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The Viability of Producing Eco-friendly

Egg Bags in Baguio City

A Project Feasibility Study Presented to the Faculty of

School of Business Administration and Accountancy

University of Baguio

In Partial Fulfillment

of the Requirements for the Course

Project Feasibility Study

Agayao, Jan Paul

Ang, Jade Renzo

Calixto, Lester John

Catao, Jessica

Diana, Ma. Abigail

Choudhry, Shazi Mae

Lawaguey, Beverly

Villanueva, Cath Lea

December 2020
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Table of Contents
Title Page ......................................................................................................................... 1

Table of Contents ............................................................................................................ 2

List of Tables ..................................................................................................................... 6

List of Figures ....................................................................................................................8

Preface ............................................................................................................................. 9

Acknowledgement ......................................................................................................... 10

Project Summary ............................................................................................................ 11

Name of Enterprise .............................................................................................. 11

Location ............................................................................................................... 11

Descriptive Definition of the Project ................................................................. 11

Project Objectives .............................................................................................. 11

Feasibility Criteria ................................................................................................ 11

Highlights of the Major Assumptions ................................................................. 11

Summary of Findings ........................................................................................... 11

Conclusion of the Study ..................................................................................... 13

Market Study ................................................................................................................... 14

Product Description ............................................................................................. 14

Demand-Supply Analysis .................................................................................... 15

4 P's Study (Price, Place, Promotion, Product) ................................................. 16

Factors Affecting the Market ............................................................................. 18

Surv ey Results&Analysis of Data Gathered .................................................... 19

Conclusions and Recommendations ................................................................ 25

Technical Study .............................................................................................................. 26

The Product .......................................................................................................... 26
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Manufacturing Process ....................................................................................... 26

Plant Size (Capacity) and Production Schedule ................................................ 27

Machinery and Equipment ................................................................................... 32

Plant Location ......................................................................................................... 35

Plant Layout ............................................................................................................ 36

Building Facilities ..................................................................................................... 38

Raw Materials and Supplies .................................................................................. 39

Utilities ...................................................................................................................... 41

Wastes ..................................................................................................................... 43

Production Cost ...................................................................................................... 43

Plant Organization .................................................................................................. 45

Appendices ............................................................................................................ 46

Organization and Management Study ........................................................................... 49

Name and Logo of Organization ........................................................................ 49

Formulation of Goals and Objectiv es .................................................................. 50

Basic Considerations .............................................................................................. 50

Form of Ow nership ................................................................................................. 50

Organizational Chart ............................................................................................. 52

Officers and Key Personnel ................................................................................... 53

Project Schedule .................................................................................................... 57

Socio-Economic Study ...................................................................................................... 59

Socio-Economic Benefits ....................................................................................... 59

Employment and I ncome .......................................................................... 59

Taxes ............................................................................................................. 59

Supply of commodities .............................................................................. 60

Demand for materials ................................................................................ 60

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Environmental Impact Analysis ........................................................................................ 61

Background ............................................................................................................. 61

Project I nformation ................................................................................................. 61

I mpact Assessment ................................................................................................. 62

Mitigation and Measures ....................................................................................... 62

Financial Study .................................................................................................................. 64

I ntroduction ............................................................................................................ 64

Major Assumptions ................................................................................................ 64

Sources of Financing ............................................................................................. 65

Projected Financial Statements ........................................................................... 65

Statement of Financial Position ................................................................ 68

Statement of Comprehensiv e I ncome ................................................... 69

Statement of Cash Flow s .......................................................................... 70

Statement of Changes in Ow ners’ Equity .............................................. 71

Notes to Financial Statements ................................................................. 72

Financial Ratios ...................................................................................................... 84

Capital Budgeting Techniques ............................................................................ 89

Breakeven Analysis ................................................................................................ 89

Sensitiv ity Analysis .................................................................................................. 91

With or Without a Project Analysis ...................................................................... 92

Conclusion ............................................................................................................. 93

Appendices ...................................................................................................................... 94
Articles of Partnership ............................................................................................ 94

Lease Contract ...................................................................................................... 96

SSS Contribution Table ........................................................................................... 98

PhilHealth Contribution Table ............................................................................... 98

PAG-I BIG Contribution Table ............................................................................... 99

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Detailed Outline of a Project Feasibility Study ................................................... 99

Pointers in Ev aluating a Project Feasibility Study ............................................... 101

Rubrics .................................................................................................................... 104

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List of Tables
Table 1. Normal Capacity ................................................................................................... 17

Table 2. Price......................................................................................................................... 17

Table 3. Breakdown ............................................................................................................. 17

Table 4. Question 4 Surv ey Result ....................................................................................... 21

Table 5. Question 9 Surv ey Result ....................................................................................... 24
Table 6. Calculation of Capacity....................................................................................... 28

Table 7. 1st Week of Production........................................................................................... 29

Table 8. Succeeding Weeks of Production......................................................................... 30

Table 9. Employee Work Hours.............................................................................................. 31

Table 10. Operations Equipment ......................................................................................... 32

Table 11. Operation Tools ..................................................................................................... 32

Table 12. Office Equipments ................................................................................................ 33

Table 13 . Furniture and Fixtures ........................................................................................... 33

Table 14 . Summary of Machine Costs ............................................................................... 34

Table 15. Building Facilities ................................................................................................... 38

Table 16 . Raw Materials ...................................................................................................... 40

Table 17 . I ndirect Materials ................................................................................................. 40

Table 18. Water Consumption ............................................................................................. 41

Table 19. Annual Consumption of Electricity ..................................................................... 42

Table 20. Production Cost: Direct Materials ....................................................................... 43

Table 21. Production Cost: Direct Labor ............................................................................. 43

Table 22. Production Cost: Manufacturing Overhead ..................................................... 43

Table 23. Rent Expense ......................................................................................................... 44

Table 24. Utilities Expense ..................................................................................................... 44

Table 25. Depreciation Expense ......................................................................................... 45

Table 26. Machinery and Equipment ................................................................................. 47

Table 27. Capital Contribution & Profit or Loss Sharing ..................................................... 51

Table 28. Net Cash of Distributor/ Selling Personnel ......................................................... 55

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Table 29. Net Cash of Sew ers ............................................................................................. 55

Table 30. Net Cash of Tray Assembler ............................................................................... 56

Table 31. Net Cash of Washer ........................................................................................... 56

Table 32. Net Cash of Cutter .............................................................................................. 57

Table 33. Project Schedule ................................................................................................. 58

Table 34. Capital Contribution and Profit or Loss Sharing ............................................... 65

Table 35. Statement of Financial Position ........................................................................ 68

Table 36. Statement of Comprehensive Income ............................................................ 69

Table 37. Statement of Cash Flow s ................................................................................... 70

Table 38. Statement of Changes in Ow ners’ Equity ....................................................... 71

Table 39. Notes to Financial Statements ............................................................................ 72

Table 40. Current Ratio ......................................................................................................... 84

Table 41. Quick Ratio ........................................................................................................... 85

Table 42. I nv entory Turnover Ratio ...................................................................................... 85

Table 43. Defensiv e Interval Ratio...................................................................................... 85

Table 44. Debt Ratio ............................................................................................................ 86

Table 45. Debt to Equity Ratio ............................................................................................ 86

Table 46. Equity Ratio .......................................................................................................... 87

Table 47. Net Profit Ratio ..................................................................................................... 87

Table 48. Operating Profit Margin ...................................................................................... 87

Table 49. Gross Profit Margin ............................................................................................. 88

Table 50. Return on Assets ................................................................................................. 88

Table 51. Asset Turnov er .................................................................................................... 88

Table 52. Return on I nvestment ........................................................................................ 88

Table 53. Return on Net Operating Profit ........................................................................ 89

Table 54. Payback Period ................................................................................................. 89

Table 55. Breakeven Analysis ........................................................................................... 90

Table 56. Net Present Value............................................................................................. 90

Table 57. Sensitiv ity Analysis ............................................................................................. 91

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List of Figures
Figure 1. Product Picture ..................................................................................................... 14

Figure 2. Question 1 Surv ey Result ...................................................................................... 20

Figure 3. Question 2 Surv ey Result ...................................................................................... 20

Figure 4. Question 3 Surv ey Result ...................................................................................... 21

Figure 5. Question 5 Surv ey Result ...................................................................................... 22

Figure 6. Question 6 Surv ey Result ...................................................................................... 22

Figure 7. Question 7 Surv ey Result ....................................................................................... 23

Figure 8. Question 8 Surv ey Result ........................................................................................ 24

Figure 9: Process Flow Diagram ............................................................................................ 27

Figure 10. Street View ............................................................................................................ 35

Figure 11. Google satellite v iew ........................................................................................... 36

Figure 12. Facility Layout- First Floor ..................................................................................... 37

Figure 13. Facility Layout- Second Floor .............................................................................. 37

Figure 14. Plant Organization ............................................................................................... 45

Figure 15. Logo of the Organization ................................................................................... 49

Figure 16. Organizational Chart ........................................................................................... 53

Figure 17. With or Without a Project Analysis ...................................................................... 92

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Preface
This project feasibility study w as conducted due to many reasons. I ts main
purpose is to help inv estors in making an economic decision – w hether or not to inv est in
this particular business project. This study giv es preliminary information regarding the
business idea w hether it w ill likely succeed or not.

This study w as made on the assumption that there are already inv estors, i.e. the
researchers, who want to inv est in the project. The researchers are also deemed as the
partners forming the organization. How ever, this study is for academic purposes only as
partial fulfillment of the requirements for the course Feasibility Study. Therefore, the
project w ill not actually materialize considering the present conditions of the
researchers. However, the researchers may still pursue this v enture when and if they
w ant to.

How ever, this study is not an assurance of any type. I t only enhances the
probability of success of the business project by letting inv estors know w hat to expect.

Readers are also adv ised to consider the inherent limitations of this study. The
research was conducted with limited resources – time, energy and money. There are
also data restrictions encountered during the conduct of the study. How ever, the
researchers made sure that the quality of the data used w as not impaired or has been
traded-off. The researchers made use of data in w hich its benefit w ould reasonably
exceed its cost.
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Acknowledgement
To all of those w ho provided us support in ev ery w ay possible, thank you. No
contribution is big or small. The fact that you helped us in your ow n w ay, we do not
know how to thank you.

We are also v ery grateful to M rs. Belen Apostol, our adviser, who gladly shared
her know ledge and performed consultations during school hours.

We also place on record our sincere thank you to all principals w ho allotted
some of their time for answ ering our survey questionnaires, to all our friends w ho
energetically helped us float our questionnaires and to ev ery parent who w ere
corresponded and sw iftly responded.

A huge part of our gratitude and acknow ledgment is giv en to Mr. Kent D.
Lasdacan. We are extremely thankful and indebted to you for sharing your expertise
and guidance in completing our study.

A heartfelt gratitude to our parents and relativ es, w ithout whom, w e are nothing.
Through their financial support, w e w ere able to defray our expenses; but through their
moral and emotional support, w e w ere able to accomplish our endeavors.

Lastly, our highest acknow ledgment to God for the good health w ellbeing and
guidance that w as necessary to complete this endeavor.
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I. PROJECT SUMMARY
A. Name of Enterprise: Bagetlog Recycles
We came up w ith this company name because our product is a bag
specifically designed for a more secured handling of eggs w hich is the reason
w hy w e came up w ith the w ord "Bagetlog". On the other hand, w e hav e the
w ord "recycles" w hich means that our bag is made up of recycled materials such
as juice packs and w ater bottles.

B. Location
The proponents decided to place the store at the Naguilian Rd. Purok 13
Cypress, I risan Baguio City. The location can be passed by the trucks dumping
their loads in the dump site as a result of faster, easy access and lastly
complimentary transaction for the suppliers of raw materials

C. Descriptive Definition of the Project

A Recycled Eco bag for eggs, up to 30 eggs can be kept safe, 15 eggs for
the base of the bag and an extra spare of egg holder to be stacked. The Eco
bag has a perfect size of H 8’’ x W 6’’ x L 12’’, suitable only for a tw o layered egg
compartment.

D. Project Objectives
This project aims to enhance the probability of success of the business
project by letting inv estors know w hat to expect. This study also serv es as the
conceptual framew ork on how a business project can be performed.

E. Highlights of the Major Assumptions

The accounting period w ill be a calendar year. The organization w ill use
accrual basis of accounting. The business w ill operate from Monday to Friday for
a total of 288 days excluding holidays and allow ances for maintenance. I nflation
rate of 3% each year is incorporated for the computation of purchases, and
supplies expense. The organization is VAT exempt for the first 3 years.
The inv entory balance in the financial statements w ill refer only to finished
goods inv entory. All purchases are expected to be used in production and paid
in cash.
Furthermore, factory overhead will be comprised of allocated rent (80% of
rent expense), depreciation of operations equipment, utilities expense from the
use of operations equipment and indirect materials used in the production.

F. Summary of Findings
Marketing Study
This study aimed to identify w hether the target market w ould avail the
proposed product and if this is a product that they need. There are 95 out of 101
w hich represent 95% of the respondents who are willing to av ail the product at ₱
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100.00-200.00 each. Based on the data analysis it could be concluded that the
product of Bagetlog Recycles is a need in the market and majority of the
respondents answered that they w ould avail the product. The results indicate
that potential buyers w ill most likely buy eco-friendly and convenient products to
carry their eggs w ith low costs rather than a box that is free but not conv enient
and might crack their eggs as soon as they arriv e at home. The researchers then,
conclude that there is enough demand for the project to be feasible.

Technical Study
The initial project cost is ₱ 1,717,784.00. The manufacturing process and
materials used in of the product w ere also identified and discussed. The
maximum annual capacity is 13,824 egg bags because the organization w ill
operate only from Monday to Saturday and from 8:00AM to 5:00PM. The
equipment and machineries listed are also v iable. Labor requirements and
operating schedules are also identified and enumerated. I nformation from these
fortified the judgment of the researchers to consider this project feasible.

Organization and Management Study

There w ill be nine employees to be filled out by the organization: general
manager, inv entory clerk, three sewers, tray assembler, selling personnel, cutter
and w asher workers. The positions for general manager, and inv entory clerk will
be filled in by the partners.

Socio-Economic Study
Partners and employees w ill hav e higher income, more experience and
personal satisfaction. Employees will be compensated w ith remuneration and
experience, which is useful in the improv ement of life. Customers will be satisfied
w ith their demand. Taxes and licenses w ill also benefit the community. The
concept of recycling of plastics, helping the env ironment, improv ement in the
economy, and assistance in implementation of law s are also addressed by the
product and the organization.

Env ironmental Impact Analysis

The researchers were able to identify the most feasible technical solution
for the process of producing egg bags from w aste including the preparation of
detailed technical design and env ironmental impact assessment. This part
identified and foresaw possible environmental conflicts, pointed out solutions
and mitigated measures for av oiding permanent negative impacts of the
project in the immediate v icinity of the facility and the staffs.

Financial Study
The business is liquid and stable w ith an av erage current ratio of 8. The
inv estors can recover their investments within 2.31 years. This indicates a rapid
recovery of investment; thus, the project is more attractive to investors. The
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av erage return on assets is around 51% and return on inv estment is around 48%
— profitable for the next fiv e years. Therefore, the business is financially v iable.

G. Conclusion of the Study

Bagetlog Recycles is a need in the market, and it is prov en since
there is enough demand for the project to be feasible and majority of the
respondents answered that they w ould avail the product. The organization w ill
hav e nine employees and w ill operate only from Monday to Saturday from
8:00AM to 5:00PM. Also, the concept of recycling of plastics, helping the
env ironment, improvement in the economy, and assistance in implementation of
law s are also addressed by the product and the organization. Moreover, the
initial project cost is ₱ 1,717,784.00 and the maximum annual capacity of egg
bags that w ill be produced is 13,824. The business is liquid and stable w ith an
av erage current ratio of 8. The inv estors can recover their investments within 2.31
years and is profitable for the next fiv e years. Therefore, the business is financially
v iable.
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II. MARKET STUDY

A. Product Description

Figure 1. Product Picture

We designed an eco-bag w hich has egg compartment in it. The egg

compartment is attached at the base of the eco bag and can hold 15 pcs of
eggs but if the compartment is not enough, there is an extra egg holder and you
just hav e to put the spare holder at the giv en div ision of the bag. The div ision will
hav e a lock on it to hold the extra egg holder. The spare egg holder is placed at
the right side zipper pocket of the eco bag w ith the long strap for the eco bag
w hich w ill be used if you the customer doesn’t like to use the eco bag handle.
The eco bag itself is made out of juice packs or junk food w rappers to make the
egg compartment fit in the eco bag and the egg compartment is made out of
juice packs as the div ider and plastic bottles w ill be used to hold the eggs inside
the compartments.

Features:
 Color: Variety of colors depending on w hat suits your taste.
Material: Juice packs or junk food w rappers for the bag and the
compartment is made out of bottles and plastic juice packs.
 Dimensions: H 8’’ x W 6’’ x L 12’’

Users of the Product:

The product being offered would more likely suffice the needs of the following:

 Adults (one w ho buys the groceries) ex. Parents

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 Small businesses (bakeries, burger stations)

 EGG Suppliers and Retailers

Uses of the Product:

 I t is ideal for keeping eggs safe and organized.

 Our eco bag is designed for convenient handling and storing of eggs
instead of using juice box or paper bags w here there's a tendency for the
egg to drop and break.
 The bag can be used by the sellers as an alternativ e storage for egg, and
they can just use the juice box (they originally intend to use) for other
unbreakable items. Also, finding a durable juice box for those eggs is hard
since some boxes are already damaged w hich can cause the eggs to
break. So using our egg bag is the best choice to av oid mishandling of the
eggs.

B. Demand-Supply Analysis

The market of the product w ill be the market or grocery shoppers with the
age ranging from 19-58 years old. Out of 99 respondents, 76.8% are females and
23.2% are males. They w ill mostly be found at public or priv ate markets, groceries,
or sari-sari stores. The majority of the respondents w ith the total of 91.8% said that
they are w illing to pay for the product w ithin 100-200 Philippine pesos. I n relation
to demand of the product, out of 99 responses, 94.8% said that if the product is
made, they are w illing to av ail the product. ECOBAG Brand is egg tray bag, a
simple lightw eight, expandable, recycle materials like paper and plastic to make
Eco bags. We introduced our bags now a days for a multi-purpose of egg tray
bag. Ev eryone is beginning to understand that w hen you "throw away" a single-
use plastic bag, there is no "aw ay" and that w anting to liv e in a clean
env ironment means you need to participate in keeping it clean. Are reaching
into communities and schools w ith this message. Local and state gov ernments
are crafting legislation.

Supply is the schedule of v arious quantities of goods which sellers are

w illing to sell at a giv en price at ceteris paribus. Determining the existing supply is
important to establish the demand-supply gap. Hav ing an existing supply for the
current need of the target market also means that there are competitors.
Competition includes all of the actual and potential riv al offerings and substitutes
that a buyer might consider. Using only direct and indirect category to classify
competitions w ould mean that only brand competition is considered a direct
competition. The researchers deem that there are no direct competitors of the
product currently exist and operate in the market. How ever, substitute products
can be also an indirect competitors which is the juice box and the readily made
egg box.
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C. 4 P's Study (Price, Place, Promotion, Product)

 PRODUCT
A Recycled Eco bag for eggs, up to 30 eggs can be kept safe,15 eggs for
the base of the bag and an extra spare of egg holder to be stacked, it has also
a clear lid to av oid the eggs fragile easily accidentally. The Eco bag has a
perfect size of H 8’’ x W 6’’ x L 12’’, suitable only for a tw o layered egg
compartment.

