Sample Feasib

Chapter 1
Executive Summary
A. Business Name
The proposed name for the project is ABYAS: Association for

Building and Yielding Agricultural Support. The researchers thought of a
word that would already fit the proposed project, instantly helping people
intuit what the cooperative would be about. Abyas is a Kapampangan
word for Tagalog word bigas which means rice. The researchers also
formed an acronym for it, Association for Building and Yielding Agricultural
Support.
B. Location
Location plays an integral role for businesses, especially for this

type which focuses on agriculture. Key factors that must be considered in
picking the location are: the target market; the accessibility; and whether
the proposed site will boost the cooperatives effectiveness and efficiency.
The proposed main office of the cooperative will be at Purok 5, Tabuyuc,
Apalit, Pampanga. The town of Apalit is composed of different barangays
that are full of rice farms or rice paddles and which main field of work is
agriculture specifically rice production. Barangay Tabuyuc, majority of the
land is composed of rice farms.
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C. Description of the Business Logo
The simple cooperative logo is designed appropriately for the

farmers. The logo shows the cooperative name and the acronym for it with
the shade of golden brown that represents the rice grain from the
abundant soil because of the organic fertilizers. The logo also displays a
rice crop bending towards the cooperative name that depicts the
unswerving support of the cooperative to the farmers.
D. Brief Description of the Business
a. Company Background
This study focuses on manufacturing organic fertilizers that

provides a better effect on the soil than the commercial fertilizer.
The cooperatives product can be used as a substitute for
commercial fertilizer for their farm inputs. This study will introduce
an organic fertilizer manufacturing business to help the agricultural
business in Apalit, Pampanga.
b. Industry Type
` The business belongs to the manufacturing industry.

ABYAS is a cooperative that helps farmers by manufacturing
organic fertilizers and selling them for a reasonable price.
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c. Type of Organization
The proponent agreed that cooperative will be the most

appropriate form of business. Cooperative is an autonomous
association of people united voluntarily to meet their common
economic, social and cultural needs and aspirations through a
jointly and democratically controlled business.
E. General Objectives of the Business
In the course of the cooperative, the owners aim for these

objectives to establish the integrity and ensure the continuity of the
business.
Retain existing customers, attract new customers, and meet
customer demands
Satisfy all customer needs
Monitor and observe the competition
Hire and train qualified service personnel
F. Research and Methodology
a. Survey
In gathering significant information and in constructing the
questionnaire, the researchers conduct an interview to some
farmers in the target area. Other information was acquired through
the internet which served as supplementary data and helped in
facilitating the undertakings of the research study.
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The researchers went to Tabuyuc, Apalit, Pampanga to
disseminate the questionnaires by having a house to house visit
which was willfully answered by the farmers. The researchers spent
great time in developing their questionnaire so as to serve its
intended purpose. The result will be tallied and tabulated based on
the frequency of items checked by the respondents.
b. Slovins Formula
n = N / ( 1 + Ne2 )
n = 250 / { 1 + [ 250 ( 0.052 ) ] }
n = 154
where:
n = sample size
N = population
e = margin of error
c. Sampling Techniques
Random sampling will be utilized in study. Since the

products are organic fertilizers, the farmers will be the respondents.
G. Project Summary
a. Market Study
The market projection of the business is based on the

related information gathered from the survey conducted within the
target area, Tabuyuc, Apalit, Pampanga.Projection of demand,
supply, and sales for the first five years of operation is based on
different factors like the population growth, market acceptability,
capacity to supply and other factors. We also consider factors like
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competitors and prevailing prices of the suppliers. Based on our
demand supply analysis, we found out that we can supply the
available market on our production capacity.
b. Technical Study
ABYAS will be located at Purok 5, Tabuyuc, Apalit,

Pampanga. The place has the right space for the cooperative to
operate and manufacture. The business will pay the electricity and
the water system. Equipments, furnitures, and supplies will be
purchased new, all in cash basis.
The cooperative will have three kinds of organic fertilizer
products: Blood Meal, Bone Meal, and Fish Meal. The raw
materials that will be used in the production of the Blood Meal
would be animal blood. For Bone Meal, the raw materials will be
animal bones, and the raw materials for the Fish Meal will be
ground-up fish bones, carcasses, guts, and other fish clippings. All
of these raw materials will be collected from the local market of
Barangay Tabuyuc, Apalit, Pampanga. The cooperative will also
acquire ready-made compost from a supplier in Laguna. The ready-
made compost is also a raw material for all of the cooperatives
products.
c. Management and Legal Study
The mission, vision and core values, organizational chart,

management and employees duties and functions, organizational
policies and procedures, code of ethics, internal controls, and
salary and wage treatment are presented. The general manager
will be all in charged for the day to day operation of the business.
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The business will have 2 laborers who will be responsible in
processing the organic fertilizers. Through a well-established
organizational structure, efficiency and stability is brought into the
business, making it feasible in this aspect.
d. Financial Study
This study focused on the financial aspect of the proposed

business. The proponents will know how much availability of funds
is needed to fulfill all its obligation and expenses. By preparing
financial statements the owners will able to know if the business will
be profitable. The cooperative will result to loss for the first five
years, making it not feasible in this aspect.
e. Socio-Economic Study
ABYAS commits to help in the growth of the community and

assures that it will do its responsibilities to the society. It ensures
that it will be responsible enough to perform their duties and
obligations of their customers, community and of course to the
government. The business will engage in uplifting the social status
as well as in promoting the welfare of its employees.
H. Definition of Terms
Abyas. Kapampangan term for bigas.

ABYAS. Abbreviation for Association of Building and Yielding
Agricultural Support. A proposed business that sells organic fertilizer
Ammonium Phosphate. Also known as N-P-0. Fertilizer that
consists nitrogen and phosphate.
Blood Meal. An organic fertilizer consists of nitrogen only.
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Bone Meal. An organic fertilizer consists of nitrogen and phosphate.
Complete Fertilizer. Also known as N-P-K. Fertilizer consists of
nitrogen, phosphate, and potassium.
Farmers. Also called an agriculture, is a person engaged in
agriculture, raising living organisms for food or raw materials.
Fish Emulsion. A complete organic fertilizer.
Fertilizer. Any material of natural or synthetic origin that is applied
to soils or plant tissues to supply one or more plant nutrient essential to
the growth of plants
Organic Fertilizer. Fertilizers derived from animal matter, human
excreta or vegetable matter.
Respondent. A person who replies to something, especially one
supplying information for a survey or questionnaire or responding to an
advertisement.
Survey. Studies the sampling of individual units form a population
and the associated data collection techniques, such as questionnaire
construction and methods for improving the number of accuracy of
responses to surveys.
Systematic Sampling. Type of probability sampling method in which
sample members from a larger population are selected according to a
random starting point and fixed periodic interval.
Urea Fertilizer. Also known as N-0-0. Fertilizer that consists of
nitrogen only.
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Chapter 2
MARKET STUDY
To run a successful business, it is essential that you know who your custo
mers are, what they need, and how to reach them. Market research will help you
get accurate and specific information about your customers and competitors, whi
ch is a critical part of starting or expanding your business. Consumer demands i
mpact and direct all aspects of your companys activities and can determine the s
uccess or failure of your business.
This aspect includes the following topics: demand, supply, demand and su
pply analysis, market share analysis and the marketing strategies.
General Objectives
Goals are the desired results taken on a long-term basis. In order to achie
ve such goal, objectives were established to stay in line with the desired final res
ult. The primary objective of this study is to determine the feasibility of putting up
a business in Tabuyuc, Apalit, Pampanga for the benefit of the farmers residing i
n the said area.
Specific Objectives
To analyze the market demand and supply of the business;

To define the target customer of the business;
To determine possible suppliers and competitors;
To determine the marketing strategies to be applied in the business;
To determine the feasibility of the business.
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A. Prospective Customers
The potential customers of the product (organic fertilizer) by Associ

ation for Building and Yielding Agricultural Support (ABYAS) are the farme
rs in the target area which is around Tabuyuc, Apalit, Pampanga. The said
area was chosen by the proponents because it is very accessible and con
venient to all the potential customers.
B. Competitors
There is a need for every business to know the environment that it

is about to enter and such the businesses that are already existing in the
environment. It is important to have an analysis of the competitors
standing to anticipate any opportunity or threats that may arise or affect
the business performance. It is not only useful for those already involved
in the established market but also for those who plan on entering into
commerce. It is important to have an analysis of competitors performance
to determine any threat that may affect the business. The researchers
were able to identify the major competitor of the business under the study
is the P and K Farm and Poultry Supply located within Apalit, Pampanga.
C. Market Research
SWOT Analysis
Strength
Quality of the product and the service is high

Product Affordability
Accessibility of Location
Product Consumability
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Weakness
No partnerships or strong relationships with farmers association.
Opportunities
There is high demand of the product in the market but there is low s
upply.
Business penetration within the target market
Threats
Customer may prefer commercial over organic fertilizer

Competitors have already established their product to the market
D. Survey Analysis
Table 2.1 Distribution of Farmers According to

Number of Hectares they Cultivate
Number of Hectares Frequency Percentage
4 4.65
2 2.33
2 2.33
1 47 54.65
1.5 2 2.33
2 3 3.49
2.5 3 3.49
3 12 13.95
3.5 0 0
4 2 2.33
4.5 4 4.65
5 5 5.80
Total 86 100%
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Figure 2.1 Distribution of Farmers According to
Number of Hectares they Cultivate
5% 6% 5% 2% 2% 1/4
2%
1/2
14%
3/4
3% 1
55%
4% 1.5
2% 2
2.5
Total Hectares: 154

The table and figure above show the distribution of farmers
according to number of hectares they cultivate. 54.65% or 47 out of 86
respondents cultivate 1 hectare of farmland. 13.95% or 12 respondents
cultivate 3 hectares, 5.8% or 5 respondents cultivate 5 hectares of
farmland, 4.65% or 4 respondents cultivate hectare, 3.49% or 3
respondents cultivate 2 and 2.5 hectares of farmland, 2.33% or 2
respondents cultivate 4 hectares as well as 1.5, and .
Table 2.2 Distribution of Respondents as to the Number of sacks of

NPK (14-14-14) Fertilizer they are using per Hectare
Number of Number of
Percentage
Sacks Respondents
1 3 3.49
2 6 6.99
3 2 2.33
4 1 1.16
5 2 2.33
6 3 3.49
7 0 0
8 5 5.81
9 34 39.5
10 30 34.88
Total 86 100
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Figure 2.2 Distribution of Respondents as to
the number of sacks of NPK (14-14-14)
Fertilizer they are using per Hectare
1 2 3 4 6 8 9 10
6% 12% 4%
2%
4%
59%
6%
7%
The table and figure above show the distribution of respondents as

to the number of sacks of NPK Fertilizer they are using. 39.5% or 34
respondents used 9 sacks of NPK Fertilizer, 34.88% or 30 respondents
used 10 sacks, 5.81% or 5 respondents used 8 sacks, 6.99% or 6
respondents used 2 sacks of fertilizers and 5.81% or 5 respondent used 8
sacks of fertilizer, 3.49% or 3 used 6 sacks of fertilizers, 2.33% or 2
respondents used 3 sacks of fertilizers as well as 5 sacks and 1.16% or 1
respondent used 4 sacks of fertilizers.

NP (16-20-0) Fertilizer they are using per Hectare
Number of Sacks Number of Respondents Percentage
1 4 4.65
2 1 1.16
3 11 12.79
4 8 9.30
5 17 19.77
6 6 6.99
7 14 16.28
8 25 29.07
Total 86 100%
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the Number of sacks of NP (16-20-0) Fertilizer
they are using per Hectare
1% 1
5%
29% 13% 2
9% 3
4
16% 20% 5
7% 6
7
8

to the number of sacks of NP Fertilizer they are using. 29.07% or 25
respondents used 8 sacks of NP Fertilizer, 19.77% or 17 respondents
used 5 sacks, 16.28% or 14 respondents used 7 sacks, 12.79% or 11
respondents used 3 sacks of fertilizers and 9.30% or 8 respondent used 4
sack of fertilizers, 4.65% or 4 respondents used 1 sack, 1.16% or 1
respondent used 2 sacks of fertilizers.

