CHAPTER I

EXECUTIVE SUMMARY

A. NAME OF THE PROJECT

Refreshments are one of the common businesses nowadays. There are varieties of
refreshment products that are derived depending on production. In order to succeed in this
kind of field it requires knowledge and skills, interest, capital and the ability to manage the
project as well as the demand of the product should be taken into consideration.

One of the market trends today is shake. The researchers think of something that is
catchy to the ears and eyes of the customers. They named this project “Frozen Love”. The
business name means love for chill since shake is cold in nature it complements the word
frozen also love stands for the fondness of cold refreshments.

B. DESCRIPTION OF THE INDUSTRY

Frozen Love will sell healthy fruit shake. The business chooses fruit shake because it
has a good quality taste and much healthier than other beverages. The researchers are
establishing this business because they want to offer something that will not only give
satisfaction but also to provide healthy products for the customer. It will likely justify as grab
and go products. In which they can bring it with them and give us credits through our fancy
place and container .By the time pass it would be known in fastest way. It will give high
chance of consumers coming to our business and taste it out of curiosity.

People today are more health conscious with the increasing demand for healthy food
choice, diets, and losing weight. Starting this kind of business creates many opportunities for
young entrepreneurs to be more conservative when it comes to their health. The study itself
will concentrate on the shake as healthy refreshment. The researchers will study the demand
of the shake and the willingness of the people to buy the product.

C. DESCRIPTION OF THE PROJECT

The product of the business is shake. A healthy food drink that is relative to all
seasons. Shakes that will be served to the customer are all freshly made and they can actually
see how it is made. The ingredients that will be mix are all natural from the water to the

1
flavors that will be added on. Unknowingly, shakes have protein and consumable as dessert,
beverage or even as a meal.

The main objective of this study is to give satisfaction for those in thirst and
pressuring mind because colds help release swollen and stressful parts of human living. The
product provides protein that enable the customers to be energized and in last fullness. Frozen
fruits like mango, strawberry and coco can be used as substitute for breakfast meal. It is open
to all ages who are not feed up by breast feeding anymore. The shakes that would be served
are in accordance with health guidelines.

D. LOCATION OF THE PROJECT

The location of the study is in Nazareth, Buenavista, Pagadian City. In front of the lot
to be rented was a water refilling station,a small market and a convenient store. There were
no direct competitors found around the place. It is near to the upcoming new Saint Columban
College campus.

2
E. HIGHLIGHTS OF MAJOR ASSUMPTION

 The method of reporting for the Income Statement is Absorption Costing

 Cost of goods sold uses Periodic Inventory System.
  All transactions are on cash basis.
 The method used in computing the Depreciation and amortization is the
Straight Line method with 10% Salvage Value.
 Light and Water increases due to Inflation.
 Sales will increase annually by 9%
 Inflation Rate is 1.04.
 The VAT Payable is accrued to the balance sheet.

F. SUMMARY OF FINDINGS AND CONCLUSION

Market Feasibility
The proposed project is feasible in the market due to high percentage who
likes to buy shake. The product is not new in the market but many people are fond of
eating it considering the supply from different competing establishments and also the
climate of today.

Technical Feasibility
The technical study focused mainly on the viability of the acquisition of the
raw materials, the costs, suppliers of the equipment and the plant location. The plant
location is achievable since it was vacant and the researchers already inquire the
owner of the building regarding the said lease. Cost and allocated budget is estimated
and reasonable.

Management Feasibility
Frozen Love is a sole proprietorship kind of business with respect to its
organization and management aspect. It shows a sign of positivity. The business will
be easily managed and supervised by the owner since it’s not that big and it only
requires few people therefore the management is feasible.

3
Financial Feasibility
The financial operation is profitable since the business continuously generates
income as shown on the Comparative Income Statement of the business it is also able
to generate enough cash to handle the cash requirements of the operation as shown on
the statement of Cash Flows. There is also a return on investment which has a
payback period of 3 years and 130 days.

Socio Economic Feasibility

The project aims to help our localities and farmers of the country and to give
healthy lifestyle of the people who are earning money of the proposed business.
Nowadays, it is important that small entrepreneurs should realize the worth of
innovating and starting a business that would largely contribute to the Socio-
economic Development of the country. The researchers consider the whole part of the
business especially the social impact in the community.

General Conclusion
The proposed project is feasible it’s because the ingredients needed to produce
the product is easily obtain and it’s very convenient and sellable. The recovery of the
investment will not take long also.

4
 CHAPTER II

MARKET STUDY

A. STUDY OF DEMAND

TARGET MARKET

Frozen Love a shake business primarily targets Nazareth, Buenavista, Pagadian City.
The researchers conducted a survey within the vicinity and these are the said respondents:

No. of
Respondents
Respondents
Young
Kids Adults
100 19%
( 6-12 years old )
Kids
Teens 50%
75
( 13- 19 years old ) Teens
31%
Young Adults
50
( 20 - 25 years old)
Total Respondents 230

The table and chart above is segmented by means of age. These are the total number of
respondents. The researchers surveyed more on teenagers because we see more potential
consumers that most of them are on the age of which we wanted.

POPULATION
28%
Kids ( 1-12 years old )
47% Teens ( 13- 19 years old )
Young Adults ( 20 - 25 years old)
Adults and Elderly ( 26 - 86 years
old )
12%
13%

The chart above composes the present people living in the area. Kids 28%, teens 12%, young
adults 13% and adult and elderly 47%.

5
 PAST ANNUAL POPULATION

2013 2014 2015 2016 2017

Buenavista 5,357 5,432 5,507 5,584 5,661
TABLE 1.1This shows the historical population of the whole Barangay Buenavista
Pagadian City from 2013 up to 2017.

PROJECTED ANNUAL POPULATION

2019 2020 2021 2022 2023

Buenavista 5,820 5,902 5,984 6,068 6,153
TABLE 1.2 This shows the projected annual population of the whole Barangay Buenavista
Pagadian Cityfrom 2019 up to 2023.

Total AvailableMarket
100% The chart shows the 100%
Served total available market, 70%
Available
Market Target Market served available market by the
70% 20%
competitors and 20% our
assumed target market

6
 PAST ANNUAL POPULATION OF THE TARGET MARKET

ACTUAL POPULATION 2013 2014 2015 2016 2017

Kids 944 959 974 989 1004
Teens 396 402 408 414 420
Young adults 451 457 463 469 475
TOTAL 1,791 1,818 1,845 1,872 1,899

TARGET MARKET 2013 2014 2015 2016 2017

Kids 132.16 134.26 136.36 138.46 140.56
Teens 55.44 56.28 57.12 57.96 58.8
Young adults 63.14 63.98 64.82 65.66 66.5
TOTAL 251 255 258 262 266
This is computed through (Actual target market population x 70% served available market
x 20% assume target market)

PROJECTED ANNUAL POPULATION OF THE TARGET MARKET

ACTUAL POPULATION 2019 2020 2021 2022 2023

Kids 1,019 1,033 1,048 1,062 1,077
Teens 426 432 438 444 450
Young adults 481 488 495 502 509
TOTAL 1,926 1,953 1,980 2,008 2,036

TARGET MARKET 2019 2020 2021 2022 2023

Kids 143 145 147 149 151
Teens 59.64 60.48 61.32 62.16 63
Young adults 67.34 68.32 69.3 70.28 71.26
TOTAL 270 273 277 281 285
This is computed through (Actual target market population x 70% served available market
x 20% assume target market)

7
PAST DEMAND PATTERN

The data shown below was calculated from the computed past five years annual
population of the target market multiplied by the 96% the percentage who said yes that they
buy shake and multiplied by their selected consumption (5% daily, 23% twice a week and
72% once a week), then multiplied the number of respondent consumptions to 30 for daily,
for twice a week is multiplied by 2 and by 4, and for once a week is multiplied by 4 in order
to get the monthly past demand and then multiplied by 12 to get annual past demand.