 PLACE
The product w ould more likely be placed and sold in retail stores, grocery
stores, w et and dry markets, displayed on online shops like Facebook
Marketplace or Lazada and Shopee.
Public market - the product w ill be distributed and w ill be mostly found in
public market so that market shoppers can easily purchase it w hen
needed.
Grocery- the product w ill also be distributed in groceries, specifically in
local groceries that sells eggs for wholesale or that offers eggs that are
not packaged already.
Sari-sari store - the product can also be found in sari-sari stores so that
people can easily access it in case they consider buying it before going
to the market or grocery.
Poultry - the product w ill also be distributed in poultry, w here the source of
egg is.
Department store/ convenience store- the products would also be
av ailable in department stores w here it is conv enient for buyers to av ail it
because now adays people prefer convenience stores closer to their
homes than going to the market.

 PROMOTI ON
Publicity is a great w ay to reach customers, thus, increasing sales and help
more people know the product. I n order to hav e the product to be know n to the
public, marketing communication comes in the picture. Since this product is new
to the market, a more costly adv ertising and promotion w ill be done. Adv ertising
through selling w ebsites like Shopee and Lazada, PR Packages w hich are
products sent to be distributed to influencers like Youtubers or bloggers and they
rev iew the products and let their v iewers who are possible consumers be
know ledgeable about the product and Word-of-Mouth Marketing can also be
applied to these since it also has been v ery useful to be adv ertised by someone
you know that has tried the product before.

 PRI CE
Price is important to customers and the organization itself. I t affects the
w illingness of buyers towards purchasing the product. It also determines the profit
that the organization w ill earn. Since the organization w ill be new, the objective
in pricing is profit-oriented to achieve the return on inv estment immediately.
Below is the table of the
Estimated Product costs:
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Table 1. Normal Capacity

Unit/hr Working Hour/day Working No. of Total
Days Workers Output
Normal 2 8 288 3 13,824
Capacity

Table 2. Price

Manufacturing Cost
Direct Materials 731,563
Direct Labor 769,090
Ov erhead Cost 217,131
Total Manufacturing Cost 1,717,784
Normal Capacity 13,824
Cost per Unit 124.21
Markup Cost 44.9 % 55.79
PRICE 180

With the estimated, product costs, w e can say that the product price ranges
from P100-200, this also aligns w ith the price that the respondents chooses to pay if they
w ill av ail with the product.

Table 3. Breakdown

Breakdown

A. Direct Materials

Product Quantity Unit Cost Monthly Cost Yearly Cost

Juice Packs 381.68 kg 15.00 5,725 68,702.40
Nylon Straps 3,456.00 yards 9.00 31,104 373,248.00
Zipper (Nylon) 864.00 yards 5.00 4,320 51,840.00
Plastic Bottles 115.20 kg 10.00 1,152 13,824.00
Thread 23,040.00 yards 0.04 806 9,676.80
Bag Adjuster 1,152.00 piece 5.50 6,336 76,032.00
Bag Hook 2,304.00 piece 5.00 11,520 138,240.00
Total Direct Materials 731,563
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B. Direct Labor

Monthly 13th Month No. of

Basic Salary SSS Philhealth HDMF Direct Labor Pay Employee Total Cost
Sewer 9,120 730 319 182 10,352 9,120 3 400,018
Washer 8,400 690 294 168 9,552 8,400 1 123,024
Cutter 8,400 690 294 168 9,552 8,400 1 123,024
Tray Assembler 8,400 690 294 168 9,552 8,400 1 123,024
Total Direct Labor 769,090

C.Overhead Cost
Rent Expense 172,800
Utilities Expense 23,911
Depreciation Expense 5,463
Indirect Materials 14,957
Total Overhead Cost 217,131
**Rent
Monthly Rent 18,000
Number of Months 12
Total Rent Expense 216,000
Allocated to Overhead (80%) 172,800
Allocated to Administrative Expenses 43,200
**Utilities
Electricity 4,815
Water 19,096
Total Utilities Expense 23,911

D. Factors Affecting the Market

Demand and Price
Under this factor, income changes affects the demand. The v arying
income lev els in a particular place w ill determine the pricing strategy of the
products and serv ices in the market since this w ill estimate w hether people will
purchase our products or not. I n that case, ev en if people are w illing to buy our
product, but if they don't hav e a budget due to income changes then they
w on't still be able to buy the bag. Since the eggbag w ill be Php 180 each for the
first year of our operation, it may be costly for some of the target market
especially to those w ho don't hav e enough budget considering that the price of
our product w ill increase in the succeeding years of operation.

On the other hand, if income changes results to higher income then

customers can surely av ail the product. Second, in terms of customer's taste
since they hav e different preferences, we assume that some customers w ould
still prefer to use juice box or tray instead of using an egg bag since some
customers are really thrifty, they w ould still prefer to use a box w hich is giv en free
once you purchase an egg. How ever, in connection to the preferences of
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customers, a lot of people prefer to use eco-friendly products to help reduce

w astes in the env ironment w hich may be the reason of increase in sales. I n terms
of the price of substitute (egg bag instead of using juice box), w e are going to
use recycled materials to reduce costs so that it w ould be affordable for the
customers w ho want to av ail the product.

I n adv ertising and promoting the product, w e plan to post it on social

media or through selling w ebsites like Lazada and Shoppee because using this
platform is v ery helpful and it can be easily seen by customers w hich in turn w ill
increase demand of the product once they find out that the bag w e are
offering is designed for a conv enient way of handling eggs.

Supply
Since our product w ill be made out of recycled materials such as juice
packs, the resources will not be that expensiv e. With regards to the gov ernment
policies, our product is line w ith the "Solid Waste Management Program" of the
gov ernment, in that case finding resources for materials w ill not be difficult
hence producing the product w ill be easy. I n terms of manpow er (labor), if there
are more w orkers then more quantity w ill be produced, there will be more supply
to suffice the demands of customers.

E. Survey Results & Analysis of Data Gathered

The project feasibility study w as conducted through online survey by the
use of Google form, from September 9 to September 13, 2020. The participants
w ere 101, 24 of them w ere male and 77 female as respondents. The researchers
chose to surv ey the respondents from all ages to 19 years old and abov e,
assuming these respondents have experienced grocery shopping in the market.
Therefore, the respondents that w e have surveyed ranges from 19-58 years of
age. The respondents w ere surveyed about their willingness to av ail the product,
and the price they are w illing to pay. After sending the surv ey questionnaire to
the target market, the researchers made an analysis of the questions asked.

Show n below, are the results of the survey that w as conducted with 100
respondents.
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Question 1: Are you aware that one of the biggest environmental problem here
in the Philippines is the use of plastics?

Figure 2. Question 1 Surv ey Result

Question 2: Do you regularly recycle product packaging?

The graph presents the percentage of the total respondents answered “Yes” or
“No”.

Do you regularly recycle product packaging?

Yes No

29%

71%

Figure 3. Question 2 Surv ey Result

Question 3: Have you ever bought or considered buying eco-friendly products?

The graph presents the percentage of the total respondents answered “Yes” or
“No”.
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Figure 4. Question 3 Surv ey Result

The aim of this 3 questions is to know if the respondents are aware that use
of plastic is a major problem in the Philippines, if the respondents recycle product
packaging and if they hav e already bought eco-friendly products. 100% of the
respondents said that they are aw are. 71% of the respondents said that they
regularly recycle product packaging and 94% said that they already bought
and considered buying eco-friendly products. The result of the 3 graphs prov es
that there are high chance that more people w ill consider buying ecofriendly
products since majority of the respondents are w illing to buy eco-friendly
products and most of them hav e already done recycling of packaging.
Furthermore, according to an article shared by Mr. Dudez Perez, if more people
are becoming aw are of plastic pollution, chances are more people will
embraced a sustainable lifestyle.

Question 4: What do you normally use to carry eggs from the market/store?
This question w as asked to find out w hat kind of storage they use in storing
eggs from the market.

Responses Percentage Statistics

Paper bags 7.9% 8
Juice box 66.3% 67
Plastic egg tray 11.9% 12
Others 13.9% 14
TOTAL 100% 101
Table 4. Question 4 Surv ey Result

Based on the table abov e, majority of the respondents answ ered “juice box”.
This w as the majority answ er because we all know that most of the market sellers use
 P a g e | 22

juice box to store eggs especially w hen consumers buy one tray or half dozen. The
data also prov es that, most of the respondents buys the eggs in the market for some
reason.

Question 5: Do you find it inconvenient if market sellers just store the eggs in a
Juice box?
This question aims to analyze if consumers find juice box inconv enient in storing
eggs.

Figure 5. Question 5 Surv ey Result

The graph show s that 58% of the respondents said that storing eggs in the
juice box is conv enient and 42% said that it is inconv enient. We conclude that,
respondents doesn’t find it inconv enient because they are used to it w hen it
comes to using juice box as a w ay of storing and the next question somehow
contradicted it.

Question 6: Have you always experienced that when you buy eggs in the market
and when you arrived to your house some eggs have already cracked?

Figure 6. Question 6 Surv ey Result

 P a g e | 23

Ev en if the respondents find it conv enient, high percentage of the respondents

still says that they experienced eggs being cracked when they arrived in their house.
62% of the respondents said that they experience it and the 38% said no. I n this graph,
w e can conclude that ev en if respondents find the juice box conv enient, there is still
high chance that eggs w ill be cracked w hen using juice box, thus sometimes results to
w asted money.

Question 7: Have you ever thought of using a recycled eco bag with an egg
compartment which is designed for a convenient way of handling or storing eggs?
This question aims to find out if respondents needed this product that it makes them
think to use it or to make it.

Figure 7. Question 7 Surv ey Result

The graph show s 65% of the respondents say that they hav e thought of
using/making it. We can conclude that, w e made the right product that is needed and
that w ill satisfy the needs of the consumer by making the product that they hav e been
thinking of using it.

Question 8: If this type of product will be made, are you going to avail the product?
This question aims to identify how many of the total respondents w ould like to avail
the proposed service. This w ill determine the ready market of the service. The graph
below w ere based on the surv ey conducted. The graph presents how many of the total
respondents answered “Yes” or “No”.
 P a g e | 24

Figure 8. Question 8 Surv ey Result

95 percentage of the population, says that they are w illing to av ail the product.
This is the ready market of the product. Based on the tallied results, a large portion of
the market is w aiting for their demand to be supplied.

Question 9:How much are you willing to spend for this type of product?

This question w as asked to find out the price that the respondents are w illing to pay.
Responses Percentage Statistics
Php 100-200 90.1% 91
Php 201-300 5.9% 6
Php 301-400 3% 3
Php 400-abov e 1% 1
TOTAL 100% 101
Table 5. Question 9 Surv ey Result

Respondents answ ered the forecasted tendency of respondents to answ er the

question w ith the low est amount. Out of the 101 respondents, 91 says that they are
w illing to pay the product betw een Php 100-200 pesos only. Respondents might hav e
thought that since it is recycled, it should be not that costly. The amount selected by
the majority of the respondents w ill be used for the purpose of the research and for the
adjustments that w ill be made if ev er.
 P a g e | 25

F. Conclusions and Recommendations

This study aimed to identify w hether the target market w ould avail the proposed
product and if this is a product that they need. There are 95 out of 101 w hich represent
95% of the respondents w ho are willing to avail the product at ₱ 100.00-200.00 each.
Based on the data analysis it could be concluded that the product beyond the
ordinary is a need in the market and majority of the respondents answ ered that they
w ould av ail the product. The results indicate that potential buyers w ill most likely buy
eco-friendly and convenient products to carry their eggs with low costs rather than a
box that is free but not conv enient and might crack their eggs as soon as they arrive at
home. The researchers then, conclude that there is enough demand for the project to
be feasible.

Based on the conclusion and factors that affect the product distribution
practitioners should consider how they can find an alternativ e to lower the costing for
the production so they can mass produce and hav e a w ider demand. To better
promote the product further studies could address more innovations and suggestions to
improv e the product for the convenience of the customers. It would also be
recommended that, further data should be acquired regarding the unsatisfied needs of
the respondents because this affects the demand-supply analysis w hich we don’t hav e
enough data for it.
 P a g e | 26

III. TECHNICAL STUDY

A. The Product

A Recycled Eco bag for eggs, up to 30 eggs can be kept safe, 30 eggs for
the base of the bag and an extra spare of egg holder to be stacked. The Eco
bag has a perfect size of H 8’’ x W 6’’ x L 12’’, suitable only for a tw o layered egg
compartment. There are Variety of colors depending on w hat suits your taste.
The material used are Juice packs or junk food w rappers for the bag and the
compartment is made out of bottles and plastic juice packs.
.

B. Manufacturing Process
I n the conduct of the product, sev eral processes are to be followed. It will
also be presented using flowchart diagram to facilitate understanding of the
general processes involved in the conduct of serv ice.
Preparation
Under the preparation stage, there are 3 steps to be follow ed. First,
cutting of bottles as w ell as juice packs. Cutting of bottles into strips w ith
half inch w idth of 2.5 inches length and 3.5 inches length for the egg
holder. Cutting the bottom part of the juice packs w hich is unnecessary in
the making of eco-bag. Second step, after cutting the materials it w ill be
deliv ered in the w ashing area, w here the staff w ill carefully wash the
bottles and packs. The plastic bottles w ill be soaked in a hot w ater for an
easy remov al of gluey labels from the bottles. And the last step w ill be the
drying of packs and bottles in the roof top area.
 P a g e | 27

Assembling
The second stage is the assembling of the of juice packs. First, the
dried juice packs w ill be tailored according to the giv en dimensions of the
bag. The second step w ill be the tailoring of the prepared fabric w ith the
printed logo.

Finishing
I n the finishing stage, assembling of the base tray and spare tray
w ill be done. Assembling of the tray includes the attaching the strips of
bottles that w as prepared in the preparation stage. This w ill be attached
through the use of glue gun. And the final step w ill be the final inspection.
This w ill be important to help detect if there are defects in the product.

Figure 9: Process Flow Diagram

C. Plant Size (Capacity) and Production Schedule

The proposed business will operate for a total of 288 days. Holidays,
maintenance days and w eekends were deducted from 360 to arriv e at
approximately 288 days. There are approximately 24 w orking days ev ery month.

Basing on the size of the plant, the plant can accommodate a maximum
of 3 manual sew ing machines, w ith an allotted space of 1.5x2.25sqm per w orking
area of tailors. Forty-eight Eco-bags are the maximum capacity that can be
 P a g e | 28

produced per day. One sew er can produce a maximum of 16 Eco-bags per
day. The basis for the maximum capacity per sew er, is the size of the bag,
because the materials are already prepared and the tailors that w ill be hired are
skilled and has an experience of tailoring juice packs making it easier for them to
sew er juice packs.
Table 6. Calculation of Capacity
Maximum capacity of a tailor (per hour) 2
Multiplied by: Number of max w orking hours per day 8

Multiplied by: Number of tailors 3

Maximum Capacity per day 48

Maximum Capacity per month (48 units x 24 working days) 1,152

Annual Maximum Capacity (48 units x 288 working days) 13,824

For the production schedule, assigned staffs for the preparation of materials which
are the w ashing, cutting and drying process of the collected wrappers and bottles w ill
be the only staffs w ho will work on the first day of operation because the materials
should be prepared first for the tailors to efficiently produce the required number of
bags in the next day of operation. All the process in the manufacturing of the bag w ill
be done ev ery day except for the first operation only.
 P a g e | 29

Table 7. 1st Week of Production

PERIOD 2020

MONDAY TUESDAY WEDNESDAY THURDSAY FRI DAY SATURDAY

ACTIVITY
Cutting of bottles as
well as juice packs

Washing of packs
and bottles
Drying Process

Juice packs tailoring

Logo Embroidery

Assembling of Base
Tray and Spare Tray

Final I nspection
 P a g e | 30

Table 8. Succeeding Weeks of Production:

PERIOD 2020

MONDAY TUESDAY WEDNESDAY THURDSAY FRI DAY SATURDAY

ACTIVITY
Cutting of bottles as
well as juice packs

Washing of packs
and bottles

Drying Process

Juice packs tailoring

Logo Embroidery

Assembling of Base
Tray and Spare Tray

Final I nspection
 P a g e | 31

Bagetlog Recycles will be operating from Monday-Saturday where they are considered to report to their duties at exactly
8:00 am and they are expected to finish at 5:00 pm.
Table 9. Employee Work Hours
EMPLOYEE MONDAY TUESDAY WEDNESD THURSDAY FRI DAY SATURDAY
S AY
Distributor 8:00 AM 8:00 AM 8:00 AM 8:00 AM 8:00 AM 8:00 AM
- - - - - -
5:00 PM 5:00 PM 5:00 PM 5:00 PM 5:00 PM 5:00 PM
Bag sewer 8:00 AM 8:00 AM 8:00 AM 8:00 AM 8:00 AM 8:00 AM
- - - - - -
5:00 PM 5:00 PM 5:00 PM 5:00 PM 5:00 PM 5:00 PM
Washer 8:00 AM 8:00 AM 8:00 AM 8:00 AM 8:00 AM 8:00 AM
- - - - - -
5:00 PM 5:00 PM 5:00 PM 5:00 PM 5:00 PM 5:00 PM
Cutter 8:00 AM 8:00 AM 8:00 AM 8:00 AM 8:00 AM 8:00 AM
- - - - - -
5:00 PM 5:00 PM 5:00 PM 5:00 PM 5:00 PM 5:00 PM
Tray 8:00 AM 8:00 AM 8:00 AM 8:00 AM 8:00 AM 8:00 AM
assembler - - - - - -
5:00 PM 5:00 PM 5:00 PM 5:00 PM 5:00 PM 5:00 PM
 P a g e | 32

D. Machinery and Equipment

These are the lists of machines and equipment needed to achiev e
effectiveness and efficiency on the operations of the organization. The
corresponding cost, and other pertinent information are also presented.

