I.

FINANCIAL ASSUMPTIONS

The assumptions used in this feasibility study were all based from the projected demand

and the analytical thinking of the proponents in relation to the weight of the data being gathered

with diligence. These assumptions are as follows:

1. The study is projected for 5 years.

2. The business operation will commence on January 2020. With the preparation of the

financial statements every calendar year ending December.

3. The proposed company shall operate for 8 hours a day, 7 days per week for a total of 365

days per year.

4. The company will have an initial cost of investment of P1,900,000 pesos which will be

financed through the contribution of the partners.

5. The selling price shall be based on the product costing which is composed of raw

materials, direct labor and overhead cost.

6. All sales shall be paid in cash.

7. An increase of 10% annually for sales.

8. The company shall use Straight line method in depreciating its property, plant and

equipment using the following estimated useful life and residual value:

All Assets Except Utensils, Materials and Building 6 yrs 5% of cost

Utensils 3 yrs 5% of cost

9. Kitchen helper shall be included in the labor cost the rest shall be included in the

operating cost.

10. Depreciation, Utilities and Rent shall be allocated as follows:

 Depreciation – All used in Kitchen shall be 100%, the rest will be included in Operation

Cost.

Utilities – 70% for operation and 30% for overhead

Rent – 70% for operation and 30% for overhead

11. Supplies shall be replenished monthly.

12. Repairs and Maintenance shall be 1% of the cost of property, plant and equipment that

will be allocated based on usage with an increase based on sales.

13. Utilities and Rent will be increased of 10% annually.

14. The cost of estimated renewal of business shall be based on http://www.full-

suite.com/blog/business-permit-renewal-fees/. It was estimated for a total of Sales of 1

million for the year 15,000 will be the payment of permit tax and 1300 for CTC plus

additional charges.

15. An increase of 10% per year for salaries, employer contribution, repairs, utilities and

licenses.

16. Cost of raw materials and packaging shall be 50% of the net sales with an increase based

on sales.
II. TOTAL PROJECT COST (INITIAL COST OF INVESTMENT)

The total project cost refers the total cost and expenses required for the proposed business to start its operations. It includes the

following components.

SCHEDULE 1: INITIAL COST OF INVESTMENT

Fixed Investment Schedule AMOUNT

Property, Plant, Equipment net 3 957,920.00

Pre-operating Expenses 5 26,050.00

Initial Working Capital

Cost of Goods Sold Note 1 3,729,218.81
Operating Expense 1,064,059.06
Total (one year) 4,793,277.88
Less: Depreciation Expense & Doubtful Accounts (Non-cash) 151,670.67
Total 4,641,607.21
Divided by number of months in a year (12 months) 386,800.60
Multiply by (if rolling over of cash expected for 2 months) 773,601.20
Total Initial Working Capital 773,601.20
TOTAL PROJECT COST 1,757,571.20
Contingency Fund 142,428.80
Total Investment 1,900,000.00
III. SOURCE OF FINANCING

The business being a sole proprietorship putting the owner resources, in this case, investment of money would have an initial

capital of P1,900,000.

Sources of Financing P/L RATIO Amount

Owner 100% ₱ 1,900,000.00
TOTAL 100% ₱ 1,900,000.00

IV. COMPARATIVE FINANCIAL STATEMENT

Present a 5-year projection of financial statements of the business, at a minimum, it shall be composed of:

Comparative Income Statement

 Pasta Natural
Comparative Income Statement
For Year Ended
S/N 2020 2021 2022 2023 2024
Sales 4 7,357,755 8,093,530 8,902,883 9,793,172 10,772,489
Vat (12%) 1,154,195
Net Sales 7,357,755 8,093,530 8,902,883 9,793,172 9,618,294
Cost of Goods Sold 1 3,964,419 4,353,061 4,780,568 5,250,826 5,768,109
Gross Profit 3,393,336 3,740,469 4,122,315 4,542,346 3,850,184

Expenses
Pre-Operating Expense 5 26,050 - - - -
Supplies Expense 2 146,877 146,877 146,877 146,877 146,877
Depreciaton Expense 3 81,499 81,499 81,499 81,499 81,499
Salaries 6 695,040 764,544 840,998 925,098 1,017,608
Employer Contribution 6 70,381 76,459 83,145 90,500 98,590
Miscellaneous Expense 7 32,225 35,098 38,257 41,733 45,556
Utilities&Rent Expense 8 133,690 147,059 161,764 177,941 195,735
Repairs and Maintenance 9 5,147 5,662 6,228 6,851 7,536
Taxes and Licenses Expense 10 - 82,021 89,673 98,090 107,349
1,190,909 1,339,218 1,448,442 1,568,589 1,700,750