YEAR 2013 2014 2015 2016 2017

DEMAND 20448.47 20774.34 21018.744 21344.616 21670.488

DEMAND YEAR
21670.4880000
5 001
2017

21344.616
4
2016

21018.744
3
2015

20774.34
2
2014

20448.47
1
2013

The chart shows the increasing past demand pattern from year 2013-2017.

8
PROJECTED DEMAND

The data shown below was calculated from the computed projected annual population
of the target market multiplied by the 96% the percentage who said yes that they buy shake
and multiplied by their selected consumption (5% daily, 23% twice a week and 72% once a
week), then multiplied the number of respondent consumptions to 30 for daily, for twice a
week is multiplied by 2 and by 4, and for once a week is multiplied by 4 in order to get the
monthly projected demand and then multiplied it by 12 to get the annual projected demand.

YEAR 2019 2020 2021 2022 2023

DEMAND 21996.36 22240.764 22566.636 22892.508 23218.38

DEMAND YEAR

23218.38
5
2023

22892.508
4
2022
22566.63599999
3 99
2021

22240.764
2
2020

21996.36
1
2019

The chart shows the increasing projected demand from year 2019-2023.

9
 B. STUDY OF SUPPLY

COMPETITORS

The researchers observed that there are no existing competitors near the location
because all direct competitors are in the City proper.

Competitors Units Produce Per

The data beside shows the existing Day

competitors in the market: Shake’n Slurp 88

Infinitea 20
Vanilla Ice Pearl 80
Bukomo to 130

HISTORICAL SUPPLY

The data below is computed through getting the total present annual supply (16249.8)

subtracted by the annual increase or decrease of population growth 1.014.

YEAR 2013 2014 2015 2016 2017

SUPPLY 15112 15339 15567 15794 16022

SUPPLY YEAR

16022
5
2017

15794
4
2016

15567
3
2015

15339
2
2014

15112
1
2013

The chart shows the increasing annual historical supply from year 2013-2017.

10
SUPPLY GROWTH PATTERN

The researchers observed that the historical growth of supply is increasing which
makes the study more efficient.

PROJECTED SUPPLY

The data below is computed by getting the total present annual supply (16249.8)
multiplied by the annual increase of population growth 1.014.

YEAR 2019 2020 2021 2022 2023

SUPPLY 16477 16707 16941 17179 17419

SUPPLY YEAR

17419
5
2023

17179
4
2022

16941
3
2021

16707
2
2020

16477
1
2019

The chart shows the increasing projected supply from 2019-2023.

11
 C. DEMAND-SUPPLY ANALYSIS

DEMAND GAP

The data below shows the demand gap it is computed by getting first the projected
demand subtracted to the projected supply.

YEAR 2019 2020 2021 2022 2023

PROJECTED
21996.36 22240.764 22566.64 22892.5 23218.4
DEMAND
PROJECTED
16477 16707 16941 17179 17419
SUPPLY
DEMAND GAP 5,519 5,534 5,626 5,714 5,799

MARKET SHARE

The data below shows the market shares it is computed:

Demand Gap
Market Share=
Projected Demand

Year 2019 2020 2021 2022 2023

Demand Gap 5,519 5,534 5,626 5,714 5,799
Market Share 1379.84 1383.441 1406.409 1428.377 1449.845
Percentage 25% 25% 25% 25% 25%

12
D. PRICE STUDY

The researchers used line graph to analyze how much target market can afford to pay.

160
147
140 The chart shows
120
that 147 respondents can
100
80 afford to pay Php20-40
60 54 for shake consumption,
40
29 54 respondents for Php40-
20
0 1 2 3 60 and 29 respondents for
Php 20-40 php 40-60 Php 60 Above
Php above.

E. MARKETING STRATEGY AND PROGRAM

PRODUCT STRATEGY

The business is somewhat existed already in the market. Hence, this business
has its advantage compared to its competitors. Most shake seller use flavoured
powder in selling their products others add food colouring too.

Frozen Love sells fruit flavoured shakes, serves four variety blend fruits such
as mango, avocado, strawberry and coco. Satisfaction of our customers is one of our
goal and we wanted them to gain health benefits with our product. These goals
motivated us to pursue the said venture.

PRICE STRATEGY

Daily amount of ingredients divided by total maximum capacity per day (120)
then multiplied by the business mark up 35%.

PROMOTION AND ADVERTISING STRATEGY

We will reach the consumers by the use of the following this will start at the
planning period of the business up to the operation of the business;

13
 Social media is a good tool to use in promoting such venture. Facebook,
instagram as well as twitter will be used in promoting and advertising the business.

Tarpaulin and flyers will also be used to notice the public.

PLACE STRATEGY

Frozen Love proposed location is at Nazareth, Buenavista, Pagadian City

Zamboanga Del Sur.

The following images depict geographical location of the proposed business

and the façade of the place.

14
 CHAPTER III
TECHNICAL STUDY

This chapter tackles process of production and activities of the business. It indicates
the manufacturing process which includes the products design and specification of material.
The production was stated in detail from raw material to finish product ready for trade. There
are list of machines, equipment and tools needed in the operation. It also conceptualized the
financial range in the production and the area planted.

A. PRODUCT DESCRIPTION

The Frozen Love serves natural fruits shakes that are blend in real fruits supplied
from Baguio City, as well as here in the local area. The product itself features their own
package mode and observes the
standard of packaging which
highlights the brand name and
appropriate authorization of
Government Agency so with the
price, volume and logo .The cups
are customized with the business
logo supplied by Precession Master
Technology Incorporation based in
Manila City. Three flavours are to
be served coco, mango and
strawberry. Other ingredients are
convenient to buy within the city.
It is a protein shake naturalized
from healthy ingredients.

15
B. MANUFACTURING PROCESS

SERVICE PROCESS

 Greeting the customers

 Get the customer order
 Billing and payments
 Customers will be given a priority number
 Service crew will prepare the product
 Product will be served

PRODUCTION PROCESS

MANGO SHAKE

Yield: 8 Serving

Time: 8 Minutes

Ingredients:

 1 kilogram of mango fruit

 16 tablespoon of evaporated milk
 8 teaspoon of vanilla extract
 2 cups of sugar
 Crashed ice
 8 cups of water

Procedure:

1. Put first the sliced mango in the blender then add evaporated milk, sugar, water,
vanilla extract and the crashed ice.
2. Then blend it for 1 minute until the mixture is fine.
3. Put the shake on a disposable cup.
4. Serve.

16
STRAWBERRY SHAKE
Yield: 10 Servings
Time: 8 Minutes

Ingredients:
 1kilogram of strawberry
 14 tablespoon of evaporated milk
 7 teaspoon of vanilla extract
 1 ½ cups of sugar
 Crashed ice
 7 cups of water
Procedure:
1. Put first the froze strawberry in the blender then add evaporated milk, sugar, water,
vanilla extract and the crashed ice.
2. Then blend it for 1 minute until the mixture is fine.
3. Put the shake on a disposable cup.
4. Serve.

