PROJECT BACKGROUND AND HISTORY

Project Promoters

The following names listed are the proponents of MORDI PASTILLAS:

NAMES ADDRESS

Juan Carlo Breta Tanong, Malabon city

Karmina Lazaro 10th Ave., Caloocan city

Kristine Anchojas Panghulo, Malabon city

Mark Jhoncelle Ellurango Sangandaan, Caloocan city

Redy Jeff Ian Daracan Sangandaan,Caloocan city

Timothy James Pacson Maypajo, Caloocan city

Economic Background

Sugar has been an agricultural product for export in the Philippines since

the 19th century and sweetness is one of the flavors recognized as part of the

Philippine palate. Many different cities and regions in the country produce their

own sweets specialties. Thesefoods, as souvenirs, are valued for their ability to

represent a place or compress the visitors experience. Not all pasalubong items

are sweet, however. Bulacan offers savory as well as sweet dishes:

ensaymadang Malolos. Among the sweets considered local delicacies, there are

some which are considered more special because of the artistic expression that

has gone into its embellishment or packaging.

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 Pastillas are one of many native delicacies or sweets. Almost certainly

influenced by Spaniards who were stationed here and looking to replicate

something sweet and dairy like from back home, pastillas are made of just milk

and sugar. Bulacan seemed to be the epicenter for pastillas production but lately

some of the best pastillas made from pure carabao milk come from Nueva Ecija.

Some commercially made pastillas shortcut their recipes by adding condensed

milk that results in a faster cooking process but also an extra sweet outcome.

Nowadays, there are a lot of people wholove to eat pastillas because of

the different innovations and combinations that were made. And many Filipinos

are now putting up a business of pastillas because of a huge demand, and

wanting to change the traditional taste of the product.

Industrial Analysis

Food is a basic necessity. The industry which deals with preparing food

items/products refers to the food service industry. The food service industry is

and will always remain in high demand because of its genre. These industries

include restaurants, fast foods, school and hospital cafeterias, catering

operations, food carts, food stall and food trucks, food producers and

manufacturers, etc. Restaurants and fast foods mainly contribute to the food

service industry.

Food Industry is further classified into different sub-categories, depending on

the product that they offer confectioneries is one of which. Confectionery refers to

food items that are rich in sugar and carbohydrates. In general, though,

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confectionery is divided into two broad and somewhat overlapping categories,

bakers' confections and sugar confections.

Bakers' confectionery, also called flour confections, includes principally sweet

pastries, cakes, and similar baked goods. In the Middle East and Asia, flour-

based confections are more dominant.

Sugar confectionery includes sweets, candied nuts, chocolates, chewing gum,

sweetmeats, pastillage, and other confections that are made primarily of sugar.

In some cases, chocolate confections (confections made of chocolate) are

treated as a separate category.

Generally, confections are low in micronutrients and protein but high in

calories. They may be fat-free foods, although some confections, especially fried

doughs, are high-fat foods. Many confections are considered empty calories.

Confections are defined by the presence of sweeteners. These are usually

sugars, but it is possible to buy sugar-free sweets, such as sugar-free

peppermints. The most common sweetener for home cooking is table sugar,

which is chemically a disaccharide called sucrose. Hydrolysis of sucrose gives a

mixture called invert sugar, which is sweeter and is also a common commercial

ingredient. Finally confections, especially commercial ones, are sweetened by a

variety of syrups obtained by hydrolysis of starch. These sweeteners include all

types of corn syrup.

Trend in Confectionaries shows that sugar confectionery used to be

positioned mainly for children. Adults, however, were increasingly targeted by

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companies through the use of coffee flavor for boiled sweets, for instance.

Towards the end of 2012, Jack n Jill XO further expanded its coffee-flavored

confectionery with the introduction of Jack n Jill XO White Coffee. Category

value growth, meanwhile, marginally improved in 2014 compared to the previous

year. The 3% value growth in 2014 originated from the launch of products

positioned for adults. Perfetti Van Melle launched Mentos Fresh Time in 2014 to

be pitched against the leading medicated confectionery brand, Maxx. Another

factor assisting the categorys growth is the increasing use of mint flavor, which is

generally positioned for adults. Wrigleys Doublemint brand, for example, is no

longer just a gum but has also extended into standard mints.

Competitive Landscape shows that leading brands of candies maintain their

lead from the previous years market share. Their companys strength lies in their

wide brand portfolio. The Jack n Jill brand, for instance, is present in boiled

sweets, lollipops, standard mints, chews, other sugar confectionery plus toffees,

caramels and nougat. Its Maxx brand, meanwhile, continues to dominate

medicated confectionery with its competitive price positioning and extensive

distribution, which even includes street vendors. Their company is also active in

introducing new flavor variants and supports its brands with adequate

promotional activities to sustain brand recall.

Like every other country, the food industry has flourished very well in

Philippines. Filipinos love to eat and thats the reason why you will see a lot of

restaurants and fast foods restaurants scattered in the cities. Filipinos also love

sweets, candies or confectioneries, more specially the children but there were

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also uprising trends on sugar confectionary that targeted adults by adding value

or offering other variant that suits the needs and taste of everyone. Thus,

engaging in food and sweets open up a great demand potentials. Mordi Pastillas

is operating in a food industry, under sugar confectionery category because it is a

pastillas manufacturer & pastillas store that offers Mordi ampalaya pastillas as

its main product, which is in the form of pastillas. Unlike common pastillas or

pastillas, Mordi pastillas has product differentiation. It has nutritional value added

brought by the ampalaya. Through such, it is not just ordinary pastillas that caters

the children but the adults as well.

Attracting a huge crowd to food entity require more than just good food.

Though important, good food is only a part of the total food consumption

experience. Equally important is believed to be the way people feel while in the

food establishment. This physical and emotional response is a result of the

atmosphere, the total environment to which customers are exposed. The proper

atmosphere can make the food, service and whole food consumption experience

seem better. For that reason a food entity or establishment must take care of the

following to please its customers. This includes checking the cleanliness of the

place and freshness of the food and ingredients, guarded premises, ambiance

and landscaping, building design, lighting, and even music.

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 CHAPTER 1

MARKETING ASPECT

Current Market Situation

Sweets and delicacies industry have been well established. And in such

industry, the province of Bulacan is well known for it. This generated income

opportunities to many Bulakeos, knowing that this type of industry can be easily

manufactured even at home. Among the well-known manufactured sweet goods

in the province are pastillas de leche, pastillas de yema, pastillas de ube, and

many more. These products not only serve as a snack, but also as a favorite

pasalubong among Filipinos, which have a great potential and high demand.

Production of pastillas requires relatively low costing and ease in manufacturing

process. It is easy to enter and leave the market.

The continuous launch of new varieties of pastillas in the market increases

consumer interest. Recently, internet food bloggers are buzzing about the

Toasted Pastillas and its reviews gone viral. It is a sweet kind of pastillas made

with condensed milk and with a coating of sugar, and then seared to let it

caramelized. Apparent in the new launch is the desire of company to target a

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broader age group and not just for children, and having a wider prospective

consumer base.

Mordi Pastillas had a few small-scale and home-based business as

competitors, for which such firms manufacture and distribute pastillas that are

locally available in the market and grocery stores. Such small-scale or home-

based competitor led the market with 16.42% market share because of its

availability and low price. Next is Aizas Sweets that has 16.42% market share,

its strength is its strategic location within SM Valenzuela. Followed by Colettes

(known for pasalubong product) with 13.52%. Taste N See Candy Store

which hit the market with its Toasted Pastillas has 12.56% market share. DVF

Dairy, which is a food stall within SM Valenzuela, has 10.63% market share.

Red Ribbon and Goldilocks both have 8.69% market share.

Mordi Pastillas, uniquely different from that of the competitors because of

the added nutritional value of ampalaya in their product. Pastillas is commonly

available in the market and grocery stores. Same with the pastillas of Aizas

Sweets, Colettes,Taste N See, DVF Dairy, Goldilocks, or Red Ribbon were

usually made of powdered milk, condensed milk, and sugar. Unlike Mordi

Pastillas which has ampalaya as its main and special ingredient that adds

nutrient or health benefit to the product. Mordi Pastilas offer something new in

the market, its product differentiation will be its competitive advantage against

other competitors.

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SWOT Analysis

Strengths

a powerful marketing strategy supported by good skills in key area

nutritional value of the main ingredient

favorable location of the business

widely recognized market leader and attractive customer base

Weaknesses

Firm is in entry level. It has little market presence, reputation and low

market share.

There is a relatively high advertising expense or extensive promotional

efforts.

There is low brand imaging.

Distribution system is not yet established.

Opportunities

Serving additional customer group in new demographic market segment

Transferring company skill on technological know-how to meet additional

group of customer needs

Acquisition of rival firms.

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Threats

Likely entry of new competitors

Slowdown in market share

Costly new regulatory requirements

Natural calamities

Product Objectives

1. To offer health nutrients of ampalaya in an appealing taste of pastillas.

2. To cater people who loves to try new recipes with ampalaya as main

ingredient.

3. To offer innovative way of consuming ampalaya, in candy form.

4. To improve product awareness and establish Mordi Pastillas brand

image and establish Mordi Pastillas in the industry.

5. To obtain brand recall and repurchase among customers.

6. To increase every sale.

Market Segment

Market segment is the process of aggregating the prospective buyers into

groups that have common needs and will respond similarly to a marketing action.

Market Segmentation enables companies to target different categories of

consumers who perceive the full value of certain products and services

differently.

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 Market segmentation is one way of targeting prospective buyers or

potential customers that are more productive and that will probably become the

prime customer of the said product. It aids Mordi Pastillas to effectively promote

its product to the group of target consumers that are more likely to respond in the

strategy.

One of the efficient ways in making a business more marketable is by

giving it a marketing edge. By segmenting a group of consumers as the target of

the business, it would be easier to execute the selected strategy in order for the

business to be more profitable.

Most common types of market segmentation are geographic,

demographic, psychographic, and behavioral segmentation.

Geographic Segmentation

Marketers can segment according to geographic criterianations, states,

regions, countries, cities, neighborhoods, or postal codes. A small business

commodity store may target only customers from the local neighborhood, while a

larger department store can target its marketing towards several neighborhoods

in a larger city or area, while ignoring customers in other continents.

Mordi Pastillas store will be situated at Blk. 4 Lot 6B Villa Flor Village, T.

Santiago St. Veinte Reales, and Valenzuela City. And thus, the researchers

target residents near the vicinity and neighboring barangays of Paso De Blas,

May San, Canumay West, Karuhatan, Parada, Hen. T. De Leon, and Malinta.

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Demographic Segmentation

Segmentation according to demography is based on variables such as

age, gender, occupation and education level or according to perceive benefits

which a product or service may provide. Benefits may be perceived differently

depending on a consumer's stage in the life cycle. Demographic segmentation

divides markets into different life stage groups and allows for messages to be

tailored accordingly.

The researchers demographic segmentation categorized consumers

according to their age bracket. There are 6 age brackets: 0-12 (kids), 13-19

(teens), 20-29 (young adults), 30-49 (early adults), 50-64 (middle adults), 65 &

above (senior citizens). The researchers group prospective buyers based on age

bracket for each category has different preferences to the product which is type

of candy. To gain broader consumer based, Mordi Pastillas is positioned not only

for children or teens but also for adults.

Psychographic Segmentation

Psychographic segmentation, which is sometimes called lifestyle, is

measured by studying the activities, interests, and opinions of customers. It

considers how people spend their leisure, and which external influences they are

most responsive to and influenced by. Psychographics are very important to

segmentation, because psychographics identify the personal activities and

targeted lifestyle the target subject endures, or the image they are attempting to

project. Mass media has a predominant influence and effect on psychographic

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segmentation. Lifestyle products may pertain to high involvement products and

purchase decisions, to specialty or luxury products and purchase decisions.

Mordi Pastillas serves as not just a snack but as a pasalubong, and thus,

those people that loves to travel also becomes target market of the product.

Behavioral Segmentation

Behavioral segmentation divides consumers into groups according to their

knowledge of, attitude towards, usage rate, response, loyalty status, and

readiness stage to a product. There is an extra connectivity with all other market

related sources. Behavioral segmentation divides buyers into segments based on

their knowledge, attitudes, uses, or responses concerning a product.

Mordi Pastillas is a ampalaya flavored pastillas. It has ampalaya, as its

main ingredient and consumers have different responses toward it. There were

some that dislike ampalaya for its bitter taste, specifically the children. Thats why

Mordi Pastillas is incorporated as a candy, to make an appeal to children.

Moreover, there were customers that are health conscious. Being knowledgeable

about the health benefits of ampalaya, Mordi Pastillas is suitable to their

preference.

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Target Market

We will be serving the Valenzuela City, Philippines. The focal point of

marketing effort is the household sector as the end users of the product.

The target market of this project are the resident of Valenzuela City,

specifically those residing near the business location, along T. Santiago St.

Veinte Reales, Valenzuela City, and with residents of neighboring barangays of

Paso De Blas, May San, Canumay West, Karuhatan, Parada, Hen. T. De Leon,

and Malinta. Also, the firm aims to target those people who are traveling and

taking the route of Malinta exit of North Luzon Expressway (NLEX), especially

those who are interested in buying pastillas or sweets as pasalubong.

Mordi Pastillas store is located at Blk. 4 Lot 6B Villa Flor Village, T.

Santiago St. Veinte Reales, Valenzuela City, near Maysan Church and Malinta

Exit of North Luzon Expressway (NLEX). People may find our pastillas healthier

because of the added nutrient derived from the ampalaya, which is very ideal for

health conscious and those having a healthy diet. The business will attract

people who are fond of eating candies, sweets, or treats because Mordi Pastillas

has delightful taste and added nutrient of ampalaya.

This information about the target market will be useful to know the

behavior and the potential customers of our business.

Market Positioning

Mordi Pastillas will build its trademark as the first producer or food store to

supply delicious and healthy candy or sweets that will definitely suit everyones

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taste buds. The candy that will be produce will contain health benefits or

nutritional value of ampalaya. As compared with Aizas Sweets, Taste N See,

Colettes, DVF Dairy, Red Ribbon, Goldilocks and other competitors, Mordi

Pastillas guarantees that their consumers will get what they deserve. They will

not just enjoy the delicious taste of the candy but also gain the added nutrient

given by the ampalaya.

Competitors

Mordi Pastillas will not be the first food store to offer candy in the form of

pastillas. There is already manufacturers and distributors that supply pastillas in

the market and grocery stores.

Based on the survey conducted, most of the respondent purchase

pastillas in the market and grocery stores and the other respondents specified

Aizas Sweets, Taste N See, Colettes, DVF Dairy, Red Ribbon, and

Goldilocks as to where they buy pastillas. For such survey results, researchers

consider local home-based pastillas manufacturer, Aizas Sweets, and Taste

N See as direct competitor while Colettes, DVF Dairy, Red Ribbon and

Goldilocks as indirect competitors.

Most of such manufacturers and distributors are in small-scale or home-

based business. Being in small-scale or home-based business, information

regarding them are so limited. But because of their availability and low pricing,

most customers preferred them as compared to other competitor. They led the

industry with 16.42% market share.

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 Aizas Sweets

Main Office

401 Sto. Tomas Sasmuan, Pampanga Philippines

SM Manila

Concepcion Cor. Arroceros & Marcelino St., Manila

SM Pampanga

Brgy. San Jose, San Fernando, Pampanga

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 Aizas Sweets is one of the two companies producing sweets in Sasmuan,

Pampanga, Philippines. It started as a sub-contractor and in March 2000 decided

to become independent by establishing Aizas Sweets, named after the founders

daughter.

Today, Aizas Sweets sells its products here and abroad and supplies all

SM malls snack exchange outlets. Aizas Sweets continues to serve their

community by employing local residents and serve as a sure market for raw

materials produced by several farmers.

Aizas Sweets has created extraordinary pastries from natural ingredients

since 1990, and continue this tradition as a maker of the best Marzipan candies,

pastillas and sweet tarts. The companys main product, cashew marzipan, is

rolled and coated with cashew chips. Its a tasty, memorable treat, rich in iron

and fiber. Our pastillas are rich in calcium and vitamin A, since the main

ingredient is premium milk, and flavored with 100% natural fresh fruits and

vegetables, thus branded health pastillas in some circles. Other variants include

(but are not limited to) carrots, purple yam, jack fruit and young coconuts. All are

carefully packed in special tins to preserve the flavor and freshness.

Aizas Sweets has a monthly production capability of 720,000 servings of

pastillas, 420,000 of cashew marzipan and over 400,000 tarts. Products are

distributed in several establishments locally and internationally. Our fine line of

delicacies contains only the quality ingredients, to produce clean, safe, and

quality products.

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 Aizas Sweets has a market share of 16.42%. Its wide distribution network

and strategic location contributed to its high market share.

Taste N See Candy Store Home of the original Toasted Pastillas

Location: Rengen Bakery, Pinagbakahan, City of Malolos

http://www.facebook.com/officialtastensee

Taste N See is an online business that offers pastillas to its customers.

They manufacture or produce their pastillas in Malolos, Bulacan. They transact

business through the internet and ship their product through carrier such as LBC.

They also have authorized reseller located at Brgy. Karuhatan, Valenzuela City.

Their pastillas are available in four flavors: Toasted Pastillas, Cookies and

Cream, Caramel, and Milk. They have 12.56% market share because of the

internet buzz or sensation brought by their Toasted Pastillas.

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 For this study, the researchers assume that DVF Dairy, Colettes Buko

Pie & Pasalubong, Red Ribbon, and Goldilocks as an indirect competitor.