Table 10. Operations equipment

OPERATIONS EQUIPMENT
Sewing Machine
Brand: SI NGER
Model: SI NGER MACHINE 15-91
Type: Belt-driven External Motor
(Straight Stitcher)
Price: ₱7,500.00 + ₱495.00 (Sipping fee)
= ₱7,995.00
Location: Metro Manila, Philippines

Table 11. Operation Tools

OPERATION TOOLS
Plastic Sheet Cutter
Price: ₱110.00 + ₱49.00 (SHI PPI NG FEE) = ₱159.00
Location: Metro Manila, Philippines
Product Specifications:
Model: LC700
Blade size: 9 x 39 mm (Fully Hardened Tempered
SK4-05 Blade)
Thickness: 0.4 mm

Storage Box (Basin)

Brand: J AND T MASTERBOX
Price: 250
Location: Mabini St. Baguio City
Product Specifications:
Capacity: 120L
Size: 36x19x15 I NCH
 P a g e | 33

Table 12. Office equipments

OFFICE EQUIPMENTS
CCTV Package
Brand: JOVI SION CCTV PACKAGE
Price: 11,500.00 + 250 (SHI PPING FEE) =
11,750.000
Location: QUEZON CI TY
I nclusions:
4 Channel DVR
2pcs. I ndoor Camera, 2pcs. Outdoor
Camera
500GB HDD19’’ square monitors
Laptop
Brand: ACER
Price: 26,990
Location: Baguio, City
Product Specifications:
I nch: 15.6-inch
Model: A315-51 Acer Aspire 3

Table13. Furniture and Fixtures

FURNITURES AND FIXTURES

Swivel Chair
Usage : for the manager
Quantity: 2 units
Cost: 2,100
Supplier: SM Home Appliances
Description: 5-prong legs
 P a g e | 34

Office Table
Usage: for the manager
Quantity: 1 unit
Cost: P2,800
Supplier: Custom made
Description: for the office use

Sofa
Usage: For employees and v isitors
Quantity: 1 unit
Cost: P 8,500
Supplier: SM Home Appliances
Description: polyester fabric
Table
Usage: For cutting used by employees
Quantity: 1 unit
Cost: P 3,300
Supplier: Custom-made
Description: laminated table
Swivel Chairs
Usage: For employees
Quantity: 7 units
Cost: P1000
Supplier: Tiongsan
Description: 5-prong legs

Table14. Summary of Machine Costs

MACHINERY AND EQUIPMENT QUANTITY UNIT COST TOTAL AMOUNT

OPERATI ONS EQUI PMENT
Sew ing Machine 3 ₱7,995.00 ₱23,985.00
OPERATI ON TOOLS
Plastic Sheet Cutter 1 ₱159.00 ₱159.00
Storage Box (Basin) 4 ₱250.00 ₱1,000.00
OFFI CE EQUI PMENT
CCTV Package 1 ₱11,750.000 ₱11,750.00
Laptop 1 ₱26,990 ₱26,990.00
FURNI TURES AND FI XTURES
 P a g e | 35

Sw iv el Chair 1 2 ₱2,100 ₱4,200

Sw iv el Chair 2 7 ₱1,000 ₱7,000
Office Table 1 ₱2,800 ₱2,800
Sofa 1 ₱8,500 ₱8,500
Table 1 ₱3,300 ₱3,300
GRAND TOTAL ₱ 89,684.00

E. Plant Location
Location is the key to most businesses, and the entrepreneurs typically
build their reputation at a particular spot.

The proponents decided to place the store at the Naguilian Rd. Purok 13
Cypress, I risan Baguio City. The location can be passed by the trucks dumping
their loads in the dump site as a result of faster, easy access and lastly
complimentary transaction for the suppliers of raw materials. Since the industry
does not require an accessible store to buyers, because the product will be
distributed to retailers.

Workers will not be a problem for the reason that it is residential area and
it w ill be fav orable for them to sav e their fare and time in transportation. For other
purposes, the facility is v iable 5 kilometers aw ay from town and hav e jitney`s
passing by. I t is alongside the road and hav e an ow n space of parking allotted
for the customers/retailers.

Moreover, adjacent to the building are other businesses and commercial

establishments ev en though there are residential houses around it. The
proponents w anted to be cost efficient that`s w hy the place is residential where
rental costs are low and renting space of high quality w as sought.

Figure 10. Street View

 P a g e | 36

Figure 11. Google satellite v iew

F. Plant Layout
A facility layout is the arrangement of all that is needed for production of
a good or a deliv ery of service. The floor plan is designed in a w ay that it can
prov ide a smooth flow of business operation and minimize the function related
time to the trav el of product and information. The layout w ould also be essential
in determining the proper setup of equipment in the building.

I n the diagram, there are: receiving area for orders and inquiries. Waiting
Area for customers and retailers. Comfort Room for the customers and w orkers.
Cutting area for the w orkers and beside it, is the w ash area, w here the materials
w ill be w ashed. Tw o storage rooms for the finished products and materials to be
processed. Office for the manager to w ork in comfortable space. Three sewing
machines and shelv es for the equipment. Also, proponents used a spiral stair to
sav e space and the rooftop w ill be used in drying the w ashed materials.
 P a g e | 37

Figure 12. Facility Layout- First Floor

RECEIVING
AREA

Figure 13. Facility Layout- Second Floor

 P a g e | 38

G. Building Facilities
The chosen building for the business is a tw o-story building and it cost
P18,000 per month. I n the first floor there is one storage room for unwashed juice
packs or w rappers, one w ashing room, cutting area, lav atory room and resting
area for the w orkers. In the second floor there is another storage room for the
finished products, office room and machinery and equipment area.
The tw o-storage room has a shelf for the juice packs or w rappers and for
the finished products to be placed. The w ashing room composed of four basins,
the cutting area has one table and plastic sheet cutter, resting area has a sala
set and telev ision, the office has a table, chair and shelv es for the documents.
Lastly, there are three machines and three chairs in the machinery and
equipment area.
For the renovation inside the building w e are going to install div iders to
maximize the space and separate the different operations. We are also going to
put up spiral stairs I the second floor going to the third floor w hich will serve as a
clothesline for the juice packs or w rapper and plastic bottles.

Table 15. Building Facilities

Spiral stairs
Price: ₱ 8,000
Dimension:
w idth 26 inches
Tread depth: 12 inches
Tread size: 8 inches

Office Door Divider

Price: ₱12,000
Dimension:
Height: 2.1 m
Width: 1.6 m
9J & A JESS and ALMA Glass and Aluminum
 P a g e | 39

5 layers shelves
DI MENSI ONS:
Length: 90 cm
Width: 40 cm
Height: 180 cm
SELLER: shelv es.ph1
PRI CE: P 1,831.25
QUANTI TY: 4
TOTAL: P 7,325.00

5 layers metal cabinet

DI MENSI ONS:
Length: 28 cm
Width: 41 cm
Height: 68.5 cm
SELLER: Toyfurnitureshop
PRI CE: P1,800.00
QUANTI TY: 1
TOTAL: P1,800.00

3 Layers Drawer
DI MENSI ONS:
Length: 40 cm
Width: 40 cm
Height: 60 cm
SELLER: Diks.ph
PRI CE: P1,400.00
QUANTI TY: 2
TOTAL: P2,800.00

H. Raw Materials and Supplies

Garbage collectors w ere asked to collect juice packs and bottles to be
purchased by the management. The nylon straps, zipper, thread, bag adjuster
and the bag hook w ill all be purchased in Tiongsan, Baguio City. The quantity
that w ere listed below are only good for the 1,152 bags w hich is the capacity of
the plant to make a bag per month.
 P a g e | 40

Table16. Raw Materials

PRODUCT QTY UNIT MONTHLY YEARLY COST

COST
Juice Packs 381.68 kg 15.00/kg ₱5,725.00 ₱68,702.00
Nylon Straps 3,456 yards 9.00/yard ₱31,104.00 ₱373,248.00
Zipper (Nylon) 864 yards 5.00/yard ₱4,320.00 ₱51,840.00
Plastic Bottles 115.20 kg 10.00/kg ₱1,152.00 ₱13,824.00
Thread 23,040 yards .035/yard ₱806.00 ₱9,677.00
Bag Adjuster 1,152 pcs. 5.50/pc. ₱6,336.00 ₱76,032.00
Bag Hook 2,304 pcs. 5.00/pc. ₱11,520.00 ₱138,240.00
TOTAL COST ₱731,563.00

The glue gun, glue stick, scissors and tape measure w ill all be purchased in Laser
Marketing located at Mabini Street, Baguio City. And the Needle Cushion and Needle
set w ill be purchased at 5-Cents Up shop also located in Mabini Street.

Table 17 . I ndirect Materials

Product Quantity Unit Cost Total Cost

Glue gun 3 piece 130 ₱ 390.00
Glue stick 3,456 piece 2 6,912
Needle cushion 3 piece 90 270
Needle Set 72 piece 55 3,960
Scissor 5 piece 35 175
Tape measure 6 piece 9 54
Storage box basin 1 piece 250 250
Plastic Sheet Cutter 1 piece 159 159
Face Mask 12 box 50 600
Hazmat Suit 3 piece 289 867
Plastic Apron 5 box 100 500
Glov es 24 piece 25 600
Brush 12 piece 80 960
Trash bin 3 piece 150 450
Trash bag 288 piece 2 605
Total Indirect Materials ₱16,752.00
 P a g e | 41

I. Utilities
I nternet Connection
The internet connection will be provided by Philippine Long-Distance
Telecommunications (PLDT). We choose their plan services at a cost of ₱ 1,300.00
per month. The internet connection will mainly aid the layout artist in
dow nloading or updating software, images, and other matters needed. This w ill
also be used in communicating to buyers through Facebook page, which was
discussed in the marketing aspect of the study.
Annual Cost = Monthly Fee × 12
= ₱ 1,880 × 12
= ₱ 22,560.00
Water
I n the conduct of the operations of the organization, consumption of
w ater is high. There are direct operations of the business that requires water. For
example, in the manufacturing process, w ater is needed since wrappers and
bottles w ill be w ashed. Four basins that contains 100 liters of w ater are needed to
be filled. Furthermore, the w ater will be changed tw o times per day. Thus, the
w ater needed per day in w ashing the materials w ill be 800 liters. How ever,
additional 32 liters are added for other consumption.

Table 18. Water Consumption

Yearly
Daily Yearly Yearly
Usage in Rate Consumption
Liters Liters cubic meter
Days
Water 832 288 239616 239.616 88.55 21,218

Electricity
Tools, laptop, lights, and other equipment w ould require the use of
electricity to w ork. Electricity will be provided by Benguet Electric Cooperative
(BENECO). The consumption for each material is calculated as presented in the
follow ing table. The w attages of the different machines w ere based on different
sources. The machineries presented w ill be the ones that the organization
expects to install and utilize in the conduct of the normal operations. The rate per
kilow att-hour is based on the recently released rate of BENECO. Daily usage in
hours w ill be expressed to monthly usage in hours w hich will be used to compute
for the annual consumption.
 P a g e | 42

Table 19. Annual Consumption of Electricity

NUMBER YEARLY
TOTAL DAILY USAGE YEARLY
PARTICULARS WATTS OF USAGE IN KWH RATE CONSUMPTION
WATTS IN HOURS WATTS
UNITS DAYS
LED Lights 2.5 9 22.5 9 288 58,320 58.32 6.7491 394
Dust
Suppression 220 1 220 9 288 570,240 570.24 6.7491 3,849
System
Air Purifier 35 1 35 9 288 90,720 90.72 6.7491 612
Laptop 50 1 50 2 288 28,800 28.8 6.7491 194
Printer 40 1 40 1 240 9,600 9.6 6.7491 65
Wi-fi 20 1 20 9 288 51,840 51.84 6.7491 350
Telev ision 91.5 1 91.5 3 288 79,056 79.056 6.7491 534
1,226,40
CCTV 35 4 140 24 365 1226.4 6.7491 8,277
0
Glue Gun 15 1 15 5 288 21,600 21.6 6.7491 146
TOTAL 14,420

TOTAL COST OF UTILITIES

Annual cost of I nternet Connection ₱ 15,600
Annual cost of Water Utilities ₱ 21,218.00
Annual cost of Electric Utilities ₱ 14,420.00
Total Annual Cost of Utilities ₱ 51,238.00
 P a g e | 43

J. Wastes
The company w ill produce no w aste but cut-outs of bottles, specifically
the upper and bottom part of the bottle that w ill be used to create another
product. These products are decorations such as flower, curtain, and garland
crafts and w ill be added as another income. The company w ill be complying
w ith the regulations of the Baguio City in proper w aste disposal and segregation.
And for the disposal of w ater, w ater will flow directly to the Canal.

K. Production Cost
I . Direct Materials
Table 20. Production Cost: Direct Materials

PRODUCT QTY UNIT MONTHLY YEARLY COST

COST
Juice Packs 381.68 kg 15.00/kg ₱5,725.00 ₱68,702.00
Nylon Straps 3,456 yards 9.00/yard ₱31,104.00 ₱373,248.00
Zipper (Nylon) 864 yards 5.00/yard ₱4,320.00 ₱51,840.00
Plastic Bottles 115.20 kg 10.00/kg ₱1,152.00 ₱13,824.00
Thread 23,040 yards .035/yard ₱806.00 ₱9,677.00
Bag Adjuster 1,152 pcs. 5.50/pc. ₱6,336.00 ₱76,032.00
Bag Hook 2,304 pcs. 5.00/pc. ₱11,520.00 ₱138,240.00
TOTAL COST ₱731,563.00

I I . Direct Labor

Table 21. Production Cost: Direct Labor

Laborer Basic SSS Philhealth HDMF Monthly 13th No. of Total

Salary Direct Month Employee Cost
Labor Pay
Sewer 9,120 730 319 182 10,352 9,120 3 400,018
Washer 8,400 690 294 168 9,552 8,400 1 123,024
Cutter 8,400 690 294 168 9,552 8,400 1 123,024
Tray 8,400 690 294 168 9,552 8,400 1 123,024
Assembler
Total Direct Labor 769,090

I II. Manufacturing Overhead

Table 22. Production Cost: Manufacturing Overhead
1. Rent Expense 172,800
2. Utilities Expense 23,911
3. Depreciation Expense 5,463
4. I ndirect Materials 14,957
Total Overhead Cost 214,569
 P a g e | 44

Table 23. Rent Expense

**Rent
Monthly Rent 18,000
Number of Months 12
Total Rent Expense 216,000
Allocated to Overhead (80%) 172,800
Allocated to Administrative Expenses 43,200

Table 24. Utilities Expense

*Other consumption of electricity are expensed in Cost of Sale
2. Utilities Expense
Electricity 4,815
Water 17,050
Total Utilities Expense 23,911
Electricity
Particulars Watts # of Total Daily Yearly Yearly KWH Rate Consumptio Allocated Allocated to
Units Watts Usag Usag Watts n to Admin. Expense
e e Overhead

LED Lights 3 9 23 9 288 58,320 58.32 6.7491 394 354 39

Dust 220 1 220 9 288 570.2 6.7491 3,849 3,848.61 -
Suppression 570,240 4
System
Air Purifier 35 1 35 9 288 90,720 90.72 6.7491 612 612.28 -
Total Electricity 4,815
Water Daily Yearly Usage Yearly Yearly Rate Consumption Allocated to Allocated to Administrative
Liters in Days Liters cubic Overhead Expense
meter
832 288 239,6 240 88.55 21,218 17,050 1,894
16
 P a g e | 45

Table 25. Depreciation Expense

3. Depreciation Expense
Unit Cost Number Total Salv age Useful Depreciation
of Units Cost Value Life Expense
Sewing Machine 7,995 3 10 2,158.65
23,985 2,399
Dust Suppression System 1 10 2,700.00
30,000 30,000 3,000
Air Purifier 4,000 1 4,000 400 10 360.00
Swiv el Chair 1,000 7 7,000 700 7 900.00
Total Depreciation Expense 6,119

L. Plant Organization
Figure 14
General
Manager

Inventory
Clerk

Tray Selling
Sewer 1 Cutter Washer
Assembler Personnel

Sewer 2

Sewer 3
 P a g e | 46

M. Appendices
i. Plant Layout
 P a g e | 47

ii. Equipment listing and cost

Table 26. Machinery and Equipment

MACHINERY AND EQUIPMENT QUANTITY UNIT COST TOTAL AMOUNT

OPERATI ONS EQUI PMENT
Sew ing Machine 3 ₱7,995.00 ₱23,985.00
OPERATI ON TOOLS
Plastic Sheet Cutter 1 ₱159.00 ₱159.00
Storage Box (Basin) 4 ₱250.00 ₱1,000.00
OFFI CE EQUI PMENT
CCTV Package 1 ₱11,750.000 ₱11,750.00
Laptop 1 ₱26,990 ₱26,990.00
FURNI TURES AND FI XTURES
Sw iv el Chair 1 2 ₱2,100 ₱4,200
Sw iv el Chair 2 7 ₱1,000 ₱7,000
Office Table 1 ₱2,800 ₱2,800
Sofa 1 ₱8,500 ₱8,500
Table 1 ₱3,300 ₱3,300
GRAND TOTAL ₱ 89,684.00

iv . Utilities calculation
DAILY YEARLY
PARTICULA NUMBER TOTAL YEARLY
WATTS USAGE IN USAGE IN KWH RATE CONSUMPTION
RS OF UNITS WATTS WATTS
HOURS DAYS
LED Lights 2.5 9 22.5 9 288 58,320 58.32 6.7491 394
Dust
Suppression 220 1 220 9 288 570,240 570.24 6.7491 3,849
System
Air Purifier 35 1 35 9 288 90,720 90.72 6.7491 612
Laptop 50 1 50 2 288 28,800 28.8 6.7491 194
Printer 40 1 40 1 240 9,600 9.6 6.7491 65
Wi-fi 20 1 20 9 288 51,840 51.84 6.7491 350
Television 91.5 1 91.5 3 288 79,056 79.056 6.7491 534
CCTV 35 4 140 24 365 1,226,400 1226.4 6.7491 8,277
Glue Gun 15 1 15 5 288 21,600 21.6 6.7491 146
TOTAL 14,420

Yearly
Yearly cubic Consumptio
Daily Liters Usage in Yearly Liters Rate
meter n
Days
Water 832 288 239616 239.616 88.55 21,218
 P a g e | 48

Allcoated Allocated to
Number of Consumption, to Administrative
Particulars Watts Units Total Watts Daily Usage Yearly UsageYearly WattsKWH Rate ConsumptionInput VAT net Overhead Expense
LED Lights 3 9 23 9 288 58,320 58.32 6.7491 394 - 394 354 39
Dust Suppression System 220 1 220 9 288 570,240 570.24 6.7491 3,849 - 3,849 3,848.61 -
Air Purifier 35 1 35 9 288 90,720 90.72 6.7491 612 - 612 612.28 -
Total Electricty 4,815

Daily Liters Yearly Usage inYearly

DaysLitersYearly cubic meter
Rate ConsumptionInput VAT Consumption,Allcoated
net to Overhead
Allocated to Administrative E
Water 832 288 239,616 240 88.55 21,218 - 21,218 19,096 2,122

TOTAL UTI LITI ES ALLOCATED TO OVERHEAD:

**Utilities
Electricity 4,815
Water 19,096
Total Utilities Expense 23,911

v . Projected cost of production

Manufacturing Cost
Direct Materials 731,563
Direct Labor 769,090
Overhead Cost 217,131
Total Manufacturing Cost 1,717,784
Normal Capacity 13,824
Cost per Unit 124.26
 P a g e | 49

IV. ORGANIZATION AND MANAGEMENT STUDY

Name of Organization
The organization’s name is Bagetlog Recycles. Three w ords are combined that is
w hy w e came up w ith Bagetlog. First, w e used the w ord ‘bag’ because the
organization focuses on producing bags specifically designed for eggs that is w hy the
w ord ‘etlog’ is present. We used the w ord ‘etlog’ w hich is an I locano word because the
organization is based on Baguio City and the main dialect used is I locano. Moreover,
the w ord ‘get’ is also present in the middle of bag and ‘etlog’ because this is the
product that you w ill use to get or store eggs in a secured bag. On the other hand, w e
hav e the w ord "recycles" which means that our bag is made up of recycled materials
such as juice packs and w ater bottles.