N (46-0-0) Fertilizer they are using per Hectare
Number of Sacks Number of Respondents Percentage
1 9 10.47
2 3 3.49
3 6 6.99
4 27 31.40
5 41 47.67
Total 86 100
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the Number of sacks of
N (46-0-0) Fertilizer they are using per Hectare
4%
10% 7%
1
48%
2
3
31%
4
5

to the number of sacks of N Fertilizer they are using. 47.67% or 41
respondents used 5 sacks of N Fertilizer, 31.40% or 27 respondents used
4 sacks, 10.47% or 9 respondents used 1 sack, 6.99% or 6 respondents
used 3 sacks of fertilizers and 3.49% or 3 respondents used 2 sacks of
fertilizers.
Table 2.5 Distribution of Respondents who are Familiar

With Organic Fertilizer
Choices Frequency Percentage
Yes 86 100
No 0 0
Total 86 100
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Figure 2.5 Distribution of Respondents who are
Familiar With Organic Fertilizer
0%
Yes
100% No
These table and figure shows the distribution of respondents who

are familiar with organic fertilizer 94% or 81 of the respondents answered
yes while 6% or 5 respondents answered no.
Table 2.6 Distribution of Respondents Who Have Tried

Using Organic Fertilizers
Yes 72 84
No 14 16
Total 86 100
Figure 2.6 Distribution of Respondents Who

Have Tried Using Organic Fertilizers
16%
Yes
No
84%
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These table and figure shows the distribution of respondents have
tried using organic fertilizer 84% or 72 of the respondents answered yes
while 16% or 14 respondents answered no.
Table 2.7 Distribution of Respondents Who are Still

Using Organic Fertilizer
Yes 9 10
No 77 90
Total 86 100
Figure 2.7 Distribution of Respondents

Who are Still Using Organic Fertilizer
10%
Yes
No
90%

are still using organic fertilizer 90% or 77 of the respondents answered
yes while 10% or 9 respondents answered no.
Table 2.8 Distribution of Respondents Who Are

Willing To Buy Fish Emulsion
Yes 35 67
No 17 33
Total 52 100
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Are
Willing To Buy Fish Emulsion
33%
Yes
67%
No

willing to buy fish emulsion 67% or 35 of the respondents answered yes

Willing to Buy Bone Meal

Yes 32 61
No 20 39
Total 52 100
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Are
Willing To Buy Bone Meal
39%
Yes
61%
No

willing to buy bone meal 61% or 32 of the respondents answered yes

Willing to Buy Blood Meal
Yes 28 54
No 24 46
Total 52 100

Are Willing to Buy Blood Meal
46%
54% Yes
no
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are willing to buy blood meal. 54% or 28 of the respondents answered yes
Demand Analysis
Table 2.11 Historical Population
Year Annual Growth Rate Projected Population

2015 250
2016 0 250
Table 2.12 Projected Population

Year Annual Growth Rate Projected Population
2016 250
2017 0 250
2018 0 250
2019 0 250
2020 0 250
2021 0 250
Table 2.13 Projected Demand

(Sack of N-P-K Fertilizer)
2016 2017 2018 2019 2020
Annually 1935 1935 1935 1935 1935
Semi-
968 968 968 968 968
Annually
Table 2.14 Projected Demand

(Sack of N-P Fertilizer)
2016 2017 2018 2019 2020
Annually 1355 1355 1355 1355 1355
Semi-
678 678 678 678 678
Annually
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Table 2.15 PROJECTED DEMAND
(Sack of N Fertilizers)
2016 2017 2018 2019 2020
Annually 973 973 973 973 973
Semi-
487 487 487 487 487
Annually
Annual demand for the study for the next five years is shown
above. This represents annual usage of fertilizer. This therefore,
represents the demand for the possible annual usage of fertilizer in
Tabuyuc, Apalit, Pampanga.
E. Supply Analysis
Supply represents the product provided by the competitors to the

potential customers. Logically, this is the satisfied portion of the demand
for the product.
Table 2.16 Projected Supply of Competitor

(P&K Farm and Poultry Supply)
NPK Fertilizer
Year Semi-Annually Annually Market Share
2016 632 1263 58.63%
2017 632 1263 58.63%
2018 632 1263 58.63%
2019 632 1263 58.63%
2020 632 1263 58.63%
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(NP Fertilizer)
2016 409 818 60.85%
2017 409 818 60.85%
2018 409 818 60.85%
2019 409 818 60.85%
2020 409 818 60.85%

(N Fertilizers)
2016 199 397 67.97%
2017 199 397 67.97%
2018 199 397 67.97%
2019 199 397 67.97%
2020 199 397 67.97%
F. DEMAND AND SUPPLY ANALYSIS
Table 2.19 Demand-Supply Analysis

NPK Fertilizers
Year Demand Supply Gap Unfilled Market
2016 1935 1263 672 34.73%
2017 1935 1263 672 34.73%
2018 1935 1263 672 34.73%
2019 1935 1263 672 34.73%
2020 1935 1263 672 34.73%
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N P Fertilizer
Unfilled
Year Demand Supply Gap
Market
2016 1355 818 537 39.63%
2017 1355 818 537 39.63%
2018 1355 818 537 39.63%
2019 1355 818 537 39.63%
2020 1355 818 537 39.63%

N Fertilizer
Unfilled
Year Demand Supply Gap
Market
2016 973 397 576 59.2%
2017 973 397 576 59.2%
2018 973 397 576 59.2%
2019 973 397 576 59.2%
2020 973 397 576 59.2%
*The demand gap shows the difference between the projected

demand and the projected supply.
G. Market Share Analysis
The annual unit sales of ABYAS is determined by getting the Total

demand gap multiplied by the product market share of competitor and
number of respondents who are willing to patronize our product
ABYAS Annual Unit Sales (NPK Fertilizer) = (65.27%) x (62.99%) x (672)

=276
*The market share of ABYAS was determined by annual unit
sales per year divided by total demand
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Market Share of ABYAS 2016 = 276/1935
=14.26%
ABYAS Annual Unit Sales 2016 (NP Fertilizer) = (60.37%) x (53.90%) x

(537)
= 175
= 12.92
ABYAS Annual Unit Sales 2016 (N Fertilizer) = (40.80%) x (56.49) x (576)
= 133
= 13.67%
H. Marketing Strategy
a. Product Strategy
A product is anything that can be offered to a market that might

satisfy a want or need. Around 65% of the land in Pampanga is
devoted to agriculture. Pampanga basically is an agricultural province,
with rice, root crops, and fruits and vegetables being the major
products.
ABYAS provides organic fertilizers to improve the structure of the
soil and increase the ability to hold water and nutrients. Farmers
spend more on commercial fertilizers; ABYAS offers less costly
organic fertilizers.
b. Place Strategy
Being in the right location is a key ingredient in a business's

success. The ABYAS will be situated at Purok 5, Tabuyuc, Apalit,
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Pampanga. It is accessible for farmers since it is nearby their farm
fields.
c. Pricing Strategy
Pricing is an important task in developing a business. It is

usually concerned with applying the right price that determines the
success of the business as it acquires customers. Product prices
are ascertained, not guessed; it is to be determined after
considering all the factors that would affect it.
A. FACTORS AFFECTING PRICE
1. Customers. Customers are the primary factor considered

in pricing. The amount a customer is willing to spend in a
particular kind of service must be taken into
consideration.
2. Competitors. Prices are subject to the type of competition
that exists in the market. As for fertilizer manufacturing,
price of the product currently offered by the direct and
indirect competitor must be determined.
3. Product Cost. It is true that most starting business price
their products at an amount lower than that of the
competitors, the cost of producing such product should
also be considered. The price of our product should give
a reasonable amount of profit for an enterprise, after
deducting the necessary expenses.
B. PRICES
After a careful analysis of the factors affecting pricing,

the researchers through the use of the surveys conducted,
was able to quantify the purchasing power of the market for
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the proposed product as well as the extent to which prices
must be limited to cover necessary expenses and not
exceed competitors price.
d. Promotion Strategy
ABYAS will use door-to-door marketing as a promotional

strategy to introduce to the farmers the products and services we
offer. Door-to-door promotion gives us the opportunity to personally
demonstrate our products, answer questions and handle
objections.
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CHAPTER 3
TECHNICAL STUDY
A. Product Description
ABYAS will be catering three lines of fertilizer products, which puts

emphasis on the nutrient needs of rice crops. These are principally
denoted by their NPK values, which are representations of ratio or
percentage of their nutrient composition, namely Nitrogen (N),
Phosphorous (P), and Potassium (K). The products of the cooperative will
be discussed below:
Blood Meal:
The commercial name for this product is commonly known

and branded as Urea. The name of this product is adapted from its
known name, which is the organic fertilizer blood meal. Blood meal
is a dry, inert powder made from blood used as a high-nitrogen
organic fertilizer. A typical blood meal contains Nitrogen levels
ranging from 13.25% to 20.56%, and insignificant amounts of
Phosphorous and Potassium. It is one of the highest non-synthetic
sources of nitrogen, which are needed by rice crops to form protein
which makes up much of the tissues present in it. It usually comes
from cattle or hogs as a slaughterhouse by-product.
The major users of this product are the farmers of barangay
Tabuyuc, Apalit, Pampanga. As a finished commodity, this fertilizer
may directly be applied to rice paddies as per farmers desire. It is
not intended to be another products input, but it could be used as a
substitute for other commercial fertilizers offered in the market
through mixing them together in a ratio preferred by the farmers.
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Bone Meal:

as Ammophos or Ammonium Phosphate. The name of this product
is adapted from its known name, which is the organic fertilizer bone
meal. Bone meal, or bone manure, is a mixture of finely and
coarsely ground animal bones. As an organic fertilizer for plants,
the N-P-K or Nitrogen-Phosphorus-Potassium ratio of bone meal
generally ranges from 3-15-0 to 15-15-0. Bone meal is also an
excellent source of calcium. As a slow-release fertilizer, bone meal
is primarily used as a source of phosphorus and protein.
Phosphorus, in addition to the Nitrogen which was already
explained above, is involved in many processes critical to plant
development. Key among them is photosynthesis, the process that
plants use when converting sunlight to energy. Phosphorus is also
important to respiration, cell enlargement, cell division, energy
storage and energy transfer. For all these reasons, phosphorus is
integral to the quality of the crop and the rice it produces. Finely
ground bone meal may provide a quicker release of nutrients than
the coarser ground version of bone meal.
Fish Meal:

as Complete, because it has complete value of nutrients of NPK.
The name of this product is adapted from its known name, which is
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the organic fertilizer fish amino acid or fish emulsion. These are
ground-up fish bones and carcasses, decomposed to produce an
emulsion. Since fish emulsion is naturally derived, it is considered
an organic fertilizer appropriate for use in organic horticulture,
having a typical N-P-K analysis of 5-2-2 to 9-6-5. In addition to the
Nitrogen and Phosphorous previously discussed, Potassium helps
farmers produce higher quality crops. It is particularly important in
carbohydrate and starch synthesis, making adequate potash critical
for high-carbohydrate crops, such as rice.
B. Product Costing
The product cost per unit of each of the following fertilizers is based
on: (1) direct material; (2) direct labor; and (3) overhead.
Fish Meal:
Raw Materials:
40 kg. Fish Meal (@ P1.00 per kg.) P 40.00
20 kg. Compost Soil (@ 12.50 per kg.) 250.00
Packaging (@ 5.00 per 50-kilogram 5.00 P 295.00
sack)
Direct Labor 258.74
Overhead 206.78
Total Product Cost: P 760.52
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Bone Meal:
Raw Materials:
41 kg. Bone (@ P1.00 per Kilo) P 41.00
10 kg. Compost Soil (@ 12.50 per kg) 125.00
sack)
Direct Labor 258.74
Overhead 223.52
Blood Meal:
Raw Materials:
50 kg. Blood (@ P1.00 per Kilo) P 50.00
10 kg. Compost Soil (@ 12.50 per kg) 125.00
sack)
Direct Labor 258.74
Overhead 229.28
C. Product Pricing
The product pricing is 120% of product costs for both the blood
meal and bone meal and 150% for the fish amino acids, which sums up as
follows:
Fish Meal Bone Meal Blood Meal

