BAN’S FRIES

A FEASIBILITY STUDY
Presented to
The Research Committee
North Central Mindanao College
Maranding, Lala, Lanaodel Norte

In Partial Fulfillment
of the Requirements for the Course
Research Writing and Counseling
Leading to
Bachelor of Science in Hotel and Restaurant Management

Johara C. Macabangon
Jahera P. Berico
Trichel B. Dolocanog

1ST SEM
S.Y 2016-2017

1
 CHAPTER I
INTRODUCTION

Banana is one of the most important commercial tropical fruits traded.

Eve was said to have used banana leaves to cover he modesty in the Garden

of Paradise as revealed from antiquity. Banana is thus called “Apple of

Paradise”. It is also known as “Adam Fig”. Banana is a type of fruit from

herbaceous plants of the genus Musa. Musa species grow in a wide range of

environments and have varied human uses, ranging from the edible bananas

and plantains of the tropics to cold-hardy fiber and ornamental plants.

Bananas come in a variety of sizes and colors when ripe, including yellow,

purple and red. Most production for local sale is of green cooking bananas

and plantains, as ripe dessert bananas are easily damaged while being

transported to market (Englberger, 2016).

Bananas are classified either as dessert bananas (meaning they are

yellow and fully ripe when eaten) or as green cooking bananas. Bananas can

be eaten raw though some varieties are generally cooked first. Bananas are a

valuable source of vitamin B6, vitamin C, and potassium (Englberger, 2016).

Bananas are the fourth most important staple crop in the world, critical

for food security in many tropical countries. World banana production amounts

to some 65 million tons per year concentrated in Africa, Asia, the Caribbean

and Latin America because of the climatic conditions. Bananas as food come

with variety of recipes such as banana chips, banana cue and banana fries

(French fries).

2
 In this feasibility study, the researchers look for viability of banana fries

in its proposed location. Banana fries is a unique product we offer because

unlike a normal french fries which is made of potato. Banana fries is not made

of artificial flavourings to make sure to maximize the healthy benefits of the

product. We consider our banana fries as a healthy snack because of its array

nutritional benefits in our body that helps reach weight-loss goal, keep bowels

healthy, provide nutrients that regulate heart rhythm and have vitamin

compounds for eye health.

3
 CHAPTER II

EXECUTIVE SUMMARY

A. TYPE OF BUSINESS
1. NATURE OF THE BUSINESS

The proposed business will be a sole proprietorship type of business

wherein it will sell healthy fries from banana. The business will manufacture

fried banana. The business will buy raw banana and cut it into wedges or

strings, packed and freeze. When cooked, the business will directly sells the

Ban’s Fries product to its customers. The production site of the business will

be in Tubod, Lanao del Norte. However, it will sell its product in Lanao del

Norte National Comprehensive High School canteen. The business will use

“Kadisnon” type of banana as the main ingredient to produce a fries since it is

a healthy and delicious Filipino snack. Banana fries will be fried using the fryer

and served hot to the customers in a sausage tray.

2. NAME OF THE BUSINESS

The business name will be ‘Ban’s Fries’. Ban’s is a clip word of

‘banana’. The name will give a hint to the target customers of the business

that it will be a banana fries.

3. LOCATION OF THE BUSINESS

The selling location of the business will be at Lanao del Norte National

Comprehensive High School (LNCHS) Canteen. A school canteen is where

most of the students buy their snacks and meals. Further, LNCHS school

population is expected to reach 3,500 numbers of students including teachers

4
and staffs as the implementation of K-12 program continues. Hence, it is

advantageous for the business to sell its product in a school canteen.

Existing competitors in selling site will give a competitive atmosphere

for the business venture. Though the business product is an innovative

production of banana recipe, through its tasteful bite and health benefits, it

could compete with the competitors’ product.

The production site of the business will be in Baroy, Lanao del Norte is

7 minutes travel from and to the selling production site. Tubod is reach with

raw banana. In this case, it is accessible for the business supply.

4. PRODUCT/ SERVICE DESCRIPTION

PHYSICAL ATTRIBUTES

Product: Ban’s Fries will sell banana fries. It will have 3 flavors: regular

banana fries, banana fries with ketchup and mayonnaise, and banana fries

with chili sauce. It is string-like or wedge-like in feature.

Packaging: Ban’s Fries will be put in sausage tray together with the

flavoring to be more convenient to the customers. The price of the product is

Ᵽ15.00 per unit at 50 grams per serving.

MECHANICAL ATTRIBUTES

Raw banana will be peel off and cut into string or wedges. The banana

strings will be soaked to water with salt solution for minutes. After soaking, the

raw banana will be placed in a plastic and put to freezer. The banana fries will

be stock in a freezer and fried upon desired amount to sell.

5
CHEMICAL ATTRIBUTES

Calories: One medium fried banana has almost twice the number of

calories of a medium raw banana. One medium fried banana contains 198

calories, according to the website Food.com. In comparison, a regular banana

has 105 calories.

Fats: Although fat does contribute some of the additional calories, the

total fat content of the fried banana is fairly low, providing less than 10 percent

of the total calories. One medium fried banana contains 2 g of total fat,

including 1 g of saturated fat, and 49 mg of cholesterol. However, the fried

banana meets 5 percent of your daily value for saturated fat, based on a

2,000-calorie diet for a healthy adult, while a regular banana meets 0 percent.

Saturated fat contributes to blood cholesterol levels and risk of heart disease.

Protein: The one significant difference between the fried banana and

plain raw banana is protein content. One medium fried banana contains 4.5 g

of protein, while the raw banana contains only 1 g. Protein is an essential

nutrient necessary to help maintain muscle mass, make new cells and support

immune health.