DVF Dairy

MANILA OFFICE:

(632) 415-7881 to 82

Ermin Garcia St., Cubao,

Metro Manila, Philippines

DVF DAIRY PLANT:

(044) 411-1393

Maharlika Road,

Barangay Poblacion Sur, Talavera, Nueva Ecija

Official page: dvfdairyfarm@yahoo.com

DVF Dairy Farm is a family-run business that was once, merely, a hobby.

From the Fausto Family Farm, Danny Fausto came up with the crazy idea

that carabaos do not only belong in the fields to plow, but that the milk from the

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carabao would be more nutritious than cow's milk and more profitable for the

farmers of the Talavera Dairy Cooperative.

DVF Dairy Farm is located at Talavera, Nueva Ecija, only 130 km north of

Manila. A very ideal location, far enough to be spared from the pollution of the

metropolis, and near enough to assure that milk can be brought to you daily,

fresh from the farm.

Nueva Ecija is known as the rice granary of the Philippines. As such,

there is an abundance of forage, which helps ensure a very well fed stock. The

Central Luzon State University (CLSU), one of the best agricultural schools in the

country, and the Philippine Carabao Center (PCC), a government agency

providing technical and veterinary assistance to farmers, are both located in

Munoz, Nueva Ecija, and some 20 kilometers from Talavera. This has provided

us a great lead as veterinarians and technical assistance are practically in our

backyard. This notwithstanding, the DVF Dairy Farm maintains its own technical

people, microbiologists, chemists and food technologists to make sure that the

milk brought to your table meets the Bureau of Food and Drugs (BFAD)

standards for quality dairy products.

The advantage brought about by this ideal location and the availability of a

competent staff, has given us the opportunity to produce very well fed carabaos,

maintained at their highest level of health. And, only the happiest and most

contented carabaos can give the best quality of milk.

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 Having grown up in Talavera, Nueva Ecija, Danilo V. Fausto, the

brainchild of DVF Dairy Farm, strived to study hard and work hard to soon be

able to put Talavera on the map.

Applying what he had learned through studying in the University of the

Philippines, Bachelor of Arts in Economics, having his MBA in De La Salle

University in Manila, and working in various areas of finance and business, he

encouraged the local farmers to work together to make Talavera Dairy

Cooperative to help each other with various needs. He then established DVF

Dairy Farm, a small manufacturing plant along Maharlika Highway, paving an

avenue to clean, package, and sell carabaos milk in an ever-growing variety of

dairy products.

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 DVF Dairy distributed their products in their food stall located in major mall

and supermarket. Their wide distribution network resulted to 10.63% market

share.

Colettes Buko Pie & Pasalubong, Malinta Valenzuela Branch

Colettes Buko Pie at Pasalubong is a good manufacturing and retail

business that produces a variety of pies, rice cakes and pastries, with buko pie

as its carrier product. It also sells native delicacies (pasalubong) and confections

sourced from various suppliers.

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 Initially, Colettes produce pan de sal alongside the pies. However, it was

the pies which apparently captured the market. From the moment they began

baking their first pies, they were already a hit with the customers. From an initial

production of 20 pies a day during the first few days of opening, production shot

up to at least 50 pies daily in the succeeding days.

In 1994, the owner felt confident operating another branch. Thus, it was

during this year that they opened the first branch of Colette's which was in

Tagaytay. The opening of the rest of the stores soon followed suit.

Today, Colette's have 45 stores nationwide including branches, franchise

and outlets. Colette's Buko Pie at Pasalubong continues to expand in the

provinces in order to meet the desire of customers for a reliable source of

pasalubong items. Its pasalubong items includes Pastillas de Leche, Broas

Espasol, Yema, Sampaloc Candy, Panocha with Peanuts, Uraro cookies,

Meringue, Pili candy, Okoy, and more.

Colettes which is known for sweets and pasalubong product has 13.52%

market share.

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 Red Ribbon, Malinta Valenzuela Branch

Red Ribbon which started out in 1979 as a hobby-induced business in

Timog, Quezon City, expanded into a proudly Filipino-owned and professionally

run business. Red Ribbon has grown to over 270 outlets all over the Philippines

and over 30 stores in US with locations in California, Nevada, Washington,

Hawaii, New York, New Jersey and Virginia. With its acquisition in October 2005

by Jollibee Foods Corporation, Red Ribbon entered a new phase in its company

history. The company soon became one of the biggest and fastest growing

bakeshops in the Philippines and has taken part in every Filipinos special

moments.

Its mission is To serve great tasting food bringing the joy of eating to

everyone, and its vision is To be the leader in the bakeshop industry and the

most loved bakeshop brand in the Philippines.

It includes Pastillas de Leche in its range of sweets product. A rich and

creamy soft candy made from fresh milk. Available in 12's Pack.

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 Red Ribbon with strong brand imaging, known for cakes and pastries, has

market share of 8.69%

Goldilocks, Malinta Valenzuela Branch

Goldilocks traces its roots to the collaboration and complementary talents

of the women, whose collective love for good food fueled what has been

transformed into the global enterprise today.

In 1966, two sisters, Milagros and Clarita and their sister-in-law Doris,

decided to open a small bakeshop along Pasong Tamo Street in Makati. A third
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sister, Maria Flor, suggested that they name the enterprise "Goldilocks", after the

character in a fairy tale. The intention was to make it easier for children and

their mothers to remember the bakeshop's name, and also because it suggested

luck and prosperity.

Little did the founders know that it would flourish, through hard work,

dedication, and an uncompromising commitment to total customer satisfaction,

Goldilocks is now the largest Filipino-owned bakeshop chain in the world. As a

true global brand, it has expanded to more than 420 stores in the Philippines and

overseas markets, and now employs a workforce of over 2,000 people. Likewise,

the opening day total sales of P574 back in 1966 have multiplied thousands of

times over.

Perhaps more impressively, generations of Filipinos consider Goldilocks

not only as a brand, but a time-honored family tradition. Now celebrating its 47th

year, Goldilocks continues to strengthen its position as a genuine Filipino Icon.

One of its pastries product is the FRESH PASTILLAS, worth 56.00 for 12s

pack.

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 Goldilocks, same with Red Ribbon, firm with strong brand imaging, known

for cakes and pastries also have 8.69% market share.

Marketing mix strategies

Mordi Pastillas would like to present its product through the following 4 Ps of

marketing strategy:

Product

The product shall be sold as a candy with health benefits, not as a

medicine. Its preventive and curative medicinal value shall be its main selling

point as it competes with existing candy brands. Thus, the product shall be

serving both regular users that consume candy as intermittent snack, dessert, or

as part of their pasalubong goodies.

Mordi Pastillas is an ampalaya candy, with ampalaya as its main ingredient.

Pricing

During the study of confectionery industry, it was observed that product

price for candies or pastillas are revised generally after every 3 to 5 year. This is

due to small price of the product which forces the manufacturers to keep unit

price in round figure i.e. 1. On the other hand, it is difficult to maintain price at

the same level over the years while production cost does not stay at the same

level. In order to maintain profit margins and cover production cost manufacturers

gradually reduce the size and weight of product till the time when product life

cycle is completed. During the last stage of the product life, manufacturers follow

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the strategy to reintroduce the product with increased price compensated by new

varieties, size and innovation of form.

The product is expected to be sold at a reasonable price; Mordi

ampalaya pastillas price is 80.00 per pack of 50 pcs. equivalent to 1.60 each.

The firm constitute cost-plus-mark up pricing, with its selling price per unit

which is equal to 1.60, while product cost per piece is equal to 0.43 resulting

to contribution margin of 1.17 per piece or 73.13% contribution margin

percentage of the selling price per piece. And thus, the firm has 273% mark-up

on cost.

It is recommended through the study that the product should be price at

1.00 to 4.00 per piece, on all varieties, which will effectively limit the target

consumer not just to try but repurchase the product. This value will be

competitive for both local and branded pastillas candy and at the same time, it

will also deliver profit.

Placement

Mordi Pastillas store is strategically located in a crowdly populated area,

near Maysan Church and Malinta Exit of North Luzon Expressway (NLEX), at

Blk. 4 Lot 6B Villa Flor Village, T. Santiago St. Veinte Reales, Valenzuela City.

Product shall be marketed not just as an ordinary candy but a healthier

alternative candy, though the product is not a medicine, it has significant added

nutrient.

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 For the purpose of this project, the business operates in a store where it

produces or manufacture the product and make sales. The store accepts retail as

well as wholesale purchase because wholesalers and retailers may also play a

key role to capture the far off markets for the product.

Promotion

To consistently supply the consumer with the product information, the

product shall be introduced with the use of print ads or flyers. Inviting the

consumers to at least try the candy, this will be the immediate goal of this initial

promotional campaign. This will be the main arm to enable to catch the target

market share and this will also represent the companys vigorous entry into the

market. After the introduction period is set, around one month, all promotions

shall be scheduled to a program per year.

During the campaign launching, the management shall associate slogans

and selling banners with the product. Promotion shall concentrate on maintaining

regular customers as mentioned in product goal after the targeted market share

has been attained.

The company, through its marketing manager should carefully evaluate

every promotional campaign over time, especially after gaining the targeted

market share.

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Marketing Program

In connection with Mordi Pastillas Partnership goals and objectives, the

business is planning to use different marketing strategies. Since the product is

not known yet to the public, the management are doing some steps for them to

be able to introduce their product in the market. The company will use effective

and efficient marketing strategy.

To begin with, the management will be offering different types of

marketing program. A Facebook page will be created to promote online, the

information about the product will be posted there. Tarpaulin will be posted in the

store. The flyers will also include business name, logo and its location.

For the start of business operation, Free-taste of the product will be given

to the walk- in customers of the store. It also has promo for the holidays

(Christmas, New Year, etc.), in which the customers can get a free pack for every

3 purchase that is limited to 10 free packs. Packaging also serves as ongoing

promotion including the logo, business name, contact details for inquiries,

comments and suggestions, the address of the business, and proper waste

disposal procedures are printed on each packaging material. And the

management will also use signboards as promotional tools.

It would be a big help for the promotion of the products if the manufacturer

will help in selling. Face to face selling also provides immediate feedback, which

help company to adopt easily.

29 | P a g e
 Below is the detailed schedule of financing that will make the advertising

programs possible:

DATE MARKETING STRATEGY BUDGET

June 2016 up to the Facebook Page Free

continuance of business Twitter Account
June 2016 up to the Tarpaulin (500.00 X 1) 500.00
continuance of business
May last week up to Flyers: 2,800.00
June 1st week 2016 Flyers Size: 4.2 x 2.8 @
(One week before and 2.00 per page
upon the start of 100 copies X 14 days=
operation) 1,400 copies
(1,400copies X 2.00)
June 2016 Food tasting (9 packs for 720.00
3days @ 1.60)
Holiday Promo Buy 3 get 1 free pack for every 800.00
purchase ( limited for 10 packs
only)
June 2016 up to the Print on the Packaging ***
continuance of business
June 2016 up to the Signboard 1,000.00
continuance of business
Total 5,820.00

Demand and Supply Analysis

Computation of Demand

The computation of total demand is derived from the answers provided by

our respondents from the survey questionnaires we spread within the location of

the proposed business to determine the preferences of the public consumer on

an existing related product. To be able to determine the number of sample

respondents, the firm used the Slovens Formula with a margin of error of 7%.

The computation is as follows:

30 | P a g e
Where: n = sample size

N = total population

1 = constant number

e = margin of error

Household 2016
Baranggay Population Household
1 Maysan 13,915 3,622
2 Paso De blas 6,849 1,728
3 Canumay west 10,740 2,752
4 Karuhatan 22,593 5,411
5 Parada 10,613 2,862
6 Gen T. De leon 57,617 14,545
7 Malinta 26,984 7,049
Total 37,969

Growth Rate = 2.66%

Solution:

n= 37969
1+ (37969)* (7%)^2

n = 203 respondents

Under this observation, the researchers acquired a census of Valenzuela

City from www.pep-net.org since it is already the actual number of household for

31 | P a g e
the year 2016. Determination of our demand is the priority of our market activity.

Demand of our product will depend on the size of the target market, number of

the consumers with the purchasing power and buying habits.

Based on the survey, the researchers found out that there is 86.21% of

the population who are eating pastillas. This is equivalent to 32,733 which is

derived from 37,969 households multiply from 86.21%.

Total Household Percentage of those who are

(2016) eating pastillas Household
37,969.00 86.21% 32,733

Based on the survey, the researchers determined that there is an average

consumption of 134 packs of pastillas per month. To get the total demand, we

multiplied 32,733 households by the average consumption of pastillas per month

which is 76.95%. Therefore, our total demand for the product will be 25,188

packs per month and 302,258 packs in a year.

Household Average Consumption per month Demand Demand (year)

32,733 76.95% 25,187 302,267

Computation for Average Consumption:

Survey Question: How often do you buy a pack of pastillas?

Respondents Consumption per year Per month

Every three months 68 272 22.67

32 | P a g e
Every two months 44 264 22
Once a month 40 480 40
Twice a month 19 456 38
Thrice a month 4 144 12
Total 175 134.67

To get the per month consumption, consumption per year is divided by 12.

Average consumption per month = 134.67

175

= 76.95%

Past Demand
2011 2012 2013 2014 2015
265,084 272,135 279,374 286,806 294,435

Computation of Supply

Stores Selling Pastillas in the Sales Per Sales Per Sales Per
Market Hour Day Year
Goldilocks 9 72 26,280
Red Ribbon 9 72 26,280
Taste and See Candy Stores 13 104 37,960
Collete's 14 112 40,880
Aiza's Pastillas 17 136 49,640
DVF Dairy Farms 11 88 32,120
Others 17 136 49,640
Total 262,800

33 | P a g e
 The researchers conducted an interview on one of each of the stores

mentioned above that is located in Valenzuela and found out the average sales

per hour for each store. The sale per hour is multiplied by 8 to get the

approximate sales per day for each store then multiplied by 12 to get the

approximate sales per year. Based on these data, the competitors can supply

262,800 packs of pastillas in a year.

Past Supply
2011 2012 2013 2014 2015
230,472 236,603 242,897 249,358 255,991

Past supply is computed by dividing the current supply to growth rate (2.66%) +

1.

2015 Supply = 262,800

1 + .0266

= 255,991
Through deducting the total demand by the total supply, the researchers

computed the unfulfilled demand of pastillas in the market. The computation is

shown below:

Unfulfilled Demand = Present Demand Present Supply

Unfulfilled Demand = 302,267

(262,800)
39,467

34 | P a g e
Market Share Analysis

Every business must determine their market share that will serve as a

basis or marketing strategy of the establishment. It will define the extent of

market that we need to satisfy. The market share of Mordi Pastillas is computed

by dividing its projected current sales by the current sales of related market.

Market Share = 30,000

262,800

= 11.42%

The researcher came up to 11.42% which means that Mordi Pastillas

influence 11.42% of the annual industry sale of pastillas on the selected

barangay in Valenzuela City.

Projected Demand and Supply

The projected demand and supply is based on the next 5 years using the

gathered information. According to the www.valenzuela.gov.ph, the 2014 census

of population is increased by an annual growth rate of 2.66%. The annual

increase of demand and supply for the year 2017-2021 is based on the

population growth of 2.66%.

35 | P a g e
36 | P a g e
 CHAPTER 2

TECHNICAL ASPECT

Description of the Product

The product of Mordi Pastillas will provide an innovative food wherein you

will be able to satisfy your cravings and health benefit at the same time. It is

made to promote the health benefits of bitter melon but it is not like the common

taste that will not endure the bitterness of it. The main ingredient of our product is

bitter melon that is why almost all the nutrients contain by bitter melon will be

placed into it. From this we will be able to help those who have negative taste

preference of eating bitter melon.

Mordi Pastillas will provide product, namely:

1. Pastillas isa sweet and sugary dessert that is well known and loved by

many people in the Philippines. You can make this dessert without cooking at

all, or you can do a bit of cooking to make this delicious treat.

Nutritional Value of Mordi Pastillas

Folates also called vitamin B9, is one of many essential vitamins. You

may also be familiar with folic acid as a form of folate; folic acid is the

synthetic version used for food fortification and supplements. Folate is

important because it plays a role in DNA synthesis and repair. It

37 | P a g e
 encourages cell and tissue growth. In fact, these benefits barely scratch

the surface and its effects are far reaching.

Niacin it includes maintaining good blood circulation, healthy robust skin

condition, and normal functioning of the brain, boosting memory power,

aiding the digestive tract to absorb sufficient carbohydrates, proteins, and

fats, reducing the effects of arthritis and improving the symptoms of

schizophrenia. The most important benefit of niacin or vitamin B3 is its

ability to lower cholesterol levels and control them.

Pantothenic Acid also known as Vitamin B5, include the alleviation of

conditions like asthma, hair loss, allergies, stress and anxiety, respiratory

disorders and heart problems. It also helps to boost immunity, reduce

osteoarthritis and signs of aging, increase resistance to various types of

infections, stimulate physical growth, and manage diabetes and skin

disorders.

Pyridoxine also known as Vitamin B6 include stimulating co-enzymatic

activities, protecting the immune system, and having positive effects on

metabolism, premenstrual syndrome, hormone control, emotional

disorders, skin conditions, cardiac diseases, kidney disorders, carpal

tunnel syndrome, multiple sclerosis, anemia, arthritis and influenza.

