Proposed Production Distribution of Coconut Wine Contained in Tetra Packs PDF

A PROPOSED PRODUCTION AND DISTRIBUTION OF COCONUT WINE
CONTAINED IN TETRA PACKS
A Feasibility
Study Presented for the
Faculty of the College of Commerce
University of San Jose – Recoletos
Cebu City, Philippines
In Partial Fulfillment
Of the Requirements for the Degree
BACHELOR OF SCIENCE IN ACCOUNTANCY
by
GEMS VILLE ABANGAN RAYFIEL STEPHANIE CUTILLAR

KRISTIAN PAUL ARMECIN AVVY MAE GECAIN
ALLAN ANDREI OSORIO
December 2016
ACKNOWLEDGEMENT
This research is a product of time and efforts rendered by various people.

It is indeed impossible to accomplish this without the valuable contributions of
distinguished individuals. Thus, the researchers would like to extend their outmost
gratitude to the people who shared their precious time and extensive knowledge.
The Almighty God, the provider of all things visible and invisible on earth,
who showered the researchers with knowledge and wisdom to work hard and finish
the study with courage, hard work and diligence.
Dr. Victoria Lee-Digao, CPA, the adviser, for her undying support in giving
her time and effort that inspired the researchers to conclude the study. She really
did not fail in extending her extensive knowledge since the construction of research
ideas until the conclusion of the study. And most importantly, she brought
inspiration to the researches and encouraged them to the best of her ability to
achieve a successful research.
The Barangay Officials and Staff of Inayawan, Cebu City for welcoming
and assisting the researchers into their barangay. Their hospitability and help is
very much appreciated.
The Residents of Inayawan, Cebu City who opened their doors to their
humble homes and to lend their time to the researchers to provide the data needed
for the study.
The panelists, for sharing their knowledge on the study and assisting the
researchers towards the improvement and betterment of the study.
Family and relatives, a grandest gratitude to them for their understanding,

love and support, may it be moral, mental or emotional, which inspired them to do
the best of their ability for the success of the study.
EXECUTIVE SUMMARY
Coconut wine or Tuba is the most popular native wine in Cebu, Bohol, Leyte
and Samar. In every celebration Bol-anon, Leytenos, Cebuanos and Samarnons
can’t be celebrating without tuba. Tuba is naturally made from the sap of a young
coconut bud. This organic wine is most affordable for everyone who wishes to buy
a drink. Once it gets into the veins, it would warmly awaken the timid blood, but
surprisingly is much better than any alcoholic beverages for a person won’t wake
up with a heavy head or hangover. In line with this, the proponents recognize the
advantages of drinking fermented coconut wine or as it is more commonly known,
“tuba” over heavy alcoholic drinks like beer, tequila, vodka and the like.
The proposed project is recommended to be organized as a sole
proprietorship with a start-up cost of P 1,323,835 which shall be financed through
the proprietor’s own funds and a long-term financing source. The business will
operate for 5 hours daily in a leased space at P. Gecain St., Dawis Norte, Carmen,
Cebu. The owner will act as the manager and he will be accompanied by one
production foreman that will supervise the production together with a packaging
staff.
The sixty registered sari-sari stores in Barangay Inayawan are the primary
target market of the proposed project. Based on the survey results, 55 out of 60
respondents or 92% are willing to sell the Coconut Wine in Tetra Packs in their
Sari-sari stores. This can be a very good indication that the respondents could
have a substantial amount of prospective sellers leading to a higher demand of the
product. Another good implication that can be gotten from the result is that, for the
reason that the respondents are willing to sell the product, it can somehow spread
publicity to the end users effecting greater demand of the product. The proposed
project is expected to have the advantage of capturing wider number of customers
because of price competitiveness, accessibility and convenience.
In compliance with the legal requirements, the business shall be registered
with the different government regulatory agencies such as DTI, BIR, SSS,
PhilHealth, and PAG-IBIG. Necessary permits and requirements shall also be
accomplished form other appropriate government offices. The business shall be
subject to VAT, income tax to the proprietor, a 5% expanded withholding tax from
its monthly rental and bookkeeper’s retainer fee.
Based on the financial projections, the business will be profitable over five
years with an increasing rate. It is also capable of recovering its initial investment
after a span of a year. As to sensitivity, the business is more sensitive on decrease
in revenues than increases on expenses.
If the project will be implemented, it would not only be beneficial to the
customers but also to other sectors such as the government, community, and
related industries.
In the light of the findings, the proponents concluded that the proposed
project is technically viable, socially and economically desirable, and financially
feasible, thus, recommended for implementation.
TABLE OF CONTENTS
CHAPTER PAGE NO.
I. PROBLEM AND ITS SCOPE 1
INTRODUCTION
Rationale of the Study 1
STATEMENT OF THE PROBLEM 2
SIGNIFICANCE OF THE STUDY 3
RESEARCH DESIGN
Research Environment 5
Population and Respondents 5
Research Methodology and Instruments 6
Limitations of the Study 9
DEFINITION OF TERMS 10
II. TECHNICAL ASPECT 14
PRODUCT DESCRIPTION 15
RAW MATERIALS 16
TOOLS AND EQUIPMENT 17

PRODUCTION FLOW 23
PRODUCTION SCHEDULE 26
PRODUCTION CAPACITY 26
PRODUCTION AND BUSINESS LOCATION 27
UTILITIES 30
QUALITY CONTROL 31
WASTE DISPOSAL MANAGEMENT 32
III. MARKETING ASPECT 33
TARGET MARKET 34
DEMAND 34
SUPPLY 45
MARKET SHARE 49
MARKETING STRATEGY 51
Product Name and Design 52
Advertising and Promotions 52
Packaging 54
Terms of Payment 56
Pricing 56
IV. MANAGEMENT ASPECT 59

PRE-OPERATING PERIOD 60
Timetable of Activities 60
OPERATING PERIOD 66
Form of Organization 66
Organizational Structure 67
Job Titles and Descriptions 68
Job Specifications 71
Working Schedule 73
Compensation 74
Employee Benefits 75
Recruitment Process 78
Management Policies 79
Disciplinary Actions/ Sanctions 82
V. LEGAL AND TAXATION ASPECT 84
LEGAL 84
Registration of Business 85
Securing Permits and Licenses 87
Application for Social Security System Membership 89

Application for Philippine Health Insurance Membership 90
Application for PAG-IBIG Membership 90
Registration with the Bureau of Internal Revenue 91
Securing a Contract of Lease 93
TAXATION 93
Value-Added Tax 93
Income Tax 94
Expanded Withholding Tax 94
Withholding Tax on Compensation 94
Documentary Stamp Tax 95
Community Tax 95
Excise Tax 95
VI. FINANCING ASPECT 97
SOURCES OF FINANCING 98
ESTIMATED PROJECT COST 98
NOTES TO ESTIMATED PROJECT COST 100
VII. FINANCIAL ASPECT 106
VIII. SOCIO-ECONOMIC DESIRABILITY 222

IX. STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS 227
SWOT MATRIX 228
STRENGTHS 229
WEAKNESSES 230
OPPORTUNITIES 231
THREATS 231
X. SUMMARY, FINDINGS, CONCLUSION AND RECOMMENDATIONS 234
SUMMARY 234
FINDINGS 235
CONCLUSION 241
RECOMMENDATIONS 241
REFERENCES
APPENDICES
CURRICULUM VITAE
LIST OF TABLES
TABLE NO. TITLE PAGE
NO.
1 Respondents of Inayawan, 6
Cebu City
2 Production Schedule 26
3 Production Capacity 27
4 Distribution of Respondents on 37
Whether or Not They Are Familiar
with Coconut Wine or Tuba
Whether or Not They Prefer
Coconut Wine or Tuba as an
Alternative to Hard Drinks
6 Perceptions on the production and 39
distribution of Coconut Wine or Tuba
in Tetra Packs
whether or not they are willing to
sell Coconut Wine or Tuba in Tetra

Packs
8 Distribution of Respondents as 41
to How Many They Are Willing to
Buy Coconut Wine in Tetra Packs daily
9 Past Population of Stores in Barangay 42
Inayawan Distributed per Purok
10 Computation of Average Growth 43
11 Computation of the Projected 44
Population for Barangay Inayawan
for the Next Five Years
12 Projected Annual Demand 45
13 Present Supply of Alternative 47
Products to Registered Sari-Sari
Stores in Inayawan, Cebu City
14 Present Annual Supply of Alternative 48
Products
15 Projected Supply of Alternative 49
Products for 5 years
16 Demand-Supply Gap 50
17 Market Share in Percentage 51
for the Production and Distribution
of Coconut Wine in Tetra Packs
18 Preferred Quantity of Packed 56
Coconut Wine or Tuba per Packaging
19 Preferred Prices of 1 Liter Packaging 58
20 Cost of the Proposed Product 59
21 Table of Activities 66
22 Working Schedule 77
23 Compensation Schedule 78
24 Table of Offenses and Sanctions 86
25 Estimated Projected Cost 103
26 Allocation of Expenses 114
27 Office Equipment and its Useful Life 116
28 Factory Equipment and its Useful Life 117
29 Delivery Equipment and its Useful Life 117
30 Leasehold Improvement and its 117
Useful Life
31 Allocation of Depreciation Expenses 118
32 Current Ratio 183
33 Quick Ratio 185
34 Cash Ratio 186
35 Receivable Turnover Ratio 188
36 Average Age of Receivables 189
37 Raw Material Turnover 190
38 Finished Goods Turnover 191
39 Average Age of Raw Materials 192
40 Average Age of Finished Goods 192
41 Average Age of Inventory 193
42 Accounts Payable Turnover 194
43 Average Age of Payables 195
44 Operating Cycle 196
45 Cash Conversion Cycle 197
46 Debt Ratio 198
47 Equity Ratio 199
48 Debt to Equity Ratio 200

49 Times Interest Earned 201
50 Gross Profit Margin 203
51 Operating Profit Margin 204
52 Net Profit Margin 205
53 Return on Assets 206
54 Return on Owner’s Equity 207
55 Contribution Margin 209
56 Contribution Margin Ratio 209
57 Break-even Sales in Units 210
58 Break-even Sales in Pesos 210
59 Margin of Safety in Units 212
60 Margin of Safety Ratio 212
61 Discounted Payback Period 213
62 Assumptions for Sensitivity Analysis 216
63 Comparative Results: Net Income 226
64 Comparative Results: Return on 226
Equity
65 Comparative Results: Discounted 227

Payback Period
66 Comparative Results: Break-even 227
Point in Pesos
LIST OF FIGURES
FIGURE NUMBER TITLE
1 Production Process 25
2 Proposed Business Location 28
3 Proposed Business Floor Plan 29
4 Product Poster and Flier 54
5 Product Packaging 55
6 Gantt Chart 64
7 Organizational Structure 70
8 Schematic Diagram showing the 181
Proposed Project’s Socio-Economic
Desirability
9 SWOT Diagram 183

LIST OF SCHEDULES
SCHEDULE NUMBER/LETTER TITLE
A Statement of Financial 121
Performance
B Statement of Cash Flows 122
C Statement of Financial 123
Position
D Statement of Changes in Equity 124
1 Projected Sale 125
1.1 Sales Discount 126
2 Cost of Goods Sold 126
2.1 Cost of Goods Manufactured 127
2.1.1 Direct Materials 127
2.1.1A Raw Material Purchases 128
2.1.1B Raw Materials End 128
2.1.1B-1 Computation Raw Materials 129
Inventory-Tetra Packs

Inventory-Vinyl Sticker
Inventory-Ink
2.1.2 Direct Labor 130
2.1.2A Annual Salary-Packaging Staff 130
2.1.3 Manufacturing Overhead 131
2.1.3A Factory Tools-Present Annual Cost 131
2.1.3B Factory Equipment and Machineries 132
2.1.3C Depreciation-Leasehold Improvements 132
2.1.3C-1 Allocation of Depreciation 133
Expense-Leasehold Improvements
2.1.3D Utilities Expense – Electricity & Water 133
2.1.3D-1 Allocation of Utilities Expense – 133
Electricity & Water
2.1.3D-2 Utilities Expense - Telephone, 134
WiFi, and CCTV
2.1.3D-3 Allocation of Utilities Expense – 134
Telephone, WiFi, and CCTV

2.1.3D-4 Allocation of Total Utilities Expense 134
2.1.3E Cleaning Supplies 135
2.1.3E-1 Allocation of Cleaning Supplies 135
Expense
2.1.3F Repairs and Maintenance 136
2.1.3G Rent Expense and Expanded 136
Withholding Tax on Rent
2.1.3G-1 Allocation of Rent Expense 136
2.1.3H Indirect Labor 137
2.1.3H-1 Benefits - Employer’s Contribution 137
- Sanitary Engineer
2.1.3H-2 Allocation of Benefits - Employer’s 138
Contribution - Sanitary Engineer
2.1.3H-3 Benefits - Employer’s Contribution – 138
Production Foreman
2.1.3H-4 Allocation of Total Benefits – 138
Employer’s Contribution
2.1.3H-5 Salaries Expense – Sanitary Engineer 139

2.1.3H-6 Allocation of Salaries Expense 139
- Sanitary Engineer
2.1.3H-7 Annual Salary-Production 139
Foreman Salary
2.2.1 Computation of Finished Goods 140
Inventory
3 General and Administrative Expenses 141
3.1 Pre-Operating Expenses 141
3.2 Permits and Licenses 142
3.3 Bookkeeper's Fee 142
3.4 Depreciation for Office Equipment 143
and Machineries
3.4.1 Office Equipment And Machineries 143
3.5 Office Supplies-Present Annual Cost 144
3.6 Doubtful Accounts Expense 144
4 Selling Expense 145
4.1 Fuel Expense 145
5 Projected Sales-Waste 146

Product (Vinegar)
6 Interest Income 146
7 Interest on Loans Payable 147
(Bank Info)
7.1 Loans Payable 148
8 Income Tax Computation 148
8.1 Computation of Deductible 149
Interest Expense
9 Salaries Expense-Secretary 149
9.1 Allocation of Salaries Expense 149
- Secretary
9.2 Benefits - Employer’s Contribution 150
- Secretary
9.3 Allocation of Benefits - Employer’s 150
Contribution - Secretary
10 SSS Contribution 151
11 Philhealth Contribution 152
12 Pag-ibig Contribution 153

13 13th Month Pay and 154
its Allocation
14 Total Depreciation Expense 155
14.1 Depreciation-Office Desk & Chairs 156
14.2 Deprecation-Steel Locker 156
14.3 Depreciation-Office Cabinet 156
14.4 Depreciation-Computer Unit 157
14.5 Depreciation-Office Printer 157
14.6 Depreciation-Air-Conditioning Unit 157
14.7 Depreciation-Fire Extinguisher 158
14.8 Depreciation-Motor Vehicle 158
15 Accounts Receivable 159
15.1 Allowance for Doubtful Accounts 159
15.2 Net Realizable Value 159
15.3 Accounts Receivable – Collections 160
16 Inventory 160
16.1 Inventory-Tetra Pack 160
16.2 Inventory-Vinyl Sticker Paper 161

16.3 Inventory-Ink Refill 161
16.4 Inventory-Finished Goods 161
17 Property, Plant & Equipment 162
17.1 Office Equipment 162
17.2 Factory Equipment and 163
Machineries
17.3 Delivery Equipment 164
17.4 Leasehold Improvement 164
17.5 Property, Plant and 165
Equipment-Lapsing Schedule
18 Accounts Payable 173
18.1 Accounts Payable-Tuba 173
18.2 Accounts Payable-Tetra Pack 174
19 Accrued Salaries 175
20 Accrued SSS Contribution 176
21 Accrued PhilHealth Contribution 176
22 Accrued Pag-ibig Contribution 177
23 Utilities Payable 178

24 Withholding Tax Payable 179
25 Income Tax Payable 180

Problem and its Scope |1
CHAPTER I
THE PROBLEM AND ITS SCOPE
INTRODUCTION
Rationale of the Study
People are fond of drinking alcoholic beverages during a family celebration
and community festivities. They like the feeling of happiness the alcohol brings to
the festivity. It made them feel free and liberated in times of hardship and distress.
There are no available statistics on the exact extent of alcoholism and alcohol
consumption in the Philippines. Filipinos are the second highest consumers of
alcohol in South East Asia (Indonesians are the first), and the number one wine
drinkers. According to research, 5 million Filipinos drink on a fairly regular basis
and 39.9% of the population behaves otherwise. (Zenarosa, 2011)
Because alcohol is more of a celebrated vice, people fail to take into
account the health implications of drinking heavily. Constant drinking of alcoholic
beverages like beer poses several health repercussions. One of these is the fact
that it exposes heavy drinkers to alcohol poisoning due to a higher percentage of
alcohol in the drinker’s blood. They can also contract a liver disease. Not only is
drinking heavily bad for the health, but it is also addictive. Too much alcoholic
infusions result to an unproductive in work the next day after drinking. One
becomes dependent on alcohol, and it can only spiral downward from there.
In light of these facts, the researchers recognize the advantages of
drinking fermented coconut wine or as it is more commonly known, “tuba” over
other alcoholic drinks like beer. Drinking coconut wine has several proven health
benefits. Some of these are improved longevity (consumers see lower mortality
rates), reduced risk of heart attack, and reduced decline in brain activity, (Linberg,
2008). Most people would agree that the average Filipino drinker would benefit
from the consumption of coconut wine rather than regular alcoholic drinks. From
these pertinent facts, one would see that not only would the product be less costly,
but also it boasts several health benefits.
Perhaps, some will ask “Why to bother pack coconut wine?” ordinarily
coconut wine must be stored in a sanitized container because it naturally has the
presence of bacteria which if mixed with other bacteria found in contaminated
containers can result to any reaction that might affect the coconut wine’s taste.
Thus, this study was conducted to determine the feasibility of proposed production
and distribution of coconut wine in Tetra Packs.
STATEMENT OF THE PROBLEM
The study was aimed to determine the feasibility of the Proposed Production and
Distribution of Coconut Wine or “Tuba” in Tetra Pack. Specifically, the following
questions were answered:
1. Is the proposed production and distribution of coconut wine feasible under each
of the following aspects:
1.1 Technical;
1.2 Marketing;
1.3 Management;
1.4 Financing;
1.5 Taxation & Legal;
1.6 Financial;
1.7 Socio-Economic Desirability; and
1.8 Strength, Weaknesses, Opportunities and Threat Analysis.
2. Based on the findings, what recommendations may be proposed for the project?
SIGNIFICANCE OF THE STUDY
This study, from the information gathered herein, would be beneficial not
just to the researchers but also to other sectors such as the potential investor,
coconut plantation farmers, prospective reader, and future researchers.
Researchers
This study prepared the proponents to face the struggles of the business
world. In the process of conducting this feasibility study, they have heightened their
expertise in areas of accounting and business-related courses. They acquired a
deeper understanding of the essence of teamwork, sense of responsibility and
time-management. Likewise, they have gained a certain level of mastery in
preparing project feasibility studies which will surely be helpful in the pursuant of
their profession.
Potential Investor
A potential investor can consider this study as a source of reliable data for
him to make an informed decision as to whether or not invest in this kind of project.
The project provides a novel idea as a business prospect. Also, they can assess
its possible risks and how to avoid or minimize them as well as its expected returns
and ways to enhance it.
Coconut Plantation Farmers
Through this study, the coconut plantation farmers would be aware of the
potential business opportunities presented in this research. They can use this as
one of their new business options and a reference to an improved business idea
where they could earn additional income.
Prospective Readers
This study would help introduce coconut wine in Tetra Packs to the public.
By reading this output, a reader would know the advantages and disadvantages of
the product which will be very useful in choosing between the present alternative
drinks available at the market. Thus, leading to a better decision in their choice of
healthy beverages.
Future Researchers
A future researcher may use the data from the study as their guide in the
proper protocol or processes needed to accomplish their studies. Likewise, it may
be used as additional input to enrich their related research endeavors.
RESEARCH DESIGN
An overall strategy must be undertaken to integrate the different
components of the study in a coherent manner to evaluate the viability of the
proposed production and distribution of coconut wine contained in Tetra pack. It
is to ensure that the researchers will conduct the project in the most effective and
efficient manner.
Consequently, the following areas of the aspect are determined: Research
Environment, Research Method Used, Data-Gathering Instrument, Data Gathering
Procedure, Data Treatment and Limitations.
Research Environment
The proponents conducted the survey at Barangay Inayawan Cebu City.
The Barangay has six (6) puroks and in it are sixty (60) sari-sari stores registered
in the Barangay. Based on observations and interviews, Barangay Inayawan is
one of the Barangays with a lot of stores selling “Tuba.” It is also very populated
and is known to have a lot of “Tuba” drinkers.
Population and Respondents
To determine the feasibility of the production and distribution of Coconut
Wine or “Tuba” contained in Tetra Packs, the proponents needed to know the
population of the target market. The researchers conducted a survey to the
registered stores of Barangay Inayawan, and their owners/stewards were made to
answer the questionnaires provided by the proponents, (see Appendix).
Table 1
Number of Respondents in Inayawan, Cebu City
n – 60
PUROK NO. No. of registered stores
I 7
II 4
III 6
IV 8
V 19
VI 16
Total Respondents 60
Table 1 shows the total number of respondents coming from Barangay
Inayawan. The proponents decided to conduct a 100% selection because under
the circumstances it is the most appropriate sampling method to be used. (Ireneo,
2015)
Research Methodology
The researchers have adopted the descriptive survey method for this study.
It is one of the methods of “descriptive research.” This is where data accumulates
from the respondents through survey questionnaires, interviews and observations.
This method describes the situations. They do not make accurate predictions, and
they do not determine cause and effect. The descriptive survey method involves
collecting numerical data to test hypotheses or answer questions concerning
current status that is then conducted either through self- report. The determination
of the respondents for this exploration bases on the characteristics and nature of
the chosen target market. The researchers have conducted a survey to the said
market. They have successfully gathered information and will use it in the demand
projections.
Data Gathering Instrument
As its data gathering tool, the researcher-made questionnaire was used as
the main data-gathering instrument for the conduct of the study. The researchers
divided the questionnaire into three parts. The first part contains basic information
regarding the respondents. The second part was aimed to discuss brief information
of coconut wine or “tuba” and how interested the respondents are to the proposed
coconut wine in Tetra Packs. The third part contains the reasons why vendors and
consumers will buy the offered product. Interviews and inquiries were also made
to the determined competing services to obtain the supply data.
Data Gathering Procedure
Essential to the success of the proposed business is the determination of
the demand and the supply. The proponents undertook activities conforming to the
research methodology to have information concerning it. They sent out letter
requests to the office of Barangay Inayawan to ask permission to conduct a survey
and ask the data about the total population of the target market. After approval and
granting of the requests made, the researchers conducted the assessment. The
survey questionnaires were used to evaluate 60 vendors who owned a Sari-Sari
Store in Barangay Inayawan. They checked the answered questionnaires by the
vendors for its completeness and accuracy. However, the researchers observed
that the vendors did not respond to it seriously (crumpled questionnaires, useless
statements, haste answers, and such), and so the researchers decided to have
the corresponding control numbers of their answered questionnaire. This control
enables them to monitor the respondents for follow-up purposes. The data
gathered then tallied were consolidated, analyzed and interpreted for use in the
other aspects of the study.
Data Treatment
For item two, numbers 2-7 in the survey questionnaire, the proponents
computed for the percentage to treat the data. The formula to get the percentage
is followed:
𝑓
% 𝑜𝑓 𝑡ℎ𝑒 𝑡𝑜𝑡𝑎𝑙 𝑟𝑒𝑠𝑝𝑜𝑛𝑑𝑒𝑛𝑡𝑠 = ∗ 100
𝑛
where f is the frequency and n is total number of respondents.
For item two, number 1 and all the numbers in item three, the responses
were the assigned weights as follows:
Item 2, number 1 in the questionnaire:
4 – Very Familiar
3 – Familiar
2 – Less Familiar
1 – Not Familiar
Item 3 in the questionnaire:
4 – Strongly Agree
3 – Agree
2 – Disagree
1 – Strongly Disagree
The formula for the weighted mean followed:
∑x f
𝑋=
𝑛
where X is computed value per weighted mean, f is frequency, x is value given,
and n is total number of respondents. In interpreting the data, correspondingly, the
quantitative scale ranges for the items in the questionnaire referred above are
given below:
Item 2, number 1: Item 3:

3.28 - 4.00 Very Familiar Strongly Agree
2.52 – 3.27 Familiar Agree
1.76 – 2.51 Less Familiar Disagree
1.00 – 1.75 Not Familiar Strongly Disagree
Limitations
The proponents recognized the impossibility of obtaining true and correct
data during the conduct of the study and identified the following limitations which
may affect the validity of some data:
1. The environment chosen was Barangay Inayawan, Cebu City. The said
location was intended because it is known to cover countless sari-sari
stores which the researchers considered a good foundation for the
company’s financials. Upon visiting their Barangay hall to obtain a copy of
the business owners, they determined that only 60 stores were registered.
P r o b l e m a n d i t s S c o p e | 10
To facilitate a smooth conduct of the survey, the researchers have settled
for the given number of business persons.
2. Few respondents were not answering the questionnaire sincerely and were
not following the instructions given.
3. In this study, the use of estimates and judgments is unavoidable since this
study deals with future uncertain events. However, the proponents used
reasonable estimates and judgments so that the desired outcome will not
be far different.
4. The study assumes that the product offered would be the same throughout
the 5-year period. This study did not consider the possibility that some
innovations in technology could be incorporated for its improvement in the
future.
OPERATIONAL DEFINITION OF TERMS
Some terms used in this study might be ambiguous and confusing to the
readers. Thus, to better comprehend the study, the following are defined:
Cocwine
It is the brand name of the proposed product. A coconut wine in Tetra pack.
Coconut Wine or Tuba
A wine made from the sweet and frothy sap of coconut stalk. Tuba juice is
produced by looping off the tip of newly sprouting stalk of coconut flower that allows
the sap to ooze out and drip.
Feasibility Study
It is a systematic analysis of factors to ascertain the viability of an
undertaking, more specifically that of a prospective business opportunity.
Financial Aspect
The aspect which examines the projected results of marketing, technical,
management, taxation and legal aspects and expresses it in peso terms and
presents the possible financial results of the proposed project.
Financing Aspect
The aspect which shed light to the possible resources needed and how it
can be used to carry out the project.
Lambanog
A transparent and clear wine made from pure and freshly gathered tuba that
is processed and goes through natural fermentation and distillation to form the final
concoction.
Management Aspect
The aspect that presents the form of business organization that best suits
the proposed subject. It also suggests the organizational structure, the number of
personnel needed, their qualifications, their compensation, and the projected time
table before the project is implemented.
Marketing Aspect
The aspect that refers to the process of ascertaining the future demand of
the product or service. It involves the study of current and projected supply and
demand factors to project the future market.
Researchers
They are someone who conducts research, i.e., an organized and
systematic investigation into something.
Socio-Economic Desirability
This involves the study of the project’s contribution to the national economy
as a whole, to the related business sectors and to the community, upon its
implementation.
Statistics
The practice of science of collecting and analyzing numerical data in large
quantities, especially for the purpose of inferring proportions in a whole from those
in a representative sample.
SWOT Analysis
It is the process that identifies the strengths, weaknesses, opportunities and
threats of an undertaking. It is a basic, analytical framework that assesses what
the organization can and cannot do, as well as its potential opportunities and
threats.
Taxation Aspect
The aspect that covers the study of the tax effects and legal tax saving
measures which includes some government incentives applicable to the project.
Technical Aspect
The aspect that refers to the technical processes of the business and
determining the design, materials and other technical details needed to attain cost
minimization and profit maximization.
Tetra Packs
A type of plasticized cardboard carton for milk and other drinks, folded from
a single sheet into a box shape.
1 Week
It is composed of six operating days covering from Mondays to Saturdays.
1 Month
It is composed of twenty five days in average.
1 Year
It is composed of three hundred days excluding Sundays and Legal
holiday
T e c h n i c a l A s p e c t | 14
CHAPTER II
TECHNICAL ASPECT
A feasibility study for the production and distribution of coconut wine or
“tuba” contained in Tetra packs is an assessment of the possibility of marketing
and sustaining a business engaged in producing coconut wine packed in Tetra
packs. Thus, necessitates the determination of the ways through which the desired
output can be materialized.
This aspect of the study is designed to evaluate and analyze the potential
of the proposed project by identifying the raw materials, machinery and equipment
to be used directly in the production of the product. This aspect gears towards the
exposition of the specifications of the product and the illustration of the production
flow which the researchers have undertaken to come up with the product.
Furthermore, in recognition of the existence of the industry, related necessities
have been determined such as the business location and production site including
its layout, and the structures and utilities necessary for the operations of the
business. Finally, recognizing the need for waste disposal management, this
aspect shows how the wastes created in the process of production are to be
disposed in a way that it can generate income.
A careful study of the technical aspect is necessary before the
implementation of the project to ascertain the successful materialization of the

business. It also provides an overview of the business and its operation. Moreover,
it affords the management to identify whether the industry is capable of carrying
out the business effectively and efficiently. Thus, the technical feasibility requires
an appropriate and timely application of both engineering and management efforts
in the attainment of a successful implementation of the proposed system.
PRODUCT DESCRIPTION
The objective of this study is to produce and distribute coconut wine in Tetra
packs in the open market. The product’s main ingredient is the coconut wine or
“tuba.”
Cocwine, the brand name, is a coconut wine packed in one-liter Tetra
packs. It has the freshly harvested pure coconut wine as its only ingredient and
has a set shelf life of two days. The product’s shelf life is intended to deliver it to
customers while in excellent taste considering that coconut wine or tuba if stocked
for some days will undergo fermentation which will then affect the product’s taste.
RAW MATERIALS
Recognizing that the study is geared towards producing and distributing
fresh and original coconut wine in tetra packs, the raw material needed in the
production consist only of:

Coconut wine or Tuba is a sweet, fresh or mildly fermented sap taken from
tapping the young expanded flowers of the coconut.
The tapping process involved: tying of the ripe spathe; cutting and removal
of the spathe tip; sheath peeling-at a position 4 to 6 cm from the cut end; tying of
the exposed spikelets with leaflets followed by trimming 2 to 3 mm of the leaflets
tied section from the cut end to allow continuous oozing of the sap. The oozing sap
was then collected in containers provided by the company to the supplier.
1 Liter Tetra Packs
A type of plasticized cardboard carton for milk and other drinks, folded from
a single sheet into a box shape. This will be used to pack the coconut wine.
FACTORY TOOLS, MACHINERIES AND EQUIPMENTS
After having known the raw materials, determining the necessary machinery
and equipment to be used in the production process is essential. These are very
important in the materialization of the product. Without these, the product would
not be made possible.

Aseptic Filling Machine
The machine used to pack the coconut wine into one liter tetra packs.
55 Gallon Plastic Barrel
A cylindrical container used to contain the freshly harvested coconut wine.
It is provided by the company to the coconut wine supplier to be used as
the main container for the ordered raw material so as to devoid it from any
contamination which might affect its taste.
Personal Protective Equipments
These are company provided equipments to be worn by employees. This
includes masks, gloves, apron and the like intended to prevent the raw material
from the contamination of bacteria coming from the workers.

Factory Furniture
A movable object intended to support various human activities. This
includes tables, chairs and the like.
Garbage Bins
It is a container for waste matter.
The company will have two garbage bins in each area of the building so that
employees may segregate their trash into biodegradable and non-biodegradable.

Fire extinguisher
An active fire protection device used to extinguish or control small fires,
often useful in emergency situations.
DELIVERY EQUIPMENT
Motor Vehicle
The proposed delivery equipment shall be motor vehicles. This will be used
in delivering the products from the business location to the designated coconut
wine retailers in Barangay Inayawan, Cebu City.
The motor vehicle will be customized specifically for its purpose. It shall
contain a box at the back of the driver’s seat intended to contain 150 pieces of 1
Liter tetra packs.

OFFICE TOOLS AND EQUIPMENT
Telephone
The telephone is important for private and commercial use. The telephone
supports business operation, socialization and global interaction by offering a way
for business to communicate without delays between messages. The telephone is
important for its ability to reduce the distance users need to communicate.
Computer Set
A computer set is a device that can be instructed to carry out an
arbitrary set of arithmetic or logical operations automatically. Its ability to follow a
sequence of operations, called a program, make computers very flexible, popular

and necessary to offices. This is important especially in printing the product’s
package design.
Office furniture
Office furniture is an important part of office management. It helps the office
look attractive and pleasant. Employees working in the office should be provided
with comfortable furniture so that they can work efficiently. Office furniture includes
chairs, tables, cabinets, cupboards, sofas, racks, and the like. In a well-furnished
office, employees will feel comfortable and are motivated for work.
Air conditioning units

Extreme conditions such as heat and humidity have an impact on overall
physical intellectual activity, making even the simplest of tasks an absolute chore.
Having proper air conditioning systems in place help reduce heat and humidity,
thus reducing the negative impact on employees’ ability to perform and complete
work tasks. This makes air conditioning units beneficial in the office.
SUPPLIES
Office Supplies
Office supplies are consumables and small items regularly used in offices
by businesses and other organizations, by individuals engaged in written
communications, record-keeping or bookkeeping, janitorial and cleaning, and for
storage of supplies or data. This includes papers, pens, notebooks, highlighters,
clips and the like.

Sanitation Supplies
Sanitation is the hygienic means of promoting health through prevention of
human contact with the hazard of wastes as well as the treatment and proper
disposal of sewage or waste water. Thus, cleanliness is important in the production
of a consumable product. This would necessitate the need to maintain sanitation
supplies which includes tissue, mops, soap, brushes, brooms, etc.
PRODUCTION PROCESS
To produce the desired output, the available resources the business has to
go through several steps for it to be commercially available. In this section, the

procedures applied in preparing the product are enumerated to facilitate better
appreciation and comprehension of the process it has to undergo.
1. Procurement of the Coconut wine from the contracted supplier
The owner (or in his absence, the manager) is required to be present
in the dealer’s coconut plantation every time the trader will make the
harvest. This control is to determine whether the seller’s method of
harvesting coconut wine is in observance of the agreed sanitation practices
to be employed by them as provided in the contract with the company.
Furthermore, the freshly harvested coconut wine will be stored directly in
the company-provided 55-Gallon Plastic Barrel which the production
foreman transported to the company’s production site at the expense or the
supplier.
In compliance with the contract to be made with the coconut wine
supplier, the owner expects that on or before seven o’clock in the morning,
the coconut wine is already at the business premises ready for the
production process.
2. Preparation of the freshly harvested coconut wine or tuba
After procurement, the packaging staff will move the coconut wine
stored in the 55 Gallon plastic barrel to the production area where a
machine is located which will do the whole process of packing.
3. Packing of the coconut wine into 1 Liter Tetra packs using the aseptic filling
machine
With the aid of the apparatus, the packaging staff creates the
proposed product through the following process:
 The roll of Tetra packs purchased from the supplier will be
formed into 1 Liter boxes.
 The coconut wine will fill boxes.
 The coconut wine in Tetra packs will then be sealed.
4. Labeling of the coconut wine Tetra Packs
The final step in the production process involves the labeling of the
packed coconut wine. The packaging crew will manually label and print the
coconut wine Tetra packs through the use of stickers where the brand
name, description, ingredients, and health benefits of the proposed product.
The packaging staff will then move the finished output to the storage
room ready for distribution.
Procurement of the Coconut wine from the contracted supplier
Preparation of the freshly harvested coconut wine or tuba
Packing of the prepared coconut wine into one liter Tetra Packs
Labeling of the coconut wine Tetra Packs
Figure 1
Production Process
PRODUCTION SCHEDULE
To promote smooth flow of operations, a predetermined set of time of the
daily the daily activities of the workers is presented below.
Table 2
Production Schedule
TIME ACTIVITIES
5:00 – 7:00 AM Procurement of the coconut wine from

the contracted supplier
7:00 AM – 9:00 AM Packing of coconut wine into one liter

Tetra Packs and the sealing of its caps.
9:00 AM – 10:00 AM Labelling of the packed coconut wine.
10:00 PM – 12:00 NN Distribution of the product to Barangay

Inayawan Sari-sari Stores.
PRODUCTION CAPACITY
A maximum quantity of yield has been predetermined to enable the
business to operate in its standardized and practical capacity taking into
consideration unforeseen circumstances. The following table presents the
projected annual production capacity of the company.
Table 3
Production Capacity
Coconut wine Coconut wine Coconut wine Coconut wine

per day per week per month per year
(Liters) (Liters) (Liters) (Liters)
538 3,229 12,917 155,000
PRODUCTION AND BUSINESS LOCATION
It is essential to take into account the choices of the location site for the
manufacture of the proposed product. The proponents consider different factors in
the determination of the most suitable site for the creation process.
The chosen facility site for the production and distribution of coconut wine
in tetra packs is situated in a leased warehouse area with an office space at P.
Gecain St., Dawis Norte, Carmen Cebu.
https://www.google.com.ph/maps/place/Dawis+Norte+Carmen+Cebu;
July 9, 2016 (access date)
Figure 2
Proposed Business Location
The said location is intended so that if the company contracted supplier
will not be able to supply the required quantity of coconut wine, the
business can easily find its alternative source considering that the place is
known to have some coconut wine suppliers.
Figure 3
Proposed Business Floor Plan
UTILITIES
Utilities are significant in the production and implementation of every
business activity whether it may be for creating products or rendering services.
They contribute to the accomplishment of the flow of processes that an enterprise
undergoes. Thus, it leads to a better chance of achieving the goals and objectives
of the industry with the highest possible outcome. The proposed project would use
water, electricity, and telecommunication during its operation.
Water
Water is one of the most important things a business should have. The
presence of which provides sanitation and cleanliness to the business. Also, it is
essential to have access to water for first aid and basic hygiene purposes. The
source of water for this project will be gotten from a wellspring present already in
the business site.
Electricity
Electricity plays a vital role in keeping businesses run smoothly. It gives
power to machinery and equipment for it to work efficiently. The source of the
business’ energy would be Cebu Electric Cooperative (CEBECO).
Telecommunication
Telecommunication is important for businesses because it enables
companies to communicate effectively with customers and provide high standards
of customer service. It also allows employees of the company to communicate with

each other more proficiently. Globe Telecommunications will provide this service
to the business.
QUALITY CONTROL
To produce quality products, the entity must adhere to some requirements for
it to realize its goal. Quality Controls, as a necessary part of the conduct of
business, have been explicitly provided in this section. It is specially established to
monitor the product during its production and delivery to the customers. Moreover,
the said quality controls are a form of engagement of the firm to produce defect-
free outputs to ensure better customer satisfaction and to obtain a greater market
share in a crowded marketplace. The preceding lists are the business’ quality
control procedures.
1. An agreement between the supplier of coconut wine or “tuba” regarding its
quality and freshness. The supplier must assure the business that the
coconut wine given will pass sanitation requirements.
2. The owner (or in his absence, the manager) will be sent to the supplier’s
coconut plantation every time they will make the harvest to observe
compliance with the sanitation requirements.
3. The company will provide 55-Gallon plastic barrels as containers in holding
and subsequently, transporting the coconut wine will be provided by the
company in the form.

4. Products are stored in the right temperature area so as not to disturb the
fermentation process.
5. The employees must observe cleanliness in every area of the factory.
6. Finished products are to be provided with its expiry date and distributed
according to age.
7. The owner will train the employees for one week.
8. Employees will be screened properly by the owner himself and are required
to pass some documents like NBI Clearance, Medical Certificate and more.
WASTE DISPOSAL MANAGEMENT
Establishments produce wastes in its operations, and it is only standard and
reasonable for companies to formulate a plan on how to manage such. In line with
the requirement imposed by the government and the Department of Environment
and Natural Resources, the business shall have a waste disposal system. The
janitor will place two (2) garbage bins in every room wherein customers and
employees may segregate their trash as either biodegradable or non-
biodegradable. The bins shall be collected and disposed of every day by the
sanitation team to a much larger garbage bin positioned outside the building which
the waste trucks will collect weekly. Furthermore, as coconut wine has a limited
span of time which is just within two (2) to three (3) days, employees shall collect
the 4-day old coconut wine and put it in a closed container to convert it into vinegar.
Leave it in the container for one week, and delivery boys shall be responsible for
selling it to the locals once a week for the benefit of the business. On the other
hand, unused and damaged Tetra Packs shall also be sold to the persons whose
business is into buying some recyclable items.

