inclusive of her thirteenth month pay for the years 2014 2018.
Table 4.5.4
SSS, PhilHealth, Pag-Ibig Contributions
(Administrative Personnel)
Employees
Cashier
Total
P 363.30 P
105 P
Monthly
Contributions
100 P
568.30
Annual
Contributions
P 6,891.60
P 6,891.60
53
Table 4.5.5
Utilities Expense
Particular
2014
2015
2016
2017
2018
Electricity
P 15,000 P 15,450 P 15,914 P 16,391 P 16,883
Communication
4,800
4,944
5,092
5,245
5,402
Water
5,280
5,438
5,601
5,769
5,942
Gasoline
26,000
26,780
27,583
28,410
29,262
Comp. Flourescent Lamp (2)
200
206
212
219
226
Clock Battery (3)
60
62
64
66
68
Total
P 51,340 P 52,880 P 54,466 P 56,100 P 57,783
Table 4.5.5 shows the annual electricity, communication, water and
gasoline or utilities expenses to be incurred are at P 51,340 for the first year. This
amount is to increase by three percent annually starting in the second year of
operations.
The total amount of the electricity and water utilities are inclusive of fixed
costs amounting to P 1,500, and P 1,320, respectively annually.
Table 4.5.6
Depreciation/ Amortization Expenses
Particular
Office Equipment
Lease Improvement
Total
Amount
P
2,450
2,750
P
5,200
54
Table 4.5.7
Permits and Licenses Renewal
Year
Agency
2015
BIR
Mun. of Aguilar
Mun. Health Office
Barangay Poblacion
Garbage fee
LTO Reg. Renewal
Total
2016
2017
2018
Amount
P
LTO Franchise
P
BIR
Mun. of Aguilar
Mun. Health Office
Barangay Poblacion
Garbage fee
LTO Reg. Renewal
Total
TIN
Mayor's Permit
Sanitary Permit
Barangay Permit
BIR
Mun. of Aguilar
Mun. Health Office
Barangay Poblacion
Garbage fee
LTO Reg. Renewal
Total
TIN
Mayor's Permit
Sanitary Permit
Barangay Permit
BIR
Mun. of Aguilar
Mun. Health Office
Barangay Poblacion
Garbage fee
LTO Reg. Renewal
Total
TIN
Mayor's Permit
Sanitary Permit
Barangay Permit
LTO Franchise
P
P
LTO Franchise
P
P
LTO Franchise
P
500
450
100
50
100
1,300
2,500
500
450
100
50
100
1,300
2,500
500
450
100
50
100
1,300
2,500
500
450
100
50
100
1,300
2,500
Table 4.5.7 shows the annual permits, taxes and licenses expenses for
the renewal of the registration and other requirements of the proposed business.
55
Table 4.5.8
Business Tax
Year
2014
2015
2016
2017
2018
Amount
Computation
P
2,670 P 890,100 x .03 x .10
2,717
905,800 x .03 x .10
3,083 1,027,832 x .03 x .10
3,136 1,045,388 x .03 x .10
3,519 1,173,063 x .03 x .10
Table 4.5.8 shows the annual business tax to be paid by the proposed
business to the municipality of Aguilar for the years 2014 2018.
The business tax is computed based on the one-tenth of three percent of
the gross sales.
The total gross sales is composed of the gross sales for water refills and
the containers found in Chapter 2, Table 2.8 and Table 2.9, respectively.
56
Table 4.5.9
Percentage Tax
Year
Amount
Computation
2014 P 26,703 P
890,100 x .03
2015
27,174
905,800 x .03
2016
30.835
1,027,832 x .03
2017
31,362
1,045,388 x .03
2018
35,192
1,173,063 x .03
Table 4.5.9 shows the annual percentage tax to be paid by the proposed
business for the years 2014 2018.
57
Chapter V
FINANCIAL PLAN
Project Cost
Table 5.1
Cost of Capital
Particular
Property, Plant, and Equipment
Production Equipment
Delivery Equipment
Office Equipment
Lease Improvements
Other Non-Current Assets
Pre-Operating Expenses
Advance lease (12 months)
Cash
Total
Amount
P
96,500
55,000
16,600
50,000
7,700
13,425
48,000
72,775
360,000
Table 5.1 shows the total cost of capital for the proposed business D n E
WATERrific Spring. The proponents are to contribute P 180,000 each.