38 | P a g e
 Riboflavin also known as vitamin B2, plays a significant role in the

production of energy. It helps in the conversion of carbohydrates to sugar,

which fuels the bodys many functions. Riboflavin also plays an active part

in the electron transport chain that produces cellular energy. Furthermore,

it helps in the processing of amino acids and fats. It can also serve as an

antioxidant, which slows the pace of aging.

Thiamine also known as Vitamin B1 is one of the eight water-soluble

vitamins in the B complex family. It helps in the conversion of

carbohydrates into glucose, which in turn is used to produce energy for

carrying out various bodily functions. Vitamin B1 is also required for the

breakdown of fats and protein.

Vitamin A is a fat-soluble vitamin that plays an important role in ensuring

healthy eyes and bone development. Vitamin A deficiency is the most

common cause of blindness among children. Vitamin A can prevent night

blindness and dry eyes, while also ensuring clear vision.

Vitamin C also known as Ascorbic Acid include the prevention and

treatment of scurvy, treatment of the common cold, boosting the immune

system, lowering hyper tension, the treatment of lead toxicity, curing

cataracts, treatment of cancer, combating stroke, maintain elasticity of the

skin, the healing of wounds, and controlling the symptoms of asthma.

39 | P a g e
 Calcium Among all the benefits of calcium, the most important ones are

that it aids in maintaining bone health and dental health, as well as the

prevention of colon cancer and the reduction of obesity. We need calcium

from birth all the way until we reach old age. In our infant days, calcium is

required for proper bone and tooth growth; during adolescence, as the

bones develop, calcium is again essential to support the growth. Finally,

when we get older, our bones tend to get porous and weak, thereby

requiring ample calcium intake. With so many fancy diets around us, we

often tend to avoid calcium-rich foods like whole food groups, including

dairy products. This avoidance often results in calcium deficiency.

Copper The health benefits of copper include proper growth of the body,

efficient utilization of iron, proper enzymatic reactions, as well as improved

health of connective tissues, hair, and eyes. Copper is also integral for

preventing premature aging and increasing energy production. Apart from

these, regulated heart rhythm, balanced thyroid glands, reduced

symptoms of arthritis, quick wound healing, increased red blood cell

formation, and reduced cholesterol are other health benefits of copper.

Iron The health benefits of iron mainly include its job of providing life-

giving oxygen to organ systems through its role in red blood cell

production. About two-thirds of the bodys iron is found in hemoglobin.

Other health benefits of iron are the reduction of iron deficiency anemia,

40 | P a g e
 anemia of chronic disease, cough, anemia in pregnancy, predialysis

anemia and many other varieties.

Magnesium is needed to keep muscle and nerve functions normal and

to keep the heart beating rhythmically. It also helps to support a healthy

immune system, and keeps bones strong. Magnesium is important in

terms of regulating blood sugar levels, thereby promoting normal blood

pressure. Magnesium also supports energy metabolism and protein

synthesis. Magnesium has a positive effect on the treatment of disorders

such as cardiovascular disease, hypertension, and diabetes. Dietary

magnesium is absorbed in the small intestines and is excreted through the

kidneys.

Manganese Some of the health benefits of manganese include a benefit

to healthy bone structure, bone metabolism, and helping to create

essential enzymes for building bones. It also acts as a co-enzyme to

assist metabolic activity in the human body. Apart from these, there are

other health benefits of manganese including the formation of connective

tissues, absorption of calcium, proper functioning of the thyroid gland and

sex hormones, regulation of blood sugar level, and metabolism of fats and

carbohydrates.

41 | P a g e
 Zinc The health benefits of Zinc include proper functioning of the

immune and digestive systems, control of diabetes, reduction of stress

levels, energy metabolism, and an increased rate of healing for acne and

wounds. Also, zinc is helpful in terms of pregnancy, hair care, eczema,

weight loss, night blindness, colds, eye care, appetite loss and many other

minor conditions.

42 | P a g e
MANUFACTURING PROCESS:

Ingredients:

1/3 kg Bitter Melon

kg Powdered Buttermilk

1 can of Condensed Milk (390g)

kg White Granulated White Sugar (for coating)

2 Tablespoon Salt

Materials to Use: (making pastillas)

Glass Bowl

Mixing Bowl

Kitchen Knife

Chopping Board

Tablespoon

Plate

Blender

Electric Kettle

43 | P a g e
Materials to Use: (packaging)

Heat Bag Sealer

Blower

Instructions:

1. Wash the bitter melon then cut them lengthwise. Using a spoon, scrape off

seeds and white pith then slice it thinly.

2. Place the sliced bitter melon in a large bowl, add salt and lukewarm water

then leave it for at least 10 minutes.

3. Put the bitter melon and 1 can of condensed milk in a blender and mix it

well then set aside.

4. In a mixing bowl, put the powdered buttermilk and pour the bitter melon

mixture then mix it thoroughly until the right texture is reached. The

mixture may be a little thick and hard to mix, so have a little patience.

44 | P a g e
5. Shape your candy into circles, dices, or cylinders. Choose the shape youd

like for your pastillas. Just use your hands to give them their desired

shape; you can wear gloves if you want to.

6. Pour the sugar on a plate and roll the pastillas into the sugar. Make sure

that all parts are covered.

7. Wrap the pastillas using plastic wrapper. Use the heat bag sealer to seal

your candies.

8. Put 50 pieces of pastillas in a plastic container/jar then use blower to seal

the lid with plastic.

The steps above can make up to 400 pieces of pastillas, you can just add

ingredients to produce more candies you like.

45 | P a g e
Workflow of the Process

Create an ampalaya pastillas concept

Gather the ingredients needed

Slice the ampalaya equally

Mix the sliced ampalaya together with condensed milk in a

blender

Mix the ampalaya mixture together with powdered

buttermilk in a bowl

Shape the mixture into circles or cubes

Roll the shaped pastillas into the sugar

Pack the shaped pastillas

Fill the plastic container with packed pastillas

Display in a shelf

46 | P a g e
PRODUCTION EQUIPMENT REQUIREMENTS

Equipment Quantity Unit Cost Total Cost Images

Mixing Bowl 3 468.00 1,404.00

Glass Bowl 3 308.00 924.00

Round Plates 4 120.00 480.00

Tablespoon 12 12.00 144.00

Chopping Board 1 300.00 300.00

Kitchen Knife 2 150.00 300.00

Blender 1 750.00 750.00

Electric Kettle 1 532.00 532.00

47 | P a g e
Hot Jaw Bag Heat Sealer 1 4,701.00 4,701.00

Blower 1 399.00 399.00

Total 9,934.00

Dishware such as bowls and plates can be bought at a minimum price at

any SM Store nearby.

Kitchenware such as knives and spoons can also be bought at a minimum

price at any SM Store nearby

Appliances such as blender and electric kettle can be bought at Home

Along located in Acacia, Malabon City for a cheaper price.

Specific item like bag heat sealer will be bought online in Lazada.com for

convenience. Item will be tried and tested upon receipt for quality checking

before disbursing payment for the ordered item.

48 | P a g e
STORE EQUIPMENT REQUIREMENTS

Equipment Quantity Unit Cost Total Cost Images

Karce Printing Calculator 1 999.00 999.00

Desktop Computer 1 10,850.00 10,850.00

CCTV Camera 1 2,179.00 2,179.00

Time Card Machine 1 2,442.00 2,442.00

Total 16,470.00

Printing Calculator is available and can be bought at any branch of

National Bookstore at a fair price.

Desktop Computer will be bought in CompuWare Computer Center

located on the third floor of SM Valenzuela.

CCTV Camera will be bought at Foscam Philippines located in

Sampaloc, Manila for a low priced top quality product.

49 | P a g e
 Time Card Machine will be ordered on Office Depot located in Pasig,

Metro Manila through landline and will arrive after three (3) days.

FURNITURES and FIXTURES REQUIREMENTS

Furniture and Fixtures Quantity Unit Cost Total Cost Images

Philips LED Light Bulbs 8 135.00 1,080.00

Kitchen Table 1 4,692.00 4,692.00

Desktop Table 1 954.00 954.00

Chair 8 180.00 1,440.00

Waiting Chair 1 2,500.00 2,500.00

Standard Ceiling Fan 2 3,320.00 6,640.00

50 | P a g e
 Standard Exhaust Fan 1 1,045.00 1,045.00

Display Cabinet 1 15,000.00 15,000.00

Display Wall Shelf 1 5,000.00 5,000.00

Glass 2 1,980.50 3,961.00

Paint 4 887.25 3,549.00

Total 45,861.00

LED Lights will be bought at nearby hardware store if there are any, if none, it

will be bought at Ace Hardware located in SM Valenzuela.

Tables will be bought online through olx.ph for a cheaper price.

Chairs will be bought at Guaranty General Merchandise located in Rizal

Avenue Sta. Cruz Manila.

Fans will be bought at SM Appliance Center that can be found in SM

Valenzuela.

Display Cabinet will be bought online through lazada.com

51 | P a g e
 Display Wall Shelf will be customarily made by carpenters that will be hired

during the plant construction.

OFFICE SUPPLIES REQUIREMENTS

Supplies Quantity Unit Cost Total Cost Images

Paper Rolls 3 152.00 456.00

Record Book 1 56.00 56.00

Ball Pen 5 8.00 40.00

Eco-friendly Plastic Bag

(500 per pack) 1 23.00 23.00

Time Card (10 per pack) 2 13.00 26.00

Total 601.00

Paper Rolls will be bought in bundles at Office Depot to save cost.

Office supplies like record book, ball pen and time card will be bought at any

branch of National Bookstore.

52 | P a g e
 Plastic bag will be bought in Interpack Packaging Product Corporation near

the business place. It will be bought in bundles for a cheaper price.

Supplies stock will be monitored to ensure a sufficient quantity for the store

and to know the right timing when to buy a new set of supplies.

STORE SUPPLIES REQUIREMENTS

Supplies and Equipment Quantity Unit Cost Total Cost Images

Hand Soap 2 35.00 70.00

Detergent Powder 1 96.00 96.00

Dishwashing Liquid 1 42.00 42.00

Bleach 1 28.00 28.00

Rugs 10 5.00 50.00

Mop 1 250.00 250.00

53 | P a g e
Broom 1 150.00 150.00

Broomstick 1 25.00 25.00

Fire Extinguisher 1 2,800.00 2,800.00

Dustpan 1 50.00 50.00

Trash Bin 3 85.00 255.00

Pale 1 35.00 35.00

Dipper 1 20.00 20.00

Total 3,871.00

Cleaning supplies such as soap, powder, bleach, etc. will be bought at the

supermarket in Pure gold or SM Malls.

Cleaning equipment such as rugs, mop, sweeper, etc. will be bought at

Home Along located in Acacia, Malabon City together with the

appliances.

54 | P a g e
 Plasticware such as trash bin, pale, and deeper will be bought Feric

Plasticware and General Merchandise along Maysan Road in Valenzuela.

DEPRECIATION TREATMENT

Most of the equipment and furniture and fixture are expected to depreciate

at a constant rate of 10% per annum according to the diminishing balance

depreciation method. Dishware and other fixtures are depreciated according to

the guide made by Nationwide Publishing Company, Inc.

Depreciation
Equipment /
Furniture and Total Useful FY 2016- FY 2017- FY 2018- FY 2019-
Fixtures Cost Life 2017 2018 2019 2020

Blender 750.00 10 75.00 75.00 75.00 75.00

Electric Kettle 532.00 10 53.20 53.20 53.20 53.20

Bag Heat Sealer 4,701.00 10 470.10 470.10 470.10 470.10

Blower 399.00 10 39.90 39.90 39.90 39.90

Time Card
Machine 2,442.00 12 203.50 203.50 203.50 203.50

Desktop Computer 10,850.00 10 1,085.00 1,085.00 1,085.00 1,085.00

CCTV Camera 2,179.00 10 217.90 217.90 217.90 217.90

Ceiling Fan 6,640.00 15 442.67 442.67 442.67 442.67

Exhaust Fan 1,045.00 20 52.25 52.25 52.25 52.25

Display Cabinet 15,000.00 20 750.00 750.00 750.00 750.00

Wall Display Shelf 5,000.00 20 250.00 250.00 250.00 250.00

Kitchen Table 4,692.00 10 469.20 469.20 469.20 469.20

55 | P a g e
 Desktop Table 954.00 20 47.70 47.70 47.70 47.70

Chair 1,440.00 10 144.00 144.00 144.00 144.00

Waiting Chair 2,500.00 10 250.00 250.00 250.00 250.00

4,475.4 4,475.4 4,475.4 4,475.4
Total 2 2 2 2

PLANT LOCATION

The plant location shall be located at Blk 4 Lot 6B Villa Flor Village T.

Santiago St. Veinte Reales, Valenzuela City located near church and factories.

Below is the location of the proposed business.

PLANT LAYOUT

The plant layout is tactically designed to support the smooth process of

the proposed business (Ampalaya Pastillas). The display area is the place where

most of the finished products that are ready to sell are being displayed. There

56 | P a g e
would be a place for the cashier where the customer will pay for purchased

product/s. There would be a waiting area in front of the cashier to give a place for

those people who are with the buyer or to the customer themselves, who might

be waiting for some acquaintance or to customer/s who are going to pay and is

waiting in line. The kitchen is the place where the pastillas will be made by the

confectioner. Few adjustments will be required in the kitchen because the sink

and t=he toilet is already in place before the occupancy of the proposed

business. A glass divider will be placed in between the kitchen and store area.

PLANT COST

Plant location is currently unoccupied and is readily available to be

leased for 9,000.00 monthly with an agreement of two (2) months advance and

57 | P a g e
one (1) month deposit. Few adjustments and placement is only required for the

commercial space to be arranged according to the plant layout. Few workers

would be hired to make the adjustments and placements needed by the

proposed business. A maximum duration of one (1) month is required to finish all

the necessary adjustments for the plant.

Estimates of Cost:

1. Two (2) carpenters and three (3) helpers would be hired which would be

paid 450 per day.

2. The glass that will be used as a divider will be bought from Universal

Glass Company Incorporated, a glass manufacturer that is located along

Mc Arthur Highway in Valenzuela for 2,836.

3. A 16L white latex paint for first coating and 4L green latex paint will be

bought to change the color of the wall that will match the theme and idea

of the proposed business which will cost 2,002 and 422 respectively.

STUDY OF AVAILABILITY OF RAW MATERIALS, LABOR AND UTILITIES

REQUIREMENTS

Raw Materials Requirements

Ampalaya (Bitter Melon)

58 | P a g e
 Bitter Melon or Ampalaya is a vegetable grown throughout the

Philippines. It is mostly cultivated, although wild forms can be found. As the

English name suggests (bitter melon), the melon has a bitter taste due to the

presence of momordicin. Our Ampalaya will be supplied and bought in Malinta

Wet Market, Valenzuela City.

White Sugar

White sugar is the crystallized sucrose extracted from either sugarcane

or sugar beets. After harvesting the sugarcane or sugar beets, the juice is

extracted and boiled down to remove moisture. As the moisture diminishes, the

natural sucrose in the juice begins to crystallize. It will be bought in the Malinta

Wet Market, Valenzuela City.

Powdered Buttermilk

Buttermilk refers to a number of dairy drinks. Originally, buttermilk was

the liquid left behind after churning butter out of cream. This type of buttermilk is

known as traditional buttermilk. It is available in a dried powder form. This stores

well at room temperature and is usually used in baked goods. This raw material

will be bought in the Malinta Wet Market, Valenzuela City.

Doreen Condensed

Sweetened Condensed Milk is processed under the most stringent

quality and hygienic conditions. Every 100g of Sweetened Condensed Creamer

59 | P a g e
 contains: Energy 300kcal, Protein 2g, Fat 10g and Carbohydrates 58g. This raw

material will be supplied and bought in Pure Gold, Paso de Blas.

Labor Requirements

1. General Manager one responsible for managing the overall operation of

the business, he is the one in-charge of monitoring and controlling the

production and sales of the organization.

2. Accountant one that will be called every period to prepare financial

statements and tax requirements.

3. Cashier one responsible for collection of payment for customer

payments.

4. Confectioner one responsible for preparing and making the pastillas

candies.

5. Molder / Packager one responsible in shaping and packing the pastillas

candies.

6. Custodial Engineer one responsible for keeping the production, store

and parking area clean and also responsible for proper disposing of

wastes.

Employee Quantity Hours / Week Cost

General Manager 1 66 500 / day

Accountant 1 As needed 2,000 / visit

60 | P a g e
Molder / Packaging 2 48 481 / day

Confectioner 2 48 481 / day

Janitor 1 91 481 / day

Cashier 1 66 481 / day

Utilities Requirements:

Philippines largest distributor of

electrical power and the only electric 3,000 / Month

power distributor in Metro Manila.

Private firm managing the water services

of the western zone of Metro Manila. 500 / Month

Countrys leading home broadband that

provides landline services and internet 990 / Month

connection.

61 | P a g e
PRODUCTION SCHEDULE

Production schedule shows a timetable for the use of resources and

processes required by our business to produce goods. Our business modifies our

production schedule in response to large customer orders, to accommodate

resource changes, to reduce costs, and to increase overall production efficiency.

This production schedule was made based on estimated future demands

of pastillas candy of 302,267 packs for 2016 with its unfulfilled demand of

39,467 in which 30,000 will be supplied by Mordi Pastillas. Forecast demand

quarterly is computed using probabilities: 25%, 20%, 25%, and 30% respectively.

Period 1 Period 2 Period 3 Period 4

Forecast Demand 9867 7893 9867 11840
Beginning Inventory 7500 0 0 0
Production Capacity - 7500 7500 7500
Ending Inventory 0 0 0 0
Unfulfilled Demand 2367 393 2367 4340

This schedule shows that Mordi Pastillas cannot supply the forecasted

demand for 2016 therefore leaving a total of 9,467 packs of pastillas still being

unfulfilled.

