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CHAPTER I SUMMARY OF THE PROJECT Name of Firm THE FOLDING BAG CO.

its name came after the product itself, a folding bag. A bag that can be folded to be in form of another bag, shoulder bag to be a back pack, shoulder bag to purse, travelling bag to tote bag. Location The location of the firm would be in the heart of the University belt. It will secure a working and selling place near Ever Mall in Morayta Sampaloc Manila. Head Office The head office would still be in the same place, near the Ever Mall in Morayta Sampaloc Manila, a 30 square meter building that would be divided to the shop and the office.

Plant Size

PRODUCTION SITE

DOOR

Place to put the sample bags and the office where wholesalers can order.
DIPLAY

DOOR

Brief Description of the Project Folding Bag Co. concept is a fast and simple folding mechanism which allows the bag to be quickly folded around its base and secured. So it can be reduced to a slim, pocket sized package in just a few seconds. And because the base is rigid, the package always stays neat and flat. Folding Bag Co. product bags differ from other reusable bags because they: Have no awkward storage pouch Fold-away flat for easy storage Have a proper gusset and semi-rigid base Do not crumple or lose shape

Project Summary Market Feasibility The over all marketing aspect of the business is suitable of the supply and demand but more or less capture the markets situation. The future operation will not be a problem in view of the supply and demand but more or less capture the market situation. We will acquire an implement current strategies in the bag product to make sure that the business will remain competitive. Technical Feasibility Technical capabilities in the product service vary widely across the developing world. The level of technology applied being highly dependent on the over all status of technology development within a particular country. The partners will be applying modern technology in the establishment of our business. They will be using modern tools and equipment and providing new facilities to the demands of the customer. Management Feasibility The project would be managed by newly graduates or newbies that would try on conquering the world of bags using materials that are earth friendly. To distribute econo-bags that are in style and can be folded if not use. Space free, affordable and attractive designs would be introduce in the market.

Financial Feasibility The total investment of the project will amount to Php. 8,000,000 partners capital. The initial investment will be used in purchasing the materials, machines and equipment, supplies, building renovation and other requirement in the operation of the business. Most of the money would be used mainly for production cost as stated above. The financial status is said to be stable since the income is

continuously increasing as the business progresses. Socio-Economic Impact The project is calculated to have a big contribution in the economy. It will be a source of employment to brought young people and old in the community, creating substantial income for individual and families aside from providing income. It also makes the employees productive and a better person in the society. It will also provide a formal job training and experience to college students who requires for their course before they graduate. Lastly, the project will help the government because of taxes that will be paying that lead to the development of communities and other government service, and the main course of all, this bag would help the country to avoid plastic use in department stores and small stores nationwide. An earth-friendly bag would be introduce by Folding Bag Co.

CHAPTER 2 BACKGROUND OF THE STUDY Brief Background of the study Global awareness of environmental issues such as climate change and resource depletion has grown dramatically in recent years. As a result,

there has been a surge of interest in developing alternative building techniques and materials which are capable of meeting our structural needs with lower energy and material consumption. These technologies are

particularly attractive for housing. Much of the global demand for housing is currently being driven by economic growth in developing countries. Additionally, natural disasters such as the 2004 Indian Ocean tsunami have destroyed houses in many countries where limited economic wealth makes reconstruction a challenge. housing in these areas. This has resulted in shortages of permanent

This thesis explores the structural behaviour of

earthbag housing under vertical compressive loading, in an attempt to broaden our quantitative understanding of this alternative building

technique. In recent years, environmental degradation has emerged as one of the most significant challenges facing global civilization. There are several

drivers of this degradation, including greenhouse gas emissions due to fossil fuel consumption for energy and transportation (IPCC, 2007), and depletion

of natural resources (Gordon et al., 2006).