M a r k e t i n g A s p e c t | 33
CHAPTER III
MARKETING ASPECT
Customers are the lifeblood of a company. There can be no business where
there are no customers. Ergo, the company needs to communicate with
consumers for them to meet half-way and do business together. This
communication is to promote and sell the product or service offered. This process
is more commonly called marketing.
Marketing is described as the process made to create and satisfy consumer
needs and wants through products and services. It is in this aspect that the perfect
target market for a proposed business is determined and whether or not the
majority of the said market will avail of the product or service offered because of
superior customer value. The exchange processes (interview, survey, etc.) and
building of long-term relationships the satisfaction of customer needs and wants is
accomplished through. As part of the organizational function, it constitutes
processes for creating, delivering, and communicating value to customers, and
customer relationship management. In this regard, marketing is the bond between
society’s material requirements and its economic patterns of response.
In the marketing aspect, the researchers were able to determine the issues
that the target market gives significance to and the methods on how to satisfy them.
Analysis of the target market is likewise presented to be able to gain wisdom on
how to better penetrate the target customers and to anticipate the business’
competitive edge. With effective marketing strategies, the business will be able to
attract as many customers as possible and to help in achieving the objectives of
the business that is profit maximization and customer satisfaction.
TARGET MARKET
According to Zarate (2011), one of the essential parts of a high-quality
functional strategy under the marketing function is appropriate customer analysis.
One needs to know the target market in which the business is to set foot in. Target
market refers to the particular group of consumers at which a company aims to sell
its products and services. However, contrary to the popular belief that target
marketing excludes those persons who do not meet the criteria set by the business
for prospective buyers, target marketing allows the company to focus on a specific
market that is more likely to buy from the trade.
The proponents have ascertained their target market to be the various
registered sari-sari stores in Inayawan, Cebu City. They have chosen the
Barangay of Inayawan because of the plentiful number of stores and people
present in the area. The proponents have also figured that because of the rural
feel inherent in Inayawan, the populace residing there may be familiar with coconut
wine and would become promising prospective buyers of the product.
DEMAND
Everybody has their needs and wants, and people would do all in their
power to fully grasp both of these. This willingness to exert effort into satisfying
these necessities and wants to develop into demand. Economically speaking,

demand refers to one’s willingness and ability to purchase a specific product or
service. It is common sense to pick out the product that gives people their money’s
worth, which would mean the best product at the best price.
In the company’s perspective, market demand is an excellent factor that
can be used to determine the enthusiasm of the target market to avail themselves
of the products offered by the business. It is also a reliable basis for the financial
projections of the first, second and other years of operations. In light of this, a
survey was conducted by the proponents to determine the demand of the target
market, and the data that follows are the survey results.
Distribution of Respondents on Whether or not They are Familiar with
The proponents asked the respondents whether or not they are familiar with
coconut wine or tuba. This question aims to determine how many of them are well-
versed with the product; it assures the proponents that the respondents know what
they are talking. Another is that it provides the researchers with a preliminary
gauge on how popular the product would be when marketed. Table 4 below shows
their responses.
Table 4
Distribution of Respondents on Whether or Not They Are Familiar with Coconut

Wine or Tuba
n - 60
Description: Frequency: Weight Fx Weighted Mean
Very Familiar 34 4 136
Familiar 20 3 60
Less Familiar 3 2 6
Not Familiar 3 1 3
TOTAL: 60 205 3.42 Very Familiar
The findings above display the frequency of answers accumulated per
answer from the respondents. Apparently, Very Familiar and Familiar garners the
most responses. Further, the Weighted Mean formula used indicates that Very
Familiar is the most common answer. This means that a number of the
respondents are well-familiar with coconut wine. The proponents assumed that the
more familiar a person is with something, the higher the probability that the
individual would purchase it.
Distribution of Respondents on Whether or Not They Prefer Coconut Wine
or Tuba as an Alternative to Hard Drinks
Through this question, the proponents asked the respondents if they prefer
coconut wine as an alternative to hard drinks. This question is necessary because
if the vendor himself dislikes the product, then why would he stock inventories of
this? It is, in this regard, also necessary to determine the willingness of the target
market to patronize the proposed project. Table 5 below shows their responses.
Table 5
Distribution of Respondents on Whether or Not They Prefer Coconut Wine or
Tuba as an Alternative to Hard Drinks
n - 60
Category: Frequency: Percentage

Those who prefer Coconut Wine 55 92%
Those who do not prefer Coconut Wine 5 8%
TOTAL: 60 100 %
Findings above show that 92% of the respondents are more interested in
coconut wine as compared to hard drinks. The higher the compared percentage to
those who are not interested in the product, the greater the chance that demand
from the market is higher than that of the competitors.
Distribution of Respondents as to Their Perceptions of Coconut Wine or
Tuba in Tetra Packs
Table 6
Perceptions on the production and distribution of
Coconut Wine or Tuba in Tetra Packs
n – 55
Coconut Wine or Tuba in Tetra Packs… Weighted Mean Interpretation
is convenient to bring around. 3.69 Strongly Agree
is healthier to consume. 3.54 Strongly Agree

is new and innovative. 3.54 Strongly Agree
can be stored for later consumption. 3.31 Strongly Agree
can be easily shared with friends. 2.51 Disagree
can be readily available to markets (e.g. sari- 3.38 Strongly Agree
sari store, malls, etc.).
To determine the probability of customer patronage of the proposed
product, the researchers asked the respondents whether or not they agree on the
given benefits of coconut wine.
The preceding results are significant in consideration of the product’s future
financial perspective. With the benefits that 92% of the respondents all strongly
agree, the coconut wine in Tetra Packs will be able to gain customer loyalty thus,
will help the business maintain or even increase its sales.
Distribution of Respondents on Whether or Not They Are Willing to Sell
Coconut Wine or Tuba in Tetra Packs
The researchers asked the respondents whether or not they are willing to
sell coconut or tuba in Tetra Packs in their store. This question aims to determine
how many of the respondents would positively respond to the question given. This
information can be used to estimate demand. Table 6 below shows their
responses.
Table 7
Distribution of Respondents on whether or not they are willing to sell Coconut
Wine or Tuba in Tetra Packs
n – 60
Those who are willing to sell 55 92%
Those who are not willing to sell 5 8%
TOTAL: 60 100 %
The result shows that 92% of the respondents gave an affirmative reply.
This percentage is a good indication that the respondents could have a substantial
amount of prospective sellers leading to a higher demand for the product. Another
good implication from the result is that, for the reason that the proponents are
willing to sell the product, it can somehow spread publicity to the end users
effecting greater demand of the product.
Distribution of Respondents as to How Much They Are Willing to Buy
Coconut Wine in Tetra Packs daily
The determination of the quantity of those who are willing to buy from the
business monthly is necessary to help the proponents forecast its probable sales
for the product. The responses of the respondents on the question of how many
they are willing to buy monthly are shown in Table 8 below.
Table 8
Distribution of Respondents as to How Many They Are Willing to

Buy Coconut Wine in Tetra Packs daily
n - 55
Average Order
Category: Frequency: Total in Liters
(Rounded)
2 liters 35 70 -
4 liters 11 44 -
8 liters 3 24 -
20 liters 6 120 -
TOTAL: 55 258 5 liters

PROJECTED DEMAND
The determination of the market’s inclination to buy the product or service
and the marketability of the proposed product requires critical analysis.
Consequently, market analysis is essential in determining the business’ projected
sales to identify the possible reasons for its success or failure. This action would
also aid in determining how sales performance can be improved and gives the idea
on what kind of goods or services to offer with the current market demand.
Projected Population of the Target Market
The proponents based the forecasted demand for the proposed product on
the past population of the target market. Hence, it is necessary to compute the
projected population of the target market based on the trend of the changes in the
population for the past years. Table 9 shows the past populations of the target
market per purok of Barangay Inayawan. The succeeding table presents the
percentage of increase or decrease in the store population for the five years
presented, and the average growth rate for the past five years.
Table 9
Past Population of Stores in Barangay Inayawan
Distributed per Purok
PUROK NO.
Year I II III IV V VI Total
2012 5 2 2 5 14 13 41
2013 5 3 4 6 15 15 48
2014 6 4 5 7 16 15 53
2015 7 4 5 8 17 15 56
2016 7 4 6 8 19 16 60
The average growth rate for a typical year of Barangay Inayawan is 10%.
This was computed by dividing the total growth rate with 4 and is shown in Table
10.
Table 10
Computation of Average Growth Rate (Rounded)
Population of
Year Population of Year Difference Increase/Growth
Previous Year
2013 48 41 7 17.07%
2014 53 48 5 10.42%
2015 56 53 3 5.66%
2016 60 56 4 7.14%
Total 40.29%
Average Growth Rate (Rounded) 10%
The researchers will use these growth rates in projecting the population for
the immediately succeeding years.
The following table, Table 11 shows the projected population of the stores
per purok of Barangay Inayawan for the immediately succeeding years.
The computation of the base population is based on the year 2016 data of
Inayawan multiplied to the average growth rate. The following formula was used in
the computation of the amounts of the succeeding tables:

PP = BP x (1+r)
Where:
PP = Projected Population r = rate of increase/decrease
BP = Base Population 1 = constant
The population in the previous tables was used as the basis for the
population in the succeeding years. The computations are as follows:
Table 11
Computation of the Projected Population for
Barangay Inayawan for the Next Five Years
Year Population of the Base Growth Projected Population

Year per Year (Actual for 2016)
(Table 10)
2016 60 - 60
2017 60 X 110% 66
2018 66 X 110% 73
2019 73 X 110% 80
2020 80 X 110% 88
2021 88 X 110% 97
2022 97 X 110% 107

The succeeding table presents the projected annual demand and the
previous pages already showed the projected population computed. The % of
respondents willing to sell the product and the % of respondents willing to order in
liters daily comes from the data gathered from the survey conducted. The annual
amount in liters is computed using the actual amount of liters ordered. This is
illustrated in the table below:
Table 12
Projected Annual Demand
Average
Those Willing to
Demand per
Projected Sell the Product Projected
Store Daily
Population (92% of the Annual Demand
Year
Population)
(in liters)
(Table 11) (in liters)*
(Table 7) (Table 8)
2017 66 61 5 91,500
2018 73 67 5 100,500
2019 80 74 5 111,000
2020 88 81 5 121,500
2021 97 89 5 133,500
2022 107 98 5 147,000
*Based on a 300-day work year.

SUPPLY
According to Zarate (2011), building competitive advantage means that the
product or service provides efficiency on the part of the company producing,
providing or giving the product or service. Thus, knowing the competitors is one of
the fundamentals strategies before establishing a business. Aside from achieving
competitive advantage, the company needs to implement growth strategies.
This study is introducing a new product into an existing market or product
development, the proposed production and distribution of Coconut Wine or Tuba
in Tetra Packs has a lot of direct competitors, but the researchers decided to focus
on two of its biggest competitors. These are the San Miguel Brewery, Inc. (SMB,
Inc.) and Asia Brewery, Inc. (AB, Inc.). Although, there are a lot of alcoholic
beverage products that are available in the market, may it be in canned or bottled,
the proposed product is cheaper, healthier and more accessible.
The researchers based the information gathered on interviews with
registered sari-sari store owners of Brgy. Inayawan, Cebu City. We conducted the
interview together with the distribution of our questionnaires. The numbers given
come from the data obtained from Table 1 which shows the total number of
registered sari-sari stores in Brgy. Inayawan, Cebu City and the usual delivery of
alcoholic beverage drinks in liters daily to each store which was computed using
different sets of formula. Based on the individual interviews, these deliveries are
done every day. Tables 13 & 14 shows the computation of the present average
supply of the alternative products daily in liters and its current annual source and
the set of the formula used to arrive at such amounts.

Table 13
Present Supply of Alternative Products to Registered

Sari-Sari Stores in Inayawan, Cebu City
Average
Supply of
Alternative
PUROK NO.
I II III IV V VI TOTAL products
daily
(in liters)*
Average
Number of
Alcoholic Drinks
from San Miguel
Brewery, Inc. 30 31 31 30 32 31 185
sold to each
store daily (in
liters)
Average
Number of
Alcoholic Drinks
from Asia
Brewery Inc. 11 12 13 11 12 12 71
sold to each
store daily
(in liters)
43
256 (rounded
off)
*Average Supply No. of Alternative (in liters) = Total Average No. of ABD from SMB, Inc. & AB,
Inc. (in liters) / Total No. of Purok

Table 14
Present Annual Supply of Alternative Products
Average
Supply of
No. of
PUROK Alternative Supply No. of days in Annual
Registered
No. products daily* a year Supply**
Stores
daily
(Table 13)
I 7 43 301 365 109,865
II 4 43 172 365 62,780
III 6 43 258 365 94,170
IV 8 43 344 365 125,560
V 19 43 817 365 298,205
VI 16 43 688 365 251,120
TOTAL 60 43 2,580 365 941,700
* Supply daily = No. of Registered Stores x Average Supply of alternative products per day
** Annual Supply = Supply per Day x No. of days in a year
PROJECTED ANNUAL SUPPLY
The researchers believed that throughout the years, the stock of the
competitor’s alcoholic beverage products would increase by 5% based on a just
and reasonable estimate. There is an increase because the companies that the
business aims to compete against are already established and stable as to the
market they have. Visible growth in light of this is immaterial.

Table 15
Projected Supply of Alternative Products for 5 years
*Projected Supply = Base Year x Rate of Increase
Base Year
Operating Rate of Projected
Product Supply
Year Increase Supply*
(Table 14)
Alcoholic
Drinks 2017 941,700 5% 988,785
(in 1L bottles)
2018 988,785 5% 1,038,224
2019 1,038,224 5% 1,090,135
2020 1,090,135 5% 1,144,642
2021 1,144,642 5% 1,201,874
2022 1,201,874 5% 1,261,968
To determine the demand – supply gap, the projected annual supply will be
deducted to the estimated annual demand shown in the previous tables. The
researchers considered that because the proposed product is a newly introduced
product in the market, it would lead to a lesser demand-supply gap than other
established companies’. Also, its competitors, being the top producing companies
for alcoholic beverages, are already recognized with regards to its image in the
market considering they have existed in the industry for decades. Nevertheless,
the researchers believed that the proposed product would be patronized by
consumers since it is healthier than what the competitor is producing.

Table 16
Demand-Supply Gap
Projected
Projected
Annual Demand-
Operating Year Annual Supply
Demand Supply Gap
(in liters)
(in liters)
2017 91,500 988,785 -897,285
2018 100,500 1,038,224 -937,724
2019 111,000 1,090,135 -979,135
2020 121,500 1,144,642 -1,023,142
2021 133,500 1,201,874 -1,068,374
2022 147,000 1,261,968 -1,114,968
PROJECTED MARKET SHARE
The anticipated market share in percentage shows the ratio of the
distribution of the proposed product given its projected annual demand with the
entire market for the said line of industry. It is computed by dividing projected
annual demand over the projected annual demand and projected annual supply.
Table 17
Market Share in Percentage for the Production and Distribution
of Coconut Wine in Tetra Packs
Projected Annual Projected Annual Market

Year Supply Demand Share
(in 1L bottles) (in 1L packs) (%)
2017 988,785 91,500 8.47
2018 1,038,224 100,500 8.83

2019 1,090,135 111,000 9.24
2020 1,144,642 121,500 9.60
2021 1,201,874 133,500 10.00
2022 1,261,968 147,000 10.43
The formula below shows how the market share percentage is derived:
PAD
MS in % =
PAD + PAS
Where:
MS in % = Market Share in Percentage
PAD = Projected Annual Demand
PAS = Projected Annual Supply
As shown in the table, the market shares are minimal since the proposed
product is a newly in the market which yields to a lower demand-supply gap. For
the first five years, the proposed product market share ranges from 8.83% to
10.43% but the proponents expects that for next succeeding years it will finally
establish a higher share at the market.

MARKETING STRATEGY
Marketing strategy is a process that involves the formulation of tactics that
will aid in the analysis of competitive advantage and achieve the goal of selling at
a surplus. This aspect will present the different programs that companies use in
attaining the organizational goal by tailoring products to meet consumer needs and
wants through supply and demand in the market. This tailoring can be done
through a marketing mix or in the means of product offered, price, promotion, and
distribution by using marketing programs involving strategic planning,
environmental scanning, control and all latent tasks that help in the fulfillment of
organizational goals and objectives in the marketing section of the business.
Businesses must develop a marketing plan to achieve the sole purpose of
venturing into business, earning profits. Developing an effective marketing strategy
helps in achieving this objective. With the increase in competition, it has become
imperative to know the customers’ needs and established actions to attract and
gain patronage from them.
Product Design
It would be appropriate to implement conceptual arrangement which
includes activities such as planning, human resource delegation and establishing
a connection between patrons and employees to attract future consumers. In
addition, product designing will also include product name, price and even
advertising which the researchers believed would help in the sale-ability of the
newly introduced product in the market.

Product Name
Naming a product is the most crucial job of most marketers. Some of them
would take years before they can truly decide for a brand name. In naming a
product, it should be simple, distinct, meaningful and easy to remember. Thus the
researchers decided to name the product as Cocwine, which derives from the
name of its main ingredient is Coconut Wine or Tuba.
Advertising and Promotion
Various marketing activities are performed to increase sales. These
activities include the development of marketing mix which involves promotion and
distribution. There are several ways of promoting a product. One of them is through
advertising. Advertising is a way of communicating and influencing the public about
the product, including its benefits. It primarily aims to promote the proposed
product to a definite target market.
The proponents suggest that in endorsing the proposed product will be
through word-of-mouth advertising with the distribution of pamphlets and fliers to
vendors of the sari-sari stores and drinking stalls in public markets all over Cebu
City. The owner will also give vendors of the sari-sari stores posters for them to
inform their customers of the proposed product availability in their store. And since
social media is of high influence to the public nowadays, the proponents also
included a website (www.facebook.com/Cocwine) for the customers to visit in case
they need inquiries or suggestions.

Figure 4
Product Poster and Flier
Packaging
Figure 5
Product Packaging
Shown in Figure 5 is the packaging of Cocwine Product. Such packaging
is made up of two major materials, namely:
 Tetra Brik® Base 1000 ml with a perforation opening of Simply
Twist 30 – a product of Tetra Paks Inc. a Swedish company
who supplies food packaging materials all over the globe
which has its branch opened in the Philippines located in 7 th
Floor, Net One Center, 26th Street, Third Avenue, Fort
Bonifacio, Global City, Taguig. This packaging protects what’s
good inside, is shatterproof, transports & carries easily and
requires a minimum of space at home or in stores.
 Sticker that contains the product name, ingredients and
description.
Packaging Quantity
In determining the packaging quantity of the proposed product, the
researchers based it in the results of their survey:
Table 18
Preferred Quantity of Packed Coconut Wine or Tuba per Packaging
Frequently Used
n - 55
250 ml 9 16%
1 liter 40 73%
2 liters 6 11%
TOTAL: 55 100 %
From Table 18, 70% or 40 out of 55 respondents preferred 1-liter quantity
of Packed Coconut Wine or Tuba (Cocwine) per packaging. Thus, the proposed
product will only come in 1 liter of Tuba.
Term of Sale
Manufacturing companies involve in the conversion of raw materials into
finished goods, assembling of prefabricated parts into a whole and the fabrication
of machinery and equipment (Patsula Media, 2001). Because of its nature, most
manufacturing companies use both cash and credit basis which will also be
adopted by the business. Since the proposed business is still new in the market,
credit basis would not be appropriate for its operations. Thus, the researchers
decided to fully adopt the cash basis accounting. And the sale transaction
commences upon the customers taking orders and ends immediately upon
settlement of through money.
Pricing Policy
The price represents marketers' assessment of the value customers see in
the product or service and are willing to pay for a product or service (Burnett, 2012).
Since the business is introducing a new product into the market, it is appropriate
to apply new product pricing strategy-Penetration pricing. This pricing strategy
means accepting a lower profit and pricing products relatively small which will
generate greater sales and establish the new product in the market more quickly.
Table 19
Preferred Prices of 1 Liter Packaging
Frequently Used
n – 40
Php 27.5 13 32.5%

Php 36.5 4 10%
Php 41 16 40%
Php 50 7 17.5%
TOTAL: 40 100%
Based in Table 19, 40% or 16 of the 40 respondents, who chose 1-liter
packaging quantity, preferred that the proponent will price the proposed product at
Php 38 which yields an average of the proposed prices of the product. On the other
hand, the Php 27.5, Php 36.5, Php 41 and Php 50 proposed prices of the proposed
product are based on product cost (broken down in Table 20) at 50%, 100%, 125%
& 175% mark up, respectively. These mark-ups are established as what the
researchers believed as equitable. The table below shows the supporting
computations of the cost of each of proposed product.
Table 20
Cost of the Proposed Product
COST OF GOODS SOLD Equivalent Cost per

Liter
Direct Material Note 1 P 15.27
Direct Labor Note 2 0.42
Factory Overhead Note 3 2.116089
Total Cost of Goods Sold P 17.806089
Note 1
Direct Materials
Coconut Wine
P 40 per gallon consumed daily x 1 gal. / 3.785412 L P 10.57
Tetra Pack with Sticker
P 1.5 tetra pack per piece
+ 3.20 sticker paper with ink 4.7
Total Direct Materials P 15.27
Note 2
Direct Labor
Packaging Staff’s Salary
P 36,000 yearly basic salary + 4,422 salary benefits
P 0.42
= P 40,422 + 3,368.5 (13th month
pay)________
345.05 liters daily production x 300 days in a year
Total Direct Labor P 0.42
Note 3
Factory Overhead
Indirect Materials
Factory Tools
P 900 per year / 300 days per year
345.05 liters daily production P 0.008694
Factory Equipment and Machineries
P 1,500 ____________
5 years useful life x 300 days per year
0.632227
+ P 651,457____________
10 years useful life x 300 days per year
= P 218.15 daily depreciation / 345.05 liters daily

production
Leasehold Improvements
P 8,940 x 50% allocation to factory
5years useful life x 300 days per year
= P 2.98 daily depreciation / 345.05 liters daily 0.008636

production
Utilities
P 5,599 per month x 50% allocation to factory
25 days per month
= P 111.98 daily expense / 345.05 liters daily production 0.324532

Cleaning Supplies
P 1,540 per month x 90% allocation to factory
25 days per month
= 55.44 daily expense / 345.05 liters daily production 0.160672

Filling Machines-repairs and maintenance
P 500 per month / 25 days in one month
345.05 liters daily production 0.057962
Indirect Labor
Production Foreman’s Salary
P 200 daily salary + 22.23 salary benefits
= 222.23 x 325 days in 1 year plus 13th month pay
= P 72,224.75_________________
345.05 liters daily production x 300 days in 1 year 0.697723
Sanitary Engineer’s Salary

P 90 daily basic salary + 12.67 salary benefit
= 102.67 x 325 days in 1 year plus 13th month pay
= P 33,367.75 x 70% allocation to factory_________

345.05 liters daily production x 300 days in 1 day
0.225643
Total Factory Overhead P 2.116089
M a n a g e m e n t A s p e c t | 59
CHAPTER IV
MANAGEMENT ASPECT
It is necessary to determine the essentials in the pre-operation and the
actual operation of the business to see the practicality of the proposed project. The
pre-operating activities of the enterprise must be clearly identified to enable them
to acquire the necessities and comply with the regulatory requirements for its legal
existence. More importantly, the requisites for the operations of the business must
be determined so that the company will achieve an effective and efficient flow of
operations. In the design of the normal processes of the entity, the form of
organization is identified and plotted in an organizational structure to facilitate easy
appreciation of each authority. Moreover, the company will provide a detailed
information as to the personnel/worker’s specifications, their qualifications,
recruitment, and their respective compensation and benefits. Finally, they will
enumerate business’ policies which shall be effective as soon as the industry starts
to operate.
This aspect of the study implies a clear and precise identification of duties
and responsibilities, flow of activity, and man power level requirement. The
business must be able to plan all activities for it to become productive and
competitive industry through the human resource, financial capability, and new
technologies recognizing the firm’s goal of optimum effectiveness and efficiency.

MANAGEMENT DURING THE PRE-OPERATING PERIOD
Preparation, as an indispensable part of every undertaking, must be allotted
with sufficient amount of time so as not to compromise the continuity of the flow of
operation. In this section, the owner will schedule the necessary pre-operating
activities and defined to help the management keep track of the activities that it
must accomplish. Accordingly, this portion involves the general project planning,
sourcing of funds, securing of business permits and licenses and signing of a lease
contract, leasehold improvements, acquisition of furniture and fixtures, hiring and
orientation of employees and advertisements and promotions.
Project Timetable
With the varied activities that the business must complete, it is necessary
that a project schedule should be prepared to keep an eye of the business’ current
and future duties and their corresponding deadlines. The use of this tool helps
organize the planned agenda and avoids overlooking of the minor tasks which the
workers must necessarily do. Moreover, the business will be able to prevent idle
time and thus, start the operations as early as possible.
Correspondingly, a Gantt chart has been prepared and shown on the next
page to show the proposed business’ happenings during the pre-operating period.
October November December
Activities 1 2 3 4 1 2 3 4 1 2 3 4
General
Project
Planning
Sourcing
of Funds
Securing
of
Business
Permits
and
Signing of
Lease
Contract
Leasehold
Improve-
ment
Acquisition
of
Furniture
and
Fixtures
Hiring and
Orientation
of
Employees
Advertise-
ments and
Promotions
Normal
Operating
Period
Figure 6
Gantt Chart
GENERAL PROJECT PLANNING
Businesses do not just come into existence through the winking of an eye
or by the throwing of a coin into a well. They need to be provided an appropriate
amount of time so that they can achieved a perfect operation. Business for the
manufacture and distribution of coconut wine in Tetra packs necessitates at least
two months of planning to formulate strategies that will fit its whole operation. It
needs a month of brainstorming to assure the smooth flow of operation and
consequently, to avoid or mitigate unforeseen circumstances that might hinder the
business’ success. Inherent to this activity are the following endeavors cited below
that the enterprise must secure before the start of operations.
Sourcing of Funds
In conducting the business, the company requires a considerable amount
of capital; therefore, it is essential to secure funds for the needed disbursements
of the business. The firm, as a sole proprietorship, will acquire its capital primarily
from the personal assets of its sole proprietor. This amount is to be used to secure
the primary necessities of the business. Loaning from banks is also considered as
one of the possible sources of fund for the company. This activity is estimated to
call for a month to complete.
Securing of Business Permits and Signing of Lease Contract
It is crucial that the required business permits and licenses be secured
recognizing the business’ need for a lawful existence. After obtaining funds, it is
but necessary to comply with the regulations that are highly operative and
obligatory in the Philippines. Consequently, it is necessary to register and submit
documents for the progress of the project. The table below shows the statutory
requirements that the business shall comply with at their designated dates.
Table 21
Table of Activities
Activities Date
Register the business with the DTI November 7-8
Obtain the business permit application form and community

November 8-9
tax certificate (CTC)
Buy special books of account at bookstore November 9
File Barangay clearance and Mayor’s permit November 10-11
Apply for Certificate of Registration (COR) and Taxpayer
Identification Number (TIN) at the Bureau of Internal November 10-11
Revenue (BIR)
Pay the registration fee and documentary stamp taxes November 12
Print receipts and invoices at the print shops November 12-14
Apply for a Fire Safety Inspection November 15
Apply for a Zoning clearance November 15
Register with the Social Security System (SSS) November 16-17
Register with the Philippine Health Insurance Business

November 17-18
(PhilHealth)
Register with the PAG-IBIG November 18-19

It is at the same time in this phase where the business will sign the contract
of lease for a lease of space and building where it shall operate the business that
is situated at P. Gecain St., Dawis Norte, Carmen Cebu.
After the business’ compliance with the statutory obligations and the
contract of lease, it is indispensable for the firm to modify and improve the physical
aspects of the building it has leased to suit the particular need of the business’
operation. It naturally involves divisions and partitions of the entire area to fit an
efficient flow of activities while maintaining a healthy environment for effective
communication and coordination within the management. Moreover, the alteration
of the building is designed to systematize the appearance of the business location.
The layout of the business location and production site presented in the
previous pages is scheduled to materialize for at least two (2) weeks.
Acquisition of Furniture and Fixtures
The business shall acquire furniture that will help the workers obtain
satisfaction from their surroundings to keep them motivated and demonstrative of
a high level of productivity considering the personnel’s need for a good working
environment. For that reason, the business shall procure tables, chairs, air-
conditioning units, lighting materials and other supplies simultaneous with the area
modification and improvement process.
Hiring and Orientation of Employees

To assure that the business has the necessary human resource personnel
with the right knowledge and technical expertise, the company will conduct an
employee screening and orientation for a month. This activity has the benefit of
giving the business a reasonable assurance that its personnel will be able to
produce an output of high quality with less cost by way of reduced spoilage and
rework. Moreover, by securing competitive employees, the business is guaranteed
that it will be able to continue in the long run, being furnished with a strong
foundation and flexible workforce.
Advertisements and Promotions
The business, to acquire greater customer attraction, will engage in various
forms of advertisements and promotions. This strategy includes conducting “Free-
Taste” activities in the open market where the product is to be sold and distributing
flyers five (5) weeks before the actual operation. Furthermore, recognizing the
widespread use of social networking sites, the business will exhibit the product
details in a webpage. The said webpage shall remain and continue as the product’s
only advertisement for the entire operations of the business to lessen its costs.
MANAGEMENT DURING THE NORMAL OPERATION
In attaining organizational goals, the operation of the business will usually
start by the acquisition of supplies and raw materials for the production of Cocwine
and the performance of the production cycle of the industry. The establishment of
the organization, performance of personnel and compliance with policies comprise

the very core of the day to day transactions of the business. Thus, the efficient and
effective utilization of resources provides an edge to the business against
competitors.
Form of Organization
An organization is a pattern of a relationship through which people, under the
direction of managers, pursue a common goal. In many instances, law governs the
ways of doing business and in some cases, preferences of the entrepreneurs
involved, such as nature of business, tax and personal considerations determine
it.
The researchers recommend its adoption of a sole proprietorship form of
organization. A sole proprietorship is a type of trade that is relatively easier to
create. An individual proprietor owns, manages and controls it. The researchers
believed that this scheme of organization, although easy and uncomplicated, will
yield to the achievement of organizational goals because it is better to control and
is inexpensive to operate. In this type of organization, communication from the top
management to its constituents is more direct thus providing a better relationship
among business operations.
Organizational Structure
The development of an organizational structure is the way in which
organization’s activities are divided, organized and coordinated. The structure will
facilitate the effectiveness of job allocation among employees for it creates a better
projection of authority and hierarchy of information communication. It also conveys
the responsibilities and rights of every individual in an organization.
A conventional and organized structure that would fit the proposed business
would develop greater depth of skills in a particular function or department and
promote functional innovation and scale at lower costs. The structure created is,
in its nature, simple and easy for each department to understand their core
responsibilities, and to justifiably hold them accountable. In the structure shown in
Figure 7, it establishes the rules of operation through apprehension of good
governance and distribution of work or labor. Wherein the owner acts as the
manager and holds authority among the three (3) different departments namely:
Production & Property; Accounting; and Sanitation. Each division is composed of
workers who will contribute to the achievement of organizational goals.
Owner/ Manager
Secretary/Receptionist
Accounting Production Department

Department Sanitation Department
Production Foreman
Bookkeeper Sanitary Engineer
Packaging Staff
Job Titles and Description
As commonly stated by good human resource managers, employees need
to know what managers desire from them and more importantly, what they are
expected to do in a job. Their performance will be affected by the knowledge they

have about their duties and responsibilities. Every function in business should
match a job title. In this regard, it would be best for a business to lay down job
descriptions so that people will know what kind of work they will get. It also gives
them an idea of what they do and where they fit in the operations of the business.
All of these will lead the way to effective and efficient utilization of the workforce.
Job Title: Owner/Manager
Duties and Responsibilities:
 Supervises and coordinates the affairs of the business in its
operations
 Makes decisions on significant matters particularly about the
longevity of the business
 Purchases the weekly supplies and raw materials
 Directs the planning and execution of marketing strategies
 In charge of recruiting and terminating employees
 Sets policies to be followed by employees
 Responsible for disbursing cash for expenses
 Responsible for the transactions of the business with clients
 In-charge for the billing of customers
 Receives payments from patrons and issuance of receipts
 Keep an inventory list of all products in the facility and their
respective expiry dates

Job Title: Secretary/Receptionist
Reports to: Owner/Manager
 In-charge of all walk-ins and all call operations about the business
 Responsible for the publication of Memoranda
 Manage all the appointments of the Owner/Manager
 Supervise the people under sanitation department
Job Title: Bookkeeper
 Records business transactions every month
 Prepares the payroll
 Maintains and updates accounting records
 Prepares financial statements of the business
 Responsible for the determination of tax liabilities and proper
compliance, including all government reportorial requirements
 Performs advisory services to improve current performance of the
business.
Job Title: Production Foreman
 Leads the workforce in the Production Department

 Be an expert consultant in the production process
 Creates Material Requisition Requests to the Owner/Manager
 Be able to cover for an employee who is out for a day
 Guarantee the compliance of the product quality standards
 Ensure the efficient and effective use of business assets
 Coordinate with the Sales Head for deliveries
 Deliver raw materials and finished products to and from the facility in
a timely fashion
 Ensure the safety of the goods while in-transit
 Responsible for safe keeping and storage of the raw materials and
finished products
 In-charge of the conditioning of the warehouses so as to avoid
spoilage
Job Title: Packaging Staff
Reports to: Production Foreman
 To package the finished product into the 1L Tetra Packs
 To bring the packed finished products to the warehouse
 To communicate to the Production Foreman the quantity of products
created
 To have the quantity double-checked

Job Title: Sanitary Engineer
Reports to: Secretary/Receptionist
 Maintain the cleanliness and order of the facility
 Ensure the sanitation of storage facilities as to ascertain the health
of consumers
Job Specifications
In the job placement procedure, one must always make sure that “the foot
fits the shoe” per se. This process is where the job specifications come in. One
must always have the qualifications to assure a business that he/she can be worth
something to the company. Job specifications consider the characteristics and
attributes of a person to qualify for the job. Such specification is a prerequisite to
assure the satisfactory performance of each duty in the operations of the business.
These may include educational attainment and specific skills for the job.
 Female of at least 20 years old
 A graduate of any four-year course
 Preferably with work experience
 Can work under pressure
 Can handle multiple tasks
 Has a pleasing personality

 Can learn fast and is able to perform tasks with minimum to no
supervision
 Must know basic computer software (MS Word, Excel, etc.)
Bookkeeper
 A graduate of any accounting-related course
 Knowledgeable of bookkeeping and accounting procedures
 Knowledgeable of Management Advisory principles
 Preferably with work experience
 Has attention to detail and accuracy
 Must know basic computer software (MS Word, Excel, etc.)
Production Foreman
 At least a high school graduate
 Willing to be trained
 Preferably with work experience in a similar production process
 Must be mentally and physically fit
 Fast-learner, being able to perform his duty with minimum to no
supervision
 Must be particular about sanitation and cleanliness
 Must have a Driver’s License
 Skilled in operating a motorcycle
 Values honesty
Packaging Staff
 Must be particular to detail and accuracy so as to avoid spillage
 Fast-learner, being able to perform his duty with minimum
supervision
Sanitary Engineer
 Must be attentive to instructions made by Secretary/Receptionist
Working Schedule
In the pursuit for efficient use of human resources, one must always give a
timetable to lay down the operational allocation of working times. This plan entails
time maximization towards cost minimization since the business pays the workers
by the hour and proper time management holds the key to significantly minimizing
costs to generate better profits. Shown in Table 22 is the working schedule of the
workforce.
Table 22
Working Schedule
Position Working Days Activities
Monday
Production Foreman Tuesday Work
Wednesday 7:00-12:00nn
Sanitary Engineer Thursday
Friday
Saturday k Work
Packaging Staff
7:00-9:00am
Bookkeeper Retainer
Compensation
As expected and equitable for the business, it will compensate the
performance of its workforce for their hard work and effort. One must always
reward people for the services they carried out, and this comes in the form of
compensation or salary. It is the approach of extending monetary value in
exchange for the work performed. It plays a vital role in the motivation and
influence of an employee that enhances the employees’ potential and the
probability of achieving the business’ goal.

For this business proposal, there will be different basis regarding the
employees’ compensation depending on their work. Table 23 illustrates the
employees and their respective payments.
Table 23
Compensation Schedule
Position Basis Amount
Secretary/Receptionist Daily P 200.00
Sanitary Engineer Daily P 187.50
Production Foreman Daily P 200.00
Packaging Staff Daily P 120.00
The table above presents the compensation of the hired personnel. The
compensation of all employees, except for the sanitary engineer and bookkeeper,
were based on the minimum wage order mandated by Department of Labor and
Employment covering all the areas around Region VII. The minimum wage rates
prescribed shall be for the normal working hours which does not exceed eight (8)
hours work a day. The company and the sanitation engineer made an agreement
as to his compensation. The bookkeeper, on the other hand, receives only a
monthly fixed retainer fee at an amount of P 5,000.00 which is by a contract
entered into between him and the company. A retainer fee is an upfront cost
incurred by an individual to pay for the services of a consultant, freelancer, lawyer
or something similar.
Employee Benefits
In addition to the compensation paid by the business, endowment of
employee benefits is indispensable in the recognition of their contribution and
labors in the carrying on of the operations of the business.
These employee benefits are expected to develop employee loyalty and
work devotion. In line with this, the organization decided to give both the mandatory
and voluntary employee benefits as expounded below.
Social Security Systems (SSS) Contributions
Republic Act No. 1161 mandates that all the personnel, including owners in
a private entity, not over 60 years old must be a member of SSS. Both the
employee and the employer would share in the contributions to SSS for the benefit
of the employee. The employer shall withhold from the employee’s gross salary
his share of the contribution and also his share in the contribution based on the
2014 SSS Contribution Table for the computation of the monthly contribution.
SSS provides the employees retirement and health benefits such as:
 Sickness benefits
 Maternity and Paternity benefits
 Disability benefits
 Retirement benefits
 Death benefits
Contribution to National Health Insurance Program (NHIP)
The National Health Insurance Program/PhilHealth, as provided in R. A. No.
7875, provides the citizens of the Philippines with affordable and accessible health
care services by their health insurance coverage. Both the employee and the
employer will share equally in the contributions for the benefit of the employee.
Contribution/Premium is computed using the PhilHealth Contribution Table. NHIP
offers the following benefits:
 Payment of medical services provided to the patients
 Help coordinate with those people who can afford medical services
to subsidize for those who cannot
 Other healthcare services
Contribution to Home Development and Mutual Fund (HDMF)
Republic Act 7835 mandates that the coverage of the Fund shall include
employees who are covered by the SSS. The computed monthly contribution is as
follows:
 Employees earning more than One thousand five hundred pesos
(P1,500) per month is subject to 2% of the income
 Not more than One thousand five hundred pesos (P1,500.00) per
month subject to 1% of the income
The maximum monthly compensation is P 5,000.00 which is the amount
currently used in computing the employee contributions, thus, the maximum
member contribution and employer counterpart per month are both currently
P100.
HDMF/PAG-IBIG provides the underprivileged and homeless citizens in
urban centers with an affordable, decent housing, and basic services.
13th Month Pay
The business shall provide a 13th-month pay to the employees in
compliance with the Labor Code of the Philippines. The average of the total
monthly salary for the year will be the computation for the payment of this 13th
month pay of the employee for the annual service. The entity should give this
benefit not later than the 24th day of December.
Service Incentive Leave
Article 95, Book III of the Labor Code provides that the business shall
provide a yearly service incentive leave of five days with pay to every employee
who has served at least one year, subject to the exceptions provided in the same
provision. The employee may accumulate the unused service incentive leave and
opt for its commutation basing on his/her salary rate in accordance with the
Omnibus Rules.
Recruitment Process
This process is highly essential to achieving the objectives of the business.
People are the business’ best resource. In this regard, it would be best to select
the most competent people that can accomplish the required business tasks. The
success of the operations of the industry should be in the most capable hands of
skillful people.
For this proposed endeavor, the business will post job opening notices
near/on the Barangay Hall of Dawis Norte, Carmen, Cebu and near/on the
Municipal Hall of Carmen, Cebu. Applicants must submit the following
requirements personally to the business facility:
 Application letter with resume’ (recent 2x2 picture should be attached)
 Copy of NSO Birth Certificate
 College/High school diploma
 NBI clearance
 Medical certificate
After the compliance and submission of the above requirements to the
satisfaction of the Owner/Manager, he will schedule an interview for the applicants.
This method will serve as a basis to the assessment of the skills and capabilities
of the applicants to determine whether they would fit into the position they are vying
for. The Owner/Manager will then select among the applicants the best person for
the job applied. The proprietor shall then notify the chosen applicants and if they
would accept the offer, they will be given an orientation and training for their
respective job positions.
Management Policies
Policies are the necessary pillars of a stable organization because it
provides a clear track towards the achievement of the business’ goals. This also
supplements the rules set forth that regulate the actions of all its members. It allows
the business in supporting an effective and efficient operating system. The
following are the proposed management policies of the enterprise:
General
 Punctuality is a must for all employees. Each employee shall log in within
30 minutes before their duty hours, starting from 6:30 am for all the regular,
employed individuals. For the irregulars, the same rule shall apply. In cases
wherein failure to log in on the given period is committed, the employee
shall be considered late. Moreover, the employee who logged in a time
beyond one (1) hour from their assigned duty hours, starting from 8:00 am
shall be deemed absent and will be given proper demerits. Please see
Table 24 for the corresponding sanctions regarding tardiness and
absences.
 Employees should give prior notification to their heads if they are absent.
 In a case of an emergency leave, he/she must file for an absence form
stating the reasons for such as soon as he/she returns to work. Such form
shall consist of the documents to support his emergency leave, which needs
approval by the owner/manager. Absence without official leave for five (5)
consecutive working days is deemed to have abandoned his work and shall
be subject to due process and termination.
 All must wear proper dress code (shirt, any maong pants, and closed
shoes).
 All employees must execute their respective duties and responsibilities
during working hours. Unnecessary actions such as sleeping are forbidden.
 Observance of proper conduct during working hours.
 Prohibition of employee’s violence and threats to the customers and with
co-workers.
 Prohibition of drinking alcoholic beverages, smoking, and using illegal drugs
during the working hours and within the vicinity of the business
 Proper usage of the business properties and equipment limited for business
purposes only.
 Prohibition of theft or misappropriation of supplies or any belongings of the
business. Any offense committed is not subject to sanctions provided there
is a justifiable reason and upon the consideration of the owner.
 In no case, the employee shall be away for more than 10 minutes from the
business premises
Hiring & Recruitment
 The owner is responsible for hiring and recruitment of employees and
should follow the general procedures provided.
 The owner should not be lenient in choosing the employees fit for the job
vacancy. He must not favor his relatives or friends during the recruitment
process, but he can hire such if they are qualified for the job.
Office
 Prohibition of any fraudulent acts which are prejudicial to the interest of the
business. Such actions are subject to penalties depending on the degree of
violation. Examples are falsifying documents or transactions for personal
gain.
Disciplinary Actions/ Sanctions

It is important for an organization to set measures in the form of disciplinary
actions or sanctions to give assurance that each of its members complies with the
policies and procedures. These rules promote discipline and order during the
operating hours inside the business. Table 24 shows the corresponding sanction
for every violation committed.
Table 24
Table of Offenses and Sanctions
Nature of Offense Occurrence and Penalty
1st 2nd 3rd 4th
Tardiness 3 3 4 5
Absence without leave 2 2 3
Theft or misappropriation 4 5
Bringing of deadly weapons or flammable

2 4 5
materials
Use of Illegal drugs 5
Drinking Liquors or Smoking 2 4 5
Violence or Threat 4 5
Negligence of Duty 2 2 3 5
Unauthorized Use of Business Properties 1 2 4 5
Conduct of Indecency or Immorality 4 5
Not Wearing Proper Dress Code 1 2 2 3
Fraudulent Acts Prejudicial to Business’

