1

CHAPTER 1
SUMMARY OF THE PROJECT

NAME OF THE FIRM

The owners named their business venture as Frootie Smoothie. It is a small food
haven which offers affordable, quality, and healthy food products. The health and wellness of
the consumers are the business’ main advocacy. The owners surely put emphasis on a
healthy tasty food without sacrificing its appeal to the eyes of the public.

LOCATION OF THE FIRM

Frootie Smoothie will be located at the UM Matina Driveway, Gravahan, Talomo,
Davao City in line with other food vendors. The rent is 50,000 a year, with a five-year lease
available. The site consists of dining room, counter, kitchen, and a bathroom.

BRIEF DESCRIPTION OF THE PROJECT

History and Background
Frootie Smoothie is a small food hub created by the initiative of four food
enthusiasts and health advocates who graduated from the University of Mindanao. The
owners, namely Ruel Armilla, John Paul Apolinario, Mark Doydora and Jerome Luiz Labordo,
collaborated in a business setting in late 2019 with a vision of offering healthy and quality
food product to the current market who care about their health and well-being.
It holds the concept of changing the general view on smoothies as an unhealthy
sugary dish into a healthy meal as well as changing public impression on organic foods by
introducing healthy fruit-based smoothies conveniently to the customers. The company sells
the same tasty goodness of a smoothie while being a great source of nutrition. The owners
thoroughly studied the perceived effectiveness of utilizing fruits as a healthy substitute to
the sweet sensation of sugar and its other forms. While the fruits glucose and distinct flavors
may not be as popular and addictive as sugar, it is an affordable new ingredient that is
natural and surely health-friendly.
Nature of the Industry
Making shakes and smoothies are a norm nowadays, specially people are becoming
more concerned and conscious about their health. The problem with this is the preparation,
 2

it consumes too much time and effort. The menu will address this by preparing dishes in
such way that people won’t realize the loss of the typical taste of sugar and its unhealthy
effects.
With respect to the business transaction, this venture will deliberately choose to be
distinctive and unique in its customer experience. Frootie Smoothie will present an image of
wholesome, healthy food in an attractive and clean atmosphere. Comment cards will be at
each table and will be collected at the register. Suggestions for new or improved meals and
flavors will be sought, as well as feedback on service and the dining experience. The
company strives to create an innovative menu with quality products that differentiates them
from the competitors, have an easily accessible location to get close to the market, provide
heartfelt services to customers, and maintain a fine reputation to achieve word-of-mouth
advertising.

Type of Organization
Frootie Smoothie as a formal legal entity has chosen to be a partnership. This
structure was chosen because of its operational simplicity. This type of business entity is easy
and inexpensive to set up. It is also very suitable for the owners to dwell into this type of
organization since they already have fiduciary relationship with each other. The plan serves
as a roadmap for the partnership to implement actions necessary to start up and make the
business grow. This type of organization is useful in making each partner focus on various
aspects of the business. The owners will each have their separate responsibilities as to the
operations, production, sales, and disbursement.
Organizational Chart

Operations In-
Charge

Production In- Disbursement

Sales In-Charge
Charge In-Charge

Cook Cashier

Service Crew Service Crew

 3

Job Descriptions and Qualifications

JOB DESCRIPTION JOB QUALIFICATION
Operation In-charge
> Manage overall operations. > Must be a graduate of
management courses
> Ensure safe and efficient operations. > Male or female from 20-25 years
old
> Carry out supervisory responsibilities. > Familiar with a variety of field’s
concepts, practices and procedures
> Planning, assigning and directing work. > Perform a variety of tasks
> Organizing the budget of the business.
> Manage staff levels, wages, hours to
contract labor to revenue.
> Develop system to account for financial
transactions by establishing records.

Production In-charge
> Managing and improving production. > Requires bachelor’s degree in area
related to management courses
> Identifying problems in production process. > Male or female from 20-25 years
old
> Directly supervising the production. > Can handle work under pressure
and unsupervised.
> Addressing employee complaints and
resolving problems.
> Organizing and prioritizing production
needs.
> Making sure that products are to the
highest grade and production standards.
> Making sure that paperwork is in place.