ESTIMATE OF PRODUCTION COST

Raw Materials Cost

Ampalaya 40 / kg
62 | P a g e
Powdered Buttermilk 140 / kg
Condensed Milk 27 / can
White Granulated Sugar 52 / kg
Plastic Wrapper 12 / 500pcs
Plastic Container 5 / pc

Direct Labor Cost

Confectioner 480 / day
Packager 480 / day

Overhead Cost
Electricity 2000 / month
Water 200 / month

Labor Capacity

Two (2) Confectioner and Two (2) Packager 30,370 packs per year
7,793 packs per quarter
2,598 packs per month
97 packs per day
12 packs per hour

4,867 pieces per day

Production Cost per Quarter

Raw Materials 159,190.85

Direct Labor 283,680.00

Overhead 6,600.00
Total 449,470.85

63 | P a g e
WASTE MANAGEMENT PLAN

1. Responsible Person

One person will be designated for managing waste on site. This will

ensure that the waste management plan will be followed. The all-around

helper will be the one in-charge of waste minimization. He will be oriented

and briefed about his responsibility upon hiring.

2. Goals and Objectives

Waste management plan is created and will be developed to

eliminate the generation of waste, as a priority. It is also created to

determine waste that will be recycled and reused on the job.

3. Estimated Waste Amounts

Material Estimated Waste Percentage

Bitter Melon (Ampalaya) 10%

Condensed Milk 5%

Powdered Buttermilk 3%

White Granulated Sugar 2%

Plastic Wrapper 7%

4. Waste Destination

Organic waste such as seeds and piths will be separated with

inorganic waste through the use of two trash bins in the production area.

64 | P a g e
 Properly disposed waste will be collected on a daily basis by Waste

Collector.

5. Communication and training

Every employee will be properly educated and informed about the

waste management plan of the organization to help in the goals and

techniques of minimizing waste. Management will encourage everyone to

participate. A waste minimization record will be put on a notice board that

will be placed in the production area and will be updated regularly to let

everyone know about the progress and to set-up an ideas board for

waste-related suggestions.

WASTE MANAGEMENT STRATEGIES

Our team will conduct proper ways of disposing and reducing our waste to

ensure the quality of our product.

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 To ensure the quality of our product, we strictly maintain the cleanliness of

our business area and follow a certain program in maintaining it.

a. Production Area

Production area is the primary concern when it comes to our waste

management system as it is the place where our product is made.

Production area is also the place where most of our waste will come from.

Thus, our team ensures the cleanliness and proper disposal of waste in

this area.

1. Deep cleaning will be done before the start of production.

Making sure that the floor, table, and cooking area are

thoroughly clean.

2. Two trash bins will be put in the area to separate wastes that

are organic to non-organic.

3. Frequent sweeping, mapping and swiping will be attended by

specific person to maintain cleanliness in the working place.

4. Non-organic wastes like cans and boxes will be sold to other

establishment that is willing to buy it.

5. Organic and other non-organic wastes will be collected by waste

collector daily at a certain time.

6. Final cleaning will be done after working hours.

b. Store Area

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 Store area is also one of our concerns when it comes to cleanliness

as it is the place where we present our product to our valued customer so

maintaining it will be a big factor for us to be able to sell our product.

1. Sweeping and mapping the floor will be done before opening

the store.

2. Furnishing glass will also be attended before opening.

3. One trash bin will also be placed at the store for proper

disposing.

c. Parking Area

Parking area is also an important part of the establishment as it

gives space for vehicles owned by possible customers.

Daily sweeping of the area will be done before opening.

Frequent sweeping of the area will be attended by specific

person through the day.

67 | P a g e
 CHAPTER 3

MANAGEMENT ASPECT

Objective:

1. To determine the specific type of organization to be established.

2. To establish the organizational structure of the organization.

3. To be able to know the number of workers that will be needed on the

operation of the business.

4. To be able to determine the benefits and incentives that will be given to

workers/employees.

5. To be able to determine the kinds the training that the management will

give to workers/employees.

CORPORATE VISION, MISSION AND CORE VALUES

Corporate Vision

Through a shared commitment to brilliance, we are devoted to be

recognized as premium brand bitter melon flavored pastillas in the country by

assuring the market with high-quality products. And as recognized leader in

providing customers with the healthiest confectionery of good quality pasalubong

items at reasonable prices coupled with excellent service.

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Corporate Mission

To satisfy customers' needs by providing them with a healthy and tasty

confection at reasonable price, and a high standard of customer service. It also

aims to provide income/employment for suppliers and community locals.

Corporate Core Values

Accountability

Commitment

Service Excellence

Integrity

Respect

Innovation

Quality

Passion

Business Name

The business is named Mordi Pastillas. The term Mordi came from the

root word momordica charantia, the scientific name of bitter melon which is the

main ingredient of our product. We can assure of the customers satisfaction

because our product promotes sweet taste and health benefits of bitter melon.

69 | P a g e
Business Logo

The proponents decided to create a logo as shown above. We choose the color

green because it is in line with the color of bitter melon.

Ownership and Legal forms of business

Mordi Pastillas legal form of business is a taxable general partnership

associated with six persons who will carry on as co owners of the business by

bringing together capital and various industrial resources. It is a trading

partnership organized for the purpose of selling innovative healthy products. The

six co-owners are Juan Carlo Breta, Karmina Lazaro, Kristine Anchojas, Mark

Jhoncelle Ellurango, Redy Jeff Ian Daracan and Timothy James Pacson. Each

partner will make an equal contribution and borrowings from bank to meet the

70 | P a g e
capitalization requirement. The total initial capital agreed by partners is PHP

250,000.00. Below are the names of the partners and their respective

contributions.

CONTRIBUTION TYPE OF
PARTNERS CONTRIBUTION
PERCENTAGE PARTNER
Capitalist
Juan Carlo Breta 16.67% 41,666.67
Industrialist
Capitalist
Karmina Lazaro 16.67% 41,666.67
Industrialist
Capitalist
Kristine Anchojas 16.67% 41,666.67
Industrialist
Capitalist
Mark Jhoncelle Ellurango 16.67% 41,666.67
Industrialist
Capitalist
Redy Jeff Ian Daracan 16.67% 41,666.67
Industrialist
Capitalist -
Timothy James Pacson 16.67% 41,666.67
Industrialist
TOTAL 100.00% 250,000.00

Partnership Agreement

This partnership agreement is made on June 2016 among the partners,

Anchojas, Christine; Breta, Juan Carlo; Daracan, Redy Jeff Ian; Elluranggo, Mark

Jhoncelle; Lazaro, Karmina; and Pacson, Timothy James

1. Name of the Business

The parties hereby form a partnership under the name of Mordi

Pastillas. The principal office will be located at the Blk4 Lot6B Villa flor

Village T. Santiago street, Veinte Reales, Valenzuela City.

2. Term

71 | P a g e
 The partnership shall commence on June 1, 2016 and continue until

terminated.

3. Capital

The capital of the partnership shall be contributed in cash by the

partners as follows:

A separate capital account shall be maintained for each partner.

Upon the demand of either partner, the capital accounts of the

partners shall be maintained at all times in the proportions in which

the partners evenly share in the profits and losses of the partnership

at the end of the financial period.

4. Profit and Loss

Each partner must share in the profits or losses of the venture.

5. Interest

No interest shall be paid on the initial contributions to the capital of

the partnership or on any subsequent contributions of capital.

6. Banking

All funds of the partnership shall be deposited in its name in such

checking account. All disbursements will be made through the checking

account to be signed by any two of the assigned partner signatories.

7. Book

The partnerships books shall be maintained by the manager and

each partner shall at all times have access thereto. The books shall be

kept on a periodic basis, and shall be closed and balanced at the end of

72 | P a g e
 the periodic year. An audit shall be made as of the closing date by an

external auditor.

8. Voluntary Termination

The partnership may be dissolved at any time by agreement of the

partners, which event of the partners shall proceed with reasonable

promptness to liquidate the business of the partnership. The partnership

name shall be sold with other assets of the business. The assets of the

partnership business shall be applied in the following order:

to pay or provide for the payment of all partnership liabilities and

liquidating expenses and obligations;

to equalize the income accounts of the partners;

to discharge the balance of the income accounts of the partners;

to equalize the capital accounts of the partners; and

to discharge the balance of the capital accounts of the partners.

Partners Distribution of Net income

Name of Partner Share in Net Income Type of partner

Anchojas, Kristine 16.67% Capitalist Industrialist

Breta, Juan Carlo 16.67% Capitalist Industrialist

Daracan, Redy Jeff 16.67% Capitalist Industrialist

Ellurango, Mark Jhoncelle 16.67% Capitalist Industrialist

73 | P a g e
Lazaro, Karmina 16.67% Capitalist Industrialist

Pacson, Timothy James 16.67% Capitalist-Industrialist

Total 100%

Project Schedule

Business objectives are set to be accomplished. In order to achieve those

objectives we need to undergo to proper planning and preparation of activities to

be taken. This involved Gantt chart that will control and monitor the progress of

74 | P a g e
different activities.

Areas of Consideration : Feasibility Study

Duration : 16 weeks

Areas of Consideration : Site Inquiry

Duration : 1 week

Areas of Consideration : Raising of Capital

Duration : 2 weeks

Areas of Consideration : Business Registration

Duration : 2 weeks

1. Registration with the Securities and Exchange Commission (SEC)

Company Name Verification Slip

Allowed the public to verify the availability of your desired

business name

Articles of Partnership

A voluntary contract between two or among more than two

persons to place their capital, labor, and skills, and corporation

in business with the understanding that there will be a sharing of

the profits and losses between/among partners.

Application for Partnership

75 | P a g e
 A voluntary contract between two or among more than two

persons to place their capital, labor, and skills, and corporation

in business with the understanding that there will be a sharing of

the profits and losses between/among partners.

2. Registration of Business name with the Department of Trade and Industry

(DTI)

3. Registration with the Municipality of Valenzuela City

Barangay Business Clearance

Barangay serves as the primary unit of government policies,

plans, programs, projects and activities in the community. The head is

called the Barangay Captain, but today, under the Local Government

Code, he is called the Punong Barangay.

You need to get a Barangay Business Clearance or Barangay

permit first, before securing a Mayors Permit. Its one of the

requirements for securing Mayors Permit.

Mayors Business Permit to Operate

act as proof that your business follows certain laws and

ordinances.

Lease / Rent Contract

formal document that identifies the lessor, lessee, and the

leased asset or property; states lease term and fee, and

detailed terms and conditions of the lease agreement.

Sanitary Permit

76 | P a g e
 is a certification in writing of the Municipal Health Officer issued

to establishment complies with the existing minimum sanitation

requirements upon evaluation or inspection conducted in

accordance with Presidential Decree No. 522 and 856, and local

ordinances.

4. Registration with the Bureau of Internal Revenue (BIR)

Form 2316 - is also called the Certificate of Compensation

Payment or Income Tax Withheld. The BIR defines compensation

as salaries, wages or otherforms of remuneration given by an

employer to an employee.

Form 1702 Annual Income Tax Return

Form 1903 Application for Registration for

Corporations/Partnerships (Taxable/Non-Taxable).

Form 1907 Application for Permit to Use Cash Register Machine

or Point of Sale Machine.

Form 0605 - This form is to be accomplished every time a taxpayer

pays taxes and fees which do not require the use of a tax return

such as second installment payment for income tax, deficiency tax,

delinquency tax, registration fees, penalties, advance payments,

deposits, installment payments, etc.

Form 2000 Documentary Stamp Tax Declaration/Return

5. Registration with the Social Security System (SSS)

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 Form R-1 Social Security System Employer Registration

Form R-1A Social Security System Employment Report

Form R-5 Social Security System Contributions Payment Return

6. Registration with the Philippine Health Insurance Company (PhilHealth)

Form ER1 Philippine Health Insurance Corporation Employer

Data Record

Form ER2 - Occupational return to be submitted to the Local

Employment Exchange once in two years

7. Registration with the Home Development Mutual Fund (Pag-IBIG)

FPF060 Pag-ibig Membership Registration/ Remittance Form

FPF040 Pag-ibig Employers Data Form

Areas of Consideration : Site Renovation

Duration : 4 weeks

Areas of Consideration : Equipment Selection

Duration : 1 week

Areas of Consideration : Raw Materials Selection

Duration : 1 week

Areas of Consideration : Order and Receipt of equipments

Duration : 1 week

78 | P a g e
Areas of Consideration : Order and Receipt of raw materials

Duration : 1 week

Areas of Consideration : Installation of equipments

Duration : 2 weeks

Areas of Consideration : Hiring and Training of personnel

Duration : 5 weeks

Employment Procedures

1. Applicants will submit personally their updated resume together with a 2x2

recent ID picture and other credentials.

2. The management will evaluate the application forms received and will

schedule a job interview for each prospective employee.

3. Prospective employees will undergo interviews facilitated by the managing

personnel to evaluate their competitiveness for the position applied for.

4. Once hired, each new employee will be given reasonable time to complete

their employment requirements. The employment requirements are as

follows:

a. Recent 2 x2 ID picture

b. Authenticated Birth Certificate

c. NBI and Police Clearance

d. Medical Examination

79 | P a g e
5. After the completion of the said requirements, all new employees will undergo

job orientation. Through orientation, new employees will learn about the

mission, vision, objectives, rules, and regulations implemented by the

organization. Most importantly, they will be informed of their duties and

functions as well as their vertical and horizontal reporting relationships and

accountabilities.

6. The newly hired employees will be deployed for one week training period.

Thereafter, they will formally be engaged in the business operations of the

entity.

Job Description Duties and Job Specifications

Responsibilities

General Manager

Position(s) Available: Develop and Candidate must

implement employee possess at least a

1 (Full Time)
performance Bachelors/College
Proposed Salary:
evaluations and Degree on

500/day improvement plans. Finance/Accountancy

Maintain, encourage or equivalent.

Inclusive of Benefits
and possess Minimum of 1 year of
SSS, HDMF, Philhealth
ownership management
and 13th month pay.
mentality. experience with

Effectively manage manufacturing and

Duties covers employee turnover. merchandising

80 | P a g e
 management Provide a positive industry.

functions such as working environment Strong leadership

planning, organizing, and handle employee skills

staffing, directing and issues appropriately Knowledgable in MS

controlling the and in a timely office (Excel, Word,

business. manner. etc.)

Responsible for the Provide exceptional Ability to effectively

overall efficient and customer service and develop others to

effective operation of ensure the next level.

the business. employees provide With pleasing

the same level of personality.

service.

Communicate,

execute and manage

marketing and

merchandising

programs.

Resolve customer

problems or

complaints by

determining optimal

solutions.

Prepare, examine,

81 | P a g e
 and analyze

accounting records,

financial statements,

and other financial

reports to assess

accuracy,

completeness and

conformance to

reporting and

procedural

standards.

Accountant

Position(s) Available: Prepare, examine Candidate preferably

and analyze possess a Bachelors

1 ( On Call)
accounting records, Degree in
Proposed Salary:
financial statements, Accountancy and a

2000/visit and other financial Certified Public

reports to assess Accountant License

accuracy, (Passed the Board

Providing financial completeness, and /Professional License
advises such as conformance to Exam).
analyzing companys reporting procedural At least 1-2 year(s)
financial performance standards. working experience

82 | P a g e
 and making longer Analyze business in the related

term forecasts and operations, trends, industry.

Recommending ways costs, revenues, Knowledgable in MS

of cutting costs if financial office (Excel, Word,

necessary. commitments and etc.)

Supervises and obligations to project Part-Time position

conducts activities future revenues and available.

relative to the expenses and to Keen on details and

maintenance of provide advice. accurate.

complete, accurate, Report to Must be available

and up-to-date management every 30th of the

accounting records of regarding the month.

transactions, control finances of the

and handling of establishment.

funds, preparation of Compute taxes owed

required reports. and prepare tax

returns, ensuring

compliance with

payment, reporting

and other tax

requirements.

Develop, maintain

and analyze budgets,

83 | P a g e
 preparing periodic

reports that compare

budgeted costs to

actual costs.

Establish table of

accounts, and

assign entries to

proper accounts.

Cashier

Position(s) Available: Accommodate and Female

answer customers 20 years old and

1 (Full Time)
questions. above
Proposed Salary:
Greet customers At least 2 years in

481/day entering the college

establishment. Skilled in providing

Inclusive of Benefits
Provide excellent prompt and friendly
SSS, HDMF, Philhealth
customer service. customer service.
and 13th month pay.
Count money in cash Dedicated iin work

drawers at the under pressure.

Responsible for beginning of shifts to Knowledgable in

keeping the cash ensure that amounts operating computer

collected from are correct and that and printing

there is adequate calculator, and

84 | P a g e
 customers, change. maintains knowledge

answering queries of cashier

and accommodating procedures.

customers. With pleasing

personality

Molder / Packager

Position(s) Available: Molds the pastillas Male / Female

into proper shapes. 20 years old and

3 (Full Time)
Pack the pastillas to above.
Proposed Salary:
the corresponding Skilled in using

481/day wrappers and into the packaging

plastic container. equipment.

Inclusive of Benefits
Maintains the Team player and
SSS, HDMF, Philhealth
cleanliness of the work well with others.
and 13th month pay.
packaging area of the

pastillas candies.

Responsible in Check the inventory

shaping and packing of packaging

the pastillas candies. materials.