Total Product Cost P 760.52 P 653.26 P 668.02
Mark-Up Rate x 1.51 x 1.68 x 1.57
Selling Price P 1,150.00 P 1,100.00 P 1,050.00
Contribution P 389.48 P 446.74 P 381.98
Margin
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D. Business Process
Purchasing of Preparation of
Processing
Raw Materials Raw Materials
Customer
Storage Packaging
Order
Delivery
Purchasing of Raw Materials:
In procurement of the raw materials needed, there will be

collections from Apalit Public Market through the use of the
cooperatives utility vehicle.
Preparation of Raw Materials:
The main raw materials acquired will be prepared by using a scale

to divide and set it into appropriate weights for processing.
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Processing and Packaging:
Blood Meal.
The animal blood collected from Apalit Public Market, after
weighing at an amount of 50 kilograms, will be treated by pouring it
onto a wide metal tray and heating it by 375 Fahrenheit using a
furnace until dried. When dried, an approximate of 40 kilograms will be
produced with the weight loss due to evaporation of H 2O. It will then be
scraped off the metal tray and grinded through the grinding machine to
pulverize it. The powdered output will then be mixed with the ready-
made compost in a ratio of 4:1, in kilograms, respectively, to ensure
that the nitrogen level will not be diffused materially. The product will
be packed in a 50-kilogram-sack and ready to be sold.
Bone Meal.
The animal bones collected from Apalit Public Market will be
weighed at 31 kilograms and be treated by boiling it into a boiler vessel
to make sure that meat and other residues are removed from it. After
boiling, an estimated amount of 30 kilograms will be up for drying, the
1 kilogram loss due to the discharge of meat residues. The bones will
then be set onto a wide metal tray and heat it by 375 Fahrenheit using
a furnace until coarse and brittle. When coarse and brittle, it will be
grinded through a grinding machine to pulverize it. The powdered
output will then be mixed with the ready-made compost in a ratio of
3:2, in kilograms, respectively, to ensure that the nitrogen and
phosphorous levels will not be diffused materially. The product will be
packed in a 50-kilogram-sack and ready to be sold.
Fish Meal.
The ground-up-40-kilogram fish bones, carcasses, guts, and
other fish clippings, are collected from Apalit Public Market and will be
treated by putting it into a large plastic container and adding tap water
enough to cover it. Cover tightly and let it decompose for 20 to 30
days. Check daily or weekly if the mixture is drying out, if so; add
31 | P a g e
necessary water enough to cover it again. Repeat the process as
necessary. After the decomposing process, an emulsion of the fish
remains will be visible; this will be dried using a drying machine and
will be mixed with the ready-made compost in a ratio of 3:2, in
kilograms, respectively, to ensure that the nitrogen, phosphorous, and
potassium levels will not be diffused materially. The product will be
packed in a 50-kilogram-sack and ready to be sold.
Storage:
The cooperative has a warehouse where the storing of
unprocessed raw materials and packed fertilizer will be done.
Customer Order:
Receiving the order of the customer after they have chosen the
specific fertilizer they needed.
Delivery:
This is the last step in the cycle. It is delivering of fertilizer upon
receiving the order of the customer
32 | P a g e
E. Business Location
The proposed business will be located at Purok 5, Tabuyuc, Apalit,

Pampanga. We believed that this location would be very accessible to our
target markets since it is located near farm lands. This area is a strategic
location for our business because it is surrounded by farm fields which are
perfect for our target customers which are farmers.
33 | P a g e
F. Business Layout
G. Production Schedule
The production for the first year of operations and the subsequent
periods is scheduled as follows:
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H. Raw Materials
The raw materials that will be gathered are the fish, bone, and
blood wastes from market, ready-made compost, and 50-kilogram-sack for
packaging. These could be acquired in no exact specifications or quality,
except that the raw materials stated herein must be handled with proper
sanitation.
The main raw materials, the bone or paypay, blood residues, and
fish remains which includes carcasses, fish bones, guts and other fish
clippings, are bought on a cash basis from the Apalit Public Market and be
picked up daily by the cooperatives utility vehicle. These raw materials
are usually given freely to customers. Since the cooperative should
consider the stability of daily supply from the market, it has been decided
that these wastes be bought at a fixed rate of P 50.00 per cavan.
The ready-made compost soil will be delivered by a supplier based
in #1 Maria Luisa Subdivision, Barrio Sampalukan, Barangay Masaya,
35 | P a g e
Bay, Laguna, at a wholesale price of P 500.00 per 40-kilogram-sack with a
minimum order of 10 sacks. This specific kind of compost soil does not
expire as long as it is properly stored in a dry place.
The 50-kilogram-sack to be used for final product packaging will be
bought from Apalit Public Market at a wholesale price of P 5.00 each.
There will be no issues regarding inventory handling and storage,
as the business will provide enough capacity to carry the bulk of inventory.
There will also be no expiration as for the raw materials and finished
products.
I. Machineries and Equipment
Equipment Quantity Capacity Cost
1pc 80kg P 110,000
Boiling Machine
1pc 80kg P 41,800
Bone Grinder
1pc 80kg P 250,800
Induction Furnace
1pc 50kg P 37,400
Vertical Screw
Blender
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35 pcs. 60kg P 22,000
Bulk Containers
1pc 150kg P 6,000
Weighing Scale
1pc 500kg P 120,000
Utility Vehicle
1pc P 133,476
Drying Machine
J. Furniture and Fixtures
Furniture and Fixtures Qty Unit Price Total Price

Office Chair
2 P1,139.25 P2278.50
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Office Table
2 P2,709.00 P5,418.00
Cabinet
1 P2,099.00 P2,099.00
Wall Clock
1 P219.75 P219.75
Fluorescent Light
4 P499.75 P1,999.00
Ceiling Fan
2 P1,595.00 P3,190.00
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Exhaust Fan
1 P932.50 P932.50
Water Dispenser
1 P2,000 P2,000.00
Computer
1 P10,000 P10,000
Printer
1 P2,500 P2,500
CCTV Cameras
3sets
(3
cam- P5,250.00 P15,750
eras)
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Cash Register
1 P2,950.00 P2,950.00
Toilet Bowl
2 P2500.00 P5,000
Padlock
4 P480.00 P1920.00
Long Table
1 P6,000 P6,000
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K. Supplies
OFFICE SUPPLIES Qty Unit Price Total

Price
Pencils
1 box P68.75 P68.75
Ballpens
10 P10.75 P107.50
pcs
Stapler
1 P60 P60.00
Staple Wire 1
boxes
P40.50 P40.50
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Puncher
1 P80.00 P80.00
Paper Clips
2 P12.00 P24.00
boxes
Columnar Notebooks
3 P23.00 P69.00
Calculator
1 P270.00 P270.0
0
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Paper
2 P140.00 P280.0
ream 0
Ledger
3 P33.50 P100.5
0
Trash Can
2 P80 P160.0
0
Pail
2 P65.00 P130.0
0
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Soap
5 P35 P175.0
boxes 0
Mineral Water per Gallon
200 P25.00 P5,000.

00
Mirror
2 P75.00 P150.0
0
Mop
1 P200.00 P200.0
0
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Broom
3 P60.00 P180.0
0
Dustpan
2 P35 P70.00
Tissue
2 P45.00 P90.00
packs
1 P 310.00 P
310.00
Ink
45 | P a g e
L. Employee Uniform
The staffs will own three sets of the uniform which must be worn
throughout the working day during Mondays, Wednesdays and Fridays.
The plant workers, on the other hand, shall wear the following to ensure
their safety and prevent contamination of inputs, in processes, and outputs.
46 | P a g e
M. Labor Requirements
The Management will employ 2 Laborers who is responsible in
processing the fertilizers; 1 driver responsible in bringing the fertilizers to
the farmers; 1 porter who will accompany the driver for picking up the raw
materials from the market.
There will be a general manager, who is the cooperator of the
business, who will perform the managerial and supervisory functions of
the business.
N. Work Schedule
1. Delivery Man and Porter. The delivery man and porter will start working
at 8 am and will work beyond depending on the schedule of delivery.
The delivery man and porter are also entitled to one (1) day off per
week.
2. Laborer. The laborer will work eight (8) hours a day from 8 am to 5 pm
every Monday to Friday with a lunch break from 12 nn to 1 pm. The
laborer is also allowed one (1) day off per week.
47 | P a g e
O. Utility Requirements
The business needs electricity, water, communication line and fuels

and lubricants for its operation thus, the business has to set up a
connection for electricity, water and communication line while fuels and
lubricants are needed for the operation.
Service Annual Expense Company Name

Water P 18,600 Crystal Liquid
Electricity P 60.600 PELCO
Fuels and Lubricants P 23,520 SHELL
TOTAL P 102,720
P. Total Project Cost
Purchase of Furniture & Fixtures and

P 62,256.75
Office Equipment
Purchase of Machineries & Equipment P 586,800
Transportation and Equipment P 120,000
Office Supplies P 7,555.25
Licenses and Permits P 33,290
Promotion P 300.00
Construction Costs P 4,400,000.00
Cash P 509,798.00
Total Project Cost P 5,720,000.00
48 | P a g e
CHAPTER 4
MANAGEMENT AND LEGAL STUDY
Management is one of the important aspects in establishing a business. It

is the performance of conceiving and achieving desired results by means of
group effort consisting of utilizing human talents and resources. Therefore,
management is considered as the force that runs an enterprise and is
responsible for its success or failure.
This study describes the form of organization that is best suited for the
proposed subject, the organizational structure, the number of personnel needed,
their qualifications, their compensation and the projected time table before the
project is implemented.
The objective of the management aspect of a feasibility study is to
determine the option effectiveness of the organizational setup and the
qualifications of the individuals who will make up the organization. This aspect
will determine the successful realization of the project study.
OBJECTIVES OF THE STUDY
The management and legal study was conducted with the consideration of
the following objectives:
1. To ascertain the form of ownership the project will adopt.

