SECTION I

Marketing Plan

Product Description

The main product of Majestic Poultry Farm would be broiler chicken. The company will
engage in contract breeding with San Miguel Foods Corporation (SMFC). In general, contract
farming can be defined as agricultural production carried out according to an agreement
between a buyer and farmers, which establishes conditions for the production and marketing
of a farm product or products. Typically, the farmer agrees to provide agreed quantities of a
specific agricultural product.As defined by the SMFC, contract breeding is an agreement
between SMFI and the Grower for the growing of broiler chicks to produce grown broilers: at
marketable size, at the right volume and at the right time meeting the quality standards at least
possible cost.

In our case, SMFC will provide us with days-old chicks and will buy the grown broiler
chickens. Moreover, building layout and certain equipment will also be provided as part of the
agreement. Certain trainings and other services would also be provided to assist the farmers in
carrying out the operations.

In line with the goals of the SMFC, Majestic Poultry Farm also aims for the best quality of
products in conformance with the contract. Hence, extra care is observed throughout the
production process and the best facilities are employed in order to achieve this goal

Location

Location site for the poultry farm should be a little away from town so that you can have the
land and labor at a cheaper cost. Moreover, the location should not be too far away from the
city because it may cost more transportation.

As provided for in the contract, the agricultural land must be a minimum of one (1) hectare
within an agricultural or agro-industrial zone. It must be at least 1km away from the nearest
residential area or from the nearest poultry/livestock farm and related operation.
With this, the partners plan tosecure a lot at Sto. Niño Ruparan, Digos City, Davao del Sur.
The map below shows the planned location of the business.

Market Area

It can be easily accessed through Sto. Niño Ruparan, Digos City, Davao del Sur.

Main Customers

Naturally, the target market of those who are the end consumer of commercial poultry farm
produce and also those who benefits from the business value chain of the poultry farming and
egg production industry is all encompassing; it is far – reaching.

Every household consumes produce from commercial poultry farms be it chicken or egg. So
also almost all hotels and fast restaurants sell chicken and eggs. In essence a commercial
poultry farmer should be able to sell his or her chicken and eggs to as many people as possible.

In view of that, Majestic Poultry Farm would be engaged in contract breeding with San Miguel
Foods Corporation, hence, its primary customer would be the San Miguel Foods Corporation.
Total Demand and Production
The total demand of poultry consumption per capita from 2006-2025 is presented below.
Figures from 2017 onwards are forecasted. The data are gathered from Statista.com.

The domestic consumption of broiler meat is also presented below. Data is taken from
Indexmundi.com.

Selling Price
The average farmgate price of commercial broiler chicken from October to December 2016-
2018 is presented below.

The selling price of the broilers would be based on the contract price provided for in the
contract.

Sales Forecast

Sales forecast would be based on the planned production since all sales are assured as a result
of contract growing. With the information from the SMFC, the annual sales forecast is
computed based on the number of cycles in a year multiplied by the chicks grown per cycle.
Based on the estimate of SMFC, there are 7.77 cycles in a year. Other studies showed a cycle
of 7.12 while others fixed the cycle into 7. For the purpose of estimating sales, 7 complete
cycles in a year will be used.

Since planned increase in capacity will take place after five (5) years of operations, the sales
are expected to be constant for the first five years of operation. Moreover, it is presumed that
the plant will operate at full capacity. Consequently, the forecasted sales are as follows:
 Sales Forecast
(per Unit)

2020 2021 2022 2023 2024

Sales (per Cycle) 36,000 36,000 36,000 36,000 36,000
Multiply by: Annual Cycle 7 7 7 7 7
Total Estimated Sales 252,000 252,000 252,000 252,000 252,000

Promotional Measures

Good marketing attracts customers’ attention to the product and services. The promotional
tactics developed by Majestic Poultry farm is contract-breeding or farm-to-
cooperatives/corporation scheme. The company would apply as contract-breeders for San
Miguel Foods Corporation.

