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DIAL ME LIQUEFIED PETROLEUM GAS AND DELIVERY

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
Marketing Elective 4- Feasibility Study
Leading to
Bachelor of Science in Business Administration

Agnes B. Alibanggo
DonabellB. Piamonte
Hanna Grace C. Dragon

1st Sem.
S.Y 2016-2017
CHAPTER I

INTRODUCTION

LP Gas (Liquefied Petroleum Gas) is a vital source of energy for tens

of millions of people throughout the world. LP Gas consists mainly of propane

and butane, which are gases at atmospheric temperature and pressure. When

subjected to modest pressure or refrigeration, these gases liquefy making it

possible to transport and store LP Gas as a liquid, yet use as a gas. This

requires pressurized cylinder tanks and containers. LP Gas is one of the very

few common consumer products sold in a metal container that is often more

costly than the product itself. In the distribution system many parties may

physically handle the cylinder before it reaches the customer. Once the

cylinder of LP Gas has been sold, the seller (who is frequently the cylinder

owner) has no direct control over its subsequent use. This makes the

importance of maintaining the cylinder or container integrity throughout the

distribution chain an integral part of customer safety (Guy Sebban, 2011).

LP Gas is a clean and portable fuel. It provides heat and power in

remote areas as well as in densely populated urban areas. Because of its

portability, it is not dependent on transmission lines or pipeline grids. Its most

popular use is for cooking, heating and water heating in the residential and

commercial markets. The agriculture market uses LP Gas for crop and animal

production, and powering farm equipment such as irrigation pump engines.

Industry relies on LP Gas for heating, drying, and powering industrial trucks.

In response to growing concerns of urban air pollution and greenhouse gas

formation, LP Gas use as an automotive fuel (autogas) is rapidly increasing.


The multitude of uses means great numbers of people are involved in its

distribution (Guy Sebban, 2011).

With the cost of electricity ever rising, it is becoming increasingly

difficult for many urban/rural homes to use it for cooking. Kerosene is also not

a very good option due to its inefficiency, the mess it brings to the kitchen and

again it is not widely and easily available in most areas, just like charcoal. All

these factors have made cooking gas, also called Liquefied Petroleum Gas

(LPG) the most reliable, affordable and efficient means of cooking in many

urban and some rural homes.

This feasibility study provides information on key facets of starting a

LPG retailing business on the proposed location which is in Maranding, Lala

Public Market. Lala is a first class municipality in the province of Lanao del

Norte, Philippines. According to the 2010 census, it has a population of

65,355 people. The population increases each succeeding years making the

location being more diverse. The place as it economically growing to a more

developed area would be a great advantage for its accessibility in relation to

LP cooking gas retailing business. LP Gas is a convenient, clean and highly

efficient fuel. The global availability and popularity of LP Gas has driven

widespread and increased usage. The proposed business prospects its

viability in terms of market, operation and financial aspects.


CHAPTER II

EXECUTIVE SUMMARY

A. Type of Business
1. Nature of the Business

The proposed business will be a sole proprietorship type of business

that is managed and operated by the owner itself. The proposed business will

be a retailing business of Liquefied Petroleum Gas or commonly known as

LPG in its proposed store location. The product will be contained in a metal

container. Product prices will vary according to amount of gas and the cost of

tank. The business will offer PHP630.00 for 11kg LP gas and PHP 2, 355.00

for 11kg LP gas with tank. PHP500.00 for 7kg LPgas and PHP 2, 100.00 for

7kg LP gas with tank. The main brand of the LP gas the business is offering

will be Pryce Gas. Since the business is not offering a refilling station for LP

gas, the customers who wished to buy should bring their own empty tank for

an exchange with a new LP gas product contained in a tank provided that the

tank brand and size will be the same with the business LP gas brand which is

Pryce Gas. It is also offering a delivery home service with an additional

delivery cost of PHP20.00 per delivery LPG product. It is safe and reliable

service delivering LPG products that are on prescription directly to the

customers door. Reliable and safe product supply because the customer will

receive the right product upon order.

2. Name of the Business


The name of the business will be Dial Me Liquefied Petroleum Gas

and Delivery. Dial Me refers to the kind of service through communication

the proposed business is offering. Through dialing with the use of cellphone,

the business could deliver quality LP gas to its customers location. Hence,

the term Dial Me is attached to the products name and delivery service of the

business to make its name as Dial Me Liquefied Petroleum Gas and

Delivery.

The name of the business could simply not only catch the attention of

the customers but also making sense a far-reach distance dialing giving a

hassle-free service for busy customers. With this, the business name could

convince customers in a right and simple way.

3. Location of the Business

The proposed location of the business will be in Maranding, LalaPublic

Market. It will rent a space in the area with an amount of PHP10, 000.00 per

month. Utilities such as electricity and water supply was pre-installed in the

area, thus, the business will pay monthly bill for the utility cost. The area is

located near to the public transportation terminal such as buses bound to

Pagadian and Cagayan, PUB, PUJ and motorcycles bound to Salvador, El,

Salvador, Pinuyak and others. Terminals for tricycles bound to Kapatagan (a

neighborhood municipality) are also located near the site. Pedicabs, autos

and other private cars could also access the area. Hence, the area is

accessible to customers. It is also where the main market of Maranding is

located (dry and wet market) as well as other business establishments such

as bakeries, grocery stores and others. Hence, people would go the area with
multiple purposes making it accessible and visible. This could be

advantageous for the business since it will be more visible for the people. The

area is viable to our proposed business with its accessibility and visibility.

4. Product/ Service Description

The product of the business will be the Liquefied Petroleum Gas. LPG

is a mixture of commercial butane and commercial propane having both

saturated and unsaturated hydrocarbons. LP Gas has a unique role for both

developing and developed economies. It is often the first, and sometimes the

only, modern energy available. In developing countries the first use is

frequently for cooking. Here, LP Gas displaces wood, charcoal, kerosene and

dung.

The business cooking gas brand (Pryce Gas) is very clear. The

business will exchange customers empty cylinders with filled ones at a fee

depending on your location and size of cylinder. Since there is stiff

competition, the business will offer delivery to homes, as a form of marketing

strategy and customer retention.

Since the business is offering a delivery service, the process would

start from the customers whose dialing the business for service. The business

will then get the details of the location of the customers and their desired size

of cylinders (11 kg or 7 kg.). The price of the LP gas will depend on the

customers size of cylinder. The business will then deliver the tank with LP

gas. LPG cylinders will have a standard valve to secure the LP gas from

leakages and combustion. Upon arrival, the business will pick their empty

one back to their premises for collection by the distributor. Additionally, to


avoid prank callers, the business will also have a pre-enrolment process for

the customers wherein the business will do a house-to-house survey on

gathering data about household information particularly those who are Pryce

gas users. This further be done on pre-operation of the business.