4 5
Interest
1 – Oral Warning
2 – Reprimand
3 – Salary Deduction
4 – Suspension
5 – Termination
Legend:
Oral Warning
A casual verbal disciplinary action is done by the owner to ensure that the
employee knows the standards in the operation of the business.
Reprimand
The owner shall conduct a formal way of disciplinary action to promote fair
procedures and natural justice to settle the offenses and give appropriate
sanctions for the employee.
Salary Deduction
The deductions imposed must not be more than 2% of employee’s annual
salary.
Suspension
The employee cannot enter the premises for a given period depending on
the weight of the offense.
Termination
The employee shall leave and cease to get involved with the operation
L e g a l a n d T a x a t i o n A s p e c t | 84
CHAPTER V
LEGAL AND TAXATION ASPECTS
The Philippine government is a body authorized to subject its citizens under
its established laws, which are ultimately for the benefit of the people. These laws
affect human activities in various ways. One of these activities that are under
administrative direction is the organization and formation of businesses. The
government imposed some legal and tax considerations that entrepreneurs have
to comply to operate a business as a legal and economic entity.
Enterprises need to conform to the requirements set forth by the law before
starting its operations. The firm must register with the appropriate government
agency. This process includes the acquisition of required licenses to legalize its
existence and paying the necessary taxes. Thus, compliance with these statutory
requirements provide legal existence and warrants the enjoyment of the services
offered by the government. In line with this, it is essential to carefully consider the
legal and tax implications of the proposed business.
LEGAL ASPECT
The Philippine laws have established rules and regulations that a business
organization has to conform with to have a legal existence. The legal aspect
confers the determination of the necessary requirements and documents imposed
by the state. The compliance with such requirements is essential to every business
for it to operate lawfully. Legally operating a business is important because it would

entail that one’s rights and privileges are exercisable which includes the provision
of the benefits of both the proprietor and its employees. Given that the proponents
chose sole proprietorship as their type of business organization, the entity must
comply with following legal requirements below:
 Registering its Business Name with the Department of Trade and Industry
(DTI)
 Securing Business Permits and Licenses
 Application for membership to Social Security System (SSS) for employee’s
safety and security, PhilHealth Insurance for employee’s health and
hospitalization insurance and PAG-IBIG for housing loans and other extra
benefits
 Registration of the Business with the Bureau of Internal Revenue (BIR)
 Obtaining a Contract of Lease for the commercial space
Registration of the Business Name with the Department of Trade and
Industry (DTI)
All businesses should establish their own business name. It is essential for
them to have their own identity and for the public to distinguish the enterprise from
others. There should not be any business using the same, identical trade name for
the benefit of those concerned.
Republic Act No. 3883 is the law governing the registration of business
names, as amended by Republic Act No. 863 and Republic Act No. 4147, also
recognized as the Business Name Law. The government agency responsible for
approving the registration and the name of the business is the Department of Trade
and Industry (DTI).
The entity opted to adapt a sole proprietorship and so, the following are the
necessary requirements for its registration with DTI:
1. Filipino Citizen, at least, 18 years old
2. Two copies of filled-up Business Name Application Form and Philippine
Business Registry Application Form and Index Card for Bureau of Trade
Regulation and Consumer Protection
3. Payment of registration fees and documentary stamp tax
4. Two pieces 2x2 picture of applicant (with his signature at the back)
5. Photocopy of proof of citizenship such as:
 Birth Certificate
 Any nationally issued identification documents (e.g. passport, PRC
ID, Postal ID, Voter’s ID)
 Certificate of naturalization with oath of allegiance in case of a
naturalized Filipino
6. The applicant must comply with following if he is an alien:
 Registration of alien certificate, if any
 Written appointment of a Filipino resident
 Under R.A. No. 7042, the alien must secure DTI form No. 17
 Authority to verify the book of accounts or bank certificates of
deposit
 If the investment includes assets other than foreign exchange, a
copy of valuation report form the Central Bank is necessary.
 Proof of inward remittance of foreign currency for non-resident
alien and Bank Certificate of Deposit for the resident alien
 Clearance from other related agencies
7. Fees
 Application fee Php 500.00
 Documentary stamp tax Php 15.00
Securing Business Permits and Licenses
After securing a trade name registered under Department of Trade and
Industry (DTI). The new business will, now, need to comply with the legal
requirements of the government for its smooth operations. It has to secure
necessary documents in the form of permits and licenses. These includes:
Business Permit
1. Secure the following clearances (original and photocopy)
 Barangay clearance with the official receipt of payment
 SSS, PHILHEALTH, and PAG-IBIG Clearance
 Sanitary permit
 Fire Safety Inspection Certificate
 Community Tax Certificate of employees
 Zoning clearance
 Other requirements from national and local government agencies,
as the case may be
2. Evaluation of Business Application
3. The applicant will proceed to the Permits and Licensing Division to have
the application form issued. The Business Permit Line Office personnel
will interview him or her and assess the filled-up and notarized
application form.
4. Issuance of billing statement
5. Applicant pays at the City Treasurer’s Office Collection Section and will
receive Official Receipt
6. After compliance with all the requirements and after payment, the
Permits and Licensing Office will issue the duly signed Business Permit.
Barangay Clearance
This document certifies that the barangay where the proposed
project shall be situated has already approved the operation of the
business. It also serves as a proof that the owner has no record of any
commission of acts contrary to law.
Police Clearance
This document contains the details of an individual’s criminal
history. It certifies that the business owner does not have any bad record in
any PNP station. This form is important in acquiring documents from
government offices.
Mayor’s Permit
This requirement is to be secured by the prospective proprietor
before commencing the business. The permit shall be acquired from the
local government of Cebu City where the business is to be established.
Declaration for Electrical and/or Mechanical Provision
This certificate proves that the business has complied with
electrical and mechanical facilities that have passed the Philippine Electrical
Code and Philippine Mechanical Engineering Code, respectively. It is also
necessary for the issuance of Fire Safety Inspection Certificate.
Fire Safety Inspection Certificate
This certificate authorizes that the business has conformed to the
requirements for fire and safety as stated in the Fire Code of the Philippines
of 2008.
Application for Social Security System (SSS) Membership
As a mandatory requirement pursuant under Republic Act 8282 or the
Social Security Law, the business shall register the employees with the SSS to
provide funds for security and other benefits.
The requirements for registration are as follows:
 Self – Employed Data Record
 Employee’s Data Record
 Monthly Contribution
 Schedule of Contribution
 Quarterly Contribution
 Sickness Notification
The forms needed for membership are as follows:
 Form R-1 (Employer Registration)
 Form R-A (Employment Record)
 Form E-1 (Personal Record)
 Form R-3 (Contribution Payment Return)
Application for Philippine Health Insurance Membership
As mandated by the National Phil Health Insurance Act of 1995 through the
establishment of the Philippine Health Corporation, the employer must ensure his
employees’ application to the National Insurance Program to obtain financial
access to health services. The following are necessary to be filled up to be a
member and continue being one:
 Form ER – 1 (Employer’s Data Record)
 Form ER – 2 (Report of Employee – Members)
 Form ME – 5 (Contribution Payment Form)
 Form RF – 1 (Employer’s Remittance Return)
Application for the Membership to PAG-IBIG
Pursuant under Republic Act 7742, all employees who are covered by the
Social Security System (SSS) and are earning, at least, PhP4,000.00 a month are
required to apply for membership in the PAG-IBIG Fund. However, for those
employees who earn less than PhP4,000.00, application for membership is only
voluntary.
The procedures for application are as follows:
 Request a copy of the Membership Registration/Remittance Form
(MRRF) from the Marketing and Enforcement Division in PAG-IBIG
Cebu North Branch
 Submit two copies of the MRFF to the Marketing and Enforcement
Division together with the following documents:
o Members Data Form of the employees
o Certificate of SSS Coverage and Compliance
Registration of the Business with the Bureau of Internal Revenue (BIR)
The BIR is an administrative agency of the State established to collect the
taxes. The proprietor should register at the BIR District Office for taxation purposes
within ten (10) days on or before the start of any business undertaking and after
acquiring the business permit.
The requirements are the following:
 DTI Certification of registered company name
 Tax Identification Number (TIN)
 Contract of lease
 Photocopy of Mayor’s Permit (or Application for Mayor’s Permit duly
received, if the former is still in the process with the LGU)

 BIR Form No. 1901 (Application for Registration) – 2 copies
 BIR Form No. 0605 (Payment Form) – 3 copies
 BIR Form No. 2000 (Documentary Stamp Payment for Lease
Contract) – 3 copies
 BIR Form No. 2305 (Certificate of Update and Exemption and
Employer’s and Employees’ Information) – 2 copies
 Birth Certificate (original and photocopy)
 Marriage Contract, if married (original and photocopy)
 NSO Certified Birth Certificate of Dependents
 Registration fee of PhP500.000
The following procedures should be undertaken:
1. Accomplish BIR Form No. 1901; submit it along with the necessary
attachments to the Revenue District Office (RDO) which has a
jurisdiction over the place of the business.
2. Payment of the Annual Registration Fee of PhP500.00 at the RDO’s
authorized banks.
3. Payment of PhP15.00 for the Certification Fee and PhP15.00 for the
Documentary Stamp Tax (attach to Form 2303).
4. The respective RDO shall issue the Certificate Registration (Form
2303).
Securing a Contract of Lease
As stated in the earlier part of the study, the proponents plan to acquire a
contract of lease where the firm will build its production and location site. This part
is essential for the commencement of the operations of the business.
TAXATION ASPECT
Taxation is an inherent power of the state exercised by its law making body
to raise and accumulate revenue from the people within its jurisdiction. Taxes are
used to finance the activities that promote the general welfare and defray the
necessary expenses for the public being the lifeblood of the government. Thus,
taxation is the root of the state’s functionality.
The taxation power of the state does not just levy and collect taxes but also
grants the government with the rights and privileges of a business entity which
makes it equitable for a business entity to pay what it owes to the government.
The following are the applicable taxes that are to be imposed to the
proposed business.
Value-Added Tax (VAT)
VAT, a type of business tax, is enforced upon those who are in the
practice of a profession and to those who engage in trade or business. VAT
liability is a tax on mark up because input VAT from purchases is deducted
from output VAT on sales.

Income Tax
The income from the proposed business is included in the income of
the proprietor from other sources in the computation of the income tax due.
The income tax due will be based on the normal tabular income tax rates
as provided by Section 24(A) of the National Internal Revenue Code
(NIRC).
Expanded Withholding Tax
This tax is a kind of withholding tax set for certain income payments.
It shall be credited against the income tax due of the payee for the taxable
period in which the income was earned. Since the proposed project will be
renting its location, a corresponding 5% expanded withholding tax in its
monthly rental will be imposed. Also, 10% expanded withholding tax would
be imposed on the services of the bookkeeper.
Withholding Tax on Compensation
The employer-employee relationship establishes a need for
application of withholding tax on compensation. This tax is the approximate
of income tax liability on the compensation of the employee that is required
to be withheld by the employer. The withholding tax table ranging from 5%-
32% after considering the personal exemptions will be the basis of the tax
rates of the proposed business’ employees.

Documentary Stamp Tax
Documentary Stamp Tax is a tax levied upon documents, loan
agreements, instruments, and papers evidencing the acceptance, sale or
transfer of an obligation, assignment, right or property incident to it. In the
proposed business, since the company site will be leased, payment of
documentary stamp tax is necessary to obtain the lease contract. The
owner shall also pay documentary stamp tax upon registration to
Department of Trade and Industry (DTI) and Bureau of Internal Revenue
(BIR).
Community Tax
Community tax is imposed on every inhabitant of the Philippines
eighteen (18) years of age or over who has been regularly employed on a
wage or salary basis for at least thirty (30) consecutive working days during
any calendar year that is required by law to file income tax return, who is
engaged in business or occupation and who owns real property with an
aggregate assessed value of One thousand pesos (P1, 000.00) or more.
Since the proposed business qualifies on the requisites in order for an
individual or juridical personality to be liable for community tax, then the
business is obliged to pay.
Excise Tax
Since the proposed business is in line with the alcoholic drink or wine
industry it would be fitting to consider excise taxes that can be imposed.
Excise taxes are imposed on wines that raw materials came from fruits such
as mango, strawberry and bugnay. But under Revenue Memorandum
Circular No 41-2011 which states that, there are commonly accepted wines
which are derived from other basic raw materials other than fruits such as
rice win, ginger wine etc. under which classification tuba, basi and tapuy
apparently fall, exempts the proposed business from paying excise taxes.
F i n a n c i n g A s p e c t | 97
CHAPTER VI
FINANCING ASPECT
The fuel of every business is money. The capital provided in every business
venture is vital for the company to finance the necessary expenses and acquire
assets for it to start its operations. The adequacy of the capital will spell the
success of the business.
The aspect shows the estimated project cost or the total amount of
resources to be used in the implementation of the proposed project. The project’s
start-up capital is essential in determining the business’ return on investment,
payback period and other financial operations. The amounts shown here in the
chapter are estimated future costs to be incurred. The particulars of the cost items
are shown in a logical manner to arrive at the total cost. This aspect needs a
thorough and excessive consideration by the prospective implementers for them
to determine if they are capable of starting the business.
Although most of the amounts are estimates, this would provide awareness
to those interested in this project. This chapter also shows how the company will
disburse funds. Also, notes and tables are also presented to demonstrate the
breakdown of each item to understand the chapter easily.

SOURCE OF FUNDS
Upon commencement of the business, the entity will source funds through
capital contributions of the owner, as the desired form of business ownership is a
sole proprietorship. The owner is to contribute money, property, and industry and
may opt to borrow funds from banks in case the contribution does not reach the
estimated start-up capital.
ESTIMATED PROJECT COST
Total estimated project cost measures the amount that is anticipated to be
incurred by the prospective implementers of the business if he puts the business
into operation. The total estimated project cost of the production and distribution
of Coconut Wine in tetra packs as shown in the next page amounts to P
1,330,634.50. The proponents show a breakdown of such amount in the notes
found in the subsequent pages. They also denominate all monetary amounts in
Philippine Pesos.
These funds will be needed to finance the necessary start-up cost of the
business. This start-up cost will include payment of required business permits and
licenses, purchase of necessary equipment and furniture and fixtures,
improvement of leasehold, acquisition of various office supplies, mandatory
deposits for rent and utilities and other costs to be incurred in the commencement
of the business. These funds should be properly used and should be properly
accounted for as it is of utmost importance.

Table 25
Estimated Projected Cost
Notes Amounts
Pre-operating Cost
Project Feasibility Cost 1 P 6,800.00
Permits and Licenses 2 7,260.00 P 14,060.00
Property and Equipment
Office Equipment 3 50,190.00
Factory Equipment and Machineries 4 652,957.00
Delivery Equipment 5 52,000.00
Leasehold Improvements 6 8,940.00 764,087.00
Working Capital
Factory Tools 7 900.00
Salaries Expenses 8 15,250.00
Benefits- Employer’s Contribution 9 1,796.80
Raw Materials 10 459,734.70
Utilities 11 5,599.00
Rent Expense 12 10,000.00
Fuel Expense 13 38,988.00
Repairs And Maintenance 14 1,000.00
Advertising And Promotions 15 3,000.00
Office Supplies 16 7,679.00
Cleaning Supplies 17 1,540.00
Insurance Expense 18 2,000.00
Bookkeeper’s Fee 19 5,000.00 552,487.50
Total Estimated Project Cost P1,330,634.50
Note 1
Project Feasibility Cost
Particulars Total Cost
Honorarium- Panelists P 3,500.00
Bookbinding 500.00
Experimentation 1,000.00
Meals and Snacks 500.00
Photocopy 100.00
Printing 1,000.00
Grammarly and Plagiarism Test 200.00
TOTAL P 6,800.00
Note 2
Permits And Licenses
LTO Registration P 3,000.00
Mayor’s Permit 500.00
FDA Licensing 1,020.00
SE and Notarial Fees 900.00
DTI Registration 515.00
BIR Registration 1,000.00
Fire Safety Clearance 100.00
Barangay Clearance 50.00
Documentary Stamp Tax 175.00
TOTAL P 7,260.00
Note 3
Office Equipment
Particulars Quantity Total Cost
Office Desk and Chairs 3 units P 5,000.00
Steel Office Locker 1 unit 1,000.00
Computer Unit 2 units 27,000.00
Office Printer 1 unit 2,195.00
Air-conditioning Units 1 unit 7,995.00
Fire Extinguisher 1 unit 7,000.00
TOTAL P 50,190.00
Note 4
Factory Equipment And Machineries
55 Gallon Plastic Barrel 3 pieces P 3684.00
Factory Tables and Chairs 2 units 1,500.00
Fire Extinguisher 1 unit 7,000.00
Electric Generator 1 unit 21,800.00
Aseptic Brick Carton Filling Machine 1 unit 600,000.00
Vinyl Cutting Plotter Printer (for sticker) 1 unit 8,795.00
Air Conditioner 1 unit 10,178.00
TOTAL P 652,957.00
Note 5
Delivery Equipment
Motor Vehicle 2 units P 50,000.00
Motor Vehicle Customization 2,000.00
TOTAL P 52,000.00
Note 6
Plywood 5 ply P 1,000.00
Nails 2 kg 240.00
Paint 5 cans 900.00
Paint Brush 5 pieces 300.00
Lumber 10 pieces 1,500.00
Labor 5,000.00
TOTAL P 8,940.00
Note 7
Factory Tools
(in one year)
Personal Protective Equipment 10 pieces P 500.00
Water Jug 5 units 400.00
TOTAL P 900.00
Note 8
Salaries Expenses
Particulars No Daily Rate Working Monthly
days per Compensation
month
Production 1 P 200.00 25 P 5,000.00
Foreman
Secretary 1 200.00 25 5,000.00

Sanitary Engineer 1 90.00 25 2,250.00
Packaging Staff 1 120.00 25 3,000.00
TOTAL P 15,250.00
Note 9
Benefits- Employer’s Contribution
Particulars SSS PAG-IBIG PhilHealth Total Cost
Contribution Contribution Contribution (in one
month)
Production P 368.30 P 100 P 87.50 P 555.80
Foreman
Secretary 368.30 100 87.50 555.80

Sanitary Engineer 184.20 45 87.50 316.70
Packaging Staff 221.00 60 87.50 368.50
TOTAL P 1,796.80
Note 10
Raw Materials
Particulars Quantity Unit Cost Total Cost
Coconut Wine 8,710 liters per P 10.57 P 92,064.70
month
Tetra Pack (minimum 250,000 pieces 1.50 375,00.00
purchase=250,000 pieces) per 2 years
Sticker Paper (minimum 9,000 pieces per 3.00 27,000.00
purchase 900 pieces) month
Printer Ink 5 pieces 334.00 1,670.00
TOTAL P 459,734.70
Note 11
Utilities
(in one month)
Electricity and Water P 4,000.00
Telephone, Internet and CCTV 1,599.00
TOTAL P 5,599.00
Note 12
Rent Expense
Prepaid Factory Rent Expense P 5,000.00
Factory Rent Expense (in one month) 5,000.00
TOTAL P 10,000.00
Note 13
Fuel Expense
(in one month)
Gasoline 1,200 liters P 32.49 P 38,988.00
Note 14
Repairs And Maintenance
(in one month)
Filling Machines-repairs and maintenance P 500.00
Motor vehicles- repairs and maintenance 500.00
TOTAL P 1,000.00
Note 15
Advertising And Promotions
Posters 2,000.00
Flyers 1,000.00
TOTAL P 3,000.00
Note 16
Office Supplies
(in one year)
Bond Paper 4 ream P 120 P 480.00
Folders 1 dozen 50 50.00
Ballpens 1 box 45 45.00
Markers 6 pieces 30 180.00
Adhesive Tapes 3 pieces 10 30.00
Stapler 2 pieces 46 92.00
Stapler Wire 10 boxes 10 100.00
Puncher 2 pieces 30 60.00
Log Book 2 pieces 60 120.00
Cash Box 2 units 2,800 5,600.00
Calculator 2 units 450 900.00
Columnar Books 1 pad 22 22.00
TOTAL P 7,679.00
Note 17
Cleaning Supplies
(in one year)
Trash Can 4 units P 150 P 600.00
Floor Mop 2 pieces 100 200.00
Basin 4 units 50 200.00
Door Mat 2 pieces 50 100.00
Broom 4 pieces 20 80.00
Dishwashing Liquid 2 bottles 20 40.00
Trash Bags 8 pieces 5 40.00
Dishwashing Sponge 4 pieces 15 60.00
Rags 20 pieces 1 20.00
Container 2 pieces 100 200.00
TOTAL P 1,540.00
Note 18
Insurance Expense
(in one year)
Motor Vehicle Insurance P 2,000.00
Note 19
Bookkeeper’s Fee
(in one month)
Bookkeeper’s Fee P 5,000.00
F i n a n c i a l A s p e c t | 106
CHAPTER VII
FINANCIAL ASPECT
The Financial aspect of a business determines the financial structure that
provides the interested users with knowledge about the financial standing of the
enterprise. Although this aspect is slightly considered as one of the crucial part in
doing business, these financial statements help the organization in making
economic decision that would significantly provide them enough basis to project
its performance.
LIST OF ASSUMPTIONS
General Assumptions
1. The business pre-operating activities will start in October - December of
2017.
2. The normal business operation will commence in the month of January of
2018.
3. The business will use the calendar year.
4. The trade will be open Mondays to Saturdays from 7:00 am to 12:00 pm.
5. The business would not operate on Sundays, national and local holidays.
6. The business will be operating at projected demand of the stores.
7. The owner will withdraw P 100,000.00 in the first year of operation and will
increase by 50% in the succeeding year.

Sales and Purchases
8. The proponents estimate that sales will be incurred 30% cash and 70%
credit.
9. Credit collection of sales are as follows:
 50% in the date of sale.
 10% in the first five days after the sale.
 1% allowance for doubtful accounts based on the current year’s
credit sales.
 The company can collect the remaining accounts receivable within
one month after the contract.
 10% of the doubtful accounts expense of the year will be written off
at year end.
10. Credit purchases will be made only for tetra packs and coconut wine. The
entity will make the other purchases in cash.
11. The company pays credit purchases for Tetra packs as follows:
 40% - Down payment
 30% - within one month after purchase.
 20% - within two months after purchase.
 10% - within three months after purchase.
These bases govern the agreements between the respondents and Tetra Pak
PH.
12. Credit purchases for coconut wine will be accumulated at the end of every
month and the entity pays as follows:
 30% - Down payment
 25% - 1 month after the month of sale.
 25% - 2 months after the month of sale.
 20% - 3 months after the month of sale.
These bases on the credit term in sales of the usual operation of the coconut
wine supplier.
13. The price of the proposed product will be constant for the first five (5) years
of operation.
14. The company shall sell waste products (coconut vinegar), resulting from the
unsold coconut wine in tetra packs within the day, on a cash basis only at a
price 5% higher than its cost. They also estimate that they will sell all waste
products.
15. The waste products are estimated to be 3% of the quantity of the coconut
wine purchased from the supplier.
16. Coconut Wine purchases from a supplier will be 4% higher than the
projected demand per year. The 4% allowance is intended for the 1% safety
for spillage and 3% allowance for a waste product.
17. The coconut wine supplier could deliver the amount of ordered liters per
day.
18. The business expects that 1% budget for spillage during the entire
production based on the quantity purchased from the suppliers.

19. The company purchases Tetra pack as the product’s packaging from the
supplier in rolls. The company can shape 250,000 boxes of tetra packs for
the roll which is good for the company’s 2-year production.
20. Other direct materials (sticker paper and ink) will be purchased on a monthly
basis equivalent to the projected demand for the proposed product per
month also applying the first in, first out basis.
21. The price of other direct materials (sticker and ink) will maintain for the five
years of operation.
Expenses
22. Below is a table showing the allocation of the expenditures as to direct labor,
factory overhead, selling or, administrative outlays:

Table 26
Allocation of Expenses
Direct Factory Selling General and

Labor Overhead Expense Administrative
Expense
Salaries
 Production 100%
Foreman
 Packaging Staff 100%
 Secretary/ 10% 90%

Receptionist
 Security Guard 100%
 Sanitary Engineer 70% 30%
 Bookkeeper 100%
Utilities Expense
 Water and 50% 50%
electricity
 Internet & 50% 10% 40%

Telephone
 Fuel 100%
Cleaning Supplies 90% 10%

Advertising and 100%
Promotion
23. Salaries will maintain for the five years of operation.
24. Water and Electricity expense will increase by 3% per annum based on the
previous year’s rate averaged.
25. Internet, telephone and CCTV cost will decrease by 19% in 2021 and by
19% again in 2022.

26. Cleaning supplies will remain constant for the first five years of operation.
27. Fuel Expense will decrease by 9% per year’s rate averaged.
28. Tables and chairs will be purchased during the pre-operating period and will
be depreciated using a straight-line basis based on its useful life.
29. The company will renew all permits and licenses every year, except for SEC
and notary fees which they shall only pay once.
30. Payment for insurance of the motor vehicle will be a constant P2,000.00 per
year.
Taxes
31. The proposed business is also liable for income taxes which shall be filed
at the end of each quarter of the year.
Cash
32. Cash receipts for the day shall be deposited in the bank the following day.
Inventories
33. Coconut wine, the main raw material, will be purchased from the supplier
daily.
34. There will be no change in the capacity for the entire five years of operation.
35. There will be remaining product labels (sticker paper with print) on hand at
the end of every year equivalent to one month supply of these items.
36. All inventories shall observe first in, first out basis.
37. Considering the set shelf life of the product, there will be a minimal amount
of catalog of the chief product at the end of every year based on the
difference of the goods manufactured and the goods sold.
Property, Plant and Equipment
38. The company shall carry at cost less accumulated depreciation and
accumulated impairment loss, if any, and all long term assets of the
proposed business.
39. The business shall follow this allocation of depreciation expenses as to
overhead, selling and, general and administrative expenses:
Table 27
Office Equipment and its Useful Life
Office Equipment Estimated Useful Life (in years)

Office Desks and Chairs 5
Steel Office Locker 10
Office Cabinet 10
Computer Unit 5
Office Printer 5
Air-Conditioning Units 10
Fire Extinguisher 10
Table 28
Factory Equipment and its Useful Life
Factory Equipment Estimated Useful Life (in years)

55 Gallon Plastic Barrel 10
Factory Tables and Chairs 5
Fire Extinguisher 10
Generator 10
Filling Machine 10
Printer for Sticker 10
Air-Conditioning Units 10
Table 29
Delivery Equipment and its Useful Life
Delivery Equipment Estimated Useful Life (in years)

Motor Vehicle 10
Table 30
Leasehold Improvement and its Useful Life
Leasehold Improvement Estimated Useful Life (in years)

Leasehold Improvement 5*
*Life of the leasehold improvement is 10 years while the Lease term is only for
5 years. Therefore, the 5 year lease term agreement shall be used as the
estimated useful life.
40. The allocation of depreciation expenses as to overhead, selling and,
general and administrative expenses are as follows:
Table 31
Allocation of Depreciation Expenses
General and
Selling
Overhead Administrative
Expense
Expense
Motor Vehicle 100%
Air Conditioning Unit 50% 50%
Other Office Equipment 100%
Leasehold Improvement 50% 50%
Accruals
41. The entity will accrue the following items during the last month of the
calendar year:
42. Salaries
43. Utilities
44. SSS Contributions
45. PhilHealth Contribution
46. PAG-IBIG Contribution
47. Withholding Tax
48. Expanded Withholding Tax
49. VAT
50. The entity will pay the accumulated salaries for the month of December
within ten days of the next month.
51. The company will pay the amassed utilities within the 12th - 13th day of the
next month based on the typical payment date for benefits of Carmen,
Cebu.
52. SSS Contribution, PhilHealth Contribution, Pag-ibig Contribution,
Withholding Tax, Expanded Withholding Tax, and VAT will be paid within
the required period in compliance with the statutory requirement.

Operating Lease
1. The business recognizes Periodic Rental as Rent Expense.
2. The entity shall depreciate leasehold improvements made by the lessee
over the life of the improvement or lease term, whichever is shorter.
3. The residual value of the leasehold improvement is ignored in computing
depreciation because the leasehold improvement becomes the property of
the lessor upon the expiration of the lease term.
4. Any security deposit refundable upon the lease expiration is accounted for
as an asset by the lessee.
5. The lease term is five years, but the entity can extend the agreement for
another 5 years.
6. The lessee shall pay five thousand pesos (P5,000.00) at the start of the
lease term as advanced payment for the rent of the last month of the lease
term and another five thousand pesos (P5,000.00) every month which shall
represent as the periodic rental.

A PROPOSED PRODUCTION AND DISTRIBUTION OF COCONUT WINE CONTAINED IN TETRA PACKS

Statement of Financial Performance
For the Years Ended December 31
Schedules 2018 2019 2020 2021 2022

Net Sales 1 ₱ 3,813,653.40 ₱ 4,212,094.80 ₱ 4,610,536.20 ₱ 5,065,897.80 ₱ 5,578,179.60
Less: Cost of Goods Sold 2 1,836,127.38 1,997,851.55 2,159,585.05 2,343,263.67 2,551,499.30
Gross Profit ₱ 1,977,526.02 ₱ 2,214,243.25 ₱ 2,450,951.15 ₱ 2,722,634.13 ₱ 3,026,680.30
Add: Other Income 5 59,573.15 64,820.29 70,067.74 76,027.19 82,783.39
Interest Income 6 200.00 4,500.50 4,853.00 5,205.51 5,558.02
Total Income ₱ 2,037,299.17 ₱ 2,283,564.04 ₱ 2,525,871.89 ₱ 2,803,866.83 ₱ 3,115,021.71
Less: Operating Expenses
General and Administrative Expenses 3 246,164.30 226,177.30 229,939.90 232,205.68 236,306.08
Selling Expenses 4 488,971.20 446,864.16 408,546.75 373,921.51 342,850.87
Earnings before Interest and Tax ₱ 1,302,163.67 ₱ 1,610,522.58 ₱ 1,887,385.24 ₱ 2,197,739.64 ₱ 2,535,864.77
Less: Interest Expense 7 40,315.07 31,438.35 22,561.65 13,684.93 4,808.22
Earnings before Tax ₱ 1,261,848.60 ₱ 1,579,084.23 ₱ 1,864,823.59 ₱ 2,184,054.71 ₱ 2,531,056.55
Income Tax Expense 8 368,812.89 471,214.74 562,733.62 664,969.86 776,099.12
Net Income after tax ₱ 893,035.71 ₱ 1,107,869.49 ₱ 1,302,089.97 ₱ 1,519,084.85 ₱ 1,754,957.42
A PROPOSED PRODUCTION AND DISTRIBUTION OF COCONUT WINE CONTAINED IN TETRA PACKS

Statement of Cash Flows
Schedules Pre-Operating 2018 2019 2020 2021 2022

Cash Flow from Operating Activities:
Net Income for the year SOFP ₱ 893,035.71 ₱ 1,107,869.49 ₱ 1,302,089.97 ₱ 1,519,084.85 ₱ 1,754,957.42
Adjustments for:
Depreciation Expense 80,872.20 80,872.20 81,352.20 81,352.20 81,352.20
Cash Operating Income before changes in Working Capital
Add(Deduct) Changes in Working Capital:
(Increase)Decrease in Accounts Receivable, net (86,882.25) (95,959.50) (105,036.75) (115,410.75) (127,081.50)
(Increase)Decrease in Inventory (289,602.32) 94,809.45 (266,771.05) 128,276.59 (224,467.98)
(Increase)Decrease in Prepaid Expenses (5,000.00)
Increase(Decrease) in Accounts Payable 124,287.35 12,985.25 12,985.14 14,840.38 16,695.32
Increase(Decrease) in Accrued Expenses 23,392.80 80.00 81.66 (213.83) 84.90
Increase(Decrease) in Other Current Assets ₱ (23,260.00) 23,260.00
Increase in Income Tax Payable 368,812.89 102,401.84 91,518.89 102,236.24 111,129.26
Net Cash provided by Operating Activities ₱ (23,260.00) ₱ 1,132,176.38 ₱ 1,303,058.73 ₱ 1,116,220.06 ₱ 1,730,165.68 ₱ 1,612,669.61
Cash Flow from Investing Activity:

Purchases of Equipment and Machineries ₱ (764,087.00) ₱ (4,800.00)
Cash Flows from Financing Activities:

Capital from the Owner Financing ₱ 900,000.00
Acquisition of Loan ₱ 500,000.00
Payments of Loans (100,000.00) ₱ (100,000.00) ₱ (100,000.00) ₱ (100,000.00) ₱ (100,000.00)
Withdrawals (100,000.00) (150,000.00) (225,000.00) (337,500.00) (506,250.00)
Net Cash provided by Financing Activities ₱ 900,000.00 ₱ 300,000.00 ₱ (250,000.00) ₱ (325,000.00) ₱ (437,500.00) ₱ (606,250.00)
Increase in Cash ₱ 876,740.00 ₱ 668,089.38 ₱ 1,053,058.73 ₱ 786,420.06 ₱ 1,292,665.68 ₱ 1,006,419.61
Add: Cash Balance , beg. 876,740.00 1,544,829.38 2,597,888.11 3,384,308.17 4,676,973.85
Cash Balance, end ₱ 876,740.00 ₱ 1,544,829.38 ₱ 2,597,888.11 ₱ 3,384,308.17 ₱ 4,676,973.85 ₱ 5,683,393.46
A PROPOSED PRODUCTION & DISTRIBUTION OF COCONUT WINE CONTAINED IN TETRA PACKS

Statement of Financial Position
As of December 31
ASSETS
Current Assets Schedules Pre-Operating 2018 2019 2020 2021 2022
Cash ₱ 876,740 ₱ 1,544,829.38 ₱ 2,597,888.11 ₱ 3,384,308.17 ₱ 4,676,973.85 ₱ 5,683,393.46
Accounts Receivable, net 15 86,882.25 182,841.75 287,878.50 403,289.25 530,370.75
Inventory 16 289,602.32 194,792.87 461,563.92 333,287.33 557,755.31
Prepaid Expenses 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Other Current Assets 23,260.00 - - - - -
Total Current Assets ₱ 900,000.00 ₱ 1,926,313.95 ₱ 2,980,522.73 ₱ 4,138,750.59 ₱ 5,418,550.43 ₱ 6,776,519.52
Non-Current Assets
Property, Plant & Equipment, net 17 ₱ 683,214.80 ₱ 602,342.60 ₱ 525,790.40 ₱ 444,438.20 ₱ 363,086.00
Total Non-Current Assets 683,214.80 602,342.60 525,790.40 444,438.20 363,086.00
TOTAL ASSETS ₱ 900,000.00 ₱ 2,609,528.75 ₱ 3,582,865.33 ₱ 4,664,540.99 ₱ 5,862,988.63 ₱ 7,139,605.52
LIABILITIES
Current Liabilities
Accounts Payable 18 ₱ 124,287.35 ₱ 137,272.59 ₱ 150,257.74 ₱ 165,098.12 ₱ 181,793.43
Accrued Expenses 19-24 23,392.80 23,472.80 23,554.46 23,340.63 23,425.53
Total Current Liabilities ₱ 147,680.15 ₱ 160,745.39 ₱ 173,812.20 ₱ 188,438.75 ₱ 205,218.96
Non-Current Liabilities
Loans Payable 7.1 ₱ 400,000.00 ₱ 300,000.00 ₱ 200,000.00 ₱ 100,000.00
Income Tax Payable 25 368,812.89 471,214.74 562,733.62 664,969.86 ₱ 776,099.12
Total Non-Current Liabilities ₱ 768,812.89 ₱ 771,214.74 ₱ 762,733.62 ₱ 764,969.86 ₱ 776,099.12
TOTAL LIABILITIES ₱ 916,493.04 ₱ 931,960.13 ₱ 936,545.82 ₱ 953,408.61 ₱ 981,318.08
OWNER'S EQUITY
Osorio, Capital SOCE ₱ 900,000.00 ₱ 1,693,035.71 ₱ 2,650,905.21 ₱ 3,727,995.17 ₱ 4,909,580.02 ₱ 6,158,287.44
TOTAL LIABILITIES and OWNER'S EQUITY ₱ 900,000.00 ₱ 2,609,528.75 ₱ 3,582,865.33 ₱ 4,664,540.99 ₱ 5,862,988.63 ₱ 7,139,605.52
A PROPOSED PRODUCTION & DISTRIBUTION OF COCONUT WINE IN TETRA PACKS

Statement of Changes in Equity
Schedule Pre-Operating 2018 2019 2020 2021 2022

Owner's Capital, Beg. ₱ 900,000.00 ₱ 900,000.00 ₱ 1,693,035.71 ₱ 2,650,905.21 ₱ 3,727,995.17 ₱ 4,909,580.02
Add: Profit SOFPo 893,035.71 1,107,869.49 1,302,089.97 1,519,084.85 1,754,957.42
Less: Withdrawals 100,000.00 150,000.00 225,000.00 337,500.00 506,250.00
Owner's Capital, End ₱ 900,000.00 ₱ 1,693,035.71 ₱ 2,650,905.21 ₱ 3,727,995.17 ₱ 4,909,580.02 ₱ 6,158,287.44
Schedule 1
Projected Sales
Schedule 2018 2019 2020 2021 2022

Units Sold 100,500.00 111,000.00 121,500.00 133,500.00 147,000.00
Multiply: Selling Price ₱ 38.00 ₱ 38.00 ₱ 38.00 ₱ 38.00 ₱ 38.00
Total Sales ₱ 3,819,000.00 ₱ 4,218,000.00 ₱ 4,617,000.00 ₱ 5,073,000.00 ₱ 5,586,000.00
Less: Sales Discount 1.1 5,346.60 5,905.20 6,463.80 7,102.20 7,820.40
Net Sales ₱ 3,813,653.40 ₱ 4,212,094.80 ₱ 4,610,536.20 ₱ 5,065,897.80 ₱ 5,578,179.60
Cash Sales
Total Sales ₱ 3,819,000.00 ₱ 4,218,000.00 ₱ 4,617,000.00 ₱ 5,073,000.00 ₱ 5,586,000.00
30% Cash Sales 30% 30% 30% 30% 30%
Total Cash Sales ₱ 1,145,700.00 ₱ 1,265,400.00 ₱ 1,385,100.00 ₱ 1,521,900.00 ₱ 1,675,800.00
Credit Sales
Total Sales ₱ 3,819,000.00 ₱ 4,218,000.00 ₱ 4,617,000.00 ₱ 5,073,000.00 ₱ 5,586,000.00
70% Credit Sales 70% 70% 70% 70% 70%
Total Credit Sales ₱ 2,673,300.00 ₱ 2,952,600.00 ₱ 3,231,900.00 ₱ 3,551,100.00 ₱ 3,910,200.00
Schedule 1.1
Sales Discount
2018 2019 2020 2021 2022

Total Credit Sales ₱ 2,673,300.00 ₱ 2,952,600.00 ₱ 3,231,900.00 ₱ 3,551,100.00 ₱ 3,910,200.00
Multiply: 10% collection within 5 days 10% 10% 10% 10% 10%
Collections before discount 267,330.00 295,260.00 323,190.00 355,110.00 391,020.00
Multiply: 2% sales discount 2% 2% 2% 2% 2%
Sales Discount ₱ 5,346.60 ₱ 5,905.20 ₱ 6,463.80 ₱ 7,102.20 ₱ 7,820.40
Schedule 2
Cost of Goods Sold
Schedules 2018 2019 2020 2021 2022

Finished Goods Inventory, beginning ₱ - ₱ 55,083.82 ₱ 115,019.37 ₱ 179,806.92 ₱ 250,104.83
Add: Cost of Goods Manufactured 2.1 1,891,211.20 2,057,787.10 2,224,372.60 2,413,561.58 2,628,044.28
Goods Available for Sale 1,891,211.20 2,112,870.92 2,339,391.97 2,593,368.50 2,878,149.11
Less: Finished Goods Ending Invetory 2.2 55,083.82 115,019.37 179,806.92 250,104.83 326,649.81
Cost of Goods Sold ₱ 1,836,127.38 ₱ 1,997,851.55 ₱ 2,159,585.05 ₱ 2,343,263.67 ₱ 2,551,499.30

Schedule 2.1
Total Cost and Unit Cost of Goods Manufactured
Schedule 2018 2019 2020 2021 2022

Direct Materials 2.1.1 ₱ 1,589,297.90 ₱ 1,755,393.80 ₱ 1,921,489.70 ₱ 2,111,361.30 ₱ 2,324,674.60
Direct Labor 2.1.2 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00
Manufacturing Overhead 2.1.3 265,913.30 266,393.30 266,882.90 266,200.28 267,369.68
Total Cost of Goods Manufactured ₱ 1,891,211.20 ₱ 2,057,787.10 ₱ 2,224,372.60 ₱ 2,413,561.58 ₱ 2,628,044.28
Divide: Units Produced 103,515.00 114,330.00 125,145.00 137,505.00 151,410.00
Unit Cost ₱ 18.27 ₱ 18.00 ₱ 17.77 ₱ 17.55 ₱ 17.36
Schedule 2.1.1
Direct Materials
Schedule 2018 2019 2020 2021 2022

Raw Materials, Beg ₱ - ₱ 234,518.50 ₱ 79,773.50 ₱ 281,757.00 ₱ 83,182.50
Add: Raw Materials Purchases 2.1.1A 1,823,816.40 1,600,648.80 2,123,473.20 1,912,786.80 2,472,597.60
Total Raw Mat. Avail. for Use ₱ 1,823,816.40 ₱ 1,835,167.30 ₱ 2,203,246.70 ₱ 2,194,543.80 ₱ 2,555,780.10
Less: Raw Mat, End 2.1.1B 234,518.50 79,773.50 281,757.00 83,182.50 231,105.50
Total Direct Materials Used ₱ 1,589,297.90 ₱ 1,755,393.80 ₱ 1,921,489.70 ₱ 2,111,361.30 ₱ 2,324,674.60
Schedule 2.1.1A
Raw Material Purchases
Units Units Units Units Units

Unit Cost Purchased 2018 Puchased 2019 Purchased 2020 Purchased 2021 Purchased 2022
Raw Material Purchases
Tetra Packs ₱ 1.50 250,000.00 ₱ 375,000.00 - ₱ - 250,000.00 ₱ 375,000.00 - ₱ - 250,000.00 ₱ 375,000.00
Vinyl Stickers 3.00 108,000.00 324,000.00 118,800.00 356,400.00 129,600.00 388,800.00 140,400.00 421,200.00 151,200.00 453,600.00
Ink 334.00 60.00 20,040.00 72.00 24,048.00 72.00 24,048.00 72.00 24,048.00 84.00 28,056.00
Coconut Wine 10.57 104,520.00 1,104,776.40 115,440.00 1,220,200.80 126,360.00 1,335,625.20 138,840.00 1,467,538.80 152,880.00 1,615,941.60
Total Purchases Gross of VAT ₱ 1,823,816.40 ₱ 1,600,648.80 ₱ 2,123,473.20 ₱ 1,912,786.80 ₱ 2,472,597.60
Schedule 2.1.1B
Raw Materials Ending Balance
Raw Material, end Schedule 2018 2019 2020 2021 2022

Tetra Packs 2.1.1B-1 ₱ 219,727.50 ₱ 48,232.50 ₱ 235,515.00 ₱ 29,257.50 ₱ 177,142.50
Vinyl Sticker 2.1.1B-2 13,455.00 26,865.00 40,230.00 48,915.00 48,285.00
Ink 2.1.1B-3 1,336.00 4,676.00 6,012.00 5,010.00 5,678.00
Total ₱ 234,518.50 ₱ 79,773.50 ₱ 281,757.00 ₱ 83,182.50 ₱ 231,105.50
Schedule 2.1.1B-1
Computation Raw Materials Inventory-Tetra Packs
Units Unit Cost Total Cost Units Unit Cost Total Cost Units Unit Cost Total Cost Units Unit Cost Total Cost Units Unit Cost Total Cost
2018 2019 2020 2021 2022
Beginning Inventory - ₱ -
₱ 1.50 146,485 ₱ 1.50 ₱ 219,727.50 32,155 ₱ 1.50 ₱ 48,232.50 157,010 ₱ 1.50 ₱ 235,515.00 19,505.0 ₱ 1.50 ₱ 29,257.50
Purchases 250,000 1.5 375,000.00 - 1.5 - 250,000 1.5 375,000.00 - 1.5 - 250,000.0 1.5 375,000.00
Total 250,000 1.5 375,000.00 146,485 1.5 219,727.50 282,155 1.5 423,232.50 157,010 1.5 235,515.00 269,505.0 1.5 404,257.50
Less: Used 103,515 1.5 155,272.50 114,330 1.5 171,495.00 125,145 1.5 187,717.50 137,505 1.5 206,257.50 151,410.0 1.5 227,115.00
Ending Inventory
146,485 1.50 ₱ 219,727.50 32,155 1.50 ₱ 48,232.50 157,010 1.50 ₱ 235,515.00 19,505 1.50 ₱ 29,257.50 118,095.0 1.50 ₱ 177,142.50
Schedule 2.1.1B-2
Computation Raw Materials Inventory-Vinyl Sticker
2018 2019 2020 2021 2022
Beginning Inventory 0 ₱ 3.00 ₱ -