Marketing Strategy

The primary marketing strategy that would be applied by Majestic Poultry Farm would be to
apply as contract-growers for San Miguel Foods Corporation. Other important marketing
strategy to be adopted would be developing strong relationships with our main customer.
 SECTION II
Production Plan

Production/Operation Process

Poultry production involves the following processes:

Growing/ Stock Clearing, Removing

Breeding Equipment & Litre
(35 Days) (2 Days)

Resting the Poultry

Cleaning & Disinfecting
House
(2 Days)
(8 Days)

Start of the Next Cycle

 The resting period is essential to ensure that all germs and disease have died off before
the next batch of chicks are reared.
 Following these guidelines it will be possible to complete 7.77 cycles in a 12-month
period.
 If production time is lost, the profitability of the venture will suffer.
Fixed Capital Investment

Fixed capital to be employed and estimated costs to be incurred is as follows:

Fixed Asset Investment

Fixed Investment Cost

Land PHP 1,000,000.00
Site Development 175,000.00
Production Building 17,350,000.00
Support Facilities 1,777,000.00
Water Supply System 453,000.00
Waste Water Treatment Facility 160,000.00
Tools and Farm Equipment 474,000.00
TOTAL PHP 21,389,000.00

Life of Fixed Capital

The life of the fixed investments is estimated as follows:

Life of Fixed Asset

Fixed Investment Useful Life

Land Indefinite
Production Building 30 years
Support Facilities 15 years
Water Supply System 10 years
Waste Water Treatment Facility 5 years
Tools and Farm Equipment 15 years
Repairs and Maintenance

Area ACTION PLAN

Housing  Roof Sprinkling
 Inside fogging
 Building insulation
Poultry Equipment  All automatic feeders and waterers shall be checked
at least once a day for efficient operation.
Sanitation  Chickens shall be checked regularly for evidence of
parasites. Necessary treatment as prescribed by the
attending veterinarian shall be given.
 Removal of litter and Manure
 Washing down of the interior of the structure and
all equipment, preferably using high-pressure
washer
 Application of disinfectant solution or fumigant
 Poultry houses, premises and equipment shall be
thoroughly cleaned and disinfected before
restocking. Proper down time periods shall be
observed upon recommendation of the attending
veterinarian.
Health Practices  Dead chickens shall be removed immediately and
disposed of properly and hygienically. Treatment
given to the chicken and their response to treatment
shall be recorded and kept to assist disease
investigators.
 Chickens with incurable disease, zoonotic diseases
or significant deformity shall be removed from the
flock and humanely destroyed immediately.

Planned Capacity

The planned capacity of the plant would be based on the minimum requirement of the contract
that is 36,000 bird space. It is assumed that the plant will operate at full capacity.

Future Capacity

The plant capacity is expected to increase by 50% for the next five years of operation.
Terms and Condition of the Contract

I. Application Process

a. Investor's Forum
b. Submission of application form and letter of intent
c. Site Inspection
d. Processing of permits / Submission of requirements
e. Start of Construction
f. Completion of Farm and Dry Run
g. Chick Loading - Start of Farm Operations

II. Investment Details

a. Definition

 It is an Agreement between SMFI and the Grower for the growing

of broiler chicks to produce grown broilers: at marketable size, the
right volume, at the right time meeting quality standards at the least
possible cost.
 Income is derived from farm production efficiencies
o Harvest Recovery (HR)
o Average Live Weight (ALW)
o Feed Conversion Ratio (FCR)
 It is NOT AFFECTED by market price or demand fluctuations.
 A sure and steady income.

b. Farm Site

 At least FOUR (4) hectares land area; Within an agricultural zone

 Should be at least ONE (1) kilometer away from nearest livestock farm
and population center
 With all weather-access road (to and from and within the farm) and must
be passable to a 10-wheeler truck
  With reliable source of electricity and adequate potable water
 With full time farm manager and farm recorder

c. Document Requirements

 Completely filled-up application form

 Two (2) pieces 2”x2” picture
 Clear photocopy of latest Community Tax Certificate
 Clear photocopy of BIR Certificate of Registration
 Proposed farm site location/vicinity map
 Photocopy of Land Title

d. Bond and Collateral

 CASH (P100.00 per breeder)