The LP gas will have 11-kg. and 7-kg. sizes of cylinders, red orange in

color with the business brand name Pryce gas LP gas physical properties

and characteristics were specified as follows:

DENSITY- LPG at atmospheric pressure and temperature is a

gas which is 1.5 to 2.0 times heavier than air. It is readily

liquefied under moderate pressures. The density of the liquid is

approximately half that of water and ranges from 0.525 to 0.580

@ 15 deg. C.
VAPOUR PRESSURE - The pressure inside a LPG storage

vessel/ cylinder will be equal to the vapour pressure

corresponding to the temperature of LPG in the storage vessel.

The vapour pressure is dependent on temperature as well as on

the ratio of mixture of hydrocarbons.


FLAMMABILITY - LPG has an explosive range of 1.8% to 9.5%

volume of gas in air. This is considerably narrower than other

common gaseous fuels. This gives an indication of hazard of

LPG vapour accumulated in low lying area in the eventuality of

the leakage or spillage. The auto-ignition temperature of LPG is

around 410-580 deg. C and hence it will not ignite on its own at

normal temperature.
COMBUSTION - The combustion reaction of LPG increases the

volume of products in addition to the generation of heat. LPG


requires upto 50 times its own volume of air for complete

combustion . Thus it is essential that adequate ventilation is

provided when LPG is burnt in enclosed spaces otherwise

asphyxiation due to depletion of oxygen apart from the formation

of carbon-dioxide can occur.


ODOUR - LPG has only a very faint smell, and consequently, it

is necessary to add some odourant, so that any escaping gas

can easily be detected. Ethyl Mercaptan is normally used as

stenching agent for this purpose.


COLOUR- LPG is colourless both in liquid and vapour phase.

During leakage the vapourisation of liquid cools the atmosphere

and condenses the water vapour contained in them to form a

whitish fog which may make it possible to see an escape of

LPG.
TOXICITY - LPG even though slightly toxic, is not poisonous in

vapour phase, but can, however, suffocate when in large

concentrations due to the fact that it displaces oxygen. In view of

this the vapourposses mild anaesthetic properties.

Other products of the business will be of the following:

Particulars Specifications Particulars Specifications


Regulator Material: Zinc Alloy Number of hobs: 1
Inlet pressure: 30 - Size (L x W x H cm):
Single
1560KPA 39 x 10 x 29
Burner
Outlet pressure: 2.80
0.50KPA Weight (kg):3.1
Flow range: 0.6 cubic Double Micromatic MGS-
232 Double Burner
meters per hour Gas Stove
Close Range: less than
3.5KPA Burner Number of hobs: 1
Size:5.7 x 3.3 Size (L x W x H cm):
x2.3in(LxWxH) 73 x 40 x 10
Colour:green Weight (kg): 4
Gross weight:183g Color: Yellow
Model:Melano Anti Gas
Leak Safety Regulator
Regulator with Adjustable Flow LPG Lighter Quantity: 1pcs
with Safety Size (L x W x H cm): Gun Material: ABS +
Valve 44x 30 x 20 Alloy
Inner Diameter:
Weight (kg): 2 15mm
Number of hobs: 1 Teflon Tape 1"
Size (L x W x H cm): Model: Freebang-
Standard 20 x 2 x 24 POA222355
Hook pin
LPG Hose Size (L x W x H cm):
with nut
Weight (kg): 0.26 0.80 x 0.40 x 0.40
Weight (kg): 0.01

B. Marketing, Management and Financial Highlights


a. Market Feasibility

The business will be Dial Me Liquefied Petroleum Gas. It will be

located in Saavedra, Maranding, Public Market. It will rent a space in the area

with an amount of PHP10, 000.00 per month. It will sell LP Gas exclusive from

Pryce Gas, Inc. product. The business target customers will be the

households. Restaurants, vendors and other establishments could also be

target customers of the business since it offers cooking gas (LP gas).With a

total of 14, 714 household, 70% of it is the consumers of LP Gas. It is

assumed that 80% of the total demand is the target demand of the

business.The business supplier will be the Pryce Gas, Inc in Cagayan de Oro

City. The price may vary on the size of the container. The demand of the

business is directly proportional to its supply. As the demand will increase, the
supply of LP gas will also increase. Projected sale of the business is assumed

to increase annually by 2%

b. Financial Feasibility

After considering the critical assets life (tools, machinery and

equipment) of 5 years, the business returns 258.75% of its investment cost.

Hence, the business is profitable. The business pays back its investment cost

after less than a year. This is less than to its investment life. Hence, the

business is desirable to invest. The net income: sales ratio above shows an

increasing trend of rate from Year 1 (12.38%) through Year 5 (13.17%). This

shows that the business is gaining as well as growing as it continues.

c. Management Feasibility

The business will be a sole proprietorship type of business. The

manager is in-charge of receiving calls from customers, trainings and planning

for future developments of the business. The cashier issues receipts, receives

payments from sold goods and reimburse for purchases of needed materials

of the business. The marketing specialist is in-charge of promotional activities

of the business at the same time entertains the customers suggestions.

Lastly, the delivery man is in-charge of loading and unloading of the LP gas

from the delivery motorcycle as it delivers the sold goods to customers.

C. Socio-Economic Contribution

The proposed business will be beneficial to the society. The economic

status of the proposed location will slightly be affected through the additional

investment and the additional employment of the business. The market


exchange on supplies and demand will also be affected since the increase of

the sales production of the proposed business will also affects the demand on

the source of supplies. The increasing income of the business will also benefit

the operator for the additional income made by the business.The impact of

this growth on society and the environment is significant as LP Gas is

displacing solid fuels such as coal, wood, and charcoal and cow dung. These

traditional fuels produce dust, dirt and smoke, which may cause severe health

problems. As a result LP Gas is making a significant contribution in improving

air quality levels in the environment, in commercial kitchens and in

restaurants.

CHAPTER III

MARKET STUDY
A. Service Description
1. Product to Sell

Below shows the prices of the LP gas:

Price of the LP Gas (Supplier)

Particulars Price
7kg *excluding tank 340.00
*including tank 1,600.00
11kg *excluding tank 445.00
*including tank 1,770.00

Price of the LP Gas (Retailer)

Particulars Price
7kg *without tank 500.00
*with tank 2,100.00
11kg *without tank 630.00
*with tank 2,355.00
Delivery
cost *including or excluding tank at any size 20.00

Other product lines of the business will be the following:

Price of Other Product Lines

Particulars Price
Regulator 499.00
Regulator with Safety Valve 2,300.00
Standard LPG Hose 569.00
Single Burner 1, 459.00
Double Burner 2,810.00
LPG Lighter Gun 500.00
Teflon Tape 16.40
Hook pin with nut 289.37
B. Target Market
1. Area Coverage

The business area coverage includesthe customers from Maranding

Public Market. It will range from the public market LalaProper. It will also

include Salvador, part of Kapatagan and Baroy.