Logo of the Organization

Figure 15. Logo of the Organization

The Leaves
The figure behind the bag is the leav es which represent the environment.
Since the company’s v ision strives towards a sustainable approach, maximally
respecting people and planet w e added this in our logo.

The Bag and Eggs

The bag and egg itself represent the organization’s product which is the
egg bag. Adding this figures w ill make the consumers know w hat the
organization offer.

The Hands
The hands placed below represents for the environment protection
aw areness and to inspire and challenge Filipinos to achiev e a high w aste
 P a g e | 50

reduction and recycling goals in the nation. The company striv es to urge the
w orld into motiv ation to pursue plastic waste reduction through encouraging the
community and ensuring sustainability

A. Formulation of Goals and Objectives

Company’s Mission
Bagetlog Recycles strives to urge the w orld into motiv ation to pursue
plastic w aste reduction through encouraging the community, follow ing the
policy and ensuring sustainability.

Company’s Vision
 Bagetlog Recycles is a company that supports recycling and offers
env ironmental friendly bag w hich is specifically designed for a conv enient
w ay of handling/storing eggs.
 The company striv es towards a sustainable approach, maximally
respecting people and planet.
 To inspire and challenge Filipinos to achiev e a high w aste reduction and
recycling goals in the nation.

Company’s Goals/ Objectives:

 Satisfy domestic demand and be a leading contributor to recycled egg
bags.
 Be innov ative in process.
 Promote/ dev elop / strengthen the plastics recycling industry in
Philippines.
 To dev elop the demand of eco-friendly consumers.
 To promote the concept of an eco-friendly lifestyle.
 To reduce an env ironmental impact on the global env ironment.
 Establish a w ell-known brand that giv es users convenience.

B. Basic Considerations
Our company aims to create an env ironmentally friendly bag w hich is
made up of used juice packs and used plastic bottles to help lessen plastic
w astes. The bag is specifically designed to be more durable for long lasting use
and for people to hav e a conv enient way of handling or storing eggs. The
considerations of this chapter include the officers and key personnel described in
the technical study.

C. Form of Ownership
Proponents decided to form the business under general partnership for
the reason that it w ill assume that profits, liabilities and management duties are
equally div ided to ev ery partner. The proponents will implement the concept of
general partnership, w herein all parties share legal and financial liability equally.
 P a g e | 51

The indiv iduals are personally responsible for the debts the partnership takes on.
Profits are also shared equally. I n the case of the organization, there w ill be 8
partners and different resources will be contributed.
Partnership is the form that w e choose because organizing a partnership is
relativ ely easier than forming a corporation. It is also more adv antageous than
sole proprietorship because it inv olves joint resources which includes intelligence,
skills and properties. Joint resources can raise more funds than the sole
proprietorship since there is a higher-power and capital enhanced by the
ow ners.
Moreover, a partnership is essentially a contract where there is meeting of
the minds. A contract may be oral or w ritten but the organization shall hav e
w ritten contract so that misunderstandings are mitigated aside from the fact that
it is a legal requirement for partnerships having a capital of more than ₱ 3,000.00.
The contract is called articles of partnership; it w ill provide details about the
agreement of the partners. The complete Articles of Partnership is provided in the
appendix.
The formal organization and existence of the partnership w ill commence
once an agreement is reached. The capital contribution and the profit or loss
sharing of the organization is presented below.

Table 27. Capital Contribution & Profit or Loss Sharing

PARTNER CONTRIBUTION PROFIT OR LOSS SHARING
Paul Agayao ₱75,000 10%
Jade Ang ₱75,000 10%
Lester Calixto ₱75,000 10%
Jessica Catao ₱75,000 10%
Shazi Choudhry ₱75,000 10%
Abigail Diana ₱75,000 10%
Bev erly Lawaguey ₱75,000 25%
Cathlea Villanuev a ₱75,000 15%
TOTAL ₱600,000 100%

The proponents w ill apply the general partnership in Securities and

Exchange Commission (SEC). I t is the gov ernment agency responsible for the
securities law and regulating the securities industry in the Philippines. After
registering, the proponents will secure a Certificate of Registration from the SEC
in order to hav e the license to operate a business. Following are the
requirements needed in applying partnership.

1. Basic Requirements

 Name Verification Slip

 Articles of Partnership (AP)
 P a g e | 52

 Joint Affidav it of two partners to change partnership name (not required if

already stated in AP)
 Registration of data-sheet
 Certificate of Bank Deposit
 Name of the partnership
 Principal office address
 The contact number of the partner
 Name, citizenship, address, birthday and Taxpayer I dentification Number
(TI N) of the partners
 Capital contribution of the partners
 Purpose of the partnership

2. Additional requirements

 Endorsement/clearance from other government agencies, if applicable

 For partnership w ith a foreign national as a partner (FI A Form - 105)

D. Organizational Chart
As an industry practice, medium-sized organizations hav e employees of
around 5 to 15. I n the organization, there w ill be initially sev en employees. The
organization is headed by the general manager w hich is actually a partner,
likew ise the inv entory clerk. The w orkers are the only employees that are not
ow ners of the business.
There is only one managerial position present in the organization. This is
only appropriate because the organization is still relativ ely small. All of the
employees including the inv entory clerk shall report directly to the general
manager. Decision-making is, therefore a centralized activity.
 P a g e | 53

Figure 16. Organizational Chart

Owners

Vi l lanuev
Aga ya o, Calixto, Ca ta o, Lawaguey, Di a na, Choudhr
Ang, Jade a,
Ja n Pa ul Lester Jes sica Beverly Abi gail y, Sha zi
Ca thl ea

General
Ma na ger

Inventor Producti Product

y on Del ivery

Inventor
y/Stock Sewi ng Cleaning Di s tributor
Cl erk

Tra y
Sewer 1 As s embl Washer Cutter
er

Sewer 2

Sewer 3

E. Officers and Key Personnel

1. Job Title: General Manager
Name: Bev erly Lawaguey
Educational Background: Masters in Business Administration (MBA) degree.
Job Description: The general manager is responsible for the overall direction,
coordination and ev aluation of direct reports and for carrying out supervisory
responsibilities in accordance with the organization’s policies and applicable
law s. Rev iewing analyses of activities, costs, operations and forecast data to
determine progress toward stated goals and objectiv es is also the job of the
general manager. A general manager also ov ersees operations to review
production and operating reports and resolve operational, manufacturing
and facility problems to ensure minimum costs and prev ent operational
delays and to meet future growth.
Job Specification:
 Work Experience and Training
-On-the-job trainings
- Leadership
-skills training
- Worked in the industry for at least fiv e years
 Qualifications
-Good know ledge of different business functions.
-Strong leadership qualities
 P a g e | 54

- Excellent communication skills

-Manage operations and processes w ithin budget.
-Computer literate
 Salary of the General Manager is through profit sharing because the
general manager is one of the ow ners of the business.

2. Job Title: I nventory Clerk

Name: Cath Lea Villanueva
Educational Background: Bachelor's degree in Business Administration major
in Finance or Bachelor’s degree in Accountancy – 4t h year Graduate
Job Description: The inv entory clerk is responsible for maintaining and
updating records, counting materials, equipment, merchandise, or supplies in
stock, reporting discrepancies between physical counts and computer
records, developing or improving upon inventory management procedures,
stocking and distributing supplies, equipment or merchandise, compiling
balance, price and cost reports.
Job Specification:
 Work Experience and Training
- Minimum of 2 years’ experience in inv entory control
 Qualifications
- Excellent math and analytical skills
- Excellent communication and interpersonal skills
- Able to reconcile inventory
- Must be able to read inv entory lists
- Computer literate
 Salary of the I nv entory Clerk is through profit sharing because the
I nventory Clerk is one of the ow ners of the business.

3. Job Title: Distributor/ Selling Personnel

Educational Background: Bachelor's degrees in fields such as logistics or
business- 4t h year graduate
Job Description: Distributors are responsible in managing stock and goods.
They maintain excellent product knowledge, ensure that quality goods are
received, and establish networks w ith clients, suppliers, and v endors.
Job Specification:
 Work Experience and Training
- On-the-job trainings
- At least fiv e years’ experience with distribution accounting, inventory
management, w arehouse safety, shipping and customer service
 Qualifications
- Strong interpersonal and communication skills
- Ability to quickly identify marketing opportunities
- Strong multi-tasking skills
- Excellent netw orking abilities
 P a g e | 55

Table 28. Net Cash of Distributor/ Selling Personnel

Monthly Salary 8,400
Number of Months 12
Total Wage of Selling Personnel 100,800
Less: Employees' Share
SSS 340
Philhealth 294
HDMF 168
Number of Selling Personnel 1
Number of Months 12
Total Employees' Share 9,624
Net Cash Received by Selling 91,176
Personnel

4. Job Title: Bag sew er

Educational Background: Qualified graduate of Tailoring NC I I
Job Description: The bag sew ers are responsible for feeding juice packs into
the sew ing machine that stitches both ends to seal the bag and in sew ing the
recycled egg tray inside the bag. They are also responsible in maintaining the
quality of the eco bag.
Job Specification:
 Work Experience and Training
- On-the-job trainings
- At least 1-2 years’ w ork related experience
 Qualifications
- Sound know ledge of fabrics as w ell as bag design and construction.
- Ability to use a sew ing machine
- Time management skills
- Effective communication skills
- Good hand- eye coordination

Table 29. Net cash of Sew ers

Monthly Salary 9,120

Number of Months 12
Total Salary of Sewers 109,440
Less: Employees' Share
SSS 360
Philhealth 319
HDMF 182
Number of Months 12
Total Employees' Share 31,018
Net Cash Received by Sewers 78,422
 P a g e | 56

5. Job Title: Tray assembler

Educational Background: N/A
Job Description: The tray assembler w ill glue the plastic strips and w ill
assemble these be used as a tray in holding the eggs inside the bag.
Job Specification:
 Qualifications
- Time management skills
- Ability to follow instructions and help w ith v arious tasks as needed skills

Table 30. Net Cash of Tray Assembler

Monthly Salary 8,400
Number of Months 12
Total Wage of Tray Assembler 100,800
Less: Employees' Share
SSS 340
Philhealth 294
HDMF 168
Number of Tray Assembler 1
Number of Months 12
Total Employees' Share 9,624
Net Cash Received by Tray 91,176
Assembler

6. Job Title: Washer

Educational Background: N/A
Job Description: Washers are responsible in making and preparing the raw
materials. They are tasked to ensure that the materials are clean before
sew ing.
Job Specification:
 Work Experience and Training
- Minimal w ork experience
 Qualifications
- Time management skills
- Ability to stand or w alk for 8-hour shifts
- Working knowledge of sanitation procedures
- Ability to follow instructions and help w ith v arious tasks as needed

Table 31. Net Cash of Washer

Monthly Salary 8,400
Number of Months 12
Total Wage of Washer 100, 800
Less: Employees' Share
SSS 340
Philhealth 294
HDMF 168
 P a g e | 57

Number of Washer 1
Number of Months 12
Total Employees' Share 9,624
Net Cash Received by Washer 91,176

7. Job Title: Cutter

Educational Background: N/A
Job Description: cutters are responsible in cutting certain part of the plastic
bottle into strips and cutting unnecessary materials.
Job Specification:
 Qualifications
- Time management skills
- Ability to follow instructions and help w ith v arious tasks as needed

Table 32. Net Cash of Cutter

Monthly Salary 8,400
Number of Months 12
Total Wage of Cutter 100,800
Less: Employees' Share
SSS 340
Philhealth 294
HDMF 168
Number of Cutter 1
Number of Months 12
Total Employees' Share 9,624
Net Cash Received by Cutter 91,176

F. Project Schedule
The project schedule serves as the timetable of the project. This w ill
portray the prospective time w hen will the organization commence its
operations. The follow ing activities are as follows.

Feasibility Study

The main purpose of feasibility study is to help inv estors in making an

economic decision – w hether or not to inv est in a particular business project.
This study giv es preliminary information regarding the business idea whether
it w ill likely succeed or not.

Obtaining Finance

Not because partners hav e enough money, it means that they can
already contribute their finances to the organization. Withdrawing large amount
of money may inv olve prior notice of w ithdrawal to the bank to let them
prepare.
 P a g e | 58

Legal Processing of Requirements

Before the partnership enters into contracts under the name of the
partnership, the proponents w ill register first as a general partnership. Articles of
partnership and other legal requirements are complied w ith.

Acquisition of Equipment and Other Assets

Equipment and other assets need time before they are acquired,
deliv ered and installed. Some suppliers require ordering in adv ance and usually
need a specific amount of time in order for them to manufacture. Moreover,
supplier for the juice packs w ill also need a specific amount of time because the
proponents w ill need to negotiate with the junkshop owners.

Hiring and Training

Employees w ill be screened and selected. Trainings w ill also be

conducted especially for the tray assembler and w ith sewers in order for them to
familiarize themselv es in their job.

Table 33. Project Schedule

PERI OD 2021 2022
ACTI VI TY Ja Fe Ma Apr Ma Ju Jul Au Sep O No De Jan
n b r y n g ct v c
1. Feasibility Study
2. Obtaining
Finance
3. Articles of
Partnership
4. Legal
Processing of
Requirements
5. Equipment and
Furniture
6. Hiring and
Training
7. Start of
Operations
 P a g e | 59

V. SOCIO-ECONOMIC STUDY
A. Socio-Economic Benefits in terms of:
i. Employment and I ncome
The Project w ill provide significant employment opportunities (skilled
and unskilled w orkers). Employees would benefit as it w ill improve their
standards of liv ing, experience sense of fulfillment of passion and also motiv ation
that they hav e a direction in life. Since the business is expected to liv e
indefinitely, the employees w ill somehow feel security of tenure from the
organization. They w ill be giv en monthly income to be used in defraying their
personal expenses. The business organization w ill also be complying w ith legal
requirements. This means that the employees w ill be av ailing SSS, PhilHealth, and
13th month pay bonus. The organization can also help them by inculcating and
strengthening their v alues, discipline and beliefs especially to their cultural
identity and care for the env ironment.
Furthermore, since this v enture is a long- term inv estment and requires
financing, the ow ners are in hopes that this w ill be a profitable inv estment.
Through the profit they w ill gain, their standards of liv ing w ill be improved.
Realizing income from these activ ities would also contribute to the betterment of
the country, at least, little by little. One of the ultimate life goals of the ow ners is
to contribute to the dev elopment of the country. An example is the fulfillment
that the partners w ill feel, knowing that w e are contributing to the plastic
problem of our Country.
The ow ners will also be activ ely involved in the management of the
organization; this w ould help them to hone their managerial skills, human
relations skills, financial knowledge, communication skills, and others that they
may apply in other aspects of life.

ii. Taxes
One w ay of giv ing back to the community w ill be paying the taxes right.
The organization w ill help our community/government by paying the correct and
appropriate taxes on or before the required deadline. The taxes paid w ill be
spent for the betterment of the community. The gov ernment is not benefitted by
taxes, it is the community that gets the benefit.
The business w ill be paying not only national taxes (requirements giv en by
the BI R and SEC) but also local taxes and fees such as business permits and other
fees. These local fees w ill also be used primarily for the improv ement of the City
or to the barangay or can be a driv er w hen it comes to effecting local change.
Maintaining a sustainable env ironment w ould also be a benefit to the
community in its entirety. The organization w ould not be neglecting their
responsibility to its stakeholders and w ould never exploit the customers. Through
the product that the business organization w ill offer, there will be a ripple effect.
 P a g e | 60

iii. Supply of commodities

Egg bag highlights on av ailing the serv ices of locals to enable them to
succeed and to help w hile gaining profit especially to the garbage collectors. By
the means of the egg bag, they w ill put an additional income, w hich can greatly
help for their daily liv es. I f the business w ill be paying tax in the City of Baguio, the
supplier also pays similar tax in their respective places. The taxes that w ill be paid
by the suppliers can aid in promoting the w elfare of the constituents of Baguio
by increasing the gov ernment`s capacity to provide basic services.

iv . Demand for materials

Direct material is primary in conducting business. Choosing the right
materials w ill help in producing quality goods for the market. The materials that
the business w ill be using are mainly recycled and from local suppliers. Recycling
of bottles w ill be practiced in the conduct of the production process of the
business.
Other essential parts w ill be purchased from local markets. This w ill help in
contributing to the industry and economy of the country because it w ill boost the
country’s demand for materials and w ill motiv ate other businesses to purchase
also to our local suppliers. This w ill also help in reducing env ironmental impacts
such as problems in plastic w astes in Baguio City and in the Philippines because
the bottles that w ill be processed in production are recycled and w e w ill also
utilize other w aste for further use to our business.
 P a g e | 61

VI. ENVIRONMENTAL IMPACT ANALYSIS

A. Background

The primary purpose of this project is to identify the most feasible technical
solution for the process of producing egg bags from w aste including the
preparation of detailed technical design and env ironmental impact assessment.

The env ironmental impact assessment (EI A) w ill be made as a part of the project,
based on the preliminary design, in order to identify and foresee possible
env ironmental conflicts, and to point to solutions and mitigate measures for
av oiding permanent negative impacts of the project on the env ironment.

The EI A w ill outline the following:

 The impacts to be assessed, focusing on the most important impacts;

 The types of alternativ es to be examined, including measures to
mitigate impacts; and

The EI A w ill be based on existing and av ailable information and on v isits to the
project area.

B. Project Information

Bagetlog Recycles will operate a recycling operation specifically recycling of

juice w rappers and bottles into an Egg bag in Cypress I risan, Baguio City.The
organization has decided to locate the facility in Cypress I risan as the location is
passed by the trucks dumping their loads in the dump site for a faster, easy access
and transaction of the suppliers of raw materials.

The main production processes to be carried out at the facility w ill be:

1. Acquiring plastic (wrappers) from suppliers- This w ill take place at different
suppliers w here juice wrappers can be collected. Garbage collectors can
also be dealt w ith as suppliers w hen they separate juice packs from other
collected trash. These juice packs w ill be recycled and is considered as
the main material for the product this w ill contribute in the goal of “lesser
env ironmental risks contributed by food packaging”.
2. The process of cutting the raw materials- This w ill take place inside the
facility w hich w ill be done through indiv idually cutting the bottles and
juice packs into ready to assemble sizes. Segregation w ill be practiced
w ith the remaining cutouts from the plastic bottles and the juice packs.
3. Washing of materials- This w ill also take place inside the w orking facility.
Large amount of w ater w ill be needed for the assurance of cleanliness for
the main materials to be used. The w ater waste is directed to the
 P a g e | 62

drainage for proper w ater disposal and to av oid direct contacts to soil,
plants and animals.

C. Impact Assessment

The potential env ironmental impact w e considered is the Air quality.