 Real Estate Mortgage (REM)
 Original TCT
 Current Year’s Tax Declaration
 Tax Clearance
 Tax Receipt
 Special Power of Attorney (SPA) if not in applicant’s name

e. Building Design

 Orientation: EAST – WEST Direction

 Dimension: Length: 410 ft
Width: 40 ft
Height: q7 ft min
 Elevation: 1 ft from the ground line
 Flooring: 3” thick cement, 1 slope
 Service Area: 10 ft x 40 ft
 Foot Bath: Concrete 1×1 m
 Bird Proofing: Fishnet 0.5” x 0.5”
 f. SMFC and Contract Breeder Responsibilities

SMFC Undertakings Breeder’s Undertakings

Day-old chicks Agricultural/Agro-industrial Land
Breeder Feeds Production Houses
Vaccines and Medicines Controlled Climate System, Auto Feeding &
Drinking
Technical Assistance Poultry Equipment
Laboratory Services Power and Water Supply & Distribution System
Competitive Payment Scheme Security
Delivery and Hauling Services Skilled Labor
Proper Farm Management

g. Financials

Estimated Investment for 36k Capacity Broiler Farm

Elevated Building
Site Development PHP 175,000.00
Production Building 17,350,000.00
Support Facilities 1,777,000.00
Water Supply System 453,000.00
Waste Water Treatment Facility 160,000.00
Tools and Farm Equipment 474,000.00
Permits 31,000
TOTAL PHP 20,420,000.00
ESTIMATED INVESTMENT COST PER BIRD PHP 567.22

Estimated Operational Expenses for 36k Bird Capacity

Elevated Building
Labor PHP 3.12
Power 3.35
LPG 0.85
Harvest 0.40
Cleaning 0.55
Vitamins/Medication 0.50
Repairs & Maintenance 0.45
Fly Control 0.40
OPERATIONAL EXPENSES/BIRD/CYCLE PHP 10.62
 Comparative Payback Period
Sample Fee
High Average Low
Gross Income 26.40 24.98 23.09
Operational Expenses/Bird/Cycle 10.62 10362 10.62
Net Income 15.78 14.36 12.47
Investment 567.22 567.22 567.22
Payback Period (7.77 Cycles) 4.63 5.09 5.86

Factory Location and Layout

Location Requirements. A poultry farm must be located outside urban areas. It must
be located in 25 m. radius from sources of ground and surface drinking water. Medium
and large poultry farms must be at least 1,000 m. away from built-up areas (residential,
commercial, institutional and industrial) while a small scale must be at least 500 m.
away from these areas.

As provided for the approval of the contract, the following location requirements will
also be considered: Within an agricultural zone, At least 1 km away from the nearest
residential area, At least 1 km away from the nearest poultry or hog farm and related
operation, Within 100km radius from the nearest SMFI operated Poultry Processing
Plant, Reliable source of electric power, Adequate source of potable water, All-weather
road leading to and inside the farm, passable to light vehicle, 6 and 10 wheeler trucks.
With this, the planned location, as presented in Section 1, is Sto. Niño Ruparan, Davao
del Sur.

Housing Requirements. If possible, the length of the broiler house should run from
east to west. This prevents direct sunlight from penetrating the side walls of the house,
which could cause heat build-up inside. Ventilation is very important. Allocate at least
1 square foot of floor space per bird. If constructing an open-sided type of housing,
elevate the house about 1.5 m. from the ground. This ensures proper circulation of air
and easier collection of fecal matter underneath the house after each harvest. The
building should be rat proof, bird proof, and cat proof. Trees may be planted on the
sides of the house to provide shade during hot season. These can also serve as protection
 from storms or weather disturbances. The roofing should be monitor-type and high
enough to provide better air circulation inside the broiler house. In preparation for the
arrival of the chicks, thoroughly clean the house with the use of a high pressure washer
to remove dust, fecal matter, or any debris inside. Disinfect the house and all equipment
to be used

The planned factory layout is shown below.