2. Customers/Consumers

The business target customers will be the households. Restaurants,

vendors and other establishments could also be target customers of the

business since it offers cooking gas (LP gas).

C. Demand and Supply Analysis

Demand

There are some existing LP gas retailers in the Maranding namely:

Blue Fire Service Center and Petron Gasul. They are dealing with different

brand of LP gas namely GasulPetronas with the proposed business make

Pryce Gas. Though these competitors existed in longer years than the

proposed business, it all depends on the services and how it was operated by

the management. . Lala is a first class municipality in the province of Lanao

del Norte, Philippines. According to Lala-LGU statistics record, Lala has a

total of 14, 714 households. The population increases each succeeding years

making the location being more diverse.Maranding is one of barangay located

in Lala is the most progressive area. Most of establishments were located in

the Maranding making it the center of trade and commerce. Maranding is

continually progressing as more the number of people is increasing.

Residential areas surround the center trade making it more like a crowded

place.

With a total of 14, 714 household, 70% of it is the consumers of LP

Gas. It is assumed that 80% of the total demand is the target demand of the

business. The table below shows the demand analysis of the business:
Demand Analysis

Percentage
of Business
Percentage Total Annual Business
No. of of Annual Target Annual
Households Consumers Demand Demand Demand
1
Total 4,714 70% 10,300 80% 8,240

Business
Monthly Weekly
Demand Demand Daily Demand
6 1
Total 87 72 25

With the demand of LPG now, the sale of cooking gas is another

lucrative business idea that small business people can consider. LPG is

among the cleanest, versatile and modern fuels on the market. Cooking gas is

among products whose market is yet to be fully exploited in the area.The

current market for LPG in Maranding is underdeveloped, although it is

particularly attractive for households where penetration is higher given the

lower availability of firewood, the ease and efficiency of LPG distribution and

retail due to the increasing population density. Hence, the demand of the

business product will be expected to increase in each succeeding years.

Supply

The business supplier will be the Pryce Gas, Inc. in Cagayan de Oro

City. The price may vary on the size of the container. The competitors namely

Blue Fire Service Center and Petron Gasul have different suppliers which is

the FGS Company with a different LP gas make which is Gasul. The proposed
business target customers will be restaurants, households and other

establishments which uses cooking gas such as LP gas. The demand of the

business is directly proportional to its supply. As the demand will increase, the

supply of LP gas will also increase. The table below shows the supply

analysis of the business.

Supply Analysis

Target Annual Target Monthly Target Daily


Supply Supply Supply

Total 8,239.84 687 25

Supply for Percentage for


Starting of the Reserved Reserved
Business Stocks Stocks
Total 48 25% 12

There are some competitors existing in Maranding. These are the Blue

Fire Service Center and Petron Gasul. The competitors are offering LP gas

with different brand which is the Gasul supplied by FGS company. The

business pricing is a way more affordable for the customers and much

accessible since it is located nearer to the customers than of the competitors

location.

D. Projected Sales

Note: Assumed that 20% of the supply will be for 7kg LP Gas while 80%

will be for 11kg LP Gas.

Production Volume
Particulars 7kg. 11kg.
Pcs. Per Day 20.00
Pcs. Per Week 35.00 140.00
Pcs. Per Month 140.00 560.00
Pcs. Per Year 1,680.00 6,720.00

Projected Sales for LP Gas

Assumptions: The projected sales include the delivery cost.

Particulars 7kg. 11kg. Total

PHP Per Day 2,600.00 13,000.00 15,600.00

PHP Per Week 18,200.00 91,000.00 109,200.00

PHP Per Month 72,800.00 364,000.00 436,800.00

PHP Per Year 873,600.00 4,368,000.00 5,241,600.00

Projected Sales for other Products

Assumptions: One on each product was sold per month.

Qty. of Monthly Annual


Particulars Price Sold Sales Sales

Regulator 499.00 5 2,495.00 29,940.00


Regulator with
Safety Valve 2,300.00 5 11,500.00 138,000.00

Standard LPG Hose 569.00 5 2,845.00 34,140.00

Single Burner 1,459.00 5 7,295.00 87,540.00

Double Burner 2,810.00 5 14,050.00 168,600.00

LPG Lighter Gun 500.00 5 2,500.00 30,000.00

Teflon Tape 16.40 5 82.00 984.00

Hook pin with nut 289.37 5 1,446.85 17,362.20


TOTAL
42,213.85 506,566.20

Total Projected Sales

Particulars Monthly Sales Annual Sales

LP Gas Sales 436,800.00 5,241,600.00

Other Products 42,213.85 506,566.20

Total 479,013.85 5,748,166.20

E. Marketing Program
1. Practices of the Competitors

Product

Competitors: Blue Fire Service Center and Petron Gasul

The product of the competitors is the LP gas which is supplied by FGS

Company.

Competitors of the Business Location Product


Petronas
Blue Fire Service Center PurokSantol Prycegas
Gasul
Petron Gasul Purok Indian Tree Gasul

Price

The price of the competitors is tabulated below:

Tank with
Product Volume Supplier Retail Tank Gas

Petronas 11 kg. 595 640 1,805 2,400

8.5 kg 490 510 1,610 2,100

Prycegas 11 kg 485 630 1,770 2,355


7 kg 390 500 1,600 2,100

Promotion

The business promotion is through flyer s and posters that spread

throughout the area. Since they have existed in longer years, word of mouth

by their customers will be likely the main promotion of the competitors

business.

Distribution

Below shows the channel of distribution of the competitors product

2. Own Marketing Program and Strategies

Product

Business name: Dial Me Liquefied Petroleum Gas and Delivery


The product of the business is the LP gas supplied by the Pryce Gas

Inc, Cagayan de Oro City.

Price

Below is the prevailing price of the proposed business:

Particulars Price
7kg *without tank 500.00
*with tank 2,100.00
11kg *without tank 630.00
*with tank 2,355.00
Delivery
cost *including or excluding tank at any size 20.00

Promotion

The business will distribute flyers and posters with their contact and

company details into the households within Lala and other neighborhood

areas such as in Kapatagan, Salvador, andBaroy. Word of mouth will be the

best way in promoting the business. It is the fast spreading information tool for

every customer which consumed good service from the proposed business.