Air quality

During operation, gaseous odors from acquiring and w ashing the w rappers and
bottles may lead to a reduction in air quality.Plastic w rappers/packaging or bottles
don’t really produce any smells. How ever, what will make it stink are the mixture of
food w aste, or anything that’s biodegradable. Since the company w ill be using
w rappers and bottles that are prov ided by garbage collectors, the main concern
here is the unpleasant smell or potential gaseous odors. Hence, this may cause
general disturbance in the neighborhood and in our production as w e may receive
complaints from people liv ing around the site. This could also impact human health
especially to the staffs w ho are exposed to the odor.

Potential gaseous odor emitted by the plastic bottles and w rapper include:

a) Hydrogen Sulfide (H2S)

I t is a colorless chalcogen hydride gas w ith the characteristic foul odor of
rotten eggs. Hydrogen sulfide smells like rotten eggs, w hile both dimethyl
sulfide and methanethiol smell somew hat like rotten cabbage. They all
hav e pretty low odor thresholds, so ev en a few micrograms floating
around in the air is going to assault your sense of smell pretty
heav ily.
b) Ammonia (NH3)
c) Ammonia is a compound of nitrogen and hydrogen w ith the formula NH₃.
A stable binary hydride, and the simplest pnictogen hydride, ammonia is
a colorless gas w ith a characteristic pungent smell. The odor threshold for
ammonia is pretty high, at 27 micrograms per meter cubed. A compound
deriv ed from ammonia, trimethylamine, might be emitted by rubbish,
particularly fishy w astes. Trimethylamine is the compound that makes fish
smell like, w ell, fish, and as the remnants of your fish dinner fester in the
trash, trimethylamine gets added into the foul gas that’s emitted.

D. Mitigation and Measures

To ensure that the operations of Beyond the Ordinary Inc. in I risan do not impact
the env ironment and those in the immediate v icinity of the facility and the staffs,
mitigations on the most significant issues relevant for the study include the follow ing:
 P a g e | 63

Air quality

I ntegrating odor management activ ities into the daily routine of site to ensure practices
and procedures for the management and mitigation of potential odor issues w ill
become a routine. Best Management Practices Plan (‘BMPP’) identifies and address all
aspects of the facility and site operations that hav e the potential to cause odor effects
at off-site receptors.

• I nstallation of a dust suppression system w ithin the building to control the dust
produced. The proposed system is a rotary atomizer system, w hich produces a
fine droplet mist w hich removes the dust particles from the air. Thus the dust is
remov ed from the air before it can escape from the building.
• Acquiring of w rappers will have a limit so it w ill not be piled or stocked. These
w rappers that arrived, will be handled immediately so the bad odor w ill be
lessened.
• Addition of industrial perfumes /odor agents to the dust suppression system in
order to lessen dow n the odors. Given the limited w astes to be processed at the
facility it is considered that odors will not be generated in any significant w ay
and there w ill be minimal impact on the local env ironment.
People

To prov ide appropriate worker protection when handling the plastics w rappers,
w earing of personal protective equipment may be required. Wearing PPE reduces risk
from germs, exposure to blood and other bodily fluids, splashes from w ashing and
inhalation of bad odors. Providing the employees the following PPE:

• Face mask
• Heav y duty, glov es
• Plastic apron
• Clothes that cov er the body
 P a g e | 64

VII. FINANCIAL STUDY

INTRODUCTION
Financial aspect plays a v ital role in making feasibility study because projects are
considered viable only w hen they are expected to be profitable to meet short-term
obligations, to be liquid and to remain liquid during adv ersities. I n this aspect, the
financial feasibility of the project is presented through different financial statements and
analyses thereof.

MAJOR ASSUMPTIONS
 Bagetlog Recycles will commence operations on January 2022.
 The accounting period w ill be a calendar year.
 The business w ill use accrual basis of accounting.
 The business w ill operate from Monday to Friday for a total of 288 days excluding
holidays and allow ances for maintenance.
 I nflation rate of 3% each year is incorporated for the computation of purchases.
 Sale w ill only be on cash basis.
 Sale of by products w ill be presented in Other I ncome due to materiality.
 The inv entory balance in the financial statements w ill refer only to finished goods
inv entory. All products started every accounting period are assumed to be
finished before the start of the next accounting period. Thus, no goods are
expected to be in process in betw een accounting periods.
 Finished goods inv entory is assumed to be at 10% at the end of the period.
 Purchases w ill increase every year based on the increase in demand and
inflation.
 All purchases are expected to be used in production.
 All purchases are assumed to be paid in cash.
 Factory ov erhead will be comprised of allocated rent (80% of rent expense),
depreciation of operations equipment, utilities expense from the use of
operations equipment and indirect materials used in the production.
 Rent is not expected to increase for the next 5 years.
 Property, Plant and Equipment w ill be depreciated using the straight line method
at a 10% residual v alue.
 P a g e | 65

 The useful liv es of the PPE used in depreciation w ill be 10 years for operations
equipment and 7 years for other PPEs.
 Leasehold improv ements will be amortized ov er 7 years
 The draw ings of the partners are their respective shares in the net income.
 The partners w ho will be w orking inside the business will be compensated
through higher profit sharing.
 Repairs and maintenance for 2021 is 1% of the original v alue of PPE and is
expected to increase by 10% ev ery year after 2021.
 Supplies are expensed immediately after purchase.

SOURCES OF FINANCING
The partnership w ill not obtain financing requirement from banks and other
financial institutions. I f a partner w ants to borrow from these financial institutions, the
partnership w ill not assume these obligations. The transaction is of personal obligation of
that particular partner. Therefore, the initial source of financing w ill be from the
partners’ capital contribution. Their contributions are presented on the table below .

Table 34. Capital Contribution and Profit or Loss Sharing

PARTNER CONTRI BUTI ON PROFI T OR LOSS SHARI NG
Paul Agayao ₱75,000 10%
Jade Ang ₱75,000 10%
Lester Calixto ₱75,000 10%
Jessica Catao ₱75,000 10%
Shazi Choudhry ₱75,000 10%
Abigail Diana ₱75,000 10%
Bev erly Lawaguey ₱75,000 25%
Cathlea Villanuev a ₱75,000 15%
TOTAL ₱600,000 100%

PROJECTED FINANCIAL STATEMENTS

Financial statements are the means by w hich the information accumulated and
processed in financial accounting is periodically communicated to the users.
Financial statements also show the results of the management’s stew ardship of
the resources entrusted to it. The financial statements presented in this study are the
follow ing: Statement of Financial Position, Statement of Comprehensiv e Income,
 P a g e | 66

Statement of Changes in Equity, Statement of Cash Flow s and Notes to Financial

Statements. The financial statements are the end product of the accounting
information system deployed w ithin an organization.

Statement of Financial Position

The Statement of Financial Position (SFP) prov ides the financial position of the
business that presents the economic resources i.e. asset, and claims against the
reporting entity i.e. liabilities and equity.
The liquidity, solv ency, need for additional financing, strengths and w eaknesses
can be prov ided by the SFP. These information are used by external and internal users.
This statement is also called Balance Sheet w herein the total assets must be equal to
the total liabilities and equity.

Statement of Comprehensive Income

Businesses are created for profit-motive. Performance of the entity is determined
by the net income deriv ed from the business or the results of the operations. A
Statement of Comprehensiv e I ncome is a financial statement that summarizes the
rev enues and expenses incurred during a specific period of time. These records provide
information about a company's ability – or lack thereof – to generate profit.
Statement of Comprehensiv e I ncome is also called Statement of Profit or Loss
and I ncome Statement. Statement of Comprehensiv e I ncome usually inv olves the
existence of other comprehensive income that does not fall w ithin the purv iew of a
regular income.

Statement of Changes in Equity

This formal statement show s the mov ements of the components of the equity or
capital of the partners for the period ended. The business shall use the transaction
approach in the computation of income for the period ended.

Statement of Cash Flows

This statement presents the summary of operating, inv esting and financing
activ ities of the organization. This show s the cash inflow and outflow of the entity, w hich
 P a g e | 67

are also the cash receipts and cash disbursements. This serv es as the basis of the users in
making decisions by prov iding the information about the ability of the organization to
generate cash and cash equiv alents. I n financial management, cash, not profit, is king
applies. Noncash transactions are not included in the statement of cash flow s. The
indirect method of presenting the financial statement is preferred.

Notes to Financial Statements

The Notes to Financial Statements is in conformance to the standard of
adequate disclosures wherein material information are attached to the financial
statements to prov ide complete and more understandable data. Breakdown
computations of account balances; accounting policies; accounting principles used
and other important non-quantifiable information are included here.
The entity shall follow the order of presenting the notes in w hich the first part must
state the compliance w ith PFRS; follow ed by statement of significance of accounting
policies used; then, supporting computation of each line item; and lastly, other
disclosures.

Financial Reports
Financial reports include not only financial statements but also other information
such as financial highlights, summary of financial important figures, analysis of financial
statements and significant ratios. Financial reports are broader than financial
statements. The accounting information system can also produce financial reports
especially financial ratios.
 P a g e | 68

Table 35. Statement of Financial Position

Bagetlog Recycles
Statement of Financial Position
As of the years 2022, 2023, 2024, 2025 and 2026
Notes 2022 2023 2024 2025 2026
ASSETS
Current Assets
Cash 346,751 337,850 355,239 386,341 410,195
Finished Goods Inventory 2 172,023 196,190 205,674 204,779 211,211
Total Current Assets 518,774 534,041 560,913 591,120 621,407
Noncurrent Assets
Office Equipment 15 40,840 40,840 40,840 40,840 40,840
Furniture and Fixtures 16 35,200 35,200 35,200 35,200 35,200
Operations Equipment 17 57,985 57,985 57,985 57,985 57,985
Leasehold Improvement 18 19,925 19,925 19,925 19,925 19,925
Accumulated Depreciation-Office 15 5,251 10,502 15,753 21,003 26,254
Equipment
Accumulated Depreciation-Furniture 16 4,526 9,051 13,577 18,103 22,629
and Fixtures
Accumulated Depreciation- 17 5,219 10,437 15,656 20,875 26,093
Operations Equipment
Accumulated Amortization- 18 2,846 5,693 8,539 11,386 14,232
Leasehold Improvement
Total Noncurrent Assets 136,108 118,267 100,425 82,583 64,742
TOTAL ASSETS 654,882 652,307 661,338 673,703 686,148
LIABILITIES
SSS Premiums Payable 19 7,390 7,810 8,230 8,650 8,950
Philhealth Premiums Payable 20 4,267 5,157 6,116 7,146 7,496
HDMF Premiums Payable 21 2,438 2,578 2,718 2,858 2,998
VAT Payable/ Deferred Output 23 - - - 19,969 21,892
Income Tax Payable 22 40,787 36,762 44,274 35,080 44,812
TOTAL LIABILITIES 54,882 52,307 61,338 73,703 86,148
EQUITY
Agayao-Capital 75,000 75,000 75,000 75,000 75,000
Ang-Capital 75,000 75,000 75,000 75,000 75,000
Calixto-Capital 75,000 75,000 75,000 75,000 75,000
Catao-Capital 75,000 75,000 75,000 75,000 75,000
Choudhry-Capital 75,000 75,000 75,000 75,000 75,000
Diana-Capital 75,000 75,000 75,000 75,000 75,000
Lawaguey-Capital 75,000 75,000 75,000 75,000 75,000
Villanueva-Capital 75,000 75,000 75,000 75,000 75,000
TOTAL EQUITY 600,000 600,000 600,000 600,000 600,000
TOTAL LIABLITIES AND EQUITY 654,882 652,307 661,338 673,703 686,148
 P a g e | 69

Table 36. Statement of Comprehensive Income

Bagetlog Recycles
Statement of Comprehensive Income
For years ended 2022, 2023, 2024, 2025 and 2026
NOTES 2022 2023 2024 2025 2026
REVENUE
Sales 1 2,289,254 2,470,487 2,664,120 2,536,591 2,731,713
Cost of Goods Sold 2 1,548,211 1,765,711 1,851,070 1,843,007 1,900,901
Gross Income 741,043 704,776 813,050 693,584 830,812
Other Income 3 51,607 53,696 55,817 55,263 57,220
Total Revenue 792,650 758,472 868,867 748,847 888,032
Less:
ADMINISTRATIVE EXPENSES
Rent Expense 4 43,200 43,200 43,200 43,200 43,200
Salaries and Wages 5 100,800 106,800 112,800 118,800 124,800
Employee Benefits 6 22,224 24,068 25,972 27,936 28,976
Depreciation Expense 7 8,877 8,877 8,877 8,877 8,877
Amortization Expense 8 2,846 2,846 2,846 2,846 2,846
Supplies Expense 9 8,875 7,636 7,865 7,233 7,450
Selling Expense 10 12,000 12,000 12,000 12,000 12,000
Repairs and Maintenance 11 1,540 1,693 1,863 2,049 2,254
Taxes and Licenses 12 8,200 26,905 28,841 27,566 29,517
Organizational Expense 13 5,977 - - - -
Utilities Expense 14 34,287 34,287 34,287 30,613 30,613
Total Administrative 248,825 268,312 278,551 281,120 290,533
Expenses

Net Income before Tax 543,825 490,160 590,316 467,727 597,499

Income Tax 163,147 147,048 177,095 140,318 179,250
NET INCOME AFTER TAX 380,677 343,112 413,221 327,409 418,249
 P a g e | 70

Table 37. Statement of Cash Flows

Bagetlog Recycles
Statement of Cash Flows
For years ended 2022, 2023, 2024, 2025 and 2026
Notes 2022 2023 2024 2025 2026
CASH FLOWS FROM OPERATING
ACTIVITIES
Net Income Before Tax 543,825 490,160 590,316 467,727 597,499
Adjustments to reconcile net Surplus to
net cash provided by operating activities:
Depreciation 7 14,995 14,995 14,995 14,995 14,995
Amortization 8 2,846 2,846 2,846 2,846 2,846
Operating cash flows before working 561,667 508,002 608,157 485,569 615,340
capital
Changes in Operating Assets and
Liabilities:
Decrease (Increase) in:
Inventory 2 (172,023 (24,167) (9,484) 896 (6,433)
Increase (Decrease) in:
SSS Premiums Payable 19 7,390 420 420 420 300
Philhealth Premiums Payable 20 4,267 890 960 1,030 350
HDMF Premiums Payable 21 2,438 140 140 140 140
VAT Payable 23 - - - 19,969 1,922
Cash Generated from Operations 403,739 485,285 600,193 508,024 611,620
Income Tax Paid 22 (122,361) (151,073 (169,583) (149,512) (169,517
) )
Interest (Paid) Received - - - - -
Net Cash Provided by (Used in) 281,378 334,212 430,610 358,511 442,103
Operating Activities
CASH FLOWS FROM INVESTING ACTIVITY
Net (Additions) Disposals to PPE 15,16, (153,950)
17,18
Net Cash Provided by (Used in) Investing (153,950) - - - -
Activities
CASH FLOWS FROM FINANCING ACTIVITY
Additional Investment 600,000
Profit Sharing (380,677) (343,112 (413,221) (327,409) (418,249
) )
Net Cash Provided by (Used in) Financing 219,323 (343,112 (413,221) (327,409) (418,249
Activities ) )
NET INCREASE (DECREASE) IN CASH 346,751 (8,900) 17,389 31,102 23,854
CASH, BEGINNING - 346,751 337,850 355,239 386,341
CASH, ENDING 346,751 337,850 355,239 386,341 410,195
 P a g e | 71

Table 38. Statement of Changes in Owners’ Equity

Bagetlog Recycles
Statement of Changes in Owners Equity
For years ended 2022, 2023, 2024, 2025 and 2026
YEAR AGAYAO ANG CALIXTO CATAO CHOUDHRY DIANA LAWAGUEY VILLANUEVA TOTAL
Initial Capital 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 600,000
Share in Net Income/Loss 38,068 38,068 38,068 38,068 38,068 38,068 95,169 57,102 380,677
2022
Drawings 38,068 38,068 38,068 38,068 38,068 38,068 95,169 57,102 380,677
Ending Balance 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 375,000

Beginning Balance 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 600,000
Share in Net Income 34,311 34,311 34,311 34,311 34,311 34,311 85,778 51,467 343,112
2023
Drawings 34,311 34,311 34,311 34,311 34,311 34,311 85,778 51,467 343,112
Ending Balance 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 375,000

Beginning Balance 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 600,000
Share in Net Income 41,322 41,322 41,322 41,322 41,322 41,322 103,305 61,983 413,221
2024
Drawings 41,322 41,322 41,322 41,322 41,322 41,322 103,305 61,983 413,221
Ending Balance 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 375,000

Beginning Balance 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 600,000
Share in Net Income 32,741 32,741 32,741 32,741 32,741 32,741 81,852 49,111 327,409
2025
Drawings 32,741 32,741 32,741 32,741 32,741 32,741 81,852 49,111 327,409
Ending Balance 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 375,000

Beginning Balance 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 600,000
Share in Net Income 41,825 41,825 41,825 41,825 41,825 41,825 104,562 62,737 418,249
2026
Drawings 41,825 41,825 41,825 41,825 41,825 41,825 104,562 62,737 418,249
Ending Balance 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 375,000
 P a g e | 72

Table 39. Notes to Financial Statements

1. SALES
2022 2023 2024 2025 2026
Projected Demand 13,824 14,515 15,241 16,003 16,803
Price 180 185 190 195 200
Gross Cash Receipts 2,488,320 2,685,312 2,895,782 3,120,587 3,360,632
VAT - - - 334,349 360,068
Gross Cash Receipts, net of VAT 2,488,320 2,685,312 2,895,782 2,786,238 3,000,564
Sales Returns 49,766 53,706 57,916 62,412 67,213
Sales Discount 124,416 134,266 144,789 156,029 168,032
Sales Allowances 24,883 26,853 28,958 31,206 33,606
Net Sales 2,289,254 2,470,487 2,664,120 2,536,591 2,731,713

2. COST OF SALES
2022 2023 2024 2025 2026
Raw Materials, beginning - - - - -
Purchases 731,563 753,510 776,115 713,749 735,161
Total Raw Materials 731,563 753,510 776,115 713,749 735,161
Raw Materials, Used 731,563 753,510 776,115 713,749 735,161
Raw Materials, End - - - - -

Raw Materials, Used 731,563 753,510 776,115 713,749 735,161

Direct Labor 769,090 816,283 863,837 911,750 955,070
Overhead 219,582 220,084 220,602 216,612 217,102
Total Manufacturing Cost 1,720,235 1,789,878 1,860,554 1,842,111 1,907,334
Work-in-Process, beginning - - - - -
Total Cost of Goods in Process 1,720,235 1,789,878 1,860,554 1,842,111 1,907,334
Work-in-Process, ending - - - - -
Total Cost of Goods Manufactured 1,720,235 1,789,878 1,860,554 1,842,111 1,907,334
Finished Goods, beginning - 172,023 196,190 205,674 204,779
Total Goods Available for Sale 1,720,235 1,961,901 2,056,744 2,047,786 2,112,113
Finished Goods, ending 172,023 196,190 205,674 204,779 211,211
Cost of Goods Sold 1,548,211 1,765,711 1,851,070 1,843,007 1,900,901