Carbohydrates: Most of the calories in the fried banana come from

carbohydrates. One medium fried banana contains 43 g of carbohydrates. It

also has 3 g of fiber, which is 12 percent of your daily value for fiber. Fiber is

an important nutrient for good health, helping to control hunger, improve

bowel function and lower your risk of both diabetes and heart disease.

6
 B. MANAGEMENT, MARKETING, AND FINANCIAL HIGHLIGHTS
a. MARKET FEASIBILITY

The business will buy raw banana and cut it into wedges or strings,

packed and freeze. The production site of the business will be in Baroy,

Lanao del Norte. However, it will sell its product in Lanao del Norte National

Comprehensive High School canteen. The target consumers of the business

product will be the students, teachers and staffs including the school

administrators and the people visiting the school area. The business assumes

that it will only target 10% (350) of its school population (3500). . Further, it is

expected to increase as promotion of ‘Education for All’ program of the

government continues. Henceforth, the business demand will eventually

increase.

The business will acquire its raw materials in Tubod, Lanao del Norte.

Tubod is known as banana capital of Lanao. Henceforth, there is an abundant

supply of banana in the area. Same with the competitors, the source of their

raw supply was from Tubod and neighboring barangays such as Baroy. The

equipments of the business will be acquired in Iligan City and Maranding,

Lala. The production supply of the business is directly proportional to its

demand.

b. FINANCIAL FEASIBILITY

The business returns as much as 214.90% of its investment cost. This

could conclude that the business is desirable to venture. The business pays

back its investment cost less than a year. Thus, the business is viable.

Nevertheless, it is profitable. The business has an increasing trend of ratio

7
with its net income and sales from year 1 (8.38%) to year 5 (14.69%). This

shows that the business is growing as it continues.

c. MANAGEMENT FEASIBILITY

The proposed business will be sole proprietorship type of business.

The business owners will contribute money amounting PHP30,000.00 from

their savings account. This will yield a total money of PHP90,000.00. Further,

this will be used a initial capital of the business. The business will have a

manager, cashier, salesman/lady and a delivery man. The manager will be in-

charge of supervising the whole operation of the business. The cashier will be

in-charge of the collections and payments of the business. The salesman/lady

will be in-charge of attending the customers’ orders. The delivery man will be

in-charge of delivering the business supply to its selling site and will be in-

charge of helping the management in cutting banana.

C. SOCIO-ECONOMIC CONTRIBUTION

The project aims to contribute benefits to the society. It will generate

additional income to the government through paying taxes and in complying

the permits needed in the operation of the business. It will also benefit the

banana farmers with its slight impact of demand and supply.

8
 CHAPTER III

MARKET STUDY

A. PRODUCT TO SELL

The business product to sell will be the banana fries. The prices of the

banana will be fixed regardless on its flavor. The table below shows the prices

of the banana fries:

Product Price
Regular Banana Fries PHP 15.00
Banana Fries with Ketchup and Mayonnaise PHP 15.00
Banana Fries with Spicy Sauce PHP 15.00

B. TARGET MARKET
1. AREA COVERAGE

The business production site will be in Tubod, Lanao del Norte. On the

other hand, the business will sell its product in Lanao del Norte National

Comprehensive High School canteen. Employees and staffs as well as the

students will be considered as target customers of the business.

2. CUSTOMERS/CONSUMERS

The target consumers of the business product will be the students,

teachers and staffs including the school administrators and the people visiting

the school area.

C. DEMAND AND SUPPLY ANALYSIS

Demand

9
 Banana product has been innovated to different recipes. Banana fries

is also known to most of the Filipinos. Banana fries has come to different

versions. It could be made into flat banana fries or cued banana. In this

proposed business, the banana fries will be made similar to a much known

French fries.

The business will sell its banana fries at Lanao del Norte National

Comprehensive High School Canteen in Baroy, Lanao del Norte. Due to the

implementation of the K-12 program, the school population is expected to

reach the average number of 3500 school population according to public

schools statistics data. Further, it is expected to increase as promotion of

‘Education for All’ program of the government continues. Henceforth, the

business demand will eventually increase. The business assumes that it will

only target 10% of its school population.

Location Population % Target Demand

LNCHS 3,500.00 10% 350

Existing competitors’ products were considered by the proposed

business. The probable competitors’ product will be the cued banana and

camote which is known to the target market. Products such as ice creams,

sweetened coco and others will be also considered.

Supply

10
 The business will acquire its raw materials in Tubod, Lanao del Norte

particularly in Brgy. Campo Singko. Tubod (Arjan Maghuyop) is known as

banana capital of Lanao. Henceforth, there is an abundant supply of banana

in the area. Same with the competitors, the source of their raw supply was

from Tubod and neighboring barangays such as Baroy. The equipments of the

business will be acquired in Iligan City and Maranding, Lala. The production

supply of the business is directly proportional to its demand. Thus, the supply

of the business will be as follows

Location Target Demand Target Supply

LNCHS 350 350

D. PROJECTED SALES

Production Volume for 10 months

Particulars Banana Fries

Maximum 350
Minimum 300
Average per Day 325
Average per Week 1,625
Average per Month 6,500
Average per Year 65,000

Production Volume for Summer

Particulars Banana Fries

Maximum 300
Minimum 258
Average per Day 279
Average per Week 1,395
Average per Month 5,580
Average per Year 11,160

Projected Sales
11
Particulars For 10 months For Summer Total
Production Volume per
Day 325.00 279.00 604.00

Price 15.00 15.00

Projected Sales per
Day 4,875.00 4,185.00 9,060.00

Sales per Week 24,375.00 20,925.00 45,300.00

Sales per Month 97,500.00 83,700.00 181,200.00

Sales per Year 1,170,000.00 167,400.00 1,337,400.00

E. MARKETING PROGRAM
1. PRACTICES OF THE COMPETITORS

Product:

The competitors’ products were the banana and camote cues. Same

with the proposed business, the competitors also sell banana. The competitor

products were displayed in the school canteen. It was cooked in the selling

located hence it is often served hot.

