Ukay Ukaya Ko Bi Feasibility Study PDF Free

A FEASIBILITY STUDY OF “UKAY-UKAYA KO BI” IN MAGNAGA,
PANTUKAN DAVAO DE ORO
Presented to
The Faculty of the College of Accounting Education
UM Tagum College
Tagum City
In Partial Fulfillment
Of the Requirements for the degree of
Bachelor in Science of Accountancy
PIA T. SURIL
PHEBE ZALLIA P. RADJAC
EMERY G. PUNO
ANA JANE R. BARET
ELIRA JI VILLEGAS
February 2020
APPROVAL SHEET
This feasibility study entitled “A FEASIBILITY STUDY OF “UKAY-

UKAYA KO BI” IN MAGNAGA, PANTUKAN DAVAO DE ORO”, prepared
and submitted by PIA T. SURIL, PHEBE ZALLIA P. RADJAC, EMERY G.
PUNO, ANA JANE R. BARET, ELIRA JI VILLEGAS in partial fulfillment of
the requirements for the degree bachelor of Science in Accountancy, has
been examined and is hereby endorsed.
MICHAEL JOHN ODE

Adviser
PANEL OF EXAMINERS
Approved by the Panel Examiner’s on Oral Examination with the grade of
_______.
Panel Member Panel Member
Financial Analyst Subject Teacher
Accepted and Approved in partial fulfillment of the requirements for the

degree Bachelor of Science in Accountancy.
Mary Cris Luzada, CPA

Department Chair
GINA FE ISRAEL
Dean of College
III
ACKNOWLEDGEMENT
This project feasibility study would not have been possible without the
guidance and the help of several individuals who in one way or another
contributed and extended their valuable assistance in the preparation and
completion of this study. The completion of this feasibility study was made
possible through the encouragement and assistance of some persons who
have given their time and solicited advice to this study:
Mr. Michael John Ode, our instructor, for his patience and guidance,
encouragement and for sharing his expertise in writing this feasibility study;
The Librarian of University of Mindanao, for allowing us to use their facilities;
To our parents, who gave us life and guided us ever since we were born, and
for the financial and moral support;
also to our friends, who always there for us. To our classmates and teachers
who gave us inspiration and support to finish this study; and above all, to
OUR LORD JESUS CHRIST, for His abundant graces and blessings
showered unto the family of the researchers.
The Researchers
IV
PREFACE
This feasibility study includes further research for the foundation of
building a successful business that can stay in long run. The researchers also
give their utmost effort and time to the study more understandable most
importantly in understanding the financial statements.
Furthermore, this feasibility study can also give a big help to those who
are interested in starting a business that can generate much profit and they
can also use this to find information on how they will make their business
profitable and easy to build in a strategic way of planning.
At last, the researchers of this study believe that they used their full effort
and determination to make this proposed feasibility study successful with the
help of Almighty God.

V
TABLE OF CONTENTS
Page
TITLE PAGE i
APPROVAL SHEET ii
ACKNOWLEDGEMENT iii
PREFACE iv
TABLE OF CONTENTS v
LIST OF TABLES ix
LIST OF FIGURES xi
LIST OF ANNEX xii
Chapter
1 INTRODUCTION
Objective of the study 1
Methodology 1
Scope and Limitations of the study 2
2 EXECUTIVE SUMMARY
Brief description of the project 3
Brief Profile of the Proponents 3
Contribution to the Economy 4
3 MARKETING PLAN
Description of the Product 5

VI
Comparison of the Product with its competitors 5
Location 5
Market Area 7
Main Customer 7
Total Demand 7
Historical Demand 8
Projected Demand 9
Historical Supply 10
Projected Supply 11
Demand and Supply Analysis 12
Market Share 13
Historical Selling Price 14
Projected Selling Price 15
Sales Revenue Forecast - Year 1 16
Summary of Sales 19
Marketing Strategy 20
Distribution Strategy 21
Pricing Strategy 21
4 DISTRIBUTION PLAN
Distribution Aspect 23
Source of Equipment 23
Planned Capacity 25
VII
Terms and Condition of Purchase Equipment 25
Store Lay-out 25
Fixed Capital 27
Life of Fixed Capital 28
Total Purchases - Year 1 29
Utility Expense 31
Projected Utility Expense 32
Rent Expense 32
Repair and Maintenance 33
Supplies Expense 34
Projected Store Supplies Expense 35
Business Permit and Licenses 35
Transportation Expense 36
Salaries and Wages 37
Projected Salaries and Wages 37
Benefits Contribution 38
Total Projected Contribution 39
Bookkeeper Honorarium 39
Summary of Expenses - Year 1 40