Confectioner

85 | P a g e
Position(s) Available: Prepare and Check Male / Female

the inventory of raw 20 years old and

3 (Full Time)
materials in making above
Proposed Salary:
the pastillas. Preferably with

481/day Ensure the freshness cooking and baking

of ampalaya and experience.

Inclusive of Benefits
other raw materials. Skilled in using
SSS, HDMF, Philhealth
Slice, mix the cooking materials
and 13th month pay.
ingredients together and equipment.

and make the (blender)

Responsible for pastillas candies. Team player and

preparing and Maintains the work well with others.

making the pastillas cleanliness of the

candies. cooking materials

and equipment.

Ensure the

cleanliness of the

cooking and mixing

process.

Janitor

Position(s) Available: Keep and ensure the Male / Female

cleanliness of the 20 years old and

1 (Full Time)
store and parking above

86 | P a g e
Proposed Salary: area. With pleasing

Keep and ensure the personality

481/day
cleanliness of the Dedicated in
Inclusive of Benefits
production area and maintaining the
SSS, HDMF, Philhealth
lavatory. cleanliness of the
and 13th month pay.
Properly disposed environment.

waste materials.

Responsible for

keeping the

production, store and

parking area clean

and also responsible

for proper disposing

of wastes.

Areas of Consideration : Promotion

Duration : 2 weeks

Areas of Consideration : Start of Normal Operation

Date : June 1, 2016

87 | P a g e
Organizational Structure

One of the general partners will be appointed as one of the General store

Manager. His/her duties cover management functions such as planning,

organizing, staffing, directing and controlling. An on-call accountant will prepare

the monthly profit and losses statements, monitor and review accounting related

system for accuracy and completeness and other duties assigned. A cashier will

be in charge for recording daily business transactions and preparing the payroll.

Organizational chart specifies how departments are tied together along with the

principal lines of authority. Regardless however of how well it may be structured,

still, it will be of no use if it cannot be understood. Understanding is necessary to

make it work and such is facilitated through accurate job descriptions with clearly

defined authority and informational relationships and introduction of specific

goals for specific positions. Moreover, the organizational structure itself must

function consistently with the way it was depicted in the chart yet flexible still to

adapt on any unforeseen events in the course of doing the business.

88 | P a g e
Organizational Policies

1. Every employee must carry out the job assigned to him responsively.

2. Every employee must at all times observe proper conduct and decorum in

the course of performing his functions.

3. Punctuality in all actions is a must.

4. The employees must communicate, at a minimum; a one-day advance

notice in case of absence/s. Absence/s under certain unexpected

circumstances would nevertheless be subject for professional evaluation

and consideration.

5. Clean as you go (CLAYGO) policy must be practiced all the time within the

entitys premises.

89 | P a g e
 6. All employees must always observe proper hygiene and wear proper

uniform.

7. Smoking within the entitys premises is strictly prohibited.

8. Reporting for duty under the state of drunkenness or influence of

prohibited drugs will automatically subject an employee for dismissal.

Employees Schedule Working Hour

Employee Schedule Number of Number of Number of

Hours per Hours per Hours per

Day Month Year

General Manager 09:00am 08:00pm 9 / 11 295 3,540

Cashier 09:00am 08:00pm 9 / 11 295 3,540

Accountant On call It depends It depends It depends

Molder/Packager 09:00am 08:00pm 9 / 11 295 3,540

Confectioner 07:00am 04:00pm 9 270 3,240

Janitor 08:00am 09:00pm 11 / 13 356 4,272

Operating hours:

Monday Thursday

9:00am 6:00pm

Friday Sunday

09:00 am 8:00 pm

90 | P a g e
Uniform Design

The proposed business will be having a uniform of its own starting from

the confectioner to the cashier up to the helper. A white shirt, black pants and a

pair of shoes will be required for each employee upon entering the premises.

Employees in the kitchen are required to wear hairnets. A green apron with the

logo of the proposed business will be given to each employee upon being hired

and they are required to wear it during working hours. The apron will be given for

free by the management.

The apron will be customarily made by Brand Booster Corporation for

the proposed business and will be priced PhP 300 each which will be shouldered

by the management.

91 | P a g e
Compensation and Benefits

Basic Pay - this will be based on the present minimum wage set up by the

government which is PHP 481.00.

Added to the basic pay are the employees13th month pay and other

statutory benefits.

Holiday Pay - Work performed on holidays (depending on the type of holiday

as per national or local government proclamations) shall be compensated

with an additional salary on regular compensation.

Government Mandated Fringe Benefits

1. Social Security System (SSS)

As per mandate, all employees from private sectors must be a member of

the Social Security System (SSS). The said government agency provides

benefits for maternity, paternity, emergency, loans, housing, pension or

retirement fund, accident and death insurance. The benefits come from both

employee and employers monthly contribution computed based on each

employees gross income bracket notwithstanding designation, employment

status, and mode of payment. The employees and employers must pay an equal

amount of contribution monthly.

2. Housing (Pag-IBIG Home Development Mutual Fund)

It gives financial assistance not only for housing, but as well as

educational, calamity and medical needs to its members through a monthly

92 | P a g e
contribution from both the employees and employers. Every employee from both

public and private institutions is required to become a member of the agency.

3. Health Insurance (PhilHealth)

It gives hospitalization and medical assistance to its members through a

monthly contribution from the member and employer. Every employee from both

public and private institutions is likewise required to become a member of the

agency.

93 | P a g e
 Chapter 4

Financial Aspect

This chapter discusses the financial aspects of the study, in order to

determine the profitability with the existence of competitors and unfavorable

economic condition; the researchers have projected a five years financial

statement.

This chapter presents statement of financial position, statement of

comprehensive income, statement of changes in owners equity, statement of

cash flows and notes to financial statements.

Financial Assumption:

1. It assumed that all partners have equal distributions profit and losses.

2. Assume that all partners are industrial/ capitalist.

3. No additional employees will be hired within the first 5 years.

4. No Increase of Salary within 5 years.

5. Employees will receive 13th month pay and other benefits.

94 | P a g e
 6. Assume that there is an increase in advertising for about 10% every

year

7. Depreciation expense is computed in a straight line basis.

8. 90% of net income will be distributed every year end stated in the

articles of co-partnership.

9.80% of total ending cash of previous year will be deposited on bank and

will earn 0.25% per annum.

10. Assume that Contingency fund increase by 30% annually before

interest income, and earn 0.25% of interest. This Contingency fund is

allotted for emergency funding needs such as natural disaster, medical

issues, and also used to cover major expenditures including acquiring of

equipments.

11. Selling Price of AmpalayaPastillas isPhp 1.60 each or Php 80 per pack

of 50 pieces

12. Income tax is 30% of net income.

13. Input vat and Output vat is 12%.

95 | P a g e
14. Capital Contribution is based on pre-operating expenses plus 1st

month of operation.

Capital Contribution based on Estimated Expenses

Amount
Pre Operating Expenses
Permits and Licenses Expense 22,000.00
Purchase of Manufacturing Equipment 9,934.00
Purchase of Store Equipment 16,470.00
Purchase of Furnitures & Fixtures 45,861.00
Uniform 4,200.00
Total Pre- Operating Expense
98,465.00

1st month of Operation Expenses

Salaries Expense 83,234.00
Utilities Expense 4,490.00
Advertising Expenses 5,820.00
Transportation Expense 480.00
Office Supplies 1,304.33
Store Supplies 601.00
Purchase of Raw Materials 59,093.75
Total Operating Expense
155,023.08

Total Estimated Capital Contribution

253,488.08

15. Increase in Sales is 12.1984% annually.

16. Raw Materials Price Increase every year by 2%.

17. There is ending raw material that is enough for 5 days of operation.

18. Used 14.78% as Minimum rate of return based on Philequity Dividend

Yield Fund, the highest rate of return on mutual fund as of 2015.

96 | P a g e
 19. The Researcher use Fiscal year.

Mordi Partnership
Statement of Financial Position
For the Year Ended May 31, 2017- 2021

2017 2018 2019 2020 2021

Assets
Current Assets Note

Cash and Cash Equivalent

(1) 236,882.29 300,679.32 371,223.01 453,135.43 545,136.50
Inventories
(2) 10,717.32 12,370.48 14,290.62 16,366.45 18,793.84
Prepaid Expenses
(3) 46,860.00 46,860.00 46,860.00 46,860.00 46,860.00

Non- Current Assets

Contingency fund
(4) 100,000.00 130,250.00 169,575.63 220,699.57 287,161.32
Property, plant and
Equipment- net (5) 53,898.58 49,423.16 44,947.74 40,472.32 35,996.90
Total Assets
448,358.19 539,582.96 646,897.00 777,533.76 933,948.56

Liabilities and Equity

Current Liabilities
Trade and other Payable
(6) 4,490.00 4,490.00 4,490.00 4,490.00 4,490.00
Vat Pay
(7) 183,563.57 205,537.01 228,744.35 254,532.13 283,132.04
Income Tax Payable
8,355.10 62,924.13 119,214.19 181,672.84 250,935.99
Equity
Owners Equity
251,949.52 266,631.82 294,448.46 336,838.79 395,390.52
Total Liabilities and Equity
448,358.19 539,582.96 646,897.00 777,533.76 933,948.56

97 | P a g e
 Mordi Partnership
Statement of Financial Performance
For the Years Ended May 31, 2017- 2021

Note 2017 2018 2019 2020 2021

Net Sales Revenue
(8) 2,142,857.14 2,404,285.71 2,697,571.43 3,026,642.86 3,395,785.71
Cost of Goods Sold
(9) (1,419,294.59) (1,511,054.15) (1,616,269.37) (1,736,680.47) (1,874,463.38)
Gross Profit
723,562.55 893,231.56 1,081,302.05 1,289,962.39 1,521,322.34
Administrative Expenses
(10) (686,900.22) (674,896.22) (675,536.42) (676,240.64) (677,015.06)
Other Operating Expenses
(11) (9,312.00) (9,312.00) (9,312.00) (9,312.00) (9,312.00)
Net Operating Income
27,350.33 209,023.34 396,453.63 604,409.75 834,995.28
Interest Income
(12) 500.00 723.76 926.99 1,166.39 1,458.02
Profit before income Tax
27,850.33 209,747.10 397,380.62 605,576.14 836,453.30
Income Tax Expense
(8,355.10) (62,924.13) (119,214.19) (181,672.84) (250,935.99)
Profit for the year
19,495.23 146,822.97 278,166.44 423,903.30 585,517.31

98 | P a g e
 Mordi Partnership
Statement of Changes in Equity
as of May 31, 2017-2021

2017 2018 2019 2020 2021

Balance, Previously Reported
Anchojas, Ma. Kristine 41,666.67 41,991.59 44,438.64 49,074.74 56,139.76
Breta, Juan Carlo Feli R. 41,666.67 41,991.59 44,438.64 49,074.74 56,139.76
Daracan, Red 41,666.67 41,991.59 44,438.64 49,074.74 56,139.76
Elluranggo, Jhoncelle 41,666.67 41,991.59 44,438.64 49,074.74 56,139.76
Lazaro, Karmina 41,666.67 41,991.59 44,438.64 49,074.74 56,139.76
Pacson, Timothy James 41,666.67 41,991.59 44,438.64 49,074.74 56,139.76
Total 250,000.00 251,949.52 266,631.86 294,448.47 336,838.54
Profit for the year Ended 19,495.23 146,822.97 278,166.44 423,903.30 585,517.31
Balance as, Restated 269,495.23 398,772.50 544,798.30 718,351.77 922,355.85

Income Distribution
Anchojas, Ma. Kristine 2,924.28 22,023.45 41,724.97 63,585.49 87,827.60
Breta, Juan Carlo Feli R. 2,924.28 22,023.45 41,724.97 63,585.49 87,827.60
Daracan, Red 2,924.28 22,023.45 41,724.97 63,585.49 87,827.60
Elluranggo, Jhoncelle 2,924.28 22,023.45 41,724.97 63,585.49 87,827.60
Lazaro, Karmina 2,924.28 22,023.45 41,724.97 63,585.49 87,827.60
Pacson, Timothy James 2,924.28 22,023.45 41,724.97 63,585.49 87,827.60
Total 17,545.71 132,140.68 250,349.79 381,512.97 526,965.58

Balance Ending
Anchojas, Ma. Kristine 41,991.59 44,438.64 49,074.74 56,139.76 65,898.42
Breta, Juan Carlo Feli R. 41,991.59 44,438.64 49,074.74 56,139.76 65,898.42
Daracan, Red 41,991.59 44,438.64 49,074.74 56,139.76 65,898.42
Elluranggo, Jhoncelle 41,991.59 44,438.64 49,074.74 56,139.76 65,898.42
Lazaro, Karmina 41,991.59 44,438.64 49,074.74 56,139.76 65,898.42
Pacson, Timothy James 41,991.59 44,438.64 49,074.74 56,139.76 65,898.42
Total 251,949.52 266,631.86 294,448.47 336,838.54 395,390.52

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 Mordi Partnership
Statement of Cash flow
as of May 31, 2017-2021
2017 2018 2019
Net Income Before tax
27,850.33 209,747.10 397,380.62
Adjustment for:
Depreciation
4,475.42 4,475.42 4,475.42
Operating income before working
capital Changes 32,325.75 214,222.52 401,856.04
Increase in
inventory (10,717.32) (1,653.16) (1,920.14)
Increase in Prepaid rent -
(46,860.00) -
Increase in Vat Payable
183,563.57 21,973.44 23,207.34
Increase in Payable - -
4,490.00
Income Tax Paid
162,802.00 (8,355.10) 226,187.70 (62,924.13) 360,219.11
Cash flow from Investing Activities
Contingency Fund
(100,000.00) (30,250.00) (39,325.63)
Purchase of Store - -
Equipment (23,156.00)
Purchase of -
Manufacturing (5,632.00) -
Equipment
Purchase of Furnitures& -
Fixture (29,586.00) (158,374.00) - (30,250.00) (39,325.63)
Cash From Financing Activities
Capital Contribution - -
250,000.00
Income Distribution
(17,545.71) 232,454.29 (132,140.68) (132,140.68) (250,349.79) (250,349.79)
Net Increase in cash and cash
equivalent 236,882.29 63,797.03 70,543.69
Cash and cash equivalent, beginning
- 236,882.29 300,679.32
Cash and cash equivalent, ending
236,882.29 300,679.32 371,223.01

* Continuation of 2020 -2021 Statement of Cash Flow at the Next page

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 Mordi Partnership
Statement of Cash flow
as of May 31, 2017-2021
2020 2021
Net Income Before tax
605,576.14 836,453.30
Adjustment for:
Depreciation
4,475.42 4,475.42
Operating income before working capital Changes
610,051.56 840,928.72
Increase in inventory
(2,075.83) (2,427.39)
Increase in Prepaid rent
-
Increase in Vat Payable
25,787.78 28,599.92
Increase in Payable - -
Income Tax Paid
(119,214.19) 514,549.32 (181,672.84) 685,428.41
Cash flow from Investing Activities
Contingency Fund
(51,123.94) (66,461.75)
Purchase of Store Equipment - -
Purchase of Manufacturing
Equipment - -
Purchase of Furnitures& Fixture
- (51,123.94) - (66,461.75)
Cash From Financing Activities
Capital Contribution - -
Income Distribution
(381,512.97) (381,512.97) (526,965.58) (526,965.58)
Net Increase in cash and cash equivalent
81,912.41 92,001.08
Cash and cash equivalent, beginning
371,223.01 453,135.43
Cash and cash equivalent, ending
453,135.43 545,136.50

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Notes to Financial Statements

Note 1- Cash & Cash Equivalent

2017 2018 2019 2020 2021
Cash on Hand 36,882.29 111,173.49 130,679.55 156,157.02 182,628.16
Cash in Bank 80% 200,000.00 189,505.83 240,543.46 296,978.41 362,508.34
Total 236,882.29 300,679.32 371,223.01 453,135.43 545,136.50

Note 2- Ending Inventory

Shedule 2017 2018 2019 2020 2021
Direct Material 1
Ampalaya 570.00 655.35 755.02 866.05 998.52
Buttermilk 5,343.75 6,207.98 7,176.16 8,219.06 9,429.08
Condense 1,374.11 1,555.27 1,795.05 2,062.22 2,381.04
Sugar 661.61 784.23 936.62 1,066.70 1,234.25
Variable OH 1
Plastic Wrapper 535.71 613.09 701.65 802.98 918.94
Plastic Jar 2,232.14 2,554.55 2,926.13 3,349.44 3,832.00
Total Ending Raw Materials (10,717.32) (12,370.48) (14,290.62) (16,366.45) (18,793.84)

Note 3- Prepaid Expenses

Schedule 2017 2018 2019 2020 2021
Prepaid rent 3 27,000.00 27,000.00 27,000.00 27,000.00 27,000.00
Store Supplies 8 8,097.00 8,097.00 8,097.00 8,097.00 8,097.00
Office Supplies 9 8,211.00 8,211.00 8,211.00 8,211.00 8,211.00
Manufacturing Supplies 10 3,552.00 3,552.00 3,552.00 3,552.00 3,552.00
Total 46,860.00 46,860.00 46,860.00 46,860.00 46,860.00

Note 4- Contingency Fund

2017 2018 2019 2020 2021
Provision (30%) 100,000.00 130,000.00 169,000.00 219,700.00 285,610.00
Increase - 30,000.00 39,000.00 50,700.00 65,910.00
Cash on Savings Account 100,000.00 130,000.00 169,250.00 220,275.63 286,609.56
Interest Income (0.25%) 250.00 325.63 423.94 551.75
Total 100,000.00 130,250.00 169,575.63 220,699.56 287,161.31