Sales In-charge
> Design and implement strategic plan.
> Build and promote strong, long-lasting
customer relationship.
> Identify emerging market and market shifts.
old
> Present sales, revenue and expenses
reports and realistic forecast to management.
Disbursement In-charge
> Pays the monthly expenses.
> Manages the disbursement cycle.
> Keeps all receipts and support documents.
> Records all the expenses incurred.
Cook
> Ensuring that strict hygiene food safety
> Modifying and improving existing recipes.
> Monitoring use of additives.
Cashier
> Receive payment by cash.
> Issue receipts, refunds, credits or change
> Count money in cash drawers at the
4
> BS/MS degree in business
administration or a related field.
> Successful previous experience
> Male or female from 20-25 years
> Requires bachelor’s degree in area
related to management courses
> Male or female from 20-25 years
old
> Can handle work under pressure
> Completed any college degree
standards are met.
> Must have thorough knowledge in
production and craft of smoothies.
> Must be a graduate of any college
degree/course
> Male or female from 20 y/o above
due to customers.
> Must possess honesty and
integrity beginning of the shift to
ensure that
 5

the amount is correct.

> Keeping the front area clean and greet
the customers.

Service Crew
> Responsible for food preparation. > At least high school graduate
> Greeting customers taking orders. > Male or female from 20 y/o above
> Answering to customer inquiries. > Must have good moral character
> Preparing dining areas.
> Cleaning utensils.
 6

CHAPTER 2
MARKETING ASPECT
Market Description
The target market focuses on the students of University of Mindanao Matina
Campus in Davao City. According to uniRank (2019), the university currently has an estimated
number of 15,000 enrolled for the first semester of school year 2019-2020. The area, being
near the university, ensures that there will be demand and ease of access for the students.
The project does not limit to students of University of Mindanao only, people residing the
area can also buy and enjoy the product. Employees of the said university will also be able to
find the satisfaction they want with the product. The product is suited to different people
regardless of age, gender, and profession.
Demand analysis
Demand in economics is described as the ability and desire of a consumer to
purchase a good or service. It is considered as the driving force of the economy and it’s
growth. Without demand, there will be no existing markets (Amadeo, 2019). Demand
analysis is done to estimate the willingness of the market to buy the proposed product
(“Definition: Demand analysis”, n.d.). There is a high demand for different kinds of beverages
in Davao City and people are now looking for healthy food alternatives.
The demand of a product is affected by several factors. These factors include things
like price of the product, tastes and preferences, income of consumers, price of substitutes,
and advertisements (Bhasin, 2018). In this study, the management chose to measure the
demand through taste and preferences and market population.
Project Demand
A. Willingness to buy
 7

Demand
Yes No

23.00%

77.00%

The graph above depicts the market’s willingness to buy. Only 77 out of 100
respondents assented to buying and trying the new product. This shows that there is a
demand in the market and that the product is feasible.

B. Consumption

Consumption
50.00%
45.00%
40.00%
35.00%
30.00%
Axis Title

25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
1 2 3 4 5

The graph depicts the number of smoothies the market is willing to consume in a
week. 46.75% of the respondents said that they can only consume 1 smoothie in a week.
Merely 1.30% agreed that they can consume 5 smoothies in a week
 8

C. Annual Demand of the Product

Number of
Respondents Average
willing to buy % of Projected Total
the product demand Consumption Population Pieces/Week
[A] [A]/77 per Week [C] [D] (C*D)

36 46.75% 1 5,400 5,400

22 28.57% 2 3,300 6,600

15 19.48% 3 2,250 6,750

3 3.90% 4 450 1,800

1 1.30% 5 150 750

77 100% 11,550 21,300

number of
weeks 52
demand/yea
r 1,107,600

*Assumption: Total population of 15,000. Growth Rate of 10%

The table above shows the projected annual demand of the product. According to
uniRank, the number of students enrolled in Matina Campus of University of Mindanao
ranges from 15,000-20,000. We assumed that the total number of students enrolled in
Matina campus is 15,000 in which 77% are willing to buy the product.

D. Projected Demand in 5 years

 9

Demand
1,600,000
1,400,000
1,200,000
1,000,000 Demand/Year
800,000
600,000
400,000
200,000
-
1 2 3 4 5

The graph above shows the annual demand for the next five years. We assumed that
the total population would increase by 10% annually in the next five years. However, only
77% of that increase in population is going to buy the product. As seen from above, as the
population increases, the demand increases proportionately as well.