Price:

The prices of the competitors’ product were as follows:

Product Price
Banana Cue PHP 5.00
Camote Cue PHP 5.00

Promotion:

The competitors do not do much with their promotion since their

business is located in a school canteen. School canteen is where most the

12
 students buy their snacks and meals. Hence, customers go to their store with

less promotional effort.

Distribution:

The distribution of the business product were as follows:

C
usom
tp e
oti t
mo r
es
rP r
so
d
u c
t

2. OWN MARKETING PROGRAM AND STRATEGIES

Product

The business product will be the banana fries. Banana fries will have

different sauce flavor such as regular banana fries, banana fries with ketchup

and mayonnaise and banana fries.

13
Price

The business product price will be as follows:

Product Price
Regular Banana Fries PHP 15.00
Banana Fries with Ketchup and Mayonnaise PHP 15.00
Banana Fries with Spicy Sauce PHP 15.00

The business will make use of economy and psychological pricing

strategy. Psychology pricing refers to techniques that marketers use to

encourage customers to respond on emotional levels rather than logical ones.

Here, the business product will be sold higher than the competitors’ product

but due to the catchy attention and tasteful production banana fries, it will

convince the customers to buy on the business product.

Promotion

The business will use tarpaulins and flyers in promoting the business

product. The materials will have the business product description and prices.

Word-of-Mouth communication will be the most influential promotional

activities for the business product. As the customers will have a taste of the

business product, customers’ satisfaction level is the main course for the

customers’ intention to buy and to recommend for their friends. The verbal

judgment will let the target customers know how the business product differs

from existing competitors’ product.

Distribution

14
 The distribution channel of the proposed business will be as follows:

BC
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CHAPTER IV
OPERATION PLAN

A. TECHNICAL PRODUCTION DESCRIPTION

The business will make use of a ‘Kadisnon’ kind of banana for fries.

Bananas will be sliced into wedges or strings. It will be washed and soaked in

a pail with water and a little bit of salt for 15 minutes before draining. After

15
draining the sliced banana, it will be packed in a plastic bag and then placed

in a freezer while it was not cook to preserve it. Fryers with oil will be used to

fry the sliced banana. Upon order of the customer, the cooked banana fries

will be placed in a sausage tray and topped with the sauce of customers’

choice. The ingredients needed for banana fries will be as follows:

- Banana
- Oil
- Salt
- Sauce: Mayonnaise, Ketchup, Pepper, Chili, Lemon,

B. PRODUCTION/ OPERATION PROCESS

16
TESP7654321
C. LABOR REQUIREMENT

17
Description Employment Base Required Quantity
Manager Direct Labor 1
Cashier Direct Labor 1
Delivery Man Direct Labor 1
Salesman/lady Direct Labor 1
Total 4

D. PRODUCTION SCHEDULE

The business will operate from 6:00 am till 3pm from Mondays to

Fridays. Saturdays will be used in acquiring raw materials. Sundays will be

used as rest day.

Particular
s Mon. Tue. Wed. Thur. Fri. Sat. Sun.
Productio
n of Acquisition
Banana Volum Volum Volum Volum Volum of Raw Rest
Fries e: 350 e: 350 e: 350 e: 350 e: 350 Supply Day

18
E. TOOLS, MACHINERY AND EQUIPMENT REQUIREMENT

Particulars Qty. EUL Specification Unit Cost Total Cost Origin

Fujidenzo FRC-105 A 10.5 cu.ft Dual
Compartment Solid Top Freezer & Chiller in
One (White)
10.5 cu.ft Dual Compartment Solid Top
Freezer & Chiller in One
220V/100W
EER: 197 21,0 21,0 Quality -
Refrigerator 1 15
7 cu. ft. Freezer capacity/ 3.5 cu. ft. chiller 00.00 00.00 Maranding, Lala
capacity
Fast freezing mode
Double Recessed Handle– Both sides and
front
Roller feet/
Frontal temperature control
HY-83EX Electric Deep Fryer (Silver)
Electric deep fryer
Material: Stainless steel
Power supply: 220V/60Hz
9,0 9,0 Quality -
Fryer 1 15 11 Liters capacity
00.00 00.00 Maranding, Lala
High grade stainless steel construction
Efficient heating element,warming rapidly
1 Tank/2 Basket
Heating value:19Mj(18000BTU/h)
Orocan 2 5 Orocan 9215 30L Ice Box (Blue) 3,5 7,0 Ozamis City
Unicorn Selected-09OGGOE05- 00.00 00.00