Raw Materials
Raw materials consist primarily of feeds. In connection the feeds needed would be: booster,
starter, and finisher feeds. Feeding requirements are as follows:

STAGE AGE IN DAYS FEED INTAKE/DAY

Booster 0-10days 10g
Broiler Starter 11-26 days 60g
Broiler Finisher 27-35 days 90g

The cost of these feeds based on the prevailing market prices is:

Type of Feeds Cost/kg

Chick Booster P 30.00
Starter Feeds P 30.00
Finisher Feeds P 31.50

However, these costs will not be followed since the SMFC will provide the feeds as part of the
provisions of the contract. Moreover, a policy of maintaining 20% of next month’s production
requirement would be implemented.

Labor

The primary labor needed for the implementation of this proposal would be the chicken
attendants. The workers will be full-time employed with average wage of 250/day. The salary
of individual employee will vary depending on the educational background, position and
behavior. The senior management will design special rewarding system, training program and
appraisal criteria. Most of the operators will have technical background in order to be able to
perform autonomous equipment maintenance.

Production/Operation Cost
Operating Expenses as estimated by the San Miguel Foods Corporation are as follows:

Operating Expenses
(36,000 Bird Capacity)

Cost/ Unit/
Expense Cycle Costs
Labor PHP 3.12 PHP 112,320.00
Power 3.35 120,600.00
LPG 0.85 30,600.00
Harvest 0.40 14,400.00
Cleaning 0.55 19,800.00
Vitamins/Medication 1.50 54,000.00
Repairs And Maintenance 0.45 16,200.00
Fly Control 0.40 14,400.00
Total Operating Expenses (per Cycle) PHP 10.62 PHP 382,320.00
 SECTION III
Organization and Management Plan

Form of the Business

Theform of the business would be a general partnership. This type of business is composed of
two or more persons agree to share in all assets, profits and financial and legal liabilities of a
business.

Organization Structure

Majestic Poultry Farm is a general partnership with 15-20 employees on its start up. The
management board consists of the senior management and two (2) managers as follows:

Senior
Management

Administrative
Operation Staff
Staff

Facilities Poultry
Accounting Administrative
management Workers
Business Experience and Qualifications of the Entrepreneur

Units Management No. Employed Qualifications Compensation

Personnel
Senior management
Operation Staff
Administrative Staff
2 Active, well-mannered and Based on profit
responsible. and loss ratio.
8-10 Physically fit and willing to Weekly based on
be trained. minimum wage
2-3 Responsible and must have Monthly
an experience in accounting
for biological assets.

3.4 Pre-operating Activities

Application for Contract Application Process

Growing
Legal Requirements  BIR Form 2303
 SEC registration,
 Tax Identification Number (TIN)
Site Selection  Plant Location
 Location Requirements
Poultry Expertise  Seminar on Basic Husbandry

3.5 Pre-operating Expenses

Expenses Cost
BIR Form 2303 (Business Name Registration) 530.00
Barangay Clearance 50.00
Mayor’s Permit and License/Sanitary Permit 5,000.00
Tax Identification Number 515.00
Environmental Compliance Certificate
 Philippine Environmental Impact System (PEIS) 15,000.00
 Environmental Impact System (EIS) 10,000.00
 Programmatic Environmental Performance Report &
Management Plan (PEPRMP) 10,000.00
 Environmental Performance Report and Management Plan
(EPRMP) 10,000.00
 Initial Environmental Examination (IEE) Checklist 5,000.00
 Documentary Stamp 15.00
 SECTION IV
Financial Plan

4.1 Project Cost

Activity Duration
Activity March April May June- December
Cost
W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 June July Aug. Sept. Oct. Nov. Dec.
Application
7 Weeks 31,000
for Contract
Legal
9 Weeks 56,110
Requirement
Site
8 Weeks 1,175,000
Selection
Poultry
2 Weeks -
Expertise
Construction
15 Weeks 19,214,000
of Production

4.2 Financing Plan & Loan Requirements

Majestic Poultry Farm do not intend to welcome any external business partners. Hence, the
partners intend to generate the start-up capital from personal savings, soft loans from family
members and friends, and obtaining a loan from a bank. With this, the financial structure of the
partnership is presented as follows:

Financial Structure
Founders/Owners 50%
Outside Creditors 50%
TOTAL 100%

The possible sources of loan would be as follows:

Source of Loan
Equity Contribution
Management Investment PHP 12,000,000.00
Banks and Lenders
Banks and Lenders 12,000,000.00
TOTAL FINANCING PHP 24,000,000.00
4.3 Security for Loan

The loan will be secured by the real properties of the company.