COCO SHAKE
Yield: 3 Servings
Time: Minutes
Ingredients:
 1 coconut
 3 tablespoon of evaporated milk
 12 teaspoon of vanilla extract
 4 cup of sugar
 Crashed ice
 12 cup of water
Procedure:
5. Put first the scrape coco in the blender then add
evaporated milk, sugar, water, vanilla extract and the crashed ice.
6. Then blend it for 1 minute until the mixture is fine.
7. Put the shake on a disposable cup.
8. Serve.
17
 C. PRODUCTION SCHEDULE

QUANTITY PER UNIT

AMOUNT
PRODUCTION PRICE
ITEM
MONTHL YEARL
Y Y
2019 3360:1120
Coco Pcs 373 4,480 20.00 89,600.00
Strawberry Kg 112 1,344 140.00 188,160.00
Mango Kg 140 1,680 40.00 67,200.00
Evaporada Pcs 672 8,064 25 201,600.00
Vanilla Extract Pcs 280 3,360 25 84,000.00
Bloc
Ice 2 21 200.00 4,165.29
k
White Sugar 4L:1kl Kg 199 2,386 30 71,573.96
Total 706,299.25
2020 3920:1307
Coco Pcs 436 5,227 20.80 108,714.67
Strawberry Kg 131 1,568 145.60 228,301.38
Mango Kg 163 1,956 41.60 81,369.60
Evaporada Pcs 784 9,408 26.00 244,608.00
Vanilla Extract Pcs 327 3,924 26.00 102,024.00
Bloc
Ice 2 24 208.00 4,992.00
k
White Sugar 4L:1kl Kg 232 2,784 31.20 86,860.80
Total 856,870.45
2021 4480:1493
Coco Pcs 489 5868 21.63 126,936.58
Strawberry Kg 149 1791.6 151.42 271,291.24
Mango Kg 187 2244 43.26 97,084.42
Evaporada Pcs 896 10752 27.04 290,734.08
Vanilla Extract Pcs 373 4476 27.04 121,031.04

18
 Bloc
Ice 2 24 216.32 5,191.68
k
White Sugar 4L:1kl Kg 265 3180 32.45 103,184.64
Total 1,015,453.67
2022 5040:1680
Coco Pcs 560 6720 22.50 151,181.72
Strawberry Kg 168 2016 157.48 317,481.62
Mango Kg 210 2520 44.99 113,386.29
Evaporada Pcs 1008 12096 28.12 340,158.87
Vanilla Extract Pcs 420 5040 28.12 141,732.86
Bloc
Ice 2 24 224.97 5,399.35
k
White Sugar 4L:1kl Kg 298 3576 33.75 120,675.41
Total 1,190,016.12
2023 5600:1867
Coco Pcs 622 7464 23.40 174,636.49
Strawberry Kg 187 2244 163.78 367,522.77
Mango Kg 233 2796 46.79 130,836.98
Evaporada Pcs 1120 13440 29.25 393,072.48
Vanilla Extract Pcs 467 5604 29.25 163,897.18
Bloc
Ice 2 24 233.97 5,615.32
k
White Sugar 4L:1kl Kg 331 3972 35.10 139,400.35
Total 1,374,981.56

D. PROJECT LOCATION AND LAYOUT

The Frozen Love is located at Nazareth Buenavista Pagadian City,
Zamboanga Del Sur. It is a capacious area surrounded by good number of residence
and near in schools which is suitable for past times with friends or family. It is
convenient place for refreshing moments for chitchatting. The location has an easy
access of transportation, electricity, and water.

LOCATION

19
 LAYOUT

E. MACHINERY AND EQUIPMENT

OPERATING EQUIPMENTS

DESCRIPTION QUANTITY UNIT PRICE TOTAL COST

Blender
3 2,030.00 6,090.00

Chest Freezer

1 24,795.00 24,795.00

Refrigerator 1 19,495.00 19,495.00

20
 Calculator

2 465 930.00

Generator

1 14,429.00 14,429.00

Cash Drawer

1 3,400.00 3,400.00

Cooler

3 1,389.00 4,167.00

Ceiling Fan

2 2800 5,600.00

TOTAL 78,906.00

21
SUPPLIES

OFFICE SUPPLIES
DESCRIPTION QUANTITY UNIT PRICE TOTAL COST
Ballpen
12 Pcs. 8.5 102.00

Record Book
5 Pcs. 85 425.00

Folder

5 Pcs. 100 500.00

Bond Paper

2 Ream 237 474.00

Daily Time Record

5 Pad 65 325.00

Receipts

50 Pad 44 2,200.00

Stapler 2 Box 40 80.00

22
 4,106.00
CLEANING SUPPLIES
Table Rag

3 Pcs. 20 60.00

Floor Rag
5 Pcs. 130 650.00

Spray Bottle

3 Pcs. 29 87.00

Rubber Blade
2 Pcs. 59 118.00

Broom

2 Pcs. 50 100.00

Dust Pan

2 Pcs. 35 70.00

Floor Mop

1 Pcs. 1,500.00 1,500.00

Broom Stick

2 Pcs. 30 60.00

2,645.00

23
 KITCHEN SUPPLIES
Disposable Hand Glove

5 Box 30 150.00

Dome Lid
40320 Pcs. 0.75 30,240.00

Disposable Cup

40320 Pcs. 2 80,640.00

Peeler

1 Pcs. 278 278.00

Measuring Cup

3 Pcs. 21 63.00

Measuring Spoon

3 Pcs. 119 357.00

Scraper

2 Pcs. 45 90.00

Knife

1 Pcs. 200 200.00

24
 Plastic Straw
40320 Pcs. 0.5 20,160.00

Table Napkin

60 Pcs. 38 2,280.00

134,458.00
SANITATION
Hairnet

5 Pcs. 5 25.00

Apron

2 Pcs. 39 78.00

Plastic Face Mask

5 Pcs. 454 2,270.00

2,373.00
TOTAL SUPPLIES 143,582.00

FURNITURE AND FIXTURE

DESCRIPTION QUANTITY UNIT PRICE TOTAL COST

Chairs

6 Pcs. 389 2,334.00

Tables 2 Pcs. 880 1,760.00

25
 Pitcher

5 Pcs. 59 295.00

Pail

2 Pcs. 74 148.00

Garbage Can

3 Pcs. 1,880.00 5,640.00

Plastic Container

3 Pcs. 309 927.00

Office Table

1 Pcs. 2,500.00 2,500.00

Chopping Board

3 Pcs. 250.00 750.00

TOTAL 14,354.00

RAW MATERIAL

26
 PRODUCT QUANTITY UNIT COST TOTAL COST
Coco
50 20.00 1,000.00

Strawberry

50 140.00 7,000.00

Mango

15 40.00 600.00

Evaporada

20 54.00 1,080.00

Vanilla Extract

20 97.00 1,940.00

White Sugar

30 30.00 900.00

ICE 1 200.00 200.00

TOTAL 12,720.00

F. BUILDING STRUCTURE AND OTHER FACILITIES

27
BUILDING CONSTRUCTION MATERIALS

BUILDING ACQUISITION COST

EARTHWORKS
BREAKDOWN
Description Quantity Unit Unit Cost Total Cost
Excavation 40.76 m3 200.00 8,152.00
Backfilling Materials 50 m3 200.00 10,000.00
Concrete Hollow Block #4 100 pc 9.00 900.00
Sand 20 m3 450.00 9,000.00
Excel Holcim cement 15 bag 230.00 3,450.00
10mm Deformed Bar 150 pc 145.00 21,750.00
Ga # 16 GI Tie Wire 52 kg 70.00 3,640.00
Gravel 20 m3 500.00 10,000.00
Excel Holcim Cement 20 bag 230.00 4,600.00
1/4"x4'x8' ordinary Plywood 30 pc 300.00 9,000.00
2"x3"x 122' Coco Lumber 4 pc 530.00 2,120.00
2"x2"x12 Coco Lumber 50 pc 25.00 1,250.00