4,485 ₱ 3.00 ₱ 13,455.00 8,955 ₱ 3.00 ₱ 26,865.00 13,410 ₱ 3.00 ₱ 40,230.00 16,305 ₱ 3.00 ₱ 48,915.00
Purchases 108,000 3.00 324,000.00 118,800 3.00 356,400.00 129,600 3.00 388,800.00 140,400 3.00 421,200 151,200 3.00 453,600.00
Total 108,000 3.00 324,000.00 123,285 3.00 369,855.00 138,555 3.00 415,665.00 153,810 3.00 461,430 167,505 3.00 502,515.00
Less: Used 103,515 3.00 310,545.00 114,330 3.00 342,990.00 125,145 3.00 375,435.00 137,505 3.00 412,515 151,410 3.00 454,230.00
Ending Inventory 4,485 3.00

₱ 13,455.00 8,955 3.00 ₱ 26,865.00 13,410 3.00 ₱ 40,230.00 16,305 3.00 ₱ 48,915.00 16,095 3.00 ₱ 48,285.00
Schedule 2.1.1B-3
Computation Raw Materials Inventory-Ink
2018 2019 2020 2021 2022
Beginning Inventory ₱ -
0 ₱ 334.00 4 ₱ 334.00 ₱ 1,336.00 14 ₱ 334.00 ₱ 4,676.00 18 ₱ 334.00 ₱ 6,012.00 15 ₱ 334.00 ₱ 5,010.00
Purchases 60 334.00 20,040.00 72 334.00 24,048.00 72 334.00 24,048.00 72 334.00 24,048.00 84 334.00 28,056.00
Total 60 334.00 20,040.00 76 334.00 25,384.00 86 334.00 28,724.00 90 334.00 30,060.00 99 334.00 33,066.00
Less: Used 56 334.00 18,704.00 62 334.00 20,708.00 68 334.00 22,712.00 75 334.00 25,050.00 82 334.00 27,388.00
Ending Inventory
4 334.00 ₱ 1,336.00 14 334.00 ₱ 4,676.00 18 334.00 ₱ 6,012.00 15 334.00 ₱ 5,010.00 17 334.00 ₱ 5,678.00
Schedule 2.1.2
Direct Labor
Schedule 2018 2019 2020 2021 2022

Annual Packaging Staff Salary 2.1.2A ₱ 36,000.00 ₱ 36,000.00 ₱ 36,000.00 ₱ 36,000.00 ₱ 36,000.00
Total Direct Labor ₱ 36,000.00 ₱ 36,000.00 ₱ 36,000.00 ₱ 36,000.00 ₱ 36,000.00
Schedule 2.1.2A
Annual Salary-Packaging Staff
Schedule 2018 2019 2020 2021 2022

No. of Working Days in a Year 300 300 300 300 300
Multiply: Rate per day 120 120 120 120 120
Total Salary ₱ 36,000.00 ₱ 36,000.00 ₱ 36,000.00 ₱ 36,000.00 ₱ 36,000.00
Schedule 2.1.3
Manufacturing Overhead
Schedule 2018 2019 2020 2021 2022

Indirect Materials
Factory Tools 2.1.3A ₱ 900.00 ₱ 900.00 ₱ 900.00 ₱ 900.00 ₱ 900.00
Factory Equipment and Machineries 2.1.3B 65,445.70 65,445.70 65,445.70 65,445.70 65,445.70
Leasehold Improvements 2.1.3C 894.00 894.00 894.00 894.00 894.00
Utilities 2.1.3D 33,576.00 34,056.00 34,545.60 33,262.98 33,772.38
Cleaning Supplies 2.1.3E 1,386.00 1,386.00 1,386.00 1,386.00 1,386.00
Filling Machines-repairs and maintenance 2.1.3F 6,000.00 6,000.00 6,000.00 6,600.00 7,260.00
Rent Expense 2.1.3G 42,000.00 42,000.00 42,000.00 42,000.00 42,000.00
Indirect Labor 2.1.3H 115,711.60 115,711.60 115,711.60 115,711.60 115,711.60
Total Manufacturing Overhead ₱ 265,913.30 ₱ 266,393.30 ₱ 266,882.90 ₱ 266,200.28 ₱ 267,369.68
Scheule 2.1.3A
Factory Tools-Present Annual Cost
Items Quantity Unit Cost Gross of Input VAT Present annual Cost
Personal Protective Equipment 10 ₱ 50.00 ₱ 500.00
Water Jug 5 80 400.00
Total Amount-Gross of VAT ₱ 900.00
Schedule 2.1.3B
Factory Equipment And Machineries
Particulars Quantity Total Cost Useful Life Annual Depreciation Expense

55 Gallon Plastic Barrel 3 pieces ₱ 3,684.00 10 ₱ 368.40
Factory Tables and Chairs 2 units 1,500 5 300
Fire Extinguisher 1 unit 7,000 10 700
Electric Generator 1 unit 21,800 10 2,180
Aseptic Brick Carton Filling Machine 1 unit 600,000 10 60,000
Vinyl Cutting Plotter Printer (for sticker) 1 unit 8,795 10 880
Air Conditioner 1 unit 10,178 10 1,018
TOTAL ₱ 652,957.00 ₱ 65,445.70
Schedule 2.1.3C
Depreciation-Leasehold Improvements
Schedule 2018 2019 2020 2021 2022

Acquisition Cost ₱ 8,940.00 ₱ 8,940.00 ₱ 8,940.00 ₱ 8,940.00 ₱ 8,940.00
Divide by: Useful Life 5 5 5 5 5
Annual Depreciation Expense ₱ 1,788.00 ₱ 1,788.00 ₱ 1,788.00 ₱ 1,788.00 ₱ 1,788.00
Schedule 2.1.3C-1
Allocation of Depreciation Expense-Leasehold Improvements
Schedule 2018 2019 2020 2021 2022

Factory Overhead-50% ₱ 894.00 ₱ 894.00 ₱ 894.00 ₱ 894.00 ₱ 894.00
Gen. and Admin. Expenses-50% 894.00 894.00 894.00 894.00 894.00
Depreciation Expense-LI ₱ 1,788.00 ₱ 1,788.00 ₱ 1,788.00 ₱ 1,788.00 ₱ 1,788.00
Schedule 2.1.3D
Utilities Expense – Electricity & Water
Schedule 2018 2019 2020 2021 2022

Monthly Bill-Gross of VAT ₱ 4,000.00 ₱ 4,080.00 ₱ 4,161.60 ₱ 4,244.83 ₱ 4,329.73
Multiply: No. of months 12 12 12 12 12
Annual Utilities Expense – E&W ₱ 48,000.00 ₱ 48,960.00 ₱ 49,939.20 ₱ 50,937.96 ₱ 51,956.76
Schedule 2.1.3D-1
Allocation of Utilities Expense – Electricity & Water
Schedule 2018 2019 2020 2021 2022

Factory Overhead - 50% ₱ 24,000.00 ₱ 24,480.00 ₱ 24,969.60 ₱ 25,468.98 ₱ 25,978.38
Administrative Expense - 50% 24,000.00 24,480.00 24,969.60 25,468.98 25,978.38
Annual Utilities Expense – E&W ₱ 48,000.00 ₱ 48,960.00 ₱ 49,939.20 ₱ 50,937.96 ₱ 51,956.76
Schedule 2.1.3D-2
Utilities Expense - Telephone, WiFi, and CCTV
Schedule 2018 2019 2020 2021 2022

Monthly Bill ₱ 1,596.00 ₱ 1,596.00 ₱ 1,596.00 ₱ 1,299.00 ₱ 1,299.00
Annual Utilities Expense –Tel ₱ 19,152.00 ₱ 19,152.00 ₱ 19,152.00 ₱ 15,588.00 ₱ 15,588.00
Schedule 2.1.3D-3
Allocation of Utilities Expense - Telephone, WiFi, and CCTV
Schedule 2018 2019 2020 2021 2022

Selling Expense - 10% 1,915.20 1,915.20 1,915.20 1,558.80 1,558.80
Annual Utilities Expense ₱ 19,152.00 ₱ 19,152.00 ₱ 19,152.00 ₱ 15,588.00 ₱ 15,588.00
Schedule 2.1.3D-4
Allocation of Total Utilities Expense
Schedule 2018 2019 2020 2021 2022

Factory Overhead ₱ 33,576.00 ₱ 34,056.00 ₱ 34,545.60 ₱ 33,262.98 ₱ 33,772.38
Administrative Expense 31,660.80 32,140.80 32,630.40 31,704.18 32,213.58
Selling Expense 1,915.20 1,915.20 1,915.20 1,558.80 1,558.80
Annual Utilities Expense ₱ 67,152.00 ₱ 68,112.00 ₱ 69,091.20 ₱ 66,525.96 ₱ 67,544.76
Schedule 2.1.3E
Cleaning Supplies-Present Annual Cost
Items Unit Cost Quantity Purchased per Year Present Annual Cost
Trash Can Php 150.00 4 units ₱ 600.00

Floor Mop 100 2 pieces 200.00
Basin 50 4 units 200.00
Door Mat 50 2 pieces 100.00
Broom 20 4 pieces 80.00
Dishwashing Liquid 20 2 bottles 40.00
Trash Bags 5 8 pieces 40.00
Dishwashing Sponge 15 4 pieces 60.00
Rags 1 20 pieces 20.00
Container 100 2 pieces 200.00
Total Amount-Gross of VAT ₱ 1,540.00
Schedule 2.1.3E-1
Allocation of Cleaning Supplies Expense
Schedule 2018 2019 2020 2021 2022

Administrative Expense - 10% 154.00 154.00 154.00 154.00 154.00
Annual Cleaning Supplies Expense ₱ 1,540.00 ₱ 1,540.00 ₱ 1,540.00 ₱ 1,540.00 ₱ 1,540.00
Schedule 2.1.3F
Repairs and Maintenance Expense
Schedule 2018 2019 2020 2021 2022

Filling Machine (Overhead) ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 6,600.00 ₱ 7,260.00
Motor Vehicle (Selling Expense) 6,000.00 6,000.00 6,000.00 6,600.00 7,260.00
Annual Repairs and Maintenance ₱ 12,000.00 ₱ 12,000.00 ₱ 12,000.00 ₱ 13,200.00 ₱ 14,520.00
Schedule 2.1.3G
Rent Expense and Expanded Withholding Tax on Rent
Schedule 2018 2019 2020 2021 2022

Monthly Rent Expense ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00
Annual Rent Expense ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00
Multiply:5% 5% 5% 5% 5% 5%
Withholding Tax on Rent ₱ 3,000.00 ₱ 3,000.00 ₱ 3,000.00 ₱ 3,000.00 ₱ 3,000.00
Schedule 2.1.3G-1
Allocation of Rent Expense
Schedule 2018 2019 2020 2021 2022

Annual Rent Expense ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00
Schedule 2.1.3H
Indirect Labor
Schedule 2018 2019 2020 2021 2022

Sanitary Engineer salary-70% 2.1.3H-6 ₱ 18,900.00 ₱ 18,900.00 ₱ 18,900.00 ₱ 18,900.00 ₱ 18,900.00
Production Foreman salary 2.1.3H-7 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00
Total Employer Contribution -SSS 10 13,701.60 13,701.60 13,701.60 13,701.60 13,701.60
Total Employer Contribution -PhilHealth 11 4,200.00 4,200.00 4,200.00 4,200.00 4,200.00
Total Employer Contribution -PAGIBIG 12 3,660.00 3,660.00 3,660.00 3,660.00 3,660.00
Total 13th Month Pay 13 15,250.00 15,250.00 15,250.00 15,250.00 15,250.00
Total Indirect Labor ₱ 115,711.60 ₱ 115,711.60 ₱ 115,711.60 ₱ 115,711.60 ₱ 115,711.60
Schedule 2.1.3H-1
Benefits - Employer’s Contribution - Sanitary Engineer
Schedule 2018 2019 2020 2021 2022

No. of Months in a Year 12 12 12 12 12
Multiply: Rate per Month 316.70 316.70 316.70 316.70 316.70
Annual Benefits - Employer’s Contribution ₱ 3,800.40 ₱ 3,800.40 ₱ 3,800.40 ₱ 3,800.40 ₱ 3,800.40
Schedule 2.1.3H-2
Allocation of Benefits - Employer’s Contribution - Sanitary Engineer
Schedule 2018 2019 2020 2021 2022

Administrative Expense – 30% 1,140.12 1,140.12 1,140.12 1,140.12 1,140.12
Annual Salaries Expense – SE ₱ 3,800.40 ₱ 3,800.40 ₱ 3,800.40 ₱ 3,800.40 ₱ 3,800.40
Schedule 2.1.3H-3
Benefits - Employer’s Contribution - Production Foreman
Schedule 2018 2019 2020 2021 2022

Multiply: Rate per Month 555.80 555.80 555.80 555.80 555.80
Schedule 2.1.3H-4
Allocation of Total Benefits - Employer’s Contribution
Schedule 2018 2019 2020 2021 2022

Production Foreman ₱ 6,669.60 ₱ 6,669.60 ₱ 6,669.60 ₱ 6,669.60 ₱ 6,669.60
Sanitary Engineer 2,660.28 2,660.28 2,660.28 2,660.28 2,660.28
Total ₱ 9,329.88 ₱ 9,329.88 ₱ 9,329.88 ₱ 9,329.88 ₱ 9,329.88
Schedule 2.1.3H-5
Salaries Expense – Sanitary Engineer
Schedule 2018 2019 2020 2021 2022

Multiply: Rate per Day 90.00 90.00 90.00 90.00 90.00
Annual Salary ₱ 27,000.00 ₱ 27,000.00 ₱ 27,000.00 ₱ 27,000.00 ₱ 27,000.00
Schedule 2.1.3H-6
Allocation of Salaries Expense - Sanitary Engineer
Schedule 2018 2019 2020 2021 2022

Administrative Expense – 30% 8,100.00 8,100.00 8,100.00 8,100.00 8,100.00
Annual Salaries Expense – SE ₱ 27,000.00 ₱ 27,000.00 ₱ 27,000.00 ₱ 27,000.00 ₱ 27,000.00
Schedule 2.1.3H-7
Annual Salary-Production Foreman Salary
Schedule 2018 2019 2020 2021 2022

Multiply: Rate per day 200.00 200.00 200.00 200.00 200.00
Total Salary ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00
Schedule 2.2.1
Computation of Finished Goods Inventory
Schedule Units Unit Cost Total Cost

2018
Beginning Inventory - - ₱ -
Goods Manufactured 103,515 18.27 1,891,211.20
Total 103,515 1,891,211.20
Goods Sold 100,500 18.27 1,836,127.38
Ending Inventory 3,015 ₱ 55,083.82

2019
Beginning Inventory 3,015 ₱ 18.27 ₱ 55,083.82
Total 117,345 2,112,870.92
Goods Sold 111,000 18.00 1,997,851.55

2020
Total 131,490 2,339,391.97
Goods Sold 121,500 17.77 2,159,585.05

2021
Total 147,495 2,593,368.50
Goods Sold 133,500 17.55 2,343,263.67

2022
Total 165,405 2,878,149.11
Goods Sold 147,000 17.36 2,551,499.30
Schedule 3
General and Administrative Expenses
Schedule 2018 2019 2020 2021 2022

Pre-Operating Expenses 3.1 ₱ 23,260.00 ₱ - ₱ - ₱ - ₱ -
Permits and Licenses 3.2 7,245.00 7,245.00 7,245.00 7,245.00 7,245.00
Bookkeeper's Fee 3.3 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00
Depreciation Expense-Leasehold Improvement 2.1.3C-1 894.00 894.00 894.00 894.00 894.00
Depreciation Expense-Office Equipment 3.4 8,438.50 8,438.50 8,918.50 8,918.50 8,918.50
Cleaning Supplies Expense 2.1.3E-1 154.00 154.00 154.00 154.00 154.00
Office Supplies Expense 3.5 7,679.00 7,679.00 7,679.00 7,679.00 7,679.00
Utilities Expense-Electricity & Water 2.1.3D-1 24,000.00 24,480.00 24,969.60 25,468.98 25,978.38
Utilities Expense-Telephone, WiFi, and CCTV 2.1.3D-3 7,660.80 7,660.80 7,660.80 6,235.20 6,235.20
Rent Expense Allocated 2.1.3G 18,000.00 18,000.00 18,000.00 18,000.00 18,000.00
Salaries Expense – Secretary 9 54,000.00 54,000.00 54,000.00 54,000.00 54,000.00
Salaries Expense – Sanitary Engineer 2.1.3H-5 8,100.00 8,100.00 8,100.00 8,100.00 8,100.00
Doubtful Accounts Expense 3.6 26,733.00 29,526.00 32,319.00 35,511.00 39,102.00
Total Gen. and Admin. Expense ₱ 246,164.30 ₱ 226,177.30 ₱ 229,939.90 ₱ 232,205.68 ₱ 236,306.08
Schedule 3.1
Pre-Operating Expenses
Schedule 2018
Project Feasib Cost ₱ 6,800.00
Permits and Licenses 3.2 13,460.00
Advertising and Promotion 3,000.00
Pre-operating Expenses ₱ 23,260.00
Schedule 3.2
Permits And Licenses
2017 2018 2019 2020 2021 2022

LTO Registration ₱ 3,000.00 ₱ 3,000.00 ₱ 3,000.00 ₱ 3,000.00 ₱ 3,000.00 ₱ 3,000.00
Mayor’s Permit 500 500 500 500 500 500
FDA Licensing 1,020 1,020 1,020 1,020 1,020 1,020
SE and Notarial Fees 900 0 0 0 0 0
DTI Registration 5815 500 500 500 500 500
BIR Registration 1,000 1,000 1,000 1,000 1,000 1,000
Fire Safety Clearance 100 100 100 100 100 100
Barangay Clearance 50 50 50 50 50 50
Documentary Stamp Tax 175 175 175 175 175 175
Sanitary Permit 900 900 900 900 900 900
Total ₱ 13,460.00 ₱ 7,245.00 ₱ 7,245.00 ₱ 7,245.00 ₱ 7,245.00 ₱ 7,245.00
Schedule 3.3
Bookkeeper's Fee
Schedule 2018 2019 2020 2021 2022

Monthly Bookkeeper's Fee ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00
Annual Bookkeeper's Fee ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00
Multiply: 10% 10% 10% 10% 10% 10%
Withholding Tax on Bookkeeper's Fee ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00
Schedule 3.4
Depreciation for Office Equipment and Machineries
2018 2019 2020 2021 2022

Office Desk and Chairs ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00
Steel Office Locker 100.00 100.00 100.00 100.00 100.00
Computer Unit 5,400.00 5,400.00 5,400.00 5,400.00 5,400.00
Office Printer 439.00 439.00 439.00 439.00 439.00
Air-conditioning Units 799.50 799.50 799.50 799.50 799.50
Fire Extinguisher 700.00 700.00 700.00 700.00 700.00
Office Cabinet 480.00 480.00 480.00
Total Depreciation Expenses-Office Equipment ₱ 8,438.50 ₱ 8,438.50 ₱ 8,918.50 ₱ 8,918.50 ₱ 8,918.50
Schedule 3.4.1
Office Equipment And Machineries
Particulars Quantity Total Cost Useful Life Annual Depreciation Expense

Office Desk and Chairs 3 units ₱ 5,000.00 5 ₱ 1,000.00
Steel Office Locker 1 unit 1,000 10 100.00
Computer Unit 2 units 27,000 5 5,400.00
Office Printer 1 unit 2,195 5 439.00
Air-conditioning Units 1 unit 7,995 10 799.50
Fire Extinguisher 1 unit 7,000 10 700.00
Office Cabinet 1 unit 4,800 10 480.00
TOTAL ₱ 54,990.00 ₱ 8,918.50
Schedule 3.5
Office Supplies-Present Annual Cost
Items Unit Cost Quantity Purchased per Year Present Annual Cost
Bond Paper ₱ 120.00 4 ream ₱ 480.00
Folders 50.00 1 dozen 50.00
Ballpens 45.00 1 box 45.00
Markers 30.00 6 pieces 180.00
Adhesive Tapes 10.00 3 pieces 30.00
Stapler 46.00 2 pieces 92.00
Stapler Wire 10.00 10 boxes 100.00
Puncher 30.00 2 pieces 60.00
Log Book 60.00 2 pieces 120.00
Cash Box 2800.00 2 units 5,600.00
Calculator 450.00 2 units 900.00
Columnar Books 22.00 1 pad 22.00
Total Amount-Gross of VAT ₱ 7,679.00
Schedule 3.6
Doubtful Accounts Expense
2018 2019 2020 2021 2020

Annual Credit Sales ₱ 2,673,300.00 ₱ 2,952,600.00 ₱ 3,231,900.00 ₱ 3,551,100.00 ₱ 3,910,200.00
Multiply: 1% Allowance for doubtful accounts expenses 1% 1% 1% 1% 1%
Annual Doubtful Accounts Expense ₱ 26,733.00 ₱ 29,526.00 ₱ 32,319.00 ₱ 35,511.00 ₱ 39,102.00

Schedule 4
Selling Expense
Schedule 2018 2019 2020 2021 2022

Fuel Expense 4.1 ₱ 467,856.00 ₱ 425,748.96 ₱ 387,431.55 ₱ 352,562.71 ₱ 320,832.07
Salaries Expense – Secretary 9 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00
Utilities Expense - Telephone 2.1.3D-3 1,915.20 1,915.20 1,915.20 1,558.80 1,558.80
Repairs and Maintenance 2.1.3F 6,000.00 6,000.00 6,000.00 6,600.00 7,260.00
Depreciation Expense – Motor Vehicle 14.8 5,200.00 5,200.00 5,200.00 5,200.00 5,200.00
Insurance Expense 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
Total Selling Expense ₱ 488,971.20 ₱ 446,864.16 ₱ 408,546.75 ₱ 373,921.51 ₱ 342,850.87
Schedule 4.1
Fuel Expense
Schedule 2018 2019 2020 2021 2022

Monthly Purchases by Liter Php 1,200.00 Php 1,200.00 Php 1,200.00 Php 1,200.00 Php 1,200.00
Multiply: Unit Cost 32.49 29.57 26.90 24.48 22.28
Total Monthly Cost 38,988.00 35,479.08 32,285.96 29,380.23 26,736.01
Annual Fuel Expense Php 467,856.00 Php 425,748.96 Php 387,431.55 Php 352,562.71 Php 320,832.07
Schedule 5
Projected Sales-Waste Product (Vinegar)
Schedule 2018 2019 2020 2021 2022

Units Sold 3,105 3,430 3,754 4,125 4,542
Multiply: Selling Price ₱ 19.18 18.90 18.66 18.43 18.22
Total Sales ₱ 59,573.15 ₱ 64,820.29 ₱ 70,067.74 ₱ 76,027.19 ₱ 82,783.39
Schedule 6
Interest Income
Schedule 2018 2019 2020 2021 2022

Cash in Bank ₱ 100,000.00 ₱ 500,250.00 ₱ 501,250.63 ₱ 501,253.13 ₱ 501,253.13
Multiply: .25% interest rate 0.25% 0.25% 0.25% 0.25% 0.25%
Annual Interest Income ₱ 250.00 ₱ 1,250.63 ₱ 1,253.13 ₱ 1,253.13 ₱ 1,253.13
Cash in Bank - Term Deposit ₱ - ₱ 500,000.00 ₱ 550,000.00 ₱ 600,000.00 ₱ 650,000.00

Multiply: 8750% 0.00875 0.00875 0.00875 0.00875
Interest Income-Term Deposit ₱ 4,375.00 ₱ 4,812.50 ₱ 5,250.00 ₱ 5,687.50
Total Interest Income ₱ 250.00 ₱ 5,625.63 ₱ 6,066.25 ₱ 6,506.89 ₱ 6,947.53

Less:Final Tax Expense 50.00 1125.13 1213.25 1301.38 1389.51
Interest Income, net of Tax ₱ 200.00 ₱ 4,500.51 ₱ 4,853.00 ₱ 5,205.51 ₱ 5,558.02
Schedule 7
Interest on Loans Payable (Bank Info)
Outstanding
Month Principal Interest Total
Balance
1 ₱ 8,333.33 ₱ 3,698.63 ₱ 12,031.96 ₱ 491,666.67

2 8,333.33 3,636.99 11,970.32 483,333.33
3 8,333.33 3,575.34 11,908.68 475,000.00
4 8,333.33 3,513.70 11,847.03 466,666.67
5 8,333.33 3,452.05 11,785.39 458,333.33
6 8,333.33 3,390.41 11,723.74 450,000.00
7 8,333.33 3,328.77 11,662.10 441,666.67
8 8,333.33 3,267.12 11,600.46 433,333.33
9 8,333.33 3,205.48 11,538.81 425,000.00
10 8,333.33 3,143.84 11,477.17 416,666.67
11 8,333.33 3,082.19 11,415.53 408,333.33
12 8,333.33 3,020.55 11,353.88 400,000.00
13 8,333.33 2,958.90 11,292.24 391,666.67
14 8,333.33 2,897.26 11,230.59 383,333.33
15 8,333.33 2,835.62 11,168.95 375,000.00
16 8,333.33 2,773.97 11,107.31 366,666.67
17 8,333.33 2,712.33 11,045.66 358,333.33
18 8,333.33 2,650.68 10,984.02 350,000.00
19 8,333.33 2,589.04 10,922.37 341,666.67
20 8,333.33 2,527.40 10,860.73 333,333.33
21 8,333.33 2,465.75 10,799.09 325,000.00
22 8,333.33 2,404.11 10,737.44 316,666.67
23 8,333.33 2,342.47 10,675.80 308,333.33
24 8,333.33 2,280.82 10,614.16 300,000.00
25 8,333.33 2,219.18 10,552.51 291,666.67
26 8,333.33 2,157.53 10,490.87 283,333.33
27 8,333.33 2,095.89 10,429.22 275,000.00
28 8,333.33 2,034.25 10,367.58 266,666.67
29 8,333.33 1,972.60 10,305.94 258,333.33
30 8,333.33 1,910.96 10,244.29 250,000.00
31 8,333.33 1,849.32 10,182.65 241,666.67
32 8,333.33 1,787.67 10,121.00 233,333.33
33 8,333.33 1,726.03 10,059.36 225,000.00
34 8,333.33 1,664.38 9,997.72 216,666.67
35 8,333.33 1,602.74 9,936.07 208,333.33
36 8,333.33 1,541.10 9,874.43 200,000.00
37 8,333.33 1,479.45 9,812.79 191,666.67
38 8,333.33 1,417.81 9,751.14 183,333.33
39 8,333.33 1,356.16 9,689.50 175,000.00
40 8,333.33 1,294.52 9,627.85 166,666.67
41 8,333.33 1,232.88 9,566.21 158,333.33
42 8,333.33 1,171.23 9,504.57 150,000.00
43 8,333.33 1,109.59 9,442.92 141,666.67
44 8,333.33 1,047.95 9,381.28 133,333.33
45 8,333.33 986.30 9,319.63 125,000.00
46 8,333.33 924.66 9,257.99 116,666.67
47 8,333.33 863.01 9,196.35 108,333.33
48 8,333.33 801.37 9,134.70 100,000.00
49 8,333.33 739.73 9,073.06 91,666.67
50 8,333.33 678.08 9,011.42 83,333.33
51 8,333.33 616.44 8,949.77 75,000.00
52 8,333.33 554.79 8,888.13 66,666.67
53 8,333.33 493.15 8,826.48 58,333.33
54 8,333.33 431.51 8,764.84 50,000.00
55 8,333.33 369.86 8,703.20 41,666.67
56 8,333.33 308.22 8,641.55 33,333.33
57 8,333.33 246.58 8,579.91 25,000.00
58 8,333.33 184.93 8,518.26 16,666.67
59 8,333.33 123.29 8,456.62 8,333.33
60 8,333.33 61.64 8,394.98 -
Schedule 7.1
Loans Payable
Year Principal Interest Total Outstanding Balance
2018 ₱ 99,999.96 ₱ 40,315.07 ₱ 140,315.03 ₱ 400,000.00

2019 99,999.96 31,438.35 131,438.31 300,000.00
2020 99,999.96 22,561.65 122,561.61 200,000.00
2021 99,999.96 13,684.93 113,684.89 100,000.00
2022 99,999.96 4,808.22 104,808.18 -
Schedule 8
Income Tax Computation
Schedule 2018 2019 2020 2021 2022

Net Sales, Net of Vat ₱ 3,813,653.40 ₱ 4,212,094.80 ₱ 4,610,536.20 ₱ 5,065,897.80 ₱ 5,578,179.60
Less: Cost of Goods Sold 1,836,127.38 1,997,851.55 2,159,585.05 2,343,263.67 2,551,499.30
Gross Profit ₱ 1,977,526.02 ₱ 2,214,243.25 ₱ 2,450,951.15 ₱ 2,722,634.13 ₱ 3,026,680.30
Add: Other Income 59,573.15 64,820.29 70,067.74 76,027.19 82,783.39
Bad Debts Recovery - 1,336.65 1,476.30 1,615.95 1,775.55
Interest Income 200.00 4,500.50 4,853.00 5,205.51 5,558.02
Gross Income ₱ 2,037,299.17 ₱ 2,284,900.69 ₱ 2,527,348.19 ₱ 2,805,482.78 ₱ 3,116,797.26
Less: Allowable Deductions
General and Administrative Expenses 246,164.30 226,177.30 229,939.90 232,205.68 236,306.08
Selling Expenses 488,971.20 446,864.16 408,546.75 373,921.51 342,850.87
Deductible Interest Expense 8.1 40,248.40 29,938.18 20,943.98 11,949.76 2,955.55
Net Taxable Income 1,261,915.27 1,581,921.05 1,867,917.56 2,187,405.83 2,534,684.77
Income Tax Due ₱ 368,812.89 ₱ 471,214.74 ₱ 562,733.62 ₱ 664,969.86 ₱ 776,099.12
Schedule 8.1
Computation of Deductible Interest Expense
Schedule 2018 2019 2020 2021 2022

Interest Paid ₱ 40,315.07 ₱ 31,438.35 ₱ 22,561.65 ₱ 13,684.93 ₱ 4,808.22
Less: 33% of Interest Income 83.33 416.88 417.71 417.71 417.71
Deductible Interest Expense ₱ 40,231.74 ₱ 31,021.48 ₱ 22,143.94 ₱ 13,267.22 ₱ 4,390.51
Schedule 9
Salaries Expense - Secretary
Schedule 2018 2019 2020 2021 2022

Multiply: Rate per Day ₱ 200.00 ₱ 200.00 ₱ 200.00 ₱ 200.00 ₱ 200.00
Annual Salary ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00
Schedule 9.1
Allocation of Salaries Expense - Secretary
Schedule 2018 2019 2020 2021 2022

Administrative Expense - 90% ₱ 54,000.00 ₱ 54,000.00 ₱ 54,000.00 ₱ 54,000.00 ₱ 54,000.00
Selling Expense – 10% 6000.00 6000.00 6000.00 6000.00 6000.00
Annual Salaries Expense – Sec. ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00 ₱ 60,000.00
Schedule 9.2
Benefits - Employer’s Contribution - Secretary
Schedule 2018 2019 2020 2021 2022

Multiply: Rate per Month ₱ 555.80 ₱ 555.80 ₱ 555.80 ₱ 555.80 ₱ 555.80
Schedule 9.3
Allocation of Benefits - Employer’s Contribution - Secretary
Schedule 2018 2019 2020 2021 2022

Administrative Expense - 90% ₱ 6,002.64 ₱ 6,002.64 ₱ 6,002.64 ₱ 6,002.64 ₱ 6,002.64
Selling Expense – 10% 666.96 666.96 666.96 666.96 666.96
Annual Salaries Expense – Sec. ₱ 6,669.60 ₱ 6,669.60 ₱ 6,669.60 ₱ 6,669.60 ₱ 6,669.60
Schedule 10
SSS Contribution
Total Annual
Year Schedule Annual Salary Monthly Salary Monthly Contribution Annual Contribution Employer's Contribution Charge to
Contribution
ER EE ER EE DL IDL Selling GAE
2018
Production Foreman ₱ 60,000.00 ₱ 5,000.00 ₱ 368.30 ₱ 181.70 ₱ 4,419.60 ₱ 2,180.40 ₱ 6,600.00 ₱ - ₱ 4,419.60 ₱ - ₱ -
Secretary 60,000.00 5,000.00 368.30 181.70 4,419.60 2,180.40 6,600.00 - 4,419.60 - -
Sanitary Engineer 27,000.00 2,250.00 184.20 90.80 2,210.40 1,089.60 3,300.00 - 2,210.40 - -
Packaging Staff 36,000.00 3,000.00 221.00 109.00 2,652.00 1,308.00 3,960.00 - 2,652.00 - -
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 1,141.80 ₱ 563.20 ₱ 20,460.00 ₱ - ₱ 13,701.60 ₱ - ₱ -
2019
Secretary 60,000.00 5,000.00 368.30 181.70 4,419.60 2,180.40 6,600.00 - 4,419.60 - -
Packaging Staff 36,000.00 3,000.00 221.00 109.00 2,652.00 1,308.00 3,960.00 - 2,652.00 - -
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 1,141.80 ₱ 563.20 ₱ 20,460.00 ₱ - ₱ 13,701.60 ₱ - ₱ -
2020
Secretary 60,000.00 5,000.00 368.30 181.70 4,419.60 2,180.40 6,600.00 - 4,419.60 - -
Packaging Staff 36,000.00 3,000.00 221.00 109.00 2,652.00 1,308.00 3,960.00 - 2,652.00 - -
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 1,141.80 ₱ 563.20 ₱ 20,460.00 ₱ - ₱ 13,701.60 ₱ - ₱ -
2021
Secretary 60,000.00 5,000.00 368.30 181.70 4,419.60 2,180.40 6,600.00 - 4,419.60 - -
Packaging Staff 36,000.00 3,000.00 221.00 109.00 2,652.00 1,308.00 3,960.00 - 2,652.00 - -
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 1,141.80 ₱ 563.20 ₱ 20,460.00 ₱ - ₱ 13,701.60 ₱ - ₱ -
2022
Secretary 60,000.00 5,000.00 368.30 181.70 4,419.60 2,180.40 6,600.00 - 4,419.60 - -
Packaging Staff 36,000.00 3,000.00 221.00 109.00 2,652.00 1,308.00 3,960.00 - 2,652.00 - -
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 1,141.80 ₱ 563.20 ₱ 20,460.00 ₱ - ₱ 13,701.60 ₱ - ₱ -
Schedule 11
Philhealth Contribution
Year Schedule Annual Salary Monthly Salary Monthly Contribution Annual Contribution Total Annual Contribution Employer's Contribution Charge to
2018
Secretary 60,000.00 5,000.00 87.5 87.5 1,050.00 1,050.00 2,100.00 - Php 1,050.00 0.00 0
Sanitary Engineer 27,000.00 2,250.00 87.5 87.5 1,050.00 1,050.00 2,100.00 - Php 1,050.00 0.00 0
Packaging Staff 36,000.00 3,000.00 87.5 97.5 1,050.00 1,170.00 2,220.00 - Php 1,050.00 0.00 0
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 350.00 ₱ 360.00 ₱ 8,520.00 ₱ - ₱ 4,200.00 ₱ - ₱ -
2019
Secretary 60,000.00 5,000.00 87.5 87.5 1,050.00 1,050.00 2,100.00 - Php 1,050.00 0.00 0
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 350.00 ₱ 350.00 ₱ 8,400.00 ₱ - ₱ 4,200.00 ₱ - ₱ -
2020
Secretary 60,000.00 5,000.00 87.5 87.5 1,050.00 1,050.00 2,100.00 - Php 1,050.00 0.00 0
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 350.00 ₱ 350.00 ₱ 8,400.00 ₱ - ₱ 4,200.00 ₱ - ₱ -
2021
Secretary 60,000.00 5,000.00 87.5 87.5 1,050.00 1,050.00 2,100.00 - Php 1,050.00 0.00 0
Sanitary Engineer 27,000.00 2,250.00 87.5 87.5 1,050.00 1,050.00 2,100.00 0 Php 1,050.00 0.00 0
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 350.00 ₱ 350.00 ₱ 8,400.00 ₱ - ₱ 4,200.00 ₱ - ₱ -
2022
Secretary 60,000.00 5,000.00 87.5 87.5 1,050.00 1,050.00 2,100.00 - Php 1,050.00 0.00 0
Sanitary Engineer 27,000.00 2,250.00 87.5 87.5 1,050.00 1,050.00 2,100.00 0 Php 1,050.00 0.00 0
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 350.00 ₱ 350.00 ₱ 8,400.00 ₱ - ₱ 4,200.00 ₱ - ₱ -
Schedule 12
Pag-ibig Contribution
Total Annual
Year Schedule Annual Salary Monthly Salary Monthly Contribution Annual Contribution Employer's Contribution Charge to
Contribution
2018
Secretary 60,000.00 5,000.00 100.00 100.00 1,200.00 1,200.00 2,400.00 - Php 1,200.00 - -
Sanitary Engineer 27,000.00 2,250.00 45.00 45.00 540.00 540.00 1,080.00 - Php 540.00 - -
Packaging Staff 36,000.00 3,000.00 60.00 60.00 720.00 720.00 1,440.00 - Php 720.00 - -
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 305.00 ₱ 305.00 ₱ 7,320.00 ₱ - ₱ 3,660.00 ₱ - ₱ -
2019
Secretary 60,000.00 5,000.00 100.00 100.00 1,200.00 1,200.00 2,400.00 - Php 1,200.00 - -
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 305.00 ₱ 305.00 ₱ 7,320.00 ₱ - ₱ 3,660.00 ₱ - ₱ -
2020
Secretary 60,000.00 5,000.00 100.00 100.00 1,200.00 1,200.00 2,400.00 - Php 1,200.00 - -
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 305.00 ₱ 305.00 ₱ 7,320.00 ₱ - ₱ 3,660.00 ₱ - ₱ -
2021
Secretary 60,000.00 5,000.00 100.00 100.00 1,200.00 1,200.00 2,400.00 - Php 1,200.00 - -
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 305.00 ₱ 305.00 ₱ 7,320.00 ₱ - ₱ 3,660.00 ₱ - ₱ -
2022
Secretary 60,000.00 5,000.00 100.00 100.00 1,200.00 1,200.00 2,400.00 - Php 1,200.00 - -
TOTAL ₱ 183,000.00 ₱ 15,250.00 ₱ 305.00 ₱ 305.00 ₱ 7,320.00 ₱ - ₱ 3,660.00 ₱ - ₱ -
Schedule 13
13th Month Pay and its Allocation
Year Schedule Annual Salary Monthly Salary 13th Month Pay Employer's Contribution Charge to
DL IDL Selling GAE

2018
Production Foreman ₱ 60,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ - ₱ 5,000.00 ₱ - ₱ -
Secretary 60,000.00 5,000.00 5,000.00 - 5,000.00 - -
Sanitary Engineer 27,000.00 2,250.00 2,250.00 - 2,250.00 - -
Packaging Staff 36,000.00 3,000.00 3,000.00 - 3,000.00 - -
Total ₱ 183,000.00 ₱ 15,250.00 ₱ 15,250.00 ₱ - ₱ 15,250.00 ₱ - ₱ -
2019
Secretary 60,000.00 5,000.00 5,000.00 - 5,000.00 - -
Packaging Staff 36,000.00 3,000.00 3,000.00 - 3,000.00 - -
Total ₱ 183,000.00 ₱ 15,250.00 ₱ 15,250.00 ₱ - ₱ 15,250.00 ₱ - ₱ -
2020
Secretary 60,000.00 5,000.00 5,000.00 - 5,000.00 - -
Packaging Staff 36,000.00 3,000.00 3,000.00 - 3,000.00 - -
Total ₱ 183,000.00 ₱ 15,250.00 ₱ 15,250.00 ₱ - ₱ 15,250.00 ₱ - ₱ -
2021
Secretary 60,000.00 5,000.00 5,000.00 - 5,000.00 - -
Packaging Staff 36,000.00 3,000.00 3,000.00 - 3,000.00 - -
Total ₱ 183,000.00 ₱ 15,250.00 ₱ 15,250.00 ₱ - ₱ 15,250.00 ₱ - ₱ -
2022
Secretary 60,000.00 5,000.00 5,000.00 - 5,000.00 - -
Packaging Staff 36,000.00 3,000.00 3,000.00 - 3,000.00 - -
Total ₱ 183,000.00 ₱ 15,250.00 ₱ 15,250.00 ₱ - ₱ 15,250.00 ₱ - ₱ -
Schedule 14
Total Depreciation Expense
Schedule 2018 2019 2020 2021 2022

Depreciation of Office Desk & Chairs 14.1 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00
Depreciation of Steel Locker 14.2 100.00 100.00 100.00 100.00 100.00
Depreciation of Office Cabinet 14.3 - - 480.00 480.00 480.00
Depreciation of Computer Unit 14.4 5,400.00 5,400.00 5,400.00 5,400.00 5,400.00
Depreciation of Office Printer 14.5 439.00 439.00 439.00 439.00 439.00
Depreciation of Air-conditioning Unit 14.6 799.50 799.50 799.50 799.50 799.50
Depreciation of Fire Extinguisher 14.7 700.00 700.00 700.00 700.00 700.00
Depreciation of Motor Vehicle 14.8 5,200.00 5,200.00 5,200.00 5,200.00 5,200.00
Depreciation of Leasehold Improvement 2.1.3C-1 1,788.00 1,788.00 1,788.00 1,788.00 1,788.00
Depreciation of 55 Gallon Plastic Barrel 2.1.3B 368.40 368.40 368.40 368.40 368.40
Depreciation of Factory Tables and Chairs 2.1.3B 300.00 300.00 300.00 300.00 300.00
Depreciation of Fire Extinguisher 2.1.3B 700.00 700.00 700.00 700.00 700.00
Depreciation of Electric Generator 2.1.3B 2180.00 2180.00 2180.00 2180.00 2180.00
Depreciation of Aseptic Brick Carton Filling Machine 2.1.3B 60000.00 60000.00 60000.00 60000.00 60000.00
Depreciation of Vinyl Cutting Plotter Printer (for sticker) 2.1.3B 879.50 879.50 879.50 879.50 879.50
Depreciation of Air Conditioner 2.1.3B 1017.80 1017.80 1017.80 1017.80 1017.80
Total Depreciation ₱ 80,872.20 ₱ 80,872.20 ₱ 81,352.20 ₱ 81,352.20 ₱ 81,352.20
Schedule 14.1
Depreciation-Office Desk & Chairs
Schedule 2018 2019 2020 2021 2022

Acquisition Cost 17.5 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00
Schedule 14.2
Depreciation-Steel Locker
Schedule 2018 2019 2020 2021 2022

Annual Depreciation Expense ₱ 100.00 ₱ 100.00 ₱ 100.00 ₱ 100.00 ₱ 100.00
Schedule 14.3
Depreciation-Office Cabinet
Schedule 2018 2019 2020 2021 2022

Acquisition Cost 17.5 ₱ 4,800.00 ₱ 4,800.00 ₱ 4,800.00
Divide by: Useful Life 10 10 10
Annual Depreciation Expense ₱ 480.00 ₱ 480.00 ₱ 480.00
Schedule 14.4
Depreciation-Computer Unit
Schedule 2018 2019 2020 2021 2022