2. To tailor the organizational chart for the project.
3. To specify the management and member duties and responsibilities.
4. To highlight the rules and policies of the cooperative.
5. To comply with the legal and government requirements for starting up a
business.
49 | P a g e
A. FORM OF OWNERSHIP
The project will adopt the cooperative type of business. A

cooperative is a duly registered association of persons, with a common
bond of interest, who have voluntarily joined together to achieve a lawful
common social or economic end, making equitable contributions to the
capital required and accepting a fair share of the risks and benefits of the
undertaking in accordance with universally accepted cooperative
principles.
B. VISION, MISSION, AND CORE VALUES
Vision:
Association for Building and Yielding Agricultural Support (ABYAS)

is a cohesive cooperative committed to the development of the
agricultural industry that molds its community to attain lifelong
progression and prosperity.
Mission:
Harness sustainability by empowering the agrarian society and

laying great emphasis to the alleviation of the plight thereof, through:
1. Provision of inputs which meet standards of quality and
excellence;
2. Nurturing awareness in the broad range of aspects relevant and
responsive to the dynamically changing environment; and
3. Cultivation of efficiency and effectiveness of individual returns
and benefits derived from the utilization of resources provided
therefor.
50 | P a g e
Core Values:
Our shared values guide our actions and describe how we

behave in the nation:
Passion for Success We will constantly strive for excellence.
We will be the best we can be and create value in everything we do.
We will be proactive, propelled by a sense of urgency, and total
dedication to results;
Teamwork With trust and respect for each other and with unity
in purpose, we will work toward our shared aspirations, transcending
boundaries along functional and organizational lines;
Respect for Our People We recognize our members as
individuals and are committed to nurturing their individual capabilities.
We will uplift the dignity of farmers by encouraging our people to be the
best in the agricultural industry. We believe their growth and the growth
of the organization go hand in hand. We are committed to creating an
environment that encourages open communication, camaraderie and
industrial growth;
Customer Focus We will be the preferred choice. They will
choose our products and services above others because we provide
them with products and services that help in improving their agrarian
regime;
Integrity In the conduct of our business, we will be guided by
what is ethical, fair and right. We believe in profit with honor and are
committed to good governance and the highest moral standards; and
Social Responsibility We believe social responsibility and
corporate citizenship are integral parts of our business. We are
committed to improving lives of our people and in the communities in
which we live and work.
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C. CAPITALIZATION
Name Cooperator Capital Sources of Capital

Aquino, Crisandra Member 520,000.00 Personal Savings
Bernardo, Krizianne Ina Member 520,000.00 Personal Savings
Cruz, Kristoper Member 520,000.00 Personal Savings
Del Corro, Kimberly Member 520,000.00 Personal Savings
Dela Cruz, Alexandra Nicole Member 520,000.00 Personal Savings
Manlangit, Jocele Ruth Member 520,000.00 Personal Savings
Pineda, Francee Maryse Member 520,000.00 Personal Savings
Reyes, Ray Christian Member 520,000.00 Personal Savings
Saguilot, Kenny Brian Member 520,000.00 Personal Savings
Semilla, Wendell Member 520,000.00 Personal Savings
Tamayo, Josenico Member 520,000.00 Personal Savings
D. ORGANIZATION CHART
The organizational structure of the enterprise defines how the

activities such as task allocation, coordination and supervision are
directed towards the achievements of organizational aims. The figure
below shows the organizational chart of the business:
52 | P a g e
The General Assembly comprised of all regular members, shall
have equal voting rights and shall exercise highest or final authority in a
cooperative.
The Board of Directors, as a body and not acting in their individual
capacity, exercises general supervision and control over the affairs of the
Cooperative and its prescribed policies consistent with the law, the By-
Laws, resolutions of the General Assembly for the management of its
business and the guidance of its members, officers and employees. The
Board of Directors who shall be responsible for the strategic planning,
direction-setting and policy formulation activities of the ABYAS
Cooperative are the following: Krizianne Ina Bernardo, Alexandra Nicole
Dela Cruz, Jocelle Ruth A, Manlangit, Francee Maryse Pineda, Ray
Christian Reyes, Kenny Brian Saguilot, and Josenico Tamayo.
The Education and Training Committee is responsible in planning
and implementing the promotional activities of the Cooperative, as well as
the education and training of employees, officers, members, and
prospective members of the Cooperative. The Vice-Chairman of the Board
of Directors, Francee Maryse Pineda, shall also serve as Chairman of the
Education and Training Committee.
The Audit & Supervisory Committee, elected by the General
Assembly, shall provide internal audit services, maintain a complete
record of its examination and inventory, and submit quarterly reports to the
Board and an audited annual financial report to the General Assembly.
The Committee is also responsible for the internal control and the
installation of an adequate and effective accounting systems and
procedures. The Board of Directors, elected Crisandra Aquino as the
cooperatives Internal Auditor.
The Election Committee, elected by the General Assembly, shall
promulgate rules and regulations in the conduct of election, validate the
qualification of candidates, supervise the conduct of election and the
53 | P a g e
canvassing of votes, certify in writing the election returns, submit the same
to the presiding officer, and proclaim the winning candidates. The
Committee shall also act on cases arising from election protest,
proceedings and any violation thereof.
E. MANPOWER REQUIREMENTS
Employee Duties and Responsibilities
Not only should the management have the duties and

responsibilities in the organization. Employees and workers are bound
to cooperate with their co-employees and co-workers, and to the
management. They should follow instructions and guidelines provided
by the management and report any misconduct within the business.
Also, motivation and hard work are encouraged by the management.
It is very vital in all business organization to know their
manpower requirements to operate systematically and effectively at all
times. It will help also to determine the capacity or capabilities of the
employees to fit in the flow of business as well as to have a clear
duties and responsibilities. Having standard qualifications in hiring and
selecting, the employee will establish efficient business operations.
Position Job Description Job Specification
* Take custody of all monies,

securities and papers of the
cooperative;
Controller
* Keep complete records of its
cash transactions for the
establishment of proof of his
cash position at any given time
54 | P a g e
and date;
* Post an adequate bond to

assure the faithful
performance of his duties; and
* Shall under policies set by *He must be familiar with

the General Assembly and the the business operation of
Board of Directors has general the cooperative;
charge of all the phases of the
business operations of the * He must at least be a
cooperatives. Upon the college graduate or has
appointment of his successor, finished the cooperative
he shall turn over to him all training program/s;
monies and properties
belonging to the cooperative * He must have at least
which he has in his possession two (2) years experience
General Manager
or over which he has control; in a cooperative or
(Management
related business; He
Staff)
* He shall maintain his records must be honest and must
and accounts in such manner have a deep sense of
that the true and correct responsibility;
condition of the business of
the cooperative may be * He must be willing to
ascertained therefrom at any undergo pre-service or
time. He shall render annual in-service training;
and periodic statements and
reports in the form and in the *He must not be
manner prescribed by the engaged directly or
Board of Directors and indirectly in any business
preserve the books, similar to that handled by
55 | P a g e
documents, correspondence the cooperative;
and records of whatever kind
pertaining to the business * He must not have been
which may come into his convicted of any
possession; administrative or criminal
case involving moral
* Subject to the policies of the turpitude, gross
Board of Directors, he may negligence or grave
employ, supervise and dismiss misconduct in the
any agent or employee in the performance of his
management force; and duties;
* Post an adequate bond to * He must not be facing

assure faithful performance of any administrative or
his duties. civil/criminal suit
involving financial and/or
property accountabilities;
and
* He must not be
addicted to any form of
gambling, immoral or
vicious habits.
Laborer Responsible in processing the

fertilizers
56 | P a g e
Responsible in bringing the * Minimum education
fertilizers to the farmers and level: Vocational
Driver picking up the raw materials
from the supplier. * At least 2 years of
experience
Accompanying the driver for

Porter
picking up the raw materials
from the supplier.
F. ORGANIZATIONAL POLICIES AND PROCEDURES
Personnel (Employment Process):
1. Applicants will be passing an application form or resume with 2x2

colored photo to the manager.
2. The manager will analyze the contents of the resume and will call
the applicant for the interview if interpreted to be satisfactory.
3. After the interview, if passed, will be given the list of requirements
to be complied for a specific period of time.
4. After compliance of all the requirements, the applicant will be
scheduled for orientation together with the other applicants.
Production:
1. Cleanliness:
a. Wearing of protective clothing and a gloves is a must;
b. Companies prohibit employees from wearing jewelry;
57 | P a g e
c. Employees with wounds or illnesses must secure clearances
from management before returning to work;
d. Wash hands before and after handling products; and
e. Foods and beverages are restricted in manufacturing areas.
2. Storage:
a. Store fertilizers in dry conditions;
b. Keep the storage area locked and clearly labeled as a fertilizer
storage area. Preventing unauthorized use of fertilizers reduces
the chance of accidental spills or theft. Labels on the windows
and doors of the building give firefighters information about
fertilizers and other products present during an emergency
response to a fire or a spill; and
c. Extra care needs to be given to finished commodity.
3. Containers. Fertilizer should be stored in their original containers
unless damaged; labels should be visible and readable; food or
beverage containers should never use for storage. Labels should
be in plain sight; no containers should come in contact with floor; all
containers should be stored up-right; aisles should be wide enough
to comfortably accommodate workers; containers should not be
crowded.
4. Damaged Containers. Containers should be checked often for
damage; when damaged containers are noticed, contents should
be repackaged and labeled or placed in suitable secondary
containment which can be sealed and labeled.
5. Security. The storage room should be locked and access restricted
to trained personnel.
6. Signage. There should be signs posted; warning signs should be
used as needed; emergency contact information should be posted.
7. Temperature Control. There should be active mechanical
temperature control and no direct sources of heat (sunny windows,
steam pipes, furnaces, etc.).
58 | P a g e
8. Ventilation. Mechanical ventilation should be working and used.
9. Storage and Record Keeping. Fertilizer stock should be labeled
carefully, including the packing date.
10. Lighting. Electrical lighting should allow view into all areas within
the storage area.
11. Inventory and Recordkeeping. Inventory should be actively
maintained as organic materials are added or removed from
storage; containers should be dated when purchased.
Credit and Collection:
The cooperative will not allow credit transactions regarding its sale
of products, to ensure the businesss sustainability. Excluding the
proceeds from selling their produce, the prospective customers lack
secured monthly income to guarantee installment-based and credit-
based payment. Considering the competitive market, the business
of this type also does allow neither credits nor installments.
Finance:
1. Cash Flow. The Company shall maintain adequate level of quick

assets to meet the cash settlement requirement.
2. Legal Risk Control. Any legal documents in respect of financial
derivative transactions shall first be reviewed by in-house and/or
outside legal counsel before being executed to control legal risk.
3. Separation of Duty. The respective functions of trading,
confirmation and settlement should be performed by different
personnel.
59 | P a g e
4. Monitoring. The Auditor or Controller, due to his/her independency,
is required to evaluate, monitor, and control aforementioned risks
arising from transactions.
5. Operating Risk Control. Delegation systems and operating
procedures set forth herein are employed to control operating risk.
G. CODE OF ETHICS
Company procedures and policies establish the rules of conduct

within an organization, outlining the responsibilities of both the employees
and employers. Each member of the organization should take attention to
the policies and rules regarding:
People and Safety:
Human Resource is our most critical asset and hence the

people, their safety and how they conduct themselves is of utmost
importance.
1. Hygiene and Sanitation. All employees must observe the highest
standard of hygiene and sanitation. Employees must be well-
groomed and continue with their work, wearing clean and proper
attire. For this purpose, the tem well-groomed shall mean proper
haircut, cut fingernails, use deodorant, and clean and regularly
washed hands. For this purpose, the term clean and proper attire
shall likewise include newly-washed and properly-ironed attire, no
excessive dirt on clothes and shoes, and proper and complete
company uniform worn properly.
2. Arrival and Departure of Employees. All employees regardless of
status and rank must submit all personal belongings for inspection
upon entering the company premises.
60 | P a g e
3. Environment, Health and Safety. We are committed to providing a
safe and healthy working environment for our employees and to
avoiding adverse impact and injury to the environment and the
communities in which we do business. We should strive to
conserve resources and reduce wastes and emissions through
recycling and other energy conservation measures.
4. Harassment. Any unwelcome, undesirable and uninvited behavior,
whether verbal or physical, which interferes with work or creates an
intimidating, hostile, dangerous or offensive work environment
would be construed as harassment. At ABYAS, we seek to provide
a work environment that is free from harassment of any kind and/or
any other offensive or disrespectful conduct. Our company would
comply with all local laws prohibiting harassment, and Code
prohibits harassment in the workplace.
5. Procedure for Notices/Bulletin Boards. Management shall post all
notices, announcements and memoranda of general application on
the bulletin board. Ignorance is not an excuse and it is incumbent
on each employee to regularly check the bulletin boards for new
notices, announcements or memoranda. No employee is allowed to
post or remove any document on the bulletin board without the prior
permission from the management.
6. Notice of Disciplinary Action. In accordance with the due process
requirements of the Labor code, as amended, all employees found
or reported to have committed a violation of the company rules and
regulations shall be given a written notice to explain, and shall be
given the opportunity to explain why no disciplinary action should
be imposed against him. Thereafter, any disciplinary action to be
imposed by the management shall again be indicated in writing and
duly furnished to the affected employee.
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Kinds of Penalties:
Employees are subject to penalties according to their