28
 Common Wood Nails 25 kl 65.00 1,625.00
SUB-TOTAL 85,487.00
ROOFING WORKS Quantity Unit Unit Cost Total Cost
# 0.4 Roofing 7 m2 280.00 1,960.00
Roofing Nails 5 kl 68.00 340.00
SUB – TOTAL 2,300.00
CARPENTRY WORKS
PVC Door 2 set 1,800.00 2,600.00
SUB – TOTAL 2,600.00
GLASS WORKS
Fixed Glass Window (10 x 6) 2 set 5,000.00 10, 000.00
Double hung window 1 set 1,500.00 1,500.00
SUB – TOTAL 11,500.00
TILE WORKS
24" x 24" Ceramic Floor Tiles 100 pc 50.00 5,000.00
15" x 15" Ceramic Tiles 290 pc 40.00 11,600.00
Tile Adhesive 12 bag 280.00 3,360.00
Excel Holcim Cement 5 bag 230.00 1,200.00
Sand 6 m3 450.00 2,700.00
SUB – TOTAL 23,860.00
Plumbing 10,000.00
Electrical 10,000.00
Varnishing 2,000.00
Other Expenses 5,000.00

TOTAL 152,747.00

LABOR COST

29
 No. of
WORKERS No. of Workers Salary Per Day TOTAL
Days
CARPENTERS 5 50 300 75,000
TOTAL LABOR COST 75,000

UTILITIES
ELECTRICITY
Source: ZAMSURECO

No. No
Total Total
Of Of Kilowat Fixed
Wattag Rat Monthly Annual
Appliances Hour Day t Hours Charg
e e Consumptio Consumptio
s s (÷1000) e
n n
(x) (x)
Blender 200 8 26 41.6 9.23 78.86 462.828 5553.936

Chest
170 24 26 106.08 9.23 78.86 1057.9784
Freezer 12695.7408

Refrigerato
400 24 26 249.6 9.23 78.86 2382.668
r 28592.016

Ceiling fan 100 8 26 1.6 9.23 78.86 270.84 541.68

Light Bulb 60 12 26 18.72 9.23 78.86 251.6456 3019.7472

Total Cost per Year 57874.3728

WATER
Source: PAWAD

Total Annual
Monthly Consumption Rate Monthly Cost
Cost
3 Cubic Meter 63.20 / Cubic Meter 189.6 2275.2

30
G. WASTE DISPOSAL SYSTEM

The waste has a reasonable microbiological quality and in connection the

researchers plan to make its own composed pit in the business area for easier way of
throwing of garbage in an eco-friendly way. The peel of the fruits is filled with
flavour and vitamins, and most often have enough matter left in them for another go-
round. It can be used as good soil for the plants in the yard. Considering the mango
fruit alone, the seed from the fruit can be planted and can also be used as source of
income. If time comes that the business would be in great profit and is capable
already to buy big machine for shredding waste peels of the fruits, it could be
converted to gas. That gas can also become one of the income sources, for anything
can be recyclable.

H. MANUFACTURING COST REQUIREMENT

COST OF DIRECT MATERIALS 706,299.25

DIRECT LABOR 98,592.00
FACTORY OVERHEAD 145,935.00
TOTAL MANUFACTRING COST (TMC) YEAR 1 950,826.25

CHAPTER 4

31
 MANAGEMENT STUDY

A. BUSINESS ORGANIZATION

The form of the business is a sole proprietorship, where a business is owned and
managed by one individual in whom there is no legal distinction between the owner and the
business.

The proponents choose sole proprietorship, because in a sole proprietorship the

owner has a complete and direct control in over all decision-making for the owner is the
business. No corporate tax payments, requires less paperwork and time to create a legal sole
proprietorship.

It is also cheap to start a sole proprietorship, where other business structures

have increased fees and filings to open for business, sole proprietorships tend to be affordable
models to start and maintain.

B. INTERNAL STRUCTURE

The chart below shows the flat organizational structure of the business where it
has a pyramid structure designed to make employees more productive, since there are
only few levels of management.

OWNER

CASHIER SERVICE CREW

C. STAFFING REQUIREMENTS

32
 The table below provides the different employees given their positions and
qualifications as well as their roles and responsibilities.

JOB NUMBER OF JOB

JOB DESCRIPTION
POSITION EMPLOYEE QUALIFICATION
 Provides money for
the business.
OWNER 1
 The sole owner of
the business.
 At least a high
 Taking money in
school
the form of cash
graduate.
from customers in
 Must be at
CASHIER 1 exchange for food
least 18 years.
or services.
 Must have
 Provides change to
pleasant
the customers.
personality.
SERVICE 1  Maintain a fast  Must be at
CREW speed of service, least a high
especially during school
rush times. graduate.
 Take orders from  Must have
customers. pleasant
 Process large personality.
orders for events.  Must be at
 Clean your station least 18 years
thoroughly before, old.
during and after
each shift.
 Respond to guest
questions, concerns
and complaints and
33
 make sure they
leave satisfied.
 Follow all
restaurant safety
and security
procedures.
 Arrive on time for
all shifts and stay
until shift
completion.

TRAINING AND ORIENTATION PROGRAM

The proponents allocate a budget worth of Php1,500.00 for the training and
orientation of the newly hired employees together with the snacks and lunch on a one
day seminar. He/ She must know the roles and responsibilities as an employee and is
required to attend the seminar discussing about the following:

1. How to welcome and greet the customer properly.

2. How to communicate with the customer.
3. How to dress and act properly in a working place.
4. How to maintain food safety.
5. How to maintain cleanliness and proper disposal of garbage.
6. Company Policies.
7. Customer Service Policies.

MANAGEMENT POLICIES AND REGULATIONS

34
 Below are some rules and regulations that every employees and employers must
follow in order to maintain an organize organization.

FOR EMPLOYEES

1. The employees must greet the customers with courtesy and manner.
2. The employees must wear the prescribed uniform.
3. The employees must consider proper hygiene and sanitation.
4. The employees must turn off their gadgets during working hours.
5. The employees must avoid going in and out of the working place
during working hours.
6. The employees must avoid tardiness.
7. The employees must maintain the organization and cleanliness of the
establishment.
8. The employees are not allowed to disclose any information pertaining
to clients or customers.
9. All employees will receive their salaries during the last day of the
month.
10. Strictly, “NO WORK, NO PAY.”

CUSTOMER SERVICE POLICY

Remember the LUEA TAFu.

1. Listen to their complaints and query.

2. Understand their criticism and opinions.
3. Explain where they have gone or your side of opinion.
4. Apologize for making mistakes or not getting their point.
5. Take Action if necessary or if there’s any casualties.
6. Follow upif there are unclear things.

D. COMPENSATION AND OTHER BENEFITS

35
 The wage rate is based on minimum wage rate RA IX NO.20.

Description Of Daily Monthly Net Take Home

SSS Pag-ibig PHILHEALTH
Position Wage Wage Pay
Cashier 350 9100 327 182 137.5 8453.5
Service Crew 316 8216 290.7 164.32 137.5 7623.48

E. PROJECT SCHEDULE

The table below shows the pre-operating schedule of the business.

ACTIVITIES JUN JUL AUG SEPT OCT NOV DEC JAN

FS Planning and
Preparation
Obtaining
Investment
Construction
Purchasing of
Asset
Registration
Hiring of
Employees
Advertising of
the Business
Start-Up
Business
Operation

36
 CHAPTER V
FINANCIAL STUDY
As it goes further, it will not succeed without any related financial analysis. In here, we will be able to know if the business is
profitable or not and how long will it take to get back our investment.