The construction industry

accounts for a large portion of total global consumption (Roodman & Lenssen, 1994). This consumption has been estimated to be 50% of global material use, and 40% of global energy use (Price Waterhouse Cooper, 2008). growth. Growth in this consumption is tied directly to global economic Additionally, the current state of the world economy is such that

growth in developing nations, especially in Asia, is driving global growth for the first time in modern history (Callen, 2007).

Objectives of the study The following are the main objectives of the study to be understand and analyze: Size the proponents expects that the establishment will increase in size, due to the people that increases and also for the smooth flow of the service. Capacity for the next 5 years, the capacity also increases due to insisted public demands. Its the time that we expand and produce more maximized space. Volume the proponents expect that the volume on sales will increase, for new product, activities and marketing strategies, for the convenience of more people. Worth for the next 5 years, the establishments worth will be proven because the place on where it stands will contribute to the business economy. Role in the Industry of the Economy the establishments role in the industry will be witnessed by the people that surround us. It can contribute for the business industry. About the economy it will help for promoting the country for its beautiful achievements for the economy.

Operational Definition of Terms Performance the act of performing or the state of being performed Profitability performances w/ one system Quality folding bag co. reputation for quality is internationally known. It is unique because the highest quality standard are maintained are reasonable prices. Facility convenient advantages maybe in the form of instrument or method. Productivity it is an environment conductive to employees. Services is best when you think like a customer. A caring and respectful attitude and sincere smile builds are value in our customer and value of folded bags History. Its all about the beginning of the entire Industry. Customer Care. It is how you handled a customer satisfaction. Internal customer. A person that is part of the team. is a technical analysis term used to compare

of different trading system of investment

External Customer. Its a person who will be the guest. Customer. Is the lifeblood of business. Without them they have no reason to open a business. It also refers to the buyer or user of goods and service. Management. Is the process by which people in the business makes use of both human and material resources to achieve the desired or set goals. Strategy. A customer care blueprint based on the discovery

information. Quality. It is the prices based on the product offered. Cleanliness. The sanitation and ambiance of surroundings. Value. The traits and attitude of people. Survey. In statistics, a method of collecting data in which people were asked to answer a number of question (usually in the form of questionnaires). Scope and Limitation of the Study The study is limited to the information gathered in putting up a company that would make and distribute folding bag or bag that can be

folded in different forms. From the history of bags the benefits of this kind of business and how it profitable for the proponents upon putting up this kind of business.

CHAPTER 3 MARKET STUDY Objectives of the study - To gather appropriate information need for the technical operation of the business. - To research for the supply of raw materials - To know the needs of unhampered flow of operation will be the rate prominent consideration in the plant layout - To know what kind of product will be offered by the business

Methodology The research is a combination of a descriptive-quantitative design. The descriptive method is designed for the investigator to secure responses to questions that are factual and practices of which the respondents are presumed to have knowledge. The research is geared towards the fulfillment of a common goal that included the study habits of the respondents in relation to their academic performance. This descriptive design was used as the method of research since it describes the nature of a prevailing conditions and practices, and seeks accurate description of activities, objects, persons and processes. This method is believed to be the most appropriate in securing evidences about the present condition of a group of persons, class or events and may involve conduction, analysis and measurement. The researcher decided to utilize

the descriptive method because the study tried to find out the present facts, concerning the present status of Folding Bag Co.

Demand As electricity and other related products have been an essential in every Filipinos craved for memories, it is consider as a prime commodity. It if therefore safe to assumed that the demand for the function room is always at the right time. Especially now that there are so many people who are busy with their professions and needs a right hand for their occasions. The rising cost of electricity bill proved that the demand continue to rise or grow. Projected demand for five(5) years ============================== YEAR COST/SALES

============================== 1st year2010 2nd year2011 3rd year2012 4th year2013 5th year2014 895,280.00 940,044.00 987,046.20 1,036,398.51 1,088,218.44

==============================

The demand is believed to increase 10% in each year because having an increase in electricity bill. 3.4 Supply 3.4.1 Supply for the past years The projected supply for five year is believed to be the following; ====================================== YEAR SALES % of DEMAND

====================================== 2010 2011 2012 2013 2014 895,280.00 940,044.00 987,046.20 1,036,398.51 1,088,218.44 10% 10% 10% 10% 10%

====================================== Accordingly, the demand is also the supply analysis and that there are increase of 10% in every supply in each year.