Supply Analysis
Supply is defined as the willingness of the seller to sell a set quantity of goods for a
price. Supply analysis is used to assess the availability of the products and how factors like
demand affects it (Eastin and Arbogast, 2011). The management used supply analysis to
determine the quantity of product to be produced.

Projected Supply
According to the information gathered from various suppliers and vendors of
beverages in the nearby area, the average daily supply per entity is 75. With that, we can
project the average annual supply for the next 5 years.
A. Annual Supply of the Product

Average Daily Number of Total Average Weekly Monthly Yearly Supply

Supply per Competitors Daily Supply Supply Supply
entity
75 15 1,125 7,875 33,750 405,000

B. Projected Supply in 5 Years

 10

We assumed that for the next 5 years the supply will increase by 6% based on the
average market growth (“Philippines – Market Overview”, 2019).

Supply
2023

2022
Supply
2021

2020

2019

- 100,000 200,000 300,000 400,000 500,000 600,000

Demand and Supply Analysis

A. Detailed Comparison of Demand and Supply for 5 years

The table below shows the quantitative values of the projected supply and demand
and its difference. We can see that the supply is not enough to fill in the demand. From here,
we can conclude that the product can enter the market feasibly since there is still a
significant gap between the supply and demand.
Year Demand Supply Gap
2019 1,107,600 405,000 702,600
2020 1,192,885.2 429,300.00 763,585
2021 1,284,737.4 455,058.00 829,679
2022 1,383,662.1 482,361.48 901,301
2023 1,490,204.1 511,303.17 978,901
 11

1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

-
1 2 3 4 5
Demand Supply Gap

The graph above shows the comparison of the movement of the supply, demand,
and the difference between them. Based on the graph, there is a direct relationship between
the three. We can also conclude that the supply is not enough to fill up the demand. This is
evident as there is a significant gap between the two.
Competitive Position

Product Presentation
The product is placed in a disposable plastic cup with lid. The product logo is placed
on the center of the cup. The image above is the logo of the business. The logo is a mix of
 12

different colors like fuchsia, blue, green, and yellow. This depicts the different “colors” of the
fruits. The business name is colored pink to make it look fruity, bubbly, and attractive.

Product Pricing
Product pricing is an important aspect in the business. Not only does it give revenue,
it can also attract the consumers. Choosing the appropriate pricing strategy plays a great
impact in the consumer’s decision. The management decided to apply the cost-plus pricing
method and penetration pricing. The competition with the food industry is very high, thus
appropriate pricing is vital to the business’ success. That is why the management chose
these 2 methods in pricing since they believe that this is the best way to attract customers
while at the same time covering up the costs.

The computation below shows how the management prices the product.
Raw Material 1,500,355
Freight In 5,000
Direct Labor 127,400
Factory Overhead 40,000
Water 12,000
Electricity 24,000
Rental 120,000
Salaries 218,400
Office Supplies 800
Total Cost 2,047,955
Projected Unit Sales 54,600
Unit Cost 36
Mark Up 10%
Mark-up Price/Unit 40

The management decided to have the following prices annually as the prices of all
materials needed and the costs increases
2019 2020 2021 2022 2023
Increase in 5% 5% 5% 5%
sales price
Sales price 40 42 44 46 48
 13

Competitive Position
Smoothies are beverages that include ingredients like milk, fruits, and yogurt.
Through consistent evolution, smoothies evolved from a beverage for strict diet to a on-the-
go meal or beverage option (“Smoothies Market growth, trends, and forecasts”,
2019).Among the beverage industry, this is one of the fastest growing sector. It can be
attributed to the consumer’s desire to find healthy alternatives to food. The myriad of
combinations of options that you can create in smoothies allows it to constantly change and
adapt to the dynamic market of it is today (“Smoothie Market Trend, 2019 ).
The competitive edge that our product has compared to other beverages sold within
the area is that our product utilizes the freshness of our ingredients.Our product, unlike
other beverages, combines different fruits to create a new flavor that people will surely love.
Projected Sales
The table below shows the projected sales in the next 5 years. Due to the increase in
demand every year, the management projected that the daily sales will increase by 12%,
10%,15% and 18% for the years 2020 to 2024 respectively. This table also shows the increase
in unit sales price due to inflation.
2019 2020 2021 2022 2023
Unit sales 54,600 61,152 67,267 77,357 93,184
Sales price 40 42 44 46 48
Total sales 2,184,000 2,568,384 2,959,748 3,558,422 4,472,818