CHAPTER IV

FINANCIAL POSITION

A. MAJOR ASSUMPTIONS

a. The method of reporting for the Income Statement is the Absorption Costing
b. Cost of goods sold uses Periodic Inventory System.
c.  All transactions are on cash basis.
d. The method used in computing the Depreciation and amortization is the Straight Line method with 10%
Salvage Value.
e. Light and Water increases due Inflation.
f. Sales will increase annually by 9%
g. Inflation Rate is 1.04.
h. The VAT Payable is accrued to the balance sheet.

37
B. TOTAL PROJECT COST

CURRENT ASSETS:

Cash 17,533
Raw Materials 58,858
Supplies Inventory 143,582
Prepaid Rent 6,000
TOTAL CURRENT ASSETS ₱225,973.27
FIXED ASSETS
Furniture and Fixtures 14,354.00
Equipment 78,906.00
Building 235,384.35
TOTAL FIXED ASSETS 328,644.35
PRE-OPERATING EXPENSES
FS Cost 6,930.00
Advertising Cost 2,550.00
TRAINING AND ORIENTATION EXPENSES 1,500.00
Permit and Licenses 5,000.00
Sanitation 2,490.00
TOTAL PRE-OPERATING EXPENSES ₱18,470.00
TOTAL PROJECT COST ₱573,087.62

38
C. SOURCES OF FINANCING

 Source of funds will be determined by Mr. Edmund Jamilarin’s prerogative.

D. FINANCIAL STATEMENTS

 PROJECTED INCOME STATEMENT

FROZEN LOVE
Statement of Financial Performance
For the years ended December 30, 2019-2023
2019 2020 2021 2022 2023
1,209,600.0
Sales 1,411,200.00 1,612,800.00 1,814,400.00 2,016,000.00
0
Less: COGS 950,826.48 1,101,791.32 1,263,692.25 1,437,162.61 1,622,868.93
Gross Profit 258,773.52 309,408.68 349,107.75 377,237.39 393,131.07
Less: Operating
Expenses
Advertising Expenses 2,550.00 - - - -
Taxes and Licenses 5,000.00 - - - -
Miscellaneous
6,930.00 - - - -
Expense

Depreciation Expense 25,284.50 25,284.50 25,284.50 25,284.50 25,284.50

Supplies Expense 12,542.00 6,536.00 6,797.44 7,069.34 7,352.11
Salary Expense 109,200.00 109,200.00 109,200.00 109,200.00 109,200.00

39
 VAT Payable 102,291.12 117,324.86 131,742.03 145,419.94 158,355.60
Net Income before
9,455.90 51,063.32 76,083.78 90,263.61 92,938.86
tax
Less: Tax expense - - - - -
Net Income after tax 9,455.90 51,063.32 76,083.78 90,263.61 92,938.86

 PROJECTED BALANCE SHEET

FROZEN LOVE
Statement of Financial Position
For the year ended December 30, 2019-2023
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
ASSETS
CURRENT ASSETS
Cash on Hand 17,533.00 107,193.82 161,348.03 227,904.08 301,437.31 376,190.92
Raw Materials 58,858.27 61,212.60 63,661.11 66,207.55 68,855.85 71,610.09
Supplies Inventory 12,542.00 6,536.00 6,797.44 7,069.34 7,352.11 7,646.20
Pre-operating Cost 18,470.00
Prepaid Expenses 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00
TOTAL CURRENT ASSETS 107,403.27 174,942.42 231,806.58 301,180.97 377,645.27 455,447.20
NON-CURRENT ASSETS
Machinery and Equipment 78,906.00 78,906.00 78,906.00 78,906.00 78,906.00 78,906.00
Less: Accumulated Depreciation 9,343.17 18,686.34 28,029.51 37,372.68 46,715.85
Carrying Amount - Machinery and
78,906.00 69,562.83 60,219.66 50,876.49 41,533.32 32,190.15
Equipment
Furniture and Fixtures 14,354.00 14,354.00 14,354.00 14,354.00 14,354.00 14,354.00
Less: Accumulated Depreciation 1,818.27 3,636.54 5,454.81 7,273.07 9,091.34
Carrying Amount - Furniture & 14,354.00 12,535.73 10,717.46 8,899.19 7,080.93 5,262.66

40
Fixtures
Building 235,384.35 235,384.35 235,384.35 235,384.35 235,384.35 235,384.35
Less: Accumulated Depreciation 14,123.06 28,246.12 42,369.18 56,492.24 70,615.31
Carrying Amount – Building 235,384.35 221,261.29 207,138.23 193,015.17 178,892.11 164,769.05
TOTAL NON-CURRENT ASSETS 328,644.35 303,359.85 278,075.35 252,790.85 227,506.35 202,221.85
TOTAL ASSETS 436,047.62 478,302.27 509,881.93 553,971.82 605,151.63 657,669.06
LIABILITIES
VAT Payable 36,288.00 42,336.00 48,384.00 54,432.00 60,480.00
SSS Payable - 617.70 617.70 617.70 617.70 617.70
PHILHEALTH Payable - 275.00 275.00 275.00 275.00 275.00
PAG- IBIG Payable - 346.00 346.00 346.00 346.00 346.00
Total Liabilities - 37,526.70 43,574.70 49,622.70 55,670.70 61,718.70
OWNERS EQUITY
Owners’ Equity 436,047.62 440,775.57 466,307.23 504,349.12 549,480.93 595,950.36
TOTAL LIABILITIES AND
436,047.62 478,302.27 509,881.93 553,971.82 605,151.63 657,669.06
EQUITY

 PROJECTED STATEMENT OF CASH FLOWS

41
FROZEN LOVE

42
 Statement of Cash Flows
For the years ended December 30, 2019 – 2023
Pre-
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Operating
Cash Flows from Operating Activities:
Pre – Operating -18,470.00 18,470.00
Net Income 9,455.90 51,063.32 76,083.78 90,263.61 92,938.86
Add: Depreciation Expense 0.00 25,284.50 25,284.50 25,284.50 25,284.50 25,284.50
(Increase)/Decrease in Raw Materials -58,858.27 -2,354.33 -2,448.50 -2,546.44 -2,648.30 -2,754.23
(Increase)/Decrease in Supplies Inventory -12,542.00 6,006.00 -261.44 -271.90 -282.77 -294.08
Increase/(Decrease) in SSS Payable 617.70 0.00 0.00 0.00 0.00
Increase/(Decrease) in PHILHEALTH
275.00 0.00
Payable
Increase/(Decrease) in PAG-IBIG Payable 346.00 0.00
Increase/ (Decrease) in VAT Payable 36,288.00 6,048.00 6,048.00 6,048.00 6,048.00
Net Increase/(Decrease) -71,400.27 30,174.87 22,574.56 22,466.16 22,353.42 22,236.18
104,597.9
Net Cash flow from Operating Activities -89,870.27 94,388.77 79,685.87 118,665.03 121,223.04
4
Cash Flow from Investing Activities:
Building -235,384.35 0.00 0.00 0.00 0.00 0.00
Machinery, Equipment and Tools -78,906.00 0.00 0.00 0.00 0.00 0.00
Furniture and Fixtures -14,354.00 0.00 0.00 0.00 0.00 0.00
Net Cash flow from Investing Activities -328,644.35 0.00 0.00 0.00 0.00 0.00
Cash Flow from Financing Activities:
Capital Investment 436,047.62 0.00 0.00 0.00 0.00 0.00
Withdrawals 0.00 -4,727.95 -25,531.66 -38,041.89 -45,131.80 -46,469.43
Net Cash Flow from Financing Activities 436,047.62 -4,727.95 -25,531.66 -38,041.89 -45,131.80 -46,469.43
NET CASH FLOW 17,533.00 89,660.82 54,154.21 66,556.05 73,533.23 74,753.61
161,348.0
Add: Cash Beginning 17,533.00 107,193.82 227,904.08 301,437.31
3