Distribution.Below shows the channel of distribution of the business product:

Retailer
Delivery
Yes Service? No

Product to
Customers Customer
Location Details
and Size of the
Container with

Customer

CHAPTER IV

OPERATION PLAN
A. Technical Operation Description

The business offers a LP gas (Liquefied Petroleum Gas) for cooking.

LP Gas, or Liquefied Petroleum Gas, is the term widely used to describe a

family of light hydrocarbons. The two most prominent members of this family

are propane (C3H8) and butane (C4H10). LP Gas is lighter than water as a

liquid but heavier than air as a gas. In their liquid state propane and butane

have the appearance of water but with have only about half the density

Business make will be Pryce Gas which is already known for the

people. It has lower value compared to any other LP gas brand. During

promo, the business will allocate time for pre-enrolment period and referral

customer per barangay. The business will also offer home delivery service for

LP gas with fee. Upon customers call, the business will get information about

the customers exact location and their desired size of the LP gas container.

The price of the LP gas will depend on the size such as 11kg and 7kg. When

the product will be delivered to the customers location, the deliveryman will

collect the money and give the order receipt to the customer. The delivery

man will then pick up the empty tank upon delivery from the customers for

exchange of the LP gas tank delivered. Thus, this will give convenience to the

customers.

B. Operation Process
C. Labor Requirement

Employment Required
No. Description Base Quantity
1 Manager Direct Labor 1
2 Cashier Direct Labor 1
Marketing
3 Specialist Direct Labor 1
4 Delivery Man Indirect Labor 2

D. Operation Schedule

The business will be opened from 8:00 am to 6:00 pm, Mondays through

Sundays. Since the business is located at the public market and near the

transportation terminals, the business schedule will be set just right. Below

shows the operation schedule of the business:


Operation Schedule

Wednesda

Particulars Monday Tuesday y Thursday Friday Saturday Sunday


Volume:

Starting Supply 100


Reserved Stocks Volume: 25
Sold Products Volume: 25 Volume: 25 Volume: 25 Volume: 25 Volume: 25 Volume: 25 Volume: 25
Operation Acquisition of LP

Gas Volume: 75 Volume: 75 Volume: 50


E. Machinery and Equipment Requirement

Note: EUL = Estimated Useful Life

Particulars Qty. EUL Specification Unit Cost Total Cost Origin


Pryce Gas
Prycegas, Inc -
Tank (11kg) 40 7 Red 1,185.00 47,400.00
Cagayan de Oro
11 kg.
Pryce Gas
Prycegas, Inc -
Tank (7kg) 8 7 Red 1,110.00 8,880.00
Cagayan de Oro
7 kg.
Place of Origin: China (Mainland)
Color: Red
Extinguishing agent: ABC dry powder
Package: fire extinguisher standard
Brand Name: YTKY powder fire Kim
Fire extinguisher Manufacturing
1 5 1,200.00 1,200.00
Extinguisher Powder percentage: 40%-70% Industries - Palao,
Valve materal: Brass Iligan City
Warranty: 5years
Working pressure: 14BAR
Cylinder materail: ST12
Fire extinguisher sizes: 10kg-50kg trolley
Screw Driver 1 set 10 8 Pc Set Heavy Duty Screw Driver Set 899.00 899.00 Hany Mart
4 pcs Negative 4 pc Positive Hardware -
Hexagon Shaft, allows wrenches to help Maranding, Lala
open tight/stubborn screws
Plastic Green Handle, Hardened Steel,
Chrome Finish
(Grey)
600 kls capacity Hany Mart
Push Cart 2 10 8 inch wheels 1,800.00 3,600.00 Hardware -
44H x 15W Maranding, Lala
10 x 16 inch platform
Sub-total 61,979.00
Cleaning Tools
Hany Mart
Floor wiper 2 pcs Ecomaps 100.00 200.00 Hardware -
5 Maranding, Lala
Tables and Novo -
5 pcs Non-cotton wipers 10.00 50.00
chairs wiper 5 Maranding, Lala
Rubbermaid Commercial Plastic 7-Gallon Novo -
Garbage cans 2 pcs 100.00
5 Trash Can, Black 200 Maranding, Lala
Sub-total 450.00
Total 62,429.00

F. Motorcycle

Particular
EUL Description Unit Cost Total Cost
s Qty. Origin
Motorcycle 2 15 Honda CB110 64,400.00 128,800.0 Motortrade- Maranding,
Model: CB110 0 Lala
Displacement(cc): 109.1
Transmission: 4-speed
Starter: Electric/Kick
Fuel Tank Capacity(L):8
Weight(kg): 100
L*W*H(mm): 1,967 x 742 x
1,075
Type: Standard,Business
128,800.0
Total 64,400.00 0

Motorcycle Registration

Particulars Cost Qty Total Cost


Registration 280.00 2.00 560.00
Emission Test 200.00 2.00 400.00
Insurance 250.00 2.00 500.00
Total 730.00 1,460.00

G. Furniture and Fixtures

Particulars Qty. Cost Total Cost EUL Description Origin


Cabinet for 5,000. 20,000.0 City Hardware - Iligan,
Display 4 00 0 7 Wood City
Monoblocks 10 300.00 3,000.00 7 Plastic
Chairs
Total 5,300.00 23,000.00
H. LP Gas Supply

I. Operation LP Gas Cost

N. Dail
O. Wee P. Mont
y
J. LP Gas K. Unit Cost L. Qty. M. Qly. kly hly
Cos Q. Yearly
Cost Cost
t Cost
R. 11 kg Y.
S. T. U. Tan V. 8,90 W. 62,30 X. 249,2
contain 2,990,40
445.00 20 k 0.00 0.00 00.00
er 0.00
Z. 7 kg. AD. AE. AG.
AA. AB. AC. AF.47,60
contain 1,700.0 11,900.0 571,200.
340.00 5 Tank 0.00
er 0 0 00
AL. AM. AN. AO.
AK.
10,600. 74,200.0 296,800. 3,561,60
TOTAL
AH. AI. AJ. 00 0 00 0.00
AP.
AQ. LP Gas Reserved Cost

AR. LP Gas AS. Unit Cost AT. Qty. AU. Qly. AV.Total Cost
AW. 11 kg AX. AY.
AZ. Tank BA. 8,900.00
container 445.00 20
BB. 7 kg. BC. BD.
BE. Tank BF.1,700.00
container 340.00 5
BG. BH. BI. BJ.TOTAL BK. 10,600.00
BL.

BM. Plant/factory Layout

BN.

BO.

BP.

BQ.

BR.
BS.

BT.

BU.

BV.

BW.

BX. Location Map

BY.

BZ.

CA.

CB.

CC.
CD.

CE.

CF.

CG.