4.4 Profit/Loss Statement

MAJESTIC POULTRY FARM COMPANY

Income Statement

2020 2021 2022 2023 2024

Sales 19,234,908 19,234,908 19,234,908 19,234,908 19,234,908
Cost of Sales 13,416,228 13,416,228 12,939,948 12,939,948 12,939,948
Gross Income 5,818,680 5,818,680 6,294,960 6,294,960 6,294,960
Less: Expenses
Operating Expenses (2,676,240) (2,676,240) (2,676,240) (2,676,240) (2,676,240)
Depreciation (760,083) (760,083) (760,083) (760,083) (760,083)
Interest (967,562) (754,521) (541,479) (328,438) (115,397)
Income Before Tax 1,414,795 1,627,836 2,317,157 2,530,198 2,743,239
Income Tax (424,439) (488,351) (695,147) (759,059) (822,972)
Net Income 990,357 1,139,485 1,622,010 1,771,139 2,743,239

Sales, Operating Costs, and Profit Forecast

25,000,000

20,000,000
Cost (in Pesos)

15,000,000

10,000,000

5,000,000

0
1 2 3 4 5
Year

Sales Operating Cost Net Profit

4.5 Cash Flows Statement

MAJESTIC POULTRY FARM COMPANY

Statement of Cash Flows

2020 2021 2022 2023 2024

Source of Cash from Operating Activities

Net Income 990,357 1,139,485 1,622,010 1,771,139 2,743,239
Depreciation 760,083 760,083 760,083 760,083 760,083
Increase in RM Inventory (170,640) - - - -
Increase/Decrease in Biological Assets (1,303,533) 389,367 524,799 (524,799) 524,799
Increase/Decrease in Accounts Payable 750,816 (68,256) - - -
Net Cash Provided by Operations 1,027,083 2,220,680 2,906,892 2,006,423 4,028,122

Source of Cash from Investing Activities

Purchase of Land and Site Development (1,175,000) - - - -
Purchase of Equipment (2,864,000) - - - -
Construction of Production Plant (17,350,000)
Net Cash Provided by Investing Activities (21,389,000) - - - -

Source of Cash form Financing Activities

Proceeds from Long-term Debt 12,000,000 - - - -
Investment of Partners 12,000,000
Payment to Partners (240,000) (240,000) (240,000) (400,000) (400,000)
Principal Repayments of Long-term Debts (2,400,000) (2,400,000) (2,400,000) (2,400,000) (2,400,000)
Net Cash Provided byFinancing Activities 21,360,000 (2,640,000) (2,640,000) (2,800,000) (2,800,000)

Net Increase/(Decrease) 998,083 (419,320) 266,892 (793,577) 1,228,122

Beginning Cash Balance - 998,083 578,762 845,655 52,078
Ending Cash Balance 998,083 578,762 845,655 52,078 1,280,200
4.6 Balance Sheet and Owner’s Equity

MAJESTIC POULTRY FARM COMPANY

Statement of Financial Position

2020 2021 2022 2023 2024

ASSETS
Current Assets
Cash 998,083 578,762 845,655 52,078 1,280,200
Raw Materials Inventory 170,640 170,640 170,640 170,640 170,640
Biological Assets 1,303,533 914,166 389,367 914,166 389,367
Total Current Assets 2,472,256 1,663,568 1,405,662 1,136,884 1,840,207