Total sales
5000000
4000000
3000000 total s al es

2000000
1000000
0
1 2 3 4 5

The graph above shows the movement of the total sales over the next 5 years. As
annual unit sales increases, the unit sales price also increases. This is due to inflation which is
the rate of change in the price of a commodity over a certain period.
 14

CHAPTER 3:
TECHNICAL ASPECT
This chapter focuses on the technical aspect of the feasibility study. It includes the
description of the product offered, how it is prepared, the production schedules, the
materials, machineries and equipment used, the location and layout of the business, the
production cost and the waste management of the entity.

PRODUCT DESCRIPTION
DALA Company introduces a new way to please customers’ craving of refreshments
by serving them smoothies with different fruits within it, also known Frootie Smoothie.
Frootie Smoothie ideally wants to change and/or mix the burger patty with banana blossom
without losing the flavor a burger could bring to satiate customers’ hunger and desire to eat
burgers. Mixed with ingredients one could see in a normal smoothie, ranging from fruits to
local sweetener, it brings a tasty but nutritious drink that would and will attract customers.
 15

The smoothie can be enjoyed inside our diner or taken out. If taken out, it would be packed
in a container with different sizes

MANUFACTURING PROCESS
The following are the ingredients and steps in making the “NAME”.
A. Peach Mango Banana
B. Carrot Apple
C. Pineapple Mango

Ingredients
1 each of the chosen fruits
1 cup milk
2 cups crashed ice

Procedure
1. Put the chosen fruits in the blender
2. Then, add the crashed ice
3. Lastly, add the liquid and dairy use 1 cup of milk

Flowchart

1b.lPenudt hre c osen fruits n the 2cr.Tahsheend,aicde the 3o.fLmasitlkly,ad the liqu d an dairy use 1 cup
Production Schedules
 16

The following are the production schedules maintained by the management

A. Operating days: 12 hours a day (10:00 am - 10:00 pm), 7 days a week
B. Estimated customers: 200 to 250 orders per day
C. Production Normal Capacity
1kg of each fruit serves at least 5 orders
o Mango
o Banana
o Carrot
o Apple
o Pineapple
1L of milk = 10 servings
1L of honey = 12 servings

Activities Allotted Time

Purchase of Raw Materials 3 hours
Preparing the Ingredients 2 hours
Accepting of orders 2-5 min
Preparation of order 5 min

MATERIALS, MACHINERIES AND EQUIPMENT

The following are the materials, machineries and equipment used in operating the business
entity:
 Item Function Quantity Price

Blender A blender is a 3 P18,000.00

17
kitchen and
laboratory appliance
used to mix, purée,
or emulsify food and
other substances.

Cups and Glasses Cups are where the 50 2500.00

smoothies will be
stored

Sinks Sinks have taps 1 P12,000.00

(faucets) that supply
hot and cold water
and may include a
spray feature to be
used for faster
rinsing.

Knives The paring knife is a 5 1000.00

small, short-
bladed knife, used
for intricate cutting,
peeling, mincing and
dicing. The blades
are simple, sharp and
precise.
Cutting Board A cutting or choppin 3 1050.00
g board is a
durable board on
which to place
material for cutting.
 18

PLANT LAYOUT

The image above illustrates the floor layout of the business entity with two main
areas: Kitchen, where the food and resources are made and stored and the Dining Room,
where the customers eat together with a single unisex bathroom

PRODUCTION COST
The following are the estimated costs in producing 1,050 smoothies in a week.

Ingredient Cost

Mango (140 kilos @ P80 per kilo) P 11,200.00

Banana ( 70 kilos @ P30 per kilo) P2,100.00
Carrot ( 70 kilos @ 40 per kilo) P 2,800.00
Apple (70 kilos @ P50 per kilo) P 3,500.00
Pineapple (70 kilos @ P40 per kilo) P 2,800.00
Milk (105 liters @ P75 per liter) P7,875.00
Total P 30,275.00
 19

Annual Production Cost

Cost Per Week P 30,275.00

Multiplied by: No. of Weeks 52
Annual Production Cost P 1,574,300.00
Divided by : Projected Annual Unit Sold 54,600
Unit Cost P 29
Unit Selling Price P 40.00

Utilities Cost
1.Rentals. The management decided to rent the space of the business located in
outside the university. The monthly rentals of the space is about 10,000. And this rental will
increase by 3% annually.