58
Major Assumptions
1. Target market is set at 11% of the demand-supply gap and will increase by
1% every three years.
2. Sales allowance is set at 1/2% of the target sales quantity.
3. Selling price of the water refill will increase by P 3 every two years.
4. Sales forecast of the containers is set at 75% for the slim-type and 25% for
the round containers.
5. Unit price of the water raw material is to increase annually by 2%.
6. The cost per unit of the electricity is to increase by 3% annually, and also,
the annual quantity consumed is to increase by 3% percent every year.
7. The quantity of container seals is to increase by 1000 pieces every two
years succeeding the first year of operations.
8. The price of cleaning supplies is to increase by 3%; the number of
quantities remains constant both in production and administrative.
9. The office supplies are to increase annually by 3%, while the number of
particulars remains constant.
10. Utilities expense is to increase by 3% annually.
11. Straight line method is the depreciation method employed in the proposed
business.
12. The container inventories are computed by weighted average method.
13. Other expenses remain constant.
14. The price of the consumables and the container inventories are constant.
15. No ending inventory finished goods, work in process, raw materials.
59
16. The number of containers sold, is the proposed estimated sale for the
proposed business.
17. All taxes are paid the following year business, percentage and income,
and are computed on annual basis.
18. Withdrawal of P 200,000 is to be made by the partners for the first year and
the amount is to increase by P 50,000 annually.
19. Fully depreciated assets with residual value will be sold without gain or loss
the following the year of full depreciation.
20. Replacement cost of fully depreciated equipments is same with original
acquisition cost.
60
Gross Sales
Less: Sales Allowance
Net Sales
Less: Cost of Sales
Gross Sales
Add: Other Income
Total
Less: Admin. & Selling Expenses
Pre-Operating Expenses
Earnings before Tax
Less: Tax Due
Net Income
Note
1 P
2
3
4
2014
890,100.00 P
4,200.00
885,900.00
258,090.47
627,809.53
627,809.53
210,504.60
13,425.00 403,879.93
121,163.99
282,715.94 P
2015
2016
2017
2018
905,800.00 P 1,027,832.00 P 1,045,388.00 P 1,173,063.00
4,300.00
4,900.00
4,984.00
5,611.00
901,500.00 1,022,932.00 1,040,404.00 1,167,452.00
269,039.12
272,063.55
275,757.80
279,120.80
632,460.88
750,868.45
764,646.20
888,331.20
800.00 632,460.88
750,868.45
765,446.20
888,331.20
218,625.60
224,303.60
226,584.60
232,549.60
413,835.28
526,564.85
538,861.60
655,781.60
124,150.58
157,969.45
161,658.48
196,734.48
289,684.70 P 368,595.40 P 377,203.12 P 459,047.12
Table 5.2 shows the projected statement of comprehensive income of D n E WATERrific Spring for the years 2014
2018. The tax rate used is 30% to get the tax due. Profit for the years 2014, 2015, 2016, 2017 and 2018 is P282,715.94;
P 289,684.70; P 368,595.40; P 377,203.12; and P 459,047.12;, respectively.