VIII
5 ORGANIZATION AND MANAGEMENT ASPECT
Form of Business Enterprise 43
Management and Organizational Structure 45
6 FINANCIAL PLAN
Financial Aspect 48
Major Assumption 48
Total Projected Cost 49
Projected Income Statement 50
Projected Cash Flow 51
Projected Balance Sheet 52
FINANCIAL RATIO ANALYSIS 53
Gross Profit Ratio 53
Net Profit Ratio 54
Return on Investment 54
ANNEX A 55
ANNEX A 56
IX
LIST OF TABLES
Table Page
1 Brief Profile of the Proponents 3
2 Historical Demand 8
3 Projected Demand 9
4 Historical Supply 10
5 Projected Supply 11
6 Demand and Supply Analysis 12
7 Market Share 13
8 Historical Selling Price 14
9 Projected Selling Price 15
10 Sales Revenue for Year 1 16
13 Summary of Sales 19
14 Marketing Strategy 20
15 Planned Capacity 25
16 Fixed Capital 27
X
17 Life of Fixed of Fixed Capital 28
18 Total Purchases for Year 1 29
21 Utility Expense 31
22 Projected Utilities Expense 32
23 Rent Expense 32
24 Repairs and Maintenance Expense 33
25 Supplies Expense 34
26 Projected Supplies Expense 35
27 Business Permit 35
28 Transportation Expense 36
29 Advertising Expense 36
30 Salaries and Wages Expense 37
31 Projected Salaries and Wages Expense 37
32 Benefit Contribution 38
33 Total Projected Benefit Contribution 39
34 Bookkeeper Honorarium 39
35 Summary of Expenses for Year 1 40

XI
38 Management Qualifications and functions 45
LIST OF FIGURES
XII
Figure Page
1 The Vicinity Map 6
2 Technical Process 24
3 Store Layout 26
4 The Organizational Structure 44

1
Chapter 1
INTRODUCTION
Objective of the study
This study aimed to determine how feasible the Ukay-Ukaya Ko Bi
business in the Magnaga, Pantukan, Davao De Oro particularly near in
national highway and the marketability of its products and services. The said
study also considers the nature and extent of the market according to its
production, technical, appropriate management aspect and the financial
aspect as well.
The proponents conducted the study in order to identify the current and
future demand as well as the supply of the proposed business, analyze the
competitiveness of the business in the market, provide fair and reasonable
price to customers according to the quality of the service and to determine if
the said business is feasible or not.
Methodology
This study conducted through surveys by gathering all the necessary data
and information in terms of the area and its population at Magnaga, Pantukan,
Davao De Oro. The proponents provide structured questionnaires to the
random respondents that will give reliable results to the entire study and aided
them on how they answer the guide questions. Moreover, the researchers
interviewed some existing business that was the same from conducted study.
2
Scope and Limitation of the Study
Ukay Ukaya ko bi business is conducted within the vicinity of Magnaga,
Pantukan, Davao De Oro. Residents were covered as part of the
respondents. The proponents focused on four aspects: the marketing,
production, management and financial aspects. The proponents examined the
information thoroughly in order to come up with realistic analysis and
recommendations.
3
Chapter 2
EXECUTIVE SUMMARY
Brief Description of the Project
“Ukay-Ukaya ko bi” is a business that offers affordable and comfortable
clothes wherein revenue is derived from customers who buy the product
offered. The amount paid depends on the cost of clothes per kilo or bundle
with additional gross profit margin. The business will be located near
Magnaga National High School. The proposed business will offer clothes and
comfortable bedding that satisfies the needs and wants of the customers.
Table 1
Brief Profile of the Proponents
Name Educational Address

Background
Pia T. Suril Bachelor of Science in Magnaga, Pantukan

Accountancy Davao De Oro
Bachelor of Science in Magnaga, Pantukan
Phebe Zallia P. Radjac Accountancy Davao De Oro
Bachelor of Science in Prk. Orchids Mankilam

Emery G. Puno Accountancy Tagum City
Bachelor of Science in Prk. 6 Canocotan,

Ana Jane R. Baret Accountancy Tagum City
4
Bachelor of Science in Prk. 7 Robiso 1

Elira Ji Villegas Accountancy Southern Davao,
Panabo City
Project contribution to the economy (Socio-economic aspect)
Ukay-ukay nowadays is a very affordable source of fashionable yet
durable clothing material for those with relatively low incomes. Some people
would resort to buying ukay-ukay items because the latter are relatively
homogenous with the brand new garments and accessories that may be
bought in relatively high-class stores and shopping malls. Philippine-made
textiles and garments are said to be 30 percent more expensive than their
counterparts in the market, due partly to the inefficient local production and
technology processes as well as their relatively low productivity (Go 2002).
The textile and garments industry still needs adequate provisions for the
training of as well as incentives for workers, technological efficiency,
development in market production, and creation of regulating bodies. It will be
tougher for these local firms to compete against the ukay-ukay sellers. To
protect the local garments, textiles and clothing industries, President Gloria
Macapagal-Arroyo banned the entry and sale of ukay-ukay items in the
market. This created discontent among their patrons, who look at ukay-ukay
goods as the most affordable in the market (Philippine Star 2002). This also
entailed some implementation cost on the side of the government. While
authorities have every legal right to confiscate and even burn such items,
ukay-ukay stall owners managed to remain unscathed by relocating outside
Metro Manila—to locations not usually monitored by the Department of Trade
and Industry (DTI) and the Department of Social Welfare and Development
(DSWD).
5
Chapter 3
MARKETING PLAN
Description of the Product
“Ukay-ukaya Ko Bi” offers affordable and comfortable clothes that are
suitable for any occasion. The said business guarantees its customer to
provide clothes that respond to current fashion trends and it also provides
pillow, pillow covers, curtains, bed sheets, etc. All of these products provide
satisfaction to customers who want to purchase materials in a very affordable
price.
Comparison of Product with its competitors
Compared to the competitors, our product is more affordable and more
stylish. This is quite unique because the said location has a total population of
10,000 individuals and most of them had to go to Kingking, Pantukan to
purchase just to purchase clothes.
Location
The proposed business will be located at Barangay Magnaga, Pantukan
Davao De Oro near Magnaga National High School. The proponents chose
this site because of its high population and this location is at the center area
of the said barangay. Figure 1 shows the vicinity map of the proposed
business.
6
MAGNAGA
BARANGGAY HALL
MAGNAGA
NATIONAL HIGH
SCHOOL
SURIGAO - DAVAO COASTAL ROAD
MAGNAGA
DEJAN’S ELEMENTARY
STORE SCHOOL
UKAY-UKAYA
THIS SITE
KO BI
7
Figure 1. Vicinity map of the proposed business
Market Area
The area covered by this business is typically the whole Barangay
Magnaga, near Magnaga National High School.
Main Customer
The main customers of this business are the students of Magnaga
National High School.
Total Demand
Presented in table 2 is the historical data gathered and analyzed by the
researchers regarding the trend of the Ukay-ukay to those consumers for the
past three (3) years. Consequently, the said data in table 2 were used as the
basis for the projected demand of the Ukay-ukay for the next three (3) years.
As you can see on table 3, the future demand for the Ukay-ukay is increasing
which shows a favorable effect for the selling of Ukay-ukay.