43
 227,904.0
Cash Balance, End 17,533.00 107,193.82 161,348.03 301,437.31 376,190.92
8

 SCHEDULES (NOTES TO FINANCIAL STATEMENTS)

SCHEDULE 1

BUILDING: ACCUMULATED DEPRECIATION

SALVAGE USEFU DEPRECIATION
COST
VALUE L LIFE EXPENSE
235,384.35 23,538.44 15 14,123.06

44
 SCHEDULE 2

MACHINERY AND EQUIPMENT

ESTIMATED
UNIT TOTAL SALVAGE DEPRECIATION
DESCRIPTION QUANTITY USEFUL
PRICE COST VALUE EXPENSE
LIFE
Blender 3 2,030.00 6,090.00 609.00 3 1,827.00
24,795.0
Chest Freezer 1 24,795.00 2,479.50 10 2,231.55
0
19,495.0
Refrigerator 1 19,495.00 1,949.50 10 1,754.55
0
Calculator 2 465 930.00 93.00 5 167.40
14,429.0
Generator 1 14,429.00 1,442.90 10 1,298.61
0
Cash Drawer 1 3,400.00 3,400.00 340.00 10 306.00
Cooler 3 1,389.00 4,167.00 416.70 5 750.06
Ceiling Fan 2 2800 5,600.00 560.00 5 1,008.00
TOTAL 78,906.00 9,343.17

45
 SCHEDULE 3

FURNITURE AND FIXTURE

ESTIMATED
UNIT TOTAL SALVAGE DEPRECIATION
DESCRIPTION QUANTITY USEFUL
PRICE COST VALUE EXPENSE
LIFE
Chairs 6 389 2,334.00 233.40 15 140.04
Tables 2 880 1,760.00 176.00 5 316.80
Pitcher 5 59 295.00 - 7 42.14
Pail 2 74 148.00 - 7 21.14
Garbage Can 3 1,880.00 5,640.00 - 7 805.71
Plastic Container 3 309 927.00 - 7 132.43
Office Table 1 2,500.00 2,500.00 250.00 10 225.00
Chopping Board 3 250.00 750.00 75.00 5 135.00
TOTAL 14,354.00 1,818.27

46
 SCHEDULE 4

SUPPLIES
DESCRIPTION QUANTITY UNIT PRICE TOTAL COST
OFFICE SUPPLIES
Ballpen 12 Pcs 8.5 102.00
Record Book 5 Pcs 85 425.00
Folder 5 Pcs 100 500.00
Bond Paper 2 Ream 237 474.00
Daily Time Record 5 Pad 65 325.00
Receipts 50 Pad 44 2,200.00
Stapler 2 Box 40 80.00
4,106.00
CLEANING SUPPLIES
Table Rag 3 Pcs 20 60.00
Floor Rag 5 Pcs 130 650.00
Spray Bottle 3 Pcs 29 87.00
Rubber Blade 2 Pcs 59 118.00
Broom 2 Pcs 50 100.00
Dust Pan 2 Pcs 35 70.00
Floor Mop 1 Pcs 1,500.00 1,500.00

47
 Broom Stick 2 Pcs 30 60.00
2,645.00
KITCHEN SUPPLIES

Disposable Hand Glove 5 Box 30 150.00

Dome Lid 40320 Pcs 0.75 30,240.00

Disposable Cup 40320 Pcs 2 80,640.00
Peeler 1 Pcs 278 278.00
Measuring Cup 3 Pcs 21 63.00
Measuring Spoon 3 Pcs 119 357.00
Scraper 2 Pcs 45 90.00
Knife 1 Pcs 200 200.00
Plastic Straw 40320 Pcs 0.5 20,160.00
Table Napkin 60 Pcs 38 2,280.00
134,458.00
SANITATION
Hairnet 5 Pcs 5 25.00
Apron 2 Pcs 39 78.00
Plastic Face Mask 5 Pcs 454 2,270.00
2,373.00
TOTAL 143,582.00

48
 SCHEDULE 5

PERMIT AND LICENSES

Clearance 200
Zoning 200
Secretary’s Fee 200
Building and Sanitation Fee 500
Business Permit Form 200
Permit Fee 1000
Barangay Clearance 1000
SEC Registration
Reservation Fee 300
Legal Research Fee 500
By Laws Fee 500
Transfer & Membership Book 400
TOTAL 5000

49
 SCHEDULE 6

PURCHASE OF RAW MATERIAL

Item Quantity per production Unit Price Amount
Monthly Yearly
2019 3360:1120
Coco pcs 373 4,480 20.00 89,600.00 Exempt
Strawberry kg 112 1,344 140.00 188,160.00 Exempt
Mango kg 140 1,680 40.00 67,200.00 Exempt
Evaporada pcs 672 8,064 25 201,600.00
Vanilla Extract pcs 280 3,360 25 84,000.00
Ice block 2 21 200.00 4,165.29
White Sugar
kg 199 2,386 30 71,573.96 357,173.96 VAT Input VAT Output VAT Payable
4L:1kl
Total 706,299.25 42,860.88 145,152 102,291.12
2020 3920:1307
Coco pcs 436 5,227 20.80 108,714.67
Strawberry kg 131 1,568 145.60 228,301.38
Mango kg 163 1,956 41.60 81,369.60
Evaporada pcs 784 9,408 26.00 244,608.00
Vanilla Extract pcs 327 3,924 26.00 102,024.00
Ice block 2 24 208.00 4,992.00
White Sugar
kg 232 2,784 31.20 86,860.80 433,492.80 VAT Input VAT Output VAT Payable
4L:1kl
Total 856,870.45 52,019.14 169,344 117,324.86
2021 4480:1493
Coco pcs 489 5868 21.63 126,936.58
Strawberry kg 149 1791.6 151.42 271,291.24
Mango kg 187 2244 43.26 97,084.42

50
 Evaporada pcs 896 10752 27.04 290,734.08
Vanilla Extract pcs 373 4476 27.04 121,031.04
Ice block 2 24 216.32 5,191.68
White Sugar
kg 265 3180 32.45 103,184.64 514,949.76 VAT Input VAT Output VAT Payable
4L:1kl
Total 1,015,453.67 61,793.97 193,536.00 131,742.03
2022 5040:1680
Coco pcs 560 6720 22.50 151,181.72
Strawberry kg 168 2016 157.48 317,481.62
Mango kg 210 2520 44.99 113,386.29
Evaporada pcs 1008 12096 28.12 340,158.87
Vanilla Extract pcs 420 5040 28.12 141,732.86
Ice block 2 24 224.97 5,399.35
White Sugar
kg 298 3576 33.75 120,675.41 602,567.15 VAT Input VAT Output VAT Payable
4L:1kl
Total 1,190,016.12 72,308.06 217,728.00 145,419.94
2023 5600:1867
Coco pcs 622 7464 23.40 174,636.49
Strawberry kg 187 2244 163.78 367,522.77
Mango kg 233 2796 46.79 130,836.98
Evaporada pcs 1120 13440 29.25 393,072.48
Vanilla Extract pcs 467 5604 29.25 163,897.18
Ice block 2 24 233.97 5,615.32
White Sugar
kg 331 3972 35.10 139,400.35 696,370.01 VAT Input VAT Output VAT Payable
4L:1kl
Total 1,374,981.56 83,564.40 241,920.00 158,355.60