violations made during their employment.
1. Written Report of Warning (WR). It is the notice calling all the
attention to the offense and warning the offenses against
repetition of such violation in the future.
2. Suspension (3D/6D/9D). If a worker has committed offense for
the second or third time, he is subject to suspension. He will be
detached from the organization with the designated period of
time without payment.
3. Termination (TR). Termination will be given to employees who
have committed a major offense. The employee will be
dishonorably separated from the organization.
Offenses WR 3D 6D 9D TR
Tardiness 1st 2nd 3rd 4th 5th
Absence without leave 1st 2nd 3rd 4th 5th
Loitering or unauthorized leaving of
1st 2nd 3rd 4th 5th
post
Extending break period 1st 2nd 3rd 4th 5th
Unauthorized use of company time for
1st 2nd 3rd 4th 5th
personal pursuit
Insubordinate or disobedience to
1st 2nd 3rd
superior
Negligence or carelessness 1st 2nd 3rd 4th 5th
Unauthorized use or misuse of
company 1st 2nd 3rd 4th 5th
Property
Willful destruction of company
1st 2nd
properties
Discourtesy towards consumers,
suppliers, 1st 2nd 3rd 4th
superiors and co-workers
Using profane language or obscene language
to superiors
1st 2nd
62 | P a g e
Stealing or attempting to steal
properties of 1st
the company or of the co-workers
Failure to comply with company rules
and
standards on security & safety and 1st 2nd 3rd 4th
Health &
Sanitation
Failure to comply with health, security
and 1st 2nd 3rd 4th
safety requirements of the company
Immortality or scandalous acts 1st
Acting with Integrity:
1. Conflict of Interest and its disclosure. A conflict of interest exists

where the interests of one person or entity conflict with the
interests or benefits of ABYAS. We are required to act ethically,
honestly, objectively and perform our official duties to the best
interest and benefit of ABYAS. We must avoid certain situations
and relationships that may influence our judgment and cause us
to act outside the best interests of the Company, our clients and
our stockholders. We must understand the types of conflicts that
may emanate and avoid situations that are most likely to result
in conflicts of interest. The company requires that we disclose
any situations that reasonably would be expected to give rise to
a conflict of interest.
2. Gifts and Entertainment. Appropriate business gifts and
entertainment are welcome courtesies designed to build
relationships and understanding among business partners.
However, gifts and entertainment should not compromise, or
63 | P a g e
appear to compromise, your ability to make objective and fair
business decisions. As a general rule at ABYAS, we may give
or receive gifts or entertainment to or from customers or
suppliers only if the gift or entertainment would not be viewed as
an inducement to or reward for any particular business decision.
All gifts and entertainment expenses should be properly
accounted for on expense reports with appropriate approvals
and authorizations.
3. Accuracy of Financial Reports. To fulfill our commitments, we
require full, fair and accurate recording and reporting of financial
and business information including in all reports and documents
that ABYAS files with or submits to regulatory authorities and in
all other public communications made by ABYAS. All financial
records and reports must accurately reflect transactions and
events and conform to require accounting principles as well as
the Company's internal controls. Inaccurate, incomplete or
untimely reporting will not be tolerated and can severely
damage the Company and result in legal liability.
Company Information and Assets:
1. Confidential Information. While there is no set definition for

confidential information, it may include but is not limited to,
business plans, financial information, sales data, etc. We must
ensure maintenance with respect to the confidentiality of
sensitive information entrusted to us by the Company, our
clients and suppliers, except when disclosure is authorized by
appropriate levels, or disclosure is legally mandated.
2. Use of company assets and properties. We must comply with all
security programs to safeguard such assets against
unauthorized use or removal, as well as against loss by criminal
64 | P a g e
act or breach of trust. ABYASs assets should be used for
legitimate business purposes only and these assets may not be
used for personal benefit, sold, loaned, given away or disposed
off without proper authorization. Permitting any such property to
be damaged, lost or used in an unauthorized manner is strictly
prohibited.
Laws, Regulations and Interaction with the Government:
1. Bribery and Corruption. We have a zero-tolerance approach to

bribery and corruption and are committed to acting
professionally, fairly and with integrity in all our relationships and
business dealings wherever we operate and to implementing
and enforcing effective systems to counter bribery. We should
not offer, directly or indirectly, any form of gift, entertainment or
anything of value to any government official or his/her
representatives to obtain or retain business or secure an unfair
advantage.
2. Compliance with Laws and Regulations. It is important to be
compliant with several laws and regulations in all areas where
we conduct business.
3. Political Contribution and Activities. ABYAS does not participate
in political activities or make any donations to political parties or
their representatives.
Third Party Relationships:
1. Suppliers. ABYAS promotes fairness and honesty with its

suppliers. Our relationships with suppliers are based on price,
quality, service and reputation, among other factors. When
dealing with suppliers we should carefully guard our objectivity
65 | P a g e
and shall not accept or solicit any personal benefit from a
supplier or potential supplier that might compromise, or appear
to compromise, our objective assessment of the suppliers
products and prices.
2. Customers. The business success depends upon our ability to
foster lasting customer relationships. We seek to understand
our customer's expectations and strive to meet and exceed
them. We collaborate with our clients to shape exceptional
opportunities of value that can be predicted, measured and
repeated. ABYAS is committed to dealing with customers fairly,
honestly and with integrity.
H. PROJECT SCHEDULE
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I. INTERNAL CONTROLS
Internal Control:
Internal Controls are systems and processes that combine

policies, authorizations and procedures with proper accounting and
management tracking. This reporting is designed to ensure that
business operations are properly managed. The Cooperative will have
in place a set of internal controls that provides reasonable assurance
that:
1. Transactions are properly authorized and accurately recorded
based on Cooperative policies and procedures;
2. Cooperative assets are adequately safeguarded
3. Financial and management reporting is reliable and accurate,
and reflects actual business activity;
4. Activities comply with applicable legal requirements; and
5. Business operations are effective and efficient.
Creating and complying with strong and effective internal control
systems is, ultimately the responsibility of each employee with
respect to his/her areas of operation
Segregation of Duties:
Proper segregation of duties is necessary to ensure that no

single individual processes a transaction in its entirety. Three functions
must be designated to three different individuals: authorizing
transactions, recording transactions, and maintaining the custody of
assets.
1. Authorizing transactions. The general manager will authorize all
the transactions such as purchase and sales transactions,
approval for the release of assets, and approval for
disbursements before cash is paid.
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2. Recording transactions. The treasurer will record all the
transactions and maintains the book of accounts. He/she will
also prepare the reports about the performance of the business.
3. Maintaining the custody of assets. The custody of assets is
given to the general manager. Before he/she releases an asset
such as supplies and petty cash fund, the person requesting the
asset must provide an approved form.
Physical Control:
Protecting the assets from theft and misuse is necessary, thus,

a need for providing physical controls to protect the companys assets.
The business will place the following controls:
1. Closed circuit television (CCTV);

2. Warehouse locks; and
3. Fire extinguisher.
J. LEGAL AND TAXATION ASPECT
In starting a business, it includes the process of registration from

different government units. It is an important step that will allow the
business to legally operate and be duly registered.
1. Cooperative Development Authority (CDA). Since ABYAS is an
agricultural cooperative, it needs to be registered to CDA. CDA
registered business name is one of the important requirement to be
able to register your business with the Mayors Office.
2. Securities and Exchange Commission. The primary regulatory
agency for the securities industry, whose responsibility is to
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promote full disclosure and to protect investors against fraudulent
and manipulative practices in the securities market.
a. Verify and reserve the availability of the company name with the
Securities and Exchange Commission (SEC)
b. Deposit paid-up capital in the Authorized Agent Bank (AAB) and
obtain bank certificate of deposit
c. Notarize articles of incorporation and Treasurer's affidavit with
notary public
d. Register company with the Securities and Exchange Commission
e. Payment of documentary stamp taxes (DST)
3. Department of Trade and Industry. The business name will be
registered In DTI to protect the ABYAS from misuse or
misinterpretation by other entities.
4. Social Security System. ABYAS will be having employees to
operate the business. The business should register the business
and employees to the SSS. This is a requirement that must be
done so that the business will not violate the Social Security Law.
Registering employees ensures that, as an employer, you are
lawfully remitting your employers contribution to the agency for the
benefits of your employees. SSS will issue an SSS number for the
business, for the owner and the employees.
5. Home Development Mutual Fund (Pag-IBIG Fund). RA 7742
requires all SSS members earning at least 4000 a month to register
with this agency. HDMF administers the Pag-Ibig Fund.
6. Department of Labor and Employment (DOLE). A business with
more than 5 employees must register with DOLE. The DOLE is
asked to promote gainful employment opportunities, protect
workers and promote their welfare, develop human resources, and
maintain industrial peace.
7. Philippine Health Insurance Corp. (PhilHealth). The New National
Health Insurance Act (RA7875) requires all employers of the
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government and private sectors and their employees to register
with this agency. PhilHealth manages and administers the
government health care system.
8. Local Barangay Office. As required by the Local Government Code,
all businesses must obtain a Barangay Clearance from the local
Barangay Office where their businesses are located. A clearance
assures that your business is a community friendly establishment
and conforms to the standards of the Barangay. This office will
issue the barangay business clearance. Obtain barangay
clearance. To get this the following are required: Application form,
Business Name Certificate from CDA and the fee to be paid. This
clearance is required to get a business permit from the Mayors
Office.
9. Mayors Office. After registering your business to CDA, Local
Barangay, SSS, HDMF and Pagibig, ABYAS is ready to register to
the Apalit, Pampanga Mayors Office and acquire the business
permit.
Obtain the Business Permit to operate. The permit affirms
that your business is in compliance to the municipality or Citys
ordinances and standards such as sanitary, fire and safety and
other clearances. The permit affirms that your business is in
compliance to the municipality or Citys ordinances and standards
such as sanitary, fire and safety and other clearances. To obtain a
business permit, the applicant submits a business transaction form
(BTF) which contains vital information to process the application
and with these documents:
a. Barangay clearance;
b. SEC registration;
c. Authorization letter of owner with ID;
d. SSS certification/clearance; and
e. Contract of Lease
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K. LABOR LAWS FOR EMPLOYEES
1. Minimum Wage. Republic Act No. 6727 (also known as the Wage
Rationalization Act) mandates the fixing of the minimum wages
applicable to different industrial sectors, namely, non-agriculture,
agriculture plantation, and non-plantation, cottage/handicraft, and
retail/service, depending on the number of workers or capitalization or
annual gross sales in some sectors. The cooperative uses P318.00 as
a minimum wage in compliance with the minimum wage in the labor
code.
2. 13th Month Pay. All employers are hereby required to pay all their rank
and file employees a 13th monthly pay not later than December 24 of
every year, provided that they have worked for at least one (1) month
during a calendar year. This includes:
a. Christmas bonus, mid-year bonus cash bonuses; and
b. Other payments amounting to not less than 1/12 of the basic
salary.
Minimum Amount: 1/12 of the total basic salary earned by an
employee within a calendar year.
Base Amount, which is the basic salary shall include:
a. Cost of living allowances (COLA) integrated into the basic salary
of a covered employee pursuant to EO 178;
b. All remunerations or earnings paid by this employer for services
rendered.
3. Overtime Pay. Overtime pay refers to the additional compensation for

work performed beyond eight (8) hours a day.
a. For work in excess of eight (8) hours performed on ordinary
working days: Plus 25% of the hourly rate.
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b. For work in excess of eight (8) hours performed on a scheduled
rest day or a special day: Plus 30% of the hourly rate on said
days.
c. For work in excess of eight (8) hours performed on a special
day which falls on a scheduled rest day: Plus 30% of the hourly
rate on said days.
d. For work in excess of eight (8) hours performed on a regular
holiday: Plus 30% of the hourly rate on said days.
e. For work in excess of eight (8) hours performed on a regular
holiday which falls on a scheduled rest day: Plus 30% of the
hourly rate on said days.
4. Service Incentive Leave. Every employee who has rendered at least

one (1) year of service is entitled to Service Incentive Leave (SIL) of
five (5) days with pay.
The service incentive leave may be used for sick and vacation
leave purposes. The unused service incentive leave is commutable to
its money equivalent at the end of the year. In computing, the basis
shall be the salary rate at the date of conversion.
5. Paternity and Maternity Leave. Paternity and maternity leave benefits

as provided by law shall be given to every employee entitled there to,
upon complying with all the requirements of the company and upon
proper verification by the companys duly authorized representatives.
6. Parental Leave for Solo Parent. The service incentive leave may be
used for sick and vacation leave purposes. The unused service
incentive leave is commutable to its money equivalent at the end of the
year. In computing, the basis shall be the salary rate at the date of
conversion. In the event that the parental leave is not availed of, it shall
not be convertible to cash, unless specifically agreed on previously.
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7. Social Security System. Republic Act 1161, known as Social Security
Act 1954 created the Social Security System (SSS) that establish a
social security protection to workers in the private sector, wage earners
as well as self-employed persons.
8. PhilHealth. The National Health Insurance Program (NHIP), formerly

known as Medicare, is a health insurance program for SSS members
and their dependents whereby the healthy subsidize the sick who may
find themselves in need of financial assistance when they get
hospitalized. The Philippine Health Insurance Corporation or
PhilHealth is the mandated administrator of the Medicare program
(now known as NHIP) under the National Health Insurance Act of 1995
(Republic Act 7875).
9. PAG-IBIG. The Home Development Mutual Fund, otherwise known as