3.5 Demand and supply analysis, demand/supply gap Accordingly, this table tells the true history for this kind of business. This business would definitely boom for the fact that there are more students and parents who would be more willing to own this kind of bag

that is low-cost, space-less and is handy, and thus schools who will require this kind of bag would like to recommend our bag because it is an ecofriendly bag. And thus Folding Bag Co. would meet their needs for demand and supply for the years to come.

Marketing Strategies Product The product is the name itself FOLDING BAG. There are different

types of bag that would be made to sell these are the following

PURE RANGE

BRIGHT RANGE

BENRI RANGE Product Category The following are the product category.

Bag size

410 x 330 x 110 mm

410 x 330 x 110 mm

370 x 300 x 95 mm

Approx size when folded

110 x 85 x 25 mm

110 x 85 x 20 mm

105 x 75 x 15 mm

Bag weight

90g

80g

50g

Volume

~15 litres

~15 litres

~10.5 litres

Fabric

Organic cotton

Nylon / polyester mix

Ripstop nylon

Waterproof?

No

Shower proof

Shower proof

Washing Instructions

Not recommended. Due to the organic properties of our cotton bags the fabric can shrink when washed, even at a low temperature Short and long handled versions available

Machine wash on low temperature

Machine wash on low temperature

Handle Info

Short and long handled Short handles only versions available

Fastening method

Free fastening cotton strap

Velcro strap

Elastic loop

Biodegradable?

Yes, natural fabrics biodegrade easily

Not really

Not really

Disposal Instructions

Remove the plastic base sections and dispose for recycling with your other household plastics. You can dispose of the bag as you wish or return it to us. We will ensure that the fabric is reused or recycled

Please return your bag to us. We will recycle the plastic base sections and promise to reuse or recycle the fabric

Please return your bag to us. We will recycle the plastic base sections and promise to reuse or recycle the fabric

Branch The Folding Bag Co. would not have a branch until after 3 years of operation to be able to give out the financiers capital and to have more investments for future branches.

Packaging Folding Bag Co. prepare eco-bag and boxes. Folding Bag Co. It will have a logo of

Pricing RETAILERS SIZES (backpack to shoulder bag) SMALL MEDIUM LARGE 150.00 200.00 250.00 PRICE

SIZES (shoulder bag to hand bag) SMALL MEDIUM LARGE

PRICE

80.00 120.00 150.00

WHOLESALERS (100pcs up) SIZES (backpack to shoulder bag) SMALL MEDIUM LARGE 100.00 150.00 200.00 PRICE

SIZES (shoulder bag to hand bag) SMALL MEDIUM LARGE

PRICE

50.00 90.00 120.00

Place of Distribution The place of distribution would be in the University Belt. Wholesalers are welcome, the product could be distributed to any part of the country because of the wholesalers. Promotions and Advertising Promotion is one of the major components of the company total marketing mixture. The proposed business establishment will be promoted not only personally and verbally, but it will also be promoted through flyers or brochures its advantage to us to promote our company because the nearby mall also located in our vicinity. The establishment will concentrate on producing high quality bags and providing excellent services to make sure that the customers will get a delightful from the products that they would by and from the word of mouth of patrons, there would be new customers that would like to try our products.