SCHEDULE 7

51
 PROMOTIONAL EXPENSE

QUANTIT UNIT
DESCRIPTIO TOTAL
Y COST
N
Flyers 100.00 3 300.00
Tarpaulins 5.00 450 2,250.00
Total 2,550.00

SCHEDULE 8

ANNUAL
DAILY MONTHLY ANNUAL PAG- MONTHLY ANNUAL
POSITION SSS PHILHEALTH DEDUCTIO
SALARY SALARY SALARY IBIG DEDUCTION NET PAY
N
Cashier (Salary
350 9,100.00 109,200.00 327.00 137.50 182 646.50 7,758.00 101,442.00
as to selling)
Service crew
(Direct labor 316 8,216.00 98,592.00 290.70 137.50 164 592.20 7,106.40 91,485.60
Cost)
Total 666.00 17,316.00 207,792.00 617.70 275.00 346 1,238.70 14,864.40 192,927.60

52
 SCHEDULE 9

UTILITIES EXPENSE (FOH)

Utilities
Year 1 Year 2 Year 3 Year 4 Year 5
Description
Water 2,370.08 2,468.91 2,571.86 2,679.11 2,790.83
Electricity 4,528.38 4,717.21 4,913.92 5,118.83 5,332.28
Total 6,898.45 7,186.12 7,485.78 7,797.94 8,123.11

SCHEDULE 10

SALARIES EXPENSE

MONTHLY
POSITIO DAILY MONTHLY ANNUAL PAG- ANNUAL ANNUAL
SSS PHILHEALTH DEDUCTIO
N SALARY SALARY SALARY IBIG DEDUCTION NET PAY
N

Cashier
327.0
(Salary as 350 9,100.00 109,200.00 137.50 182 646.50 7,758.00 101,442.00
0
to selling)
Service
crew 290.7
316 8,216.00 98,592.00 137.50 164 592.20 7,106.40 91,485.60
(Direct 0
labor Cost)
617.7
Total 666.00 17,316.00 207,792.00 275.00 346 1,238.70 14,864.40 192,927.60
0

53
 SCHEDULE 11

COST OF GOODS SOLD

COCO STRAWBERRY MANGO
Material
15.63 22.96 13.96
cost/unit
products
13,440.00 13,440.00 13,440.00 2019 2020 2021 2022 2023
sold/year
Material 1,018,577.7
210,046.42 308,606.42 187,646.42 706,299.25 856,976.43 1,191,735.91 1,377,117.05
cost/year 0
Labor 98,592.00 98,592.00 98,592.00 98,592.00 98,592.00
Factory Overhead 145,935.22 146,222.89 146,522.55 146,834.71 147,159.88
1,263,692.2
Cost of Goods Sold 950,826.48 1,101,791.32 1,437,162.61 1,622,868.93
5

54
E. FINANCIAL STATEMENT ANALYSIS

 HORIZONTAL ANALYSIS

Year 1 Year 2 Year 3 Year 4 Year 5

100% 17% 14% 13% 11%
100% 16% 15% 14% 13%
100% 20% 13% 8% 4%
100% 0% - - 0%
100% -48% 4% 4% 4%
100% 0% 0% - 0%

100% 440% 49% 19% 3%

100% 440% 49% 19% 3%

55
 VERTICAL ANALYSIS

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

100% 51% 41% 41% 32% 25%
100% 4% 4% 4% 4% 4%
100% 4% 4% 4% 4% 4%
100%

100% 33% 30% 30% 25% 21%

100% 0% 0% 0% 0% 0%
100% 100% 100% 50% 33% 25%
100% -13% -13% -16% -18% -22%
100% 0% 0% 0% 0% 0%
100% 100% 100% 50% 33% 25%
100% -15% -15% -17% -20% -26%
100% 0% 0% 0% 0% 0%
100%
100% -6% -6% -7% -7% -8%
100% -8% -8% -9% -10% -11%
100% 7% 7% 9% 9% 9%

100% 0% 0% 0% 0% 0%
100% 0% 0% 0% 0% 0%
100% 0% 0% 0% 0% 0%

100% 16% 16% 14% 12% 11%

56
 100% 6% 6% 8% 9% 8%
100% 7% 7% 9% 9% 9%

 RATIO ANALYSIS

PROFITABILITY RATIOS
Year 1 Year 2 Year 3 Year 4 Year 5
Return on Sales Profit / Net Sales 0.0078174 0.036184 0.047175 0.049748 0.046101
Return on Profit/Average Total
0.0206833 0.103348 0.143034 0.155745 0.147192
Investment Assets

Liquidity Ratios Year 1 Year 2 Year 3 Year 4 Year 5

Inventory
COS/ Ave. Inventory 16.15 18.35 20.24 22.13 24.03
Turnover
Days to sell 360/ Inventory
22.2848 19.61602 17.78698 16.26563 14.98052
Turnover Turnover
Beginning
Year 1 Year 1 Year 2 Year 3 Year 4
Inventory
61,212.60 63,661.11 66,207.55 68,855.85 71,610.09
Ending Inventory Year 1 Year 2 Year 3 Year 4 Year 5
58,858.27 61,212.60 63,661.11 66,207.55 68,855.85
Average Inventory 30606.3 31830.55 33103.78 34427.93 35805.04

Cost of Sales 60,035.44 62,436.85 64,934.33 67,531.70 70,232.97

LEVERAGE RATIOS
Equity Multiplier TotalAssets/ Equity 108.51% 109.34% 109.84% 110.13% 110.36%

57
 PAYBACK PERIOD

PAYBACK PERIOD
Net Cash Cost to be
Year Net Income Depreciation Cash to Date Payback
Inflow Recovered
0 436,047.62
1 9,455.90 25,284.50 34,740.40 34,740.40 401,307.22 1
2 51,063.32 25,284.50 76,347.82 111,088.22 324,959.40 1
3 76,083.78 25,284.50 101,368.28 212,456.50 223,591.12 1
4 90,263.61 25,284.50 115,548.11 328,004.61 1.935047904
5 92,938.86 25,284.50 118,223.36 446,227.97
PAYBACK PERIOD 4.935047904

PAYBACK
RECIPROCAL = 1/Payback Period
=0.20263227822732
2

PROFITABILITY INDEX =PVCI/COI

=1.02334686824027

58
 NET PRESENT VALUE

NET PRESENT VALUE

35.7458993%
Net Cash
Year Net Income Depreciation PV Factor Present Value
Inflow
1 9,455.90 25,284.50 34,740.40 1.0000000 34,740.40
2 51,063.32 25,284.50 76,347.82 1.0000000 76,347.82
3 76,083.78 25,284.50 101,368.28 1.0000000 101,368.28
4 90,263.61 25,284.50 115,548.11 1.0000000 115,548.11
5 92,938.86 25,284.50 118,223.36 1.0000000 118,223.36
PRESENT VALUE OF CASH INFLOWS(PVCI) 446,227.97
Less: COST OF INVESTMENT (COI) 436,047.62
NET PRESENT VALUE 10,180.35

 INTERNAL RATE OF RETURN

INTERNAL RATE OF RETURN 35.745899%

Present
Year Net Cash Inflow PV Factor
Value
1 34,740.40 0.736670504 25,592.23
2 76,347.82 0.542683431 41,432.70
3 101,368.28 0.399778876 40,524.90
4 115,548.11 0.294505306 34,029.53
5 118,223.36 0.216953372 25,648.96
PRESENT VALUE OF CASH INFLOWS(PVCI) 167,228.31
Less: COST OF INVESTMENT (COI) 436,047.62
NET PRESENT VALUE -

59
 CHAPTER VI

SOCIO-ECONOMIC STUDY

A. EMPLOYMENT BENEFITS

The proposed project Frozen Love offers a great opportunity to those

unemployed individuals and also to those people who are willing to be trained and
capable to work. This proposed business would help to lessen the number of
unemployed individuals within the society. Also the proponents guarantee that the
daily wage of our future employees is within the prescribed figures mandated in Wage
Order RA IX No.20 by the Department of Labor and Employment (DOLE). Putting
ourselves safe and clean in the law and guiding your future at the same time.