61
Table 5.3
D n E WATERrific Spring
Projected Statement of Cash Flows
For the year Ended December 31, 2014 2018
2014
Cash flows from Operating Activities
Income after Tax
Add: Non-Cash Charges
Depreciation/Amortization
Other Non-Cash Charges
Increase in Taxes Payable
Net cash provided by Operating Activities
Cash flows from Investing Activities
Cash Inflow/(Outflow)
Production Equipment
Delivery Equipment
Administrative Equipment
Other Non-current Assets
Payment for Lease Improvements
Net cash flow from Investing Activities
Cash flows from Financing Activities
Partners' Investment
Partners' Withdrawals
Net cash flow from Financing Activities
Increase in Cash
Add: Cash, beginning balance
Cash, at the end of the period
2015
2016
2017
2018
P 282,715.94
P 289,684.70
P 368,595.40
P 377,203.12
P 459,047.12
22,250.00
22,250.00
22,250.00
22,250.00
22,250.00
(P
150,536.99
455,502.93 P
96,500.00)
(55,000.00)
(16,600.00)
(7,700.00)
(50,000.00)
(P 225,800.00)
3,504.59
315,439.29 P
37,845.87
428,691.27 P
(P
(P
4,269.03
403,722.15 P
39,289.00
520,586.12
(P
6,900.00)
6,900.00) (P
1,400.00)
1,400.00)
360,000.00
(200,000.00)
(250,000.00)
(300,000.00)
(350,000.00)
(400,000.00)
P 160,000.00 (P 250,000.00) (P 300,000.00) (P 350,000.00) (P 400,000.00)
P 389.702.93 P
65,439.29 P 128,691.27 P
46,822.15 P 119,186.12
389.702.93
455,142.22
583,833.49
630,655.64
P 389.702.93 P 455,142.22 P 583,833.49 P 630,655.64 P 749,841.70
Table 5.3 shows the projected statement of cash flows for the years 2014 2018. In determining the cash balance,
indirect method was used. Non-cash charges are added back to profit after tax. There was no beginning cash balance for
2014, which is the initial year of operations.
62
Table 5.4
D n E WATERrific Spring
Projected Statement of Changes in Partners Equity
For the Year Ended December 31, 2014 2018
2014
2015
2016
2017
2018
Partners' Equity
Fabros Capital, Beg
Add: Share in Net Income
Total
Withdrawals
Fabros Capital, End
P 180,000.00 P 221,357.97 P
141,357.97
144,842.35
321,357.97
366,200.32
100,000.00
125,000.00
P 221,357.97 P 241,200.32 P
241,200.32 P 275,490.02 P
184,297.70
188,601.56
425,498.02
464,099.58
150,000.00
175,000.00
275,490.02 P 289,099.58 P
289,099.58
229,523.56
518,623.14
200,000.00
318,623.14
P 180,000.00 P 221,357.97 P
141,357.97
144,842.35
321,357.97
366,200.32
100,000.00
125,000.00
P 221,357.97 P 241,200.32 P
241,200.32 P 275,490.02 P
184,297.70
188,601.56
425,498.02
464,099.58
150,000.00
175,000.00
275,490.02 P 289,099.58 P
289,099.58
229,523.56
518,623.14
200,000.00
318,623.14
Table 5.3 shows the projected statement of changes in partners equity for the years 2014 2018. The partners
equity represents total share of both the proponents in the ratio of 50:50. Profit and withdrawals for each year will be equal
for both partners.
63
Table 5.5
D n E WATERrific Spring
Projected Statement of Financial Position
As of December 31, 2014 - 2018
Note
2014
2015
2016
2017
2018
Assets
Current Assets
Cash
Total Current Assets
Non-Current Assets
Poperty, Plant and Equipment
Lease Improvements
Other Non-Current Assets
Total Non-Current Assets
5
6
7
TOTAL ASSETS
Liabilities and Partners' Equity
Taxes Payable
Partners' Equity, End
TOTAL LIABILITIES AND
PARTNERS' EQUITY
P
P
389,702.93 P
389,702.93 P
455,142.22 P
455,142.22 P
583,833.49 P
583,833.49 P
630,655.64 P
630,655.64 P
749,841.76
749,841.76
150,900.00 P
47,250.00
5,400.00
203,550.00 P
133,700.00 P
44,500.00
3,100.00
181,300.00 P
116,500.00 P
41,750.00
800.00
159,050.00 P
99,300.00 P
39,000.00
5,400.00
143,700.00 P
83,500.00
36,250.00
3,100.00
122,850.00
593,252.93 P
636,442.22 P
742,883.49 P
774,355.64 P
872,691.76
150,536.99 P
442,715.94
154,041.58 P
484,400.64
191,887.45 P
550,996.04
196,156.48 P 235,445.48
774,355.64
6,372,467.28
593,252.93 P
636,442.22 P
742,883.49 P
774,355.64 P
872,691.76
Table 5.4 shows the projected statement of financial position for the years 2014 2018. Total assets must equal
total liabilities and partners equity. Total assets amounted to P 593,252.93; P636,442.22; P 742,883.49; P 774,355.64
and P 872,691.76; for the years 2014 to 2018, respectively.