Chapter IV Technical Study 4.1 Objectives of the study - To know Sizing and structuring of the shop - To know the product and services of the business - To know about the market competition - To be knowledgeable about major advertisement that would help the business 4.2 Product / service Folding Bag Inc. has a variety of services to offer and from which to choose. During the first two years, the product line will include: 4.2.1 Uses of Products The bags can use for shopping bag,gift bag,carrier bag,packaging bag, promotional bag,advertising bag,etc 4.3 Manufacturing Process Pre Operations This is the first stage of manufacturing process, these are several factors to be considered to achieve the minimum time effort, materials and workers, the preparation may require the following activities. Organization

Setting up the working area Preparing tools and equipment Checking up, warming up large equipments Checking proper equipment temperature

Assembling all raw materials or ingredients needed for production. Pattern/Frames of the Product & Cutting of Leather

Skiving

Folding of edges

Sticking of different Parts

Stitching Fixing of locks & Accessories

Finishing quality check & Packing

4.3.2 Alternative Process Considered The location of the firm would be in the heart of the University belt. It will secure a working and selling place near Ever Mall in Morayta Sampaloc Manila. Head Office The head office would still be in the same place, near the Ever Mall in Morayta Sampaloc Manila, a 30 square meter building that would be divided to the shop and the office.

Plant Size

PRODUCTION SITE

DOOR

Place to put the sample bags and the office where wholesalers can order.
DIPLAY

DOOR

4.7 Plant Size and layout

The Folding Bag Inc. would have 1 storey building with total lot area of 700 sqm. The proposed establishment would be well equipped and will have complete facilities for the convenience of both customers and personnel. The establishment would have spacious display area, which can accommodate many person as possible. The building and the facilities of the proposed establishment are designed for the convenience of the customers and employees. Air conditioning unit are installed to provide outmost cool effect on the entire establishment. 4.8 raw Materials and supplies 4.9 utilities 4.10 waste disposal 4.11 direct labor requirements Chapter V Management Study 5.1 Objectives of the study

1. Getting Maximum Results with Minimum Efforts - The main objective of management is to secure maximum outputs with minimum efforts & resources. Management is basically concerned with thinking & utilizing human, material & financial resources in such a manner that would result in best combination. This combination results in reduction of various costs. 2. Increasing the Efficiency of factors of Production - Through proper utilization of various factors of production, their efficiency can be increased to a great extent which can be obtained by reducing spoilage, wastages and breakage of all

kinds, this in turn leads to saving of time, effort and money which is essential for the growth & prosperity of the enterprise. 3. Maximum Prosperity for Employer & Employees - Management ensures smooth and coordinated functioning of the enterprise. This in turn helps in providing maximum benefits to the employee in the shape of good working condition, suitable wage system, incentive plans on the one hand and higher profits to the employer on the other hand. 4. Human betterment & Social Justice - Management serves as a tool for the upliftment as well as betterment of the society. Through increased productivity & employment, management ensures better standards of living for the society. It provides justice through its uniform policies

5.2 Form of business ownership The proponents chose to form Limited Partnership because all the individuals involved in the project are willing to share or provide not only the capital requirements but also their ability and skills to perform the obligation assigned for the effective and efficient operation of the business. The proponents have a General partner and the rest are a limited partner. The General manager will contribute 25% of the capital and the other partners will contribute 18.75% each with a total of 100%

The staff of this business has equal duties and responsibilities in operating the business to provide coordination. The profit loss will also be divided according to the capital contribution of each of the proponents. As for the companys liability the general partner will be liable for debts which may extend beyond his capital contribution while the limited partners liability is only up to the extend of their capital contribution. 5.3 Capitalization The capital of Cliques Resto-bar would be 5 Million Pesos which will be contributed by 5 partners.

5.4 Organizational structure

General Manager

Telephone operators

Production control supervisor

Wover Repairer Counter Packer Janitor Security Guard

Machine operators
Raw materials handler

Production Head Quality Control


Assistant Quality Control

5.5 Manpower requirements General Manager responsible for directing and controlling the work and personnel of a business or a particular department with in the business. Monitor and check the performance of all outlets against target, take note of variances. Attends to staff concerns and problems, build morale and teamwork in his/her department. Responsible for maintaining good public and client image.