****Overhead
Allocated Rent 172,800 172,800 172,800 172,800 172,800
Depreciation 6,119 6,119 6,119 6,119 6,119
Utilities Expense 23,911 23,911 23,911 21,349 21,349
Indirect Materials 16,752 17,254 17,772 16,344 16,834
Total Overhead 219,582 220,084 220,602 216,612 217,102

****Direct Labor
Sewer 400,018 423,679 447,521 471,542 493,742
Washer 123,024 130,868 138,772 146,736 153,776
Cutter 123,024 130,868 138,772 146,736 153,776
Tray Assembler 123,024 130,868 138,772 146,736 153,776
Total Direct Labor 769,090 816,283 863,837 911,750 955,070
 P a g e | 73

3. OTHER INCOME
2022 2023 2024 2025 2026
Sale of Plastic Bottle Crafts 51,607 53,696 55,817 55,263 57,220

4. RENT EXPENSE
2022 2023 2024 2025 2026
Monthly Rent 18,000 18,000 18,000 18,000 18,000
Number of Months 12 12 12 12 12
Total Rent Expense 216,000 216,000 216,000 216,000 216,000
Allocated to Overhead (80%) 172,800 172,800 172,800 172,800 172,800
Allocated to Administrative Expenses 43,200 43,200 43,200 43,200 43,200

5. SALARIES AND WAGES

*Only the salaries of the selling personnel is shown as a line item because the salaries of
the other employees are included in the Cost of Goods Manufactured and Sold.
2022 2023 2024 2025 2026
Sewer
Monthly Salary 9,120 9,620 10,120 10,620 11,120
Number of Months 12 12 12 12 12
Number of Sew ers 3 3 3 3 3
Total Salary of Sewers 328,320 346,320 364,320 382,320 400,320
Less: Employees' Share
SSS 360 380 400 420 440
Philhealth 319 385 455 531 556
HDMF 182 192 202 212 222
Number of Sew ers 3 3 3 3 3
Number of Months 12 12 12 12 12
Total Employees' Share 31,018 34,459 38,081 41,882 43,862
Net Cash Received by Sewers 297,302 311,861 326,239 340,438 356,458
Washer
Monthly Salary 8,400 8,900 9,400 9,900 10,400
Number of Months 12 12 12 12 12
Number of Washer 1 1 1 1 1
Total Wage of Washer 100,800 106,800 112,800 118,800 124,800
Less: Employees' Share
SSS 340 360 380 400 420
Philhealth 294 356 423 495 520
HDMF 168 178 188 198 208
Number of Washer 1 1 1 1 1
Number of Months 12 12 12 12 12
Total Employees' Share 9,624 10,728 11,892 13,116 13,776
Net Cash Received by Washer 91,176 96,072 100,908 105,684 111,024
 P a g e | 74

Cutter
Monthly Salary 8,400 8,900 9,400 9,900 10,400
Number of Months 12 12 12 12 12
Number of Cutter 1 1 1 1 1
Total Wage of Cutter 100,800 106,800 112,800 118,800 124,800
Less: Employees' Share
SSS 340 360 380 400 420
Philhealth 294 356 423 495 520
HDMF 168 178 188 198 208
Number of Cutter 1 1 1 1 1
Number of Months 12 12 12 12 12
Total Employees' Share 9,624 10,728 11,892 13,116 13,776
Net Cash Received by Cutter 91,176 96,072 100,908 105,684 111,024
Tray Assembler
Monthly Salary 8,400 8,900 9,400 9,900 10,400
Number of Months 12 12 12 12 12
Number of Tray Assembler 1 1 1 1 1
Total Wage of Tray Assembler 100,800 106,800 112,800 118,800 124,800
Less: Employees' Share
SSS 340 360 380 400 420
Philhealth 294 356 423 495 520
HDMF 168 178 188 198 208
Number of Tray Assembler 1 1 1 1 1
Number of Months 12 12 12 12 12
Total Employees' Share 9,624 10,728 11,892 13,116 13,776
Net Cash Received by Tray Assembler 91,176 96,072 100,908 105,684 111,024
Selling Personnel
Monthly Salary 8,400 8,900 9,400 9,900 10,400
Number of Months 12 12 12 12 12
Number of Selling Personnel 1 1 1 1 1
Total Wage of Selling Personnel 100,800 106,800 112,800 118,800 124,800
Less: Employees' Share
SSS 340 360 380 400 420
Philhealth 294 356 423 495 520
HDMF 168 178 188 198 208
Number of Selling Personnel 1 1 1 1 1
Number of Months 12 12 12 12 12
Total Employees' Share 9,624 10,728 11,892 13,116 13,776
Net Cash Received by Selling Personnel 91,176 96,072 100,908 105,684 111,024

Total Cash Received by Employees 662,006 696,149 729,871 763,174 800,554

 P a g e | 75

6. EMPLOYEE BENEFITS *Only the benefits of the selling personnel is shown as a line item because
the benefits of the other employees are included in the Cost of Goods Manufactured and Sold.

2022 2023 2024 2025 2026

Sewer
Social Security System 730 770 810 850 890
PhilHealth 319 385 455 531 556
Home Dev elopment Mutual Fund 182 192 202 212 222
Number of Sew ers 3 3 3 3 3
Monthly Employer's Contribution 3,695 4,042 4,403 4,780 5,005
Number of Months 12 12 12 12 12
Total Yearly Contribution 44,338 48,499 52,841 57,362 60,062
13th Month Pay 27,360 28,860 30,360 31,860 33,360
Total Employee Benefits of Sewer 71,698 77,359 83,201 89,222 93,422
Washer
Social Security System 690 730 770 810 820
PhilHealth 294 356 423 495 520
Home Dev elopment Mutual Fund 168 178 188 198 208
Number of Washer 1 1 1 1 1
Monthly Employer's Contribution 1,152 1,264 1,381 1,503 1,548
Number of Months 12 12 12 12 12
Total Yearly Contribution 13,824 15,168 16,572 18,036 18,576
13th Month Pay 8,400 8,900 9,400 9,900 10,400
Total Employee Benefits of Washer 22,224 24,068 25,972 27,936 28,976
Cutter
Social Security System 690 730 770 810 820
PhilHealth 294 356 423 495 520
Home Dev elopment Mutual Fund 168 178 188 198 208
Number of Cutter 1 1 1 1 1
Monthly Employer's Contribution 1,152 1,264 1,381 1,503 1,548
Number of Months 12 12 12 12 12
Total Yearly Contribution 13,824 15,168 16,572 18,036 18,576
13th Month Pay 8,400 8,900 9,400 9,900 10,400
Total Employee Benefits of Cutter 22,224 24,068 25,972 27,936 28,976
Tray Assembler
Social Security System 690 730 770 810 820
PhilHealth 294 356 423 495 520
Home Dev elopment Mutual Fund 168 178 188 198 208
Number of Tray Assembler 1 1 1 1 1
Monthly Employer's Contribution 1,152 1,264 1,381 1,503 1,548
Number of Months 12 12 12 12 12
Total Yearly Contribution 13,824 15,168 16,572 18,036 18,576
13th Month Pay 8,400 8,900 9,400 9,900 10,400
Total Employee Benefits of Tray Assembler 22,224 24,068 25,972 27,936 28,976
 P a g e | 76

Selling Personnel
Social Security System 690 730 770 810 820
PhilHealth 294 356 423 495 520
Home Dev elopment Mutual Fund 168 178 188 198 208
Number of Selling Personnel 1 1 1 1 1
Monthly Employer's Contribution 1,152 1,264 1,381 1,503 1,548
Number of Months 12 12 12 12 12
Total Yearly Contribution 13,824 15,168 16,572 18,036 18,576
13th Month Pay 8,400 8,900 9,400 9,900 10,400
Total Employee Benefits of Selling Personnel 22,224 24,068 25,972 27,936 28,976

Total Employee Benefits 160,594 173,631 187,089 200,966 209,326

7. DEPRECIATION EXPENSE
2022 2023 2024 2025 2026
CCTV 1,511 1,511 1,511 1,511 1,511
Laptop 3,470 3,470 3,470 3,470 3,470
Printer 270 270 270 270 270
Office Table 360 360 360 360 360
Wall Panel Div ider 1,543 1,543 1,543 1,543 1,543
Executiv e Chair 270 270 270 270 270
Sw iv el Chair 900 900 900 900 900
Table 360 360 360 360 360
Sofa 1,093 1,093 1,093 1,093 1,093
Dust Suppression System 2,700 2,700 2,700 2,700 2,700
Air Purifier 360 360 360 360 360
Sew ing Machine 2,159 2,159 2,159 2,159 2,159
Total Depreciation Expense 14,995 14,995 14,995 14,995 14,995
Allocated to Ov erhead 6,119 6,119 6,119 6,119 6,119
Allocated to Administrativ e Expenses 8,877 8,877 8,877 8,877 8,877

8. AMORTIZATION EXPENSE
2022 2023 2024 2025 2026
Spiral Stair 1,143 1,143 1,143 1,143 1,143
Wall Shelv es 1,704 1,704 1,704 1,704 1,704
Total Amortization Expense 2,846 2,846 2,846 2,846 2,846
 P a g e | 77

9. SUPPLIES EXPENSE
2022 2023 2024 2025 2026
Bond Paper: short (ream) 650 670 690 710 732
Bond Paper: long (ream) 650 670 690 710 732
Staple and Staple Wire 450 50 52 53 55
Ball Pens (box) 120 124 127 131 135
Glue Gun 390 402 414 426 439
Glue Stick 6,912 7,119 7,333 7,553 7,780
Needle Cushion 270 278 286 295 304
Needle Set 3,960 4,079 4,201 4,327 4,457
Tape Measure 54 56 57 59 61
Scissors 210 216 223 229 236
Correction Tape (set) 120 124 127 131 135
Markers (boxes) 200 206 212 219 225
Wall Clocks 460 - - - -
Log Books 200 206 212 219 225
Calculator 500 - - - -
Cutters 100 - - - -
Packing Tapes (set) 350 361 371 382 394
Multi-colored I nks 1,480 1,524 1,570 1,617 1,666
Brooms and Dust Pan 260 268 276 284 293
Dust Cleaners 75 77 80 82 84
Window Cleaners 150 155 159 164 169
Mops 200 206 212 219 225
Trash Bags 630 649 668 688 709
Trash Bins 600 618 637 656 675
Brush 960 989 1,018 1,049 1,080
Face Mask 600 618 637 656 675
Hazmat Suit 867 893 920 947 976
Plastic Apron 500 515 530 546 563
Glov es 600 618 637 656 675
Tissue 300 309 318 328 338
Plastic Sheet Cutter 159 164 169 174 179
Storage Box Basin 250 258 265 273 281
Fire Extinguisher 2,400 2,472 2,546 2,623 2,701
Total Supplies Expense 25,627 24,891 25,637 26,406 27,199
I nput VAT - - - 2,829 2,914
Total Supplies Expense, net of VAT 25,627 24,891 25,637 23,577 24,284
Allocated to Ov erhead 16,752 17,254 17,772 16,344 16,834
Allocated to Administrativ e Expenses 8,875 7,636 7,865 7,233 7,450
 P a g e | 78

10. SELLING EXPENSE

2022 2023 2024 2025 2026
Transportation/ Distribution 12,000 12,000 12,000 12,000 12,000
Total Selling Expense 12,000 12,000 12,000 12,000 12,000

11. REPAIR AND MAINTENANANCE

2022 2023 2024 2025 2026
Repairs and Maintenance 1,540 1,693 1,863 2,049 2,254
Total Repairs and Maintenance 1,540 1,693 1,863 2,049 2,254

12. TAXES AND LICENSES

2022 2023 2024 2025 2026
Business Tax (1% of I nitial Capital) 6,000
Business Tax (1% of Total Sales) 24,705 26,641 25,366 27,317
Mayor's Permit 125 125 125 125 125
BI R Renewal 500 500 500 500 500
DTI Renewal 500 500 500 500 500
Sanitary I nspection Fee 125 125 125 125 125
Garbage Fee 300 300 300 300 300
Barangay Business Clearance 500 500 500 500 500
Business Plate 150 150 150 150 150
Total Taxes and Licenses 8,200 26,905 28,841 27,566 29,517

13. ORGANIZATIONAL COST

2022 2023 2024 2025 2026
BI R Registration 500 - - - -
SEC Form 600 - - - -
SEC Filing Fee 4,200 - - - -
SEC Legal Research 42 - - - -
SEC Handling Fee 20 - - - -
Documentary Stamp Fee 15 - - - -
BI R Certification 100 - - - -
DTI Registration 500 - - - -
Total Organizational Cost 5,977 - - - -
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14. UTILITIES EXPENSE

2022 2023 2024 2025 2026
LED Lights 394 394 394 394 394
Dust Suppression Sytem 3,849 3,849 3,849 3,849 3,849
Air Purifier 612 612 612 612 612
Laptop 194 194 194 194 194
Printer 65 65 65 65 65
Wi-fi 350 350 350 350 350
Telev ision 534 534 534 534 534
CCTV 8,277 8,277 8,277 8,277 8,277
Glue Gun 146 146 146 146 146
Water 21,218 21,218 21,218 21,218 21,218
I nternet 22,560 22,560 22,560 22,560 22,560
Total Utilities Expense 58,198 58,198 58,198 58,198 58,198
I nput VAT - - - 6,235 6,235
Total Utilities Expense, net of VAT 58,198 58,198 58,198 51,962 51,962
Allocated to Ov erhead 23,911 23,911 23,911 21,349 21,349
Allocated to Administrativ e Expenses 34,287 34,287 34,287 30,613 30,613

15. OFFICE EQUIPMENT

2022 2023 2024 2025 2026
CCTV 11,750 11,750 11,750 11,750 11,750
Laptop 26,990 26,990 26,990 26,990 26,990
Printer 2,100 2,100 2,100 2,100 2,100
Total Acquisition Cost 40,840 40,840 40,840 40,840 40,840
I nput VAT - - - - -
Total Acquisition Cost, net of VAT 40,840 40,840 40,840 40,840 40,840
Salv age Value (10% of cost) 4,084 4,084 4,084 4,084 4,084
Useful Life 7 7 7 7 7
Annual Depreciation 5,251 5,251 5,251 5,251 5,251
Accumulated Depreciation 5,251 10,502 15,753 21,003 26,254
Book Value 35,589 30,338 25,087 19,837 14,586

16. FURNITURE AND FIXTURES

2022 2023 2024 2025 2026
Office Table 2,800 2,800 2,800 2,800 2,800
Wall Panel Div ider 12,000 12,000 12,000 12,000 12,000
Executiv e chair 2,100 2,100 2,100 2,100 2,100
Sw iv el chair 7,000 7,000 7,000 7,000 7,000
Table 2,800 2,800 2,800 2,800 2,800
Sofa 8,500 8,500 8,500 8,500 8,500
Total Acquisition Cost 35,200 35,200 35,200 35,200 35,200
I nput VAT - - - - -
Total Acquisition Cost, net of VAT 35,200 35,200 35,200 35,200 35,200
Salv age Value (10% of cost) 3,520 3,520 3,520 3,520 3,520
Useful Life 7 7 7 7 7
Annual Depreciation 4,526 4,526 4,526 4,526 4,526
Accumulated Depreciation 4,526 9,051 13,577 18,103 22,629
Book Value 30,674 26,149 21,623 17,097 12,571
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17. OPERATIONS EQUIPMENT

2022 2023 2024 2025 2026
Sewing Machine 23,985 23,985 23,985 23,985 23,985
Dust Suppression System 30,000 30,000 30,000 30,000 30,000
Air Purifier 4,000 4,000 4,000 4,000 4,000
Total Acquisition Cost 57,985 57,985 57,985 57,985 57,985
I nput VAT - - - - -
Total Acquisition Cost, net of VAT 57,985 57,985 57,985 57,985 57,985
Salv age Value (10% of cost) 5,799 5,799 5,799 5,799 5,799
Useful Life 10 10 10 10 10
Annual Depreciation 5,219 5,219 5,219 5,219 5,219
Accumulated Depreciation 5,219 10,437 15,656 20,875 26,093
Book Value 52,766 47,548 42,329 37,110 31,892

18. LEASEHOLD IMPROVEMENT

2022 2023 2024 2025 2026
Spiral Stair 8,000 8,000 8,000 8,000 8,000
Wall Shelv es 11,925 11,925 11,925 11,925 11,925
Total Acquisition Cost 19,925 19,925 19,925 19,925 19,925
I nput VAT - - - - -
Total Acquisition Cost, net of VAT 19,925 19,925 19,925 19,925 19,925
Useful Life 7 7 7 7 7
Annual Amortization 2,846 2,846 2,846 2,846 2,846
Accumulated Amortization 2,846 5,693 8,539 11,386 14,232
Book Value 17,079 14,232 11,386 8,539 5,693

19. SSS PAYABLE

2022 2023 2024 2025 2026
Sewer
Employee's Share 360 380 400 420 440
Employer's Share 730 770 810 850 890
Number of Sew ers 3 3 3 3 3
Monthly Contribution 3,270 3,450 3,630 3,810 3,990
Months of Serv ice 12 12 12 12 12
Annual Contribution 39,240 41,400 43,560 45,720 47,880
Washer
Employee's Share 340 360 380 400 420
Employer's Share 690 730 770 810 820
Number of Washer 1 1 1 1 1
Monthly Contribution 1,030 1,090 1,150 1,210 1,240
Months of Serv ice 12 12 12 12 12
Annual Contribution 12,360 13,080 13,800 14,520 14,880
 P a g e | 81

Cutter
Employee's Share 340 360 380 400 420
Employer's Share 690 730 770 810 820
Number of Cutter 1 1 1 1 1
Monthly Contribution 1,030 1,090 1,150 1,210 1,240
Months of Serv ice 12 12 12 12 12
Annual Contribution 12,360 13,080 13,800 14,520 14,880
Tray Assembler
Employee's Share 340 360 380 400 420
Employer's Share 690 730 770 810 820
Number of Tray Assembler 1 1 1 1 1
Monthly Contribution 1,030 1,090 1,150 1,210 1,240
Months of Serv ice 12 12 12 12 12
Annual Contribution 12,360 13,080 13,800 14,520 14,880
Selling Personnel
Employee's Share 340 360 380 400 420
Employer's Share 690 730 770 810 820
Number of Selling Personnel 1 1 1 1 1
Monthly Contribution 1,030 1,090 1,150 1,210 1,240
Months of Serv ice 12 12 12 12 12
Annual Contribution 12,360 13,080 13,800 14,520 14,880
Total Annual Contribution 88,680 93,720 98,760 103,800 107,400
Add: Beginning Balance 7,390 7,810 8,230 8,650
Total SSS Premiums Payable 88,680 101,110 106,570 112,030 116,050
Payment Remitted except December 81,290 93,300 98,340 103,380 107,100
SSS Premiums Payable, ending 7,390 7,810 8,230 8,650 8,950