Income before tax 2,202,427 2,401,251 2,673,873 2,973,757 2,149,434

Income Tax Expense 11 554,776.64 618,400.28 705,639.30 801,602.22 537,818.95
Net Income 1,647,650.36 1,782,850.61 1,968,233.52 2,172,154.72 1,611,615.28

Notes and Schedules

 SCHEDULE 2: Supplies
Particulars Unit Unit Cost Total Cost Times Annual Cost
Air deodorizer 5 65 324 12 3,885
General purpose cleaner 4 99 396 12 4,752
Glass cleaner 4 94 376 12 4,512
Hand gloves (pack) 1 60 60 12 720
Window cleaner 3 99 297 12 3,564
Sponge 5 25 125 12 1,500
Squeezer 2 4,399 8,798 12 105,576
Mop 3 200 600 12 7,200
Kitchen cleaning cloth 10 50 500 12 6,000
Dust pan with brush 2 305 610 12 7,320
Out of order sign (comfort room) 1 154 154 12 1,848
Total Supplies 146,877

Note 1: Cost of Goods Sold

Particulars Schedule 2020 2021 2022 2023 2024
Food Cost and Packaging 3,284,712 3,613,183 3,974,502 4,371,952 4,809,147
Direct Labor 6 287,159 315,659 347,009 381,494 419,427
Overhead Cost
Depreciaton Expense 3 75,832 75,832 75,832 75,832 75,832
Utilities 8 311,942 343,137 377,450 415,195 456,715
Repairs and Maintenance 10 4,773 5,250 5,775 6,353 6,988
Total Overhead Cost 392,548 424,219 459,058 497,381 539,536
Cost of Goods Sold 3,964,419 4,353,061 4,780,568 5,250,826 5,768,109
 SCHEDULE 3: PROPERTY PLANT EQUIPMENT, NET
Salvage Value Useful Annual BOOK VALUES
Particulars Unit Unit Cost Total Cost 5% Life Depreciation 2020 2021 2022 2023 2024
Kitchen Utensils - -
Over mitts 3 27 81 4 3 26 55 30 85 59 34
Measuring tool 2 276 551 28 3 174 377 202 579 404 230
Kitchen knives 1 440 440 22 3 139 301 161 462 323 183
Chopping board 4 83 330 17 3 105 226 121 347 242 138
Wire whisk 2 19 39 2 3 12 26 14 40 28 16
Peeler 2 17 33 2 3 10 23 12 35 24 14
Strainer 1 165 165 8 3 52 113 61 173 121 69
Total 15 1,639 82 519 1,120 601 1,720 1,202 683
Kitchen Equipment - - -
Pasta Dough mixer 1 16,000 16,000 800 6 2,533 13,467 10,933 8,400 5,867 3,333
Pasta machine 1 300,000 300,000 15,000 6 47,500 252,500 205,000 157,500 110,000 62,500
Chest freezer 1 20,350 20,350 1,018 6 3,222 17,128 13,906 10,684 7,462 4,240
Burners/Stove 1 39,315 39,315 1,966 6 6,225 33,090 26,865 20,640 14,416 8,191
Refrigerator 1 100,000 100,000 5,000 6 15,833 84,167 68,333 52,500 36,667 20,833
Total 5 475,665 23,783 75,314 400,351 325,038 249,724 174,411 99,097
Other Assets - - -
Air conditioner 2 46,595 93,190 4,660 6 14,755 78,435 63,680 48,925 34,170 19,415
Lamp Decorations 5 750 3,750 188 6 594 3,156 2,563 1,969 1,375 781
Shelf shortage 2 2,815 5,630 282 6 891 4,739 3,847 2,956 2,064 1,173
Dishwasher 1 39,340 39,340 1,967 6 6,229 33,111 26,882 20,654 14,425 8,196
Kitchen sink 1 14,040 14,040 702 6 2,223 11,817 9,594 7,371 5,148 2,925
Trolley food tray rack 1 3,380 3,380 169 6 535 2,845 2,310 1,775 1,239 704
Table centerpiece 15 50 750 38 6 119 631 513 394 275 156
Picture frame 4 450 1,800 90 6 285 1,515 1,230 945 660 375
Picture frame 6 300 1,800 90 6 285 1,515 1,230 945 660 375
Floor matt entrance 1 350 350 18 6 55 295 239 184 128 73
Book shelf 2 350 700 35 6 111 589 478 368 257 146
Van 1 350,000 350,000 17,500 6 55,417 294,583 239,167 183,750 128,333 72,917