Production Control Supervisor Checking all the materials Checking of quality control products Checking of packed products Training new hired employees

Production Head Responsible in checking all the raw materials Checking of the machine operations

Quality Control Checking all the materials Checking of quality control products

Checking of packed products

Assistant Quality Control Re-check all the materials Re-checking of quality control products Re-checking of packed products

Packer Responsible in packing finished products

Machine Operators Responsible in operating the machines that makes the bag1

Counter After all the checking of quality control, the counter is responsible in counting bags as it is packed by the packer. Wover Responsible in woving the bags before and after it was seen by the quality control Make sure that all bags are properly woven.

Telephone Operator Answers all call from orders Write down orders in a order form

Write purchase orders in receipts

Raw Materials Handler Responsible in handling raw materials to the machine operators Counter of the raw materials stock.

Repairer Repairer of the bags that was rejected by the quality control

Janitor To secure the place in its feature Make the work place clean

Security Guard responsible for the safety of the establishment. Assigned to secure the smooth flow of the working areas. Responsible for handling any violence inside the store. Makes a daily report for what incident during their work.

Qualifications General Manager Male/Female College graduate, preferably with a business management degree Between 27 35 years of age Should have started a career in a service oriented industry Must be hardworking and self motivated With 3 years experience Articulate in English and Filipino Must be good in handling subordinates

Production Control Supervisor Male / Female between 24 34 years of age With at least 2 years work experience Knowledgeable in foldingbags Graduate of any course Willing to train everything related in their work

Production Head preferred management graduate but not required Male/Female between 25 35 years old of age Familiar with Folding bag With at least 2 years in experience Dependent and can work well with minimum supervision

Assistant Quality Control Female, 20 years of age Graduate of any course Can work on flexible hours

Packer Male, between 25 30 years of age Graduate in any course Must be good in handling co workers

Machine Operators Male, between 22 27 years of age Must be a college graduate with any course With 1 year experience in servicing machine operations

Woover Female, between 20 25 years of age 2 years vocational course

Telephone operator female, 22 27 years of age graduate of any related course Should have knowledge to communicate with the customer Can work in flexible hours

Raw Materials Handler

Male, 21 27 years of age Graduate in ant 2 years vocational course Can work in flexible hours Knowledge in a service industry

Repairer Male, 21 27 years old Any 2 years course graduate Can work in flexible hours Must be hard working

Janitor Male, Female 21 27 years of age At least 2 years college degree Can work in flexible hours Must be hardworking

Security Guard Male, 25 35 years old Well trained in security agency Physically fit At least vocational graduate Preferably with similar work experience Hardworking and courteous No criminal records

5.6 Compensation PERSONNEL NO. REQUIRED Project Engineer Payroll Manager General Foreman Head Carpenter Carpenter With in 120 Days Welder Assistant Welder Mixer Steal Man Lead Mason Mason Laborer With In 90 Days 1 1 1 1 4 8 2 2 2 3 1 4 10 24

Master Plumber Assistant Plumber Master Electrician Electrician Helper Painter With in 60 days

1 2 1 2 5 11

Operational Period PERSONNEL NO. REQUIRED General Manager Production Supervisor Production Head Quality Control Assistant Quality Control 1 1 2 550 350 400 14,300 9,000 18,200 171,600 109,200 218,400 Control 1 1 SALARY/ DAY 600 400 SALARY/ MONTH 15,600 10,400 SALARY ANNUALLY 187,200 124,800

Packer Machine Operators Counter Woover Telephone Operator Raw Materials Handler Repairer Janitor Security Guard Total Salary

3 2 3 10 1 2 2 2 2 33

840 560 840 2,800 280 560 560 560 600 9,900

21,840 14,560 21,840 72,800 7,280 14,560 14,560 14,560 15,600 192,400

262,080 174,720 262,000 873,600 873,600 174,720 174,720 174,720 187,200 2,308,800