CH.
CI. Waste Disposal System

CJ. The proposed business will provide 2 containers of waste

(Plastic 7-Gallon Trash Can, Black) for biodegradable and non-biodegradable.

Wastes samples were the plastics, papers, and others. It is expected to have

at least 1 container of waste volume per day. Garbage collection will be

collected by the Maranding Garbage Collectors

CK. Quality Control System


CL.
a. The business should follow Department of Energy standards for

LP Gas retailers. Decanting of gas from one container to

another is prohibited. The business should keep away from

open fire. Employees and customers are not allowed to smoke

within the business premises. The business should maintain

sanitation to avoid deposition of waste and make sure up-to-

date check for LP gas containers. Containers filled with gas

should have valves or caps to avoid leakages. The business will

not accept rusty containers to avoid gas leakages.


b. Utilities
CM. The electricity of the business is pre-installed in the proposed

location. The electricity consumption will be paid monthly in LANECO

and the water supply will be paid also in KAPWAD. The electricity will

be used for lighting the area when it is dark, charging the cellphones as

it is used for telecommunications and others. Water will be used for

washing plates and other materials.


CN.
CO. Operation Cost

CP. P CQ. CR. U CS. C


nit
articular ost
produced
CV. 8,
CT. CU. CW.
880.00
CX. Fi CY. 2. DA. 23
CZ.
xed cost 68 ,820.57
DB. Va DE. 4,
DC. 53
riable DD. 729,570.
2.61
cost 34
DF. To DI. 4,753,39
DG. DH.
tal cost 0.91
DJ. To

tal
DK. 53
productio DL. DM.
5.29
n cost

per unit
DN.

DO. Formula:

DP. Fixed cost per Unit = Annual Fixed Cost/ Unit produced annually

DQ. Variable Cost per Unit = Variable cost annually/ Unit Produced

annually

DR. Production Cost per Unit = Fixed Cost per Unit + Variable Cost

per Unit

DS. Note: Variable Cost includes all expenses incurred in the

business except tax due.

DT.
DU.

DV.

DW.

DX.

DY.

DZ. CHAPTER V

EA. ORGANIZATIONAL PLAN

EB.

A. Legal Form of Business

EC. The proposed business will be a sole proprietorship type of

business will be managed and operated by the owner their selves. In order to

fully operate the business, legal forms should be done. Samples are shown in

the next pages.

- Sanitary Permit
- Business Permit
- DTI Permit
ED.
B. Organizational Structure
EE.

EF.Figure 1 Organizational Chart

EG.

EH. Functions of Personnel

1. Manager
Manages the day to day activities of the business such as

training the employees


Receives calls for order and other business-related transactions
2. Cashier
In-charge of purchases of LP Gas
In-charge of cash payments and collections
In-charge of product inventories
In-charge of attending to customers
3. Marketing Specialist
In-charge of attending to customers
In-charge of promotional activities
In-charge of listing sold goods and customers complaints and

suggestions
4. Delivery man
Delivers the LP-Gas to the customers location
Checks the LP Gas cylinders
In-charge of maintenance of the motorcycle for delivery
EI.
EJ.
EK.
EL.
EM.
EN.
C. Qualifications of Officers

G. Re
E. No. of qui H. Salar I. Total
D. Partic Hrs. red y per Salar
F. Requirements
ulars Devot Qu mont y per
ed anti h year J. Benefi
ty ts
Q. SSS
and
M. knows how to manage the P. 108,
K. Mana O. 9,000 PhilH
L. 8 business; graduate of any 000.
ger .00 ealth
business-related course 00
Contri
N. 1 bution
AS.
SSS and
AR.
AM. AN. AO. Physically Fit; preferably AQ. PhilH
108,000
Cashier 8 female 20-25 yrs. Old; flexible 9,000.00 ealth
.00
Contri
AP.1 bution
AZ.
AT.Marke SSS and
AY.108,
ting AU. AV.willing to work under pressure, AX. PhilH
000.
Speci 8 Physically fit; has a driver's licence 9,000.00 ealth
00
alist AW. Contri
1 bution
BN.
BJ.Knows how to drive motorcycle; SSS and
BH. BM.
has a drivers' license; knows how BL. PhilH
Delivery BI. 8 204,000
to maintain the motorcycle and has 8,500.00 ealth
Man .00
an approachable aura; physically fit Contri
bution
BK.
2
BS. BT.528,
BO. BU.
BP. BQ. BR. 35,500.0 000.
Total
0 00
BV.
BW. Office Equipment

CB.
BX. Unit CC.
BY. BZ.
Partic CA. Spe C Total
Q E
ula cification o Co
rs s st CD.
t Origin
CH. EL- CK.
143S CI. Alfalan
7 CJ. d,
CE.
0 Ma
Calcul CF. CG.
0 1,4 ran
at 2 7
. 00. din
or
0 00 g,
CO. SH 0 Lal
ARP a
CV. IWA
TA Wall
Mounted
Industrial
Fan
Tornado-
24W
DC. *24"
wall
mounted
industrial
fan
DJ. *3
speed
CS.
control CW.
Wall CT. CU. CX.
with 499
fa 2 7 9998
oscillation 9
n
DQ. *20
0 watts
power
DX. *21
5m3 per
minute air CY.
volume Qualit
EE. *wit y,
h built-in Ma
thermal ran
fuse din
EL. *var g,
i-angle Lal
wall mount a
EP.Tot EQ. ER. ES. ET. EU. EV.
al
11,
39
8.0
0
EW.
EX. Office Supplies Cost

FB. FC. Total


EY.Partic EZ. FA. Unit Cost per
ulars Qty. Unit Cost Month
FD. FE. FG.
Receipts 30.00 FF. pad 10.00 FH. 300.00
FI. Reco
rd FJ. 1.0 FK. FL.20.0
Book 0 book 0 FM. 20.00
FN. FO. FQ.
Ball Pen 6.00 FP. pcs 7.00 FR. 42.00
FS. FU.
Total FT. FV. FW. 362.00
FX.