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Note 5- Property Plant and Equipment
Schedule 2017 2018 2019 2020 2021
Cost 7
Manufacturing Equipment 5,632.00 5,632.00 5,632.00 5,632.00 5,632.00
Store Equipment 23,156.00 23,156.00 23,156.00 23,156.00 23,156.00
Furnitures and Fixtures 29,586.00 29,586.00 29,586.00 29,586.00 29,586.00
Total 58,374.00 58,374.00 58,374.00 58,374.00 58,374.00

Accumulated Depreciation
Manufacturing Equiment (563.20) (1,126.40) (1,689.60) (2,252.80) (2,816.00)
Store Equipment (2,001.32) (4,002.64) (6,003.96) (8,005.28) (10,006.60)
Furnitures and Fixtures (1,910.90) (3,821.80) (5,732.70) (7,643.60) (9,554.50)
Total (4,475.42) (8,950.84) (13,426.26) (17,901.68) (22,377.10)

Carrying Amount
Manufacturing Equiment 5,068.80 4,505.60 3,942.40 3,379.20 2,816.00
Store Equipment 21,154.68 19,153.36 17,152.04 15,150.72 13,149.40
Furnitures and Fixtures 27,675.10 25,764.20 23,853.30 21,942.40 20,031.50
Total 53,898.58 49,423.16 44,947.74 40,472.32 35,996.90

Note 6- Trade and other Payables

Schedule 2017 2018 2019 2020 2021
Utilities Payable 4 4,490.00 4,490.00 4,490.00 4,490.00 4,490.00
Total 4,490.00 4,490.00 4,490.00 4,490.00 4,490.00

Note 7 - Vat Payable

Schedule 2017 2018 2019 2020 2021
Sales (vat inclusive) 2,400,000.00 2,692,800.00 3,021,280.00 3,389,840.00 3,803,280.00
Output Vat 257,142.86 288,514.29 323,708.57 363,197.14 407,494.29

Purchase of Raw Materials 1

Non- Vatable 34,320.00 38,698.80 44,289.83 50,683.29 58,007.54
Vatable (vat inclusive) 686,740.00 774,454.58 886,332.71 1,014,206.82 1,160,714.27
Input Vat 73,579.29 82,977.28 94,964.22 108,665.02 124,362.25

Vat Payable 183,563.57 205,537.01 228,744.35 254,532.12 283,132.04

Note 8 - Sales Revenue

2017 2018 2019 2020 2021
Unit of Sales 30,000.00 33,660.00 37,766.00 42,373.00 47,541.00
Unit Price 80.00 80.00 80.00 80.00 80.00
Total Cash Sales 2,400,000.00 2,692,800.00 3,021,280.00 3,389,840.00 3,803,280.00
Output Vat (257,142.86) (288,514.29) (323,708.57) (363,197.14) (407,494.29)
Net Sales 2,142,857.14 2,404,285.71 2,697,571.43 3,026,642.86 3,395,785.71

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 Note 9 - Cost of Good Sold 2017 2018 2019
Schedule
A. Production
Direct Material 1
Ampalaya 33,750.00 38,613.45 44,190.16
Buttermilk 316,406.25 362,000.78 414,281.47
Condense 81,361.61 93,086.00 106,530.34
Sugar 39,174.11 470,691.96 44,819.30 538,519.52 51,291.68 616,293.65
Direct Labor
Confectioner Basic Pay 283,680.00 283,680.00 283,680.00
Molder Basic Pay 283,680.00 283,680.00 283,680.00
SSS Premium 20,928.00 20,928.00 20,928.00
PH Premium 7,200.00 7,200.00 7,200.00
Pag-Ibig Premium 4,800.00 600,288.00 4,800.00 600,288.00 4,800.00 600,288.00
Fixed Overhead
Depreciation 563.20 563.20 563.20
Rent 108,000.00 108,000.00 108,000.00
Utilities 26,400.00 134,963.20 26,400.00 134,963.20 26,400.00 134,963.20
Indirect Labor
13th Month 47,280.00 47,280.00 47,280.00 47,280.00 47,280.00 47,280.00

B. Packaging
Variable Overhead
Plastic Wrapper 32,142.86 36,774.86 42,086.04
Plastic Jar 133,928.57 166,071.43 153,228.57 190,003.43 175,358.49 217,444.53

C. Finished Goods in Pack

Variable Cost (Php 23.6375 x 30,000)- 12% vat 636,763.39 (Php 24.1032 x 33,660) - 12% vat 728,522.95 (Php 24.5852 x 37,766)- 12% vat 833,738.17
Fixed Cost 782,531.20 782,531.20 782,531.20
Cost of Finished Goods 1,419,294.59 1,511,054.15 1,616,269.37

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* Continuation of Cogs for the year 2020-2021 at the next page
 Note 9 - Cost of Good Sold 2020 2021

A. Production
Direct Material
Ampalaya 50,572.26 57,875.07
Buttermilk 474,112.99 542,576.83
Condense 121,915.77 139,520.78
Sugar 58,698.74 705,299.76 67,175.20 807,147.88
Direct Labor
Confectioner Basic Pay 283,680.00 283,680.00
Molder Basic Pay 283,680.00 283,680.00
SSS Premium 20,928.00 20,928.00
PH Premium 7,200.00 7,200.00
Pag-Ibig Premium 4,800.00 600,288.00 4,800.00 600,288.00
Fixed Overhead
Depreciation 563.20 563.20
Rent 108,000.00 108,000.00
Utilities 26,400.00 134,963.20 26,400.00 134,963.20
Indirect Labor
13th Month 47,280.00 47,280.00 47,280.00 47,280.00

B. Packaging
Variable Overhead
Plastic Wrapper 48,164.43 55,119.56
Plastic Jar 200,685.08 248,849.51 229,664.74 284,784.30

C. Finished Goods in Pack

Variable Cost (Php 25.0768 x 42,373)- 12% vat 954,149.27 (Php 25.5783 x 47,541)- 12% vat 1,091,932.18
Fixed Cost 782,531.20 735,251.20

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Cost of Finished Goods 1,736,680.47 1,827,183.38
Note 10 - Selling & Administrative Expense
Schedule 2017 2018 2019 2020 2021
Salaries Expense 2 456,144.00 456,144.00 456,144.00 456,144.00 456,144.00
Premium Expenses 2 96,096.00 96,096.00 96,096.00 96,096.00 96,096.00
Advertising Expense 6 5,820.00 6,402.00 7,042.20 7,746.42 8,520.84
Utilities Expense 4 27,480.00 27,480.00 27,480.00 27,480.00 27,480.00
Store Supplies Expense 8 8,097.00 8,097.00 8,097.00 8,097.00 8,097.00
Office Supplies Expense 9 8,211.00 8,211.00 8,211.00 8,211.00 8,211.00
Furnitures & Fixtures Depreciation 7 1,910.90 1,910.90 1,910.90 1,910.90 1,910.90
Store Equiment Depreciation 7 2,001.32 2,001.32 2,001.32 2,001.32 2,001.32
Professional Fee 24,000.00 24,000.00 24,000.00 24,000.00 24,000.00
Uniform 4,200.00 4,200.00 4,200.00 4,200.00 4,200.00
13th Month 35,954.00 35,954.00 35,954.00 35,954.00 35,954.00
Permits & Licences 11 16,986.00 4,400.00 4,400.00 4,400.00 4,400.00
Total 686,900.22 674,896.22 675,536.42 676,240.64 677,015.06

Note 11- Other Operating Expenses

Schedule 2017 2018 2019 2020 2021
Transportation Expense 5 5,760.00 5,760.00 5,760.00 5,760.00 5,760.00
Manufacturing Supply Expense 10 3,552.00 3,552.00 3,552.00 3,552.00 3,552.00
Total 9,312.00 9,312.00 9,312.00 9,312.00 9,312.00

Note 12- Interest Income

2017 2018 2019 2020 2021
Cash in Bank 200,000.00 189,505.83 240,543.46 296,978.41 362,508.34
Contingency Fund 100,000.00 130,250.00 169,575.63 220,699.57
Interest per Annum 0.025% 0.025% 0.025% 0.025% 0.025%
Interest Income 500.00 723.76 926.98 1,166.39 1,458.02

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 Schedules

Schedule 1- Raw Materials

2017 2018 2019

Quantity Price Total Price Output Vat Net Price Quantity Price Total Price Output Vat Net Price Quantity Price Total Price Output Vat Net Price
Beginning Raw Materials
Direct Material
Ampalaya 57 pcs 10.00 570.00 Non- Vat 570.00 64.25 pcs 10.20 655.35 Non- Vat 585.13
Buttermilk 42.75 kg. 140.00 5,985.00 641.25 5,343.75 48.69 kg 142.80 6,952.93 744.96 6,207.98
Condense 57 can 27.00 1,539.00 164.89 1,374.11 63.25 can 27.54 1,741.91 186.63 1,555.27
Sugar 14.25 kg. 52.00 741.00 79.39 661.61 16.56 kg. 53.04 878.34 94.11 784.23
Variable OH - -
Plastic Wrapper 25,000 pcs 0.02 600.00 64.29 535.71 28,050 pcs 0.02 686.66 73.57 613.09
Plastic Jar - 500 pcs 5.00 2,500.00 267.86 2,232.14 561 pcs 5.10 2,861.10 306.55 2,554.55
Total Beginning Raw Materials 10,717.32 12,300.26

Add: Purchase Raw materials

Direct Material
Ampalaya 3,432 pcs 10.00 34,320.00 Non- Vat 34,320.00 3,794 pcs 10.20 38,698.80 Non- Vat 38,698.80 4,257 pcs 10.40 44,289.83 Non- Vat 44,289.83
Buttermilk 2,574 Kg. 140.00 360,360.00 38,610.00 321,750.00 2,846 kg. 142.80 406,408.80 43,543.80 362,865.00 3,193 kg. 145.66 465,079.61 49,829.96 415,249.65
Condense 3,432 can 27.00 92,664.00 9,928.29 82,735.71 3,793 can 27.54 104,459.22 11,192.06 93,267.16 4,257 can 28.09 119,582.54 12,812.41 106,770.12
Sugar 858 kg. 52.00 44,616.00 4,780.29 39,835.71 949 kg. 53.04 50,334.96 5,393.03 44,941.93 1,065 kg. 54.10 57,617.35 6,173.29 51,444.06
Variable OH - - - - - -
Plastic Wrapper 1,525,000 pcs 0.02 36,600.00 3,921.43 32,678.57 1,686,050 pcs. 0.02 41,274.50 4,422.27 36,852.24 1,891,722 pcs 0.02 47,235.54 5,060.95 42,174.59
Plastic Jar 30,500 pcs 5.00 152,500.00 16,339.29 136,160.71 33,721 pcs 5.10 171,977.10 18,426.12 153,550.98 37,835 pcs 5.20 196,817.67 21,087.61 175,730.06
Total Purchase Raw Matrials 721,060.00 73,579.29 647,480.71 813,153.38 82,977.28 730,176.11 930,622.54 94,964.22 835,658.32
Total Goods Available for Process 647,480.71 740,893.43 847,958.58

Less: Raw Materials Ending

Direct Material
Ampalaya 57 pcs 10.00 570.00 Non- Vat 570.00 64.25 pcs 10.20 655.35 Non- Vat 655.35 72.57 pcs 10.40 755.02 Non- Vat 755.02
Buttermilk 42.75 kg. 140.00 5,985.00 641.25 5,343.75 48.69 kg 142.80 6,952.93 744.96 6,207.98 55.18 kg. 145.66 8,037.30 861.14 7,176.16
Condense 57 can 27.00 1,539.00 164.89 1,374.11 63.25 can 27.54 1,741.91 186.63 1,555.27 71.57 can 28.09 2,010.46 215.41 1,795.05
Sugar 14.25 kg. 52.00 741.00 79.39 661.61 16.56 kg. 53.04 878.34 94.11 784.23 19.39 kg. 54.10 1,049.01 112.39 936.62
Variable OH - - - - -
Plastic Wrapper 25,000 pcs 0.02 600.00 64.29 535.71 28,050 pcs 0.02 686.66 73.57 613.09 31,472 pcs 0.02 785.84 84.20 701.65
Plastic Jar 500 pcs 5.00 2,500.00 267.86 2,232.14 561 pcs 5.10 2,861.10 306.55 2,554.55 630 pcs 5.20 3,277.26 351.14 2,926.13
Total Ending Raw Materials (10,717.32) (12,370.48) (14,290.62)
Raw Materials Used 636,763.39 728,522.95 833,667.96

Breakdown of Raw Material Used

Direct Material
Ampalaya 3,375 pcs 10.00 33,750.00 Non- Vat 33,750.00 3,786.75 pcs 10.20 38,613.45 Non- Vat 38,613.45 4,248.68 pcs 10.40 44,190.16 Non- Vat 44,190.16
Buttermilk 2,531.25 kg. 140.00 354,375.00 37,968.75 316,406.25 2,840.06 kg. 142.76 405,440.87 43,440.09 362,000.78 3,186.51 kg. 145.61 463,995.24 49,713.78 414,281.47
Condense 3,375 can 27.00 91,125.00 9,763.39 81,361.61 3,786.75 can 27.53 104,256.32 11,170.32 93,086.00 4,248.68 can 28.08 119,313.98 12,783.64 106,530.34
Sugar 843.75 kg. 52.00 43,875.00 4,700.89 39,174.11 946.69 kg. 53.02 50,197.62 5,378.32 44,819.30 1,062.17 kg. 54.08 57,446.68 6,155.00 51,291.68

107 | P a g e
Variable OH
Plastic Wrapper 1,500,000 pcs 0.02 36,000.00 3,857.14 32,142.86 1,683,000 pcs 0.02 41,187.84 4,412.98 36,774.86 1,888,300 pcs 0.02 47,136.36 5,050.32 42,086.04
Plastic Jar 30,000 pcs 5.00 150,000.00 16,071.43 133,928.57 33,660 pcs 5.10 171,616.00 18,387.43 153,228.57 37,766 pcs 5.20 196,401.51 21,043.02 175,358.49
636,763.39 728,522.95 833,738.17

*2020 2021 Continuation of Raw materials at the next page

 2020 2021
Quantity Price Total Price Output Vat Net Price Quantity Price Total Price Output Vat Net Price
Beginning Raw Materials
Direct Material
Ampalaya 72.57 pcs 10.40 755.02 Non- Vat 755.02 81.61 pcs 10.61 866.05 Non- Vat 866.05
Buttermilk 55.18 kg. 145.66 8,037.30 861.14 7,176.16 61.96 kg. 148.57 9,205.34 986.29 8,219.06
Condense 71.57 can 28.09 2,010.46 215.41 1,795.05 80.61 can 28.65 2,309.69 247.47 2,062.22
Sugar 19.39 kg. 54.10 1,049.01 112.39 936.62 21.65 kg. 55.18 1,194.71 128.00 1,066.70
Variable OH - - - -
Plastic Wrapper 31,472 pcs 0.02 785.84 84.20 701.65 35,311 pcs 0.03 899.34 96.36 802.98
Plastic Jar 630 pcs 5.20 3,277.26 351.14 2,926.13 707 pcs 5.31 3,751.37 401.93 3,349.44
Total Beginning Raw Materials 14,290.62 16,366.45

Add: Purchase Raw materials

Direct Material
Ampalaya 4,776 pcs 10.61 50,683.29 Non- Vat 50,683.29 5,359 pcs 10.82 58,007.54 Non- Vat 58,007.54
Buttermilk 3,582 kg. 148.57 532,174.59 57,018.71 475,155.88 4,019 kg. 151.54 609,041.28 65,254.42 543,786.86
Condense 4,776 can 28.65 136,844.89 14,661.95 122,182.94 5,359 can 29.23 156,620.36 16,780.75 139,839.60
Sugar 1,194 kg. 55.18 65,888.28 7,059.46 58,828.82 1,340 kg. 56.29 75,423.87 8,081.13 67,342.74
Variable OH - - - -
Plastic Wrapper 2,122,489 pcs. 0.03 54,057.66 5,791.89 48,265.76 2,381,357 pcs 0.03 61,863.78 6,628.26 55,235.52
Plastic Jar 42,450 pcs 5.31 225,241.40 24,133.01 201,108.39 47,627 pcs 5.41 257,764.98 27,617.68 230,147.31
Total Purchase Raw Matrials 1,064,890.11 108,665.02 956,225.10 1,218,721.81 124,362.24 1,094,359.57
Total Goods Available for Process 970,515.72 1,110,726.01

Less: Raw Materials Ending

Direct Material
Ampalaya 81.61 pcs 10.61 866.05 Non- Vat 866.05 92.25 pcs 10.82 998.52 Non- Vat 998.52
Buttermilk 61.96 kg. 148.57 9,205.34 986.29 8,219.06 69.69 kg. 151.54 10,560.57 1,131.49 9,429.08
Condense 80.61 can 28.65 2,309.69 247.47 2,062.22 91.25 can 29.23 2,666.77 285.73 2,381.04
Sugar 21.65 kg. 55.18 1,194.71 128.00 1,066.70 24.56 kg. 56.29 1,382.36 148.11 1,234.25
Variable OH - - - - - -
Plastic Wrapper 35,311 pcs 0.03 899.34 96.36 802.98 39,618 pcs 0.03 1,029.21 110.27 918.94
Plastic Jar 707 pcs 5.31 3,751.37 401.93 3,349.44 793 pcs 5.41 4,291.84 459.84 3,832.00
Total Ending Raw Materials (16,366.45) (18,793.84)
Raw Materials Used 954,149.27 1,091,932.18