5.7 Organization Policies Benefits of the Employees All hired employees of the business are entitled to the ff. benefits: 1. 13th month pay for every employee is entitled for the 13th month pay, which has equivalent to of the basic salary of an employee within a month. 2. 3. 4. SSS benefits a social security contribution will be providing for the employees. Phil. Health will be provided for the hospitalization of employees. Incentives/bonuses all employees with one year of service are entitled to any yearly bonuses. 5. Annual vacation leave regular employees are entitled to annual service leave of 5 days with pay for every one year of service. 6. 7. Sick Leave any employees had a right to leave for the medicine. Paternity/Maternity leave issue for the employees needs an emergency leave. Managerial Benefits The managers are also entitled to benefits and privileges environmental to employees plus the following: 1. 2. 3. 4. 5. Salary increase depending on the state of the business every year. They will provide 10% discount on all food item. They will be given a vacation, sick or emergency leave. Paternity/maternity leave will also provided. 13th month pay, SSS benefits, Phil. Health, Pag ibig benefits will be given.

5.8 Legal requirements In starting the operation of the business, the owners should complete the necessary documents and requirements needed for the legalization; this stage of business is organized in a formal manner, which requires registration in various regulating government agencies. Before a partnership can operate legally, it must first to comply with certain level registration that are summarized as follows: Place of Registration 1. Security and Exchange Commission (SEC) 2. Department of Trade and Industry (DTI) 3. City of Municipal Hall Permit (Mayors Permit) 4. Bureau of Internal Revenue 5. Social Security System 6. Other Agencies as may be required In building business there are certain requirements to make specific business legal. If the following cannot be obtained the operation will not function well. BIR 1902 DTI application

Business Permit For employees: SSS,PhilHealth,Pag- ibig Barangay Clearance Declaration of real property tax SEC

Fire Inspection Certificate Building Permit

Chapter VI Financial Study 6.1 Objectives of the study The financial study is important because it is tasked to find out whether the business ventured will be profitable even in the place of competition and unfavorable conditions. The study will also show in detail the upward movement of the ventures finances a period. The financial study after undertaken, is best presented by showing the statements and schedules of the profits that are presented by showing the statements and schedules of the profits that are intended to be realized. It must also show the sources and kind of financing and the ways in which to repay what it owed. The study will also reflect other financial information and data, which are needed in order for the business venture to succeed. The financial study has several parts, initially; there is the portion which status assumptions. These are very important for these assumptions become the bases for the estimates. To come up with a good assumptions, one must look into business practices that are currently followed in the same industry as the proposed business. Also previous feasibility studies, made in similar ventures as the one proposed might prove helpful. Another important source of information for assumptions are government regulations and policies, industry profiles, conferences, business plan, and articles from business associations may help. The next portion of the financial study is which discusses the total cost of the project. A company will need assets. The next part of the study list down the sources from where money can be borrowed on acquire. The list includes sources from where long and short term loans can be acquired.

6.2 Total project cost all items considered consumption made PRODUCTION COST

FIXED CAPITAL
Machinery and equipment Utilities Total 1,795,658.00 585,769.00 2,381,428.00

WORKING CAPITAL
Stocks Labor cost Electricity & water Miscellaneous Computer advertisement Taxes & licenses Repairs & maintenance Others 78,636.00 21,600.00 10,000.00 60,000.00 4,000.00 14,400.00 586,000.00 58,000.00 832,636.00

TOTAL

3,214,064.00

6.3 Initial capital requirements all items considered The proposed business, Folding Bag Inc.is a General Partnership which means that there are three or more owners of this business. And that the investment cost of the business are sub divided into the owners capital, which total of:

5,000,000.00

6.4 Sources of financing 6.4.1 Sources selected or proposed for both long-term and short-term financing 6.4.2 Alternative sources 6.4.3 Amount and terms of financing The proponents of the project will not seek help from financing or bank loan, but from their own savings and with the help of their parents. From this the company wont need to rush up their sales just to pay for their financial loan.