8
Historical Demand
Table 2 shows the historical demand of ukay-ukay for the past three (3)
years. The proponents gathered data with regards to the total student’s
population of Magnaga National High School thru the Principal’s and
Registrar’s office. Based on the interview conducted, 80% of the target
populace patronized the business. There were 400 interviewees and 320 of
them responded that they are purchasing Ukay-ukay at least seven times (7)
a month.
Table 2
Historical Demand
Average Frequency
Year Students Percentage of purchase per Total Demand
Client (80%) year
2016 1,100 880 24 21,120
2017 1,300 1,040 24 24, 960
2018 1,600 1,280 24 30,720
Projected Demand
9
Table 3 presents the projected demand and it is computed through the
moving average method. Based on the historical demand, it shows an
average percentage increase of 23% in years 1, 2, and 3.
Table 3
Projected Demand
Year Based Year Average % Projected
Increases Demand
1 30,720 23% 37,785
2 37,785 23% 46,476
3 46,476 23% 57,165
Historical Supply
10
For the historical supply, the proponents identified only one (1) existing
business with the same nature as the proposed business situated at crossing
Magnaga near Catholic church that operates (5) days per week. Table 4
shows the competitor’s supply for the past three (3) years.
Table 4
Historical Supply
Year Competitor
2016 20,000
2017 23,000
2018 26,000
Projected Supply
The projected supply will be the basis in determining the average
percentage increase in supply for the past three (3) years of business
11
operation. Base from the table below, it shows an average increase of 13%.
Table 5 shows the projected supply of the proposed business and it is
computed through the moving average method.
Table 5
Projected Supply
Year Based Year Increase Projected Supply
29, 380
1 26,000 13%
13%
2 29, 380 33, 199
3 33, 199 13% 37, 515
Demand and Supply Analysis
In Table 6, demand is higher than supply and it is rapidly increasing and
this signifies that there is a need to create an ukay-ukay store in the area.
12
This means that, there is a great feasibility of starting up “Ukay-Ukaya Ko Bi”
store in the area.
Table 6
Demand-Supply Analysis
Unsatisfied
Year Demand Supply
Demand
Historical Value
2016 1, 120
21, 120 20, 000
2017 1,960
24, 960 23,000
2018
4,720
30, 720 26,000
Projected Value
1 29, 380
8,405
37,785
2
33, 199 13,277
46,476
3
37,515 19,650
57,165
Market Share
Table 7 shows Market share that is computed by dividing the unsatisfied
demand by the selling capacity. The base of getting the selling capacity is
based on the capacity of the proposed business to sell the product.

13
Table 7
Market Share
Year Unsatisfied Selling Capacity Market Share
Demand
8,405
1 20,000 42%
13,277
2 22,000 60%
19,650
3 24,000 82%
Historical Selling Price
Table 8 shows the historical selling price for the last three years.
Table 8
Historical Selling Price
Items Year 1 Year 2 Year 3
Pants 45.00 45.00 45.00
Jacket 35.00 35.00 35.00

14
Blouses and
25.00 25.00 25.00
shirts
Skirt 25.00 25.00 25.00
Dress 35.00 35.00 35.00
Projected Selling Price
Table 9 indicates the Projected Selling Price of each new arrival of pants,
jacket, blouses and shirts, skirt and dress that is offered by “Ukay-Ukaya Ko
Bi”. It is assumed to increase P5.00 for second year as well as for third year.
Table 9
Projected Selling Price

15
Items Year 1 Year 2 Year 3
50.00
Pants 45.00 55.00
40.00
Jacket 35.00 45.00
35.00
Blouses and shirts 25.00 30.00
30.00
Skirt 25.00 35.00
40.00
Dress 35.00 45.00
Sales Revenue Forecast
Table 10 shows the sales revenue of the year 1 of the “Ukay-ukaya ko bi”
business. The data stated are based on the computation from the total
number of pieces purchased per year. Supply capacity is multiplied by selling
price to get the total sales. The total sales of the items are P650, 000.
Table 10
16
Sales Revenue
Year 1
Particulars Share in Quantity Selling Total Sales

percentage Price
Pants 5,000 45.00 P 225,000

25%
Jacket 2,000 35.00 70,000

10%
Blouses and
6,000 25.00 150,000
shirts 30%
Skirt 20% 4,000 25.00 100,000
Dress 15% 3,000 35.00 105,000
Total 100% 20,000 P 650,000
price to get the total sales. The total sales of the items are P 825,000.
Table 11
17
Sales Revenue
Year 2
Particulars Share in Quantity Selling Price Total Sales