19
 Orocan15LBlue
food grade pails
6 1,3 Kristine -
Pail 2 5 20 Liters
50.00 00.00 Maranding, Lala
Color: white
Size (L x W x H cm):30.48x6.35x2.54
3 Novo -
Knives 4 10 Weight (0.14kg)
75.00 00.00 Maranding, Lala
Set Size:1
1 Liter Novo -
Sauce Bottle 6 5
White, plastic 12.00 72.00 Maranding, Lala
12 pcs. Plain Spoon
Spoon and 12 pcs. Plain Fork 1 1 Divisoria -
1 8
Fork 7" Length 49.00 49.00 Maranding, Lala
Stainless Steel
Size (L x W x H cm):7 x 3 x 2 Divisoria -
Spatula 2 8
Weight (0.2 kg) 37.00 74.00 Maranding, Lala
White, plastic, round plate 2 Divisoria -
Plates 6 5
Size (L x W x H cm):21 x 21 x 6 35.00 10.00 Maranding, Lala
Size (L x W x H cm): 20 x 20 x 12 2 4 Novo -
Mixing Bowl 2 8
Weight (kg): 0.21 00.00 00.00 Maranding, Lala
10-Inch stainless-steel locking tongs Novo -
Tong 2 5
Size: 10.43*1.57 inch/26.5*4 cm 20.00 40.00 Maranding, Lala
Glassware, white 2 Novo -
Cups 6 5
Size (L x W x H cm): 7 x 3 x 2 35.00 10.00 Maranding, Lala
Fire 1 5 Place of Origin: China (Mainland) 1,2 1,2 Kim
Extinguisher Color: Red 00.00 00.00 Manufacturing
Extinguishing agent: ABC dry powder Trading - Iligan
Package: fire extinguisher standard City

20
 Brand Name: YTKY powder fire extinguisher
Powder percentage: 40%-70%
Valve materal: Brass
Warranty: 5years
Working pressure: 14BAR
Cylinder materail: ST12
Fire extinguisher sizes: 10kg-50kg trolley

TOTAL 40,955.00

F. FURNITURE AND FIXTURES

Particulars Qty Unit Cost EUL Total Cost Description

Chairs 6 300.00 10 1,800.00 Monoblock chairs
Square Table 2 3,500.00 10 7,000.00 Wood-made
Total 8,800.00

G. RAW MATERIALS

21
 Total Cost per
Particulars Qty. Unit Unit Cost Day Cost per Week Cost per Year
For 10
months

Banana 70.00 kg. 12.00 840.00 4,200.00 168,000.00

Ketchup 1.00 L 25.00 25.00 125.00 5,000.00

Mayonaise 1.00 L 265.00 265.00 1,325.00 53,000.00

Oil 2.00 L 48.00 96.00 480.00 19,200.00

Chili 0.10 kg. 10.00 1.00 5.00 200.00

Salt 0.50 kg. 10.00 5.00 25.00 1,000.00

Garlic 0.40 kg. 60.00 24.00 120.00 4,800.00

Lemon 0.50 kg. 15.00 7.50 37.50 1,500.00

Black Pepper 0.01 kg. 5.00 0.05 0.25 10.00

Subtotal 1,263.55 6,317.75 252,710.00
For 2 months

Banana 60.00 kg. 12.00 720.00 3,600.00 144,000.00

Ketchup 1.00 L 25.00 25.00 125.00 5,000.00

Mayonaise L 265.00 265.00 1,325.00 53,000.00

22
 1.00

Oil 2.00 L 48.00 96.00 480.00 19,200.00

Chili 0.10 kg. 10.00 1.00 5.00 200.00

Salt 0.50 kg. 10.00 5.00 25.00 1,000.00

Garlic 0.40 kg. 60.00 24.00 120.00 4,800.00

Lemon 0.50 kg. 15.00 7.50 37.50 1,500.00

Black Pepper 0.01 kg. 5.00 0.05 0.25 10.00

Subtotal 1,143.55 5,717.75 228,710.00
TOTAL COST 2,407.10 12,035.50 481,420.00

23
H. PLANT/FACTORY LAYOUT

24
I. LOCATION MAP

25
J. WASTE DISPOSAL SYSTEM

The business will provide 2 trash bags everyday for the business

waste. The business assumes that it will accumulate an average of 7 liters of

waste per day. The waste in production site will be collected by local garbage

collectors.

K. QUALITY CONTROL SYSTEM

a. The business will check its raw materials including the ingredients

in making banana fries everyday. Equipments that will be used in

cooking and cutting banana will be always maintained clean after

using.
b. The business will make use of water in washing the dishes and the

raw materials such as banana. Electricity will be used in operating

the fryers and other current-dependent equipments. The water bill

that will be used in the production site will be pain in NAWASA

while the electric bill will be paid in LANECO.

L. PRODUCTION COST

Particular Unit produced Cost

84,000.00
Fixed cost 0.07 6,294.28
Variable cost 14.26 1,197,818.00
Total cost 1,204,112.28
Total
production cost 14.33
per unit

CHAPTER V

26
 ORGANIZATIONAL PLAN

A. LEGAL FORM OF BUSINESS

The business will be a sole proprietorship type of business. In order to

operate legally, the following forms will be acquired by the business.

- Business Permit
- Sanitary Permit
B. ORGANIZATIONAL STRUCTURE

M
C
a
n
s
a
h
ig
e
r
Figure 1. Organizational Chart

Functions:

Manager

- In-charge of supervising the whole operation of the business

- Helps in cutting banana

Cashier

- In-charge of collecting customer’s payments

- In charge of bookkeeping
- In-charge of acquisitions of raw materials needed for the business to

operate

27
 - Helps in cutting banana

Salesman/lady

- In-charge of attending customers’ order

- Packages the banana fries
- Fries the Banana Fries
- Helps in cutting banana

Delivery Man

- Helps in delivering the supplies into school canteen

- Helps in acquisitions of raw materials
C. Qualifications of Officers

No. of Salary Total

Particular Hrs. Requirement per Salary
s Devoted s month per year Benefits
Manager 8 knows how to 8,500.00 102,000.0 SSS and
manage a
Must know 0 PhilHealth
basic math;
must be 21-25
yrs. Old;
flexible;
accurate and SSS and
keen PhilHealth
observant; 102,000.0 Contributi
Cashier 8 licensed driver 8,500.00 0 on