64
Note 1
Gross Sales
Year
Particular
P
2014
Water Refill
Containers [S]
Containers [R]
Total
Water Refill
Containers [S}
Containers [R]
Total
Water Refill
Containers [S]
Containers [R]
Total
Water Refill
Containers [S]
Containers [R]
Total
Water Refill
Containers [S]
Containers [R]
Total
2015
2016
2017
2018
Total Sales
846,600
32,250
11,250
890,100
862,300
32,250
11,250
905,800
983,332
33,000
11,500
1,027,832
1,000,888
33,000
11,500
1,045,388
1,127,683
33,750
11,750
1,173,183
This shows the total annual gross sales for the years 2014 2018.
Note 2
Cost of Sales
2014
Water Refills
Raw Materials
Cost of Labor
Factory Overhead
Total
2015
2016
2017
2018
Containers
Merchandise
Total
P
P
25,500.00 P
25,500.00 P
25,500.00 P
25,500.00 P
25,500.00 P
25,500.00 P
25,500.00 P
25,500.00 P
25,500.00
25,500.00
Total
258,090.47 P
269,039.12 P
272,063.55 P
275,757.80 P
279,120.80
This shows the annual cost of sales for water refills and containers for the
years 2014 2018.
65
Note 3
Administrative and Selling Expenses
Particulars
Reference
2013
2014
Lease
Ch. 3, Tab. 3.1 P 48,000.00 P 48,000.00 P
Office Supplies
Ch. 4, Tab. 4.5.1
1,100.00
1,133.00
Cleaning Supplies
Ch. 4, Tab. 4.5.2
1,000.00
1,030.00
Administrative Salaries
Ch. 4, Tab. 4.5.3
67,600.00
67,600.00
SSS, PhilHealth,Pag-Ibig Ch. 4, Tab. 4.5.4
6,891.60
6,891.60
Contributions
Utilities
Expense
Ch. 4, Tab. 4.5.5
51,340.00
52,880.00
Depreciation/Amortization Ch. 4, Tab. 4.5.6
5,200.00
5,200.00
Expense
Permits, Taxes and
Ch. 4, Tab. 4.5.7
2,500.00
Licenses -Tax
Renewal
Business
Ch. 4, Tab. 4.5.8
2,670.00
2,717.00
Percentage Tax
Ch. 4, Tab. 4.5.9
26,703.00
27,174.00
Marketing Expense
Ch. 2, Tab. 2.10
3,500.00
Total
P 210,504.60 P 218,625.60 P
2015
2016
48,000.00 P 48,000.00 P
1,167.00
1,202.00
1,061.00
1,093.00
67,600.00
67,600.00
6,891.60
6,891.60
54,466.00
56,100.00
5,200.00
5,200.00
2,500.00
2,500.00
3,083.00
3,136.00
30,835.00
31,362.00
3,500.00
3,500.00
224,303.60 P 226,584.60 P
2017
48,000.00
1,238.00
1,126.00
67,600.00
6,891.60
57,783.00
5,200.00
2,500.00
3,519.00
35,192.00
3,500.00
232,549.60
This shows the annual administrative and selling expenses for the years
2014 2018.
Note 4
Pre-Operating Expenses
Particular
Permits, Taxes and Licences
Mobility Expense
Marketing Expense
Total
Amount
P
2,935
4,950
5,360
P
13,425
This shows the pre-operating expenses for the initial year of operations,
2014.
66
Note 5
Property, Plant and Equipment
Paritcular
Production Equipment
Accum. Depreciation
Total
2014
2015
2016
2017
2018
P
96,500 P
96,500 P
96,500 P
96,500 P
96,500
(9,800)
(19,600)
(29,400)
(39,200)
(49,000)
P
86,700 P
76,900 P
67,100 P
57,300 P
47,500
Delivery Equipment
Accum. Depreciation
Total
Administrative Equipment
Accum. Depreciation
Total
Total
55,000 P
(4,950)
50,050 P
55,000 P
(9,900)
45,100 P
55,000 P
(14,850)
40,150 P
55,000 P
(19,800)
35,200 P
55,000
(24,750)
30,250
16,600 P
(2,450)
14,150 P
16,600 P
(4,900)
11,700 P
16,600 P
(7,350)
9,250 P
16,600 P
(9,800)
6,800 P
16,600
(10,850)
5,750
99,300 P
83,500
Note 6
Lease Improvements
Particular
Leased Improvements
Accum. Depreciation
Total
P
P
2014
50,000 P
(2,750)
47,500 P
2015
50,000 P
(5,500)
44,500 P
2016
50,000 P
(8,250)
41,750 P
2017
50,000 P
(11,000)
39,000 P
2018
50,000
(13,750)
36,250
This shows the yearly composition of the lease improvements for the
years 2014 2015.