percentage
Pants 25% 5,500 50.00 P 275,000
Jacket 10% 2,200 40.00 88, 000
Blouses and 30% 6,600 30.00 198, 000

shirts
Skirt 20% 4,400 30.00 132, 000
Dress 15% 3,300 40.00 132, 000
Total 100% 22,000 P 825,000
price to get the total sales. The total sales of the items are P 1,020,000.
Table 12
Sales Revenue
18
Year 3
Particulars Share in Quantity Selling Price Total Sales
percentage
Pants 25% 6,000 55.00 P 330,000
Jacket 10% 2,400 45.00 108,000
Blouses and 30% 7,200 35.00 252,000

shirts
Skirt 20% 4,800 35.00 168,000
Dress 15% 3,600 45.00 162,00
Total 100% 24,000 P 1,020,000
Summary of Sales
Table 13 shows the summary of total sales revenue for the years 1, 2, and
3.
Table 13
Summary of Sales
Year Total Sales

19
1 P 650,000
2 825,000
3 1,020,000
Marketing Strategy
Our business is committed to achieve affordable and good quality
clothing. The proponents plan to execute a broader marketing strategy to
build name and have better relationship with the target customers through
free website and facebook in order to reach wider range of possible
customers.
Table 14
CALENDAR OF MARKETING ACTIVITIES
Strategy Key Action Items By When Budget

20
Survey the location

where the business
Survey runs into. December 23 P500
Introducing the
business and the
Distribution of flyers and product to a large January 6 P2, 000
leaflets number of customers.
(300 pieces for whole
week)
To reach wider range of

Advertisement via facebook possible customers. January 6 P250
Opening Promo All items for 25.00 only January 27 P16, 000
TOTAL P18, 750
..
Distribution Strategy
The business uses direct selling for distribution to the customer on which
the target market can directly acquire the products. The location is accessible
in the distribution of the product for the convenience of the students,
employees and households. The product will be assembled in order to ensure
the products are affordable.
Pricing Strategy
“Ukay-ukay” wares are sold in bales by traders. A bale may consist of
anywhere from 500-1000 different articles of clothing, and may be sorted into
specific kinds like women’s blouses, men’s shirts, kid’s wear, pants, jackets
21
and others. The price of bales depends on the number of clothes each bale
has or the quality of clothes they carry. Some bales of 1000 pcs are sold at
Php11, 000-15,000, plus shipping price. At this rate, the investment is around
Php11-15 per piece of clothing.
Basic “ukay” wares like shirts and blouses in Metro Manila are priced at
an average of Php75. Clearance sales may see the prices drop by at most
50%. But even when sold at a discount, entrepreneurs can still profit from a
sale because of the very low initial investment. Whether sold ‘fresh’ (within 3-5
days after the opening of the bale) or in a 3-for-100 bargain, the entrepreneur
can still profit or expect a return of investment amounting to 2-4x the original
cost per piece of clothing.
Pricing “ukay” wares definitely depends on an
entrepreneur’s diskarte (business acumen) – how he or she deals with
customers while balancing the flow of income and the disposal of stocks.
Provided an entrepreneur knows how to use his or her diskarte to manipulate
these factors, then return of investment can be maximized for each bale.
22
Chapter 4
Distribution plan
Distribution Aspect
This chapter shows the process of purchasing the products for the
business. The first step is purchasing second hand apparels like clothes,
bags, shoes and etc. Second, the proponents will set the price of the clothes,
bags, shoes and etc. Third, the items or products will display in the store and
lastly, the payment of the customers. Furthermore, this chapter discusses the
acquisition of Fixed Capital, Equipment and Furniture and Fixtures with their
23
corresponding cost and also the expenses of the business operation all
throughout the duration.
Source of Equipment
The equipment that is using can be found at the shopping malls in Tagum
City. The proponents will have an easily access to purchase the equipment
that are needed to the business.
Purchasing
second hand
apparel
Pricing the
clothes
Display the
Items
Payments
24
Figure 2. Technical Process
Planned Capacity
Table 15 shows the planned capacity of the business and it will assume to
increase by 10% each year.
Table 15
Planned Capacity
Year Planned Capacity

25
1 20,000
2 22,000
3 24,000
Terms and Condition of Purchase Equipment
In purchasing the equipment, it should be in a cash basis as well as, the
proponents will allocate the maintenance and repair of the equipment so that
it will avoid delay or inconvenience in the business operation.
Store Lay-out
The location of the proposed business is at Magnaga, Pantukan, Davao
de Oro. The beneficial of the proposed business is that, the place is easy to
access to the customers and the business is near from national road. Figure 3
will show the lay-out of the store.