6.4.4 Projected balance sheet


Folding Bag Inc.

BALANCE SHEET For year ended 2011

CURRENT ASSETS Cash FIXED ASSETS Gross Fixed Asset Accumulated depreciation Net Fixed asstes TOTAL ASSETS LIABILITIES notes payable income tax payable TOTAL LIABILITIES PARTNERS CAPITAL Capital Capital Capital Capital Capital Add:Net Income retained earnings less:drawings Total partners equity TOTAL LIABILITIES & CAPITAL

3,000,000.00

2,195,632.00 49,869.38 2145762.62 854237.38

117,149.00 854237.38

1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 5000000 895,820.00 345,695.00 1241515

3645762.6

6.5 Financial statements 6.5.1 Assumptions 1. Miscellaneous expenses increase 3% annually. 2. Permit and license increases 5% annually. 3. Advertising expense increase 2% annually. 4. Purchases increase 5% annually. 5. Salaries and wages increase 3% annually. 6. Office supplies increase 3% annually. 7. Utility expenses increase 3% annually. 8. Repair and maintenance increase 5% annually. 9. Depreciation expense computed on a straight line method. 10. Sales increase 5% 6% 7% 8% and 9% on succeeding years. 11. 13th month pay increase 3% annually. 12. Value added taxes 12%. 13. Income tax payable 35% on the Net Income before tax.

6.5.2 Projected income


Folding Bag Inc.

Income statement For December 31, 2011 SALES LESS COST OF SALES STOCKS LABOR COST TOTAL COST OF SALES GROSS PROFIT less :operating expense electricity & water rent expense taxes & licenses selling expense repairs & maintenance miscellaneous comp. advertisement contingencies depreciation TOTAL OPERATING EXPENSE income from operation LESS: interest expense TOTAL NET INCOME 895,280.00

78,636.00 80,000.00 158,636.00 1,053,916.00

10,000.00 60,000.00 14,400.00 8,000.00 586,000.00 60,000.00 10,000.00 85,080.00 45,233.00 878,713.00 174,203.00 23,086.00 151,117.00 151,117.00

6.5.3 Capital cash flow statements


2011 CASH INFLOW Beginning Balance Partners capital Proceeds from loan Sales Others Total cash inflow 62000 135801 39380 600 527681 422688 600 671584 553488 800 889440 714138 1000 1207929 908934 1000 1644759 248296 335152 492791 734825 2012 2013 2014 2015

Less : cash outflow Stocks Labor cost 78636 21600 100236 93372 22680 119052 118456 23812 142268 145956 25008 170964 180525 26256 2006781

Add : operating expense Electricity & water Miscellaneous Taxes and licenses Others Computer advertisement Selling expense Repairs & maintenance Contingencies 4000 60000 14400 1000 10000 1000 1000 1080 69000 14832 1100 10500 1100 1100 1134 79350 15276 1210 11025 1210 1210 1191 91253 15732 1331 11576 1331 1331 1250 104941 16200 1464 12155 1464 1464 1313

Total operating expense

92480

98766

110472

123804

139001

Interest expense Payments of loan Withdrawals Payment of taxes Acquisition of machinery & equipment & utilities CASH ON HAND

23086 26418 31000

18595 30909 33000 36110

13341 36163 35000 59405 -

7193 42311 37000 91832 -

39000 131822 -

6165

248296

335152

492791

734825

1128155

6.5.4 Projected balance sheet


Folding Bag Inc.