Must be
approachable;
flexible;
knows how to
cook banana SSS and
fries; must be PhilHealth
Salesman physically fit; 102,000.0 Contributi
/lady 8 licensed driver 8,500.00 0 on
licensed SSS and
driver; flexible; PhilHealth
Delivery physically fit; Contributi
Man 8 must be male 8,000.00 96,000.00 on
402,000.0
Total 33,500.00 0

28
 D. OFFICE EQUIPMENT

Particulars Qty. EUL Specification Unit Cost Total Cost

Calculator Casio/MX-120S
1,5
2 5 Size:13.9 x 10.4 x
750.00 00.00
2.6

E. GANTT CHART OF ACTIVITIES

Month 1
Particulars
1 2 3 4
Acquisition of the Capital
Completion of Legal Forms of the
Business

Acquisition of Fixed Assets

Acquisition of Raw Materials
Business Promotion.
Start of the business
F. ADMINISTRATIVE EXPENSE

Particulars Per Month Payment Per Year Payment

Salary and Wages 33,500.00

Permits and Licenses 3,100.00

SSS Contribution 3,725.00

PhilHealth Contribution 800.00

Purchases of Office
Supplies 2,354.00

Rent Expense-Canteen 3,000.00

Rent Expense-
Production Site 5,000.00

Fire Extinguisher 900.00

Utilities 1,700.00
Total 50,079.00 4,000.00

29
 CHAPTER VI

FINANCIAL STUDY

A. TOTAL PROJECT COST

Schedule 1 Total Project Cost

Particulars Equity Total Cost

Fixed Assets
Tools, Machinery and Equipment 40,955.00
Furniture and Fixtures 8,800.00
Office Equipment 1,500.00
Store Construction 10,000.00
Sub-total 61,255.00
Working Capital:
Permits and License 3,100.00
Purchases of Raw Materials 2,407.10
Promotional Expense 850.00
Packaging Materials 580.00

30
Rent Expense 8,000.00
Utility Cost 800.00
Transportation Cost 5,000.00
Sub-total 20,737.10
Total Project Cost 81,992.10

B. Sources of Financing

The business owners will contribute money amounting PHP30,000.00 from

their savings account. This will yield a total money of PHP90,000.00. Further,

this will be used a initial capital of the business.

31
 BAN’S FRIES
INCOME STATEMENT
FOR THE FIVE YEARS ENDED DEC. 31

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Sales (Sched. 16) 1,337,400.00 1,404,270.00 1,474,483.50 1,548,207.68 1,625,618.06
Less:
Purchases of Raw Materials (Sched.
17) 481,420.00 505,491.00 530,765.55 557,303.83 585,169.02
Administrative Expense ((Sched. 9) 577,500.00 576,593.00 577,009.16 577,433.64 577,866.62
Purchases of Office Supplies ((Sched.
8) 28,248.00 28,248.00 28,248.00 28,248.00 28,248.00
Promotional Expense ((Sched. 11) 850.00 892.50 937.13 983.98 1,033.18
Packaging Materials (Sched. 18 71,200.00 74,760.00 78,498.00 82,422.90 86,544.05
Transportation Cost ((Sched. 10) 38,600.00 33,936.00 34,275.36 34,618.11 34,964.29
Depreciation Expense (Sched. 24) 6,294.28 6,294.28 6,294.28 6,294.28 6,294.28
Sub-total 1,204,112.28 1,226,214.78 1,256,027.47 1,287,304.74 1,320,119.43
Gross Operating Profit 133,287.73 178,055.23 218,456.03 260,902.93 305,498.63
Less: Tax Due (Sched. 27) 21,157.55 32,013.81 42,114.01 53,270.88 66,649.59
Net Income 112,130.18 146,041.42 176,342.02 207,632.05 238,849.04

32
 BAN’S FRIES
CASH FLOW STATEMENT
FOR THE FIVE YEARS ENDED DEC. 31
Pre-
Particulars operation Year 1 Year 2 Year 3 Year 4 Year 5
Cash Inflows
1,337,400.0 1,404,270.0 1,474,483.5 1,548,207.6 1,625,618.0
Sales (Sched. 16) 0.00 0 0 0 8 6
Add. Investments 90,000.00 0.00 0.00 0.00 0.00 0.00
1,337,400.0 1,404,270.0 1,474,483.5 1,548,207.6 1,625,618.0
Total Cash Inflows 90,000.00 0 0 0 8 6
Cash Outflows
Acquisition of Fixed Assets (Sched. 1) 61,255.00 0.00 0.00 0.00 0.00 0.00
Purchases of Raw Materials (Sched. 17) 2,407.10 479,012.90 505,491.00 530,765.55 557,303.83 585,169.02
Administrative Expense ((Sched. 9) 11,900.00 565,600.00 576,593.00 577,009.16 577,433.64 577,866.62
Purchases of Office Supplies ((Sched.
8) 0.00 28,248.00 28,248.00 28,248.00 28,248.00 28,248.00
Promotional Expense ((Sched. 11) 850.00 0.00 892.50 937.13 983.98 1,033.18
Packaging Materials (Sched. 18) 580.00 70,620.00 74,760.00 78,498.00 82,422.90 86,544.05
Transportation Cost (Sched. 10) 5,000.00 33,600.00 33,936.00 34,275.36 34,618.11 34,964.29
Income Tax Due 0.00 21,157.55 32,013.81 42,114.01 53,270.88 66,649.59
1,198,238.4 1,251,934.3 1,291,847.2 1,334,281.3 1,380,474.7
Total Cash Outflows 81,992.10 5 1 0 5 4
Net Cash Flow 8,007.90 139,161.56 152,335.69 182,636.30 213,926.33 245,143.32
Cash Balance, Beg. 0.00 8,007.90 147,169.46 299,505.15 482,141.45 696,067.78
Cash Balance, End 8,007.90 147,169.46 299,505.15 482,141.45 696,067.78 941,211.09