Non-Current Assets
Land 1,175,000 1,175,000 1,175,000 1,175,000 1,175,000
Production Building 17,350,000 17,350,000 17,350,000 17,350,000 17,350,000
Support Facilities 1,777,000 1,777,000 1,777,000 1,777,000 1,777,000
Water Supply System 453,000 453,000 453,000 453,000 453,000
Waste Water Treatment Facility 160,000 160,000 160,000 160,000 160,000
Tools and Farm Equipment 474,000 474,000 474,000 474,000 474,000
Less: Accumulated Depreciation (760,083) (1,520,167) (2,280,250) (3,040,333) (3,800,417)
Total Noncurrent Assets 20,628,917 19,868,833 19,108,750 18,348,667 17,588,583
TOTAL ASSETS 23,101,173 21,532,402 20,514,412 19,485,551 19,428,790

LIABILITIES AND PARTNERS' EQUITY

Liabilities
Accounts Payable 750,816 682,560 682,560 682,560 682,560
Loan Payable 9,600,000 7,200,000 4,800,000 2,400,000 -
Total Liabilities 10,350,816 7,882,560 5,482,560 3,082,560 682,560

Partners' Equity
Lao, Capital 6,375,178 6,824,921 7,515,926 8,201,495 9,373,115
Singcolan, Capital 6,375,178 6,824,921 7,515,926 8,201,495 9,373,115
Total Equity 12,750,357 13,649,842 15,031,852 16,402,991 18,746,230
TOTAL LIABILITIES & EQUITY 23,101,173 21,532,402 20,514,412 19,485,551 19,428,790
 Proforma Balance Sheet
25,000,000

20,000,000
Amount (in Pesos)

15,000,000

10,000,000

5,000,000

0
1 2 3 4 5
Year

Total Assets Total Liabilities Total Equity

4.7 Loan Repayment Schedule

Outstanding
Month Principal Interest Total
Balance
1 200,000.00 88,767.12 288,767.12 11,800,000.00
2 200,000.00 87,287.67 287,287.67 11,600,000.00
3 200,000.00 85,808.22 285,808.22 11,400,000.00
4 200,000.00 84,328.77 284,328.77 11,200,000.00
5 200,000.00 82,849.32 282,849.32 11,000,000.00
6 200,000.00 81,369.86 281,369.86 10,800,000.00
7 200,000.00 79,890.41 279,890.41 10,600,000.00
8 200,000.00 78,410.96 278,410.96 10,400,000.00
9 200,000.00 76,931.51 276,931.51 10,200,000.00
10 200,000.00 75,452.05 275,452.05 10,000,000.00
11 200,000.00 73,972.60 273,972.60 9,800,000.00
12 200,000.00 72,493.15 272,493.15 9,600,000.00
13 200,000.00 71,013.70 271,013.70 9,400,000.00
14 200,000.00 69,534.25 269,534.25 9,200,000.00
15 200,000.00 68,054.79 268,054.79 9,000,000.00
16 200,000.00 66,575.34 266,575.34 8,800,000.00
17 200,000.00 65,095.89 265,095.89 8,600,000.00
18 200,000.00 63,616.44 263,616.44 8,400,000.00
19 200,000.00 62,136.99 262,136.99 8,200,000.00
20 200,000.00 60,657.53 260,657.53 8,000,000.00
21 200,000.00 59,178.08 259,178.08 7,800,000.00
22 200,000.00 57,698.63 257,698.63 7,600,000.00
23 200,000.00 56,219.18 256,219.18 7,400,000.00
24 200,000.00 54,739.73 254,739.73 7,200,000.00
25 200,000.00 53,260.27 253,260.27 7,000,000.00
26 200,000.00 51,780.82 251,780.82 6,800,000.00
27 200,000.00 50,301.37 250,301.37 6,600,000.00
28 200,000.00 48,821.92 248,821.92 6,400,000.00
29 200,000.00 47,342.47 247,342.47 6,200,000.00
30 200,000.00 45,863.01 245,863.01 6,000,000.00
31 200,000.00 44,383.56 244,383.56 5,800,000.00
32 200,000.00 42,904.11 242,904.11 5,600,000.00
33 200,000.00 41,424.66 241,424.66 5,400,000.00
34 200,000.00 39,945.21 239,945.21 5,200,000.00
35 200,000.00 38,465.75 238,465.75 5,000,000.00
36 200,000.00 36,986.30 236,986.30 4,800,000.00
37 200,000.00 35,506.85 235,506.85 4,600,000.00
38 200,000.00 34,027.40 234,027.40 4,400,000.00
39 200,000.00 32,547.95 232,547.95 4,200,000.00
40 200,000.00 31,068.49 231,068.49 4,000,000.00
41 200,000.00 29,589.04 229,589.04 3,800,000.00
42 200,000.00 28,109.59 228,109.59 3,600,000.00
43 200,000.00 26,630.14 226,630.14 3,400,000.00
44 200,000.00 25,150.68 225,150.68 3,200,000.00
45 200,000.00 23,671.23 223,671.23 3,000,000.00
46 200,000.00 22,191.78 222,191.78 2,800,000.00
47 200,000.00 20,712.33 220,712.33 2,600,000.00
48 200,000.00 19,232.88 219,232.88 2,400,000.00
49 200,000.00 17,753.42 217,753.42 2,200,000.00
50 200,000.00 16,273.97 216,273.97 2,000,000.00
51 200,000.00 14,794.52 214,794.52 1,800,000.00
52 200,000.00 13,315.07 213,315.07 1,600,000.00
53 200,000.00 11,835.62 211,835.62 1,400,000.00
54 200,000.00 10,356.16 210,356.16 1,200,000.00
55 200,000.00 8,876.71 208,876.71 1,000,000.00
56 200,000.00 7,397.26 207,397.26 800,000.00
57 200,000.00 5,917.81 205,917.81 600,000.00
58 200,000.00 4,438.36 204,438.36 400,000.00
59 200,000.00 2,958.90 202,958.90 200,000.00
60 200,000.00 1,479.45 201,479.45 0
4.8 Break-even Point