Breakdown of Raw Material Used

Direct Material
Ampalaya 4,766.96 pcs 10.61 50,572.26 Non- Vat 50,572.26 5,348.36 pcs 10.82 57,875.07 Non- Vat 57,875.07
Buttermilk 3,575.22 kg. 148.52 531,006.54 56,893.56 474,112.99 4,011.27 kg. 151.49 607,686.05 65,109.22 542,576.83
Condense 4,766.96 can 28.64 136,545.67 14,629.89 121,915.77 5,348.36 can 29.22 156,263.27 16,742.49 139,520.78
Sugar 1,191.74 kg. 55.17 65,742.59 7,043.85 58,698.74 1,337.09 kg. 56.27 75,236.22 8,061.02 67,175.20

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Variable OH
Plastic Wrapper 2,118,650 pcs 0.03 53,944.16 5,779.73 48,164.43 2,377,050 pcs 0.03 61,733.90 6,614.35 55,119.56
Plastic Jar 42,373 pcs 5.30 224,767.29 24,082.21 200,685.08 47,541 pcs 5.41 257,224.51 27,559.77 229,664.74
954,149.27 1,091,932.18
 Schedule 2- Salaries

Other Deductions Employee Remitance

Basic Pay Cola Compensation Gross Pay SSS Philhealth Pag-Ibig Net Pay SSS Philhealth Pag-Ibig EC Total
Production:
Confectioner 1 12,116.00 390.00 - 12,506.00 436.00 150.00 100.00 11,820.00 884.00 150.00 100.00 10.00 1,144.00
Confectioner 2 12,116.00 390.00 - 12,506.00 436.00 150.00 100.00 11,820.00 884.00 150.00 100.00 10.00 1,144.00
Molder 1 12,116.00 390.00 - 12,506.00 436.00 150.00 100.00 11,820.00 884.00 150.00 100.00 10.00 1,144.00
Molder 2 12,116.00 390.00 - 12,506.00 436.00 150.00 100.00 11,820.00 884.00 150.00 100.00 10.00 1,144.00

Total Monthly 48,464.00 1,560.00 50,024.00 1,744.00 600.00 400.00 47,280.00 3,536.00 600.00 400.00 40.00 4,576.00
Annually 581,568.00 18,720.00 600,288.00 20,928.00 7,200.00 4,800.00 567,360.00 42,432.00 7,200.00 4,800.00 480.00 54,912.00

Selling:
Cashier 12,116.00 390.00 - 12,506.00 436.00 150.00 100.00 11,820.00 884.00 150.00 100.00 10.00 1,144.00

Total Monthly 12,116.00 390.00 12,506.00 436.00 150.00 100.00 11,820.00 884.00 150.00 100.00 10.00 1,144.00
Annually 145,392.00 4,680.00 150,072.00 5,232.00 1,800.00 1,200.00 141,840.00 10,608.00 1,800.00 1,200.00 120.00 13,728.00

General and Administrative

Manager 12,116.00 390.00 494.00 13,000.00 436.00 150.00 100.00 12,314.00 884.00 150.00 100.00 10.00 1,144.00
Janitor 12,116.00 390.00 - 12,506.00 436.00 150.00 100.00 11,820.00 884.00 150.00 100.00 10.00 1,144.00

Total Monthly 24,232.00 780.00 494.00 25,506.00 872.00 300.00 200.00 24,134.00 1,768.00 300.00 200.00 20.00 2,288.00
Annually 290,784.00 9,360.00 5,928.00 306,072.00 10,464.00 3,600.00 2,400.00 289,608.00 21,216.00 3,600.00 2,400.00 240.00 27,456.00

Grand Total Monthly 3,052.00 1,050.00 700.00 83,234.00 8,008.00

Annually 36,624.00 12,600.00 8,400.00 998,808.00 96,096.00

Schedule 3 Rent Expense

Monthly Annual Cost

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Php 9,000.00 Php 108,000.00

Provision of 1 month advance and 2 months deposit

Schedule 4 Utilities Expense

Allocation
Selling &
Utilities Monthly Administrative Manufacturing
Electricity 3,000.00 1,000.00 2,000.00
Water 500.00 300.00 200.00
Telephone 990.00 990.00 -
Total 4,490.00 2,290.00 2,200.00

Schedule 5- Transportation Expense

Cost per transport Number of transportation Cost of transportation Cost of transporation

(two way) per month per month per year

Php 40.00 12 times Php 480.00 Php 5,760.00

Schedule 6- Advertising Expense

Items Quantity Cost Per Unit Duration Annual Cost

Tarpaulin 1 Tarp 500.00 1 Year 500.00
Flyers 11,200 Copies 0.25 1 Year 2,800.00
Food Tasting 9 Packs 80.00 3 Days 720.00
Buy 3 Get 1 (limited Offer) 10 Packs 80.00 3 Days 800.00
Signboard 1 1,000.00 1 year 1,000.00
Total 5,820.00
Provision of 10% increase annually

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Schedule 7- Depreciation Expenses

Annual
Total Cost Useful Life Depreciation
Manufacturing Equipment
Blender 750.00 10 75.00
Electric Kettle 532.00 10 53.20
Bag Heat Sealer 4,701.00 10 470.10
Blower 399.00 10 39.90
Mixing Bowl 1,404.00 5 280.80
Glass Bowl 924.00 5 184.80
Kitchen Knife 300.00 5 60.00
Tablespoon 144.00 20 7.20
Round Plates 480.00 5 96.00
Chopping Board 300.00 5 60.00
Total 9,934.00 1,327.00

Store Equipment
Time Card Machine 2,442.00 12 203.50
Printing Calculator 999.00 10 99.90
Desktop Computer 10,850.00 10 1,085.00
CCTV Camera 2,179.00 10 217.90
Total 16,470.00 1,606.30
Annual
Total Cost Useful Life Depreciation
Furnitures and Fixtures
Display Cabinet 15,000.00 20 750.00
Wall Display Shelf 5,000.00 20 250.00
Desktop Table 954.00 20 47.70
Chair 1,440.00 10 144.00
Waiting Chair 2,500.00 10 250.00
Ceiling Fan 6,640.00 15 442.67
Exhaust Fan 1,045.00 20 52.25
LED Light Bulbs 1,080.00 5 216.00
Kitchen Table 4,692.00 10 469.20
Glass 3,961.00 5 792.20
Paint 3,549.00 5 709.80
Total 45,861.00 4,123.82

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Schedule 8- Store Supplies

Cost per Cost per

Supplies Quantity Unit month Cost per Year
Hand Soap 2 bars 35.00 840.00 10,080.00
Detergent Powder 1 dozen 96.00 1,152.00 13,824.00
Dishwashing Liquid 1 bottle 42.00 504.00 6,048.00
Bleach 1 bottle 28.00 336.00 4,032.00
Rugs 10 pcs 5.00 600.00 7,200.00
Mop 1 pc 250.00 250.00
Broom 1 pc 150.00 150.00
Broomstick 1 pc 25.00 25.00
Dustpan 1 pc 50.00 50.00
Trash Bin 3pcs 85.00 255.00
Pale 1 pc 35.00 35.00
Dipper 1 pc 20.00 20.00
Fire Extinguisher 1 tank 2,800.00 2,800.00
LED Light Bulbs 8 bulbs 135.00 1,080.00
Total 45,849.00

Schedule 9 Office Supplies

Office Supplies Quantity Unit Cost Cost per month Cost Per year
Paper Rolls 3 Rolls 152.00 456.00 5,472.00
Record Book 1 pc 56.00 56.00 672.00
Ball Pen 5 pcs 8.00 40.00 480.00
Eco-friendly Plastic Bag 1 pack 23.00 23.00 276.00
(500 per pack)
Time Card (10 per pack) 2 packs 13.00 26.00 312.00
Printing Calculator 1 pc 999.00 999.00
Total 8,211.00

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Schedule 10 Manufacturing Supplies

Manufacturing Supplies Quantity Unit Cost Cost Per Year

Tablespoon 12 pcs 12.00 144.00
Round Plates 120 pcs 4.00 480.00
Mixing Bowl 468 pcs 3.00 1,404.00
Glass Bowl 308 pcs 3.00 924.00
Kitchen Knife 150 pcs 2.00 300.00
Chopping Board 300 pcs 1.00 300.00
Total 3,552.00

Schedule 11 Permits & Licenses

Cost for
Permits & Licenses Cost on first Year
Suceeding Year
Verification of Name 40.00
Notarize of articles of co- partnership 500.00
Register with SEC 2,665.00
Annual Community tax 500.00 500.00
Baranngay Clearance 300.00
Notarize of Business permit 100.00
Business permit to operate 4,296.00
Special book of account 400.00 400.00
Apply for certificate of registration 15.00
Pay doc stamp taxes 4,670.00
Print receipt & Invoices 3,500.00 3,500.00
16,986.00 4,400.00

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Financial Statements Ratio Analysis

A. To Measure Liquidity

1. Current Ratio = The current ratio is a financial ratio that measures whether or
not a firm has enough resources to pay its debts over the next 12 months. It
compares a firm's current assets to its current liabilities.

=

2017 2018 2019 2020 2021

Current Assets 294,459.61 359,909.80 432,373.63 516,361.87 610,790.34
Current Liabilities 196,408.67 272,951.14 352,448.54 440,694.97 538,558.03
Current Ratio 1.4992 1.3186 1.2268 1.1717 1.1341

2. Net Working Capital = A company's net working capital is the amount of

money it has available to spend on its day-to-day business operations, such as
paying short term bills and buying inventory.

2017 2018 2019 2020 2021

Current Assets 294,459.61 359,909.80 432,373.63 516,361.87 610,790.34
Current Liabilities 196,408.67 272,951.14 352,448.54 440,694.97 538,558.03
Net Working Capital 98,050.94 86,958.66 79,925.09 75,666.91 72,232.31

3. Quick Ratio = The quick ratio is a measure of how well a company can meet its
short-term financial liabilities. Also known as the acid-test ratio.

=
+ + +/

2017 2018 2019 2020 2021
Cash on hand 36,882.29 111,173.49 130,679.55 156,157.02 182,628.16
Cash in Bank 200,000.00 189,505.83 240,543.46 296,978.41 362,508.34
Total 236,882.29 300,679.32 371,223.01 453,135.43 545,136.50
Current Liabilities 196,408.67 272,951.14 352,448.54 440,694.97 538,558.03
Quick Ratio 1.2061 1.1016 1.0533 1.0282 1.0122

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 4, Inventory Turn-over = is a measure of the number of times inventory is sold or
used in a time period such as a year.

=

2017 2018 2019 2020 2021

Raw Materials used in production 636,763.39 728,522.95 833,738.17 954,149.27 1,091,932.18
Average Inventory 5,358.66 11,543.90 13,330.55 15,328.53 17,580.14
Beginning Raw Materials 0 10,717.32 12,370.48 14,290.62 16,366.45
Ending Raw Materials 10,717.32 12,370.48 14,290.62 16,366.45 18,793.84
Inventory Turnover 119 63 63 62 62

5. Average Sale Period = This Measure how many times a companys inventory
been sold and place during the year

360
=

2017 2018 2019 2020 2021

Number of Days 360.00 360.00 360.00 360.00 360.00
Inventory Turnover 118.83 63.11 62.54 62.25 62.11
Average Sale Period 3.03 5.70 5.76 5.78 5.80

B. To Measure Solvency

1. Debt to Asset Ratio = The debt to assets ratio indicates the proportion of a
company's assets that are being financed with debt, rather than equity. The
ratio is used to determine the financial risk of a business.

=

2017 2018 2019 2020 2021

Total Liabilities 196,408.67 272,951.14 352,448.54 440,694.97 538,558.03
Average Total Assets 224,179.10 493,970.58 593,239.98 712,215.38 855,741.16
Beginning Assets 0 448,358.19 539,582.96 646,897.00 777,533.76
Ending Assets 448,358.19 539,582.96 646,897.00 777,533.76 933,948.56
Debt to Asset Ratio 0.8761 0.5526 0.5941 0.6188 0.6293

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 2. Debt to Equity Ratio = The debt-to-equity ratio (D/E) is a financial ratio
indicating the relative proportion of shareholders' equity and debt used to
finance a company's assets. Closely related to leveraging, the ratio is also
known as Risk, Gearing or Leverage.

=

2017 2018 2019 2020 2021

Total Liabilities 196,408.67 272,951.14 352,448.54 440,694.97 538,558.03
Partner's Equity 251,949.52 266,631.82 294,448.46 336,838.79 395,390.52
Debt to Equity Ratio 0.7796 1.0237 1.1970 1.3083 1.3621

C. To Measure Profitability

1. Gross Profit Ratio = Gross profit margin is a financial metric used to assess a
firm's financial health by revealing the proportion of money left over from
revenues after accounting for the cost of goods sold. Gross profit
margin serves as the source for paying additional expenses and future savings.

=

2017 2018 2019 2020 2021

Gross Profit 723,562.55 893,231.56 1,081,302.05 1,289,962.39 1,521,322.34
Net Sales 2,142,857.14 2,404,285.71 2,697,571.43 3,026,642.86 3,395,785.71
Gross Profit Ratio 0.3377 0.3715 0.4008 0.4262 0.4480

2. Profit Margin = The profit margin is an accounting measure designed to

gauge the financial health of a business or industry. In general, it is defined as
the ratio of profits earned to total sales receipts (or costs) over some defined
period.

=

2017 2018 2019 2020 2021

Net Income 19,495.23 146,822.97 278,166.44 423,903.30 585,517.31
Net Sales 2,142,857.14 2,404,285.71 2,697,571.43 2,995,571.43 3,395,785.71
Profit Margin 0.01 0.06 0.10 0.14 0.17

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 3. Return on Asset = Return on assets (ROA) is an indicator of how profitable a
company is relative to its total assets. ROA gives an idea as to how efficient
management is at using its assets to generate earnings.

2017 2018 2019 2020 2021

Net Income 19,495.23 146,822.97 278,166.44 423,903.30 585,517.31
Average Total Asset 224,179.10 493,970.58 593,239.98 712,215.38 855,741.16
Return on Asset 0.0870 0.2972 0.4689 0.5952 0.6842

4. Asset Turn over = is a financial ratio that measures the efficiency of a

company's use of its assets in generating sales revenue or sales income to the
company.

=

2017 2018 2019 2020 2021

Net Sales 2,142,857.14 2,404,285.71 2,697,571.43 2,995,571.43 3,395,785.71
Average Total Assets 224,179.10 493,970.58 593,239.98 712,215.38 855,741.16
Asset Turnover 9.5587 4.8673 4.5472 4.2060 3.9682

5. Return on Equity = Return on equity (ROE) is the amount of net

income returned as a percentage of shareholders equity. Return
on equity measures a corporation's profitability by revealing how much profit a
company generates with the money shareholders have invested.

=

2017 2018 2019 2020 2021

Net Sales 2,142,857.14 2,404,285.71 2,697,571.43 2,995,571.43 3,395,785.71
Total Partner's Equity 251,949.52 266,631.82 294,448.46 336,838.79 395,390.52
Return on Equity 8.5051 9.0172 9.1614 8.8932 8.5884
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Capital Budgeting

1. Payback Period = The payback period is the time required for the amount invested in
an asset to be repaid by the net cash outflow generated by the asset. It is a simple way
to evaluate the risk associated with a proposed project. The payback period is expressed
in years and fractions of years.

2017 2018 2019 2020 2021

Annual Net Income After tax 19,495.23 146,822.97 278,166.44 423,903.30 585,517.31
Depreciation Expense 4,475.42 4,475.42 4,475.42 4,475.42 4,475.42
Annual Net Cash Inflow 23,970.65 151,298.39 282,641.86 428,378.72 589,992.73

Investment 250,000.00 226,029.35 74,730.96

0.26440159 2.26 years

2. Internal Rate of Return = Internal rate of return (IRR) is a metric used in capital
budgeting measuring the profitability of potential investments. Internal rate of return is
a discount rate that makes the net present value (NPV) of all cash flows from a
particular project equal to zero. IRR calculations rely on the same formula as NPV does.

Annual Net
Investment Cash Inflow PV rate Present Value
250,000.00 2017 23,970.65 0.6102 14,626.00
2018 151,298.39 0.3723 22,790.00
63.89% 2019 282,641.86 0.2272 66,093.00
2020 428,378.72 0.1386 75,943.00
2021 589,992.73 0.0846 70,548.00
250,000.00

3. Profitable Index = also known as profit investment ratio (PIR) and value investment
ratio (VIR), is the ratio of payoff to investment of a proposed project. It is a useful tool
for ranking projects because it allows you to quantify the amount of value created per
unit of investment.

Minumum Annual Net

Rate of Return Cash Inflows PV Rate Present Value
14.78% 2017 23,970.65 0.871231922 20,884.00
2018 151,298.39 0.759045062 114,842.30
2019 282,641.86 0.661304288 186,912.27
2020 428,378.72 0.576149406 246,810.14
2021 589,992.73 0.501959754 296,152.60
Total 865,601.31

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4. Net Present Value = is the difference between the present valueof cash inflows and
the present value of cash outflows. NPV is used in capital budgeting to analyze the
profitability of a projected investment or project.