33
 BAN’S FRIES
BALANCE SHEET
FOR THE FIVE YEARS ENDED DEC. 31
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Current Assets
Cash 147,169.46 299,505.15 482,141.45 696,067.78 941,211.09
Total Current Assets 147,169.46 299,505.15 482,141.45 696,067.78 941,211.09
Non-Current Assets
Tools, Machinery and Equipment (Sched. 1) 40,955.00 40,955.00 40,955.00 40,955.00 40,955.00
Furniture and Fixtures (Sched. 1) 8,800.00 8,800.00 8,800.00 8,800.00 8,800.00
Office Equipment (Sched. 1) 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00
Store Construction (Sched. 1) 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00
Total 61,255.00 61,255.00 61,255.00 61,255.00 61,255.00
Less: Accumulated Depreciation (Sched.
25) 6,294.28 12,588.55 18,882.83 25,177.10 31,471.38
Total Non-Current Assets 54,960.73 48,666.45 42,372.18 36,077.90 29,783.63
Total Assets 202,130.18 348,171.60 524,513.62 732,145.68 970,994.72
Liabilities and Owner's Equity
Liabilities
Accounts Payable 0.00 0.00 0.00 0.00 0.00
Total Liabilities 0.00 0.00 0.00 0.00 0.00

34
Owner's Equity
Capital, Beg. 90,000.00 202,130.18 348,171.60 524,513.62 732,145.68
Add: Net Income 112,130.18 146,041.42 176,342.02 207,632.05 238,849.04
Capital, End 202,130.18 348,171.60 524,513.62 732,145.68 970,994.72
Total Liabilities and Owner's Equity 202,130.18 348,171.60 524,513.62 732,145.68 970,994.72

35
 C. FINANCIAL ANALYSIS
a. RETURN ON INVESTMENT

Return on Investment=Ave. Annual Net Income/Total Investments X

100%

Year Net Income

1 112,130.18
2 146,041.42
3 176,342.02
4 207,632.05
5 238,849.04
Total Net Income 880,994.72
Divided by Critical Asset Life 5
Average Net Income 176,198.94
Total Project Cost 81,992.10
Return on Investment 214.90%

The business returns as much as 214.90% of its investment cost. This

could conclude that the business is desirable to venture.

b. PAYBACK PERIOD

Cumulative Payback
Net Income+
Year Total Period
Depreciation

36
 1 118,424.46 118,424.46 1
2 152,335.69 270,760.15
3 182,636.30 453,396.45
4 213,926.33 667,322.78
5 245,143.32 912,466.09
Total Project Cost 81,992.10
Less Cummulative
Total where investment 118,424.46
is to be recovered
Total amount to be
-36,432.36
recovered
Divided by Net
Income+Dep.
118,424.46
Where the investment is
recovered
-
Quotient
0.307642159
Years
-
Months(Multiplied by 12) -4
3.691705907
Payback Period less than a year

The business pays back its investment cost less than a year. Thus, the

business is viable. Nevertheless, it is profitable.

c. NET INCOME: SALES RATIO

Net Income: Sales Ratio

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

112,130.1 146,041.4 176,342.0 207,632.0 238,849.0
Net Income
8 2 2 5 4
Gross 1,337,400 1,404,270 1,474,483 1,548,207 1,625,618
Revenue .00 .00 .50 .68 .06
Net Income
8.38% 10.40% 11.96% 13.41% 14.69%
Rate

37
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
Year 1 Year 2 Year 3 Year 4 Year 5

The business has an increasing trend of ratio with its net income and

sales from year 1 (8.38%) to year 5 (14.69%). This shows that the business is

growing as it continues.

d. BREAK-EVEN POINT

Contribution Margin = Sales – Variable Cost

Sales 1,337,400.00
Less: Variable Cost 1,197,818.00
Total 139,582.00

Contribution Margin per Unit = Selling Price Average – Unit Cost

Average Selling Price 15.00

Less: Average Unit Cost 14.33
Total 0.67

Contribution Margin Ratio = TCM/ Total Sales X 100%

Total Contribution Margin 139,582.00

Divided By: Total Sales 1,337,400.00
Quotient 0.104368177
Multiply by: 100%
Contribution Margin Ratio 10.44%

38
Break-even Point in unit

Unit Produced per Day 350

Multiplied by: Production Cost per Unit 14.33
Product 5,017.13
Divided by: Selling Price 15.00
Quotient 334
Break-even Point in Unit 334

D. LIST OF ASSUMPTIONS

Assumptions

 Projected Sales will increase by 5% annually

 Purchases of Raw Materials and Packaging Materials will increase by

5% annually
 Promotional Expense will increase by 5% annually
 Transportation Cost will increase by 1% annually
 Depreciation Expense Formula:
o Depreciation Cost = Depreciable Amount/ Lifespan

E. SCHEDULES

Schedule 2 Permits and Licenses

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Business Permit 2,450.00 2,450.00 2,450.00 2,450.00 2,450.00
DTI Registration 515.00 0.00 0.00 0.00 0.00
Cedula 75.00 75.00 75.00 75.00 75.00
Purok Clearance 10.00 10.00 10.00 10.00 10.00
Barangay
50.00 50.00 50.00 50.00 50.00
Clearance
Total 3,100.00 2,585.00 2,585.00 2,585.00 2,585.00