Pag-IBIG (Pagtutulungan sa kinabukasan: Ikaw, Bangko, Industriya at
Gobyerno) Fund is a mutual provident savings system for private and
government employees and other earning groups, supported by
matching mandatory contributions of their respective employers with
housing as the primary investment.
10. Holiday Pay. It is a one-day pay given by law to an employee even if

he does not work on a regular holiday. When a regular holiday falls on
a Sunday, the following Monday shall not be a holiday, unless a
proclamation is issued declaring it a special day. Unless otherwise
modified by law, order, or proclamation, the following are the twelve
(12) regular holidays in a year under Executive Order No. 292, as
amended by Republic Act 9849:
List of Regular Holidays: New Years Day January 1; Maundy
Thursday Movable Date; Good Friday Movable Date; Araw ng
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Kagitingan April 9; Labor Day May; Independence Day 12;
National Heroes Day Last Monday of August; Eidl Fitr Movable
Date; Eidl Adha Movable Date; Bonifacio Day 30; Christmas Day
December 25; and Rizal Day December 31
Every employee covered by the Holiday Pay Rule is entitled to
the minimum wage rate (daily basic wage and COLA) . This means
that the employee is entitled to at least 100% of his/her minimum wage
rate even if he/she did not report for work, provided he/she is present
or is on leave of absence with pay on the work day immediately
preceding the holiday. Work performed on that day merits at least
twice (200%) the wage rate of the employee.
When Araw ng Kagitingan falls on the same day as Maundy
Thursday or Good Friday, a covered employee is entitled to at least
two hundred percent (200%) of his/her daily wage even if said day is
unworked. Where the employee is required to work on that day, he/she
is entitled to an additional 100% of the daily wage.
11. Premium Pay. Premium pay refers to the additional compensation for
work performed within eight (8) hours on non-work days, such as rest
days and special days. Unless otherwise modified by law, order, or
proclamation, the following are the three (3) special days in a year
under Executive Order No. 292, as amended by Republic Act 9849
that shall be observed in the Philippines:
List of Special (Non-Working Days): Ninoy Aquino Day August
21; All Saints Day November 1; and Last Day of the Year
December 31.
The no work, no pay principle applies during special days and
on such other special days as may be proclaimed by the President or
by Congress. On the other hand, work performed on special days
merits additional compensation of at least thirty percent (30%) of the
basic pay or a total of one hundred thirty percent (130%). Where the
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employee works on a special day falling on his rest day, he/she shall
be entitled to an additional compensation of at least fifty percent (50%)
of his/her basic wage or a total of one hundred fifty percent (150%).
L. INCOME TAXES
Cooperatives transacting business with both members and non-

members shall not be subjected to tax on their transactions with members.
In relation to this, the transactions of members with the cooperative shall
not be subject to any taxes and fees, including not limited to final taxes on
members deposits and documentary tax. Notwithstanding the provisions
of any law or regulation to the contrary, such cooperatives dealing with
nonmembers shall enjoy the following tax exemptions:
1. Cooperatives with accumulated reserves and undivided net savings
of not more than Ten million pesos (P10,000,000.00) shall be
exempt from all national, city, provincial, municipal or barangay
taxes of whatever name and nature. Such cooperatives shall be
exempt from customs duties, advance sales or compensating taxes
on their importation of machineries, equipment and spare parts
used by them and which are not available locally a certified by the
department of trade and industry (DTI). All tax free importations
shall not be sold nor the beneficial ownership thereof be transferred
to any person until after five (5) years, otherwise, the cooperative
and the transferee or assignee shall be solidarily liable to pay twice
the amount of the imposed tax and / or duties.
2. Cooperatives with accumulated reserves and divided net savings of
more than Ten million pesos (P10, 000,000.00) shall fee the
following taxes at the full rate:
a. Income Tax - On the amount allocated for interest on
capitals: Provided, That the same tax is not consequently
imposed on interest individually received by members. The
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tax base for all cooperatives liable to income tax shall be the
net surplus arising from the business transactions with non-
members after deducting the amounts for the statutory
reserve funds as provided for in the Cooperative Code and
other laws.
b. Value-Added Tax On transactions with non-members:
Provided, however, That cooperatives duly registered with
the Authority; are exempt from the payment of value-added
tax; subject to Section 109, sub-sections L, M and N of
Republic Act No. 9337, the National Internal Revenue Code,
as amended:
Sales by agricultural cooperatives duly registered and
in good standing with the CDA to their members, as well as
sale of their produce, whether in its original state or
processed form, to non-members, their importation of direct
farm inputs, machineries and equipment, including spare
parts thereof, to be used directly and exclusively in the
production and/or processing of their produce.
Provided, further; That the exempt transactions
pursuant to the above shall include sales made by a duly
registered agricultural cooperative organized and operated
by its members to undertake the production and processing
of raw materials or of goods produced by its members into
finished or processed products for sale by said cooperative
to its members or non-members: Provided, finally, That any
processes product or its derivative arising from the raw
materials produced by its members, sold in the name and for
the account of the cooperative, shall be deemed the product
of the cooperative.
Sale by agricultural cooperatives to non-members can
only be exempted from VAT if the producer of the
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agricultural products sold is the cooperative itself. If the
cooperative is not the producer, only those sales to its
members shall be exempted from VAT.
Exempt transactions shall include sales made by a
duly registered agricultural cooperative organized and
operated by its members to undertake the production and
processing of raw materials or of goods produced by its
members into finished or processed products for sale by said
cooperative to its members and non-members.
Products produced/processed by non-members or
production not related to the purposes for which a
cooperative is created as stated in its Articles of Cooperation
even if sold in the name of said cooperative shall not be
considered as produced/processed by said cooperative. To
illustrate, raw materials produced by the members and
processed by the cooperative shall be exempt from VAT.
It is to be reiterated however, that sale or importation
of agricultural food products in their original state is exempt
from VAT irrespective of the seller and buyer thereof.
Transactions of cooperatives as may be deemed
VAT-exempt under the NIRC:
c. Percentage Tax- all sales of goods and/or services rendered
to non-members shall be subject to the applicable
percentage taxes imposed by Title V of the NIRC, as
amended, except sales made by producers, marketing, or
service cooperatives;
d. All other Internal Revenue Taxes unless otherwise provided
herein; and
e. Donations to charitable, research and educational
institutions and reinvestment to socioeconomic projects
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within the area of operation of the cooperative may be tax
deductible.
3. All cooperatives, regardless of the amount of accumulated
reserves and undivided net savings shall be exempt from
payment of local taxes and taxes on transactions with banks
and insurance companies: Provided, That all sales or
services rendered for non-members shall be subject to the
applicable percentage taxes sales made by producers,
marketing or service cooperatives: Provided further, That
nothing in this article shall preclude the examination of the
books of accounts or other accounting records of the
cooperative by duly authorized internal revenue officers for
internal revenue tax purposes only, after previous
authorization by the Authority.
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Chapter V
Financial Study
The financial aspect of the project feasibility study quantifies the results of
the marketing, technical, management, taxation and legal phase of the project
study and expresses in peso terms the possible outcome of operating the project.
The major parts of the financial study are:
1. Statements of assumptions;
2. Projected financial statements;
3. Analysis of the financial projections
Objectives:
a. To make a realistic, complete, and conservative estimate of the total cost
to put up a project of its capital requirements,
b. To make complete, safe, and realistic projections of operating cost and
revenues,
c. To determine whether the project will be able to pay its total debt with a
reasonable margin of safety,
d. To determine the necessary financial arrangements to insure that the
project will have the cash it needs when required,
e. To determine the companys earnings performance and the soundness
and liquidity of its financial positions.
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A. Major Assumptions:
1. Volume of Sales increase by 10% every year.
2. Annual increase of 10% on volume of production.
3. Depreciation method used is a straight line method.
4. Utilities expense in the plant increases 3% every year and utilities
expense in the office will be at a fixed amount.
5. Supplies expense is 15% of office supplies available and purchases
increase by 15% of ending office supplies.
6. Property, Plant and Equipment is depreciated using straight-line
method with salvage value of 15% for Building and Machineries &
Equipment and 4.5% Furniture & Fixtures.
7. Cooperators will contribute P 520,000 each and a land worth 500,000
will be donated by the family of one of the cooperator.
Financial Statements
A financial statement presents an orderly and understandable form of the

cash budget and the operating performance. This statement depicts the progress
of the company in financial term. These are compacts reports that summarize the
financial position of the firm as of a given date or the result of financial operation
over a given date.
Income statement
This is a computation for the revenues and total cost for the fiscal year,
thereby arriving at the concerns net income or deficit within the period together
with its performance in terms of its profitability and cost control.
Balance sheet
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This shows the assets derived by the firm from its corresponding liabilities
and capital. This is an overall picture of the firms financial condition. It also
shows the major changes brought out by the firms operation within fiscal period.
Cash flow statement
It is as systematic cash receipts and disbursement for a given period or

fiscal year. The cash budget inflow and outflow of cash during the operation of
the firm, thus presenting a large-scale schedule for the determination of ending
cash balance sheet. This is also used to minimize profitability by efficient cash
utilization.
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ABYAS: Association for Building and Yielding Agricultural Support
Projected Statement of Financial Position
For the years ended 2018, 2019, 2020, 2021, 2022
ASSETS
Current Assets:
Cash 446,668.00 407,261.44 414,164.39 440,481.85 523,871.16
Other Current Asset:
Unused Supplies 6421.96 6441.23 6460.55 6479.93 6499.37
Non-Current Assets:
Property, Plant & Equipment 5,496,587 5,324,118 5,151,648 4,979,179 4,806,710
Total Assets: 5,949,677.26 5,737,820.52 5,572,273.35 5,426,140.74 5,337,080.04
LIABLITIES
TOTAL LIABLITIES - - - - -
EQUITY
Share Capital Shares 5,720,000.00 5,720,000.00 5,720,000.00 5,720,000.00 5,720,000.00
Donations/ Grants 500,000.00 500,000.00 500,000.00 500,000.00 500,000.00
Accumulated Deficit (270,322.74) (482,179.48) (647,726.66) (793,859.27) (882,919.97)
TOTAL LIABILITIES AND EQUITY 5,949,677.26 5,737,820.52 5,572,273.34 5,426,140.73 5,337,080.03
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Projected Statement of Operations
REVENUES: 2018 2019 2020 2021 2022
Sales 1 623,300.00 686,850.00 754,850.00 829,550.00 912,100.00
Less: Cost of Goods Sold 2 401,057.60 441,348.20 460,915.23 476,558.44 499,913.10
Gross Revenues 222,242.40 245,501.80 293,934.77 352,991.56 412,186.90
LESS: EXPENSES
Salaries & Wages 3 253,500.00 253,500.00 253,500.00 253,500.00 253,500.00
Pre operating expenses 33,590.00
Employer's Contribution 4 11,516.40 11,516.40 11,516.40 53,275.20 53,275.20
Employee's Benefits 5 27,985.00 27,985.00 27,985.00 27,985.00 27,985.00
Office Supplies Expense 6 1,133.29 1,136.69 1,140.10 1,143.52 1,146.95
Delivery Expense (Fuel &Dep Utility vehicle) 7 17,400.00 17,400.00 17,400.00 17,400.00 17,400.00
Utilities Expense 8 7,800.00 7,800.00 7,800.00 7,800.00 7,800.00
Depreciation Expense 9 136,020.45 136,020.45 136,020.45 136,020.45 136,020.45
Repairs & Maintenance 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00
Permits and Licenses 500.00 500.00 500.00 500.00
Miscellaneous Expense 2,120.00 2,120.00 2,120.00
Total Expenses 492,565.14 457,358.54 459,481.95 499,124.17 501,247.60
Net Deficit (270,322.74) (211,856.74) (165,547.18) (146,132.61) (89,060.70)
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Projected Statement of Cash Flows
2018 2019 2020 2021 2022