Schedule 14.5
Depreciation-Office Printer
Schedule 2018 2019 2020 2021 2022

Schedule 14.6
Depreciation-Air-conditioning Unit
Schedule 2018 2019 2020 2021 2022

Schedule 14.7
Depreciation-Fire Extinguisher
Schedule 2018 2019 2020 2021 2022

Schedule 14.8
Depreciation-Motor Vehicle
Schedule 2018 2019 2020 2021 2022

Schedule 15
Accounts Receivable
Schedule 2018 2019 2020 2021 2022

Accounts Receivable, beginning ₱ - ₱ 110,941.95 ₱ 233,474.85 ₱ 367,598.70 ₱ 514,969.35
Add: Credit Sales 2,673,300.00 2,952,600.00 3,231,900.00 3,551,100.00 3,910,200.00
Less: Collections 15.3 2,559,684.75 2,827,114.50 3,094,544.25 3,400,178.25 3,744,016.50
Write-Offs 2,673.30 2,952.60 3,231.90 3,551.10 3,910.20
Accounts Receivable, ending ₱ 110,941.95 ₱ 233,474.85 ₱ 367,598.70 ₱ 514,969.35 ₱ 677,242.65
Schedule 15.1
Allowance for Doubtful Accounts
2018 2019 2020 2021 2022

Allowance for Doubtful Accounts, beginnnig ₱ - ₱ 24,059.70 ₱ 50,633.10 ₱ 79,720.20 ₱ 111,680.10
Add: Doubtful Accounts Expense 26,733.00 29,526.00 32,319.00 35,511.00 39,102.00
Less: Write-Offs 2,673.30 2,952.60 3,231.90 3,551.10 3,910.20
Allowance for Doubtful Accounts, ending ₱ 24,059.70 ₱ 50,633.10 ₱ 79,720.20 ₱ 111,680.10 ₱ 146,871.90
Schedule 15.2
Net Realizable Value
2018 2019 2020 2021 2022

Accounts Receivable, ending ₱ 110,941.95 ₱ 233,474.85 ₱ 367,598.70 ₱ 514,969.35 ₱ 677,242.65
Less: Allowance for Doubtful accounts, ending 24,059.70 50,633.10 79,720.20 111,680.10 146,871.90
Accounts Receivable, net ₱ 86,882.25 ₱ 182,841.75 ₱ 287,878.50 ₱ 403,289.25 ₱ 530,370.75
Schedule 15.3
Accounts Receivable - Collections
Monthly Units Sold Cash Sale Credit Sale (Past 11 Months) Credit Sale (12th month) Total Credit Collections
total 1% Uncollectible Collections Down payment 1st 5 Days 1% Uncollectible Ending Receivable
8,375.00 1,145,700.00 2,450,525.00 24,505.25 2,426,019.75 111,387.50 22,277.50 2,227.75 86,882.25 2,559,684.75
9,250.00 1,265,400.00 2,706,550.00 27,065.50 2,679,484.50 123,025.00 24,605.00 2,460.50 95,959.50 2,827,114.50
10,125.00 1,385,100.00 2,962,575.00 29,625.75 2,932,949.25 134,662.50 26,932.50 2,693.25 105,036.75 3,094,544.25
11,125.00 1,521,900.00 3,255,175.00 32,551.75 3,222,623.25 147,962.50 29,592.50 2,959.25 115,410.75 3,400,178.25
12,250.00 1,675,800.00 3,584,350.00 35,843.50 3,548,506.50 162,925.00 32,585.00 3,258.50 127,081.50 3,744,016.50
Schedule 16
Inventory
Schedule 2018 2019 2020 2021 2022

Inventory - Tetra Pack 16.1 ₱ 219,727.50 ₱ 48,232.50 ₱ 235,515.00 ₱ 29,257.50 ₱ 177,142.50
Inventory - Vinyl Sticker Paper 16.2 13,455.00 26,865.00 40,230.00 48,915.00 48,285.00
Inventory - Ink Refill 16.3 1,336.00 4,676.00 6,012.00 5,010.00 5,678.00
Inventory - Finished Goods 16.4 55,083.82 115,019.37 179,806.92 250,104.83 326,649.81
Total Inventory ₱ 289,602.32 ₱ 194,792.87 ₱ 461,563.92 ₱ 333,287.33 ₱ 557,755.31
Schedule 16.1
Inventory-Tetra Pack
2018 2019 2020 2021 2022

Raw Materials Inventory, beginning ₱ - ₱ 224,250.00 ₱ 57,750.00 ₱ 250,500.00 ₱ 50,250.00
Add: Raw Materials Purchases 375,000.00 - 375,000.00 - 375,000.00
Raw Materials Available for Use 375,000.00 224,250.00 432,750.00 250,500.00 425,250.00
Less: Raw Materials Used 150,750.00 166,500.00 182,250.00 200,250.00 220,500.00
Raw Materials Inventory, ending ₱ 224,250.00 ₱ 57,750.00 ₱ 250,500.00 ₱ 50,250.00 ₱ 204,750.00
Schedule 16.2
Inventory-Vinyl Sticker Paper
2018 2019 2020 2021 2022

Raw Materials Inventory, beginning ₱ - ₱ 13,455.00 ₱ 26,865.00 ₱ 40,230.00 ₱ 48,915.00
Add: Raw Materials Purchases 324,000.00 356,400.00 388,800.00 421,200.00 453,600.00
Raw Materials Inventory, ending ₱ 13,455.00 ₱ 26,865.00 ₱ 40,230.00 ₱ 48,915.00 ₱ 48,285.00
Schedule 16.3
Inventory-Ink Refill
2018 2019 2020 2021 2022

Raw Materials Inventory, beginning ₱ - ₱ 832.22 ₱ 3,665.65 ₱ 4,492.30 ₱ 3,025.48
Add: Raw Materials Purchases 20,040.00 24,048.00 24,048.00 24,048.00 28,056.00
Raw Materials Inventory, ending ₱ 832.22 ₱ 3,665.65 ₱ 4,492.30 ₱ 3,025.48 ₱ 2,986.52
Schedule 16.4
Inventory-Finished Goods
2018 2019 2020 2021 2022

Finished Goods, beginning ₱ - ₱ 55,135.35 ₱ 115,179.46 ₱ 179,781.94 ₱ 249,457.53
Add: Cost of Goods Manufactured 1,878,205.35 2,044,724.11 2,238,237.48 2,400,585.59 2,615,267.69
Finished Goods Available for Sale 1,878,205.35 2,099,859.46 2,353,416.94 2,580,367.53 2,864,725.22
Less: Cost of Goods Sold 1,823,070.00 1,984,680.00 2,173,635.00 2,330,910.00 2,538,690.00
Finished Goods, ending ₱ 55,135.35 ₱ 115,179.46 ₱ 179,781.94 ₱ 249,457.53 ₱ 326,035.22
Schedule 17
Property, Plant and Equipment
Schedule 2018 2019 2020 2021 2022

Office Equipment, net 17.1 ₱ 41,751.50 ₱ 33,313.00 ₱ 29,194.50 ₱ 20,276.00 ₱ 11,357.50
Factory Equipment and Machineries, net 17.2 587,511.30 522,065.60 456,619.90 391,174.20 325,728.50
Delivery Equipment, net 17.3 46,800.00 41,600.00 36,400.00 31,200.00 26,000.00
Leasehold Improvement, net 17.4 7,152.00 5,364.00 3,576.00 1,788.00 -
TOTAL ₱ 683,214.80 ₱ 602,342.60 ₱ 525,790.40 ₱ 444,438.20 ₱ 363,086.00
Schedule 17.1
Office Equipment
Schedule 2018 2019 2020 2021 2021

Office Desk and Chairs 17.5 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00
Steel Office Locker 17.5 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00
Office Cabinet 17.5 - - 4,800.00 4,800.00 4,800.00
Computer Unit 17.5 27,000.00 27,000.00 27,000.00 27,000.00 27,000.00
Office Printer 17.5 2,195.00 2,195.00 2,195.00 2,195.00 2,195.00
Air-conditioning Units 17.5 7,995.00 7,995.00 7,995.00 7,995.00 7,995.00
Fire Extinguisher 17.5 7,000.00 7,000.00 7,000.00 7,000.00 7,000.00
Total Office Equipment ₱ 50,190.00 ₱ 50,190.00 ₱ 54,990.00 ₱ 54,990.00 ₱ 54,990.00
Accumulated Depreciation - Office Equipment

Office Desk and Chairs 17.5 ₱ 1,000.00 ₱ 2,000.00 ₱ 3,000.00 ₱ 4,000.00 ₱ 5,000.00
Steel Office Locker 17.5 100.00 200.00 300.00 400.00 500.00
Office Cabinet 17.5 - - 480.00 960.00 1,440.00
Computer Unit 17.5 5,400.00 10,800.00 16,200.00 21,600.00 27,000.00
Office Printer 17.5 439.00 878.00 1,317.00 1,756.00 2,195.00
Air-conditioning Units 17.5 799.50 1,599.00 2,398.50 3,198.00 3,997.50
Fire Extinguisher 17.5 700.00 1,400.00 2,100.00 2,800.00 3,500.00
Total Accumulated Depreciation - Off. Eqpt. ₱ 8,438.50 ₱ 16,877.00 ₱ 25,795.50 ₱ 34,714.00 ₱ 43,632.50
Total Office Equipment, net ₱ 41,751.50 ₱ 33,313.00 ₱ 29,194.50 ₱ 20,276.00 ₱ 11,357.50

Schedule 17.2
Factory Equipment and Machineries
Schedule 2018 2019 2020 2021 2022

55 Gallon Plastic Barrel 17.5 ₱ 3,684.00 ₱ 3,684.00 ₱ 3,684.00 ₱ 3,684.00 ₱ 3,684.00
Factory Tables and Chairs 17.5 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00
Fire Extinguisher 17.5 7,000.00 7,000.00 7,000.00 7,000.00 7,000.00
Electric Generator 17.5 21,800.00 21,800.00 21,800.00 21,800.00 21,800.00
Aseptic Brick Carton Filling Machine 17.5 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00
Vinyl Cutting Plotter Printer (for sticker) 17.5 8,795.00 8,795.00 8,795.00 8,795.00 8,795.00
Air Conditioning Units 17.5 10,178.00 10,178.00 10,178.00 10,178.00 10,178.00
Total Factory Equipment and Machineries ₱ 652,957.00 ₱ 652,957.00 ₱ 652,957.00 ₱ 652,957.00 ₱ 652,957.00
Accumulated Depreciation - Factory Equipment and Machineries

55 Gallon Plastic Barrel 17.5 ₱ 368.40 ₱ 736.80 ₱ 1,105.20 ₱ 1,473.60 ₱ 1,842.00
Factory Tables and Chairs 17.5 300.00 600.00 900.00 1,200.00 1,500.00
Fire Extinguisher 17.5 700.00 1,400.00 2,100.00 2,800.00 3,500.00
Electric Generator 17.5 2,180.00 4,360.00 6,540.00 8,720.00 10,900.00
Aseptic Brick Carton Filling Machine 17.5 60,000.00 120,000.00 180,000.00 240,000.00 300,000.00
Vinyl Cutting Plotter Printer (for sticker) 17.5 879.50 1,759.00 2,638.50 3,518.00 4,397.50
Air Conditioning Units 17.5 1,017.80 2,035.60 3,053.40 4,071.20 5,089.00
Total Accumulated Depreciation - Factory Equipment and Machineries ₱ 65,445.70 ₱ 130,891.40 ₱ 196,337.10 ₱ 261,782.80 ₱ 327,228.50
Total Factory Equipment and Machineries, net ₱ 587,511.30 ₱ 522,065.60 ₱ 456,619.90 ₱ 391,174.20 ₱ 325,728.50
Schedule 17.3
Delivery Equipment
Schedule 2018 2019 2020 2021 2022

Motor Vehicle 17.5 ₱ 50,000.00 ₱ 50,000.00 ₱ 50,000.00 ₱ 50,000.00 ₱ 50,000.00
Motor Vehicle Customization 17.5 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
Total Delivery Equipment ₱ 52,000.00 ₱ 52,000.00 ₱ 52,000.00 ₱ 52,000.00 ₱ 52,000.00
Accumulated Depreciation - Delivery Equipment

Delivery Equipment 17.5 ₱ 5,200.00 ₱ 10,400.00 ₱ 15,600.00 ₱ 20,800.00 ₱ 26,000.00
Total Delivery Equipment, net ₱ 46,800.00 ₱ 41,600.00 ₱ 36,400.00 ₱ 31,200.00 ₱ 26,000.00
Schedule 17.4
Leasehold Improvement
Schedule 2018 2019 2020 2021 2022

Building 17.5 ₱ 8,940.00 ₱ 8,940.00 ₱ 8,940.00 ₱ 8,940.00 ₱ 8,940.00
Accumulated Depreciation - Leasehold Improvement

Building 17.5 ₱ 1,788.00 ₱ 3,576.00 ₱ 5,364.00 ₱ 7,152.00 ₱ 8,940.00
Total Leaehold Improvement, net ₱ 7,152.00 ₱ 5,364.00 ₱ 3,576.00 ₱ 1,788.00 ₱ -

Schedule 17.5
Property, Plant and Equipment - Lapsing Schedule
Office Desk and Chairs Schedule 2018 2019 2020 2021 2022
Cost ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00
Beginning - - - - -
Additions - - - - -
Disposals
Ending Balance ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00
Accumulated Depreciation
Beginning ₱ - ₱ 1,000.00 ₱ 2,000.00 ₱ 3,000.00 ₱ 4,000.00
Provision 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00
Additions - - - - -
Disposals - - - - -
Ending Balance 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00
Book Value ₱ 4,000.00 ₱ 3,000.00 ₱ 2,000.00 ₱ 1,000.00 ₱ -
Steel Office Locker

Cost
Beginning ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00
Beginning ₱ - ₱ 100.00 ₱ 200.00 ₱ 300.00 ₱ 400.00
Provision 100.00 100.00 100.00 100.00 100.00
Additions - - - - -
Disposals - - - - -
Ending Balance 100.00 200.00 300.00 400.00 500.00
Book Value ₱ 900.00 ₱ 800.00 ₱ 700.00 ₱ 600.00 ₱ 500.00
Office Cabinet
Cost
Beginning ₱ - ₱ - ₱ 4,800.00 ₱ 4,800.00 ₱ 4,800.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ - ₱ - ₱ 4,800.00 ₱ 4,800.00 ₱ 4,800.00
Beginning ₱ - ₱ - ₱ - ₱ 480.00 ₱ 960.00
Provision - - 480.00 480.00 480.00
Additions - - - - -
Disposals - - - - -
Ending Balance - - 480.00 960.00 1,440.00
Book Value ₱ - ₱ - ₱ 4,320.00 ₱ 3,840.00 ₱ 3,360.00
Computer Unit
Cost
Beginning ₱ 27,000.00 ₱ 27,000.00 ₱ 27,000.00 ₱ 27,000.00 ₱ 27,000.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 27,000.00 ₱ 27,000.00 ₱ 27,000.00 ₱ 27,000.00 ₱ 27,000.00
Beginning ₱ - ₱ 5,400.00 ₱ 10,800.00 ₱ 16,200.00 ₱ 21,600.00
Provision 5,400.00 5,400.00 5,400.00 5,400.00 5,400.00
Additions - - - - -
Disposals - - - - -
Ending Balance 5,400.00 10,800.00 16,200.00 21,600.00 27,000.00
Book Value ₱ 21,600.00 ₱ 16,200.00 ₱ 10,800.00 ₱ 5,400.00 ₱ -
Office Printer
Cost
Beginning ₱ 2,195.00 ₱ 2,195.00 ₱ 2,195.00 ₱ 2,195.00 ₱ 2,195.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 2,195.00 ₱ 2,195.00 ₱ 2,195.00 ₱ 2,195.00 ₱ 2,195.00
Beginning ₱ - ₱ 439.00 ₱ 878.00 ₱ 1,317.00 ₱ 1,756.00
Provision 439.00 439.00 439.00 439.00 439.00
Additions - - - - -
Disposals - - - - -
Ending Balance 439.00 878.00 1,317.00 1,756.00 2,195.00
Book Value ₱ 1,756.00 ₱ 1,317.00 ₱ 878.00 ₱ 439.00 ₱ -
Air-Conditioning Units
Cost
Beginning ₱ 7,995.00 ₱ 7,995.00 ₱ 7,995.00 ₱ 7,995.00 ₱ 7,995.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 7,995.00 ₱ 7,995.00 ₱ 7,995.00 ₱ 7,995.00 ₱ 7,995.00
Beginning ₱ - ₱ 799.50 ₱ 1,599.00 ₱ 2,398.50 ₱ 3,198.00
Provision 799.50 799.50 799.50 799.50 799.50
Additions - - - - -
Disposals - - - - -
Ending Balance 799.50 1599.00 2398.50 3198.00 3997.50
Book Value ₱ 7,195.50 ₱ 6,396.00 ₱ 5,596.50 ₱ 4,797.00 ₱ 3,997.50
Fire Extinguisher
Cost
Beginning ₱ 7,000.00 ₱ 7,000.00 ₱ 7,000.00 ₱ 7,000.00 ₱ 7,000.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 7,000.00 ₱ 7,000.00 ₱ 7,000.00 ₱ 7,000.00 ₱ 7,000.00
Beginning ₱ - ₱ 700.00 ₱ 1,400.00 ₱ 2,100.00 ₱ 2,800.00
Provision 700.00 700.00 700.00 700.00 700.00
Additions - - - - -
Disposals - - - - -
Ending Balance 700.00 1,400.00 2,100.00 2,800.00 3,500.00
Book Value ₱ 6,300.00 ₱ 5,600.00 ₱ 4,900.00 ₱ 4,200.00 ₱ 3,500.00
55 Gallon Plastic Barrel

Cost
Beginning ₱ 3,684.00 ₱ 3,684.00 ₱ 3,684.00 ₱ 3,684.00 ₱ 3,684.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 3,684.00 ₱ 3,684.00 ₱ 3,684.00 ₱ 3,684.00 ₱ 3,684.00
Beginning ₱ - ₱ 368.40 ₱ 736.80 ₱ 1,105.20 ₱ 1,473.60
Provision 368.40 368.40 368.40 368.40 368.40
Additions - - - - -
Disposals - - - - -
Ending Balance 368.40 736.80 1,105.20 1,473.60 1,842.00
Book Value ₱ 3,315.60 ₱ 2,947.20 ₱ 2,578.80 ₱ 2,210.40 ₱ 1,842.00
Factory Table and Chairs

Cost
Beginning ₱ 1,500.00 ₱ 1,500.00 ₱ 1,500.00 ₱ 1,500.00 ₱ 1,500.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 1,500.00 ₱ 1,500.00 ₱ 1,500.00 ₱ 1,500.00 ₱ 1,500.00
Beginning ₱ - ₱ 300.00 ₱ 600.00 ₱ 900.00 ₱ 1,200.00
Provision 300.00 300.00 300.00 300.00 300.00
Additions - - - - -
Disposals - - - - -
Ending Balance 300.00 600.00 900.00 1,200.00 1,500.00
Book Value ₱ 1,200.00 ₱ 900.00 ₱ 600.00 ₱ 300.00 ₱ -
Electric Generator
Cost
Beginning ₱ 21,800.00 ₱ 21,800.00 ₱ 21,800.00 ₱ 21,800.00 ₱ 21,800.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 21,800.00 ₱ 21,800.00 ₱ 21,800.00 ₱ 21,800.00 ₱ 21,800.00
Beginning ₱ - ₱ 2,180.00 ₱ 4,360.00 ₱ 6,540.00 ₱ 8,720.00
Provision 2,180.00 2,180.00 2,180.00 2,180.00 2,180.00
Additions - - - - -
Disposals - - - - -
Ending Balance 2,180.00 4,360.00 6,540.00 8,720.00 10,900.00
Book Value ₱ 19,620.00 ₱ 17,440.00 ₱ 15,260.00 ₱ 13,080.00 ₱ 10,900.00
Aseptic Brick Carton Filling Machine

Cost
Beginning ₱ 600,000.00 ₱ 600,000.00 ₱ 600,000.00 ₱ 600,000.00 ₱ 600,000.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 600,000.00 ₱ 600,000.00 ₱ 600,000.00 ₱ 600,000.00 ₱ 600,000.00
Beginning ₱ - ₱ 60,000.00 ₱ 120,000.00 ₱ 180,000.00 ₱ 240,000.00
Provision 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00
Additions - - - - -
Disposals - - - - -
Ending Balance 60,000.00 120,000.00 180,000.00 240,000.00 300,000.00
Book Value ₱ 540,000.00 ₱ 480,000.00 ₱ 420,000.00 ₱ 360,000.00 ₱ 300,000.00
Vinyl Cutting Plotter Printer (for sticker)

Cost
Beginning ₱ 8,795.00 ₱ 8,795.00 ₱ 8,795.00 ₱ 8,795.00 ₱ 8,795.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 8,795.00 ₱ 8,795.00 ₱ 8,795.00 ₱ 8,795.00 ₱ 8,795.00
Beginning ₱ - ₱ 879.50 ₱ 1,759.00 ₱ 2,638.50 ₱ 3,518.00
Provision 879.50 879.50 879.50 879.50 879.50
Additions - - - - -
Disposals - - - - -
Ending Balance 879.50 1,759.00 2,638.50 3,518.00 4,397.50
Book Value ₱ 7,915.50 ₱ 7,036.00 ₱ 6,156.50 ₱ 5,277.00 ₱ 4,397.50
Air-Conditioning Units
Cost
Beginning ₱ 10,178.00 ₱ 10,178.00 ₱ 10,178.00 ₱ 10,178.00 ₱ 10,178.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 10,178.00 ₱ 10,178.00 ₱ 10,178.00 ₱ 10,178.00 ₱ 10,178.00
Beginning ₱ - ₱ 1,017.80 ₱ 2,035.60 ₱ 3,053.40 ₱ 4,071.20
Provision 1017.8 1017.8 1017.8 1017.8 1017.8
Additions - - - - -
Disposals - - - - -
Ending Balance 1,017.80 2,035.60 3,053.40 4,071.20 5,089.00
Book Value ₱ 9,160.20 ₱ 8,142.40 ₱ 7,124.60 ₱ 6,106.80 ₱ 5,089.00
Delivery Equipment
Cost
Beginning ₱ 52,000.00 ₱ 52,000.00 ₱ 52,000.00 ₱ 52,000.00 ₱ 52,000.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 52,000.00 ₱ 52,000.00 ₱ 52,000.00 ₱ 52,000.00 ₱ 52,000.00
Beginning ₱ 5,200.00 ₱ 10,400.00 ₱ 15,600.00 ₱ 20,800.00
Provision 5,200.00 5,200.00 5,200.00 5,200.00 5,200.00
Additions - - - - -
Disposals - - - - -
Ending Balance 5,200.00 10,400.00 15,600.00 20,800.00 26,000.00
Book Value ₱ 46,800.00 ₱ 41,600.00 ₱ 36,400.00 ₱ 31,200.00 ₱ 26,000.00
Leasehold Improvement
Cost
Beginning ₱ 8,940.00 ₱ 8,940.00 ₱ 8,940.00 ₱ 8,940.00 ₱ 8,940.00
Additions - - - - -
Disposals - - - - -
Ending Balance ₱ 8,940.00 ₱ 8,940.00 ₱ 8,940.00 ₱ 8,940.00 ₱ 8,940.00
Beginning ₱ 1,788.00 ₱ 3,576.00 ₱ 5,364.00 ₱ 7,152.00
Provision 1,788.00 1,788.00 1,788.00 1,788.00 1,788.00
Additions - - - - -
Disposals - - - - -
Ending Balance 1,788.00 3,576.00 5,364.00 7,152.00 8,940.00
Book Value ₱ 7,152.00 ₱ 5,364.00 ₱ 3,576.00 ₱ 1,788.00 ₱ -
Schedule 18
Accounts Payable
Schedule 2018 2019 2020 2021 2022

Accounts Payable - Tuba Supplier 18.1 ₱ 124,287.35 ₱ 137,272.59 ₱ 150,257.74 ₱ 165,098.12 ₱ 181,793.43
Accounts Payable - Tetra Pak 18.2 - - - - -
Total Accounts Payable ₱ 124,287.35 ₱ 137,272.59 ₱ 150,257.74 ₱ 165,098.12 ₱ 181,793.43
Schedule 18.1
Accounts Payable-Tuba
Schedule 2018 2019 2020 2021 2022

Accounts Payable, beginning ₱ - ₱ 124,287.35 ₱ 137,272.59 ₱ 150,257.74 ₱ 165,098.12
Add: Credit Purchases 1,104,776.40 1,220,200.80 1,335,625.20 1,467,538.80 1,615,941.60
Total 1,104,776.40 1,344,488.15 1,472,897.79 1,617,796.54 1,781,039.72
Less: Payments
From Prior years - 124,287.35 137,272.59 150,257.74 165,098.12
Downpayment during Purchase (30%) 331,432.92 366,060.24 400,687.56 440,261.64 484,782.48
1 month after Purchase (25%) 253,177.93 279,629.35 306,080.78 336,310.98 370,319.95
2 months after Purchase (25%) 230,161.75 254,208.50 278,255.35 305,737.25 336,654.50
3 months after Purchase (20%) 165,716.46 183,030.12 200,343.78 220,130.82 242,391.24
Total Payments 980,489.06 1,207,215.56 1,322,640.06 1,452,698.42 1,599,246.29
Accounts Payable, ending ₱ 124,287.35 ₱ 137,272.59 ₱ 150,257.74 ₱ 165,098.12 ₱ 181,793.43
Schedule 18.2
Accounts Payable-Tetra Pack
Schedule 2018 2019 2020 2021 2022

Accounts Payable, beginning ₱ - ₱ - ₱ - ₱ - ₱ -
Add: Credit Purchases 375,000.00 - 375,000.00 - 375,000.00
Total 375,000.00 - 375,000.00 - 375,000.00
Less: Payments
Downpayment (40%) 150,000.00 - 150,000.00 - 150,000.00
Within 1 month after purchase (30%) 112,500.00 - 112,500.00 - 112,500.00
Within 2 months after purchase (20%) 75,000.00 - 75,000.00 - 75,000.00
Within 3 months after purchase (10%) 37,500.00 - 37,500.00 - 37,500.00
Total Payments 375,000.00 - 375,000.00 - 375,000.00
Accounts Payable, ending ₱ - ₱ - ₱ - ₱ - ₱ -
Schedule 19
Accrued Salaries
Schedule 2018 2019 2020 2021 2022

Accrued Salaries, beginning ₱ - ₱ 15,250.00 ₱ 15,250.00 ₱ 15,250.00 ₱ 15,250.00
Add: Annual Salaries
Production Foreman 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00
Secretary 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00
Sanitary Engineer 27,000.00 27,000.00 27,000.00 27,000.00 27,000.00
Packaging Staff 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00
Total Annual Salaries ₱ 183,000.00 ₱ 183,000.00 ₱ 183,000.00 ₱ 183,000.00 ₱ 183,000.00
Total Accrued Salaries ₱ 183,000.00 ₱ 198,250.00 ₱ 198,250.00 ₱ 198,250.00 ₱ 198,250.00

Less: Payments
From prior year salaries - 15,250.00 15,250.00 15,250.00 15,250.00
From current year salaries 167,750.00 167,750.00 167,750.00 167,750.00 167,750.00
Total Payments 167,750.00 183,000.00 183,000.00 183,000.00 183,000.00
Acccrued Salaries,end ₱ 15,250.00 ₱ 15,250.00 ₱ 15,250.00 ₱ 15,250.00 ₱ 15,250.00
Schedule 20
Accrued SSS Contribution
Schedule 2018 2019 2020 2021 2022

Accrued SSS Contribution, beginning 10 ₱ - ₱ 1,141.80 ₱ 1,141.80 ₱ 1,141.80 ₱ 1,141.80
Add: Annual Contribution 10 13,701.60 13,701.60 13,701.60 13,701.60 13,701.60
Total ₱ 13,701.60 ₱ 14,843.40 ₱ 14,843.40 ₱ 14,843.40 ₱ 14,843.40
Less: Payments
Prior Year - 1,141.80 1,141.80 1,141.80 1,141.80
Currrent Year 12,559.80 12,559.80 12,559.80 12,559.80 12,559.80
Total Payments 12,559.80 13,701.60 13,701.60 13,701.60 13,701.60
Accrued SSS Contribution, end ₱ 1,141.80 ₱ 1,141.80 ₱ 1,141.80 ₱ 1,141.80 ₱ 1,141.80
Schedule 21
Accrued PhilHealth Contribution
Schedule 2018 2019 2020 2021 2022

Accrued PhilHealth Contribution, beginning 11 ₱ - ₱ 350.00 ₱ 350.00 ₱ 350.00 ₱ 350.00
Total ₱ 4,200.00 ₱ 4,550.00 ₱ 4,550.00 ₱ 4,550.00 ₱ 4,550.00
Less: Payments
Prior Year - 350.00 350.00 350.00 350.00
Currrent Year 3,850.00 3,850.00 3,850.00 3,850.00 3,850.00
Total Payments 3,850.00 4,200.00 4,200.00 4,200.00 4,200.00
Accrued PhilHealth Contribution, end ₱ 350.00 ₱ 350.00 ₱ 350.00 ₱ 350.00 ₱ 350.00
Schedule 22
Accrued Pag-ibig Contribution
Schedule 2018 2019 2020 2021 2022

Accrued Pag-ibig Contribution, beginning 12 ₱ - ₱ 305.00 ₱ 305.00 ₱ 305.00 ₱ 305.00
Total ₱ 3,660.00 ₱ 3,965.00 ₱ 3,965.00 ₱ 3,965.00 ₱ 3,965.00
Less: Payments
Prior Year - 305.00 305.00 305.00 305.00
Currrent Year 3,355.00 3,355.00 3,355.00 3,355.00 3,355.00
Total Payments 3,355.00 3,660.00 3,660.00 3,660.00 3,660.00
Accrued Pag-ibig Contribution, end ₱ 305.00 ₱ 305.00 ₱ 305.00 ₱ 305.00 ₱ 305.00
Schedule 23
Utilities Payable
Electricity and Water Schedule 2018 2019 2020 2021 2022

Utilities Payable, beginning 2.1.3D ₱ - ₱ 4,000.00 ₱ 4,080.00 ₱ 4,161.66 ₱ 4,244.83
Add: Total Billings for the year 2.1.3D 48,000.00 48,960.00 49,939.96 50,937.96 51,956.73
Total Utilities Payable ₱ 48,000.00 ₱ 52,960.00 ₱ 54,019.96 ₱ 55,099.62 ₱ 56,201.56
Less: Payments
Prior Year - 4,000.00 4,080.00 4,161.66 4,244.83
Current Year 44,000.00 44,880.00 45,778.30 46,693.13 47,627.00
Total Payments 44,000.00 48,880.00 49,858.30 50,854.79 51,871.83
Utilities Payable, end ₱ 4,000.00 ₱ 4,080.00 ₱ 4,161.66 ₱ 4,244.83 ₱ 4,329.73
Telephone, WiFi and CCTV

Utilities Payable, beginning 2.1.3D-2 ₱ - ₱ 1,596.00 ₱ 1,596.00 ₱ 1,596.00 ₱ 1,299.00
Add: Total Billings for the year 2.1.3D-2 19,152.00 19,152.00 19,152.00 15,588.00 15,588.00
Total Utilities Payable ₱ 19,152.00 ₱ 20,748.00 ₱ 20,748.00 ₱ 17,184.00 ₱ 16,887.00
Less: Payments
Prior Year - 1,596.00 1,596.00 1,596.00 1,299.00
Current Year 17,556.00 17,556.00 17,556.00 14,289.00 14,289.00
Total Payments 17,556.00 19,152.00 19,152.00 15,885.00 15,588.00
Utilities Payable, end ₱ 1,596.00 ₱ 1,596.00 ₱ 1,596.00 ₱ 1,299.00 ₱ 1,299.00
Schedule 24
Withholding Tax Payable
Expanded Withholding Tax Payable Schedule 2017 2018 2019 2020 2021
On Rent
Annual Withholding Tax ₱ 3,000.00 ₱ 3,000.00 ₱ 3,000.00 ₱ 3,000.00 ₱ 3,000.00
Add: Withholding Tax Payable, beg. - 250 250 250 250
Total ₱ 3,000.00 ₱ 3,250.00 ₱ 3,250.00 ₱ 3,250.00 ₱ 3,250.00
Less: Payments
Prior Year - 250 250 250 250
Current Year 2,750.00 2,750.00 2,750.00 2,750.00 2,750.00
Total Payments ₱ 2,750.00 ₱ 3,000.00 ₱ 3,000.00 ₱ 3,000.00 ₱ 3,000.00
Withholding Tax Payable, end ₱ 250.00 ₱ 250.00 ₱ 250.00 ₱ 250.00 ₱ 250.00
On Professional Fees
Annual Withholding Tax ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00
Add: Withholding Tax Payable, beg. 0 500 500 500 500
Total ₱ 6,000.00 ₱ 6,500.00 ₱ 6,500.00 ₱ 6,500.00 ₱ 6,500.00
Less: Payments
Prior Year - 500 500 500 500
Current Year 5,500.00 5,500.00 5,500.00 5,500.00 5,500.00
Total Payments ₱ 5,500.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00
Withholding Tax Payable, end ₱ 500.00 ₱ 500.00 ₱ 500.00 ₱ 500.00 ₱ 500.00
Total Expanded Withholding Tax Payable ₱ 750.00 ₱ 750.00 ₱ 750.00 ₱ 750.00 ₱ 750.00
Total Accrued Expense ₱ 23,392.80 ₱ 23,472.80 ₱ 23,554.46 ₱ 23,340.63 ₱ 23,425.53

Schedule 25
Income Tax Payable
2018 2019 2020 2021 2022

Net Taxable Income ₱ 1,261,915.27 ₱ 1,581,921.05 ₱ 1,867,917.56 ₱ 2,187,405.83 ₱ 2,534,684.77
For Over P 500,000 125,000.00 125,000.00 125,000.00 125,000.00 125,000.00
For Excess Over 500,000 243,812.89 346,214.74 437,733.62 539,969.86 651,099.12
Income Tax Payable, current year 368,812.89 471,214.74 562,733.62 664,969.86 776,099.12
Add: Income Tax Payable,beginnning - 368,812.89 471,214.74 562,733.62 664,969.86
Total Income Tax Payable 368,812.89 840,027.62 1,033,948.35 1,227,703.48 1,441,068.99
Less Payments - 368,812.89 471,214.74 562,733.62 664,969.86
Income Tax Payable, end ₱ 368,812.89 ₱ 471,214.74 ₱ 562,733.62 ₱ 664,969.86 ₱ 776,099.12
FINANCIAL STATEMENT ANALYSIS
General-purpose financial statements contain historical information about
the firm’s financial condition, operating results, and other business activities. When
one reads a company’s financial statements, he gets an over-all picture of the
corporation’s profitability and financial conditions. Merely reading such reports,
however, is not enough when one wants to make informed judgments or decisions.
For decision-making purposes, an analyst is required thorough analysis and
interpretation of such statements. (Roque, 2011)
Just looking at a company’s financials would tell if the company is doing well
but that vision is but a worm’s-eye view. To improve the business, one must dig
deeper into the grind of the components of each balance, of each account.
Financial statement analysis does just that. It eliminates the time a user of the
financial statement would have to spend trying to interpret the same for him to use.
Current decision making springs only from knowledge gained from analysis of
ratios. It will help particularly with the identification of strengths and weaknesses
of a company. Financial statement analysis will identify whether the business has
gained a profit or incurred loss over the period in more detail; whether or not it will
be able to meet its short-term and long-term obligations when due; and whether or
not the management has been effective and efficient in resource utilization or not.
It also helps determine the competitive standing of the business by enabling
comparison between similar industries.
Different ratios were computed and analyzed in the following pages.

Liquidity Ratios
Liquidity refers to the company’s ability to pay its short-term liabilities as
they fall due. Though the analysis of liquidness is most important to short-term
creditors, it is also of concern to long-term creditors and stockholders. This event
is because even if a firm has a great long term prospect, its realization is impossible
if it could not pay even its short-term obligations. No firm could get to the long term
if it could not even get through the short term. (Roque, 2011)
Liquidity Ratios are quotients, which provide information about the firm’s
ability to pay its current obligations as they fall due and continue operations. In
general, if the ratio yields a high value, it signifies a higher margin of safety in
covering its short-term debts. These formulae ordinarily include the current, quick,
and cash ratios.
Current Ratio
The current ratio measures the company’s capability of paying the
current liabilities with the available current assets and shows the number of
times it can do so. The current ratio is an important measure of liquidity
because short-term liabilities are due within the next year. The previous
statement means that a company has a limited amount of time to raise funds
to pay for these obligations.
The formula is as follows:
𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑨𝒔𝒔𝒆𝒕𝒔
𝑪𝑼𝑹𝑹𝑬𝑵𝑻 𝑹𝑨𝑻𝑰𝑶 =
𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒆𝒔
Table 32
Current Ratio
2018 2019 2020 2021 2022
Current
Assets
1,926,313.95 2,980,522.74 4,138,750.59 5,418,550.43 6,776,519.53
Divide by:
Current
Liabilities
147,680.15 160,745.39 173,812.20 188,438.75 205,218.96
Current
Ratio
13.04 18.54 23.81 28.75 33.02
As seen in the computations above, the ratio of current assets is
more than P1. It shows that the company is very liquid and is capable of
paying off its current liabilities. The ratio herein is bloated because of the
delay allowed in the payment of the Tetra packs. The company plans on
taking advantage of the lax collection period of the supplier. The large
current ratio indicates inefficiency in the management of the current assets,
mostly cash. The company’s cash could be used for its expansion starting
in the sixth year of operation to avoid inefficiency.
Liquidity Ratios
Liquidity refers to the company’s ability to pay its short-term liabilities as
they fall due. Though the analysis of liquidness is most important to short-term
creditors, it is also of concern to long-term creditors and stockholders. This event
is because even if a firm has a great long term prospect, its realization is impossible
if it could not pay even its short-term obligations. No firm could get to the long term
if it could not even get through the short term. (Roque, 2011)
Liquidity Ratios are quotients, which provide information about the firm’s
ability to pay its current obligations as they fall due and continue operations. In
general, if the ratio yields a high value, it signifies a higher margin of safety in
covering its short-term debts. These formulae ordinarily include the current, quick,
and cash ratios.
Current Ratio
The current ratio measures the company’s capability of paying the
current liabilities with the available current assets and shows the number of
times it can do so. The current ratio is an important measure of liquidity
because short-term liabilities are due within the next year. The previous
statement means that a company has a limited amount of time to raise funds
to pay for these obligations.
As seen in the computations above, the ratio of current assets is
more than P1. It shows that the company is very liquid and is capable of
paying off its current liabilities. The ratio herein is bloated because of the
delay allowed in the payment of the Tetra packs. The company plans on
taking advantage of the lax collection period of the supplier. The large
current ratio indicates inefficiency in the management of the current assets,
mostly cash. The company’s cash could be used for its expansion starting
in the sixth year of operation to avoid inefficiency.

Quick Ratio
One problem that the company may encounter with the use of current
is that of composition, particularly of the current assets. The formula uses
total figures – total current assets, which might conceal important
information. The entity should remove some data when found because of
its nature is slow to realize or unrealizable nature.
The current ratio is further “refined” by including in the formula only
the quick or liquid current assets, through the use of the so-called quick ratio
or acid test ratio to overcome this problem. It measures the firm’s ability to
pay its short-term debts from its most liquid assets without having to rely on
inventory and prepaid expenses. Its formula is as follows:
Table 33
Quick Ratio
2018 2019 2020 2021 2022
Quick Assets
1,631,711.63 2,780,729.87 3,672,186.67 5,080,263.10 6,213,764.22
Divide by:
Current
Liabilities
147,680.15 160,745.39 173,812.20 188,438.75 205,218.96
Quick Ratio
11.05 17.30 21.13 26.96 30.28
Based on the computations above, it is evident that the company can
and will be able to pay its current liabilities in cash even without relying on
its highly liquid inventory. This high turnover amount also indicates bad
current asset management.
Cash Ratio
To even further solve the problem being solved by the quick ratio,
the business can look at another more conservative variation. This formula
is the cash ratio. It is much more restrictive than the current ratio or quick
ratio because no other current assets can be used to pay off current debt--
only money. This fact is especially useful because creditors may tend to see
if a company maintains adequate cash balances to pay off all of their current
obligations as they come due.
Table 34
Cash Ratio
2018 2019 2020 2021 2022
Cash
1,544,829.38 2,597,888.12 3,384,308.17 4,676,973.85 5,683,393.47
Divide by:
Current
Liabilities
147,680.15 160,745.39 173,812.20 188,438.75 205,218.96
Cash Ratio
10.46 16.16 19.47 24.82 27.69
The cash ratio of the company is even higher than P1 which indicates
that the company is in a great position liquidity wise. It means that the entity
can pay current liability creditors without having to rely on anything but cash.
However, this high amount shows bad money management.