B. GOVERNMENT BENEFITS

The proposed project will fulfil its obligations by paying taxes promptly and
accurately. Also, we can help people in times of calamity by giving donations.

C. COMMUNITY INVOLVEMENT PROGRAMS

We can do community service like participating in a charity race, plant a tree

for Arbor Day, participate in the clean-up day at the project location and since the
Saint Columban College will be having a new campus at Nazareth, Buenavista,
Pagadian City we can also help the students to have a comfort place to stay while
studying during their vacant time and also to provide a healthy and refreshing drinks
to the community.

60
 APPENDICES
AND
ATTACHMENTS

61
MARKET STUDY
SURVEY QUESTIONNAIRE
The fourth year students of Saint Columban College the College of Business
Education department will conduct a survey as a guide for their feasibility study.
Gathering information from residents of Nazareth,BuenavistaPagadian City is vital to
this study.
Name (Optional): Date:
1. Do you buy fruit flavored shake?
Yes ( Natural or Powdered Flavor)
No (Please proceed to question number 6)
2. How often do you buy shake?
Daily Never
Twice a week Others please specify
Once a week________________
3. How much do you spend for a cup of fruit flavored shake?
Php 20-40
Php 40-60
Php 60 above
4. Why do you like fruit flavored shakes?
Taste
Comfort Drink
Health Benefits
5. Give 3 flavored of the fruit shakes you often order?
_____________
_____________
_____________
6. Which among of the beverage enumerated below do you like most ? Rank them
from 1-5.
_____ Teas(Milk, Iced or Hot )
_____Coffee
_____ Soft Drinks (Sprite , Coke, Royal)
_____Alcoholic

62
7. How often do you buy your most preferred beverage?
Daily Never
Twice a week Others please specify
Once a week ________________

8. How much do you usually spend for your most preferred beverage, indicated above?
Php 20-40
Php 40-60
Php 60 above

63
SURVEY RESULTS (TALLY)

1. Do you buy fruit flavored shake?

Yes No
RESPONDENTS ANSWER
4%
YES 221 96%
NO 9 4%
TOTAL 230 100%

96%

2. How often do you buy shake?

Daily twice a week Once a week RESPONDENTS ANSWER

5%
DAILY 12 5%
TWICE A WEEK 53 23%
23%
ONCE A WEEK 165 72%
TOTAL 230 100%
72%

3. How much do you spend for a cup of fruit flavored shake?

Php 20-40 php 40-60

Php 60 Above

RESPONDENTS ANSWER
13%
PHP 20-40 147 64%
PHP 40-60 54 23%
23%
PHP 60 ABOVE 29 13%
64%
TOTAL 230 100%

4. Why do you like fruit flavored shake?

64
 RESPONDENTS ANSWER
TASTE 226
COMFORT DRINK 190
HEALTH BENEFIT 214

5. Flavors of fruit flavored shake you often buy?

RESPONDENTS ANSWER
MANGO 219
STRAWBERRY 118
COCO 220
GUYABANO 96
PAPAYA 89

6. Which among beverages enumerated below do you usually buy?

RESPONDENTS ANSWER
TEA 217
COFFEE 220
SOFTDRINKS 221
ALCOHOL 19

7. How often do you buy your most preferred beverages?

daily twice a week

once a week
RESPONDENTS ANSWER

33%
DAILY 95 41%
41%
TWICE A WEEK 59 26%
26%
ONCE A WEEK 76 33%
TOTAL 230 100%
8. How much do you usually spend for
your most preferred beverage, indicated above?

65
 Php 20-40 php 40-60
Php 60 Above RESPONDENTS ANSWER
PHP 20-40 156 68%
13%
PHP 40-60 43 19%
19% PHP 60 ABOVE 31 13%
68% TOTAL 230 100%

FORECASTING TOOLS

POPULATION

YEARLY INCREASE OF POPULATION:1.014

SERVED TARGET MARKET: 70%

TARGET MARKET: 20%

66
 PAST ANNUAL POPULATION OF THE TARGET MARKET

ACTUAL POPULATION 2013 2014 2015 2016 2017

Kids 944 959 974 989 1004
Teens 396 402 408 414 420
Young adults 451 457 463 469 475
TOTAL 1,791 1,818 1,845 1,872 1,899

TARGET MARKET 2013 2014 2015 2016 2017

Kids 132.16 134.26 136.36 138.46 140.56
Teens 55.44 56.28 57.12 57.96 58.8
Young adults 63.14 63.98 64.82 65.66 66.5
TOTAL 251 255 258 262 266

PROJECTED ANNUAL POPULATIONOF THE TARGET MARKET

ACTUAL POPULATION 2019 2020 2021 2022 2023

Kids 1,019 1,033 1,048 1,062 1,077
Teens 426 432 438 444 450
Young adults 481 488 495 502 509
TOTAL 1,926 1,953 1,980 2,008 2,036

TARGET MARKET 2019 2020 2021 2022 2023

Kids 143 145 147 149 151
Teens 59.64 60.48 61.32 62.16 63
Young adults 67.34 68.32 69.3 70.28 71.26
TOTAL 270 273 277 281 285

DEMAND

67
YES: 93%

DAILY:9%

TWICE A WEEK: 24%

ONCE A WEEK: 67%

PAST DEMAND PATTERN

2013 2014 2015 2016 2017

233.43 237.15 239.94 243.66 247.38
DAILY 630.261 640.305 647.838 657.882 667.926
TWICE A WEEK 448.1856 455.328 460.6848 467.8272 474.9696
ONCE A WEEK 625.5924 635.562 643.0392 653.0088 662.9784
MONTHLY 1731.19
1704.039 1751.562 1778.718 1805.874
DEMAND 5
ANNUAL 20774.3
20448.47 21018.744 21344.62 21670.49
DEMAND 4

PROJECTED DEMAND

2019 2020 2021 2022 2023

251.1 253.89 257.61 261.33 265.05
DAILY 677.97 685.503 695.547 705.591 715.635
501.753
TWICE A WEEK 482.112 487.469 494.6112 508.896
6
ONCE A WEEK 672.948 680.425 690.3948 700.364 710.334
68
 4
MONTHLY 1907.70
1833.03 1853.4 1880.553 1934.87
DEMAND 9
ANNUAL 22892.5
21996.4 22240.8 22566.64 23218.4
DEMAND 1

SUPPLY

Units Units
(70%)
Competitors Produced (x) Produced
(20%)
Per Day Per Year
36
Shake'n Slurp 88 32120 4496.8
5
36
Infinitea 20 7300 1022
5
Vanilla Ice 36
80 29200 4088
Pearl 5
36
Bukomo to 130 47450 6643
5
116070 16249.8

69
 Historical Supply Decrease
2018 16249.8 (227)
2017 16022.3028
2016 15794.8056
2015 15567.3084
2014 15339.8112
Projected Supply Increase
2013 15112.314
2018 16249.8 (1.014)
2019 16477.3
2020 16708
2021 16941.9
2022 17179.1
2023 17419.6

MANAGEMENT STUDY

70
71