2. Electricity and Water Supply. The business has its own meter that measures its
consumption and use of water and electricity. The management estimated to have P12,000
and P24,000 annually for water and electricity respectively. This costs will eventually increase
by 3% annually due to its growing consumption.

WASTE MANAGEMENT
It is important for a business to have its own waste management especially for those
engaged in food industry. Establishing waste management does not only conform to legal
compliance but it gives an impact on the consumers. It is because most consumers value
cleanliness and proper sanitation in order to ensure their health and safety.
The management ensure that every food they serve are not just delicious and
healthy but also clean and safe from any contamination. To achieve it, the management
follows certain procedures on waste management.
1. All waste are segregated whether its recyclable, biodegrable, and
nonbiodegradable.
2. 2. All waste are dispose properly everyday. And all trash bins have been
disinfected and dried before using again.
 20

3. There are separate bins around the establishment and placed them in sufficient
distance to avoid contamination.

CHAPTER 4
FINANCIAL ASPECT

The financial aspect of this feasibility study determines and evaluates the capital
required, possible sources of funding which includes the terms and conditions, and forecast of
operating revenues, costs and expenses. This chapter includes the Projected Balance Sheet,
Projected Statement of Financial Performance, Projected Statement of Cash Flows, Projected
Statement of Changes in Equity, and the necessary schedules. Financial key ratios will also be
presented to evaluate the liquidity, profitability and solvency of the proposed business. These
projected financial statements will be prepared on a five years basis.

INITIAL CAPITAL REQUIREMENT

 21

It was agreed that each partner will contribute P500,000 which is mainly obtained
from the partner's own pocket. As a result, the partnership can accumulate a total of P500,000
contributed capital which is sufficient enough to support the initial operation of the business.
It was further agreed that any profit or loss will be divided among the partners equally.

ASSUMPTIONS:
1. Sales price increases by 5% in the next 4 years.
2. Demand in sales increases by 12%, 10%, 15% and 18% for the next four years after the
year of commencement.
3. Raw materials and packaging purchases increase annually by 3%
4. The desired level of ending inventory is 5% of the current year's total goods available
for use.
5. All operating expenses increase by 5% annually.
6. Smoothies are sold on a cash basis.
7. Purchase of raw materials is made on credit. Half of it is paid in the month of purchase,
while the remaining is paid in the following month.
8. Income tax rate is 30%
9. 50% of the year’s net income will be distributed to each partner equally.
 DALA COMPANY
Projected Balance Sheet
As of December 31, 2019-2023

2019 2020 2021 2022

ASSETS
Current Assets :
Cash 1,942,065.00 2,076,518.50 2,323,636.65 2,752,7
Inventory 78,965.00 85,274.70 88,022.48 90,6
Kitchen Supplies 10,000.00 10,000.00 10,000.00 10,0
Total Current Assets 2,031,030.00 2,171,793.20 2,421,659.13 2,853,4

Non-Current Assets:
Office Furnitures & Fixtures, net 15,175.00 13,350.00 11,525.00 9,7
Equipment, net 65,500.00 58,000.00 50,500.00 43,0
Total Non-Current Assets 80,675.00 71,350.00 62,025.00 52,7
Total Assets 2,111,705.00 2,243,143.20 2,483,684.13 2,906,1
LIABILITIES & OWNER'S EQUITY
Current Liabilities:
Accounts Payable 65,596.00 67,563.00 69,591.00 71,6
Total Liabilities 65,596.00 67,563.00 69,591.00 71,6

Owner's Equity
Armilla, Capital 511,527.25 543,895.05 603,523.28 708,6
Apolinario, Capital 511,527.25 543,895.05 603,523.28 708,6
Doydora, Capital 511,527.25 543,895.05 603,523.28 708,6
Labordo, Capital 511,527.25 543,895.05 603,523.28 708,6
Total Equity 2,046,109.00 2,175,580.20 2,414,093.13 2,834,4
Total Liabilities & Equity 2,111,705.00 2,243,143.20 2,483,684.13 2,906,1
 DALA COMPANY
Projected Statement of Financial Performance
For The Year Ended December 31, 2019-2023