Activity Ratios
Relying solely on the liquidity ratios is not enough to understand the whole
picture of the financial statement. It does not answer the question of how long the
firm needs to wait to realize cash from its receivables and inventories, and when it
should it aim to pay its many current liabilities. These questions are all answered
by the activity ratios. These set of ratios measure how the firm uses its assets to
generate revenue and income, and it quantifies the time it takes to realize its
investments in assets.
Receivable Turnover Ratio
Accounts receivable turnover is an efficiency ratio or activity ratio that
measures how many times a business can turn its accounts receivable into
cash during a period. In other words, the accounts receivable turnover ratio
measures how many times a trade can collect its average accounts
receivable during the year. This ratio shows how efficient a company is at
amassing its credit sales from customers. Therefore, a higher receivable
turnover would indicate faster collection and vice-versa.
Receivables turnover is computed as follows:
𝑵𝒆𝒕 𝑪𝒓𝒆𝒅𝒊𝒕 𝑺𝒂𝒍𝒆𝒔

𝑹𝑬𝑪𝑬𝑰𝑽𝑨𝑩𝑳𝑬 𝑻𝑼𝑹𝑵𝑶𝑽𝑬𝑹 𝑹𝑨𝑻𝑰𝑶 =
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑹𝒆𝒄𝒆𝒊𝒗𝒂𝒃𝒍𝒆𝒔
Table 35
Receivable Turnover Ratio
2018 2019 2020 2021 2022
Net Credit Sales

3,813,653.40 4,212,094.80 4,610,536.20 5,065,897.80 5,578,179.60
Divide by: Average
Accounts
Receivable
86,882.25 134,862.00 235,360.13 345,583.88 466,830.00
Receivable
Turnover Ratio
43.89 31.23 19.59 14.66 11.95
With the computations above, the proponents observed that the
business has a decreasing trend as to the number of times it collects its
receivables. The business consistent lenient credit terms which give its
customers greater time before they pay their obligations causes the change.
Average Age of Receivables or Average Collection Period
The average age of credit or the average collection period indicates
the average number of days the company is able to collect credit and must
wait before. It measures the number of days it takes a company to collect
cash from its credit sales. In other words, it shows how well a company can
collect money from its customers. The sooner the business can received,
the sooner this currency can be used for other operations. Both liquidity and
cash flows increase with a lower average age of receivables measurement.
It is computed as follows:
𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝑾𝒐𝒓𝒌𝒊𝒏𝒈 𝑫𝒂𝒚𝒔 𝒊𝒏 𝒂 𝒚𝒆𝒂𝒓

𝑨𝑽𝑬𝑹𝑨𝑮𝑬 𝑨𝑮𝑬 𝑶𝑭 𝑹𝑬𝑪𝑬𝑰𝑽𝑨𝑩𝑳𝑬𝑺 =
𝑹𝒆𝒄𝒆𝒊𝒗𝒂𝒃𝒍𝒆 𝑻𝒖𝒓𝒏𝒐𝒗𝒆𝒓
Table 36
Average Age of Receivables
2018 2019 2020 2021 2022
300 Working Days

300.00 300.00 300.00 300.00 300.00
Divide by: Receivable
Turnover
43.89 31.23 19.59 14.66 11.95
6.83 9.61 15.31 20.47 25.11
The average age of receivables formula shows investors and
creditors how well companies' can collect currencies from their customers.
Evidently, sales do not matter if the company never receives cash. The age
of these receivables grows every year because of the continuous slack
credit period of the company. This fact allows the customers to pay at a later
date. This ratio measures the number of days it takes a company to convert
its sales into cash. Therefore, lower amounts would be best.
Inventory Turnover
The Inventory turnover measures the number of times that the entity
replaces inventory during the period. It shows how efficiently it manages
goods by comparing the cost of goods sold with average inventory for a
period. This measures how many times average stock is "turned" or sold
during a period. Inventory turnover is a measure of how efficiently a
company can control its merchandise, so it is important to have a high turn.
This fact shows the company does not overspend by buying too much
inventory and wastes resources by storing non-salable inventory. It also
shows that the industry can effectually sell the listings it buys.
In this section, the business presented just two sets of inventory
turnovers and they are as follows: (a) Raw Materials Turnover, and (b)
Finished Goods Turnover. The proponents do not present goods-in-process
turnover because goods spend almost no time in cycle. Much like the
receivable turnover, a higher turnover indicates that fast-moving inventory
and higher volume of sales.
𝑪𝒐𝒔𝒕 𝒐𝒇 𝑹𝒂𝒘 𝑴𝒂𝒕𝒆𝒓𝒊𝒂𝒍𝒔 𝑼𝒔𝒆𝒅

𝑹𝑨𝑾 𝑴𝑨𝑻𝑬𝑹𝑰𝑨𝑳𝑺 𝑻𝑼𝑹𝑵𝑶𝑽𝑬𝑹 =
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑹𝒂𝒘 𝑴𝒂𝒕𝒆𝒓𝒊𝒂𝒍𝒔 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚
Table 37
Raw Material Turnover
2018 2019 2020 2021 2022
Raw Materials Used

1,589,297.90 1,755,393.80 1,921,489.70 2,111,361.30 2,324,674.60
Divide by: Average Raw
Materials Inventory
234,518.50 157,146.00 180,765.25 182,469.75 157,144.00
Raw Materials
Turnover
6.78 11.17 10.63 11.57 14.79
𝑪𝒐𝒔𝒕 𝒐𝒇 𝑮𝒐𝒐𝒅𝒔 𝑺𝒐𝒍𝒅

𝑭𝑰𝑵𝑰𝑺𝑯𝑬𝑫 𝑮𝑶𝑶𝑫𝑺 𝑻𝑼𝑹𝑵𝑶𝑽𝑬𝑹 =
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑭𝒊𝒏𝒊𝒔𝒉𝒆𝒅 𝑮𝒐𝒐𝒅𝒔 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚
Table 38
Finished Goods Turnover
2018 2019 2020 2021 2022
Cost of Goods Sold

1,836,127.38 1,997,851.55 2,159,585.05 2,343,263.67 2,551,499.30
Divide by: Average
Finished Goods
Inventory
55,083.82 85,051.59 147,413.14 214,955.87 288,377.32
Finished Goods
Turnover
33.33 23.49 14.65 10.90 8.85
Inventory turnover is a measure of how efficiently a company can
control its merchandise, so it is important to have a great turn. The table
above shows the company does not overspend by buying too much
inventory and wastes resources by storing non-salable inventory. It also
displays that it can excellently sell the stocks it buys. The higher amounts
of inventory kept per year is because of the rise in expected demand by the
customers.
Average Age of Inventory or Average Conversion Period
It measures the number of days it will take a company to convert and
sell its entire inventory. In other words, the average age of inventory shows
how many days a company's current stock of inventory will last. When the
turnover is high for each inventory turnover, the shorter will its conversion
period be. The average age of inventory is a significant component in a
company's inventory management. Inventory is expensive for a company to
keep, maintain, and store. Companies also have to be worried about
protecting inventory from theft and obsolescence.
In this section, the conversion period of each inventory is computed
to get the totality of the alteration period – from the usage of raw materials
to the selling of finished goods. These are computed as follows:

𝑨𝑽𝑬𝑹𝑨𝑮𝑬 𝑨𝑮𝑬 𝑶𝑭 𝑹𝑨𝑾 𝑴𝑨𝑻𝑬𝑹𝑰𝑨𝑳𝑺 =
𝑹𝒂𝒘 𝑴𝒂𝒕𝒆𝒓𝒊𝒂𝒍𝒔 𝑻𝒖𝒓𝒏𝒐𝒗𝒆𝒓
Table 39
Average Age of Raw Materials
2018 2019 2020 2021 2022
300 Working Days
300.00 300.00 300.00 300.00 300.00

Divide by: Raw Materials
Turnover
6.78 11.17 10.63 11.57 14.79
44.27 26.86 28.22 25.93 20.28

𝑨𝑽𝑬𝑹𝑨𝑮𝑬 𝑨𝑮𝑬 𝑶𝑭 𝑭𝑰𝑵𝑰𝑺𝑯𝑬𝑫 𝑮𝑶𝑶𝑫𝑺 =
𝑭𝒊𝒏𝒊𝒔𝒉𝒆𝒅 𝑮𝒐𝒐𝒅𝒔 𝑻𝒖𝒓𝒏𝒐𝒗𝒆𝒓
Table 40
Average Age of Finished Goods
2018 2019 2020 2021 2022
300 Working Days
300.00 300.00 300.00 300.00 300.00

Divide by: Finished Goods Turnover
33.33 23.49 14.65 10.90 8.85

Average Age of Finished Goods
9.00 12.77 20.48 27.52 33.91
𝑨𝑽𝑬𝑹𝑨𝑮𝑬 𝑨𝑮𝑬 𝑶𝑭 𝑰𝑵𝑽𝑬𝑵𝑻𝑶𝑹𝒀

= 𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑨𝒈𝒆 𝒐𝒇 𝑹𝒂𝒘 𝑴𝒂𝒕𝒆𝒓𝒊𝒂𝒍𝒔
+ 𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑨𝒈𝒆 𝒐𝒇 𝑭𝒊𝒏𝒊𝒔𝒉𝒆𝒅 𝑮𝒐𝒐𝒅𝒔
Table 41
Average Age of Inventory
2018 2019 2020 2021 2022

44.27 26.86 28.22 25.93 20.28
Add: Average Age of Finished
Goods
9.00 12.77 20.48 27.52 33.91
Average Age of Inventory
53.27 39.63 48.70 53.45 54.19
The average age of inventory for the business appears to be
fluctuating because of the manner it stocks its inventory predominantly the
Tetra packs. Since the minimum purchase of tetra packs is good for two
years, the supplier leaves the company with no choice but to store the said
raw material for two operating years.
The number of days for the business to convert its inventory to sales
is undeniably long. This fact could be a disadvantage to the trade because
it has to account costs for storing said lists. Furthermore, said records can
be subject to theft or obsolescence.
Accounts Payable Turnover
The accounts payable turnover is of particular concern to a firm’s
internal management and its trade creditors. This statement is so because
this measures the company’s attitude towards paying its short-term debt. It
also shows a company's ability to pay off its accounts payable by comparing
net credit purchases to the average accounts payable throughout a period.
In other words, the accounts payable turnover ratio determines how many
times a company can pay off its average accounts payable balance during
a year.
A higher ratio shows suppliers and creditors that the company pays
its bills frequently and regularly. It also implies that new vendors will get paid
back quickly. A high turnover ratio can be used to negotiate favorable credit
terms in the future. This turnover is computed as follows:
𝑵𝒆𝒕 𝑪𝒓𝒆𝒅𝒊𝒕 𝑷𝒖𝒓𝒄𝒉𝒂𝒔𝒆𝒔

𝑨𝑪𝑪𝑶𝑼𝑵𝑻𝑺 𝑷𝑨𝒀𝑨𝑩𝑳𝑬 𝑻𝑼𝑹𝑵𝑶𝑽𝑬𝑹 =
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑨𝒄𝒄𝒐𝒖𝒏𝒕𝒔 𝑷𝒂𝒚𝒂𝒃𝒍𝒆
Table 42
2018 2019 2020 2021 2022
Net Credit Purchases
1,823,816.40 1,600,648.80 2,123,473.20 1,912,786.80 2,472,597.60

Divide by: Average Accounts
Payable
124,287.35 130,779.97 143,765.16 157,677.93 173,445.77
14.67 12.24 14.77 12.13 14.26
As computed above, the inventory turnover for the first five years of
operation is reasonable. This idea means that the company faithfully pays
its debts from its suppliers. This fact its good relationship with its supplier
because of paying on a timely basis.
The fluctuating rate of the said account is because the business
purchases some of its inventory with an interval of one year.
Average Age of Payables or Average Payment Period
The age of payables indicates the length of time or the number of
days which trade payables remain unpaid. In other words, it measures the
time which elapses from the period of purchase of materials in credit up to
the payment of accounts billed arising from such purchase. This is
computed as follows:

𝑨𝑽𝑬𝑹𝑨𝑮𝑬 𝑨𝑮𝑬 𝑶𝑭 𝑷𝑨𝒀𝑨𝑩𝑳𝑬𝑺 =
𝑨𝒄𝒄𝒐𝒖𝒏𝒕𝒔 𝑷𝒂𝒚𝒂𝒃𝒍𝒆 𝑻𝒖𝒓𝒏𝒐𝒗𝒆𝒓
Table 43
Average Age of Payables
2018 2019 2020 2021 2022
300 Working Days

300.00 300.00 300.00 300.00 300.00
Divide by: Accounts Payable Turnover
14.67 12.24 14.77 12.13 14.26
Average Age of Payables
20.44 24.51 20.31 24.73 21.04
The suppliers give more than ample time. Creditors can usually
expect payment after 20 to 25 days. The company pays its payables not
later than one week to create a good relationship with its supplier.
Preferably, the age of account payable should not be shorter than the age
of accounts receivable.
An operating cycle for a manufacturing firm begins from the time raw
materials are acquired, through production, the sale of finished goods, until
the time the firm collects receivables or converts it into cash which may, in
turn, be used again to attain raw materials. As in the case of the business,
the length of time it can complete an operating cycle is calculated by adding
the average ages of receivables, and the two inventories – raw materials
and finished goods. (Roque, 2011) It is computed as follows:
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑔𝑒 𝑜𝑓 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠

+ 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑔𝑒 𝑜𝑓 𝑅𝑎𝑤 𝑀𝑎𝑡𝑒𝑟𝑖𝑎𝑙𝑠
= OPERATING CYCLE
+ 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑔𝑒 𝑜𝑓 𝐹𝑖𝑛𝑖𝑠ℎ𝑒𝑑 𝐺𝑜𝑜𝑑𝑠
Table 44
Operating Cycle
2018 2019 2020 2021 2022

6.83 9.61 15.31 20.47 25.11
Add: Average Age of Inventory
53.27 39.63 48.70 53.45 54.19
Operating Cycle
60.10 49.23 64.02 73.91 79.29
The company would on average take 49-79 days. The business may
join reconvene and think about how to improve its operating cycle. The
results show that there is room for improvement operation-wise.
Cash Conversion Cycle
Related to the operating cycle is the cash conversion cycle. The cash
conversion cycle is a cash flow calculation that attempts to measure the
time it takes a company to convert its investment in inventory and other
resource inputs into cash. In other words, the cash conversion cycle
calculation measures how long cash is tied up in goods before the business
can sell and collect cash from customers. This cycle is computed as follows:
𝑪𝑨𝑺𝑯 𝑪𝑶𝑵𝑽𝑬𝑹𝑺𝑰𝑶𝑵 𝑪𝒀𝑪𝑳𝑬 = 𝑶𝒑𝒆𝒓𝒂𝒕𝒊𝒏𝒈 𝑪𝒚𝒄𝒍𝒆 − 𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑨𝒈𝒆 𝒐𝒇 𝑷𝒂𝒚𝒂𝒃𝒍𝒆𝒔
Table 45
2018 2019 2020 2021 2022
Operating Cycle
60.10 49.23 64.02 73.91 79.29
Less: Average Age of Payable
20.44 24.51 20.31 24.73 21.04
39.66 24.72 43.70 49.18 58.25
The cash conversion period of the company is relatively healthy. As
with most cash flow calculations, smaller or shorter designs are usually
decent, depending on the circumstances. The company should reflect on
ways to improve its cycle different ways.
Solvency Ratios
Debt Ratio
A company’s debt ratio indicates the percentage of funds provided
by creditors to finance the business’ everyday operations. In a sense, the
debt ratio shows a company's ability to pay off its liabilities with its assets.
In other words, this shows how many assets the company must sell pay off
all of its liabilities.
This ratio measures the financial leverage of a company. This
formula helps investors and creditors analyze the overall debt burden on
the company as well as the firm's ability to pay off the debt in future,
uncertain economic times. It is computed by dividing the total liabilities by
the total assets. In formula form, the calculation is:
𝑻𝒐𝒕𝒂𝒍 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔
𝑫𝑬𝑩𝑻 𝑹𝑨𝑻𝑰𝑶 =
𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔
Table 46
Debt Ratio
2018 2019 2020 2021 2022
Total Liabilities
916,493.03 931,960.13 936,545.81 953,408.61 981,318.08
Divide by: Total Assets
2,609,528.75 3,582,865.34 4,664,540.99 5,862,988.63 7,139,605.53
Debt Ratio
0.35 0.26 0.20 0.16 0.14
Based on the computation above, the company has more than twice
the properties as his liabilities. This fact means that the entity is financially
stable and is solvent enough to stay going concern. The debt ratio of the
company is very low on account of the little amount of loans borrowed from
outside financing. The amount of debt ratio is decreasing because the slow
amortization of the whole amount of loan borrowed.
Equity Ratio
Equity Ratio shows the proportion of total assets that are provided
by the owner. This ratio is the complement of the debt formula, and
therefore the entity calculates it by subtracting the debt ratio from 100%. Or
it can be computed by dividing the total owner’s equity by the total assets:
𝑻𝒐𝒕𝒂𝒍 𝑶𝒘𝒏𝒆𝒓′ 𝒔 𝑬𝒒𝒖𝒊𝒕𝒚

𝑬𝑸𝑼𝑰𝑻𝒀 𝑹𝑨𝑻𝑰𝑶 =
𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔
Table 47
Equity Ratio
2018 2019 2020 2021 2022
Total Owner’s Equity

1,693,035.72 2,650,905.21 3,727,995.18 4,909,580.02 6,158,287.44
Divide by: Total Assets
2,609,528.75 3,582,865.34 4,664,540.99 5,862,988.63 7,139,605.53
Equity Ratio
0.65 0.74 0.80 0.84 0.86
In general, higher equity ratios are typically favorable for businesses.
Higher investment levels by shareholders show potential shareholders that
the company is worth investing in since so many investors are willing to
finance the business. A higher ratio also shows potential creditors that the
corporation is more sustainable and less risky to lend future loans.
Debt – Equity Ratio
The owners and creditors provide the total assets of a business firm.
The debt-equity ratio is computed by expressing the liabilities as a
percentage of total owner’s equity to determine the amount provided by
creditors relative to that provided by the owners. Thus:
𝑻𝒐𝒕𝒂𝒍 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔
𝑫𝑬𝑩𝑻 − 𝑬𝑸𝑼𝑰𝑻𝒀 𝑹𝑨𝑻𝑰𝑶 =
𝑻𝒐𝒕𝒂𝒍 𝑶𝒘𝒏𝒆𝒓′ 𝒔 𝑬𝒒𝒖𝒊𝒕𝒚
Table 48
Debt to Equity Ratio
2018 2019 2020 2021 2022
Total Liabilities
916,493.03 931,960.13 936,545.81 953,408.61 981,318.08
Divide by: Total

Owner’s Equity
1,693,035.72 2,650,905.21 3,727,995.18 4,909,580.02 6,158,287.44
Debt – Equity Ratio
0.54 0.35 0.25 0.19 0.16
Debt to equity ratio of 1 would mean that investors and creditors have
an equal stake in the business assets. A lower debt to equity ratio usually
implies a more financially stable business. Companies with a higher debt to
equity ratio are considered riskier to creditors and investors than companies
with a lower ratio.
Times Interest Earned
Times interest earned is a coverage ratio that measures the
proportionate amount of income that can be used to cover interest expenses
in the future. To show how many times the company has earned interest,
the formula is computed by dividing net income before interest and charges
by the annual interest charge. Its formula is:
𝑬𝒂𝒓𝒏𝒊𝒏𝒈𝒔 𝒃𝒆𝒇𝒐𝒓𝒆 𝑰𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝒂𝒏𝒅 𝑻𝒂𝒙𝒆𝒔

𝑻𝑰𝑴𝑬𝑺 𝑰𝑵𝑻𝑬𝑹𝑬𝑺𝑻 𝑬𝑨𝑹𝑵𝑬𝑫 =
𝑰𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝑬𝒙𝒑𝒆𝒏𝒔𝒆
Table 49
Times Interest Earned
2018 2019 2020 2021 2022
Earnings before
Interest and
Taxes
1,302,163.67 1,610,522.58 1,887,385.24 2,197,739.64 2,535,864.77
Divide by: Interest
Expense
40,315.07 31,438.35 22,561.65 13,684.93 4,808.22
Times Interest
Earned
32.30 51.23 83.65 160.60 527.40
The table above shows number of times interest earned per year.
The company performs exceedingly well in gathering enough profits to
satisfy and justify increases in investments through debt. The last two years
of the company is great because of the lowering amount of loan slowly paid.
Profitability Ratios
A company’s goal, among all others, is to earn the highest amount of profit
possible. The same holds true for prospective investors and creditors, who want
their money safe and earning. Without profit, it is impossible to attract potential
stockholders and creditors to invest capital in the firm. Therefore, a business firm
can be assumed to survive when it can earn enough revenue to satisfy all
obligations and provide a satisfactory return on the investments and loans of
investors and creditors, respectively.
Profitability Ratios are financial ratios which provide information whether the
business has generated revenue from its past performances and whether the entity
is sustainable enough to continue generating revenue in its future undertakings.
This ratio will determine if the proposed business will be profitable or not. Some of
the relationships involved in profitability ratios are net profit margin, return on
assets, and return on owner’s equity.
Gross Profit Margin
The gross profit margin indicates the average premium obtained on
products sold. This ratio measures how profitable a company sells its
inventory or merchandise. In other words, the gross profit percentage is
essentially the percentage markup on merchandise from its cost. This fact
is the pure profit from the sale of inventory that can go to paying operating
expenses. Higher ratios mean the company is selling their goods at a higher
profit percentage. It is computed as follows:
𝑮𝒓𝒐𝒔𝒔 𝑷𝒓𝒐𝒇𝒊𝒕
𝑮𝑹𝑶𝑺𝑺 𝑷𝑹𝑶𝑭𝑰𝑻 𝑴𝑨𝑹𝑮𝑰𝑵 =
𝑵𝒆𝒕 𝑺𝒂𝒍𝒆𝒔
Table 50
Gross Profit Margin
2018 2019 2020 2021 2022
Gross Profit
1,977,526.02 2,214,243.25 2,450,951.15 2,722,634.13 3,026,680.30
Divide by: Net Sales
3,813,653.40 4,212,094.80 4,610,536.20 5,065,897.80 5,578,179.60
Gross Profit Margin
0.52 0.53 0.53 0.54 0.54
The gross profit method is an important concept because it shows
management and investors how efficiently the business can produce and
sell products. In other words, it shows how profitable products are. The
business has over 50% because of the company enjoys lesser cost of
production.
Operating Profit Margin
The operating margin ratio, also known as the operating profit
margin, measures what percentage of total revenues is made up by

operating income. In other words, the operating margin ratio demonstrates
how big a return the entity has left over after it has paid all the variable or
operating costs. This percentage is important to both creditors and investors
because it helps show how stout and profitable a company's operations are.
It is computed as follows:
𝑶𝒑𝒆𝒓𝒂𝒕𝒊𝒏𝒈 𝑷𝒓𝒐𝒇𝒊𝒕
𝑶𝑷𝑬𝑹𝑨𝑻𝑰𝑵𝑮 𝑷𝑹𝑶𝑭𝑰𝑻 𝑴𝑨𝑹𝑮𝑰𝑵 =
Table 51
2018 2019 2020 2021 2022
Operating Profit
1,242,390.52 1,541,201.79 1,812,464.50 2,116,506.94 2,447,523.35
3,813,653.40 4,212,094.80 4,610,536.20 5,065,897.80 5,578,179.60
0.33 0.37 0.39 0.42 0.44
The company, as shown above, allows a relatively large amount of
capital from operating profit margin. The business earns a rather great
amount from sales that go directly to the expenses it has to pay and
investments that it may want to take on. This would also be a measure to
operation effectiveness in a sense because of how the business’ operation’s
main goal is to earn money.
Net Profit Margin
The profit margin ratio, also called the return on sales ratio or gross
profit ratio, measures the amount of net income earned with each peso of
sales generated by comparing the net income and net sales of a company.
In other words, the profit margin ratio shows what percentage of sales are
left over after all expenses are paid by the business.
It is computed with this formula:
𝑵𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕
𝑵𝑬𝑻 𝑷𝑹𝑶𝑭𝑰𝑻 𝑴𝑨𝑹𝑮𝑰𝑵 =
Table 52
Net Profit Margin
2018 2019 2020 2021 2022
Net Profit
893,035.72 1,107,869.49 1,302,089.97 1,519,084.84 1,754,957.42
3,813,653.40 4,212,094.80 4,610,536.20 5,065,897.80 5,578,179.60
Net Profit Margin
0.23 0.26 0.28 0.30 0.31
The company enjoys a rather large share in its sales. The other
amount of this ratio goes directly to the payment of liabilities and debts. The
company should look for many other ways in looking for investments to
increase because of this higher amount from sales. The business can also
use higher profits to reinvest in new equipment, eliminate debt, and even
make payments to shareholders, but higher profits aren’t always favorable.
Return on Assets
The company’s return on assets ratio is a profitability ratio that
measures the net income produced by total assets during a period by

comparing net income during the period to the average total assets. In other
words, the return on assets ratio or ROA measures how efficiently a
company can manage its assets to produce profits during a period. This
ratio helps both management and investors see how well the company can
convert its investments in assets into profits.
In short, this ratio measures how profitable a company's assets are.
𝑵𝒆𝒕 𝑰𝒏𝒄𝒐𝒎𝒆
𝑹𝑬𝑻𝑼𝑹𝑵 𝑶𝑵 𝑨𝑺𝑺𝑬𝑻𝑺 =
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔
Table 53
Return on Assets
2018 2019 2020 2021 2022
Net Income
893,035.72 1,107,869.49 1,302,089.97 1,519,084.84 1,754,957.42
Divide by: Average
Total Assets
2,609,528.75 3,096,197.04 4,123,703.17 5,263,764.81 6,501,297.08
Return on Assets
0.34 0.36 0.32 0.29 0.27
The return on assets ratio measures how effectively a company can
earn a return on its investment in assets. In other words, return on assets
shows how efficiently a company can convert the money used to purchase
assets into net income or profits. This also shows that the company is
handling its total assets well and good. From the data gathered above, one
can be assured that the business is earning enough for its assets invested.
Return on Owner’s Equity

The return on equity ratio is a profitability ratio that measures the
ability of a firm to generate profits from its shareholders’ investments in the
company. In other words, the return on equity ratio shows how much profit
each dollar of common stockholders' equity generates. This ratio is also an
indicator of how sound management is at using equity financing to fund
operations and grow the company.
This ratio is computed by dividing net income by average owner’s
equity as shown as follows:
𝑵𝒆𝒕 𝑰𝒏𝒄𝒐𝒎𝒆
𝑹𝑬𝑻𝑼𝑹𝑵 𝑶𝑵 𝑬𝑸𝑼𝑰𝑻𝒀 =
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑶𝒘𝒏𝒆𝒓′ 𝒔 𝑬𝒒𝒖𝒊𝒕𝒚
Table 54
Return on Owner’s Equity
2018 2019 2020 2021 2022
Net Income
893,035.72 1,107,869.49 1,302,089.97 1,519,084.84 1,754,957.42
Divide by:
Average
Owner’s Equity
1,693,035.72 2,171,970.46 3,189,450.20 4,318,787.60 5,533,933.73
Return on
Equity
0.53 0.51 0.41 0.35 0.32
Return on equity measures how efficiently a firm can use the money
from shareholders to generate profits and grow the company. The owner
would want to see a high return on equity ratio because this indicates that
the company is using his funds well.
Break-even Analysis
Break-even point analysis calculates the margin of safety by comparing a
number of revenues or units that must be sold to cover fixed and variable costs
associated with making the sales. In other words, it’s a way to calculate when a
project will be profitable by equating its total revenues with its total expenses. The
purpose of the break-even analysis formula is to compute a number of sales that
compares revenues to expenses, and a number of excess proceeds, also known
as profits, after getting the fixed and variable costs.
Contribution Margin
The contribution margin is the difference between a company's total
sales revenue and variable costs. In other words, the contribution margin
equals the amount that sales exceed variable costs. Such quantity
contributes to pay off fixed expenditures. The contribution margin measures
how efficiently a company can produce products and maintain low levels of
variable costs. These computations pave the way toward computing the
next set of formulae.
𝑪𝑶𝑵𝑻𝑹𝑰𝑩𝑼𝑻𝑰𝑶𝑵 𝑴𝑨𝑹𝑮𝑰𝑵 = 𝑺𝒂𝒍𝒆𝒔 − 𝑽𝒂𝒓𝒊𝒂𝒃𝒍𝒆 𝑪𝒐𝒔𝒕𝒔
Table 55
Contribution Margin
2018 2019 2020 2021 2022
Sales
3,813,653.40 4,212,094.80 4,610,536.20 5,065,897.80 5,578,179.60
Less: Variable Costs
1,625,297.90 1,791,393.80 1,957,489.70 2,147,361.30 2,360,674.60
Contribution Margin
2,188,355.50 2,420,701.00 2,653,046.50 2,918,536.50 3,217,505.00
𝑪𝒐𝒏𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 𝑴𝒂𝒓𝒈𝒊𝒏
𝑪𝑶𝑵𝑻𝑹𝑰𝑩𝑼𝑻𝑰𝑶𝑵 𝑴𝑨𝑹𝑮𝑰𝑵 𝑹𝑨𝑻𝑰𝑶 =
𝑺𝒂𝒍𝒆𝒔
Table 56
Contribution Margin Ratio
2018 2019 2020 2021 2022
Contribution
Margin
2,188,355.50 2,420,701.00 2,653,046.50 2,918,536.50 3,217,505.00
Divide by: Sales
3,813,653.40 4,212,094.80 4,610,536.20 5,065,897.80 5,578,179.60
Contribution
Margin Ratio
0.57 0.57 0.58 0.58 0.58
The company measures how efficiently a company can yield
products and maintain low levels of variable expenditures. The contribution
margin measures how efficiently a company can produce products and
maintain low levels of variable costs. Lower variable costs would entail
higher amounts of funds available from operations to pay liabilities,
expenses, and debt.
Break-even Sales
Break-even sales computes the total number of units sold for the
company to generate enough revenues to cover all of its expenses. Once
this amount is known, the break-even sales in pesos can easily be
determined by multiplying the break-even sales in units by the selling price
per unit. The computation of the break-even sales in pesos uses another
formula.
𝑭𝒊𝒙𝒆𝒅 𝑪𝒐𝒔𝒕
𝑩𝑹𝑬𝑨𝑲 − 𝑬𝑽𝑬𝑵 𝑺𝑨𝑳𝑬𝑺 𝑰𝑵 𝑼𝑵𝑰𝑻𝑺 =
𝑪𝒐𝒏𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 𝑴𝒂𝒓𝒈𝒊𝒏 𝒑𝒆𝒓 𝒖𝒏𝒊𝒕
Table 57
Break-Even Sales in Units
2018 2019 2020 2021 2022
Fixed Cost
1,410,176.76 1,442,087.85 1,490,664.82 1,550,982.27 1,627,433.97
Divide by: Contribution
Margin per Unit
21.77 21.81 21.84 21.86 21.89
Break – Even Sales in
Units
64,762.22 66,126.20 68,267.09 70,945.19 74,353.51
𝑭𝒊𝒙𝒆𝒅 𝑪𝒐𝒔𝒕
𝑩𝑹𝑬𝑨𝑲 − 𝑬𝑽𝑬𝑵 𝑺𝑨𝑳𝑬𝑺 𝑰𝑵 𝑷𝑬𝑺𝑶𝑺 =
𝑪𝒐𝒏𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 𝑴𝒂𝒓𝒈𝒊𝒏 𝑹𝒂𝒕𝒊𝒐
Table 58
Break-Even Sales in Pesos
2018 2019 2020 2021 2022
Fixed Cost
1,410,176.76 1,442,087.85 1,490,664.82 1,550,982.27 1,627,433.97
Divide by:
Contribution
Margin Ratio
0.57 0.57 0.58 0.58 0.58
Break – Even
Sales in Pesos
2,457,519.08 2,509,277.57 2,590,517.78 2,692,143.02 2,821,477.82
As shown above, the company will be able to sustain itself with just
a tenth or so of its projected sales. This figure would mean that the company
is flexible enough to survive sudden changes in consumer patronage. The
business, to further itself, may try to change elements in the formulas
reduce the number of units needs to produce and increase profitability.
Margin of Safety
The margin of safety measures a number of sales that exceed the
break-even point. In other words, this is the revenue earned by the company
or department pays all of its fixed and variable costs associated with
producing the goods or services. It is a number of sales a company can
afford to lose before it stops being profitable. The margin of safety is a
particularly important measurement for management when they are
contemplating an expansion or new product line because it shows how safe
the company is and how much lost sales or increased costs the company
can absorb.
𝑴𝑨𝑹𝑮𝑰𝑵 𝑶𝑭 𝑺𝑨𝑭𝑬𝑻𝒀 𝑰𝑵 𝑼𝑵𝑰𝑻𝑺

= 𝑨𝒄𝒕𝒖𝒂𝒍 𝒐𝒓 𝑷𝒍𝒂𝒏𝒏𝒆𝒅 𝑺𝒂𝒍𝒆𝒔 𝑼𝒏𝒊𝒕𝒔 − 𝑩𝒓𝒆𝒂𝒌 − 𝒆𝒗𝒆𝒏 𝑺𝒂𝒍𝒆𝒔 𝑼𝒏𝒊𝒕𝒔
Table 59
Margin of Safety in Units
2018 2019 2020 2021 2022
Planned Sales in Units

100,500.00 111,000.00 121,500.00 133,500.00 147,000.00
Less: Break – Even
Sales in Units
64,762.22 66,126.20 68,267.09 70,945.19 74,353.51
Margin of Safety in
Units
35,737.78 44,873.80 53,232.91 62,554.81 72,646.49
𝑨𝒄𝒕𝒖𝒂𝒍 𝒐𝒓 𝑷𝒍𝒂𝒏𝒏𝒆𝒅 𝑺𝒂𝒍𝒆𝒔 − 𝑩𝒓𝒆𝒂𝒌 − 𝒆𝒗𝒆𝒏 𝑺𝒂𝒍𝒆𝒔

𝑴𝑨𝑹𝑮𝑰𝑵 𝑶𝑭 𝑺𝑨𝑭𝑬𝑻𝒀 𝑹𝑨𝑻𝑰𝑶 =
𝑨𝒄𝒕𝒖𝒂𝒍 𝒐𝒓 𝑷𝒍𝒂𝒏𝒏𝒆𝒅 𝑺𝒂𝒍𝒆𝒔
Table 60
Margin of Safety Ratio
2018 2019 2020 2021 2022
Planned Sales
in Pesos 3,819,000.00 4,218,000.00 4,617,000.00 5,073,000.00 5,586,000.00
Less: Break –
Even Sales
2,457,519.08 2,509,277.57 2,590,517.78 2,692,143.02 2,821,477.82
Margin of
Safety in
Pesos
1,361,480.92 1,708,722.43 2,026,482.22 2,380,856.98 2,764,522.18
Divide by:
Planned Sales
in Pesos 3,819,000.00 4,218,000.00 4,617,000.00 5,073,000.00 5,586,000.00
Margin of
Safety Ratio
0.36 0.41 0.44 0.47 0.49
As seen in the above computations, the business has over three
million as its margin of safety against fluctuations in sales. The margin also
expresses a ratio ranging from 0.36-0.49. The company has prepared for
itself a relatively high amount of buffer for when times get a little hard for a
company.
Discounted Payback Period
The conventional payback method determines the time required to
recover the cost of investment, without regard to present value
considerations. In fact, this is one of the disadvantages cited about payback:
it does not consider the time value of money. To solve this problem, the
present value payback method may be used. Under this method, the cash
flows are to be used in computing the payback period are converted to their
present values. (Roque, 2011)
𝑈𝑛𝑟𝑒𝑐𝑜𝑣𝑒𝑟𝑒𝑑 𝐶𝑜𝑠𝑡 𝑎𝑡 𝑡ℎ𝑒 𝑠𝑡𝑎𝑟𝑡 𝑜𝑓 𝑡ℎ𝑒 𝑦𝑒𝑎𝑟

𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑌𝑒𝑎𝑟𝑠 𝑝𝑟𝑖𝑜𝑟 𝑡𝑜 𝑟𝑒𝑐𝑜𝑣𝑒𝑟𝑦 +
𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑁𝑒𝑡 𝐶𝑎𝑠ℎ 𝐹𝑙𝑜𝑤𝑠 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑒 𝑦𝑒𝑎𝑟
Table 61
Present
Investment To Net Cash PV of Cash Value
Year x PVF Balance
be Recovered Inflow Inflows Payback
Years
2018 1
1,400,000.00 1,108,916.38 0.892857 990,103.91 409,896.09
0.39459
2019
409,896.09 1,303,058.74 0.797194 1,038,790.45
1.39459
409,896.09
∗ 0.394589775 =
1,038,790.45
As illustrated above, the discounted payback period is 1.39 years.
This amount indicates that the company recovers the initial investment of
the owner and the loan from the bank within the span of 1.39 years.
SENSITIVITY ANALYSIS
In every business, there is nothing constant. That is the reason why
managers need to observe the financial standing of the company’s cash flows. In
perceiving such company standing, unfavorable consequences also exist in which
the managers necessarily have to determine to uncover adverse situations.
Moreover, managers may also set various alternatives to assuming different
circumstances to analyze cash flows; this is what we call- sensitivity analysis.
Sensitivity analysis can be used to minimize the effect of uncertainty. It is
used to determine the impact of a change in a factor(s) influencing a projected
result (Roque, 2013). Sensitivity analysis is a useful means in of assessing
whether project decisions are likely to be affected by such changes and its possible
effects in a definite variable from what was previously assumed considering the
rapid changes in prices of the commodities and goods due to inflation and other
factors.
Considering the different scenarios given below, a forecast of the effect in
the company’s financial performance in relation to the company’s financial
performance, return on equity, payback period, and break-even point are
presented in the next page:

Table 62
Assumptions for Sensitivity Analysis
Particulars Scenario 1 Scenario 2 Scenario 3

Inc. Dec. Inc. Dec. Inc. Dec.
Sales 5% 5%
Direct Materials 2.5% 2.5%
Direct Labor 7% 7%
Indirect Labor 8% 8%
Office Supplies 2.5% 2.5%
Factory Tools 2.5% 2.5%
Cleaning Supplies 2.5% 2.5%
Rent Expense 2.5% 2.5%
Utilities Expense- 2.7% 2.7%
Electricity and
Water
Utilities Expense- 0.2% 0.2%
Telephone, WiFi,
and CCTV
Fuel Expense 4.9% 4.9%
Professional 2.5% 2.5%
Expense-
Bookkeeper
Repairs and 3.6% 3.6%
Maintenance
Scenario 1
A Proposed Production and Distribution of Coconut Wine in Tetra Packs

For the Year Ended December 31, 2017-2022
Schedule 2017 2018 2019 2020 2021 2022

Net Sales 1 ₱ - ₱ 3,622,970.73 ₱ 4,001,490.06 ₱ 4,380,009.39 ₱ 4,812,602.91 ₱ 5,299,270.62
Gross Profit ₱ - ₱ 1,786,843.35 ₱ 2,003,638.51 ₱ 2,220,424.34 ₱ 2,469,339.24 ₱ 2,747,771.32
Operating Profit ₱ - ₱ 1,053,044.50 ₱ 1,332,073.35 ₱ 1,583,553.64 ₱ 1,864,987.60 ₱ 2,170,569.47
Add: Other Income 5 59,573.15 64,820.29 70,067.74 76,027.19 82,783.39
Interest income 6 200.00 4,500.50 4,853.00 5,205.51 5,558.02
Earnings before Interest and Tax ₱ - ₱ 1,112,817.65 ₱ 1,401,394.14 ₱ 1,658,474.38 ₱ 1,946,220.30 ₱ 2,258,910.89
Earnings before Tax ₱ - ₱ 1,072,502.58 ₱ 1,369,955.79 ₱ 1,635,912.73 ₱ 1,932,535.37 ₱ 2,254,102.67
Net Income after tax ₱ - ₱ 764,280.42 ₱ 965,662.16 ₱ 1,146,430.58 ₱ 1,348,051.69 ₱ 1,566,628.78

Schedule 2017 2018 2019 2020 2021 2022

Net Income (Loss) for the year SOFP ₱ - ₱ 764,280.42 ₱ 965,662.16 ₱ 1,146,430.58 ₱ 1,348,051.69 ₱ 1,566,628.78
Changes in Accounts Receivable, net (82,538.14) (91,161.52) (99,784.91) (109,640.21) (120,727.43)
Changes in Inventory (289,602.32) 94,809.45 (266,771.05) 128,276.59 (224,467.98)
Changes in Prepaid Expenses (5,000.00) - - - -
Changes in Accounts Payable 124,287.35 12,985.25 12,985.14 14,840.38 16,695.32
Changes in Accrued Expenses 23,392.80 80.00 81.66 (213.83) 84.90
Changes in Income Tax Payable 308,222.16 96,071.47 85,188.51 95,001.53 102,990.21
Net Cash provided by Operating Activities ₱ - ₱ 923,914.47 ₱ 1,159,319.00 ₱ 959,482.13 ₱ 1,557,668.35 ₱ 1,422,556.00

Total Purchases of Equipment and Machineries ₱ - -₱ 764,087.00 ₱ - -₱ 4,800.00 ₱ - ₱ -
Cash Flow from Financing Activities:

Capital from the Owner Financing ₱ 900,000.00 ₱ 900,000.00 ₱ - ₱ - ₱ - ₱ -
Acquisition of Loan 500,000.00 - - - -
Payments of Loans (100,000.00) (100,000.00) (100,000.00) (100,000.00) (100,000.00)
Withdrawals (100,000.00) (150,000.00) (225,000.00) (337,500.00) (506,250.00)
Net Cash provided by Financing Activities ₱ 900,000.00 ₱ 1,200,000.00 -₱ 250,000.00 -₱ 325,000.00 -₱ 437,500.00 -₱ 606,250.00
Net Change in Cash ₱ 900,000.00 ₱ 1,359,827.47 ₱ 909,319.00 ₱ 629,682.13 ₱ 1,120,168.35 ₱ 816,306.00
Add: Cash Balance , beg. ₱ - ₱ - 1,359,827.47 2,269,146.47 2,898,828.61 4,018,996.96
Cash Balance, end ₱ 900,000.00 ₱ 1,359,827.47 ₱ 2,269,146.47 ₱ 2,898,828.61 ₱ 4,018,996.96 ₱ 4,835,302.96

As of December 31, 2017 - 2022
ASSETS
Current Assets Schedule 2017 2018 2019 2020 2021 2022
Cash SoCF ₱ 900,000.00 ₱ 1,359,827.47 ₱ 2,269,146.47 ₱ 2,898,828.61 ₱ 4,018,996.96 ₱ 4,835,302.96
Inventory 16 289,602.32 194,792.87 461,563.92 333,287.33 557,755.31
Non-Current Assets
Total Non-Current Assets ₱ 683,214.80 ₱ 602,342.60 ₱ 525,790.40 ₱ 444,438.20 ₱ 363,086.00
TOTAL ASSETS ₱ 900,000.00 ₱ 2,420,182.73 ₱ 3,244,981.60 ₱ 4,164,667.50 ₱ 5,184,847.27 ₱ 6,264,996.48
LIABILITIES
Current Liabilities
Accounts Payable 18 ₱ - ₱ 124,287.35 ₱ 137,272.59 ₱ 150,257.74 ₱ 165,098.12 ₱ 181,793.43
Total Current Liabilities ₱ - ₱ 147,680.15 ₱ 160,745.39 ₱ 173,812.20 ₱ 188,438.75 ₱ 205,218.96
Loans Payable ₱ - ₱ 400,000.00 ₱ 300,000.00 ₱ 200,000.00 ₱ 100,000.00 ₱ -
Income Tax Payable 25 308,222.16 404,293.64 489,482.14 584,483.68 687,473.88
Total Non-Current Liabilities ₱ - ₱ 708,222.16 ₱ 704,293.64 ₱ 689,482.14 ₱ 684,483.68 ₱ 687,473.88
TOTAL LIABILITIES ₱ - ₱ 855,902.31 ₱ 865,039.03 ₱ 863,294.34 ₱ 872,922.42 ₱ 892,692.84
OWNER'S EQUITY
Scenario 2

Schedule 2017 2018 2019 2020 2021 2022

Net Sales 1 ₱ - ₱ 3,813,653.40 ₱ 4,212,094.80 ₱ 4,610,536.20 ₱ 5,065,897.80 ₱ 5,578,179.60
Gross Profit ₱ - ₱ 1,925,626.95 ₱ 2,158,300.14 ₱ 2,390,963.75 ₱ 2,658,059.71 ₱ 2,956,915.02
Operating Profit ₱ - ₱ 1,165,229.16 ₱ 1,461,398.67 ₱ 1,730,481.43 ₱ 2,031,667.58 ₱ 2,359,034.18
Add: Other Income 5 61,257.02 66,635.37 72,014.03 78,122.31 85,046.93
Interest income 6 200.00 4,500.50 4,853.00 5,205.51 5,558.02
Earnings before Tax ₱ - ₱ 1,186,371.11 ₱ 1,501,096.19 ₱ 1,784,786.81 ₱ 2,101,310.46 ₱ 2,444,830.91
Net Income after tax ₱ - ₱ 841,711.02 ₱ 1,054,837.63 ₱ 1,247,664.96 ₱ 1,462,818.76 ₱ 1,696,323.99