Note 7
Other Non-Current Assets
Particular
Other Non-Current Assets
Accum. Depreciation
Total
2014
2015
2016
2017
2018
7,700 P 7,700 P 7,700 P 7,700 P 7,700
(2,300)
(4,600)
(6,900)
(2,300)
(4,600)
P 5,400 P 3,100 P
800 P 5,400 P 3,100
P
This shows the yearly composition of other non-current assets for the
years 2014 2018.
67
Note 8
Taxes Payable
Paricular
2014
2015
2016
2017
2018
Business Tax Payable
P
2,670.00 P
2,717.00 P
3,083.00 P
3,136.00 P
3,519.00
Percentage Tax Payable
26,703.00
27,174.00
30,835.00
31,362.00
35,192.00
Income Tax Payable
121,163.99 124,150.58 157,969.45 161,658.48 196,734.48
Total
P 150,536.99 P 154,041.58 P 191,887.45 P 196,156.48 P 235,445.48
This shows the annual taxes payable for the years 2014 2018. This
comprise of income taxes, percentage taxes payable and business taxes
payable.
68
Particular
2014
2015
2016
2017
2018
P 129,792.00 P 129,792.00 P 129,792.00 P 129,792.00 P 129,792.00
17,050.00
17,050.00
17,050.00
17,050.00
17,050.00
25,500.00
25,500.00
25,500.00
25,500.00
25,500.00
130,511.60
136,511.60
136,511.60
136,511.60
136,511.60
P 302,853.60 P 308,853.60 P 308,853.60 P 308,853.60 P 308,853.60
66%
66%
66%
66%
65%
P 458,869.09 P 467,960.00 P 467,960.00 P 467,960.00 P 475,159.48
Direct Labor
Fixed Factory Overhead
Merchandise Inventory-Container
Fixed Admin. & Selling Expense
Total Fixed Cost
Divided by: CMR* (1 - VCR)
Break-even Point in Sales
*Note: CMR Contribution Margin Ratio
Table 5.6 shows the break-even point in terms of peso sales of the
proposed business for the years 2014 2018. The break-even in peso sales is
computed by totaling all fixed cost, and then divides it by the contribution margin
ratio (1 variable cost ratio).
Computation for Variable Cost Ratio
Paricular
Raw Materials - Water Refill
Variable Factory Overhead
Pre-Operating Expense
Variable Admin. & Selling Expense
Sales Allowance
Income Tax
Total Variable Cost
Divided by: Gross Sales
Variable Cost Ratio
2014
28,633.47 P
57,115.00
13,425.00
79,993.00
4,200.00
121,163.99
304,580.46 P
890,100.00
34%
2015
2016
2017
2018
29,705.12 P
30,902.55 P
32,089.80 P
33,264.80
66,992.00
68,819.00
71,506.00
73,534.00
82,114.00
87,792.00
90,073.00
96,038.00
4,300.00
4,900.00
4,984.00
5,611.00
124,150.58
157,969.45
161,658.48
196,734.48
307,261.70 P 350,383.00 P 360,311.28 P 405,182.28
905,800.00 1,027,832.00 1,045,388.00 1,173,063.00
34%
34%
34%
35%
Table 5.7
69
Particular
2014
2015
2016
2017
2018
Direct Labor
P 129,792.00 P 129,792.00 P 129,792.00 P 129,792.00 P 129,792.00
Fixed Factory Overhead
17,050.00
17,050.00
17,050.00
17,050.00
17,050.00
Merchandise Inventory-Container
25,500.00
25,500.00
25,500.00
25,500.00
25,500.00
Fixed Admin. & Selling Expense
130,511.60
136,511.60
136,511.60
136,511.60
136,511.60
Total Fixed Cost
P 302,853.60 P 308,853.60 P 308,853.60 P 308,853.60 P 308,853.60
Divided by: CM/unit (SP/unit - VC/unit) P
16.01 P
16.09 P
18.02 P
17.92 P
19.86
Break-even Point in Volume
18917
19195
17139
17235
15552
Table 5.7 shows the break-even point in terms of volume of the proposed
business for the years 2014 2018. The break-even in volume is computed by
totaling the fixed cost, and then divides it by the contribution margin per unit
(selling price/unit variable cost/unit).