2019 2020 2021

Sales 2,184,000.00 2,568,384.00 2,959,748.00

Less: Cost of Sales (Sch 1) 1,667,735.00 1,795,189.30 1,855,321.59
Gross Profit 516,265.00 773,194.70 1,104,426.41
Less: Operating Expenses
Utilities Expense (Sch 2) 36,000.00 37,800.00 39,690.00
Rent Expense (Sch 3) 120,000.00 126,000.00 132,300.00
Salaries Expense (Sch 4) 218,400.00 229,320.00 240,786.00
Depreciation Expense (Sch 5) 9,325.00 9,325.00 9,325.00
Office Supplies Expense (Sch 6) 800.00 832.00 859.87
Income Before Tax 131,740.00 369,917.70 681,465.54
Less: Income Tax Expense 39,522.00 110,975.31 204,439.66
Net Profit 92,218.00 258,942.39 477,025.88

DALA COMPANY

Projected Statement of Changes in Owner's Equity

For The Year Ended December 31, 2019-2023

2019 2020 2021

Owner's Equity, Beginning 2,000,000.00 2,046,109.00 2,175,580.2

Add: Net Income 92,218.00 258,942.39 477,025.8

Total 2,092,218.00 2,305,051.39 2,652,606.0

Less: Withdrawals 46,109.00 129,471.20 238,512.9

Owner's Equity, Ending 2,046,109.00 2,175,580.20 2,414,093.1

 DALA COMPANY
Projected Statement of Cash Flows
For The Year Ended December 31, 2019-2023
2019 2020 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Collections from customers 2,184,000.00 2,568,384.00 2,959,
Less: Disbursements
Payment of Utilities 36,000.00 37,800.00 39,
Payment of Rentals 120,000.00 126,000.00 132,
Payment of Salaries 345,800.00 363,090.00 381,
Payment of Supplies 800.00 832.00
Payment of Taxes 39,522.00 110,975.31 204,
Payment of Raw Materials 1,508,704.00 1,619,562.00 1,668,
Transportation 5,000.00 5,000.00 5,
Payment of Kitchen Supplies 10,000.00 -
Purchase of Packaging 40,000.00 41,200.00 42,
Total Outflow of Operating Activities 2,105,826.00 2,304,459.31 2,474,

Net Cash Provided by Operating Activities 78,174.00 263,924.69 485,

CASH FLOWS FROM INVESTING ACTIVITIES

Payment to acquire fixed assets 90,000.00 -

Net Cash Used by Investing Activities 90,000.00 -

CASH FLOWS FROM FINANCING ACTIVITIES

Initial Investment by the Partners 2,000,000.00 -
Withdrawals by the Partners 46,109.00 129,471.20 238,

Net Cash Provided by Financing Activities 1,953,891.00 -129,471.20 -238,

INCREASE IN CASH & CASH EQUIVALENTS 1,942,065.00 134,453.50 247,

CASH & CASH EQUIVALENTS- JANUARY 1 - 1,942,065.00 2,076,

CASH & CASH EQUIVALENTS- DECEMBER 31 1,942,065.00 2,076,518.50 2,323,

 Schedule

Statement of Cost of Goods Sold

For the Year Ended December 31, 2019-2023
2019 2020 2021 2022 2023
Materials Inventory, Beg. - 78,965.00 85,274.70 88,022.48 90,665.1
Add: Purchases* 1,574,300.00 1,621,529.00 1,670,174.87 1,720,280.12 1,771,888.5
Freight In 5,000.00 5,000.00 5,000.00 5,000.00 5,000.0
Total Goods Available for Use 1,579,300.00 1,705,494.00 1,760,449.57 1,813,302.59 1,867,553.6
Less: Materials Inventory,
78,965.00 85,274.70 88,022.48 90,665.13 93,377.6
End.**
Materials Used 1,500,335.00 1,620,219.30 1,672,427.09 1,722,637.46 1,774,175.9
Add: Direct Labor*** 127,400.00 133,770.00 140,458.50 147,481.43 154,855.5
Factory Overhead**** 40,000.00 41,200.00 42,436.00 43,709.08 45,020.3
Cost of Goods Sold 1,667,735.00 1,795,189.30 1,855,321.59 1,913,827.97 1,974,051.8