Schedule 2017 2018 2019 2020 2021 2022

Net Income (Loss) for the year SOFP ₱ - ₱ 841,711.02 ₱ 1,054,837.63 ₱ 1,247,664.96 ₱ 1,462,818.76 ₱ 1,696,323.99
Net Cash provided by Operating Activities ₱ - ₱ 1,031,881.91 ₱ 1,247,545.21 ₱ 1,059,339.83 ₱ 1,671,095.97 ₱ 1,550,829.18


Withdrawals (100,000.00) (150,000.00) (225,000.00) (337,500.00) (506,250.00)
Net Change in Cash ₱ 900,000.00 ₱ 1,467,794.91 ₱ 997,545.21 ₱ 729,539.83 ₱ 1,233,595.97 ₱ 944,579.18
Cash Balance, end ₱ 900,000.00 ₱ 1,467,794.91 ₱ 2,465,340.12 ₱ 3,194,879.94 ₱ 4,428,475.91 ₱ 5,373,055.09

ASSETS
Cash SoCF ₱ 900,000.00 ₱ 1,467,794.91 ₱ 2,465,340.12 ₱ 3,194,879.94 ₱ 4,428,475.91 ₱ 5,373,055.09
Inventory 16 291,159.29 198,028.13 466,598.81 340,259.45 566,820.39
Non-Current Assets
TOTAL ASSETS ₱ 900,000.00 ₱ 2,534,051.25 ₱ 3,453,552.60 ₱ 4,480,147.65 ₱ 5,621,462.81 ₱ 6,838,332.23
LIABILITIES
Current Liabilities
Loans Payable ₱ 400,000.00 ₱ 300,000.00 ₱ 200,000.00 ₱ 100,000.00 ₱ -
OWNER'S EQUITY
Scenario 3

Schedule 2017 2018 2019 2020 2021 2022

Net Sales 1 ₱ - ₱ 3,622,970.73 ₱ 4,001,490.06 ₱ 4,380,009.39 ₱ 4,812,602.91 ₱ 5,299,270.62
Gross Profit ₱ - ₱ 1,734,944.28 ₱ 1,947,695.40 ₱ 2,160,436.94 ₱ 2,404,764.82 ₱ 2,678,006.04
Operating Profit ₱ - ₱ 975,883.14 ₱ 1,252,270.23 ₱ 1,501,570.57 ₱ 1,780,148.24 ₱ 2,082,080.30
Add: Other Income 5 61,257.02 66,635.37 72,014.03 78,122.31 85,046.93
Interest income 6 200.00 4,500.50 4,853.00 5,205.51 5,558.02
Earnings before Tax ₱ - ₱ 997,025.09 ₱ 1,291,967.75 ₱ 1,555,875.95 ₱ 1,849,791.12 ₱ 2,167,877.03
Net Income after tax ₱ - ₱ 712,955.73 ₱ 912,630.29 ₱ 1,092,005.57 ₱ 1,291,785.61 ₱ 1,507,995.35

Schedule 2017 2018 2019 2020 2021 2022

Net Income (Loss) for the year SOFP ₱ - ₱ 712,955.73 ₱ 912,630.29 ₱ 1,092,005.57 ₱ 1,291,785.61 ₱ 1,507,995.35
Net Cash provided by Operating Activities ₱ - ₱ 846,880.00 ₱ 1,103,805.47 ₱ 902,601.90 ₱ 1,498,598.64 ₱ 1,360,715.56


Withdrawals (100,000.00) (150,000.00) (225,000.00) (337,500.00) (506,250.00)
Changes in Cash ₱ 900,000.00 ₱ 1,282,793.00 ₱ 853,805.47 ₱ 572,801.90 ₱ 1,061,098.64 ₱ 754,465.56
Cash Balance, end ₱ 900,000.00 ₱ 1,282,793.00 ₱ 2,136,598.47 ₱ 2,709,400.38 ₱ 3,770,499.02 ₱ 4,524,964.58

ASSETS
Cash SoCF ₱ 900,000.00 ₱ 1,282,793.00 ₱ 2,136,598.47 ₱ 2,709,400.38 ₱ 3,770,499.02 ₱ 4,524,964.58
Inventory 16 291,159.29 198,028.13 466,598.81 340,259.45 566,820.39
Non-Current Assets
TOTAL ASSETS ₱ 900,000.00 ₱ 2,344,705.23 ₱ 3,115,668.87 ₱ 3,980,274.16 ₱ 4,943,321.46 ₱ 5,963,723.18
LIABILITIES
Current Liabilities
Loans Payable ₱ 400,000.00 ₱ 300,000.00 ₱ 200,000.00 ₱ 100,000.00 ₱ -
OWNER'S EQUITY
COMPARATIVE RESULTS
Table 63
Net Income
Original Scenario
Net 1Income Scenario 2 Scenario 3
2018 ₱ 893,035.72
Original ₱ 764,280.42
Scenario 1 ₱ 841,711.02
Scenario 2 ₱ 712,955.73
Scenario 3
2019
2018 ₱
₱ 1,107,869.49
893,035.72 ₱
₱ 965,662.16
764,280.42 ₱
₱ 1,054,837.63
841,711.02 ₱
₱ 912,630.29
712,955.73
2020
2019 ₱
₱ 1,302,089.97
1,107,869.49 ₱
₱ 1,146,430.58
965,662.16 ₱
₱ 1,247,664.96
1,054,837.63 ₱
₱ 1,092,005.57
912,630.29
2021
2020 ₱
₱ 1,519,084.84
1,302,089.97 ₱
₱ 1,348,051.69
1,146,430.58 ₱
₱ 1,462,818.76
1,247,664.96 ₱
₱ 1,291,785.61
1,092,005.57
2022
2021 ₱
₱ 1,754,957.42
1,519,084.84 ₱
₱ 1,556,628.78
1,348,051.69 ₱
₱ 1,696,323.99
1,462,818.76 ₱
₱ 1,507,995.35
1,291,785.61
2022 ₱ 1,754,957.42 ₱ 1,556,628.78 ₱ 1,696,323.99 ₱ 1,507,995.35
Table 64
Return on Equity
Original Scenario
Return1on Equity Scenario 2 Scenario 3
2018 Original 0.53 Scenario 1 0.49 Scenario 2 0.51 Scenario 3 0.47
2019
2018 0.51
0.53 0.49
0.49 0.50
0.51 0.48
0.47
2020
2019 0.41
0.51 0.40
0.49 0.41
0.50 0.40
0.48
2021
2020 0.35
0.41 0.35
0.40 0.35
0.41 0.36
0.40
2022
2021 0.32
0.35 0.32
0.35 0.32
0.35 0.33
0.36
2022 0.32 0.32 0.32 0.33
Table 65

Original Scenario 1 Scenario 2 Scenario 3
2018-2022 1.01 Discounted Payback
1.24 Period 1.10 1.35
2018-2022 1.01 1.24 1.10 1.35
Break-even Point (in Pesos)
Table 66
2018 ₱ 463,407.87 ₱ Break-even
482,259.20 ₱
Point (in Pesos) 492,440.38 ₱ 513,437.64
2019 ₱ 463,532.60 ₱ Scenario
Original 482,318.42
1 ₱ Scenario
492,490.82
2 ₱ Scenario
513,406.44
3
2020 ₱₱
2018 463,796.35 ₱₱
463,407.87 482,534.62 ₱₱
482,259.20 492,700.81 ₱₱
492,440.38 513,556.25
513,437.64
2021 ₱₱
2019 462,061.52 ₱₱
463,532.60 480,675.46 ₱₱
482,318.42 490,815.92 ₱₱
492,490.82 511,527.20
513,406.44
2022 ₱₱
2020 464,609.82 ₱₱
463,796.35 483,377.75 ₱₱
482,534.62 492,269.82 ₱₱
492,700.81 512,977.87
513,556.25
2021 ₱ 462,061.52 ₱ 480,675.46 ₱ 490,815.92 ₱ 511,527.20
2022 ₱ 464,609.82 ₱ 483,377.75 ₱ 492,269.82 ₱ 512,977.87
Conclusion:
Scenario 2 shows a higher net income as compared to Scenario 1.
Considering such finding, the proposed business is more sensitive to the increase
in sales. On the other hand, the worst impact on net income is expected to arise in
the case of Scenario 3 where there is a concurrent decrease in revenues and
increase in costs and expenses. However, the company must still undertook the
furtherance of the business because the condition is not that unfavorable to the
company for, despite the situation, the company remains profitable.

S o c i o - E c o n o m i c D e s i r a b i l i t y | 222
CHAPTER VIII
SOCIO-ECONOMIC DESIRABILITY
Since the process of drafting the project, the researchers have considered
the profitability component as the goal for the existence of the proposed business
project. However, after recognizing the fact that business’ presence is
interdependent with its environment, it was necessary to consider the project’s
forecasted worth to the needs of the society.
This study on the socio-economic desirability of the proposed project
showed the advantageous effects of the implementation of the project to the
industries directly conducting business with it and to societal development in
general. While it was true that the entity establishes the project to the benefit of its
trade investors, this chapter exposes the desirability of the project from the
viewpoint of the public as a whole. This project, when materialized, is expected to
benefit the following sectors:
Habitual Coconut Wine Drinkers
Coconut wine, commonly contained in unsanitary and weighty containers or
plastics, will be made convenient in the form of liters. The proposed production
and distribution of coconut wine in tetra packs is designed to provide the target
market with an alternative way of carrying their long-established beverage
conveniently while maintaining its distinct and natural taste.

With the realization of this project, the enterprise expects that their product
will provide maximum convenience to regular coconut wine drinkers recognizing
that coconut wine in tetra packs are very convenient for they can bring it wherever
they go and can then be disposed easily.
General Public
Known to everybody is the fact that coconut wine is rarely available in urban
places. Most of its dealers conducts its production is mostly in rural areas, and if
sold in cities, it will cost much. With the proposed production and distribution of
coconut wine contained in tetra packs, the entity will send the end product to
various areas, for a regulated price, including those places with less availability of
coconut wine. Thus, this proposal is not only intended to lessen the cost of the
general consumers but also to bring coconut wine closer to the public.
Government
With the presence of the business within the Philippine’s jurisdiction, the
government is expected to protect and provide general advantages in the form of
tangible and intangible benefits intended to improve the business’ existence.
In return for the benefits availed by the enterprise from the government, they
anticipate repayment in the form of taxes. Taxes, being used to defray
government’s varied activities, will be continually paid by the business to the
authority through the management’s religious adherence to its annual tax
obligations. Moreover, the government would also acquire funds from the company
in the form of business permits and licenses paid for the permission of the former
to start up business affairs. If the proposed project will comes into existence, the
government will have an additional source of income to which it shall take its
finances.
Creditors
A pioneering business establishment such as the proposed production and
distribution of coconut wine in tetra packs requires a considerable amount of
investment. After discovering that the owners’ individual contributions may not
suffice the needed financing to run the business, the management may take into
consideration the seeking of additional assistance from financing institutions
through loan applications. The business, as the user of the fund, will be required
to pay interests in the manner provided by the agreement. Thus, additional income
will flow to the financing institution.
Community
In the implementation of the proposed product, set of workers is a factor of
importance. Primarily, in the extraction of the sap from the coconut flower and its
consequent fermentation, suppliers will have to be contracted. Secondly, in the
operation of the business, workers such as employees, maintenance personnel,
etc. will be employed. Finally, the business will have to hire technicians for its
regular maintenance or repairs. These necessities of human resources give rise
to the obligation to pay their consequent salaries. Thus, it will help the recipient of
the same to enhance their quality of life. Furthermore, the engagement of the said
individuals will support diminish the country’s unemployment rate.

Related Industries
In the conduct of business affairs, the project considers the interdependent
relationship of the business venture and other industries. From the acquisition of
the facilities alone, the enterprise will need to purchase resources like the materials
required for the production, equipment for the business structure and the like. The
entity will also need various materials to maintain and enhance the quality of its
existence. Hence, additional income will be provided to various enterprises from
the creation to the operation of the business.

FIGURE 8
SCHEMATIC DIAGRAM SHOWING THE PROPOSED PROJECT’S SOCIO-
ECONOMIC DESIRABILITY
Sectors Benefits Outcomes
Habitual
C Coconut Wine Convenience Customers’
Drinkers Satisfaction
O
C
O
N  Costs Saving Enhanced ability
U General Public  Coconut to cater additional
Wine needs & wants
T
Availability
W
I Improved public
N Additional source structures and
Government
of funds through services
E taxes
I
N Increased ability
Increase in to cater additional
Creditor
inflows in the debtors
T form of interest
E
T
R Enhanced
A Community Salaries capacity to
improve standard
way of living
P
A
C Additional Greater capacity
K income through to address
Related
increased sales customer needs
S Industries
S t r e n g t h s , W e a k n e s s e s , O p p o r t u n i t i e s a n d T h r e a t s | 227
CHAPTER IX
STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS
No one knows what the future holds. The same holds true with regards to business
ventures. Along with this uncertainty, risks root from the time the enterprise starts its
operations. These risks are a mixture of internal and external factors that directly and
indirectly affect the life of every business. However, these risks, though will not be
completely eliminated, shall be reduced to an acceptable level by identifying the
strengths, weaknesses, opportunities, and threats of a prospective business venture and
analyzing its could-be effects.
SWOT Analysis is both a planning and controlling technique to assess the
strengths, weaknesses, opportunities, and threats associated with the proposed project.
By doing such, the proponents of this project will be able to maximize the strengths the
project holds and minimize the weaknesses it has. Opportunities related to the project are
also matched with strengths while threats identified in the business are also given focus
so these may be minimized or eventually turn into opportunities.
Although this analysis cannot and will not provide absolute assurance that the
project will be successful in the future, nevertheless, this is included in the study to guide
the people who will soon be implementing the proposed business. Figure 9 shows a
matrix of the strengths, weaknesses, opportunities, and threats associated with the
project.
Figure 9
SWOT Diagram
STRENGTHS WEAKNESSES
CONVERT- Short expiry date
- Customers' Familiarity of the Product
- Unfamiliarity in Urban Areas
- Innovative, Convenient Packaging
- Availability of Raw Materials
- Affordability
- Wider Market
- Health Benefits
CONVERT
OPPORTUNITIES THREATS
- Customer Curiosity - Existing Alternative Alcoholic Drinks
- Few Direct Competitors
STRENGTHS
Customers’ Familiarity of the Product
The familiarity of a product is a factor that helps companies in increasing its sales.
Coconut wine has existed in the country for quite some time now, and as the respondents
answered in our survey, they are very familiar with coconut wine. This familiarity can be
used to increase sales by increased customer patronage. Because the customers are
familiar with the product, they may feel more inclined to buying the same.
Innovative, Convenient Packaging
With the existence of the business, they will place the coconut wine in a
convenient, socially appealing, and sealed container. It enables the merchandise to
attract consumers who are afraid to be burdened with its usual bulky bottles, “poor man’s
drink” appeal to the public, and the foul smell it can cause to the objects surrounding it.
The product can be carried around without the risk of breaking because the company
intends to place it in a 1L milk carton-like box
Affordability
Since the business aims to market its products to the lower and middle class (those
who like drinking coconut wine), it is imperative that the product is affordable. This plan
is attainable because the business is engaged in the plain packing of coconut wine; the
company will incur lesser cost in the conduct of the company. Consequently, the entity
can charge consumers lower prices in contrast with other alcoholic drinks.
Wider Market
Considering that coconut wine is mostly available only in rural areas, the business
will be the sole distributor of coconut wine that is in a convenient container. Moreover, it
has the advantage of catching a greater number of buyers through its wide distribution in
the open market. Various sari-sari stores, dealing with the entity, will help to accomplish
such act. With it, regular coconut wine drinkers do not have to go far to buy the product.
Health Benefits
It is a known fact that coconut wine has health benefits that put it on top from other
alcoholic drinks. Some of these advantages include but are not limited to improved
longevity, reduced risk of heart attack, and reduced decline in brain activity (Linberg,
2008). Because of this fact, it may be used effectively to increase customer patronage
through advertisement and publication of the benefits.
WEAKNESSES
Unfamiliarity in Urban Areas
Recognizing that coconut wine is patronized mostly in rural areas only, the drink
does not have a greater market presence in urban places. As a result, the business may
encounter difficulties in establishing a market share in the area.
Availability of Raw Materials
The business, being engaged in the mere repacking of coconut wine, recognizes
that constant supply of the raw material is essential and imperative to carry on business
operations on a daily basis. The suppliers give life and start up the operations with the
provision of raw materials to the company.

OPPORTUNITIES
Customer Curiosity
Curiosity is something that would compel people to want to try something they
have not tried before. This rule applies with regards to the marketing of coconut wine. The
average consumer is curious as to the taste, texture, and the alcoholic content of the
same. This matter can be used to the advantage of the business by making the product
famous by word-of-mouth.
Few Direct Competitors
Though there exist few sellers of coconut wine, the business has relatively no
problem with regards to direct competitors. Also, the products shall be distributed to the
various sari-sari stores thus making the same more accessible for the consumer market.
THREATS
Existing Alternative Alcoholic Drinks
Large and established competitors dominates the market. Thus, market
penetration of the product would require aggressive marketing strategies and greater
costs. The business will have to ramp up its efforts in promoting the product.
CONVERTING WEAKNESSES TO STRENGTHS
A short expiry date can prove to be a momentous task and burden, but this can
serve as a drive to better market and sell the product, coconut wine. The pressure created
by the deadline, per se, can push the business and its customers to sell the products
even faster.
Since other competitors are not able to establish coconut wine in urban places yet,
the company will develop a more comprehensive marketing strategy that will introduce
the local drink into their preferences. Effective marketing strategies would entice
customers that would ordinarily not patronize the product.
Reliance on the suppliers giving the business its raw materials is not in favorable
terms of the company. The business can, then, use this to its advantage by good
negotiations. Using relations will enable the entity in receiving advantageous prices for
raw materials and ensure the reception of the same.
CONVERTING THREATS TO OPPORTUNITIES
The existence of alternatives is a threat to all business of any kind. Competition is
always detrimental to the growth of a company. This presence of these competitors can
be used to the business’ advantage by benchmarking. To observe the processes and
strategies of these larger companies would be wise because the business has so much
to learn from them. The enterprise may also improve itself by finding just how to prolong
its expiration, improve taste, and texture.
MATCHING STRENGTHS TO OPPORTUNITIES
Considering customer familiarity, innovative and convenient packaging, and
affordability of the proposed product, it is expected that the company will establish an
increase in demand and that, as a result, the business will realize greater sales. Also, the
known health benefits of coconut wine can encourage more customers to avail of the
product which can also contribute to the proposed product’s earnings.
Moreover, recognizing the presence of few direct competitors in the wide-ranging
market, the advantage can help the business penetrate easily in the market and thus,
obtain an increasing percentage in the market share.
These strengths, matched with the product’s opportunities, will help the business
promote greater customer satisfaction that can also support the company maintain its
captured market and consequently maintain and even increase revenues.

S u m m a r y , F i n d i n g s , C o n c l u s i o n s a n d R e c o m m e n d a t i o n s | 234
CHAPTER X
SUMMARY, FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
SUMMARY
This study was aimed to determine the feasibility of the Proposed
Production and Distribution of Coconut Wine in Tetra Packs. Specifically, the
following queries were answered:
1. Is the proposed project feasible under each of the following aspects?
1.1 Technical;
1.2 Marketing;
1.3 Management;
1.4 Legal and Taxation;
1.5 Financing;
1.6 Financial;
1.7 Socio – Economic Desirability; and
1.8 Strengths, Weaknesses, Opportunities and Threats (SWOT)
2. Based on the findings, what recommendations may be provided regarding
the proposed project?
Research Design
The proponents conducted the study at Barangay Inayawan Cebu City. The
barangay has six (6) puroks and in it are sixty (60) sari-sari stores registered in the
Barangay. The proponents have adopted the descriptive survey method for this
study whereby the owners/stewards of the stores were made to answer the
researcher-made questionnaires. Sixty (60) owners of the sari-sari store have
responded to the conducted survey which is the total population of the target
market.
Furthermore, the proponents have also made extensive research on the
related topics using references and resources from the library, internet, and
inquiries from knowledgeable persons to gather significant and needed data to
enrich this work.
FINDINGS
The following summarized findings were based in the data from the previous
chapters, to wit:
Technical Aspect
Cocwine, as its brand name, is a coconut wine packed in tetra packs with a
set shelf life of two days. From its description alone, the main raw materials of the
product are coconut wine and tetra packs. The process involved in producing the
finished product does not actually contain complex procedures. It starts with the
procurement and preparation of the coconut wine from the contracted suppliers. In
a 1-liter tetra packaging using the Aseptic Brick Carton Filling Machine, and final
labeling of the packed coconut wine manually by the workers, the finished product
can directly be delivered to the stores of Barangay Inayawan, the business’ primary
market from 10:00 am to 12:00 nn.

In the course of conducting its business, Cocwine Industries has chosen P.
Gecain St., Dawis Norte, Carmen Cebu to be its business location where numbers
of coconut wine suppliers are found.
Marketing Aspect
The initial target market of the proposed project is the various registered
sari-sari stores in Inayawan, Cebu City. Statistical data gathered from surveys
show that 92% of the 60 respondent stores are willing to purchase and stock
themselves with the product that values Php 38. Coconut wine in tetra packs are
new in a market dominated by alternative liquors. Therefore, the basis of its current
supply data comes from the company’s competitors. The proponents were able to
ascertain the market share to be 8.83% in the first year increasing up to 10.43% in
the fifth year using the data gathered. The proponents believe that the business
could sustain itself for many years and may be able to expand itself through the
increment of capacity taking into account the uniqueness and innovation of the
marketing. In promoting the proposed project, the business expects perform
various marketing activities. These include word-of-mouth advertising, distribution
of pamphlets, and posting of fliers in a visible area at the various registered sari-
sari stores of Inayawan.
Management Aspect
The proposed project adopts a sole proprietorship form of organization
basically because the business is relatively small and easy to create. Through this,
the entity is expected to have a more direct relationship among its employees and
have a better control over the operations of the enterprise. It would operate five (5)
hours a day, excluding Sundays, starting from 7:00 am to 12 noon. The business
shall have five (5) employees: secretary; production foreman; packaging staff; and
sanitary engineer. The compensation of all employees, except for the sanitary
engineer and bookkeeper, will be based on the minimum wage order under the
province of Carmen which is P 320. The minimum wage rates prescribed shall be
for the normal working hours which does not exceed eight (8) hours work a day.
Since the business operates for five (5) hours only, necessary computations are
needed such that the secretary and production foreman shall have a compensation
of P 200/day and P 120/day for the packaging staff. The company and janitor’s
agreement would be the basis of the latters’ compensation which is 187.50/day.
The bookkeeper, on the other hand, receives only a monthly fixed retainer fee at
an amount of P 5,000.00 which is by a contract entered into between him and the
company.
Legal and Taxation Aspect
Before the operations can officially commence, there are some legal
requirements that a business should comply. These requirements are Barangay
Clearance, Mayor’s Permit, Police Clearance, Fire and Safety Certificate, BIR
Registration, DTI Registration, DOLE Registration, SSS Membership,
PHILHEALTH Membership and PAG-IBIG Membership with the necessary
documentary stamps.
The government would impose Value - Added Tax (VAT) on the revenue of
the proposed business. Its income shall be subject to income tax to be borne by
the proprietor. The government will also enforce a 5% expanded withholding tax
for the company’s monthly rental for the leased space and bookkeeper’s fee.
Likewise, there will be another withholding tax for its employees’ compensation.
Since the proposed business deals with the distribution of wines it is proper to
consider excise taxes, but because the proposed business only covers tuba or
coconut wine, it shall be exempted from excise tax (Revenue Memorandum
Circular No 41-2011).
Financing Aspect
Initially, the proposed business shall need P 585,931.00 to finance its start-
up capital coming from the implementer’s pocket. This amount of initial capital
would be used to cover the necessary preliminary costs of the business which
include the initial operating expenses, materials and equipment and other
requirements essential for the company to operate.
Financial Aspect
Based on the number of assumptions identified, the enterprise has
projected a complete set of financial statements for the next five years. Apparently,
based on the financial figures, these reports show favorable results. The
company’s balance sheet exhibits sufficient capital necessary for the operation of
the business. The income statement, on the other hand, discloses a profitable
operation of the entity. This beneficial outcome of the business’ undertaking
showcases the company’s ability to manage operations well even at its the very
start.
To further understand the status of the business, ratios have been
computed and analyzed. These rates help not only the proprietor but also those
parties interested to the current standing of the company who need them for the
purpose of decision-making. Accordingly, the liquidity, solvency and profitability
ratios were computed. Moreover, the entity used break-even analysis in the
conduct of its sensitivity analysis.
Sensitivity analysis is a tool used for investigating the impact of changes in
project variables on the base-case. In this particular aspect, the business plotted
three different scenarios and accordingly, determined its possible impact.
Socio-economic Desirability
The proposed product would give economic and social benefits to various
sectors. They include regular coconut wine drinkers, the general public,
government, creditors, the community and related industries.
The realization of the project benefits the coconut wine drinkers by providing
them a sanitized and convenient way of carrying their long established beverage
drink. The packaging of the product can also help the general public by making
coconut wine available to the public without the need of going to rural areas. The
government benefits from this project in the form of taxes that the business will pay
to the authorities. The creditors can benefit by way of the interest that they will
receive as the business pays its debts. The project can also support the community
because it is where the company will source its workers. Consequently, it will
lessen the population’s unemployment rate because the entity has the goal of
hiring unemployed individuals for the operation of the enterprise. Finally, related
industries will be benefited by the project since they would generate additional
income from their products or services rendered.
SWOT Analysis
If implemented, the proposed project has sufficient strengths to surpass its
weaknesses and fully take advantage of its opportunities. As shown in the previous
chapter, the proposed project’s strengths include customer familiarity, innovative
and convenient packaging, affordability, wider market range, and health benefits.
The product’s short expiry date, the unfamiliarity of the product in highly urban
areas, and the availability of its raw materials sunders its strengths. The
enumerated weaknesses may be converted to become strengths through using
the expiry date as a motivator, the development of an effective marketing strategy
to entice urban dwellers, and the improvement of negotiation skills to get lower
prices for raw materials.
The major threat that the proposed project faces is the presence of existing
alternative alcoholic drinks in the area of sale. This presence would entail the
creation of more aggressive marketing strategies and therefore, larger marketing
costs. The company converts this threat with the use of benchmarking. This
method is a highly recommended action because the situation the proposed
project is in has huge competitors from whom the business can follow good
practices and strategies.

CONCLUSIONS
Based on the findings, the proponents have concluded that the Proposed
Production and Distribution of Coconut Wine in Tetra Pack is technically viable,
socio-economically desirable and financially feasible.
RECOMMENDATIONS
In the light of the findings, the proponents recommend the implementation of
the Proposed Production and Distribution of Coconut Wine Contained in Tetra
packs. The following are further recommended to maximize resources, attain
customer satisfaction and patronage, and realize profit maximization:
1. Branching out to other potential marketplaces when the business shows
stability and readiness for expansion through constant evaluation of the
business’ performance and the trend in the market.
2. Continuous monitoring of the entire operations to minimize spillage and the
formation of its waste products. Through this, the management might also
determine essential things or ways to help improve the processes of the
business.
3. Enhance marketing strategies through offering periodic promo rates and
freebies to attain a better customer patronage.
4. Always ensure that the facilities are in a good working condition to reach
the daily demand and ascertain the quality of the Cocwine produced.
5. Continuously, monitor the financial standing of the business whether it will
need additional resources or seek for investment opportunities for idle funds
to help maximize profitability.

REFERENCES
References
Jernigan, D. (1997). Thirsting for Markets – the global impact of corporate alcohol
Kamalanabhan, T. (2010). Management Science II
Roque, R. (2013). Reviewer in Management Advisory Services
Electronic Sources
“Alcoholism in the Philippines.” 2016. Online. Available at
http://alcoholrehab.com/alco…/alcoholism-in-the-philippines/
“Asceptic Filling Machine.” 2017. Online. Available at
https://www.saveryusa.com/aseptic-filling-machine/
“BIR Revenue Memorandum Circular No. 41-2011.” Online. Available at
http://www.bir.gov.ph/index.php/archive/2011-revenue-memorandum-
circulars.html
“Bisaya English translation of Tuba.” 2014. Online. Available at
http://translate.sandayong.com/cebuano/english/tuba
“Computer.” Online. Available at https://en.wikipedia.org/wiki/Computer
“Edgie Polistico’s Encyclopedic Philippine Food, Cooking, and Dining Dictionary.”
2010. Online. Available at http://philfoodcooking.blogspot.com/2010/12/pinoy-
food-and-cooking-dictionary-l.html
“English Oxford Living Dictionaries.” 2017. Online. Available at
https://en.oxforddictionaries.com/definition/tetra_pak
“English Oxford Living Dictionaries.” 2017. Online. Available at
https://en.oxforddictionaries.com/definition/statistics
“Financial Ratios Analysis.” Online. Available at
http://www.myaccountingcourse.com/financial-ratios/
“Fire Extinguisher.” Online. Available at
https://en.wikipedia.org/wiki/Fire_extinguisher
“Health Benefits of Tuba.” Online. Available at http://tuba.tacloban.ph/young-
man-in-the-city/
“Health Benefits of Tuba or Coconut Wine.” 2015. Online. Available at
http://www.phil-islands.com/health-benefits-of-tuba/
“Impact of alcohol consumption on Asia.” Online. Available at
http://www.ias.org.uk/What-we-do/Publication-archive/The-Globe/Issue-4-2001-
amp-3-2001/Impact-of-alcohol-consumption-on-Asia.aspx
“Investopedia.” 2017. Online. Available at
http://www.investopedia.com/terms/s/swot.asp
“Office Supplies.” Online. Available at
https://en.wikipedia.org/wiki/Office_supplies
“Philippine Coconut Authority.” Online. Available at http://pca.da.gov.ph/
“Philippine Price Index.” Online. Available at
http://www.tradingeconomics.com/philippines/consumer-price-index-cpi
“Philippine Water Districts Water Rates.” Online. Available at http://pawd.org.ph
“Sanitation.” Online. Available at https://en.wikipedia.org/wiki/Sanitation

APPENDICES-1
University of San Jose-Recoletos
Cebu City
College of Commerce
Department of Accountancy and Finance
Dear Respondent,
We, Bachelor of Science in Accountancy students, are enrolled in Feasibility Study. In compliance of the
requirement of such course, we are currently conducting a study “A Proposed Production and Distribution of Coconut Wine
(Tuba) in Tetra Pack."
To enable us to accomplish the said study, we humbly ask your help to answer the questionnaire below.
Rest assured that whatever data gathered shall be treated with utmost confidence.
Yours truly,
Researchers
I. Personal Information
Name of Respondent (optional): ____________________ Gender: _________ Age: _____

Contact Number: ________________________
II. General
Written below are questions regarding Coconut Wine or “Tuba”. Please check the blank of your best answer.
1) How familiar are you with Coconut wine or Tuba? (CHECK ONLY ONE)
____ Not familiar ____ Less Familiar _____ Familiar ____ Very Familiar
2) If given the choice of Coconut Wine or “Tuba” as an alternative drink which has 4-10% alcohol content compared
to other hard drinks containing 65-90%, would you prefer Coconut Wine (Tuba)?
____ Yes ____ No
3) If a Coconut Wine or “Tuba” in Tetra Pack will be available in the market, are you willing to sell?
____ Yes ____ No
4) Which of the following quantities (grams) per packaging do you prefer?
____ 250 mL ____ 1 Liter ____ 2 Liters
5) Which of the following prices per packaging quantity do you prefer to sell? (Based in your answer in number 4)
If 250 mL
____ Php 10.00 ______ Php 15.00 ______ Php 20.00 _____ Php
30.00
If 1 Liter
____ Php 27.50 ______ Php 36.50 ______ Php 41.00 _____ Php
50.00
If 2 Liters
____ Php 40.00 ______ Php 55.25 ______ Php 60.50 _____ Php
65.00
6) How much Coconut Wine or “Tuba” in Tetra Packs are you willing to buy from us per month?
_______ 2Liters _______ 4Liters _______ 8Liters _______ 20 Liters

III. Coconut Wine or Tuba in Tetra Pack’s Sale-ability to consumers
Please answer by checking the box of your best answer in regards to…
A. Perceptions on the production and distribution of Strongly Strongly

Agree Agree Disagree Disagree
Coconut Wine or Tuba in Tetra Pack
Coconut Wine or Tuba in Tetra Pack
1. - is convenient to bring around
2. - is healthier to consume
3. - is new and innovative
4. - can be stored for later consumption
5. - can be easily shared with friends
6. - can be readily available to markets (e.g. sari-sari store,
malls, etc.)
APPENDICES-2
University of San Jose- Recoletos
Corner P. Lopez & Magallanes Streets, 6000 Cebu City, Philippines
September 19, 2016
Mr. Joey G. Echivarria, CPA, MBA

Faculty, College of Commerce
Magallanes Street, Cebu City
Dear Mr. Echivarria:
Greetings!
The Accountancy and Finance Department acknowledges that currently there is a need to bridge the gap
between what is being taught in the classroom and what is being demanded by the industry. As such,
the department has always been supportive of the emerging trends in the Philippine education system
such as the implementation of outcomes-based education.
As fourth year Bachelor of Science in Accountancy students, we are currently conducting a feasibility
study entitled, “A Proposed Production and Distribution of Coconut Wine in Tetra Packs.” We will have
our Final-orals this coming December 10, 2016, 1:00-2:30 pm at the Business Resource Center.
In this connection, we humbly ask you to be one of our panelists for the said activity. You are expected
to be responsible of the following:
 To critique, evaluate, ask questions, and suggest recommendations on the Introduction,
Management and Socio-Economic Desirability Aspects of the study.
 To help the adviser in checking if the suggestions and recommendations of the Technical
and Marketing panelists are being followed by the group.
We believe that your knowledge and expertise can surely be of great help in the success of our study.
Thank you so much and Adelante!
Respectfully yours,
Allan Andrei M. Osorio

Team Representative
Noted by:
Dr. Victoria L. Digao, CPA

Adviser
Noted by:
Mrs. Rosemarie V. Jacalan, CPA, MBA

Chairman, Accountancy and Finance Department
September 19, 2016
Mr. Rolando Martinez, CPA

Greetings!
our Final-orals this coming December 10, 2016, 1:00-2:30 pm at the Business Resource Center.
Respectfully yours,

Team Representative
Noted by:

Adviser
Noted by:

September 19, 2016
Mr. Alejandro N. Galang Jr.

Dear Mr. Galang Jr.:
Greetings!
The Accountancy and Finance Department acknowledges that currently there is a need to bridge
the gap between what is being taught in the classroom and what is being demanded by the industry.
As such, the department has always been supportive of the emerging trends in the Philippine
education system such as the implementation of outcomes-based education.
As fourth year Bachelor of Science in Accountancy students, we are currently conducting a

feasibility study entitled, “A Proposed Production and Distribution of Coconut Wine in Tetra paks”.
We will have our Pre-orals this coming September 21, 2016, 1:00-2:30 pm at the Business Resource
Center.
In this connection, we humbly ask you to be one of our panelists for the said activity. You are to
critic, evaluate, ask questions, and suggest recommendations to improve our study especially on
the Marketing Aspect. We believe that your knowledge and expertise can surely be a great help
in the success of our study.
Respectfully yours,

Team Representative
Noted by:

Adviser
Noted by:
Mrs. Rosemarie V. Jacalan, CPA

Rev. Fr. Hernando Coja, OAR

Director, Safety and Security Department
USJ-R Main Campus
Thru: Mr. Bryan Maningo

Chief, Safety and Security Department
Dear Rev. Fr. Coja:
We, the fourth year Bachelor of Science in Accountancy students, will have our Oral Defense on
our Project Feasibility Study entitled “A Proposed Production and Distribution of Coconut Wine in
Tetra Pack” on September 21, 2016 (Wednesday) at 1:00-3:00 PM at the BRC Office . We are
inviting professionals as our Panelist for the Oral Defense to help improve our study.
In this connection, we would like to ask permission to allow our Panelist, Mr. Armstrong
Calinawan, to enter the school campus on said date.
We are hoping for your favorable response to our humble request. Thank you and God Bless!
Respectfully yours,
Allan Andrei Osorio

Group Leader
Noted by:
Dr. Victoria Digao, CPA

Class Adviser
Noted by:

Chairman, Accountancy and Finance Dept.
September 19, 2016
Mr. Joey G. Echivarria, CPA, MBA

Greetings!
our Pre-orals this coming September 21, 2016, 1:00-2:30 pm at the Business Resource Center.
Respectfully yours,

Team Representative
Noted by:

Adviser
Noted by:

September 19, 2016
Mr. Armstrong Calinawan, Chemist

Business Process Outsourcer
Convergys Cebu
Jose Maria del Mar Street, Cebu City
Dear Mrs. Arco:
Greetings!
The Accountancy and Finance Department acknowledges that currently there is a need to bridge
the gap between what is being taught in the classroom and what is being demanded by the industry.
As such, the department has always been supportive of the emerging trends in the Philippine
education system such as the implementation of outcomes-based education.
As fourth year Bachelor of Science in Accountancy students, we are currently conducting a

feasibility study entitled, “A Proposed Production and Distribution of Coconut Wine in Tetra paks”.
We will have our Pre-orals this coming September 21, 2016, 1:00-2:30 pm at the Business Resource
Center.
In this connection, we humbly ask you to be one of our panelists for the said activity. You are to
critique, evaluate, ask questions, and suggest recommendations to improve our study especially on
the Technical Aspect. We believe that your knowledge and expertise can surely be a great help in
the success of our study.
Respectfully yours,

Team Representative
Noted by:

Adviser
Noted by:

COLLEGE OF COMMERCE
Hon Lutherlee I. Soon

Barangay Captain, Inayawan, Cebu City
August 22, 2016
Dear Hon. Soon:

Greetings!
We, the fourth year students of Bachelor of Science in Accountancy at the University of
San Jose - Recoletos, are currently enrolled in Accounting 16 (Feasibility Studies). In
compliance with the requirements of the course, we intend to conduct a study entitled
“Proposed Production and Distribution of Coconut Wine in Tetra Packs.”
In line with this, we are requesting to view the records of our barangay regarding the
number of population of registered sari-sari stores, if possible records from last five (5)
years up until the present. Such document, when received, will be of great help and to our
study. Rest assured that all things related to the records will be treated with utmost
privacy.
We look forward for your favorable consideration in the pursuit of this academic
endeavor. You can send us your response through this e-mail or through this cellphone
number 09327408142.
Thank you so much.
Respectfully yours,

Group Representative
Noted by:

Adviser
APPENDICES-3
BPI SAVINGS ACCOUNT
Source: https://www.bpiexpressonline.com/p/1/326/deposit-rates-savings-and-checking
CEBECO II – Electric Charges
2015
March - December = Php 9.8731/kwh
January = Php 9.4890/kwh
Average = Pho 9.68105/kwh
2014
December = Php 9.7202/kwh
Average = Php 9.5042/kwh
2013
January - March = Php 10.2791/kwh
2012
July – December = Php 9.4690/kwh
2011
http://www.kuryente.org.ph/electric-company/rates/71/2015/february
GASOLINE PRICE CHANGES
Gasoline Price ($) x Average USDPHP Exchange Rate = Gasoline Price per Liter
2012
1.25 x 42.39 = 52.99
2013
1.30 x 42.67 = 55.47
2014
1.045 x 45.14 = 46.185
2015
0.83 x 45.953 = 38.14
2016
0.805 x 48.73 = 39.23
USDPHP RATES
2016
2015
2014
2013
2012
Source: http://www.tradingeconomics.com/philippines/gasoline-prices
METROBANK
LOAN PAYABLE – Total Monthly Payments
Outstanding
Month Principal Interest Total
Balance
1 8,333.33 3,698.63 12,031.96 491,666.67

2 8,333.33 3,636.99 11,970.32 483,333.33
3 8,333.33 3,575.34 11,908.68 475,000.00
4 8,333.33 3,513.70 11,847.03 466,666.67
5 8,333.33 3,452.05 11,785.39 458,333.33
6 8,333.33 3,390.41 11,723.74 450,000.00
7 8,333.33 3,328.77 11,662.10 441,666.67
8 8,333.33 3,267.12 11,600.46 433,333.33
9 8,333.33 3,205.48 11,538.81 425,000.00
10 8,333.33 3,143.84 11,477.17 416,666.67
11 8,333.33 3,082.19 11,415.53 408,333.33
12 8,333.33 3,020.55 11,353.88 400,000.00
13 8,333.33 2,958.90 11,292.24 391,666.67
14 8,333.33 2,897.26 11,230.59 383,333.33
15 8,333.33 2,835.62 11,168.95 375,000.00
16 8,333.33 2,773.97 11,107.31 366,666.67
17 8,333.33 2,712.33 11,045.66 358,333.33
18 8,333.33 2,650.68 10,984.02 350,000.00
19 8,333.33 2,589.04 10,922.37 341,666.67
20 8,333.33 2,527.40 10,860.73 333,333.33
21 8,333.33 2,465.75 10,799.09 325,000.00
22 8,333.33 2,404.11 10,737.44 316,666.67
23 8,333.33 2,342.47 10,675.80 308,333.33
24 8,333.33 2,280.82 10,614.16 300,000.00
25 8,333.33 2,219.18 10,552.51 291,666.67
26 8,333.33 2,157.53 10,490.87 283,333.33
27 8,333.33 2,095.89 10,429.22 275,000.00
28 8,333.33 2,034.25 10,367.58 266,666.67
29 8,333.33 1,972.60 10,305.94 258,333.33
30 8,333.33 1,910.96 10,244.29 250,000.00
31 8,333.33 1,849.32 10,182.65 241,666.67
32 8,333.33 1,787.67 10,121.00 233,333.33
33 8,333.33 1,726.03 10,059.36 225,000.00
34 8,333.33 1,664.38 9,997.72 216,666.67
35 8,333.33 1,602.74 9,936.07 208,333.33
36 8,333.33 1,541.10 9,874.43 200,000.00
37 8,333.33 1,479.45 9,812.79 191,666.67
38 8,333.33 1,417.81 9,751.14 183,333.33
39 8,333.33 1,356.16 9,689.50 175,000.00
40 8,333.33 1,294.52 9,627.85 166,666.67
41 8,333.33 1,232.88 9,566.21 158,333.33
42 8,333.33 1,171.23 9,504.57 150,000.00
43 8,333.33 1,109.59 9,442.92 141,666.67
44 8,333.33 1,047.95 9,381.28 133,333.33
45 8,333.33 986.30 9,319.63 125,000.00
46 8,333.33 924.66 9,257.99 116,666.67
47 8,333.33 863.01 9,196.35 108,333.33
48 8,333.33 801.37 9,134.70 100,000.00
49 8,333.33 739.73 9,073.06 91,666.67
50 8,333.33 678.08 9,011.42 83,333.33
51 8,333.33 616.44 8,949.77 75,000.00
52 8,333.33 554.79 8,888.13 66,666.67
53 8,333.33 493.15 8,826.48 58,333.33
54 8,333.33 431.51 8,764.84 50,000.00
55 8,333.33 369.86 8,703.20 41,666.67
56 8,333.33 308.22 8,641.55 33,333.33
57 8,333.33 246.58 8,579.91 25,000.00
58 8,333.33 184.93 8,518.26 16,666.67
59 8,333.33 123.29 8,456.62 8,333.33
60 8,333.33 61.64 8,394.98 0
Disclaimer: The computation is indicative only and may change without prior notice.
Source: https://www.metrobank.com.ph/sme/LoanCalculator.aspx
Motorcycle Insurance Service
Book2wheel provides a service connecting people to motorbike owners. It also provides
service which connects motorbike owners to insurance brokers and agents. You are
provided with direct communication from our recommended insurance companies.
What does motorbike insurance cover?
The premium insurance covers own damage/theft, acts of nature (force majeure),
personal body injury, excess bodily injury, and third party property damage.
Who can avail this service?
Anyone who has a vehicle, motorbike/scooter and cars as well, can avail a premium
insurance for their vehicle in the Philippines.
How much does this Premium cost?
It depends on the net price of your vehicle. You can decide how much you want to be
covered with premium insurance.
Example: Racal JR 125cc, a fully automatic scooter with cash value of 46,000 PHP
Summary of Premium and Other Charges
Premium 1,591 .00 PHP COC VF ……..