20. PHILHEALTH PAYABLE

2022 2023 2024 2025 2026
Sewer
Employee's Share 319 385 455 531 556
Employer's Share 319 385 455 531 556
Number of Sew ers 3 3 3 3 3
Monthly Contribution 1,915 2,309 2,732 3,186 3,336
Months of Serv ice 12 12 12 12 12
Annual Contribution 22,982 27,706 32,789 38,232 40,032
Washer
Employee's Share 294 356 423 495 520
Employer's Share 294 356 423 495 520
Number of Washer 1 1 1 1 1
Monthly Contribution 588 712 846 990 1,040
Months of Serv ice 12 12 12 12 12
Annual Contribution 7,056 8,544 10,152 11,880 12,480
Cutter
Employee's Share 294 356 423 495 520
Employer's Share 294 356 423 495 520
Number of Cutter 1 1 1 1 1
Monthly Contribution 588 712 846 990 1,040
Months of Serv ice 12 12 12 12 12
Annual Contribution 7,056 8,544 10,152 11,880 12,480
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Tray Assembler
Employee's Share 294 356 423 495 520
Employer's Share 294 356 423 495 520
Number of Tray Assembler 1 1 1 1 1
Monthly Contribution 588 712 846 990 1,040
Months of Serv ice 12 12 12 12 12
Annual Contribution 7,056 8,544 10,152 11,880 12,480
Selling Personnel
Employee's Share 294 356 423 495 520
Employer's Share 294 356 423 495 520
Number of Selling Personnel 1 1 1 1 1
Monthly Contribution 588 712 846 990 1,040
Months of Serv ice 12 12 12 12 12
Annual Contribution 7,056 8,544 10,152 11,880 12,480
Total Annual Contribution 51,206 61,882 73,397 85,752 89,952
Add: Beginning Balance - 4,267 5,157 6,116 7,146
Total Philhealth Premiums Payable 51,206 66,149 78,554 91,868 97,098
Payment Remitted except December 46,939 60,992 72,437 84,722 89,602
Philhealth Premiums Payable, ending 4,267 5,157 6,116 7,146 7,496

21. HDMF PAYABLE

2022 2023 2024 2025 2026
Sewer
Employee's Share 182 192 202 212 222
Employer's Share 182 192 202 212 222
Number of Sew ers 3 3 3 3 3
Monthly Contribution 1,094 1,154 1,214 1,274 1,334
Months of Serv ice 12 12 12 12 12
Annual Contribution 13,133 13,853 14,573 15,293 16,013
Washer
Employee's Share 168 178 188 198 208
Employer's Share 168 178 188 198 208
Number of Washer 1 1 1 1 1
Monthly Contribution 336 356 376 396 416
Months of Serv ice 12 12 12 12 12
Annual Contribution 4,032 4,272 4,512 4,752 4,992
Cutter
Employee's Share 168 178 188 198 208
Employer's Share 168 178 188 198 208
Number of Cutter 1 1 1 1 1
Monthly Contribution 336 356 376 396 416
Months of Serv ice 12 12 12 12 12
Annual Contribution 4,032 4,272 4,512 4,752 4,992
Tray Assembler
Employee's Share 168 178 188 198 208
Employer's Share 168 178 188 198 208
Number of Tray Assembler 1 1 1 1 1
Monthly Contribution 336 356 376 396 416
Months of Serv ice 12 12 12 12 12
Annual Contribution 4,032 4,272 4,512 4,752 4,992
 P a g e | 83

Selling Personnel
Employee's Share 168 178 188 198 208
Employer's Share 168 178 188 198 208
Number of Selling Personnel 1 1 1 1 1
Monthly Contribution 336 356 376 396 416
Months of Serv ice 12 12 12 12 12
Annual Contribution 4,032 4,272 4,512 4,752 4,992
Total Annual Contribution 29,261 30,941 32,621 34,301 35,981
Add: Beginning Balance - 2,438 2,578 2,718 2,858
Total HDMF Premiums Payable 29,261 33,379 35,199 37,019 38,839
Payment Remitted except December 26,822 30,801 32,481 34,161 35,841
HDMF Premiums Payable, ending 2,438 2,578 2,718 2,858 2,998

22. INCOME TAX PAYABLE

2022 2023 2024 2025 2026
I ncome Tax Payable, beginning 40,787 36,762 44,274 35,080
I ncome Tax Payable for Current Year 163,147 147,048 177,095 140,318 179,250
Payment Remmitted except 4th Quarter 122,361 151,073 169,583 149,512 169,517
Income Tax Payabe, ending 40,787 36,762 44,274 35,080 44,812

23. VAT PAYABLE

2022 2023 2024 2025 2026
Output VAT for Current Year - - - 334,349 360,068
I nput VAT for Current Year - - - 94,715 97,369
Net VAT Payable for Current Year - - - 239,634 262,699
Add: Beginning Balance - - - - 19,969
Total VAT Payable - - - 239,634 282,668
Payment Made Except for December - - - 219,664 260,777
VAT Payable, ending - - - 19,969 21,892

INPUT VAT
2022 2023 2024 2025 2026
Raw Materials - - - 85,650 88,219
Supplies - - - 2,829 2,914
Utilities - - - 6,235 6,235
Office Equipment - - - - -
Furniture & Fixtures - - - - -
Operations Equipment - - - - -
Leasehold I mprov ement - - - - -
Total Input VAT - - - 94,715 97,369
 P a g e | 84

Financial Ratios
Financial ratios can be classified according to the information they prov ide.
Frequently used ratios are liquidity, profitability, financial lev erage, and asset turn ov er
ratios.
Financial ratios are useful indicators of a firm’s performance and financial
situation. Financial ratios can be used to analyze trends and to compare the
company’s financial to those of the other firms. I n some cases, financial ratios can be
used to predict future bankruptcy. By examining past and current financial
statements—balance sheets, income statements, and cash flow statements—potential
inv estors can form opinions about inv estment value and expectation of future
performance.

Liquidity Ratios
Liquidity ratios prov ide information about a firm’s ability to meet its short-term
financial obligations. Tw o frequently used liquidity ratios are the current ratio and quick
ratio.

Current Ratio
Current ratio is the ratio of current assets and current liabilities. It is a measure of
the paying ability of the firm to meet its currently maturing obligations. Current liabilities
are the denominator because it represents the obligation that must be immediately
paid w ithin one year or in a one operating cycle.
Current Assets
Current Liabilities

Table 40. Current Ratio

Current Ratio 2022 2023 2024 2025 2026
Current Assets 518,774.12 534,040.52 560,913.43 591,120.02 621,406.61
Current Liabilities 54,882.47 52,307.22 61,338.48 73,703.42 86,148.36
Current Ratio 9.45 10.21 9.14 8.02 7.21

The table indicates that the business has the ability to pay its currently maturing
liabilities w ith the use of its short-term assets. The business has current assets that can
cov er up to 10 times the amount of its current liabilities. The business is liquid.

Quick Ratio
The quick ratio or acid test ratio is a liquidity ratio that measures the ability of a
company to pay its current liabilities w hen they come due w ith only quick assets. Quick
 P a g e | 85

assets are current assets that can be conv erted to cash w ithin 90 days or in the short-
term.
Current Assets – I nv entories – Prepaid expenses
Current Liabilities
Table 41. Quick Ratio
Quick Ratio 2022 2023 2024 2025 2026
Quick Asset 346,750.67 337,850.41 355,239.00 386,341.44 410,195.34
Current Liabilities 54,882.47 52,307.22 61,338.48 73,703.42 86,148.36
Quick Ratio 6.32 6.46 5.79 5.24 4.76

Cash is the only current asset aside from inv entories. The table show s that the
entity’s cash alone is more than sufficient to pay for its currently maturing obligations.
Thus, the entity is liquid.

Table 42. I nv entory Turnover Ratio

Inventory Turnover Ratio 2022 2023 2024 2025 2026
Cost of Sales 1,548,211.12 1,765,710.98 1,851,069.84 1,843,007.17 1,900,901.41
Av erage I nv entory 86,011.73 184,106.78 200,932.27 205,226.50 207,994.92
Inventory Turnover Ratio 18.00 9.59 9.21 8.98 9.14

Table 43. Defensiv e Interval Ratio

Defensive Interval Ratio 2022 2023 2024 2025 2026
Current Assets 518,774.12 534,040.52 560,913.43 591,120.02 621,406.61
Daily Operational Expenses 6,239.71 7,062.58 7,394.52 7,375.44 7,609.15
Defensive Interval Ratio 83.14 75.62 75.86 80.15 81.67

Leverage Ratios
Lev erage ratio measure the v alue of equity in a company by analyzing its ov erall
debt picture. I n other words, the financial leverage ratios measure the overall debt load
of a company and compare it w ith the assets or equity. This show s how much of the
company assets belong to the shareholders rather than creditors.

Debt Ratio
Debt ratio is a ratio that measures a firm's total liabilities as a percentage of its
total assets. I n a sense, the debt ratio show s a company's ability to pay off its liabilities
w ith its assets.
Total Liabilities
Total Assets
 P a g e | 86

Table 44. Debt Ratio

Debt Ratio 2022 2023 2024 2025 2026

Total Liabilities 54,882.47 52,307.22 61,338.48 73,703.42 86,148.36
Total Assets 654,882.47 652,307.22 661,338.48 673,703.42 686,148.36
Debt Ratio 0.08 0.08 0.09 0.11 0.13

The table abov e shows that the liabilities only amount to about 8% to 13% of the
company’s total assets. This indicates that the company can easily pay its liabilities. I t is
also w orthy to note that the business expects to only hav e short-term obligations arising
from statutory liabilities.

Debt to Equity Ratio

The debt to equity ratio show s the percentage of company financing that
comes from creditors and inv estors.

Table 45. Debt to Equity Ratio

Debt to Equity Ratio 2022 2023 2024 2025 2026
Total Liabilities 54,882.47 52,307.22 61,338.48 73,703.42 86,148.36
Total Equity 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00
Debt to Equity Ratio 0.09 0.09 0.10 0.12 0.14

The firm’s debt to equity ratio indicates that majority of the financing came from
the partners. A low er debt to equity ratio usually implies a more financially stable
business. Companies w ith a higher debt to equity ratio are considered more risky to
creditors and inv estors than companies w ith a low er ratio. This is because companies
lev eraging large amounts of debt might not be able to make the payments. I n this
case, the business has actually no financing from creditors other than the gov ernment
and customers. The business chose to hav e a 100% capital from partners because a
partnership is exclusively a contract.

Equity Ratio
The equity ratio is an inv estment leverage or solvency ratio that measures the
amount of assets that are financed by ow ners' investments by comparing the total
equity in the company to the total assets.
Total Equity
Total Assets
 P a g e | 87

Table 46. Equity Ratio

Equity Ratio 2022 2023 2024 2025 2026
Total Equity 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00
Total Assets 654,882.47 652,307.22 661,338.48 673,703.42 686,148.36
Equity Ratio 0.92 0.92 0.91 0.89 0.87

Up to 92% of the assets of the business are ow ned by the partners.

This further proves that a huge portion of the financing came from the partners. Higher
equity ratios are more preferred than low er ones because it suggests that the business
does not hav e large amounts of debt.
Profitability Ratios
Profitability ratios compare income statement accounts and categories to show
a company's ability to generate profits from its operations. These ratios basically show
how w ell companies can achieve profits from their operations.

Net Profit Margin

Net Profit Margin is a profitability ratio that measures the amount of net income
earned w ith each peso of sales generated by comparing the net income and net sales
of a company.
Net I ncome
Net Sales

Table 47. Net Profit Ratio

Net Profit Ratio 2022 2023 2024 2025 2026
Net I ncome after Tax 380,677.49 343,112.20 413,221.01 327,408.89 418,249.09
Sales 2,289,254.40 2,470,487.04 2,664,119.81 2,536,591.08 2,731,713.47
Net Profit Ratio 0.17 0.14 0.16 0.13 0.15

The table indicates that the business earns a net income of approximately 9% to
15& of its sales. Hav ing these profit margin ratios are still a plus considering that the
business is labor intensiv e. However, a higher profit margin ratio is alw ays desired.

Table 48. Operating Profit Margin

Operating Profit Ratio 2022 2023 2024 2025 2026
Net I ncome before Tax 543,824.98 490,160.28 590,315.72 467,726.99 597,498.69
Sales 2,289,254.40 2,470,487.04 2,664,119.81 2,536,591.08 2,731,713.47
Operating Profit Ratio 0.24 0.20 0.22 0.18 0.22
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Table 49. Gross Profit Margin

Gross Profit Ratio 2022 2023 2024 2025 2026

Gross Profit 741,043.28 704,776.06 813,049.96 693,583.91 830,812.06
Sale 2,289,254.40 2,470,487.04 2,664,119.81 2,536,591.08 2,731,713.47
Gross Profit Ratio 0.32 0.29 0.31 0.27 0.30

Return on Assets
The return on assets ratio or ROA measures how efficiently a company can
manage its assets to produce profits during a period.
Net I ncome
Av erage Total Assets

Table 50. Return on Assets

Return on Asset 2022 2023 2024 2025 2026
Net I ncome 380,677.49 343,112.20 413,221.01 327,408.89 418,249.09
Total Assets 327,441.24 653,594.85 656,822.85 667,520.95 679,925.89
Return on Asset 1.16 0.52 0.63 0.49 0.62

This suggests that the business earns 51% on the av erage of the v alue of its assets.
The business can improv e on the management of its assets.

Table 51. Asset Turnov er

Asset Turnover 2022 2023 2024 2025 2026
Sales 2,289,254.40 2,470,487.04 2,664,119.81 2,536,591.08 2,731,713.47
Total Assets 654,882.47 652,307.22 661,338.48 673,703.42 686,148.36
Asset Turnover 3.50 3.79 4.03 3.77 3.98

Return on Investment
The return on inv estment ratio shows how much profit each peso of equity
generates.
Net I ncome
I nv estment

Table 52. Return on I nvestment

Return on Investment 2022 2023 2024 2025 2026
Net I ncome 380,677.49 343,112.20 413,221.01 327,408.89 418,249.09
Total Equity 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00
Return on Investment 0.63 0.57 0.69 0.55 0.70

A peso of inv ested capital returns at least 33% of its original v alue. This suggests
that the business is earning w ell enough to recover the capital provided by the partners
surely.
 P a g e | 89

Table 53. Return on Net Operating Profit

Return on Net Operating Profit 2022 2023 2024 2025 2026

Net I ncome before Tax 543,824.98 490,160.28 590,315.72 467,726.99 597,498.69
Total Assets 654,882.47 652,307.22 661,338.48 673,703.42 686,148.36
Return on Net Operating Profit 0.83 0.75 0.89 0.69 0.87

CAPITAL BUDGETING TECHNIQUES

Capital expenditures are resources committed for a long-term period to realize
future benefits from it. The researchers took into consideration the analysis of the cash
flow profile of the particular project in evaluating this Project Feasibility. I ncluded in the
analysis is the Payback period, break-even analysis, and rates of return.

Payback Period
Payback period is the amount of time it takes an inv estment to earn enough
money to pay for itself or breakeven. This time-based measurement is particularly
important to management for analyzing risk.

Table 54. Payback Period

Payback Period
Net I ncome 380,677.49
Depreciation 14,995.22
Amortization 2,846.43
Annual Cash inflow 398,519.14
Equity 600,000.00
Payback Period 1.51

The inv estment is recoverable in 2.31 years if the net income for the succeeding
years w ill be the same w ith the first year.

BREAKEVEN ANALYSIS
Break-even point analysis is a measurement system that calculates the margin of
safety by comparing the amount of rev enues or units that must be sold to cov er fixed
and v ariable costs associated with making the sales. I n other words, it is a w ay to
 P a g e | 90

calculate w hen a project will be profitable by equating its total rev enues w ith its total
expenses.
Table 55. Breakev en Analysis

Breakeven Volume Analysis 2022 2023 2024 2025 2026

Fixed Cost 427,743.98 447,230.76 457,469.52 460,038.91 469,452.04
Selling Price - Variable Cost/Unit 68.50 69.02 69.66 76.07 77.14
BEV 6,244.04 6,480.13 6,566.85 6,047.57 6,085.91

Breakeven Cash Analysis 2022 2023 2024 2025 2026

Cash Fixed Cost 409,902.33 429,389.11 439,627.87 442,197.26 451,610.39
Selling Price - Variable Cost/Unit 68.50 69.02 69.66 76.07 77.14
BEC 5,983.60 6,221.61 6,310.74 5,813.03 5,854.62

Breakeven Selling Price Analysis 2022 2023 2024 2025 2026

Total Cost 1,969,059.91 2,058,189.74 2,139,105.03 2,123,231.58 2,197,867.49
Unit Volume 13,824.00 14,515.20 15,240.96 16,003.01 16,803.16
BESP 142.44 141.80 140.35 132.68 130.80

Breakeven Sales Analysis 2022 2023 2024 2025 2026

Fixed Cost 427,743.98 447,230.76 457,469.52 460,038.91 469,452.04
1-(VC/Net Sales) 0.33 0.35 0.37 0.34 0.37
BES 1,309,218.38 1,285,447.03 1,240,481.51 1,336,080.51 1,278,192.96

Table 56. Net Present Value

Net Present Value 2022 2023 2024 2025 2026
After-tax Cash Flow 281,378.15 334,211.94 430,609.60 358,511.33 442,102.98
Discount Rate 8% 8% 8% 8% 8%
Present Value 260,535.33 286,532.87 341,831.78 263,516.53 300,887.86
Total 1,453,304.37
I nitial I nv esment 600,000.00
Net Present Value 853,304.37

Since the NPV is greater than zero, it w ould be better to inv est in the project than
to do nothing.
 P a g e | 91

Net Present Value 2022 2023 2024 2025 2026

After-tax Cash Flow 281,378.15 334,211.94 430,609.60 358,511.33 442,102.98
Internal Rate of Return 29% 29% 29% 29% 29%
Present Value 217,593.82 199,863.88 199,137.12 128,211.68 122,265.61
Total 867,072.10
I nitial I nv esment 600,000.00
Net Present Value 267,072.10

Sensitivity Analysis
I f the business decided to reduce the sales price by 5 pesos ev ery year, it w ill still
result to a net income.