Total 41 514,730 25,737 81,499 433,231 351,732 270,233 188,734 107,235
Total PPE 957,920 47,896 151,670.67 806,249.33 654,578.67 502,908.00 351,237.33 199,566.67
Depreciation Expense Breakdown
Overhead Percentage 2020 2021 2022 2023 2024
Kitchen Equipment, Utensils 477,303.50 100% 75,832 75,832 75,832 75,832 75,832
Total 477,304 75,832 75,832 75,832 75,832 75,832
Operation
Others 514,730 100% 81,499 81,499 81,499 81,499 81,499
Total 514,730 81,499 81,499 81,499 81,499 81,499
 Schedule 4: Revenue
Unit per month No. of Price per box 2020 2021 2022 2023 2024
Particulars Unit Months Supermarket (24pcs)
Pasta ( Carrot Flavor ) 5 12 9 2,983.14 1,610,897 1,771,987 1,949,185 2,144,104 2,358,514
Pasta ( Squash Flavor ) 5 12 9 2,983.14 1,610,897 1,771,987 1,949,185 2,144,104 2,358,514
Pasta ( Spinach Flavor ) 5 12 9 2,499.30 1,349,623 1,484,586 1,633,044 1,796,349 1,975,983
Pasta ( Tomato Flavor ) 5 12 9 2,579.94 1,393,169 1,532,486 1,685,734 1,854,308 2,039,739
Pasta ( Turmeric Flavor ) 5 12 9 2,579.94 1,393,169 1,532,486 1,685,734 1,854,308 2,039,739
Total Revenue 7,357,755 8,093,530 8,902,883 9,793,172 10,772,489
 SCHEDULE 5: PRE-OPERATING EXPENSES
DTI Registration:
Reservation of Name 100.00
Filing Fee 3,838.00
Total 3,938.00
Mayors Permit:
DTI or SEC Registration 500.00
Certificate / Articles of Incorporation -
Community Tax Certificate 1,260.00
Barangay Clearance 500.00
Certificate of Occupancy -
Building Permit -
Fire Safety / Inspection Permit 1,340.00
Electrical Inspection Certificate -
Contract of Lease -
Picture / Sketch of the Site -
SSS Registration 7,370.00
Philhealth 3,025.00
Pag-ibig 200.00
Business Permit Fee 5,000.00
Sanitary Permit Fee 90.00
Total 19,285.00
BIR Registration:
BIR documentary Stamp tax 1,250.00
Notarial fees (various documents) 1,400.00
BIR annual registration fee: Php 500 500.00
Books of account 100.00
3,500.00
Printing of official receipts (25 booklets) from an accredited printing press
Doc Stamp 15.00
Total 6,765.00
Total Pre-Operating Cost 26,050.00
 Schedule 6: SALARIES
Operation Salaries and Wages
Particulars No. of Employee 2020 2021 2022 2023 2024
Manager 1 120,000 132,000 145,200 159,720 175,692
Cashier 2 192,000 211,200 232,320 255,552 281,107
Driver/Delivery Man 2 174,720 192,192 211,411 232,552 255,808
Security Personnel 1 96,000 105,600 116,160 127,776 140,554
Utility Personnel 1 94,320 103,752 114,127 125,540 138,094
Maintenance 1 18,000 19,800 21,780 23,958 26,354
Total 8 695,040 764,544 840,998 925,098 1,017,608
Employer contribution
SSS 51,224 56,347 61,982 68,180 74,998
Philhealth 9,557 10,512 11,564 12,720 13,992
Pag-Ibig 9,600 9,600 9,600 9,600 9,600
Total 70,381 76,459 83,145 90,500 98,590
Overhead Salaries and Wages
Direct Labor
Particulars 2020 2021 2022 2023 2024
Kitchen Helper 3 262,080 288,288 317,117 348,828 383,711
Total 3 262,080 288,288 317,117 348,828 383,711
Employer contribution
SSS 19,315 21,247 23,372 25,709 28,280
Philhealth 3,604 3,964 4,360 4,796 5,276
Pag-ibig 2,160 2,160 2,160 2,160 2,160
Total 25,079 27,371 29,892 32,665 35,716