Fitting Room
26
Stock Room
Cashier
Display
Area
ENTRANCE/EXIT
Figure 3. Store Lay-out
Fixed Capital
27
Table 16 shows the equipment and furniture and fixtures which to be
used in the business operation.
Table 16
Fixed Capital
Equipment
Particulars Quantity Unit Cost Total Amount
Ceiling Fan 2 P 1,999.00 P 3,998.00
CCTV 1 15,000.00 15,000.00
Sub-Total P 18,998.00
Furniture and Fixtures
Table 1 P 500.00 P 500.00
Hangers 42 dozen 100.00 4,200.00
Mannequin 4 3,500.00 14,000.00
Chair 2 350.00 700.00
Sub-Total P 19,400.00
Grand Total P 38,398.00
Life of Fixed Capital

28
Table 17 shows the estimated life and corresponding depreciation of the
equipment and furniture and fixtures.
Table 17
Life of Fixed Capital
Equipment
Depreciation
Estimated
Particulars Amount Life of Year 1 Year 2 Year 3
Asset
Ceiling Fan P 3,998.00 5 P 799.60 P 799.60 P 799.60
CCTV 15,000.00 5 3,000.00 3,000.00 3,000.00
Sub-Total P 18,998.00 P 3,799.60 P 3,799.60 P 3,799.60
Furniture and Fixtures
Table P 500.00 2 P 250.00 P 250.00
Hangers 4,200.00 3 1,400.00 1,400.00 P 1,400.00
Mannequin 14,000.00 4 3,500.00 3,500.00 3,500.00
Chair 700.00 2 350.00 350.00
Sub-Total P 19,400.00 P5,500.00 P5,500.00 P 4,900.00

Grand
P38,398.00 P 9,299.60 P 9,299.60 P 8,699.60
Total
Total Purchases
29
Table 18, 19 and 20 show the total purchases of supply for the first three
years. The total amount of purchases in year 1 is P 170,000, year 2 is P
209,000 and the total amount in year 3 is P 252,000.
Table 18
Year 1
Quantity Cost of
Particulars Selling Price Original Price
Purchases Purchases
Pants 45.00 10 50,000

5,000
Jacket 35.00 10 20,000
2,000
Blouses and
25.00 5 30,000
shirts 6,000
Skirt 25.00 10 40,000
4,000
Dress 35.00 10 30,000
3,000
TOTAL 170,000
20,000
Table 19
Year 2
Quantity Cost of
Purchases Purchases
Pants 11 60,500
5,500 55.00
Jacket 11 24,200
2,200 45.00
Blouses and
6 39, 600
shirts 6,600 35.00
Skirt 11 48, 900
4,400 35.00
Dress 11 36, 300
3,300 45.00
TOTAL 209,000
22,000
Table 20
30
Year 3
Quantity Cost of
Purchases Purchases
Pants 6,000 12 72,000

60.00
Jacket 2,400 12 28,800

50.00
Blouses and 7,200 7 50, 400

shirts 40.00
Skirt 4,800 12 57, 600

40.00
Dress 3,600 12 43, 200

50.00
TOTAL 24,000 252,000

31
Utility Expense
Presented in Table 21 is the possible utilities expense to be incurred by
the proposed business and it is estimated to increase 5% per year.
Table 21
Utility Source Basis Rate per Total Amount

Month (Annually)
Power Supply DANECO Kilowatt P 1,500.00 P 18,000.00

hour
Water Supply Barangay Cubic Metres 250.00 3,000.00

Magnaga
TOTAL P 21,000.00
Utilities Expense
Projected Utilities Expense

32
Table 22 shows the projected utilities expense for the first three years.
The total amount projected utilities expense in year 1 is P 21,000.00 and
assumed that it will increase by 5% per year.
Table 22
Projected Utilities Expense
Year Amount
1 P 21,000.00
2 22,050.00
3 23,152.50
Rent Expense
Table 23 shows the rent expense of the building where the business firm
is located and it is assumed to increase by 5% per year.
Table 23
Rent Expense
Year Amount
1 P 60,000.00
2 63,000.00
3 66,150.00
Repairs and Maintenance

33
The proponents make sure that they have purchased of high quality
equipment. This is to avoid errors in terms of business operations. The
proponents decided to allocate P 3,000.00 for its maintenance to make sure
that all of the equipment to be used would function well and it assumed to
increase 10% per year
Table 24
Repairs and Maintenance
Year Amount
1 P 3,000.00
2 3,300.00
3 3,630.00
Supplies Expense
34
Table 25 shows expenses of supply that will be used by the business.
This will serve as a tool for completing everyday transactions.
Table 25
Supplies Expense
Particulars Unit Cost Quantity Annual Cost
Ball pen P 190.00 P 380.00

2 boxes
Calculator 385.00 770.00

2 pcs
Garbage Bins 105.00 2 pcs 210.00
Dust Pan 150.00 1 150.00
Garbage 45.00 2 rolls 90.00

Cellophane
Broom 50.00 2 pcs 100.00
Record Book 160.00 320.00

2 pcs
Plastic Bag 70.00/ream 3,500.00

50 reams
TOTAL P 5,520.00
Projected Store Supplies Expense

35
Table 26 shows the projected store supplies expense of the business. It
will increase by 5% per year.
Table 26
Projected Store Supplies Expense
Year Amount
1 P 5,520.00
2 5,796.00
3 6,085.80
Business Permit and Licenses
Table 27 shows the Business Permit and Licenses which is important in
the establishment in order to the starting business to be legal. It is assumed
that the business permit will increase by 5% due to the changes in capital.
Table 27
Business Permit and Licenses
Year Total Amount
1 P 3,000.00
2 3,150.00
3 3,307.50
Transportation Expense
36
Table 28 shows the Transportation Expense of the business which is
used in purchasing necessary material for the operation of the business and
the proponents assumes that it will increase by 5% per year.
Table 28
Transportation Expense
Year Total Amount
1 P 24,000.00
2 25,200.00
3 26,460.00
Advertising Expense
Table 29 shows the Transportation Expense of the business which is used
in purchasing necessary material for the operation of the business and the
proponents assumes that there is no increase in advertising expense.
Table 29
Advertising Expense
Year 1 2 3
Total Amount P2, 250 P2, 250 P2, 250
Salaries and Wages