BALANCE SHEET For year ended 2011 CURRENT ASSETS Cash FIXED ASSETS Gross Fixed Asset Accumulated depreciation Net Fixed asstes TOTAL ASSETS LIABILITIES notes payable income tax payable TOTAL LIABILITIES PARTNERS CAPITAL Capital Capital Capital Capital Capital Add:Net Income retained earnings less:drawings Total partners equity TOTAL LIABILITIES & CAPITAL

3,000,000.00

2,195,632.00 49,869.38 2145762.62 854237.38

117,149.00 854237.38

1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 500,000.00 4500000 895,820.00 345,695.00 1241515

3645762.6

6.5.5 Financial analysis 6.5.5.1 Ratios I. Test of Profitability A. Net Profit Margin = Net Income After Tax Sales =8,156,381 20,250,000 = .40 B. Gross Profit = Profit before tax Income =12,548,277 8,156,381 = 1.54 C. Return on owners equity investment = Net Income Stock Equity =8,156,381 22,709,467 = .36 D. Turnover Rate of Gross Capital = Gross Sales Gross Capital =20,250,000 17,000,000 = 1.19 Test of Liquidity E. Current Ratio = Current Asset Current Liabilities =151,984.03

4,349,896.90 = .35 F. Quick on Acid Test = Asset - Inventories Current Liabilities =1,519,845.03 192000 4,349,896.90 = .31 G. Liquidity of Inventories = Cost of Sales Average Inventory =20,250,000 192,000 = 105.19 H. Deb To Net Wale Ratio = Total Liabilities Total Equities = 4,349,896.90 22,709,467 = .19

6.5.5.2 Break-even point analysis

Break-even calculations assume a 25% to 30% gross margin. This is a conservative estimate, and it will be improved as strategic relationships develop and the benefits of Folding Bag Inc. offerings are realized by customers.

Break-even Analysis

Break-even Analysis: Monthly Units Break-even Monthly Revenue Break-even 95,000.00 P95,000.00

Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost P200.00 P200.00 P6,000.00

6.5.5.3 Capital recovery, and earnings Showing the cash payoff period, The project met the income requirements of 27% (cost of capital) since the total computer NPV is greater than the total project cost. The total project cost is 344,636.00 and the computer NPV is

Year 2006 2007 2008 2009 2010

Annual cash flow 77,968 127,470 196,375 281355 384,018

27% 0.70740 0.62000 0.48819 0.38440 0.30268

net present value PHP 55,154 79,031 95,868 108,152 116,234

NPV = 454,439 - 197,801 =256,638

Payback period

The investment will be recovered within 1 year and nine month. This means that the project is feasible because the capital will be recovered in less than 2 years. Year 2011 2012 2013 2014 2015 total project cost recovered first year to be recovered -77,968 119,833 365 first year to be recovered -127,470.00 349 119,833 349 =708 days Net cash flow 77,968 127,470 196,375 281355 384,018 197,801

payback period = 1 year 11 months and 7 days

Rate of return The computation shows an average of 35.6% which means that the business is maximizing its assets throughout the operation. ROI Net Income/ Total Assets

YEAR 2011 2012 2013 2014 2015

NET INCOME 76,735 126,237 195,142 280,122 382,785

ASSETS 253,228 338,851 495,257 736,058 1,128,155

ROI 30.30% 37.25% 39.40% 38.86% 33.93% 35.79%

Chapter VII Socio-Economic 7.1 Contribution to the Philippine economy As we start the business, there will be a benefit to the government or Municipal and national government. And as of this days more

business owners/establishment gives more taxes, showing to increase the revenues of the government. development of the community. So that revenues can be used in the All these taxes are enforced by the

government to every business owners/establishment. The project will help us increase the business and to outgrow it. 7.2 Employment generation This can provide jobs so skilled and unskilled person and this is a great benefit in the society. As for the country suffered a crisis of

unemployment and the business can help the government in decreasing the unemployment rate in the country. 7.3 Social desirability Folding Bag Inc. business also plays a big role in the society, because this business provide good quality of services and recycled bags that the customers need, sell this is a reasonable price and supply needs of the people.

7.4 Others The proponents The project would be beneficial to the proponents for it gained profit that would raise the quality of their families. The income generated by the partners will surely improve the standard of living of themselves and their families.

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