PHP
Value added tax 190.92 PHP
Documentary stamp tax 198.88 PHP
Local government tax 7.96 PHP
Amount Due 1,988.76 PHP
Coverage/s Sum Insured
Own Damage/ Theft 46,000.00 PHP
Acts of Nature 46,000.00 PHP
Personal accident 100,000.00 PHP

Excess Bodily Injury 200,000.00 PHP
Would you like to get a quote for your motorbike or car? Fill the form and an agent will
get back to you as soon as possible. You may also write an email at:
admin@book2wheel.com
Note: This is only for personal use motorbike. The insurance company does not covers
damages if you rent your motorbike to third party.
Source: http://www.book2wheel.com/blog/2016/07/14/motorcycle-insurance-philippines/
BPI TIME DEPOSIT
Source: https://www.bpiexpressonline.com/p/0/87/time-deposit-rates
Value Added Tax Exemptions in the Philippines
By: Tax and Accounting Center Philippines
As a rule, any person who, in the course of trade or business, sells barters, exchanges, leases
goods or properties, renders services, and any person who imports goods shall be subject to the
value-added tax. Being an indirect tax that sellers may pass-on, prices would tend to escalate with
the application of value added tax in the Philippines with respect to prime commodities, basic
needs, and other preferred goods and services.
For this reason, the value added tax rules in the Philippines provide for exemptions from value
added tax applications. Under Section 109 of the tax Code, as amended, the following
transactions shall be exempt from the value added tax:
(A) Sale or importation of agricultural and marine food products in their original state, livestock
and poultry of or king generally used as, or yielding or producing foods for human consumption;
and breeding stock and genetic materials therefor. Original state even if they have undergone the
simple processes of preparation or preservation for the market, such as freezing, drying, salting,
broiling, roasting, smoking or stripping. Polished and/or husked rice, corn grits, raw cane sugar
and molasses, ordinary salt, and copra shall be considered in their original state;
(B) Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn, livestock and
poultry feeds, including ingredients, whether locally produced or imported, used in the
manufacture of finished feeds (except specialty feeds for race horses, fighting cocks, aquarium
fish, zoo animals and other animals generally considered as pets);
(C) Importation of personal and household effects belonging to the residents of the Philippines
returning from abroad and nonresident citizens coming to resettle in the Philippines: Provided,
That such goods are exempt from customs duties under the Tariff and Customs Code of the
Philippines;
(D) Importation of professional instruments and implements, wearing apparel, domestic animals,
and personal household effects (except any vehicle, vessel, aircraft, machinery other goods for
use in the manufacture and merchandise of any kind in commercial quantity) belonging to
persons coming to settle in the Philippines, for their own use and not for sale, barter or exchange,
accompanying such persons, or arriving within ninety (90) days before or after their arrival, upon
the production of evidence satisfactory to the Commissioner, that such persons are actually
coming to settle in the Philippines and that the change of residence is bona fide;
(E) Services subject to percentage tax under Title V;
(F) Services by agricultural contract growers and milling for others of palay into rice, corn into
grits and sugar cane into raw sugar;
(G) Medical, dental, hospital and veterinary services except those rendered by professionals;
(H) Educational services rendered by private educational institutions, duly accredited by the
Department of Education (DepEd), the Commission on Higher Education (CHED), the Technical
Education and Skills Development Authority (TESDA) and those rendered by government
educational institutions;
(I) Services rendered by individuals pursuant to an employee-employer relationship;
(J) Services rendered by regional or area headquarters established in the Philippines by

multinational corporations which act as supervisory, communications and coordinating centers
for their affiliates, subsidiaries or branches in the Asia-Pacific Region and do not earn or derive
income from the Philippines;
(K) Transactions which are exempt under international agreements to which the Philippines is a
signatory or under special laws, except those under Presidential Decree No. 529;
(L) Sales by agricultural cooperatives duly registered with the Cooperative Development
Authority 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;
(M) Gross receipts from lending activities by credit or multi-purpose cooperatives duly
registered with the Cooperative Development Authority;
(N) Sales by non-agricultural, non- electric and non-credit cooperatives duly registered with the
Cooperative Development Authority: Provided, That the share capital contribution of each
member does not exceed Fifteen thousand pesos (P15,000) and regardless of the aggregate capital
and net surplus ratably distributed among the members;
(O) Export sales by persons who are not VAT-registered;
(P) Sale of real properties not primarily held for sale to customers or held for lease in the
ordinary course of trade or business or real property utilized for low-cost and socialized housing
as defined by R.A. No. 7279, otherwise known as the Urban Development and Housing Act of
1992, and other related laws, residential lot valued at one million nine hundred nineteen thousand
five hundred pesos P1,919,500 and below, house and lot, and other residential dwelling valued at
three million one hundred ninety nine thousand two hundred pesos (P3,199,200) and below:;
(Q) Lease of a residential unit with a monthly rental not exceeding twelve thousand eight
hundred pesos (P12,800);
(R) Sale, importation, printing or publication of books and any newspaper, magazine review or
bulletin which appears at regular intervals with fixed prices for subscription and sale and which is
not devoted principally to the publication of paid advertisements;
(S) Sale, importation or lease of passenger or cargo vessels and aircraft, including engine,
equipment and spare parts thereof for domestic or international transport operation;
(T) Importation of fuel, goods and supplies by persons engaged in international shipping or air
transport operations;
(U) Services of banks, non-bank financial intermediaries performing quasi-banking functions,

and other non-bank financial intermediaries; and
(V) Sale or lease of goods or properties or the performance of services other than the transactions
mentioned in the preceding paragraphs, the gross annual sales and/or receipts do not exceed the
amount of one million nine hundred nineteen thousand five hundred pesos P1,919,500
A VAT- registered person may elect that the above exemptions not apply to its sale of goods or
properties or services and such shall be irrevocable for a period of three (3) years from the quarter
the election was made.
Source: http://taxacctgcenter.org/value-added-tax-exemptions-in-the-philippines/
What are exempted from Withholding Tax on Compensation?
1. Remuneration as an incident of employment, such as the following:
a. Retirement benefits received under RA 7641
b. Any amount received by an official or employee or by his heirs from the

employer due to death, sickness or other physical disability or for any cause
beyond the control of the said official or employee such as retrenchment,
redundancy or cessation of business
c. Social security benefits, retirement gratuities, pensions and other similar

benefits
d. Payment of benefits due or to become due to any person residing in the

Philippines under the law of the US administered by the US Veterans
Administration
e. Payment of benefits made under the SSS Act of 1954, as amended
f. Benefits received from the GSIS Act of 1937, as amended, and the
retirement gratuity received by the government official and employees
2. Remuneration paid for agricultural labor and paid entirely in products of

the farm where the labor is performed
3. Remuneration for domestic services
4. Remuneration for casual labor not in the course of an employer's trade or

business
5. Compensation for services by a citizen or resident of the Philippines for a
foreign government or an international organization
6. Payment for damages
7. Proceeds of Life Insurance
8. Amount received by the insured as a return of premium
9. Compensation for injuries or sickness
10. Income exempt under Treaty
11. Thirteenth (13th) month pay and other benefits (not to exceed P 30,000)
12. GSIS, SSS, Medicare and other contributions
13. Compensation Income of Minimum Wage Earners (MWEs) with respect

to their Statutory Minimum Wage (SMW) as fixed by Regional Tripartite
Wage and Productivity Board (RTWPB)/National Wage and Productivity
Commission (NWPC), including overtime pay, holiday pay, night shift
differential and hazard pay, applicable to the place where he/she is assigned.
14. Compensation Income of employees in the public sector if the same is

equivalent to or not more than the SMW in the non-agricultural sector, as
fixed by RTWPB/NWPC, including overtime pay, holiday pay, night shift
differential and hazard pay, applicable to the place where he/she is assigned.
Source: http://www.bir.gov.ph/index.php/tax-information/withholding-tax.html#wt003
APPENDICES-4
Contract for Sale of Goods – Tetra Pak PH
This Contract for Sale of Goods is made this 25th day of November, 2017 by and
between Tetra Pak PH (“Seller”) with its principal place of business at Bonifacio Global
City, Manila Philippines, and Cocwine Industries, (“Buyer”) with its principal place of
business at Dawis Norte, Carmen, Cebu, Philippines, for the purchase of the goods
described below:
Qty. Item # Description Price Total
Php 350,000.00
250,000 --- Tetra Brik® Base 1000 ml with a Php 1.50
pieces perforation opening of Simply Twist per piece
30
1. Term. This Contract shall begin on January 01, 2018, and end upon the last delivery for
the quantity specified in this agreement, unless the parties agree otherwise. However, if, as
of such date, Buyer is in arrears on the account, Seller may then cancel this Contract and
sue for damages, including lost profits, offsetting the deposit there against, and further
recover its cost of suit including attorney fees.
2. Delivery. Buyer will give Seller 30 days’ advance notice regarding the quantity
requested for delivery. Upon receipt of the request for delivery, Seller will arrange for
delivery through a carrier chosen by Seller, the costs of which shall be F.O.B.Destination
Freight Prepaid & Added To Invoice.
3. Risk Of Loss. The risk of loss from any casualty to the Goods, regardless of the cause,
will be the responsibility of the Buyer once the goods have been shipped by the Seller.
4. Acceptance. Buyer will have the right to inspect the goods upon receipt, and within two
(2) business days after delivery, Buyer must give notice to Seller of any claim for damages
on account of condition, quality, or grade of the goods, and Buyer must specify the basis
of the claim in detail. Failure of Buyer to comply with these conditions will constitute
irrevocable acceptance of the goods by Buyer.
5. Charges. Seller shall invoice Buyer upon and for each shipment. Buyer shall pay all
charges on terms of Net 90 Days Receipt of Goods. Overdue invoices shall also bear
interest at the rate of 5% per invoice. If Seller undertakes collection or enforcement efforts,
Buyer shall be liable for all costs thereof, including attorney fees. If Buyer is in arrears on
any invoice, Seller may, on notice to Buyer, apply the deposit thereto and withhold further
delivery until the deposit and all arrearages are brought current.
6. Warranty. Seller warrants that the goods sold hereunder are new and free from
substantive defects in workmanship and materials. Seller's liability under the foregoing
warranty is limited to replacement of goods or refund of the purchase price at Seller's sole
option. No other warranty, express or implied, is made by Seller, and none shall be imputed
or presumed.
7. Taxes. All sales taxes, tariffs, and other governmental charges shall be paid by Buyer
and are Buyer's Responsibility except as limited by the law.
IN WITNESS WHEREOF, parties herein affixed their signatures on the date and place
above written.
________________________________ ALLAN ANDREI OSORIO

SELLER BUYER
Signed in the presence of:
_____________________________ ______________________________
Contract for Sale of Goods – Coconut Wine
This Contract for Sale of Goods is made this 25th day of November, 2017 by and
between Mercelina P. Gecain (“Seller”) with its principal place of business at Dawis Norte,
Carmen, Cebu, Philippines, and Cocwine Industries, (“Buyer”) with its principal place of
business at Dawis Norte, Carmen, Cebu, Philippines, for the purchase of the goods
described below:
Year Qty. Description Price Total
2018 92 gallons per day Fresh Coconut Wine P 40 per P 3680

gallon
gallon
gallon
gallon
gallon
1. Term. This Contract shall begin on January 01, 2018, and end upon the last delivery for
the quantity specified in this agreement, unless the parties agree otherwise. However, if, as
of such date, Buyer is in arrears on the account, Seller may then cancel this Contract and
sue for damages, including lost profits, offsetting the deposit there against, and further
recover its cost of suit including attorney fees.
2. Delivery. Buyer will give Seller 5 days’ advance notice regarding the quantity requested
for delivery. Upon receipt of the request for delivery, Seller will arrange for delivery
through a carrier chosen by Seller, the costs of which shall be F.O.B.Destination Freight
Prepaid & Added To Invoice.
3. Risk Of Loss. The risk of loss from any casualty to the Goods, regardless of the cause,
will be the responsibility of the Buyer once the goods have been shipped by the Seller.
4. Acceptance. Buyer will have the right to inspect the goods upon receipt, and within two
(2) business days after delivery, Buyer must give notice to Seller of any claim for damages
on account of condition, quality, or grade of the goods, and Buyer must specify the basis
of the claim in detail. Failure of Buyer to comply with these conditions will constitute
irrevocable acceptance of the goods by Buyer.
5. Charges. Seller shall invoice Buyer upon and for each shipment. Buyer shall pay all
charges on terms of Net 90 Days Receipt of Goods. Overdue invoices shall also bear
interest at the rate of 5% per invoice. If Seller undertakes collection or enforcement efforts,
Buyer shall be liable for all costs thereof, including attorney fees. If Buyer is in arrears on
any invoice, Seller may, on notice to Buyer, apply the deposit thereto and withhold further
delivery until the deposit and all arrearages are brought current.
6. Warranty. Seller warrants that the goods sold hereunder are new and free from
substantive defects in workmanship and materials. Seller's liability under the foregoing
warranty is limited to replacement of goods or refund of the purchase price at Seller's sole
option. No other warranty, express or implied, is made by Seller, and none shall be imputed
or presumed.
7. Taxes. All sales taxes, tariffs, and other governmental charges shall be paid by Buyer
and are Buyer's Responsibility except as limited by the law.
above written.
________________________________ ALLAN ANDREI OSORIO

SELLER BUYER
_____________________________ ______________________________
LEASE CONTRACT
KNOW ALL MEN BY THESE PRESENTS:
This CONTRACT OF LEASE is made and executed at the City of Cebu, this day of
November 10, 2017, by and between:
MERCELINA P. GECAIN, of legal age, married to Abdias Gecain, Filipino, and with
residence and postal address at 311 P. Gecain S., Dawis Norte, Carmen, Cebu,
hereinafter referred to as the LESSOR.
-AND-
ALLAN ANDREI OSORIO, Filipino and with residence and postal address at Idaho,
Newtown Estates, Basak Pardo, Cebu City, hereinafter referred to as the LESSEE.
WITNESSETH; That
WHEREAS, the LESSOR is the owner of THE LEASED PREMISES, a residential property
situated at 311 P. Gecain St., Dawis Norte, Carmen, Cebu;
WHEREAS, the LESSOR agrees to lease-out the property to the LESSEE and the LESSEE
is willing to lease the same;
NOW THEREFORE, for and in consideration of the foregoing premises, the LESSOR
leases unto the LESSEE and the LESSEE hereby accepts from the LESSOR the LEASED
premises, subject to the following:
TERMS AND CONDITIONS
1. PURPOSES: That premises hereby leased shall be used exclusively by the LESSEE
for residential purposes only and shall not be diverted to other uses. It is hereby expressly
agreed that if at any time the premises are used for other purposes, the LESSOR shall
have the right to rescind this contract without prejudice to its other rights under the law.
2. TERM: This term of lease is for FIVE (5) YEAR. from January 1, 2018 to December
31, 2022 inclusive. Upon its expiration, this lease may be renewed under such terms
and conditions as my be mutually agreed upon by both parties, written notice of intention
to renew the lease shall be served to the LESSOR not later than seven (7) days prior to
the expiry date of the period herein agreed upon.
3. RENTAL RATE: The monthly rental rate for the leased premises shall be in PESOS:
AMOUNT IN WORDS (P 5,000.00), Philippine Currency. All rental payments shall be
payable to the LESSOR.
4. DEPOSIT: That the LESSEE shall deposit to the LESSOR upon signing of this contract
and prior to move-in an amount equivalent to the rent for ONE (1) MONTH or the sum
of PESOS: AMOUNT IN WORDS (P 5,000.00), Philippine Currency. wherein the one (1)
month deposit shall answer partially for damages and any other obligations, for utilities
such as Water, Electricity, CATV, Telephone, Association Dues or resulting from
violation(s) of any of the provision of this contract.
5. DEFAULT PAYMENT: In case of default by the LESSEE in the payment of the rent,
such as when the checks are dishonored, the LESSOR at its option may terminate this
contract and eject the LESSEE. The LESSOR has the right to padlock the premises when
the LESSEE is in default of payment for One (1) month and may forfeit whatever rental
deposit or advances have been given by the LESSEE.
6. SUB-LEASE: The LESSEE shall not directly or indirectly sublet, allow or permit the
leased premises to be occupied in whole or in part by any person, form or corporation,
neither shall the LESSEE assign its rights hereunder to any other person or entity and
no right of interest thereto or therein shall be conferred on or vested in anyone by the
LESSEE without the LESSOR'S written approval.
7. PUBLIC UTILITIES: The LESSEE shall pay for its telephone, electric, cable TV, water,
Internet, association dues and other public services and utilities during the duration of
the lease.
8. FORCE MAJEURE: If whole or any part of the leased premises shall be destroyed or
damaged by fire, flood, lightning, typhoon, earthquake, storm, riot or any other
unforeseen disabling cause of acts of God, as to render the leased premises during the
term substantially unfit for use and occupation of the LESSEE, then this lease contract
may be terminated without compensation by the LESSOR or by the LESSEE by notice in
writing to the other.
9. LESSOR'S RIGHT OF ENTRY: The LESSOR or its authorized agent shall after giving
due notice to the LESSEE shall have the right to enter the premises in the presence of
the LESSEE or its representative at any reasonable hour to examine the same or make
repairs therein or for the operation and maintenance of the building or to exhibit the
leased premises to prospective LESSEE, or for any other lawful purposes which it may
deem necessary.
10. EXPIRATION OF LEASE: At the expiration of the term of this lease or cancellation
thereof, as herein provided, the LESSEE will promptly deliver to the LESSOR the leased
premises with all corresponding keys and in as good and tenable condition as the same
is now, ordinary wear and tear expected devoid of all occupants, movable furniture,
articles and effects of any kind. Non-compliance with the terms of this clause by the
LESSEE will give the LESSOR the right, at the latter's option, to refuse to accept the
delivery of the premises and compel the LESSEE to pay rent therefrom at the same rate
plus Twenty Five (25) % thereof as penalty until the LESSEE shall have complied with
the terms hereof. The same penalty shall be imposed in case the LESSEE fails to leave
the premises after the expiration of this Contract of Lease or termination for any reason
whatsoever.
11. JUDICIAL RELIEF: Should any one of the parties herein be compelled to seek
judicial relief against the other, the losing party shall pay an amount of One Hundred
(100) % of the amount clamed in the complaint as attorney's fees which shall in no case
be less than P50,000.00 pesos in addition to other cost and damages which the said party
may be entitled to under the law.
12. This CONTRACT OF LEASE shall be valid and binding between the parties, their
successors-in-interest and assigns.
above written.
MERCELINA P. GECAIN ALLAN ANDREI OSORIO

LESSOR LESSEE
_____________________________ ______________________________
ACKNOWLEDGEMENT
Republic of the Philippines)

_________________________) S.S
BEFORE ME, personally appeared:
Name CTC Number Date/Place Issued
(Name of Lessor) 10000000 February 24, 20__ / Cebu City

(Name of Lessee) 10000000 January 07, 20__ / Cebu
City
Known to me and to me known to be the same persons who executed the foregoing
instrument and acknowledged to me that the same is their free and voluntary act and
deed.
This instrument consisting of ____ page/s, including the page on which this
acknowledgement is written, has been signed on each and every page thereof by the
concerned parties and their witnesses, and and sealed with my notarial seal.
WITNESS MY HAND AND SEAL, on the date and place first above written.
Notary Public
Doc. No.______;
Page No. ______;
Book No.______;
Series of 20___.
APPENDICES-5
REPUBLIC OF THE PHILIPPINES
Office of the Punong Barangay
_____________, Cebu City
BARANGAY CLEARANCE
(Required under Sec. 152, Par. (c))
This is to certify that __________________________, doing business under the

style and name _________________________________, (if any) is legitimately engaged
in the business of ____________________________ (refer to footnote), with address at
________________________________________ Cebu City.
The applicant has been doing business within the barangay since __________
and known to the community as peaceloving and law-abiding citizen, (Write "Not
Applicable” at the blank space in case of first application.
His/her business establishment does not encroach on any public road or street.
Issued pursuant to Sec. 152, par. (c) of RA 7160 otherwise known as Local
Government Code of 1991.
Barangay ___________________Cebu City_______________200__.
_________________________
Punong Barangay
Cert. Fee: P10.00

O.R. No. ________________
Issued on ________________
For: Manufacturers, assemblers, repackers, processors, brewers, distillers, compounders

of liquors, distilled spirits and wines, manufacturers of any article of commerce of whatever
kind or nature, (Sec. 143, par. (a) Local Government Code.)
For: Wholesalers and distributors, or dealers in any article of commerce of whatever kind
or nature (Sec. 143, par. (b) Local Government Code.)
For: Exporters, or manufacturers, millers, producers, wholesalers, distributors, retailers

or essential commodities (rice and corn, cassava flour, dairy meat, sugar, salt, other
agricultural products, marine fresh water products, cooking oil, cooking gas, laundry soap,
detergents, medicines, fertilizer, pesticides, herbicide, farm implements, poultry and
animal feeds, school supplies, cement) (Sec. 143, par. (c) (8) , Local Government Code.)
For: Retailers of non-essential commodities (Sec. 143, par (d) Local Government Code.)
For: Contractors and other services (Sec. 143, par. (a) Local Government Code.)
FOOD AND DRUG ADMINISTRATION
LICENSE TO OPERATE
APPLICATION AND ORDER OF PAYMENT FORM
Document Tracking No.

CLASSIFICATION : APPLICATION TYPE :
(P lease Select One) (P lease Select o ne)
COMPANY INFORMATION
Name of Establishment :
Plant Address (For Manufacturer) : REGION :
Office Address : REGION :
Contact Details :
Warehouse Address (if applicable) : REGION :
Tax Identification No. (TIN) :
Name of Owner :
LTO No. (If renewal/turned initial) :
Validity (If applicable) : Issued on :
PRC Registered Professional : PRC ID No.
(If applicable) Validity
Service Begun :
Previous Employer :
Date of Resignation :
The undersigned confirm the truth of the above information and that continuous compliance of the different good practices such as but not limited to
Good Manufacturing Practice (GMP), Good Distribution and Storage Practice (GDSP), Good Pharmacy Practice (GPP), Good Laboratory Practice
(GLP) and implementing rules and regulations of Food and Drug Administration is strictly observed and followed.
(PASSPORT SIZE PHOTO) (PASSPORT SIZE PHOTO)
Printed Name & Signature Printed Name & Signature

(P lease Select One) (P lease Select o ne)
Postal Address : Postal Address :
Type of Government ID : Type of Government ID :

ID No. : Date Issued : ID No. : Date Issued :
Telephone No. : Telephone No. :
E-mail Address : E-mail Address :
Date of Licensing Seminar Attended : Date of Licensing Seminar Attended :
APPLICATION DETAILS (Please Fill One Category Only)

Manufacturer Product Category
Distributor
Retail Outlet Capital (Latest Financial Statement)
AMENDMENT 1
AMENDMENT 2
AMENDMENT 3
OTHERS
Additional Pay
PAYMENT DETAILS :
Fee : 0.00 Amount Paid : 0.00
LRF : 0.00 OR Number :
Surcharge : 0.00 Date Issued :
AMENDMENT 2
AMENDMENT 3
OTHERS
Additional Pay
PAYMENT DETAILS :
Fee : 0.00 Amount Paid : 0.00
LRF : 0.00 OR Number :
Surcharge : 0.00 Date Issued :
I have read and agreed to the declaration attached in this application form.
Page 1 of 2
In the matter of Application for
License to Operate as:
Ref No.
Petitioner- Applicant/s
x---------------------------------------------------------------------------------------------------x
PETITION
COMES NOW, Applicant/s unto this Honorable Office, most respectfully state that:
Petitioner/s is/are Filipino citizen, company or corporation existing and duly organized under Philippine laws and
with business address at
Petitioner/s hereby apply/ies for the issuance of a License to Operate as

to be located at
under the business name or style with TIN No. ;
I/we am/are duly authorized to affirm the following declaration on behalf of the Company:
I. The said establishment shall be open for business hours under the supervision of PRC registered professional (if applicable) or authorized
II. The pharmacist and other allied health professionals, upon and during employment in this establishment, is/are not and will not in any way be
III. The approved and valid License to Operate shall be displayed in a conspicuous place of the establishment;
IV. To change the business name of the establishment in the event that there is a similar or same name registered with the Food and Drug
V. The attached electronic copy of files/documents/information of the LTO application are the exact duplicate of the hard copy and, any discrepancy/
VI. If applying for automatic renewal:

a. Have filed the application before expiry date
b. Have paid the renewal fee prior its expiry date
c. That there are no unapproved changes or variations whatsoever in the establishment since the last renewal of LTO specifically but not limited
VII. The products we manufacture, distribute and sell are registered or to be registered with FDA
VIII. The establishment whether for initial, renewal or automatic renewal, is still subject to inspection by FDA’s authorized representatives at any
IX. Non-compliance with the requirements and/or failure to give notice to the FDA of the change in business address, business name, ownership, or
X. Any violation of the above provisions and rules and regulations will automatically be subject to the SUSPENSION/CANCELLATION/
XI. I/We make this declaration in full knowledge and awareness of Republic Act No. 3720, as amended by Republic Act no. 9711, otherwise known
WHEREFORE, the undersigned confirm the truth of our declaration and awareness of the foregoing duties and responsibilities among others,
Alabang, Muntinlupa City, .
WAIVER
I HEREBY GRANT AUTHORITY TO THE FOOD AND DRUG ADMINISTRATION TO VERIFY THE AUTHENTICITY OF ALL THE DOCUMENTS
Respectfully Submitted:
Page 2 of 2 Applicant’s Signature over Printed Name

Business Permit Application Form
_____ New _____ Additional
His Honor; the Mayor Application No. ___________________

City of Cebu Date Received ___________________
Received by: __________________
Sir:
I, __________________________________________, owner/operation, of legal age and

citizen of __________________________________ hereby apply for a permit to engage in
business and for this purpose the following information are submitted:
BUSINESS/TRADE NAME : ____________________________________

SIGNAGE NAME (if differ from business/trade name: _____________________
NAME OF PERMITEE-
>in case of Corp., the name of Corporation: _____________________________
>in case of Single Proprietor, name of Owner:
BUSINESS ADDRESS : _________________________________________
CAPITAL INVESTED : _________________________________________
DATE OF OPERATION : _________________________________________
DESCRIPTION OF BUSINESS : ___________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
BARANGAY : _________________________________________
The above declaration is subject to verification by proper authorities upon demand without
objection. I promise to open only the business (es) granted approval by this application, subject
to submission of the applicable requirements as listed at the back of this application form.
The permit issued shall be posted in a conspicuous place in the establishment together
with all the receipts evidencing payments of taxes, fees and other charges provided for in Section
11, City Ord. LXIX, as amended, series of 1993, otherwise I shall be liable to pay the penalties
prescribed thereon.
I promise to surrender the business permit with tax receipts duly annotated by the City
Treasurer, upon expiration of the period stated therein or upon transfer for any cause. Otherwise,
by non-compliance therewith, shall subject me to whatever amount of tax and other charges that
may be imposed by the government.
________________________________
Signature of Applicant
Community Tax Cert. No. ___________
Issued on __________ at ___________
TIN: ____________________________
SUBSCRIBED AND SWORN to before me this _____ day of _________________, 20___

at ________________________, Philippines. Affiant exhibiting to me his/her Community Tax
Certificate No. ____________ issued on __________________, 20___ at
________________________, Philippines.
________________________________
Notary Public
REQUIREMENTS FOR BUSINESS PERMIT APPLICATION:
GENERAL REQUIREMENTS: (Must be submitted by all types of Application)
[ ] 1. Latest Barangay Clearance or duly accomplished application for Barangay Clearance
[ ] 2. Sketch Plan of business location (to be drawn in separate sheet of paper)
Note: ADDITIONAL DOCUMENTS: (To be submitted within 30 days upon Issuance of certification)
[ ] 3. Sanitary Permit
[ ] 4. SSS Clearance
[ ] 5. Declaration for Electrical and/or Mechanical Provisions
[ ] 6. Public Liability Insurance
[ ] 7. Residence Certificate A and B for Single Proprietorship, C and C1 for Corporation
[ ] 8. Lease Contract between the Lessor and the Lease. If leased, attached mayor’s Permit, registration
of the building owner/landlord as a real Estate Lessor. If not, Lease Contract between the Lessee
and the Sub-Lessee with conformity of the Owner of the Building Administration. If owned, transfer
Certificate of Title (TCT) or Tax Declaration (photocopy copy).
[ ] 9. Fire Safety Inspection Certificate
SPECIFIC REQUIREMENTS: (In addition to the General Requirements must be complied upon application)
TYPE OF BUSINESS REQUIREMENTS
[ ] Sole/Single Proprietor Business Name registration from DTI
[ ] Corporations/Branch Offices of Corporations SEC/CDA; Certificate of Registration; Board
Resolution in case of Corporation whose main
office is outside Cebu City authorizing the
opening of a branch in Cebu City and indicating
the Capital Investment thereat.
[ ] Auto repair Shop, Electronics, Radio & DTI Accreditation Certificate
other Electrical Equipments
[ ] Bakery BFAD License

[ ] Banking Institution Central Bank Authorization
[ ] Custom Brokerage Custom Broker’s License
[ ] Dealers of Rice, Corn & Wheat NFA License
[ ] Drugstore BFAD License
[ ] General/Specialty & Engineering Contractor PCAB Contractor’s License
[ ] LPG Dealer ERB Permit
[ ] Manning & Crewing Services POEA Accreditation
[ ] Merchant/Broker of Commodities for Future Future Commodity Merchant/Broker’s License
Transactions
[ ] Messengerial & Courier Service DOTC Permit
[ ] Mining DENR Clearance
[ ] Pest Control Services Pest Control License
[ ] Real Estate Broker DTI Issued Real Estate Broker’s License
[ ] Real estate Lessor Occupancy Permit & Ownership
[ ] Recruitment Agency DOLE Permit
[ ] Rent-A-Car & Transport Service LTFRB License
[ ] Sell/Operation – Firearms & Explosives Camp Crame License to Operate
[ ] Security Agency PCSUCIA National License
[ ] Selling, Disposing, and/or Dispensing of Liquor Liquor License
[ ] Telecommunication NTC License
[ ] Video rental Services Videogram Permit issued by VRB
[ ] Videoke Machine/Video Game Machine PNP Approval
[ ] Video Music Machine (coin-operated) SPEED Approval
[ ] Government-owned lot/clearance
[ ] Others: _______________________________ ______________________________________
--------------------------------------------------------------------------------------------------------------------------------------------
HOW DO YOU WANT THE CITY GOVERNMENT TO USE THE MONEY THAT YOU PAY FOR BUSINESS
PERMIT? Please Check one (1) only.
[ ] For the improvement of Peace & Order (more police, more patrol cars, etc.) Pls. Specify ___________
_________________________________________________________________________________
[ ] Asphalting of road (name of road) _____________________________________________________
[ ] Sodium lights (name of road/location) __________________________________________________
[ ] Artesian Well (location) ______________________________________________________________
[ ] Drainage improvement (location) ______________________________________________________
[ ] Others (pls. specify) ________________________________________________________________

Mayor’s Business Permit Application Form
_____ New _____ Additional
His Honor; the Mayor Application No. ___________________

City of Cebu Date Received ___________________
Received by: __________________
Sir:
I, __________________________________________, owner/operation, of legal age and

citizen of __________________________________ hereby apply for a permit to engage in
business and for this purpose the following information are submitted:
BUSINESS/TRADE NAME : ____________________________________

SIGNAGE NAME (if differ from business/trade name: _____________________
NAME OF PERMITEE-
>in case of Corp., the name of Corporation: _____________________________
>in case of Single Proprietor,name of Owner:
BUSINESS ADDRESS : _________________________________________
CAPITAL INVESTED : _________________________________________
DATE OF OPERATION : _________________________________________
DESCRIPTION OF BUSINESS : ___________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
BARANGAY : _________________________________________
The above declaration is subject to verification by proper authorities upon demand without
objection. I promise to open only the business(es) granted approval by this application, subject to
submission of the applicable requirements as listed at the back of this application form.
The permit issued shall be posted in a conspicuous place in the establishment together
with all the receipts evidencing payments of taxes, fees and other charges provided for in Section
11, City Ord. LXIX, as amended, series of 1993, otherwise I shall be liable to pay the penalties
prescribed thereon.
I promise to surrender the business permit with tax receipts duly annotated by the City
Treasurer, upon expiration of the period stated therein or upon transfer for any cause. Otherwise,
by non-compliance therewith, shall subject me to whatever amount of tax and other charges that
may be imposed by the government.
________________________________
Signature of Applicant
Community Tax Cert. No. ___________
Issued on __________ at ___________
TIN: ____________________________
SUBSCRIBED AND SWORN to before me this _____ day of _________________, 20___

at ________________________, Philippines. Affiant exhibiting to me his/her Community Tax
Certificate No. ____________ issued on __________________, 20___ at
________________________, Philippines.
________________________________
Notary Public
REQUIREMENTS FOR BUSINESS PERMIT APPLICATION:
GENERAL REQUIREMENTS: (Must be submitted by all types of Application)
[ ] 1. Latest Barangay Clearance or duly accomplished application for Barangay Clearance
[ ] 2. Sketch Plan of business location (to be drawn in separate sheet of paper)
Note: ADDITIONAL DOCUMENTS: (To be submitted within 30 days upon Issuance of certification)
[ ] 3. Sanitary Permit
[ ] 4. SSS Clearance
[ ] 5. Declaration for Electrical and/or Mechanical Provisions
[ ] 6. Public Liability Insurance
[ ] 7. Residence Certificate A and B for Single Proprietorship, C and C1 for Corporation
[ ] 8. Lease Contract between the Lessor and the Lease. If leased, attached mayor’s Permit, registration
of the building owner/landlord as a real Estate Lessor. If not, Lease Contract between the Lessee
and the Sub-Lessee with conformity of the Owner of the Building Administration. If owned, transfer
Certificate of Title (TCT) or Tax Declaration (photocopy copy).
[ ] 9. Fire Safety Inspection Certificate
SPECIFIC REQUIREMENTS: (In addition to the General Requirements must be complied upon application)
TYPE OF BUSINESS REQUIREMENTS
[ ] Sole/Single Proprietor Business Name registration from DTI
[ ] Corporations/Branch Offices of Corporations SEC/CDA; Certificate of Registration; Board
Resolution in case of Corporation whose main
office is outside Cebu City authorizing the
opening of a branch in Cebu City and indicating
the Capital Investment thereat.
[ ] Auto repair Shop, Electronics, Radio & DTI Accreditation Certificate
other Electrical Equipments
[ ] Bakery BFAD License

[ ] Banking Institution Central Bank Authorization
[ ] Custom Brokerage Custom Broker’s License
[ ] Dealers of Rice, Corn & Wheat NFA License
[ ] Drugstore BFAD License
[ ] General/Specialty & Engineering Contractor PCAB Contractor’s License
[ ] LPG Dealer ERB Permit
[ ] Manning & Crewing Services POEA Accreditation
[ ] Merchant/Broker of Commodities for Future Future Commodity Merchant/Broker’s License
Transactions
[ ] Messengerial & Courier Service DOTC Permit
[ ] Mining DENR Clearance
[ ] Pest Control Services Pest Control License
[ ] Real Estate Broker DTI Issued Real Estate Broker’s License
[ ] Real estate Lessor Occupancy Permit & Ownership
[ ] Recruitment Agency DOLE Permit
[ ] Rent-A-Car & Transport Service LTFRB License
[ ] Sell/Operation – Firearms & Explosives Camp Crame License to Operate
[ ] Security Agency PCSUCIA National License
[ ] Selling, Disposing, and/or Dispensing of Liquor Liquor License
[ ] Telecommunication NTC License
[ ] Video rental Services Videogram Permit issued by VRB
[ ] Videoke Machine/Video Game Machine PNP Approval
[ ] Video Music Machine (coin-operated) SPEED Approval
[ ] Government-owned lot/clearance
[ ] Others: _______________________________ ______________________________________
-------------------------------------------------------------------------------------------------------------------------------- ------------
HOW DO YOU WANT THE CITY GOVERNMENT TO USE THE MONEY THAT YOU PAY FOR BUSINESS
PERMIT? Please Check one (1) only.
[ ] For the improvement of Peace & Order (more police, more patrol cars, etc.) Pls. Specify ___________
_________________________________________________________________________________
[ ] Asphalting of road (name of road) _____________________________________________________
[ ] Sodium lights (name of road/location) __________________________________________________
[ ] Artesian Well (location) ______________________________________________________________
[ ] Drainage improvement (location) ______________________________________________________
[ ] Others (pls. specify) ________________________________________________________________

CURRICULUM
VITAE
PERSONAL INFORMATION
Name : Gems Ville J. Abangan

Age : 20
Gender : Male
Address : Upper Torre, Inayawan, Cebu City
Religion : Roman Catholic
Contact No. : +6339327408142
Email Add : gemsvillejumaoas@gmail.com
EDUCATIONAL BACKGROUND
Tertiary
School : University of San Jose-Recoletos
Address : Magallanes Street, Cebu City
Course : Bachelor of Science in Accountancy
Secondary
School : CBD College
Address : Inayawan, Cebu City
Primary
School : Inabanga Central Elementary School
Address : Inabanga, Bohol
“Work hard in silence and let your success be the noise .”

Name : Kristian Paul S. Armecin

Age : 19
Gender : Male
Address : Pari-an, Sikatuna St. Cebu City, Cebu
Contact No. : 09483139269
Email Add : armecinkristianpaul08@gmail.com
Tertiary
Address : Magallanes St., Cebu City, Cebu
Secondary
School : Zillovia National High School
Address : Zillovia, Talacogon, Agusan del Sur
Primary
School : Delton View College
Address : Zillovia, Talacogon, Agusan del Sur
“Go for the moon, if you don’t make it you’ll still be heading for a star.” – Willis Reed
Name : Rayfiel Stephanie T. Cutillar

Age : 19 years old
Gender : Female
Address : 442-P 2nd Street De Jesus Compound Duljo Fatima Cebu City
Contact No. : 0933-309-3302
Email Add : rayfiel.fieley@gmail.com
Tertiary
School : University of San Jose - Recoletos
Address : Corner P. Lopez and Magallanes St., Cebu City, Philippines
Secondary
Address : N. Bacalso Avenue, Basak Pardo Cebu City, Philippines
Primary
School : St. Catherine’s College
Address : Carcar City Cebu, Philippines
“True victory isn’t always winning but in rising every time we fall.”
Name : Avvy Mae P. Gecain

Age : 19
Gender : Female
Address : 311 P. Gecain St., Dawis Norte, Carmen, Cebu
Contact No. : +639226820518
Email Add : avvygecain@gmail.com
Tertiary
Address : Magallanes Street, Cebu City
Secondary
School : Sto. Tomas College – Danao (1st year)
Address : Danao, Cebu
School : Carmen Christian School Inc. (2nd year to 4th year)
Address : Carmen, Cebu
Primary
School : Dawis Elementary School
Address : Carmen, Cebu
“The real opportunity for success lies within the person and not in the job.”
Name : Allan Andrei M. Osorio

Age : 20 years old
Gender : Male
Address : Newtown Estates, Bulacao Pardo, Cebu City
Contact No. : 0943-051-2171
Email Add : osorioallan96@gmail.com
Tertiary
Address : Corner P. Lopez and Magallanes St., Cebu City, Philippines
Secondary
Primary
“The best car in the world will not take you to the right place,
If you don’t know where you want to go.”

Proposed Production Distribution of Coconut Wine Contained in Tetra Packs PDF

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A PROPOSED PRODUCTION AND DISTRIBUTION OF COCONUT WINE

CONTAINED IN TETRA PACKS

GEMS VILLE ABANGAN RAYFIEL STEPHANIE CUTILLAR

This research is a product of time and efforts rendered by various people.

Family and relatives, a grandest gratitude to them for their understanding,

CHAPTER PAGE NO.

I. PROBLEM AND ITS SCOPE 1

Rationale of the Study 1

STATEMENT OF THE PROBLEM 2

SIGNIFICANCE OF THE STUDY 3

Population and Respondents 5

Research Methodology and Instruments 6

Limitations of the Study 9

II. TECHNICAL ASPECT 14

TOOLS AND EQUIPMENT 17

PRODUCTION AND BUSINESS LOCATION 27

WASTE DISPOSAL MANAGEMENT 32

III. MARKETING ASPECT 33

Product Name and Design 52

Advertising and Promotions 52

IV. MANAGEMENT ASPECT 59

Job Titles and Descriptions 68

Disciplinary Actions/ Sanctions 82

V. LEGAL AND TAXATION ASPECT 84

Securing Permits and Licenses 87

Application for Social Security System Membership 89

Application for PAG-IBIG Membership 90

Registration with the Bureau of Internal Revenue 91

Securing a Contract of Lease 93

Expanded Withholding Tax 94

Withholding Tax on Compensation 94

Documentary Stamp Tax 95

VI. FINANCING ASPECT 97

ESTIMATED PROJECT COST 98

NOTES TO ESTIMATED PROJECT COST 100

VII. FINANCIAL ASPECT 106

VIII. SOCIO-ECONOMIC DESIRABILITY 222

SWOT MATRIX 228

X. SUMMARY, FINDINGS, CONCLUSION AND RECOMMENDATIONS 234

TABLE NO. TITLE PAGE

Whether or Not They Are Familiar

with Coconut Wine or Tuba

Whether or Not They Prefer

Coconut Wine or Tuba as an

Alternative to Hard Drinks

6 Perceptions on the production and 39

distribution of Coconut Wine or Tuba

whether or not they are willing to

sell Coconut Wine or Tuba in Tetra

to How Many They Are Willing to

Buy Coconut Wine in Tetra Packs daily

9 Past Population of Stores in Barangay 42

Inayawan Distributed per Purok

10 Computation of Average Growth 43

11 Computation of the Projected 44

Population for Barangay Inayawan

for the Next Five Years

12 Projected Annual Demand 45

13 Present Supply of Alternative 47

Products to Registered Sari-Sari

Stores in Inayawan, Cebu City

14 Present Annual Supply of Alternative 48

15 Projected Supply of Alternative 49