Cash Flows from Operating Activities
Net Surplus for the Year (270,322.74) (211,856.74) (165,547.18) (146,132.61) (89,060.70)
Adjustments to Reconcile Net Surplus to Net Cash
Provided by Operating Activities
Depreciation Expense - Machineries, Tools and
Equipment 25,049.00 25,049.00 25,049.00 25,049.00 25,049.00
Depreciation Expense - Transportation Equipment 11,400.00 11,400.00 11,400.00 11,400.00 11,400.00
Depreciation Expense - Furniture and Fixtures 11,353.78 11,353.78 11,353.78 11,353.78 11,353.78
Depreciation Expense Building 124,666.67 124,666.67 124,666.67 124,666.67 124,666.67
Decrease(Increase) in supplies (6,421.96) (19.27) (19.32) (19.38) (19.44)
Net Cash Provided by Operating Activities (104,275.25) (39,406.56) 6,902.95 26,317.46 83,389.31
Cash Flows from Investing Activities

Acquisition of Property, Plant and Equipment
Payment for Machinery & Equipment (586,800.00) - - - -
Purchase of Transportation Equipment (120,000.00) - - - -
Purchase of Furniture and Fixtures (62,256.75) - - - -
Construction of Building (4,400,000.00)
Net Cash from Investing Activities (5,169,056.75) - - - -
Cash Flows from Financing Activities
Addition of Share Capital 5,720,000.00 - - - -
Payment of Interest on Share Capital - - - - -
Net Cash from Financing Activities 5,720,000.00 - - - -
Net Increase (Decrease) in Cash 446,668.00 (39,406.56) 6,902.95 26,317.46 83,389.31
Cash, beginning 446,668.00 407,261.44 414,164.39 440,481.85
Cash, ending 446,668.00 407,261.44 414,164.39 440,481.85 523,871.16
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Projected Statement of Changes in Equity
Share Capital
Beginning Balance 5,720,000.00 5,720,000.00 5,720,000.00 5,720,000.00 5,720,000.00
Add: Additional Capital Build- 0 0 0 0 0
Up
Less: Withdrawals in Capital 0 0 0 0 0
Ending Balance 5,720,000.00 5,720,000.00 5,720,000.00 5,720,000.00 5,720,000.00
Donations And Grants

Beginning Balance 500,000.00 500,000.00 500,000.00 500,000.00 500,000.00
Add: Additional/Credits - - 0 0 0 0 0
Less: Charges 0 0 0 0 0
Ending Balance 500,000.00 500,000.00 500,000.00 500,000.00 500,000.00
Net Surplus (Accumulated

Deficit)
Beginning Balance 0 (270,322.74) (482,179.48) (647,726.66) (793,859.27)
Add: Net Loss (270,322.74) (211,856.74) (165,547.18) (146,132.61) (89,060.70)
Less: Net Income 0 0 0 0 0
Total (270,322.74)
Net Surplus 0 0 0 0 0
Ending Balance (270,322.74) (482,179.48) (647,726.66) (793,859.27) (882,919.97)
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FINANCIAL ANALYSIS
A. TEST OF PROFITABILITY
Profitability ratios measure the firms use of its assets and control of its
expenses to generate an acceptable rate of return.
1. Profit margin analysis
Profit margin analysis uses the percentage calculation to provide a
comprehensive measure of a companys profitability on a historical
basis. The objective of margin analysis is to detect consistency or
positive/ negative trends in a companys earnings. Gross profit analysis
is computed as:
Gross Profit Margin= Gross Profit/ Net Sales
Profit margin
Analysis 2018 2019 2020 2021 2022
Gross Profit 222,242.40 245,501.80 293,934.77 352,991.56 412,186.90
Net Sales 623,300.00 686,850.00 754,850.00 829,550.00 912,100.00
Ratio 35.66% 35.74% 38.94% 42.55% 45.19%
Net Profit margin= Net Income/ Net Sales
Return on
sales 2018 2019 2020 2021 2022
Net Deficit (270,322.74) (211,856.74) (165,547.18) (146,132.61) (89,060.70)
Sales 623,300.00 686,850.00 754,850.00 829,550.00 912,100.00
Ratio (0.43)% (0.31)% (0.22)% (0.18)% (0.10)%
2. Return on Assets
This ratio indicates how profitable a company is relative to its total
assets. The return on assets ratio illustrates how well management is
employing thee companys total assets to make a profit. Return on
assets is computes as:
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Return on Assets = Net Income /Average Total Assets
Return on
Assets 2018 2019 2020 2021 2022
Net Deficit (270,322.74) (211,856.74) (165,547.18) (146,132.61) (89,060.70)
Average 5,850,975.86 5,538,797.72 5,275,049.15 5,034,111.54 4,852,365.84
Assets
Ratio (4.54)% (3.69)% (2.97)% (2.69)% (1.67)%
3. Return on Equity
This ratio indicates how profitable a company is by comparing its net
income to its average equity. The return on equity ratio measures how
much the owners earned for their investment in the company.
Return on Equity= Net income / Average total equity
Return on
equity 2018 2019 2020 2021 2022
Net Loss (412,106.30) (390,070.70) (342,898.15) (290,808.31) (232,949.96)
Average 5,720,000.00 5,720,000.00 5,720,000.00 5,720,000.00 5,720,000.00
Equity
Ratio (7.20)% (6.82)% (5.99)% (5.08)% (4.07)%
4. Asset Turnover
Asset Turnover= Net Sales / Total Assets
Asset
Turnover 2018 2019 2020 2021 2022
Net Sales 623,300.00 686,850.00 754,850.00 829,550.00 912,100.00
Total Assets 5,949,677.26 5,737,820.52 5,572,273.35 5,426,140.74 5,337,080.04
Ratio 10.48% 11.97% 13.55% 15.29% 17.09%
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Chapter 6
Socio-Economic Study
It is important that small entrepreneurs should realize the worth

innovating and starting a business that would largely contribute to the
socio-economic development of the country. In this certain project, the
researchers consider the whole part of the business especially the social
impact in the community.
EMPLOYMENT AND INCOME
Workers and employees in the business need income support for

their own needs and also for their services rendered in the business.
Building up business is a great opportunity for an unemployed people to
have jobs. It will also be their opportunity of having another source of
income.
The main goal of a certain business is to have high income

especially in the part of the owner. The business should generate
pleasantly relationship between the manager and the employees to attain
the goal of the business.
GOVERNMENT
This business is expected to give a great contribution to the local

government in the form of permits & licenses. The payment from the
business would help the localities as well as the economy in its future
project especially for people that will benefit.
88 | P a g e
DISPOSAL OF WASTE
The business will observe proper waste disposal in order to

maintain cleanliness and orderliness. This will also help to lessen
pollution that causes different diseases and health problems to the
community. The waste of ABYAS are the flesh leftovers from the
production, as well as the office wastes particularly, excess papers will
be collected by the government garbage truck that is scheduled every
Wednesday. The business proponent will allocate enough budgets to
sustain the execution of waste management in its operations.
89 | P a g e
APPENDICES
90 | P a g e
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
COLLEGE OF ACCOUNTANCY
Mabini Campus, Sta. Mesa, Manila
Magandang Araw!
Kami ay mga mag-aaral mula sa PUP na kasalukuyang nagsasagawa ng masusing
pananaliksik ukol sa pagtatatag ng isang kooperatiba para sa ikauunlad at ikagiginhawa ng ating
mga magsasaka. Kalakip nito ay isang palatanungan, maaari po lamang ay inyo itong sagutan
ayon sa inyong nalalaman tungkol dito. Aming ipinangangako na ang mga datos na aming
makakalap ay gagamitin lamang sa layuning pang-akademiko.
Maraming salamat sa inyong kooperasyon.
Gumagalang,
Mga
Mananaliksik
PANUTO: Markahan ng tsek () sa puwang na ibinigay na tumutugma sa iyong sagot.
1. Ilang ektarya ng lupa ang inyong sinasaka?

[ ] ektarya [ ] 2 ektarya
[ ] 1 ektarya [ ] 4 ektarya
2. Ilang sako ng abono ang iyong ginagamit kada ektarya?

o NPK Fertilizer 14-14-14
[ ] 1 sako [ ] 6 sako
[ ] 2 sako [ ] 7 sako
[ ] 3 sako [ ] 8 sako
[ ] 4 sako [ ] 9 sako
[ ] 5 sako [ ] 10 sako
o NP Fertilizer 16-20-0
[ ] 1 sako [ ] 5 sako
[ ] 2 sako [ ] 6 sako
[ ] 3 sako [ ] 7 sako
[ ] 4 sako [ ] 8 sako
o N Fertilizer 46-0-0
[ ] 1 sako [ ] 5 sako
[ ] 2 sako
[ ] 3 sako
[ ] 4 sako
91 | P a g e
3. Saang suking tindahan ninyo nabibili ang mga pataba?
[ ] P&K Farm and Poultry
[ ] FERRY Farm Supply
[ ] Iba pa, pakitukoy: _______________
4. Pamilyar ba kayo sa paggamit ng organikong abono?

[ ] Oo
[ ] Hindi
5. Nasubukan niyo na bang gumamit ng organikong abono?

[ ] Oo
[ ] Hindi
6. Gumagamit pa din ba kayo ng organikong abono?

[ ] Oo
[ ] Hindi
7. Interesado ba kayong bumili ng orkanikong abono?