Break-Even Analysis

2020 2021 2022 2023 2024

Sales 19,234,908 19,234,908 19,234,908 19,234,908 19,234,908
Variable Expenses 17,484,468 17,335,339 16,852,815 16,703,686 16,554,557
Contribution Margin 1,750,440 1,899,569 2,382,093 2,531,222 2,680,351
Fixed Expenses 760,083 760,083 760,083 760,083 760,083
Net Income 990,357 1,139,485 1,622,010 1,771,139 1,920,268

Break-Even Point (Pesos) 8,352,262 7,696,554 6,137,515 5,775,919 5,454,559

Break-Even Point (Units) 109,424 100,834 80,409 75,671 71,461

4.9 Return on Investment

Return on Investment

2020 2021 2022 2023 2024

Total Assets 23,101,173 21,532,402 20,514,412 19,485,551 19,428,790
Net Income 990,357 1,139,485 1,622,010 1,771,139 2,743,239
ROI 4.29% 5.29% 7.91% 9.09% 14.12%
4.10 Financial Statement Analysis

MAJESTIC POULTRY FARM COMPANY

Financial Ratio Analysis

RATIO ANALYSIS 2020 2021 2022 2023 2024

Liquidity
Working Capital to Assets Ratio 7.45% 4.56% 3.52% 2.33% 5.96%

Solvency
Debt Ratio 44.81% 36.61% 26.73% 15.82% 3.51%
Equity Ratio 55.19% 63.39% 73.27% 84.18% 96.49%
Debt-to-Equity Ratio 81.18% 57.75% 36.47% 18.79% 3.64%

Profitability
Gross Profit Margin 30.25% 30.25% 32.73% 32.73% 32.73%
Net Profit Margin 5.15% 5.92% 8.43% 9.21% 14.26%
Cash Flow Margin 5.34% 11.55% 15.11% 10.43% 20.94%
Return on Total Assets (ROA) 4.44% 5.42% 8.11% 9.10% -

Asset Management
Asset Turnover 0.83 0.89 0.94 0.99 0.99
Capital Intensity Ratio 1.20 1.12 1.07 1.01 1.01
 University of Mindanao Digos College
Roxas Extension, Digos City

In Partial Fulfillment of the Requirements for

Synthesis

Proponents:
Queen Arianne Faith R. Singcolan
PR C. Lao

March 2019