FY.GANTT Chart of Activities

FZ. GA. Month 1 GB. Month 2


Particul GD. GE. GF. GG. GH. GI. GJ. GK.
ars 1 2 3 4 1 2 3 4
GL.
Acquisit
ion
GM. GN. GO. GP. GQ. GR. GS. GT.
of
the
Capi
tal
GU.
Comple
tion
of GV. GW. GX. GY. GZ. HA. HB. HC.
Leg
al
For
ms
HD.
Promoti
on
HE. HF. HG. HH. HI. HJ. HK. HL.
of
the
Busi
ness
HM.
Plant
HN. HO. HP. HR. HS. HT. HU.
Ren
ovati
on. HQ.
HV.
Acquisit
ion
of HW. HX. HY. HZ. IB. IC. ID.
the
Equi
pme IA.
nt
IE. Acq
uisiti
on
of
the
LP
Gas IF. IG. IH. II. IJ. IK. IL. IM.
Prod
uct
and
othe
r
Sup
plies
IN. Start
of
IO. IP. IQ. IR. IS. IT. IU. IV.
the
Busi
ness
IW.
IX. Administrative Expense

IZ. Per Month JA.Per Year


IY. Particulars Payment Payment
JC.
JB.Salary and Wages 35,500.00 JD.
JG.
JE.Permits and Licenses JF. - 3,100.00
JI.
JH. SSS Contribution 4,890.00 JJ.
JL.
JK.PhilHealth Contribution 1,075.00 JM.
JN. Fire Extinguisher JP.
Refill JO. - 900.00
JQ. Telecommunicatio JR.
n Cost 400.00 JS.
JT. Purchases of Office JU. JV.
Supplies 362.00
JY.
JX. -
JW. Fire Insurance 1,500.00
KA.
JZ. Utilities 750.00 KB.
KD. KE.
KC. Total 42,977.00 5,500.00
KF.

KG.

KH.

KI.

KJ.

KK.

KL.

KM.

KN. CHAPTER VI

KO. FINANCIAL PLAN

A. Total Project Cost

KP.Schedule 1 Total Project Cost

KR. Eq KS. Tot


KQ. Particulars uity al Cost
KT. Fixed Assets KU. KV.
KW. Tools, Machinery and KX. 62,
Equipment 429.00 KY.
LA. 11,
KZ. Office Equipment 398.00 LB.
LD. 12
LC. Motorcycle 8,800.00 LE.
LF. Motorcycle Extension LG. 5,0 LH.
00.00
LI. Plant Renovation LJ. 10,000.00 LK.
LM. 23,
LL. Furniture and Fixtures 000.00 LN.
LQ. 24
LO. Sub-total LP. 0,627.00
LR. Working Capital: LS. LT.
LU. Permits and License
(Sched. 3) LV. 3,100.00 LW.
LX. LP Gas Cost (Sched. 4) LY. 42,400.00 LZ.
MB. 3,0
MA. Miscellaneous Expense 00.00 MC.
MD. Supplies Cost (Sched. ME. 36
8) 2.00 MF.
MH. 3,5
MG. Promotional Expense 00.00 MI.
MJ. Telecommunication MK. 50
Cost (Sched. 23) 0.00 ML.
MN. 75
MM. Utility Cost (Sched. 7) 0.00 MO.
MP. Transportation Cost MQ. 2,5
(Sched. 9) 00.00 MR.
MU. 56,
MS. Sub-total MT. 112.00
MX. 29
MV. Total Project Cost MW. 6,739.00
MY.

B. Sources of Financing

MZ. Since there are 3 owners of the business, each of the owners

will invest money amounting to PHP100,000.00 from their savings which will

be accumulated amounting to PHP300,000.00. This will be used for

acquisition of equipments and other materials needed for the business to

operate.