[ ] Oo
[ ] Fish Meal
[ ]Blood Meal
[ ]Bone Meal
[ ] Hindi
8. Kung ito ay itatatag bilang kooperatiba at magkakaron ng diskwento ang mga miyembro
sa pagbili ng produkto, ikaw ba ay interesadong magpa-miyembro?
[ ] Oo
[ ] Hindi
92 | P a g e
Schedule 1 Total 2018 2019 2020 2021 2022
Sales
Fish Meal
Expected Sales 276 304 334 367 404
Selling Price 1,150.00 1,150.00 1,150.00 1,150.00 1,150.00
Sales 317,400 349,600 384,100 422,050 464,600
Bone Meal
Expected Sales 175 193 212 233 256
Selling Price 1,100.00 1,100.00 1,100.00 1,100.00 1,100.00
Sales 192,500.00 212,300.00 233,200.00 256,300.00 281,600.00
Blood Meal
Expected Sales 108 119 131 144 158
Selling Price 1050.00 1050.00 1050.00 1050.00 1050.00
Sales 113,400.00 124,950.00 137,550.00 151,200 165,900
Total Sales 623,300.00 686,850.00 754,850.00 829,550.00 912,100.00
93 | P a g e
Schedule 2 Cost of Sales 2018 2019 2020 2021 2022
Fish Meal 276 304 334 367 404
Raw Materials:
Fish 11,040.00 12,160.00 13,360.00 14,680.00 16,160.00
Sack 1380.00 1520.00 1670.00 1835.00 2020.00
Compost 69,000.00 76,000.00 83,500.00 91,750.00 101,000.00
Total Raw Materials 81,420.00 89,680.00 98,530.00 108,265.00 119,180.00
Labor: 74,210.73 74,175.80 74,152.74 71,345.39 71,345.39
Overhead:
Utilities 47,460.00 48,883.80 50,350.31 51,860.82 53,416.65
Depreciation 7,904.50 7,904.50 7,904.50 7,904.50 7,904.50
Total Overhead 55,364.50 56,788.30 58,254.81 59,765.32 61,321.15
Total Product Cost Fish Meal 210,995.22 220,644.10 230,937.55 239,375.71 251,934.47
Per sack 764.48 725.80 691.43 652.25 623.6
Bone Meal 175 193 212 233 256

Raw Materials:
Bone 7,175.00 7,913.00 8,692.00 9,553.00 10,496
Sack 875.00 965.00 1,060.00 1,165.00 1,280.00
Compost 21,875.00 48,250.00 53,000 58,250.00 64,000.00
Labor: 47,053.90 47,091.87 47,067.01 45,295.58 45,264.68
Overhead:
Utilities 28,476.00 29,330.00 30,210.19 31,116.49 32,049.99
Depreciation 13,222.60 13,222.60 13,222.60 13,222.60 13,222.60
94 | P a g e
Total Overhead 41,698.60 42,552.88 43,432.79 44,339.09 45,272.59
Total Product Cost Bone Meal 118,677.50 146,772.75 153,251.80 158,602.67 166,313.27
Per Sack 678.60 760.48 722.89 680.70 649.66
Blood Meal: 108 119 131 144 158

Raw Materials:
Blood 5,400.00 5,950.00 6,550.00 7,200.00 7,900.00
Sack 540.00 595.00 655.00 720.00 790.00
Compost 13,500.00 14,875.00 16,375.00 18,000.00 19,750.00
Labor: 29,038.98 29,035.92 29,083.86 27,993.83 27,936.80
Overhead:
Utilities 18,984.00 19,553.52 20,140.13 20,744.33 21,366.66
Depreciation 3,921.90 3,921.90 3,921.90 3,921.90 3,921.90
Total Overhead 22,905.90 23,475.42 24,062.03 24,666.23 25,288.56
Total Product Cost Blood Meal 71,384.88 73,931.34 76,725.89 78,580.06 81,665.36
Per Sack 660.97 621.27 585.69 545.69 516.87
Total Product Cost-Fish Meal 210,995.22 220,644.10 230,937.55 239,375.71 251,934.47

Total Product Cost- Bone Meal 118,677.50 146,772.75 153,251.80 158,602.67 166,313.27
Total Product Cost Blood Meal 71,384.88 73,931.34 76,725.89 78,580.06 81,665.36
Total Cost of Sales 401,057.60 441,348.20 460,915.23 476,558.44 499.913.10
95 | P a g e
Schedule 3- Payroll
General Monthly No. of Gross Pay SSS PhilHealth Pag-ibig Withholding Total Net Pay
Manager Pay Months Work Tax Deductions
2018 7,500.00 12 90,000.00 0 1,200.00 1,800.00 3999.36 6,999.36 83,000.64
2019 7,500.00 12 90,000.00 0 1,200.00 1,800.00 3999.36 6,999.36 83,000.64
2020 7,500.00 12 90,000.00 0 1,200.00 1,800.00 3999.36 6,999.36 83,000.64
2021 7,500.00 12 90,000.00 3270 1,200.00 1,800.00 3999.36 10,269.36 79,730.64
2022 7,500.00 12 90,000.00 3270 1,200.00 1,800.00 3999.36 10,269.36 79,730.64
Controller
2018 7,500.00 12 90,000.00 0 1,200.00 1,800.00 3999.36 6,999.36 83,000.64
2019 7,500.00 12 90,000.00 0 1,200.00 1,800.00 3999.36 6,999.36 83,000.64
2020 7,500.00 12 90,000.00 0 1,200.00 1,800.00 3999.36 6,999.36 83,000.64
2021 7,500.00 12 90,000.00 3270 1,200.00 1,800.00 3999.36 10,269.36 79,730.64
2022 7,500.00 12 90,000.00 3270 1,200.00 1,800.00 3999.36 10,269.36 79,730.64
2 Laborers
2018 12,985.00 12 155,820.00 0.00 2,400.00 3,116.40 5,516.40 150,303.60
2019 12,985.00 12 155,820.00 0.00 2,400.00 3,116.40 5,516.40 150,303.60
2020 12,985.00 12 155,820.00 0.00 2,400.00 3,116.40 5,516.40 150,303.60
2021 12,985.00 12 155,820.00 5,668.80 2,400.00 3,116.40 11,185.20 144,634.80
2022 12,985.00 12 155,820.00 5,668.80 2,400.00 3,116.40 11,185.20 144,634.80
Driver
2018 3062.50 12 36,750.00 36,750.00
2019 3062.50 12 36,750.00 36,750.00
2020 3062.50 12 36,750.00 36,750.00
2021 3062.50 12 36,750.00 36,750.00
2022 3062.50 12 36,750.00 36,750.00
96 | P a g e
Porter
2018 3062.50 12 36,750.00 36,750.00
2019 3062.50 12 36,750.00 36,750.00
2020 3062.50 12 36,750.00 36,750.00
2021 3062.50 12 36,750.00 36,750.00
2022 3062.50 12 36,750.00 36,750.00
Schedule 4 - Employer's Contribution

Employee SSS Philhealth Pag-Ibig Total
General Manager 6,630.00 1200 1800 9,630.00
Controller 6,630.00 1200 1800 9,630.00
2 Factory Workers 11,491.20 2400 3116.4 17,007.60
Total 36,267.60
Schedule 5- Employee Benefits

Monthly salary 13th month pay
General Manager 7,500.00 7,500.00
Controller 7,500.00 7,500.00
2 Factory Workers 12,985.00 12,985.00
Total 27,985.00 27,985.00
97 | P a g e
Schedule 6- Supplies &
Supplies Expense 2018 2019 2020 2021 2022
Office Supplies, Beg. 0 6,421.96 6,441.23 6,460.55 6,479.93
Purchases 7,555.25 1,155.95 1,159.42 1,162.90 1,166.39
Office Supplies, End 6,421.96 6,441.23 6,460.55 6,479.93 6,499.37
Supplies Expense 1,133.29 1,136.69 1,140.10 1,143.52 1,146.95
Schedule 7 Delivery
Expense 2018 2019 2020 2021 2022
Depreciation 11,400.00 11,400.00 11,400.00 11,400.00 11,400.00
(114,000.00/10)
Fuel 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00
Total 17,400.00 17,400.00 17,400.00 17,400.00 17,400.00
Schedule 8 Utilities Expense 2018 2019 2020 2021 2022

Electricity @ 500.00 per
month 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00
Water @ 150.00 per month 1,800.00 1,800.00 1,800.00 1,800.00 1,800.00
Total 7,800.00 7,800.00 7,800.00 7,800.00 7,800.00
98 | P a g e
Schedule 9 Depreciation Expense
Annual
Cost Depreciable Value Estimated Years Depreciation Total
Building 4,400,000 3740000 30 124666.67 124666.67
Furniture, Fixtures &
Equipment:
Office Chair 2,278.50 2164.575 5 432.915
Office Table 5,418.00 5147.1 5 1029.42
Cabinet 2,099.00 1994.05 5 398.81
Wall Clock 219.75 208.7625 5 41.7525
Fluorescent Light 1,999.00 1899.05 5 379.81
Ceiling Fan 3,190.00 3030.5 5 606.1
Exhaust Fan 932.50 885.875 5 177.175
Water Dispenser 2,000.00 1900 5 380
Computer 10,000 9500 5 1900
Printer 2,500 2375 5 475
CCTV Cameras 15,750.00 14962.5 5 2992.5
Cash Register 2,950.00 2802.5 5 560.5
Toilet Bowl 5,000.00 4750 10 475
Padlock 1,920.00 1824 5 364.8
Long Table 6,000.00 5700 5 1140 11353.78
Total 136,020.45
99 | P a g e
Schedule 10- Property, Plant and Equipment 2018 2019 2020 2021 2022
FLand 500,000.00 500,000.00 500,000.00 500,000.00 500,000.00
Building 4,400,000.00 4,400,000.00 4,400,000.00 4,400,000.00 4,400,000.00
Accumulated Depreciation - Building 124,666.67 249,333.33 374,000.00 498,666.67 623,333.33
Machineries, Tools & Equipment 586,800.00 586,800.00 586,800.00 586,800.00 586,800.00
Accumulated Depreciation - Machineries Tools
& Equipment 25,049.00 50,098.00 75,147.00 100,196.00 125,245.00
Transportation Equipment 120,000.00 120,000.00 120,000.00 120,000.00 120,000.00
Accumulated Depreciation - Transportation
Equipment 11,400.00 22,800.00 34,200.00 45,600.00 57,000.00
Furniture Fixtures & Equipment 62,256.75 62,256.75 62,256.75 62,256.75 62,256.75
Accumulated Depreciation - FFE 11,353.78 22,707.57 34,061.35 45,415.13 56,768.91
Total 5,496,587.30 5,324,117.85 5,151,648.40 4,979,178.95 4,806,709.50
100 | P a g e

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Chapter 1

The proposed name for the project is ABYAS: Association for

Location plays an integral role for businesses, especially for this

The simple cooperative logo is designed appropriately for the

D. Brief Description of the Business

This study focuses on manufacturing organic fertilizers that

` The business belongs to the manufacturing industry.

The proponent agreed that cooperative will be the most

E. General Objectives of the Business

In the course of the cooperative, the owners aim for these

F. Research and Methodology

In gathering significant information and in constructing the

questionnaire, the researchers conduct an interview to some

farmers in the target area. Other information was acquired through

the internet which served as supplementary data and helped in

facilitating the undertakings of the research study.

Random sampling will be utilized in study. Since the

The market projection of the business is based on the

ABYAS will be located at Purok 5, Tabuyuc, Apalit,

c. Management and Legal Study

The mission, vision and core values, organizational chart,

This study focused on the financial aspect of the proposed

ABYAS commits to help in the growth of the community and

Abyas. Kapampangan term for bigas.

sample members from a larger population are selected according to a

random starting point and fixed periodic interval.

Urea Fertilizer. Also known as N-0-0. Fertilizer that consists of

To analyze the market demand and supply of the business;

The potential customers of the product (organic fertilizer) by Associ

There is a need for every business to know the environment that it

Quality of the product and the service is high

No partnerships or strong relationships with farmers association.

Customer may prefer commercial over organic fertilizer

Table 2.1 Distribution of Farmers According to

Total Hectares: 154

Table 2.2 Distribution of Respondents as to the Number of sacks of

The table and figure above show the distribution of respondents as

Table 2.3 Distribution of Respondents as to the Number of sacks of

The table and figure above show the distribution of respondents as

Table 2.4 Distribution of Respondents as to the Number of sacks of

The table and figure above show the distribution of respondents as

Table 2.5 Distribution of Respondents who are Familiar

These table and figure shows the distribution of respondents who

Table 2.6 Distribution of Respondents Who Have Tried

Figure 2.6 Distribution of Respondents Who

Table 2.7 Distribution of Respondents Who are Still

Figure 2.7 Distribution of Respondents

These table and figure shows the distribution of respondents who

Table 2.8 Distribution of Respondents Who Are

These table and figure shows the distribution of respondents who

Table 2.9 Distribution of Respondents Who Are

Choices Frequency Percentage

These table and figure shows the distribution of respondents who

Table 2.10 Distribution of Respondents Who Are

Figure 2.10 Distribution of Respondents Who

Table 2.11 Historical Population

Year Annual Growth Rate Projected Population

Table 2.12 Projected Population

Table 2.13 Projected Demand

Table 2.14 Projected Demand

Supply represents the product provided by the competitors to the

Table 2.16 Projected Supply of Competitor

Table 2.18 Projected Supply of Competitor