1: Cost Of Good Sold

 * Purchases increase by 3% annually
** Ending Materials Inventory is 5% of the year’s total goods available for use
*** Salary of the smoothie maker
**** Cost of packaging

Schedule 2: Utilities Expense

2019 2020 2021 2022 2023

Water 12,000.00 12,600.00 13,230.00 13,891.50 14,586.08
Electricity 24,000.00 25,200.00 26,460.00 27,783.00 29,172.15
Total 36,000.00 37,800.00 39,690.00 41,674.50 43,758.23

Water and Electricity will increase by 5% annually

Schedule 3: Rent Expense

2019 2020 2021 2022 2023

Rental 120,000.00 126,000.00 132,300.00 138,915.00 145,860.75

Rentals will increase by 5% annually

Schedule 4: Salaries Expense

 2019 2020 2021 2022 2023
Smoothie Maker 127,400.00 133,770.00 140,458.50 147,481.43 154,855.50
Service Crew 218,400.00 229,320.00 240,786.00 252,825.30 265,466.57
Total 345,800.00 363,090.00 381,244.50 400,306.73 420,322.06

Salaries will increase by 5% annually

Schedule 5: Depreciation
Expense

Fixed Asset Cost Life Annual Depreciation

Blenders 18,000.00 8 2,250.00
Refrigerator 40,000.00 10 4,000.00
Sinks 12,000.00 10 1,200.00
Ice Maker 15,000.00 12 1,250.00
Cabinets 5,000.00 8 625.00
Total 90,000.00 9,325.00

Fixed Assets are depreciated using Straight Line method with no residual at the end of their useful lives.

Schedule 6: Office
Supplies

Item 2019 2020 2021 2022 2023

Journals 120.00 124.80 128.98 132.94 136.93
Official Invoices 300.00 312.00 322.45 332.35 342.32
Ball Pens 80.00 83.20 85.99 88.63 91.29
Stapler 60.00 62.40 64.49 66.47 68.46
Calculator 200.00 208.00 214.97 221.57 228.21
Scissors 40.00 41.60 42.99 44.31 45.64
Total 800.00 832.00 859.87 886.27 912.86
 Projected 2019 2020 2021 2022 2023

Inflation Rate 4.95% 4% 3.35% 3.07% 3%

FINANCIAL RATIO ANALYSIS

Test of Liquidity

2,031,030.00 2,171,793.20 2,421,659.13 2,

Current Ratio =
65,596.00 67,563.00 69,591.00 7

Current Ratio = 30.96 32.14 34.80

Test of Profitability
2019 2020 2021 2022

92,218.00 258,942.39 477,025.88 8

Return on Owner's Equity =
1,023,054.50 2,110,844.60 2,294,836.66 2,

Return on Owner's Equity = 0.09 0.12 0.21 0.32

Test of Solvency

65,596.00 67,563.00 69,591.00 71,6

Debt/Equity Ratio =
2,046,109.00 2,175,580.20 2,414,093.13 2,83

Debt/Equity Ratio = 0.032 0.031 0.029 0.02

 29

Financial Ratio Analysis:

Test of Liquidity
Liquidity refers to the ability of the company to pay its current liabilities as they mature. As shown
above, the proposed business will have a very high current ratio. This trend is expected to continue for 5
years which means that the suppliers are assured of repayments.

Test of Profitability
Maximizing profit is the main reason why the proponents want to enter into this kind of business. To
measure if the desired performance is achieved, tests of profitability is conducted. It is evident that the
proposed business is capable of generating profit. From 9% in the first year of operation, it is expected to
increase to 45% by the end of fifth year.