Selling price is P 25 for 2014 2015; P 28 for 2016 2017; and P 31 for
2018.
Computation for Variable Cost per Unit
Paricular
Raw Materials - Water Refill
Variable Factory Overhead
Pre-Operating Expense
Variable Admin. & Selling Expense
Sales Allowance
Income Tax
Total Variable Cost
Divided by: Gross Sales (Quantity)
Variable Cost per Unit
P
P
2014
28,633.47 P
57,115.00
13,425.00
79,993.00
4,200.00
121,163.99
304,580.46 P
33,696
8.99 P
2015
29,705.12 P
66,992.00
82,114.00
4,300.00
124,150.58
307,261.70 P
34,320
8.91 P
2016
30,902.55 P
68,819.00
87,792.00
4,900.00
157,969.45
350,383.00 P
34,944
9.98 P
2017
32,089.80 P
71,506.00
90,073.00
4,984.00
161,658.48
360,311.28 P
35,568
10.08 P
2018
33,264.80
73,534.00
96,038.00
5,611.00
196,734.48
405,182.28
36,192
11.15
Table 5.8
Return on Investment
Year
Return on
Investment
Computation
(Percentage)
2014
48
2015
47
2016
53
2017
50
2018
56
282,715.94
(593,252.92)
289,684.70
[(593,252.92 + 636,442.22)/2]
368,595.40
[(636,442.22 + 742,883.49)/2]
377,203.12
[(742,883.49 + 774,355.64)/2]
459,047.12
[(774,355.64 + 872,691.76)/2]
Table 5.8 illustrates the return on investment (ROI) for the years 2014
2018. The return on investment is a measure that indicates whether the
management is using funds wisely. The formula for computation of the ROI is net
income over average total assets.
Table 5.9
Return on Sales
71
Year
Return on
Sales
Computation
(Percentage)
2014
32
2015
32
2016
36
2017
36
2018
39
282,715.94
885,900.00
289,684.70
901,500.00
368,595.40
1,022,932.00
377,203.12
1,040,404.00
459,047.12
1,167,452.00
Table 5.9 illustrates the return on sales of the proposed business for the
years 2014 2018. Based on the data, the return on sales increase gradually
from 32% 39% from 2014 2018.
Table 5.10
Current Ratio
72
Year
Current
Ratio
2014
2.59
2015
2.95
2016
3.04
2017
3.22
2018
3.18
Computation
3,897,023.00
150,536.99
455,142.22
154,041.58
583,833.49
191,887.45
630,655.64
196,156.48
749,841.76
235,445.48
Table 5.10 illustrates the current ratio of the proposed business for the
years 2014 2018. Current ratio is the test of short-term debt paying ability of the
business.
Table 5.11
Payback Period
Year
Cash Outflow
2014
2015
2016
2017
2018
360,000 P
Cash Inflow
304,965.94
311,934.70
390,845.40
399,453.12
481,297.12
Cumuative
Payback
Cashflow
Period
(P 55,034.06)
1
256,900.04
0.18
647,746.04
1,047,199.16
1,528,496.28
73
SOCIO-ECONOMIC ASPECT
This aspect is concerned with the benefits that the proposed business can
offer to its employees, to the municipality of Aguilar, Pangasinan, to the local and
national economy.
The proposed business can help generate employment and these
employees shall be given basic salary for their living.
Government
The national government will be benefited by the taxes that the proposed
business will pay. The proposed business will be paying 3% percentage tax of
gross sales and income tax of 30% of net income.
In the local government setting, the proposed business will pay business
tax computed by one-tenth of the 3% of the gross sales. These taxes will help the
government in the accomplishment of different projects in the municipality of
Aguilar.