Table 57. Sensitiv ity Analysis

2021 2022 2023 2024 2025
REVENUE
Sales 2,022,649 2,064,787 2,106,083 2,146,346 2,185,371
Cost of Goods Sold 1,481,114 1,689,978 1,772,490 1,843,255 1,909,293
Gross Income 541,534 374,809 333,593 303,091 276,078

Other Income 49,370 51,396 53,450 55,534 57,499

Total Revenue 590,905 426,204 387,043 358,625 333,577

ADMINISTRATIVE EXPENSES
Rent Expense 43,200 43,200 43,200 43,200 43,200
Salaries and Wages 100,800 106,800 112,800 118,800 124,800
Employee Benefits 22,224 24,068 25,972 27,936 28,976
Depreciation Expense 7,926 7,926 7,926 7,926 7,926
Amortization Expense 2,541 2,541 2,541 2,541 2,541
Supplies Expense 7,924 6,818 7,023 7,233 7,450
Selling Expense 12,000 12,000 12,000 12,000 12,000
Repairs and Maintenance 1,540 1,693 1,863 2,049 2,254
Taxes and Licenses 8,200 22,848 23,261 23,663 24,054
Organizational Expense 5,977 - - - -
Utilities Expense 30,613 30,613 30,613 30,613 30,613
Total Administrative Expenses 242,945 258,507 267,198 275,962 283,814

Net Income before Tax 347,960 167,697 119,845 82,663 49,763

Income Tax 104,388 50,309 35,953 24,799 14,929
NET INCOME AFTER TAX 243,572 117,388 83,891 57,864 34,834

And if the business w ill be able to increase their market by 25% each year by
offering the product nationwide, it w ill result to a huge increase in the profit.
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2021 2022 2023 2024 2025

REVENUE
Sales 2,022,649 2,598,542 3,335,966 4,279,693 5,486,786
Cost of Goods Sold 1,481,114 1,843,402 2,143,392 2,500,896 2,941,667
Gross Income 541,534 755,139 1,192,573 1,778,797 2,545,119

Other Income 49,370 56,510 65,302 76,219 89,719

Total Revenue 590,905 811,649 1,257,875 1,855,015 2,634,838

ADMINISTRATIVE EXPENSES
Rent Expense 43,200 43,200 43,200 43,200 43,200
Salaries and Wages 100,800 106,800 112,800 118,800 124,800
Employee Benefits 22,224 24,068 25,972 27,936 28,976
Depreciation Expense 7,926 7,926 7,926 7,926 7,926
Amortization Expense 2,541 2,541 2,541 2,541 2,541
Supplies Expense 7,924 6,818 7,023 7,233 7,450
Selling Expense 12,000 12,000 12,000 12,000 12,000
Repairs and Maintenance 1,540 1,693 1,863 2,049 2,254
Taxes and Licenses 8,200 28,185 35,560 44,997 57,068
Organizational Expense 5,977 - - - -
Utilities Expense 30,613 30,613 30,613 30,613 30,613
Total Administrative Expenses 242,945 263,845 279,497 297,295 316,828

Net Income before Tax 347,960 547,804 978,378 1,557,720 2,318,010

Income Tax 104,388 164,341 293,513 467,316 695,403
NET INCOME AFTER TAX 243,572 383,463 684,865 1,090,404 1,622,607

With or Without a Project Analysis

I nvestors w ill be receiving an additional benefit from this new project as it has
been forecasted to be financially v iable.

Figure 17. With or Without a Project Analysis

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CONCLUSION
The business is liquid and stable w ith an av erage current ratio of 8. The inv estors
can recover their investments within 2.31 years. This indicates a rapid recovery of
inv estment; thus, the project is more attractiv e to inv estors. The av erage return on assets
is around 51% and return on inv estment is around 48% — profitable for the next fiv e
years. Therefore, the business is financially v iable.
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APPENDICES
ARTICLES OF PARTNERSHIP
OF
__________________________Bagetlog Recycles___________________________
(Partnership Name)

KNOW ALL MEN BY THESE PRESENTS:

That we, the undersigned partners, all of legal age, residents and citizens of the
Philippines, have on this day voluntarily associated ourselves together for the purpose of
forming a general partnership under the following terms and conditions and subject to existing
and applicable laws of the Republic of the Philippines:

AND WE HEREBY CERTIFY:

ARTICLE I. Partnership Name:That the name of this partnership shall

be Bagetlog Recycles and shall transact business under the said company name.

ARTICLE II. Business Purpose:That the purpose/s for which this partnership is formed
is/are: to engage in the business of owning and manufacturing eco-friendly bags.

ARTICLE III. Principal Place of Business:That the principal place of business of this
partnership shall be located at: Naguilian Road, Purok 13, Irisan, Baguio City, 2600

ARTICLE IV. Term of Existence:That this partnership shall have a term of ____5___
years from and after the original recording of its Articles of Partnership by the Securities and
Exchange Commission.

ARTICLE V. Partners’ Circumstances:That the names, nationalities and complete residence

addresses of the partners are as follows:

Name Nationality Complete Residence Address

Jan Paul Agayao Filipino kd-16 Cruz La Trinidad Benguet

Jade Renzo Ang Filipinojb 147 km4 La Trinidad Benguet
Lester John Calixto Filipino Purok 17, Irisan Baguio City
Jessica Catao Filipino 270 Purok 4 Loakan Liwanag, Baguio City
Shazi Mae Choudhry Filipino 77A Purok 6, Loakan Liwanag, Baguio City
Ma. Abigail Diana Filipino 230 Carantes Compound Camp 7, Baguio City
Beverly Lawaguey Filipino 371 Upper San Vicente, Baguio City
Cath Lea Villanueva Filipino IC-93 Betag, La Trinidad, Benguet

ARTICLE VI. Capital Contributions:That the capital of this Partnership shall be the
amount of six hundred thousand (P600,000.00), Philippine Currency, contributed in cash by the
partners, as follows:
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NameAmount Contributed
Jan Paul Agayao ₱ 75,000
Jade Renzo Ang ₱ 75,000
Lester John Calixto ₱ 75,000
Jessica Catao ₱ 75,000
Shazi Mae Choudhry ₱ 75,000
Ma. Abigail Diana ₱ 75,000
Beverly Lawaguey ₱ 75,000
Cath Lea Villanueva ₱ 75,000

That no transfer of interest which will reduce the ownership of Filipino citizens to less
than the required percentage of capital as provided by existing laws shall be allowed or
permitted to be recorded in the proper books of the partnership.
ARTICLE VII. Sharing Ratios:That the profits and losses of this partnership shall be
divided and distributed proportionately on the ratio of the capital contribution of each partner.

ARTICLE IX. Management:That this partnership shall be under Beverly Lawaguey, as

General Manager, who shall be in charge of the management of the affairs of the company. He
shall have the power to use the partnership name and in otherwise performing such acts as are
necessary and expedient in the management of the firm and to carry out its lawful purposes.

ARTICLE X. Undertaking to Change Name: That the partners undertake to change

the name of this partnership, as herein provided or as amended thereafter, immediately upon
receipt of notice or directive from the Securities and Exchange Commission that another
corporation, partnership or person has acquired a prior right to the use of that name or that the
name has been declared as misleading, deceptive, confusingly similar to a registered name, or
contrary to public morals, good customs or public policy.

IN WITNESS WHEREOF, we have hereunto affixed our signatures this 25th day of
_November, 2020, at Baguio City.

______________________ _______________________
Jan Paul Agayao Shazi Mae Choudhry

______________________ _______________________
Jade Renzo Ang Ma. Abigail Diana

Lester John Calixto Beverly Lawaguey

Jessica Catao Cath Lea Villanueva

(Names and Signatures of the partners)

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LEASE CONTRACT

KNOW ALL MEN BY THESE PRESENTS:

This CONTRACT OF LEASE is made and executed at the City of Baguio, this day of January 1,
2021, by and between:

Raymond Smith, of legal age, single, Filipino, and with residence and postal address at
Naguillian Rd. Purok 13 Irisan Baguio City, 2600, hereinafter referred to as the LESSOR.

-AND-

Lester John Calixto, Filipino and with residence and postal address at Purok 17 Irisan,
Baguio City, hereinafter referred to as the LESSEE.

WITNESSETH; That

WHEREAS, the LESSOR is the owner of THE LEASED PREMISES, a residential property
situated at Naguillian Rd. Purok 13 Irisan Baguio City, 2600;

WHEREAS, the LESSOR agrees to lease-out the property to the LESSEE and the LESSEE is
willing to lease the same;

NOW THEREFORE, for and in consideration of the foregoing premises, the LESSOR leases
unto the LESSEE and the LESSEE hereby accepts from the LESSOR the LEASED premises,
subject to the following:

TERMS AND CONDITIONS

1. TERM: This term of lease is for ONE (1) YEAR. From (January 1, 2022) to January 1, 2023
inclusive. Upon its expiration, this lease may be renewed under such terms and conditions as my
be mutually agreed upon by both parties, written notice of intention to renew the lease shall be
served to the LESSOR not later than seven (7) days prior to the expiry date of the period herein
agreed upon.

2. RENTAL RATE: The monthly rental rate for the leased premises shall be in peso: Eighteen
thousand (P 18,000.00), Philippine Currency. All rental payments shall be payable to the
LESSOR.

3. DEPOSIT: That the LESSEE shall deposit to the LESSOR upon signing of this contract and
prior to move-in an amount equivalent to the rent for THREE (3) MONTHS or the sum of Thirty
four thousand pesos (P 34,000.00), Philippine Currency. Wherein the two (2) months deposit
shall be applied as rent for the 11th and 12th months.
 P a g e | 97

4. TERMINATION – Either the party may exterminate this contract by writtennotice to the other
of such desire to terminate at least sixty (60) days prior to the contemplated date of termination.

5. OCCUPANCY – The leased premises shall be used exclusively by the LESSEE for his
business operations only.

6. PUBLIC UTILITIES: The LESSEE shall pay for its telephone, electric, water, Internet,
association dues and other public services and utilities during the duration of the lease.

7. OBSERVANCE OF GOVERNMENT REGULATIONS – The LESSEE shall at his own

expense and risk, comply with all laws, ordinance and other regulations of any department of the
government, local or national affecting of pertaining to the leased premises and to any affects or
articles which the said LESSEE may store in the leased premises during the term of his lease or
renewal.

8. LESSOR'S RIGHT OF ENTRY: The LESSOR or its authorized agent shall after giving due
notice to the LESSEE shall have the right to enter the premises in the presence of the LESSEE or
its representative at any reasonable hour to examine the same or make repairs therein or for the
operation and maintenance of the building or to exhibit the leased premises to prospective
LESSEE, or for any other lawful purposes which it may deem necessary.

9. This CONTRACT OF LEASE shall be valid and binding between the parties, their successors-
in-interest and assigns.

IN WITNESS WHEREOF, parties herein affixed their signatures on the date and place above
written.

RAYMOND SMITH LESTER JOHN CALIXTO

LESSOR LESSEE

Signed in the presence of:

_____________________________ _________________________
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SSS CONTRIBUTION TABLE

PHILHEALTH CONTRIBUTION
 P a g e | 99

PAG-IBIG CONTRIBUTION

Detailed Outline of a Project Feasibility Study

I. Project Summary
A. Name of Enterprise
B. Location
C. Descriptiv e Definition of the Project
D. Project Objectiv es
E. Feasibility Criteria
F. Highlights of the Project
G. Major Assumptions and Summary of Findings
H. Conclusion of the Study

II. Market Study

A. Product Description
B. Demand-Supply Analysis
C. 4 P's Study (Price, Place, Promotion, Product)
D. Factors Affecting the Market
E. Surv ey Results
F. Analysis of Data Gathered
G. Conclusions and Recommendations

III. Technical Study

A. The Product I Serv ice
B. Manufacturing Process
C. Plant Size (Capacity) and Production Schedule
D. Machinery and Equipment
E. Plant Location
F. Plant Layout
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G. Building Facilities
H. Raw Materials and Supplies
I . Utilities
J. Waste Disposal
K. Production Cost
i. Direct Materials
ii. Direct Labor
iii. Manufacturing Ov erhead

L. Plant Organization

M. Appendices
i. Plant Layout I Equipment
ii. Equipment flow sheet
iii. Equipment listing and cost
iv . Utilities calculation
v . Plant facilities breakdow n of cost
v i. Projected cost of production

IV. Socio-Economic Study (Normally used for government projects)

A. Socio-Economic Benefits in terms of:
i. Employment and I ncome
ii. Taxes
iii. Supply of commodities
iv . Demand for materials

V. Organization and Management Study

A. Formulation of Goals and Objectiv es
B. Basic Considerations
C. Form of Ow nership
D. Organizational Chart
E. Officers and Key Personnel
F. Project Schedule

VI. Environmental Impact Analysis

VII. Recommendation
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Pointers in Evaluating a Project Feasibility Study

I F THE PREPARATI ON of a project feasibility study is v ital to the success of an

undertaking, the ev aluation of the study is just as important. The recommendations
contained in the study w ill be the basic guidelines in formulating a final decision,
and the decision rests heav ily on the ev aluation of these recommendations. How
then should one go about ev aluating a project study? How can one prioritize the
less relev ant items in an exhaustiv e study or determine the full implications of a
simple but concise project feasibility study?
Follow ing is a brief discussion of the major parts of a project study w hich are
generally of prime importance in making a "go" or "no go" decision.

A. MARKET STUDY
The market study answ ers tw o basic questions: I s there a demand for the product? If
so, can the marketing program effectiv ely meet this demand?
I n the process of determining demand, the corollary issues of market size, location,
segmentation, characteristics, and grow th as w ell as the supply situation are
tackled. The conclusion - w hether or not there exists substantial demand, or can the
demand be fully met by supply? - is at the heart of the w hole project study. I f
demand does not exist nor cannot be created, there is no point in pushing through
w ith the project.
How ev er, if the findings on the demand are fav orable, the next question is how to
address such a demand. Here, the marketing program comes into focus. The selling
price, product quality and packaging, channels of distribution, and promotions are
taken into consideration. The marketing program is then ev aluated against the
backdrop of general marketing practices w ithin the industry to assess its chances of
meeting its objectiv es.
Ultimately, the answ ers to the tw o basic questions posed earlier greatly affect the
feasibility of the project. A negativ e response to either question means that the
project has no potential for success.

B. TECHNICAL STUDY
There are three basic issues to be considered in the technical section. These
are product quality, resource av ailability and accessibility, and optimal use of
resources to produce the highest possible quality at the low est possible cost.
Product quality should allow the product to compete fav orably w ith existing market
leaders. The product should likew ise be appropriate and suitable for its intended
use(s). One should ask the question: What characteristics distinguish this product
from the others in the same category?
Resource av ailability and accessibility are next in importance. I t is of little use to
aspire for a product w ith superior qualities if the raw materials needed are alw ays
short in supply or cannot be readily transported from their points of origin. Resources
also mean labor, equipment, machinery, utilities, technology, and all other items
that are directly necessary for production. Are they all av ailable in sufficient
quantities and at reasonable costs?
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The focal point of the technical study is to determine the most efficient w ay
of allocating resources to produce the desired product w ith competitiv e quality at
the low est possible cost. The product and its characteristics hav e been defined. The
resources necessary for production hav e been identified.
I t is now a question of efficient and effectiv e use of resources. I f this can be
reasonably attained, then the technical aspect of the study is deemed feasible. I t
may also be concluded at this stage that the product of a specific quality and w ith
a confirmed demand in substantial quantities can be efficiently produced.

C. ORGANIZATION AND MANAGEMENT STUDY

Tw o major questions may be posed in ev aluating organization and
management aspects of a project study:
• I s the organizational setup optimally effectiv e?
• Are the recommended key officials the best qualified under the
circumstances?
Optimum effectiv eness refers to the ability of the organizational setup to
carry out its function smoothly w hile hav ing the low est number of personnel
possible. This implies a clear and precise identification of duties and responsibilities,
flow of authority, and staffing lev el requirements. Thus, an organization that can
perform in the most effectiv e manner w ith the few est personnel possible shall be
considered most appropriate for the project.
Keeping this criterion in mind, the qualifications of indiv iduals recommended
for key positions must also be examined. I s a particular manager suited for the
demands of the position? I s s/he the best av ailable? Does s/he hav e the right
background, training and experience for the job?
Organization and management factors are normally considered tow ard the
end of the project study. But it is by no means the least important. The
organizational framew ork is the link betw een planning and I mplementation. I t w ill
determine the successful realization of the project goals and objectiv es. Ev ery step,
therefore, must be carefully taken in deciding on the positions to be created, the
relationships of positions, the number of personnel to employ, and the kind of staff
to put in place. The plan is only as good as the implementers.

D. SOCIO-ECONOMIC STUDY
The ev aluation of this portion of the project study is a matter of determining
w hether society and the economy deriv e net positiv e gams from the project.
I t is not, how ev er, a simple exercise. For instance, a plant in a remote community
may prov ide the local residents w ith better income-earning opportunities. But, if in
the process, the env ironment is seriously polluted, the community may be better off
w ithout the plant and the improv ed income earning opportunities. The extent of
pollution and the v alue judgments of the authorities and the community w ill strongly
influence the ev aluation of the project's socio-economic desirability.
The economic aspect is relativ ely easier to ev aluate. I f the project intends to
produce an essential item that is not in abundant supply, the positiv e effects on the
economy as a w hole can hardly be doubted. The issue becomes ticklish in a
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situation w here the product intended for production is completely non-essential,

e.g., fancy items,or those already in excess supply.

The project proponents may be regarded as nothing more than profit-

seeking indiv iduals w ith little or no concern for socio-economic uplift. This may be
the case ev en if the project is entirely harmless from the socio-economic v iew point,
but does not contribute to the promotion of socio-economic conditions.
At this point, it is w orthw hile to distinguish betw een priv ate sector projects and
gov ernment projects. The former w ill generally consider profitability as the primary
criterion. The latter w ill place socio-economic desirability abov e anything else.
Thus, w hile gov ernment projects at times ignore profitability for as long as socio-
economic desirability is achiev ed, priv ate entities in general do not feel inclined to
do the same. This is a v ital consideration in ev aluating different types of projects.

E. FINANCIAL STUDY
The financial study requires the preparation of a number of financial
statements and the analysis of sev eral benchmarks in the form of ratios culled from
the financial statements. As such the entire study practically boils dow n to a
question of profitability. This is so because a profitable income statement w ill
generally mean a fav orable cash flow . Since profitability and liquidity v irtually
determine the financial health of any firm, profitability becomes the single most
important factor, not only in show ing the v iability of the product but also in
ultimately attracting inv estments or financing to the project.

Profitability is not the same as profit: The distinction is important since the
profit figure is, by itself, meaningless w hile profitability is a measure of net income as
a percentage of sales. I t takes other factors into consideration, particular rev enue,
and therefore giv es a better picture of ov erall business performance.
I f, for instance, Firm A generates a profit of ₱1 million as against Firm B’s ₱100,000, it
w ould appear that Firm A has a better financial picture. I f Firm A, how ev er, had
rev enue of ₱10 million w hile Firm B earned rev enue of ₱500,000, then Firm A’s 10%
return on sales pales in comparison to Firm B’s 20%. I n this case, Firm B is said to be
more profitable.
I n ev aluating the profitability of a project, it is important to consider the
industry's profitability situation. I n an industry w here 10% profitability is the historical
trend, aiming for 20% may be tantamount to asking for the moon. On the other
hand, a projected profitability of 10% in an industry w here 20% is generally
attainable leav es much to be desired.
Profitability must also be v iew ed from a long-term or medium-term
perspectiv e. Losses in the first few years of operation do not necessarily suggest an
unprofitable v enture. I f a continually profitable operation is projected after, say,
three years, the project may still be considered v iable. Hence profitability in the
long-run is the more relev ant gauge.
Finally, the question of financing comes into focus. I f the project is deemed
profitable, are there enough sources for the initial capital requirements? Are the
 P a g e | 104

financing arrangements and terms reasonable and v iable? I n general, financing

w ould not be a troublesome issue if the other aspects of the project study (e.g.,
market, technical, etc.) yield fav orable conclusions. An undertaking w hich can
efficiently and profitably produce a product w ith sufficient demand w ill certainly
not be w anting in financing.

RUBRICS
Rubrics For Oral Defense
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Rubrics for the Final Output of the Project Feasibility Study

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