Schedule 2.1 Business Permit

Particulars Amount
Billboard Fee 250.00
Sanitary Fee 300.00

39
 Municipal ecology 300.00
Mayor's Permit 500.00
Weight and
50.00
Measure
Zoning Fee 50.00
Basic Tax
1,000.00
Clearance
Total 2,450.00

Schedule 3 Salary and Wages

Description Salary per Month Salary per Year

Manager 8,500.00 102,000.00
Cashier 8,500.00 102,000.00
Salesman/lady 8,500.00 102,000.00
Delivery Man 8,000.00 96,000.00
TOTAL 33,500.00 402,000.00

Schedule 4 PhilHealth Contributions and SSS Contributions

Salary per PhilHealth SSS

Description Month Contribution Contribution

Manager 8,500.00 200.00 945.00

Cashier 8,500.00 200.00 945.00

Salesman/lad
y 8,500.00 200.00 945.00

Delivery Man 8,000.00 200.00 890.00

TOTAL 33,500.00 800.00 3,725.00

Schedule 5 Utility Cost

Particular
s Monthly Year 1 Year 2 Year 3 Year 4 Year 5
Water 500.00 6,000.00 6,120.00 6,242.40 6,367.25 6,494.59
1,200.0 14,400.0 14,688.0 14,981.7 15,281.4 15,587.0
Electricity 0 0 0 6 0 2
1,700.0 20,400.0 20,808.0 21,224.1 21,648.6 22,081.6
Total 0 0 0 6 4 2

40
Schedule 6 Rent Expense – Production Site

Particulars Amount
Monthly 5,000.00
Yearly 60,000.00

Schedule 7 Rent Expense – School Canteen

Particulars Amount
Monthly 3,000.00
Yearly 36,000.00

Schedule 8 Office Supplies

Monthly
Particulars Qty. Price Cost Yearly Cost

Notebook 1 15.00 15.00 180.00

Pot Holder 4 20.00 80.00 960.00

Hand
Gloves 150 10.00 1,500.00 18,000.00

Apron 3 150.00 450.00 5,400.00

Hairnet 36 5.00 180.00 2,160.00

Ballpen 4 5.50 22.00 264.00

Puncher 1 65.00 65.00 780.00

Staple 1 32.00 32.00 384.00

Staple wire 1 10.00 10.00 120.00

Total 2,354.00 28,248.00

Schedule 9 Administrative Expense

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Salary and 402,000. 402,000. 402,000. 402,000. 402,000.

Wages 00 00 00 00 00
Permits and
Licenses 3,100.00 2,585.00 2,585.00 2,585.00 2,585.00
44,700.0 44,700.0 44,700.0 44,700.0 44,700.0
SSS Contribution 0 0 0 0 0
PhilHealth

41
Contribution 9,600.00 9,600.00 9,600.00 9,600.00 9,600.00

Rent Expense- 36,000.0 36,000.0 36,000.0 36,000.0 36,000.0

Canteen 0 0 0 0 0

Rent Expense- 60,000.0 60,000.0 60,000.0 60,000.0 60,000.0

Production Site 0 0 0 0 0

Fire Extinguisher 900.00 900.00 900.00 900.00 900.00

20,400.0 20,808.0 21,224.1 21,648.6 22,081.6
Utilities 0 0 6 4 2

576,700. 576,593. 577,009. 577,433. 577,866.

Total 00 00 16 64 62

Schedule 10 Transportation Cost

Particulars Total Cost

Weekly 700.00

Monthly 2,800.00

Yearly 33,600.00

Schedule 11 Promotional Expense

Particulars Qty. Amount Total Cost

Flyers 50 5.00 250.00

Tarpaulins 2 300.00 600.00
Total 850.00

Schedule 12 Production Volume – School Canteen for 10 months

Particulars Banana Fries

Maximum 350
Minimum 300
Average per Day 325
Average per Week 1,625
Average per Month 6,500
Average per Year 65,000

Schedule 13 Production Volume – School Canteen for summer

Particulars Banana Fries

42
Maximum 300
Minimum 258
Average per Day 279
Average per Week 1,395
Average per Month 5,580
Average per Year 11,160

Schedule 14 Projected Sales – School Canteen for 10 months

Particulars For 10 months

Production Volume per Day 325.00
Price 15.00
Projected Sales per Day 4,875.00
Sales per Week 24,375.00
Sales per Month 97,500.00
Sales per Year 1,170,000.00

Schedule 15 Projected Sales – School Canteen for Summer

Particulars For Summer

Production Volume per Day 279.00
Price 15.00
Projected Sales per Day 4,185.00
Sales per Week 20,925.00
Sales per Month 83,700.00
Sales per Year 167,400.00