Minumum Annual Net

Rate of Return Cash Inflows PV Rate Present Value
14.78% 2017 23,970.65 0.871231922 20,884.00
2018 151,298.39 0.759045062 114,842.30
2019 282,641.86 0.661304288 186,912.27
2020 428,378.72 0.576149406 246,810.14
2021 589,992.73 0.501959754 296,152.60
Total 1,476,282.35 865,601.31

NPV 610,681.03

5. Discounted Payback Period = A capital budgeting procedure used to determine the

profitability of a project. In contrast to an NPV analysis, which provides the overall value
of an project, a discounted payback period gives the number of years it takes to break
even from undertaking the initial expenditure.

Present Value
2017 20,884.00
2018 114,842.30 2.61 Years
2019 186,912.27
2020 246,810.14
2021 296,152.60

6. Break- Even Analysis = is used to determine when your business will be able to cover
all its expenses and begin to make a profit. It is important to identify your startup costs,
which will help you determine your sales revenue needed to pay ongoing business
expenses.

Sales 2,400,000.00
Varialble Expense 709,125.00
Contribution Margin 1,690,875.00
Unit 30,000.00
Contribution Margin per unit 56.3625
Fixed Cost 783,295.00
Break- Even 13,897.45 Units

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 Mordi Partnership
Statement of Financial Position
For the Year Ended May 31, 2017- 2021

2017 2018 2019 2020 2021

Assets
Current Assets
Cash and Cash Equivalent 236,882.29 52.83% 300,679.32 55.72% 371,223.01 57.39% 453,135.43 58.28% 545,136.50 58.37%
Vertical Analysis

Inventories 10,717.32 2.39% 12,370.48 2.29% 14,290.62 2.21% 16,366.45 2.10% 18,793.84 2.01%
Prepaid Expenses 46,860.00 10.45% 46,860.00 8.68% 46,860.00 7.24% 46,860.00 6.03% 46,860.00 5.02%

Non- Current Assets

Contingency fund 100,000.00 22.30% 130,250.00 24.14% 169,575.63 26.21% 220,699.57 28.38% 287,161.32 30.75%
Property, plant and Equipment- net 53,898.58 12.02% 49,423.16 9.16% 44,947.74 6.95% 40,472.32 5.21% 35,996.90 3.85%
Total Assets 448,358.19 100% 539,582.96 100% 646,897.00 100% 777,533.76 100% 933,948.56 100%

Liabilities and Equity

Current Liabilities
Trade and other Payable 4,490.00 1.00% 4,490.00 0.83% 4,490.00 0.69% 4,490.00 0.58% 4,490.00 0.48%
Vat Pay 183,563.57 40.94% 205,537.01 38.09% 228,744.35 35.36% 254,532.13 32.74% 283,132.04 30.32%
Income Tax Payable 8,355.10 1.86% 62,924.13 11.66% 119,214.19 18.43% 181,672.84 23.37% 250,935.99 26.87%
Equity
Owners Equity 251,949.52 56.19% 266,631.82 49.41% 294,448.46 45.52% 336,838.79 43.32% 395,390.52 42.34%
Total Liabilities and Equity 448,358.19 100% 539,582.96 100% 646,897.00 100% 777,533.76 100% 933,948.56 100%

Mordi Partnership
Statement of Financial Performance
For the Years Ended May 31, 2017- 2021

2017 2018 2019 2020 2021

Net Sales Revenue 2,142,857.14 100.00% 2,404,285.71 100.00% 2,697,571.43 100.00% 3,026,642.86 100.00% 3,395,785.71 100.00%
Cost of Goods Sold (1,419,294.59) 66.23% (1,511,054.15) 62.85% (1,616,269.37) 59.92% (1,736,680.47) 57.38% (1,874,463.38) 55.20%
Gross Profit 723,562.55 33.77% 893,231.56 37.15% 1,081,302.05 40.08% 1,289,962.39 42.62% 1,521,322.34 44.80%
Administrative Expenses (686,900.22) 32.06% (674,896.22) 28.07% (675,536.42) 25.04% (676,240.64) 22.34% (677,015.06) 19.94%
Other Operating Expenses (9,312.00) 0.43% (9,312.00) 0.39% (9,312.00) 0.35% (9,312.00) 0.31% (9,312.00) 0.27%
Net Operating Income 27,350.33 1.28% 209,023.34 8.69% 396,453.63 14.70% 604,409.75 19.97% 834,995.28 24.59%
Interest Income 500.00 0.02% 723.76 0.03% 926.99 0.03% 1,166.39 0.04% 1,458.02 0.04%
Profit before income Tax 27,850.33 1.30% 209,747.10 8.72% 397,380.62 14.73% 605,576.14 20.01% 836,453.30 24.63%
Income Tax Expense (8,355.10) 0.39% (62,924.13) 2.62% (119,214.19) 4.42% (181,672.84) 6.00% (250,935.99) 7.39%
Profit for the year 19,495.23 0.91% 146,822.97 6.11% 278,166.44 10.31% 423,903.30 14.01% 585,517.31 17.24%

120 | P a g e
Note: The cost of goods sold rate is declining due to an average rate of 37.31%
production cost is related to fixed labor cost.
 CHAPTER 5

SOCIAL ASPECT

This chapter will discuss the different social sectors that would benefit

from the proposed business. The purpose of having this business is not just to

generate profit but also to give importance to social and economic benefit that it

can provide to different sectors in the economy. Nowadays, it is important that

entrepreneurs should realize the worth of contributing greatly to the socio-

economic development of the country.

Customer

Mordi Pastillas supply an array of innovative product which makes use of

ampalaya as its main ingredient thus, giving a whole lot of meaning in eating

delicacies. We will provide our customers with high quality delicacies on its taste

and health benefits as well.

Employment

The main goal of a certain business is to have high income especially in the

part of the owner. The business should generate pleasant relationship between

the manager and employees to attain the main goal of the business, in which is

to have an income. Workers and employees in the business need income to

121 | P a g e
support their own needs and daily necessities. They will be given income by

having fair compensation and benefits according to their qualifications and

performance.

Government

In putting up the proposed business, we should make it sure that it is

properly registered. It is necessary to have the permits needed in order to

conform to the policies provided by the government. These permit and licenses,

along with the different taxes are then paid as the business operates. The tax

payment from the business would help the localities as well as the economy in its

future projects especially for the people that will benefit from it.

Related Industries

Primarily the proposed business will be of big help to our suppliers. It will

help to increase the demand of ampalaya in turn will help our farmers. Moreover,

the business will contribute in a healthy competition among competitors in the

same confectionery industry and candy distributors. Through this healthy

competition, it will help normalize on the high price of pastillas of the other

competitors.

Community

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 The Mordi Pastillas, like any other business has an obligation or

commitment to produce goods and services for the benefit of the general public

or society. Increase in population will result in increase in demand for food, which

also means an increase in demand for pastillas in the area. To gain profit is not

only major concern of the business but also to promote a healthy treat for the

community, especially for children. With the continuous operation of the

business, the employees will be helped to uplift the standard of their living.

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 CHAPTER 6

ENVIRONMENTAL ASPECT

This chapter provides an assessment on the potential impact of the

proposed business in the environment, either during its construction or during the

operation of the proposed business. This task also involves the possible

development of measures that impact the pedestrians, drivers, passengers, and

neighboring properties. Identifying the anticipated cumulative environmental

effects will be treated of great value. This helps in preserving and conserving the

environment as much as possible while undertaking the required activities

necessary to bring life to the proposed business.

In addition, a monitoring plan will also be visualized in order to quantify the

potential adverse effect that may result as part for a development activity. This

plan will be carefully designed, planned, and implemented to techniques

designed to reduce and possibly eliminate the severity of effects. Such

circumstances have been extensively studied and have defined the possible

measures to those that include:

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Clean Water

The Philippines is once known to be relatively abundant in water

resources. However, the pressure of population growth, urbanization, and

industrialization placed a toll on the resource. One of the most pressing concerns

is the increased competition in the various uses of water. There is also serious

concern regarding watershed degradation and unmonitored extraction of

groundwater by illegal users. At the same time, issues on water pollution is

present. From a World Bank study, 84% of the sewage generated in the country

is not treated. Major rivers and waterways are also confronted with pollution and

degradation due to the encroachment of settlers, especially in urban centers. For

these reasons, the government made the Republic Act 9275 also known as

Clean Water Act of 2004.

The Philippine Clean Water Act of 2004 (RA No.9275) aims to provide for

the abatement and control of pollution from land-based sources, and lays down

water quality standards and regulations. The Act shall apply to water quality

management in all water bodies: fresh, brackish and marine waters. It shall be

the policy of the State to: prevent, control and abate pollution of the countrys

water resources; promote environmental strategies for the protection of water

resources; formulate a national program of water quality management; promote

commercial and industrial processes and products that are environment friendly

and energy efficient; etc. The Act among other things shall provide for: the

designation of water quality management areas by the Department, in

coordination with the National Water Resources Board; the designation of water

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bodies where specific pollutants from either natural or man-made sources have

already exceeded water quality guidelines as non-attainment areas for the

exceeded pollutants; a national program on sewerage and septic management;

domestic sewage collection, treatment and disposal; water pollution permits and

charges; offences and penalties; etc.

Implementing Programs and Policies:

a. Mordi Pastillas will continue and maintain the existing legal septic and

sewerage connection of the commercial space before the business was

established.

b. Mordi Pastillas will schedule a semi-annual sewage collection, treatment

and disposal.

c. Mordi Pastillas will have a proper waste disposal system to prevent

improper waste disposal on waterways in the area.

Clean Air

As of today, the level of pollution in the environment is very much alarming

especially in our atmosphere. The air we are breathing nowadays is polluted

caused by different air pollutants emitted or produced by different sectors in our

country. In order to minimize the increasing concerns about the level of air

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pollution, the government also made a law, called the Republic Act 8749 also

known as Clean Air Act of 1999.

The Philippine Clean Air Act of 1999 (RA No.8749) outlines the

governments measures to reduce air pollution and incorporate environmental

protection into its development plans. It relies heavily on the polluter pays

principle and market-based instruments to promote self-regulation among the

population. It sets standards for all motor vehicles and issues registration only

upon demonstration of compliance. It also issues pollutant limitations for industry

which comprises the proposed business. Installation of pollution control devices

is required to comply with the emissions standards in the Act.

Implementing Program and Policies:

a. Mordi Pastillas complies with the said law by not using any heavy

equipment or devices that may produce an amount of air pollution which

ensures the management to set the amount of air pollutant to its minimum

level.

b. Mordi Pastillas will also set rules regarding individuals that may produce

air pollution, like individuals who smoke. Smoking within the vicinity will be

strictly prohibited, signage will be put on different locations of the

establishment to implement non-smoking policy.

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Ecological Waste Management

Ecological waste management aims for the reduction of solid waste

through source reduction and waste minimization measures, treatment and

disposal of waste in accordance with ecologically sustainable development

principles. It also aims to ensure the proper segregation, collection, transport,

storage, treatment and disposal of solid waste through the formulation and

adoption of the best environmental practice in ecological waste management

excluding incineration. There is an existing law that will serve as framework and

guidance in developing such strategy, called the Republic Act 9003 also known

as Ecological Waste Management Act of 2000.

RA 9003 considers waste as a resource that can be recovered,

emphasizing on recycling, reuse and composting as methods to minimize waste

problems. The said act gives strong emphasis on the role of municipal and local

government units providing for the creation of solid waste management

communities up to the barangay level.

Implementing Program and Policies:

a. Waste Characterization and Segregation

The solid waste generated within the area of jurisdiction shall be

characterized for initial source reduction and recycling element of the

business waste management plan. A separate container will be placed for

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 each type of waste for on-site collection properly marked as

compostable, non-recyclable, recyclable or special waste.

b. Source Reduction

Mordi Pastillas will participate to the methods set by the Local

Government Units by which they reduce a sufficient amount of solid waste

disposed on which LGUs are expected to divert at least 25% of all solid

waste from waste disposal facilities through re-use, recycling and

composting activities, by proper segregation of waste.

c. Collection and Transport of Solid Waste

Properly segregated waste will be removed from the business

establishment through regular basis by an assigned individual on a certain

time set by the local government, in which they provide a reasonable time

for disposing on a specific place and later on will be collected by waste

collecting companies.

d. Recycling Program

Properly segregated recyclable waste published by Department of

Trade and Industry to have an existing markets, such as cans and boxes,

will be brought to establishments that accept and buy recyclable materials.

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 The strategies developed for this waste management plan are mentioned

in the technical aspect of the study.

Environmental Policy

Mordi Pastillas is committed to environmental leadership in all of its

business activities. Mordi Pastillas provide policies to provide a safe, healthful

workplace, protecting the environment, conserving energy and natural resources.

With these policies in place we believe that we can achieve a healthy and safe

environment. We are committed to do and will:

Provide a safe and healthful workplace and ensure that personnel are

properly trained with the appropriate safety and emergency equipment.

Be an environmentally responsible neighbor in the community where we

operate, and correct incidents or conditions that endanger health, safety, or

the environment.

Conserve natural resources by adopting pollution prevention exercises, such

as extending the life of equipment through preventive maintenance

scheduling, purchasing and reworking used equipment, etc.

Develop and improve operations and technologies to minimize waste, and

other pollution, minimize health and safety risks, and dispose of waste safely

and responsibly.

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 Ensure the responsible use of energy throughout our business, including

conserving energy, improving energy efficiency, and giving preference to

renewable over non-renewable energy when feasible.

Participate in efforts to improve environmental protection and understanding.

Sharing appropriate pollution prevention technology, knowledge and methods

with other industry.

Promptly report all non-compliance issues in accordance with applicable

governmental reporting requirements, evaluate causes of non-compliance,

and implement corrective actions.

Establish procedures for periodic review of environmental compliance with all

laws and regulations.

Establish procedures to ensure that all employees are knowledgeable of,

understand and comply with all applicable environmental laws and

regulations.

Promptly correct any practice and condition not in compliance with this policy.

Code of Sanitation

The proposed business is entering the food industry wherein, the health of

the people is given of paramount importance. All efforts of public services will be

directed towards the protection and promotion of health. For this reason, our

government arises with the need of updating and codifying our scattered sanitary

laws, to ensure that establishments like the proposed business are keeping with

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the modern standards of sanitation and provide a handy reference and guidance

for enforcement. Therefore, Presidential Decree 856 also known as Code on

Sanitation of 1975 has been ordered by President Ferdinand Marcos.

The said provisions provide a reference and guidelines on sanitation on

businesses entering the food industry in Chapter 3, Sections 14-33 that will be

discussed below.

Section 14 Sanitary Permit

Mordi Pastillas will secure a sanitary permit to operate as a food

establishment. Permit shall be posted in conspicuous place of the

establishment. Fees payable on applications and upon the issuance and

renewals shall be properly paid upon the Municipal Imposition.

Section 15 Health Certificate

Mordi Pastillas shall not hire or employ any person without a health

certificate issued by local health authority.

Section 16 Quality and Protection of Food

Mordi Pastillas shall only obtain ingredients from sources approved by

the local health authority.

Section 17 Structural Requirements

Mordi Pastillas business site shall not be used for other purposes

aside from food production and food selling. No animals shall be allowed

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 within the production area. Floors, walls and ceiling shall be properly

furnished, and lightings shall have sufficient intensity to allow effective

inspection.

Section 18 Use of Food-Service Spaces.

Mordi Pastillas shall have a proper rules and regulations of the proper

use of production area and service area, such as animals shall be

prohibited in the area, clothing and personal properties shall be kept away

from food services.

Section 19 Food Handlers

Mordi Pastillas shall have a strict implementations on what to wear by

the one who prepares the food.

Section 20 Vermin Control

Mordi Pastillas shall ensure that vermin will be controlled properly.

Production area shall be constructed and maintained to exclude vermin,

all openings such as windows will be protected by screens.

Section 21 Toilet and Washing Facilities

Mordi Pastillas shall have adequate and clean toilet facility for its

personnel which will be properly located. Adequate hand-washing facility

shall also be provided adjacent to toilet room.

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 Section 22 Disposal of Refuse

Mordi Pastillas shall have a proper technique for the collection,

treatment and disposal of the solid waste. Storage refuse cans shall be in

a designated space separate from food-handling operations. These cans

shall be constructed and maintained to be vermin-proof and easily

cleaned.

Section 23 Equipment and Utensils

Mordi Pastillas equipments and utensils shall be designed and placed

in areas where cleaning will be easy and they will not pose health

hazards.

Section 24 Washing of Utensils

Mordi Pastillasutensils shall be scrapped and pre-rinsed to remove

food articles and be thoroughly cleansed with soap or detergent.

Section 25 Bactericidal Treatment

Utensils and equipment, after thoroughly cleaned, shall be subject to

bactericidal treatment like, immersion for at least half a minute in clean hot

water.

Section 26 Handling of Washed Utensils

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 Washed utensils shall be allowed to drain dry in racks without using

drying cloths, or shall be stored in a self-draining position to permit ready

air-drying.

Section 27 Storage of Washed Utensils

Utensils shall be stored in a clean and dry place adequately protected

against vermin and other sources of contamination

Section 28 Dry Storage of Non-Perishable Foods

Mordi Pastillas shall have designated spaces, cabinets, and racks

used for storage and will be made with the exact quality as used in food

preparation.

Section 30 Food Servicing Operations

Mordi Pastillas shall implement the following rules and regulations:

Hand contacts with food shall be avoided

Surfaces of containers and utensils which come in contact with

food shall not be handled.

Clean cloths, napkins, spoons, towels and other cloth equipment

shall be stored in clean places designated to them.

Section 31 - Evaluation of Food Establishment

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 Municipality or city health officer shall have an inspection for at least

every six months and shall cause as many additional inspections and re-

inspections and evaluation to be made as necessary for the enforcement

of the provision of this Chapter.

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