Schedule 7: Miscellaenous Expense

2020 2021 2022 2023 2024
Advertisement 28,725 31,598 34,757 38,233 42,056
Uniform 3,500 3,500 3,500 3,500 3,500
TOTAL 32,225 35,098 38,257 41,733 45,556
 Schedule 8: UTILITIES and RENT
Operation and Overhead Breakdown
2020 2021 2022 2023 2024
Water 30,000 33,000 36,300 39,930 43,923
Electricity 79,632 87,595 96,355 105,990 116,589
Rent 336,000 369,600 406,560 447,216 491,938
Total 445,632 490,195 539,215 593,136 652,450
Operation 30% 133,690 147,059 161,764 177,941 195,735
Overhead 70% 311,942 343,137 377,450 415,195 456,715
Total 445,632 490,195 539,215 593,136 652,450

Schedule 9: Repairs and Maintenance

Particulars Cost 2020 2021 2022 2023 2024
Overhead (A x 1%)
Kitchen Equipment, Utensils 477,304 4,773 5,250 5,775 6,353 6,988
Total 477,304 4,773 5,250 5,775 6,353 6,988
Operation
Others 514,730 5,147 5,662 6,228 6,851 7,536
Total 514,730 5,147 5,662 6,228 6,851 7,536
 Schedule 10: TAXES AND LICENSES
2020 2021 2022 2023 2024
Estimated Renewal Cost - 82,021 89,673 98,090 107,349
Total Taxes and Licenses - 82,021 89,673 98,090 107,349

Schedule 11: Income Tax Expense

Particulars 2020 2021 2022 2023 2024
Income 2,202,427 2,401,251 2,673,873 2,973,757 2,149,434
250,000 and below 0%
>250,000 to 400,000 20% of excess over 250k
>400,000 to 800,000 30,000 + 25% excess over 400k
>800,000 to 2,000,000 130,000 + 30% excess over 800k
>2,000,000 to 8,000,000 490,000 + 32% excess over 2m 554,777 618,400 705,639 801,602 537,819
above 8,000,000 2.41m + 35% excess over 8m
Total 554,777 618,400 705,639 801,602 537,819

V. PROFITABILITY ANALYSIS AND CAPITAL BUDGETING

Present the profitability and performances of the company through financial ratios, briefly discuss each ratio analysis, at a

minimum, it must include

1. Common-sized Income Statement

 Pasta Natural
Common-sized Income Statement
For Year Ended
S/N 2020 2021 2022 2023 2024
Sales 4 112% 112% 112% 112% 112%
Vat (12%) 12% 12% 12% 12% 12%
Net Sales 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Goods Sold 1 53.9% 53.8% 53.7% 53.6% 60.0%
Gross Profit 46.1% 46.2% 46.3% 46.4% 40.0%

Expenses
Pre-Operating Expense 5 0.4% 0.0% 0.0% 0.0% 0.0%
Supplies Expense 2 2.0% 1.8% 1.6% 1.5% 1.5%
Depreciaton Expense 3 1.1% 1.0% 0.9% 0.8% 0.8%
Salaries 6 9.4% 9.4% 9.4% 9.4% 10.6%
Employer Contribution 6 1.0% 0.9% 0.9% 0.9% 1.0%
Miscellaneous Expense 7 0.4% 0.4% 0.4% 0.4% 0.5%
Utilities&Rent Expense 8 1.8% 1.8% 1.8% 1.8% 2.0%
Repairs and Maintenance 9 0.1% 0.1% 0.1% 0.1% 0.1%
Taxes and Licenses Expense 10 0.0% 1.0% 1.0% 1.0% 1.1%
16.2% 16.5% 16.3% 16.0% 17.7%

Income before tax 29.9% 29.7% 30.0% 30.4% 22.3%

Income Tax Expense 11 7.5% 7.6% 7.9% 8.2% 5.6%
Net Income 22.4% 22.0% 22.1% 22.2% 16.8%

2. Return on investment
 2020 2021 2022 2023 2024
Net Income 1,647,650.36 1,782,850.61 1,968,233.52 2,172,154.72 1,611,615.28
Return on Investment
Initial Investment 1,900,000.00 1,900,000.00 1,900,000.00 1,900,000.00 1,900,000.00
87% 94% 104% 114% 85%

3. Payback Period

Pasta Natural
Payback Period

Initial Investment - 1,900,000.00

Annual Net Operating Cash Flows: Cummulative
2020 1,818,792 1,818,792 1.00
-0.042
2021 1,940,182 3,758,974
2022 2,125,565 5,884,539
2023 2,329,486 8,214,025
2024 1,768,947 9,982,972

Payback Period 1 year and 15 days