Schedule 16 Total Projected Sales

Particulars For 10 months For Summer Total

Production Volume per
Day 325.00 279.00 604.00

Price 15.00 15.00

Projected Sales per
Day 4,875.00 4,185.00 9,060.00

Sales per Week 24,375.00 20,925.00 45,300.00

Sales per Month 97,500.00 83,700.00 181,200.00

Sales per Year 1,170,000.00 167,400.00 1,337,400.00

Schedule 17 Purchases of Raw Materials

43
 Uni Total Cost Cost per Cost per
Particulars Qty. t Unit Cost per Day Week Year
For 10
months

Banana 70.00 kg. 12.00 840.00 4,200.00 168,000.00

Ketchup 1.00 L 25.00 25.00 125.00 5,000.00

Mayonaise 1.00 L 265.00 265.00 1,325.00 53,000.00

Oil 2.00 L 48.00 96.00 480.00 19,200.00

Chili 0.10 kg. 10.00 1.00 5.00 200.00

Salt 0.50 kg. 10.00 5.00 25.00 1,000.00

Garlic 0.40 kg. 60.00 24.00 120.00 4,800.00

Lemon 0.50 kg. 15.00 7.50 37.50 1,500.00

Black
Pepper 0.01 kg. 5.00 0.05 0.25 10.00

Subtotal 1,263.55 6,317.75 252,710.00

For 2
months

Banana 60.00 kg. 12.00 720.00 3,600.00 144,000.00

Ketchup 1.00 L 25.00 25.00 125.00 5,000.00

Mayonnais
e 1.00 L 265.00 265.00 1,325.00 53,000.00

Oil 2.00 L 48.00 96.00 480.00 19,200.00

Chili 0.10 kg. 10.00 1.00 5.00 200.00

Salt 0.50 kg. 10.00 5.00 25.00 1,000.00

Garlic 0.40 kg. 60.00 24.00 120.00 4,800.00

Lemon 0.50 kg. 15.00 7.50 37.50 1,500.00

Black
Pepper 0.01 kg. 5.00 0.05 0.25 10.00

Subtotal 1,143.55 5,717.75 228,710.00

TOTAL 12,035.5
COST 2,407.10 0 481,420.00

44
Schedule 18 Packaging Materials Cost

Total Cost Cost per Cost per

Particulars Qty. Unit Cost per Day Week Year
For 10
months
Sausage
Tray 29 5.00 145.00 725.00 29,000.00

Plastic Bag 3 45.00 135.00 675.00 27,000.00

Trash Bag 2 10.00 20.00 100.00 4,000.00

Subtotal 300.00 1,500.00 60,000.00

For 2
months
Sausage
Tray 25 5.00 125.00 625.00 5,000.00

Plastic Bag 3 45.00 135.00 675.00 5,400.00

Trash Bag 2 10.00 20.00 100.00 800.00

Subtotal 280.00 1,400.00 11,200.00

TOTAL
COST 580.00 2,900.00 71,200.00

Schedule 19 Utility Cost for Pre-operation

Particulars Pre-operation
Water 300.00
Electricity 500.00
Total 800.00

Schedule 20 Depreciation Expense for Tools, Machinery and Equipment

Depreciable Depreciation
Particulars Amount Useful Life Cost
Refrigerator 21,000.00 15 1,400.00
Fryer 9,000.00 15 600.00
Orocan 7,000.00 5 1,400.00
Pail 1,300.00 5 260.00

Knives 300.00 10 30.00

Sauce Bottle 72.00 5 14.40

Spoon and Fork 149.00 8 18.63

45
Spatula 74.00 8 9.25

Plates 210.00 5 42.00

Mixing Bowl 400.00 8 50.00

Tong 40.00 5 8.00

Cups 210.00 5 42.00

Fire
Extinguisher 1,200.00 5 240.00
Total 40,955.00 4,114.28

Schedule 21 Depreciation Expense for Furniture and Fixtures

Depreciable Depreciation
Particulars Amount Useful Life Cost
Furniture and
Fixtures 8,800.00 10 880.00

Schedule 22 Depreciation Expense for Store Construction

Depreciable Depreciation
Particulars Amount Useful Life Cost
Cart
Construction 10,000.00 10 1,000.00

Schedule 23 Depreciation Expense for Office Equipment

Depreciable Depreciation
Particulars Amount Useful Life Cost
Office
Equipment 1,500.00 5 300.00

Schedule 24 Total Depreciation Expense

Particulars Amount
Tools, Machinery and Equipment 4,114.28
Furniture and Fixtures 880.00
Cart Construction 1,000.00
Office Equipment 300.00
Total Depreciation Expense 6,294.28

46
 Schedule 25 Accumulated Depreciation

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Accumulated 12,588.5 18,882.8 25,177.1 31,471.3

Depreciation 6,294.28 5 3 0 8

Schedule 26 BIR Policies for Individual Taxpayers

If Taxable Income is: Tax Due is

Not over 10, 000.00 5%
Over 10, 000.00 but not over 500+10% of the excess over
30,000.00 10,000
Over 30,000.00 but not over 2,500+15% of the excess over
70,000.00 30,000
Over 70,000.00 but not over 8,500+20% of the excess over
140,000.00 70,000
Over 140,000.00 but not over 22,500+25% of the excess over
250,000.00 140,000
Over 250,000.00 but not over 50,000+30% of the excess over
500,000.00 250,000
125,000+32% of the excess over
Over 500,000.00
500,000
Schedule 27 Income Tax Due

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

133,287. 178,055. 218,456. 260,902. 305,498.
Income Before Tax 73 23 03 93 63
70,000.0 140,000. 140,000. 250,000. 250,000.
Less: Basic Amount 0 00 00 00 00
63,287.7 38,055.2 78,456.0 10,902.9 55,498.6
Excess 3 3 3 3 3
Multiply: Tax
Percentage 0.2 0.25 0.25 0.3 0.3
12,657.5 19,614.0 16,649.5
Sub-Total 5 9,513.81 1 3,270.88 9
22,500.0 22,500.0 50,000.0 50,000.0
Add: Basic Tax 8,500.00 0 0 0 0
21,157.5 32,013.8 42,114.0 53,270.8 66,649.5
Income Tax Due 5 1 1 8 9

Schedule 33 PhilHealth Contribution Table

47
Schedule 34 SSS Contribution Table

48
49