37
Table 30 shows the salaries and wages of the employees where the
monthly salary of cashier is P 90,000.00 while the saleslady and sales boy is
P 72,000.00.
Table 30
Salaries and Wages
Employees Rate per Day Monthly Salary Annual Salary
Cashier P 250.00 P 7,500.00 P 90,000.00
Sales lady 200.00 6,000.00 72,000.00
Sales boy 200.00 6,000.00 72,000.00
TOTAL P234,000.00
Projected Salaries and Wages
Table 31 shows the projected salaries and wages of the employees where
there is an increase of 5% every year.
Table 31
Projected Salaries and Wages
Employees Year 1 Year 2 Year 3

Cashier P 90,000.00 P 94, 500.00 P 99, 225.00
Sales lady 72,000.00 75, 600.00 79, 380.00
Sales boy 72,000.00 75, 600.00 79, 380.00
TOTAL P234,000.00 P 245, 700.00 P257, 985.00
Benefits Contribution
38
Table 32 shows the Benefits Contribution of the employer where the total
yearly contribution is P 32,640.00.
Table 32
Phil Health SSS Premium Pag-ibig

Contribution Contribution Contribution
EE ER EE ER EE ER Total
Employees Monthly Monthly Monthly Monthly Monthly Monthly Yearly
Share Share Share Share Share Share Contributio
n
Cashier P150.00 P150.00 P340.00 P680.00 P150.00 P150.00 P11,760.00
Saleslady/ 150.00 150.00 300.00 600.00 120.00 120.00 P10,440.00

sales boy
Benefits Contribution
Total Projected Contribution

39
Table 33 shows the Total Projected Contribution and in every year there is
no increase of the contribution.
Table 33
Total Projected Contribution
Employees Year 1 Year 2 Year 3
Cashier P 11,760.00 P 11,760.00 P 11,760.00
Saleslady 10,440.00 10,440.00 10,440.00
Sales Boy 10,440.00 10,440.00 10,440.00
TOTAL P 32,640.00 P 32,640.00 P 32,640.00
Bookkeeper Honorarium
Table 34 shows the Honorarium of the Bookkeeper annually and it has a
total amount of P 6,000.00 per year with no increase yearly.
Table 34
Bookkeeper Honorarium
Year Total Amount
1 P 6,000.00
2 6,000.00
3 6,000.00
Summary of Expenses
40
Table 35, 36, and 37 shows the summary of operating expenses of the
proposed business.
Table 35
Summary of Operating Expenses
Year 1
Particulars Operating Expense
Depreciation Expense P9,299.60
Utilities Expense 21,000.00
Repairs and Maintenance 3,000.00
Store Supplies Expense 5,520.00
Rent Expense 60,000.00
Permit and Licenses 3,000.00
Transportation Expenses 24,000.00
Benefit Contribution 32,640.00
Salaries and Wages 234,000.00
Bookkeeper Honorarium 6,000.00
Advertisement 2,250.00
TOTAL P 400,709.90
Summary of Expenses
41
Table 36
Year 2
Depreciation Expense P 9,299.60
Salaries and Wages 245, 700.00
TOTAL P 418, 385.60
Summary of Expenses
Table 37
42
Year 3
Depreciation Expense P 8,699.00
Salaries and Wages 257, 985.00
TOTAL P 436, 359.9
Chapter 5
Organization and Management Aspect

43
Form of Business Enterprise
“Ukay-Ukaya ko bi” is a sole proprietorship form of business. This is
considered as the simplest form of business organization. It is a type of
enterprise that is owned and run by one person and in which there is no legal
distinction between the owner and the business entity. The capital is provided
itself, so as the expense and profit of the business. The over-all decision is on
the owner as well as the control of the operation of the firm.
Management and Organization Structure
The owner will be the one who manage and decide what will be the
activity and operations of the business. Figure 4 shows the organizational
structure of the business.
MANAGER
44
Bookkeeper
Sales Cashier
Lady/Men
Figure 4. Organizational Structure
Management Qualification and Functions
The table 38 below shows the qualification and functions of the workers. This
would help them to know their duties and responsibilities in order to do their
tasks properly.
45
Table 38
Management Qualification and Functions
Position Job Description Job Specification
Manager ● Develops business ● Had broad knowledge in
management goals merchandising business.
and objectives that ● Know how to handle
tend to growth and employees and
prosperity. customers.
● Enforce policy to ● Establish and maintain
cultivate an the desired professional
environment that ethos when in a work
makes employees place.
accountable for their
action.
● Communicate and
motivate employees
while establishing
appropriate methods
to evaluate job
performance.
Sales Lady/Men ● Assist customers and ● At least a high school
must be able to graduate
answer questions or ● Had knowledge of

46
concerns. customer service and
● Any complaints must sales.
be handled ● Had experience in retail
professionally and and business
must communicate administration.
properly. ● With good manners and
right conduct.
Cashier ● Scan the customer’s ● Have knowledge of basic
selections, ensure that accounting.
prices and quantities ● Customer service or
are accurate, accept Cashier experience.
payments, issue ● Ability to handle
receipts, answer transactions accurately
inquiries, and provide and responsibly.
helpful information to
customers.
● Processing refunds
and exchanges,
resolving complaints.
Also, wrapping
purchases to ensure
safe transport.
Bookkeeper ● Recording transactions ● Accounting graduate and
such as income and trustworthy.
outgoings, and posting