Test of Solvency
Solvency measures the ability of the proposed business to pay all its liabilities, whether they are
current or non-current. The debt to equity ratio of the proposed business is expected to decline for the
next five years. This means that the capital of the business is mostly provided by its owners. As a result,
less risk is assumed by its creditors.
 30

CHAPTER 5
SOCIO-ECONOMIC ASPECT

Most people nowadays are not that health conscious. They tend to eat a lot of unhealthy foods
and leave their diet unchecked not knowing that they can innovate food and substitute it to unhealthy
foods. To raise health awareness to the public, the government campaigns about healthy food
consumption and to remind the consumers to be more health conscious. The fruits used in making
Frootie Smoothie’s smoothies are far from the usual sweet delight of processed sugars, for it is made
from 100% healthy organic fruits. Aside from having a cheaper price, it has a lot more health benefits
and nutritious goodness because it is a nutrient dense food which can boost essential nutrients for the
body and increase nutrition. It is also an easy way to feed children who is not fond of eating fruits, this
way they can enjoy the smoothies and also enjoy the benefits of healthy foods. Moreover, it will always
be beneficial to be more healthy and aware in the nutrient composition of the foods we consume.
We, the proponents of this feasibility study proposed to the public – the Frootie Smoothie which
derives a traditional smoothie to a healthier and more beneficial treat by making fruits as the main
ingredient. This product is best substitute to ordinary unhealthy smoothies which causes health
problem. It is necessary to the public which are smoothie lovers and health conscious customers. The
purpose of this study is to promote healthy food that fit to the preference of the public.
The beneficiaries of this study are the following:
I. Public – may be aware of this healthy smoothie that fit to their preference. They can enjoy
their smoothies with healthier benefits.
II. Government – may use as additional information in their campaigns when it comes to
health issues of food consumption. The campaign of health issues will give more awareness
to the citizen of the country.
III. Future Researchers – may serve this study as their source of reference that has same
research ideas regarding the consumption of healthy smoothies (fruit-based).
 31

CHAPTER 6
CONCLUSION

Smoothies made of fresh fruits and ingredients is a product that can benefit all. This product
offers a lot of benefits and nutrients to the consumer while not sacrificing their enjoyment in drinking it.
The project addresses the customer’s need to quench their thirsts in a unique and satisfying way.
The target market of this study only focuses on the consumers located near University of
Mindanao Matina Campus. The area being near to the campus makes it easier for them to buy and
consume the food. This area is also near different kinds of people like students, professionals, and even
nearby residents which will allow the product to cover most of the market. Based on the results
gathered from the management, the product will continue to be profitable for the next five years. The
project’s financial statements are also shown hence showing positive outcomes of this project.
This feasibility study is conducted to know how viable our product will be. Furthermore, it can
help the future generation who wanted to have business of their own. It can used as references or guide
for their future studies. It can benefit the public due to the health benefits of it.
 32

APPENDICES
 33

REFERENCES
Amadeo, K. (2019). Demand, its implication and its impact. Retrieved from
https://www.thebalance.com/what-is-demand-definition-explanation-effect-3305708
on October 13, 2019

Bhasin, H. (2018). What is demand Analysis? Retrieved from

https://www.marketing91.com/what-is-demand-analysis/ on October 13, 2019

Definition: Demand Analysis. (n.d). Retrieved from https://www.mbaskool.com/business-

concepts/marketing-and-strategy-terms/10953-demand-analysis.html on October 13,
2019

Easton, R. and Arbogast, G. (2011). Demand and Supply Analysis: Introduction. University of
California, USA.

Philippines – Market Overview. (2019). Retrieved from https://www.export.gov/article?

id=Philippines-Market-Overview on October 13, 2019
 34

Smoothies Market growth, trends, and forecasts. (2019). Retrieved from

https://www.mordorintelligence.com/industry-reports/smoothies-market on October 13,
2019
Smoothie Market trends. (2019). Retrieved from https://blog.technavio.com/blog/top-10-
smoothie-market-trends on October 13, 2019

University of Mindanao (2019). Retrieved from https://www.4icu.org/reviews/9023.html on

October 13, 2019

SURVEY QUESTIONNAIRE

Good Day! We are the students from the College of Accounting Education and we would like to
conduct a poll in relation to our Feasibility Study. Please answer the following questions. Your responses
are highly appreciated.

Name (optional):

Age: Gender:

1. Are you willing to buy a smoothie?

Yes No

2. How many smoothie are you willing to buy in a week?

3. At what price are you willing to pay for it?

P30.00 P50.00

P40.00 More than 50.00

4. What flavor of smoothie do you like the most?

a. Peach Mango Banana

b. Carrot Apple
 35

c. Avocado Cucumber

d. Pineapple Mango

e. Pineapple Coconut

f. Avocado Pechay