NA.
C. Projected Financial Statement

D. Dial Me Liquefied Petroleum Gas and Delivery


E. Income Statement
F. For the Year Ended Dec. 31

G. Particulars H. Year 1 I. Year 2 J. Year 3 K. Year 4 L. Year 5


N. O. P. Q. R.
5,748,16 5,863,12 5,980,39 6,099,99 6,221,99
M. Sales (Sched. 14) 6.20 9.52 2.11 9.96 9.96
S. Less: T. U. V. W. X.
AA. 3, AB. 3, AC. 3, AD. 3,
Z. 3,551,00 632,832. 705,488. 779,598. 855,190.
Y. LP Gas Cost (Sched. 4) 0.00 00 64 41 38
AE. Purchases of other AF.354,596. AG. 36 AH. 36 AI. 376,300. AJ.383,826.
products (Sched. 25) 34 1,688.27 8,922.03 47 48
AK. Administrative Expense AL. 62 AM. 62 AN. 62 AO. 62 AP.623,645.
(Sched. 11) 4,474.00 2,938.44 3,170.95 3,406.59 41
AQ. Rent Expense (Sched. AR. 12 AS. 12 AT.120,000. AU. 12 AV.120,000.
13) 0,000.00 0,000.00 00 0,000.00 00
AX. 9, AZ. 6, BA. 6, BB. 6,
AW. Miscellaneous Expense 000.00 AY.6,000.00 000.00 000.00 000.00
BD. 9, BE. 6, BG. 6, BH. 6,
BC. Promotional Expense 500.00 000.00 BF.6,000.00 000.00 000.00
BI. Repair and Maintenance BJ.10,000.0 BK. 10 BL. 10 BM. 10 BN. 10
(Sched. 12) 0 ,100.00 ,201.00 ,303.01 ,406.04
BO. Multicab Registration BP.1,460.00 BQ. 1, BR. 1, BS. 1, BT.1,460.00
Cost (Sched. 10) 460.00 460.00 460.00
BU. Transportation Cost BV. 49 BW. 34 BX. 35 BY.36,715.6 BZ. 37
(Sched. 9) ,540.00 ,608.00 ,646.24 3 ,817.10
CA. Depreciation Expense CB. 23 CC. 23 CD. 23 CE. 23 CF. 23
(Sched. 21) ,820.57 ,820.57 ,820.57 ,820.57 ,820.57
CH. 4, CJ. 4, CK. 4, CL. 5,
753,390. CI. 4,819,44 900,709. 983,604. 068,165.
CG. Sub-total 91 7.27 43 68 97
CO. 1, CP. 1, CQ. 1, CR. 1,
CN. 99 043,682. 079,682. 116,395. 153,833.
CM. Gross Operating Profit 4,775.29 25 68 27 98
CS. Less: Tax Due (Sched. CT. 28 CU. 29 CV. 31 CW. 32 CX. 33
29) 3,328.09 8,978.32 0,498.46 2,246.49 4,226.87
CZ. 71 DA. 74 DB. 76 DC. 79 DD. 81
CY. Net Income 1,447.20 4,703.93 9,184.22 4,148.79 9,607.11
DE.
DF. Dial Me Liquefied Petroleum Gas and Delivery
DG. Cash Flow Statement
DH. For the Year Ended Dec. 31
DJ.
Pre-
opera DK. Y DL. Y DM. DN. DO.
DI. Particulars tion ear 1 ear 2 Year 3 Year 4 Year 5
DQ. DT. DU. DV.
DP. Cash Inflows DR. DS.
DY. 5 DZ. 5 EA. EB. EC.
DX. ,748,1 ,863,1 5,980,39 6,099,99 6,221,99
DW. Sales (Sched. 14) 0.00 66.20 29.52 2.11 9.96 9.96
EE.
300,000.0 EG. 0 EH.
ED. Add. Investments 0 EF.0.00 .00 0.00 EI. 0.00 EJ.0.00
EL. EM. 5 EN. 5 EO. EP.6,099 EQ.
300,000.0 ,748,1 ,863,1 5,980,39 ,999. 6,221,99
EK. Total Cash Inflows 0 66.20 29.52 2.11 96 9.96
ES. EV. EW. EX.
ER. Cash Outflows ET. EU.
EZ.
EY.Acquisition of Fixed Assets 240,627.0 FA. 0 FB. 0 FC. FD. FE.
(Sched. 1) 0 .00 .00 0.00 0.00 0.00
FH. 3 FI. 3,632, FJ. 3,705 FK. FL.3,855
FG. ,519,2 832.0 ,488. 3,779,59 ,190.
FF.LP Gas Cost (Sched. 4) 42,400.00 00.00 0 64 8.41 38
FO. 3 FQ. FR. FS.
FM. Purchases of Other FN. 54,596 FP.361,6 368,922. 376,300. 383,826.
Products (Sched. 25) 0.00 .34 88.27 03 47 48
FW. 6 FX. FZ.
FT.Administrative Expense FU. FV.619,76 22,93 623,170. FY.623,4 623,645.
(Sched. 11) 4,712.00 2.00 8.44 95 06.59 41
GC. 1 GD. 1 GE. GF. GG.
GA. Rent Expense (Sched. GB. 20,000 20,00 120,000. 120,000. 120,000.
13) 0.00 .00 0.00 00 00 00
GJ. 6 GK. 6
GI. 3,000. ,000.0 ,000.0 GL. GM. GN.
GH. Miscellaneous Expense 00 0 0 6,000.00 6,000.00 6,000.00
GQ. 6 GR. 6
GP. ,000.0 ,000.0 GS. GT. GU.
GO. Promotional Expense 3,500.00 0 0 6,000.00 6,000.00 6,000.00
GX. 1 GY. 1 GZ. HA. HB.
GV. Repair and GW. 0,000. 0,100. 10,201.0 10,303.0 10,406.0
Maintenance (Sched. 12) 0.00 00 00 0 1 4
HE. 1 HF. 1
HC. Multicab Registration HD. ,460.0 ,460.0 HG. HH. HI. 1,460
Cost (Sched. 10) 0.00 0 0 1,460.00 1,460.00 .00
HL. 4 HM. 3 HN. HO. HP.
HJ. Transportation Cost HK. 7,040. 4,608. 35,646.2 36,715.6 37,817.1
(Sched. 21) 2,500.00 00 00 4 3 0
HS. 2 HT. 2 HU. HV. HW.
HQ. Income Tax Due HR. 83,328 98,97 310,498. 322,246. 334,226.
(Sched. 29) 0.00 .09 8.32 46 49 87
HY. HZ. 4 IA. 5,094, IB. 5,187 IC. 5,282 ID. 5,378
296,739.0 ,967,3 605.0 ,387. ,030. ,572.
HX. Total Cash Outflows 0 86.43 3 32 60 28
IF. 3,261. IG. 780,77 IH. 768,5 II. 793,0 IJ. 817,9 IK. 843,4
IE. Net Cash Flow 00 9.77 24.50 04.79 69.35 27.67
IP. 1,552 IQ. 2,345 IR. 3,163
IN. 3,261. IO. 784,0 ,565. ,570. ,539.
IL. Cash Balance, Beg. IM. 0.00 00 40.77 26 05 41
IV. 1,552, IW.2,345 IX. 3,163 IY. 4,006
IT. 3,261. IU. 784,04 565.2 ,570. ,539. ,967.
IS. Cash Balance, End 00 0.77 6 05 41 08
IZ.
JA. Dial Me Liquefied Petroleum Gas and Delivery
JB. Balance Sheet
JC. For the Year Ended Dec. 31
JE. Y JG. Y JH. Y
JD. Particulars ear 1 JF. Year 2 ear 3 ear 4 JI. Year 5
JJ. Assets JK. JL. JM. JN. JO.
JP.Current Assets JQ. JR. JS. JT. JU.
JW. 7 KA. 4
84,040. JX.1,552,5 JY. 2,345,5 JZ. 3,163,5 ,006,96
JV.Cash 77 65.26 70.05 39.41 7.08
KC. 1 KD. 1 KE. 1 KG. 1
0,600.0 0,600.0 0,600.0 KF.10,600. 0,600.0
KB. Reserved LP Gas (Sched. 24) 0 0 0 00 0
KK. 2 KL. 3 KM. 4
KI. 794,640 KJ.1,563,1 ,356,17 ,174,13 ,017,56
KH. Total Current Assets .77 65.26 0.05 9.41 7.08
KN. Non-Current Assets KO. KP. KQ. KR.
KU. 6 KV. 6 KW. 6 KX. 6
KS. Tools, Machinery and KT.62,429. 2,429.0 2,429.0 2,429.0 2,429.0
Equipment (Sched. 1) 00 0 0 0 0
KZ. 1 LA. 1 LB. 1 LC. 1 LD. 1
1,398.0 1,398.0 1,398.0 1,398.0 1,398.0
KY.Office Equipment (Sched. 1) 0 0 0 0 0
LG. 1 LH. 1
LF. 128,800 28,800. 28,800. LI. 128,800 LJ. 128,800
LE. Motorcycle (Sched. 1) .00 00 00 .00 .00
LK. Motorcycle Extension (Sched. LL. 5,000.0 LM. 5 LN. 5 LO. 5 LP.5,000.0
1) 0 ,000.00 ,000.00 ,000.00 0
LR. 1 LS. 1 LU. 1
0,000.0 0,000.0 LT. 10,000. 0,000.0 LV. 10,000.
LQ. Plant Renovation (Sched. 1) 0 0 00 0 00
LW. Furniture and Fixtures LX. 2 LY. 23,000. LZ.23,000. MA. 2 MB. 2
3,000.0 3,000.0 3,000.0
(Sched. 1) 0 00 00 0 0
MD. 2 ME. 2 MF. 2 MG. 2 MH. 2
40,627. 40,627. 40,627. 40,627. 40,627.
MC. Total 00 00 00 00 00
MJ. 2 MK. 4 ML. 7 MM. 9 MN. 1
MI. Less: Accumulated Depreciation 3,820.5 7,641.1 1,461.7 5,282.2 19,102.
(Sched. 22) 7 3 0 7 83
MP. 2 MQ. 1 MR. 1 MS. 1 MT. 1
16,806. 92,985. 69,165. 45,344. 21,524.
MO. Total Non-Current Assets 43 87 30 73 17
MV. 1 MW. 1 MX. 2 MY. 3 MZ. 4
,011,44 ,756,15 ,525,33 ,319,48 ,139,09
MU. Total Assets 7.20 1.13 5.35 4.14 1.25
NA. Liabilities and Owner's Equity NB. NC. ND. NE.
NF. Liabilities NG. NH. NI. NJ. NK.
NM. 0 NN. 0 NO. 0 NP. 0 NQ. 0
NL. Accounts Payable .00 .00 .00 .00 .00
NS. 0 NT. 0 NU. 0 NV. 0 NW. 0
NR. Total Liabilities .00 .00 .00 .00 .00
NX. Owner's Equity NY. NZ. OA. OB. OC.
OE. 3 OF. 1 OG. 1 OH. 2
00,000. ,011,44 ,756,15 ,525,33 OI. 3,319,4
OD. Capital, Beg. 00 7.20 1.13 5.35 84.14
OK. 7 OL. 7 OM. 7 ON. 7 OO. 8
11,447. 44,703. 69,184. 94,148. 19,607.
OJ. Add: Net Income 20 93 22 79 11
OP. Capital, End OQ. 1 OR. 1 OS. 2 OT. 3 OU. 4
,011,44 ,756,15 ,525,33 ,319,48 ,139,09
7.20 1.13 5.35 4.14 1.25
OW. 1 OX. 1 OY. 2 OZ. 3 PA. 4
OV. Total Liabilities and Owner's ,011,44 ,756,15 ,525,33 ,319,48 ,139,09
Equity 7.20 1.13 5.35 4.14 1.25
PB. Financial Analysis
a. Return on Investment