47
them to various
accounts.
Chapter 6
Financial Plan
Financial Aspect
Major Assumption
1. The Market share per year is 42%, 60% and 82% of the total
unsatisfied
demand.
48
2. Depreciation is computed by using the straight line method.
3. Salaries and wages is P 19,500.00 each month.
4. Honorarium of Bookkeeper is assumed to be P 6,000.00.
5. Utility expense assumed to increase by 5% each year.
6. Rent expense assumed to increase by 5% each year and rent payment
for initial operation contains 1 month deposit and 1 month advance.
7. Repair and Maintenance expense assumed to increase by 5% each
year.
8. Store Supplies expense assumed to increase by 5% each year.
9. Business Permit is P3,000.00 on the first year and assumed to increase
by 5% each year.
10. Transportation expense assumed to increase by 5% each year.
11. Benefits and contribution expense assumed to increase by 5% each
year.
Total Projected Cost
The proposed business of the proponents needs P 150,000.00 to support
the operation of the business.
Pre- operating Expense

Business Permit P 3,000.00
Initial Fixed Capital Cost
Equipment P 18,998.00
Furniture and Fixtures 19,400.00 P 38,398.00
Initial Working Capital (one month)
49
Cost of Purchases P 14,167.00

Operating Expenses (one month)
Utilities Expense P 1,750.00
Repair and 250.
Maintenance 00
460.
Store Supplies 00
15,000.
Rent Expense 00
Transportation 2,000.
Expense 00
2,720.
Benefits Contribution 00
500.
Bookkepeer Honorarium 00
19,500.
Salaries and Wages 00
187.
Advertisement 50 P 42,367.50
97,932.
TOTAL 50
Add 52,067.
: Cash on Hand 50
150,000.
TOTAL INVESTMENT COST 00
Ukay Ukaya Ko Bi
Projected Income Statement
For the year ended December 31, Year 1-3
YEAR 1 YEAR 2 YEAR 3

Sale
s P 650,000.00 P 825,000.00 P 1,020,000.00
Less: Cost of Sales 170,000.00 209,000.00 252,000.00
Gross Profit P 480,000.00 P 616,000.00 P 768,000.00
Operating Expense
Utilities Expense P 21,000.00 P 22,050.00 P 23,152.50

Repair and Maintenance 3,000.00 3,300.0 3,630.0
50
Expense 0 0
5,796.0 6,085.8
Store Supplies Expense 5,520.00 0 0
63,000.0 66,150.0
Rent Expense 60,000.00 0 0
3,150.0 3,307.0
Permit and Licenses 3,000.00 0 0
25,200.0 26,460.0
Transportation 24,000.00 0 0
32,640.0 32,640.0
Benefits Contribution 32,640.00 0 0
6,000.0 6,000.0
Bookkeeper Honorarium 6,000.00 0 0
245,700.0 257,985.0
Salaries and Wages 234,000.00 0 0
9,299.6 8,699.6
Depreciation Expense 9,299.60 0 0
2,250.0 2,250.0
Advertisement 2,250.00 0 0
Total Operating Expense P 400,709.60 P 418,385.60 P 436,359.90
NET INCOME P 79,290.40 P 197,614.40 P 331,640.10

51
Ukay Ukaya Ko Bi
Projected Cash Flow
For the year ended December 31, Year 1-3
Cash Inflow YEAR 1 YEAR 2 YEAR 3
Sales Revenue P 650,000.00 P 825,000.00 P 1,020,000.00

Less:Cash Outflows
Cost of Sales P 170,000.00 P 209,000.00 P 252,000.00
Fixed Asset 38,398.00 0.00 0.00
Utilities Expense 21,000.00 22,050.00 23,152.50
Repair and Maintenance Expense 3,000.00 3,300.00 3,630.00
Store Supplies Expense 5,520.00 5,796.00 6,085.80
Rent Expense 60,000.00 63,000.00 66,150.00
Permit and Licenses 3,000.00 3,150.00 3,307.00
Transportation 24,000.00 25,200.00 26,460.00
Benefits Contribution 32,640.00 32,640.00 32,640.00
Bookkeeper Honorarium 6,000.00 6,000.00 6,000.00
Salaries and Wages 234,000.00 245,700.00 257,985.00
Advertisement 2,250.00 2,250.00 2,250.00
TOTAL P 599,808.00 P 618,086.00 P 679,660.30
Net Increase in Cash P 50,192.00 P 206,914.00 P 340,339.70

Add: Cash Balance, Beg 150,000.00 200,192.00 407,106.00
Ending Cash Balance P 200,192.00 P 407,106.00 P 747,445.70
Ukay Ukaya Ko Bi
Projected Balance Sheet

52
As of December 31, Year 1-3
ASSET
YEAR 1 YEAR 2 YEAR 3
Current Asset
Cash P 200,192.00 P 407,106.00 P 747,445.70
Non-Current Asset
Equipment P 18,998.00 P 18,998.00 P 18,998.00
Acc. Depreciation 3,799.60 7,599.20 11,398.80
Furniture and Fixtures 19,400.00 19,400.00 19,400.00
Acc. Depreciation 5,500.00 11,000.00 15,900.00
Total Non-Current Asset P 29,098.40 P 19,798.80 P 11,099.20
TOTAL ASSET P 229,290.40 P 426,904.80 P 758,544.90
Owner's Equity
Capital, Beg. Php150,000.00 Php229,290.40 Php426,904.80
Add: Net Income 79,290.40 197,614.40 331,640.10
TOTAL OWNER'S EQUITY P 229,290.40 P 426,904.80 P 758,544.90
Financial Ratio Analysis