Local Economy
The proposed business will create job opportunities which can help lessen
the unemployment rate of our country.
74
Customers
The proposed business can help the customers by producing and
providing them safe, sterilized, and natural alkaline water.
Recommendation
Based on all the data gathered and evaluated, and the result of the
studies the proposed business is feasible.
75
APPENDICES
76
APPENDIX A
SURVEY QUESTIONNAIRE
YES ____________
NO ___________
__________
Five ___________
Two
__________
Six ___________
Three __________
Four __________
77
APPENDIX B
UNSTRUCTURED INTERVIEW GUIDE
78
APPENDIX C
POPULATION
Name of
Barangay
Bayaoas
Baybay
Bocacliw
Bocboc East
Bocboc West
Buer
Calsib
Laoag
Manlocboc
Ninoy
Panacol
Poblacion
Pogomboa
Pogonsili
San Jose
Tampac
TOTAL ---------
Female
Male
1032
1433
1303
1287
928
1531
1173
1443
599
1641
847
1894
871
1189
1204
1133
19508
1070
1445
1304
1349
847
1606
1178
1606
659
1708
825
1970
891
1250
1281
1136
20125
No. of
Household
Population
2011
2102
2878
2607
2636
1775
3137
2351
3049
1258
3349
1672
3864
1762
2439
2485
2269
39633
No. of
Household
No. of
Families
400
583
513
482
317
607
476
570
229
620
351
816
361
466
466
476
7733
488
638
528
539
354
689
539
669
247
687
362
867
396
547
518
521
8589
79
Name of
Barangay
Bayaoas
Baybay
Bocacliw
Bocboc East
Bocboc West
Buer
Calsib
Laoag
Manlocboc
Ninoy
Panacol
Poblacion
Pogomboa
Pogonsili
San Jose
Tampac
TOTAL ---------
Female
Male
1021
1418
1290
1274
919
1514
1161
1427
593
1622
839
1870
862
1176
1190
1122
19298
1059
1430
1291
1335
838
1589
1166
1589
652
1689
816
1947
882
1235
1268
1124
19910
No. of
Household
Population
2010
2080
2848
2581
2609
1757
3103
2327
3016
1245
3311
1655
3817
1744
2411
2458
2246
39208
No. of
Household
No. of
Families
396
577
508
477
314
600
471
563
227
613
347
808
357
460
461
471
7650
4843
632
523
534
350
682
534
661
244
680
358
857
392
540
516
515
8497
80
Name of
Barangay
Bayaoas
Baybay
Bocacliw
Bocboc East
Bocboc West
Buer
Calsib
Laoag
Manlocboc
Ninoy
Panacol
Poblacion
Pogomboa
Pogonsili
San Jose
Tampac
TOTAL ---------
Female
Male
1011
1404
1277
1261
910
1498
1149
1413
587
1605
830
1850
853
1164
1177
1111
19100
1048
1415
1278
1321
829
1573
1154
1573
645
1672
808
1927
873
1222
1255
1112
19705
No. of
Household
Population
2009
2059
2819
2555
2582
1739
3071
2303
2986
1232
3277
1638
3777
1726
2386
2432
2223
38805
No. of
Household
No. of
Families
392
571
503
472
311
594
466
557
225
607
343
800
353
456
455
466
7571
478
626
518
529
346
675
529
654
241
673
354
848
388
534
506
510
8409
81
APPENDIX D
STORE LOCATION
82
APPENDIX E
FACTORY LAYOUT
Aircon
4 meters
Table Desk
3 meters
83
APPENDIX F
COMPETITORS
Competitor A Living Water Refilling Station
Buer, Aguilar
84
APPENDIX G
BUSINESS LOGO
D n E WATERrific Spring
Alkaline Water Refilling Station
85
APPENDIX H
CURRICULUM VITAE
PERSONAL INFORMATION
Name:
Donald R. Fabros
Nickname:
Nald/domz
Age:
20 years old
Birthday:
Parents:
Address:
EDUCATIONAL BACKGROUND
86
PERSONAL INFORMATION
Name:
Edward P. Molano
Nickname:
Dardy
Age:
20 years old
Birthday:
October 1, 1992
Parents:
Address:
EDUCATIONAL BACKGROUND
87