53
In determining the projected performance of the proposed business, the
financial ratios are important which will reflect the feasibility of the study.
Gross Profit Ratio
The Gross profit ratio for the first three years of business operations of the
proposed business are 73%, 74%, and 75% respectively. Below show the
proposed business performance in the succeeding years.
Gross Profit Ratio:
Year 1 Year 2 Year 3
Gross Profit
P 480,000.00 P 616,000.00 P 768,000.00
Divide: Net Sales

P 650,000.00 P825,000.00 P 1,020,000.00
73% 74% 75%
Net Profit Ratio

54
The net profit ratios of the first three years of operation of the proposed
business are 12.20%, 24%, and 33% respectively. Below show the proposed
business will be efficient in converting the sales into actual profit.
Net Profit Ratio:
Net Profit
P 79,290.40 P 197,614.40 P 331,640.10
Divide: Net Sales

P 650,000.00 P825,000.00 P 1,020,000.00
12.20% 24% 33%
Return on Investment
The Return on investment results to 34.45%, 52.70% and 54.42%
respectively. The computation shows below.
Return on Investment
Net Income
P 79,290.40 P 197,614.40 P 331,640.10
Divide: Total
Assets P 229,290.40 P 426,904.80 P 758,544.90
34.58% 46% 44%

Annex A
55
HISTORICAL DEMAND
Average Percentage = Total number of interviewees who purchase

secondhand retail 7 times a week ÷ Total number of Interviewees
AP = 320 / 400 = 80%
Total Demand = (Total population x Average Percentage) x Frequency

purchase per year
Total Demand (2016) = (1100 x 80%) x 24 = 21,120

Total Demand (2017) = (1300 x 80%) x 24 = 24,960
Total Demand (2018) = (1600 x 80%) x 24 = 30,720
PROJECTED DEMAND
Average Increase = (Current Year – Based Year) / Based Year
AI = (30,720 – 24,960) / 24960 = 23%
Projected Demand = (Based Year x Average Increase) + Based Year
Projected Demand (Year 1) = (30,720 x 23%) + 30,720 = 37,785

PROJECTED SUPPLY
Increase = (Current Year – Based Year) / Based Year
Increase = (26,000 – 23,000) / 23,000 = 13%

56
Projected Supply (Year 1) = (26,000 x 13%) + 26,000 = 29,380

Market Share Percentage = Unsatisfied demand / Selling capacity
Year 1 = 8,405 ÷ 20,000 = 42%
Year 2 = 13,277 ÷ 22,000 = 60%
Year 3 = 19,650 ÷ 24,000 = 82%

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A FEASIBILITY STUDY OF “UKAY-UKAYA KO BI” IN MAGNAGA,

PANTUKAN DAVAO DE ORO

This feasibility study entitled “A FEASIBILITY STUDY OF “UKAY-

MICHAEL JOHN ODE

Approved by the Panel Examiner’s on Oral Examination with the grade of

Panel Member Panel Member

Financial Analyst Subject Teacher

Accepted and Approved in partial fulfillment of the requirements for the

Mary Cris Luzada, CPA

contributed and extended their valuable assistance in the preparation and

possible through the encouragement and assistance of some persons who

have given their time and solicited advice to this study:

Mr. Michael John Ode, our instructor, for his patience and guidance,

encouragement and for sharing his expertise in writing this feasibility study;

The Librarian of University of Mindanao, for allowing us to use their facilities;

for the financial and moral support;

OUR LORD JESUS CHRIST, for His abundant graces and blessings

showered unto the family of the researchers.

This feasibility study includes further research for the foundation of

importantly in understanding the financial statements.

profitable and easy to build in a strategic way of planning.

help of Almighty God.

LIST OF ANNEX xii

Objective of the study 1

Scope and Limitations of the study 2

Brief description of the project 3

Brief Profile of the Proponents 3

Contribution to the Economy 4

Description of the Product 5

Comparison of the Product with its competitors 5

Demand and Supply Analysis 12

Historical Selling Price 14

Projected Selling Price 15

Sales Revenue Forecast - Year 1 16

Sales Revenue Forecast - Year 2 17

Sales Revenue Forecast - Year 3 18

Terms and Condition of Purchase Equipment 25

Life of Fixed Capital 28

Total Purchases - Year 1 29

Total Purchases - Year 2 29

Total Purchases - Year 3 30

Projected Utility Expense 32

Repair and Maintenance 33

Projected Store Supplies Expense 35

Business Permit and Licenses 35

Salaries and Wages 37

Projected Salaries and Wages 37

Total Projected Contribution 39

Summary of Expenses - Year 1 40

Summary of Expenses - Year 2 41

Summary of Expenses - Year 3 42

5 ORGANIZATION AND MANAGEMENT ASPECT

Form of Business Enterprise 43

Management and Organizational Structure 45

Total Projected Cost 49

Projected Income Statement 50

Projected Cash Flow 51

Projected Balance Sheet 52

FINANCIAL RATIO ANALYSIS 53

Gross Profit Ratio 53

Net Profit Ratio 54

1 Brief Profile of the Proponents 3

6 Demand and Supply Analysis 12