PC. Return on Investment=Ave. Annual Net Income/Total

Investments X 100%

PD. Year PE. Net Income


PF.1 PG. 711,447.20
PH. 2 PI. 744,703.93
PJ.3 PK. 769,184.22
PL. 4 PM. 794,148.79
PN. 5 PO. 819,607.11
PP.Total Net Income PQ. 3,839,091.25
PR. Divided by Critical Asset Life PS. 5
PT.Average Net Income PU. 767,818.25
PV. Total Project Cost PW. 296,739.00
PX. Return on Investment PY. 258.75%
PZ.

QA. The table above shows the rate of return on investment of

the business. After considering the critical assets life (tools, machinery

and equipment) of 5 years, the business returns 258.75% of its

investment cost. Hence, the business is profitable.

QB.

QC.

QD.

a. Payback Period

QE. Year QH. P


QF. N
QG. C aybac
et
ummulat k
Incom
ive Total Perio
e+
d
QJ. D QK. QL.
epreci
ation
QN. 7
QO. 73
QM. 1 35,26 QP. 1
5,267.77
7.77
QR. 7 QS. 1,
QQ. 2 68,52 503,792. QT.
4.50 26
QV. 7 QW. 2,
QU. 3 93,00 296,797. QX.
4.79 05
QZ. 8 RA. 3,
QY. 4 17,96 114,766. RB.
9.35 41
RD. 8 RE. 3,
RC. 5 43,42 958,194. RF.
7.67 08
RH. 2
RG. Total Project
96,73
Cost
9.00 RI. RJ.
RK. Less
Cummulative RM. RN.
RL. 7
RO. Total where
35,26
investment RQ. RR.
7.77
RS. is to be
recovered RU. RV.
RW. Total RX. -
amount to be 438,5
recovered 28.77 RY. RZ.
SA. Divided by
Net Income+Dep. SB. 7 SC. SD.
SE. Where the 35,26
investment is 7.77
recovered SG. SH.
SJ.-
0.596
SI. Quotient
42049
6 SK. SL.
SM. Years SN. SO. SP.
SR. -
SQ. Months(Mult 7.157
ST.-7
iplied by 12) 04595
8 SS.
SU. Payback
SV. Less than a year
Period
SW.
SX. The table above shows the payback period of the

business. It shows that the business pays back its investment cost after

less than a year. This is less than its investment life. Hence, the

business is desirable to invest.

SY.

SZ.

TA.

TB.

TC.

a. Net Income: Sales Ratio

TD. Net Income: Sales Ratio

TE. P TF.Ye TI. Ye TJ.Ye


TG. TH.
articul ar ar ar
Year 2 Year 3
ars 1 4 5
TK. N TL.711 TM. TN. TO. TP.81
et ,44 744,70 769,18 794,14 9,6
Incom 7.2 3.9 4.2 8.7 07.
e 0 3 2 9 11
TR. TS. TT.5,9 TU. TV.6,2
TQ. G
5,748, 5,863, 80, 6,099, 21,
ross
16 12 39 99 99
Reven
6.2 9.5 2.1 9.9 9.9
ue
0 2 1 6 6
TW. N
TX. TY.12. TZ. UA. UB.
et
12.38 70 12.86 13.02 13.17
Incom
% % % % %
e Rate
UC.
UD.

13.40%

13.20%

13.00%

12.80%

12.60%
Net Income:Sales Ratio
12.40%

12.20%

12.00%

11.80%

UE. The net income: sales ratio above shows an increasing trend of

rate from Year 1 (12.38%) through Year 5 (13.17%). This shows that the

business is gaining as well as growing as it continues.

UF.

UG.

UH.
UI.

a. Break-even Point

UJ. Contribution Margin = Sales Variable Cost

UK. Sales UL. 5,748,166.20


UM. Less: Variable Cost UN. 4,729,570.34
UO. Total UP. 1,018,595.86
UQ.

UR. Contribution Margin per Unit = Selling Price Average Unit Cost

US. Average Selling Price UT. 957.28


UU. Less: Average Unit Cost UV. 535.29
UW. Total UX. 421.99
UY.

UZ. Contribution Margin Ratio = TCM/ Total Sales X 100%

VA. Total Contribution Margin VB. 1,018,595.86


VC. Divided By: Total Sales VD. 5,748,166.20
VE. Quotient VF.0.17720362
VG. Multiply by: VH. 100%
VI. Contribution Margin Ratio VJ.17.72%
VK.

VL. Break-even Point in unit

VM. Unit Produced per Day VN. 25


VO. Multiplied by: Production Cost per
Unit VP.535.29
VR. 13,382.2
VQ. Product 9
VS. Divided by:Selling Price VT.957.28
VU. Qoutient VV. 13.98
VW. Break-even Point in Unit VX. 13.98
VY.

VZ.
WA.
WB.
WC.
WD. List of Assumptions

WE. Assumptions:

LP Gas Cost will increase by 2% annually


LP Gas Cost as per starting of the business is worth PHP25,650
Projected Sales will increase by 2% annually
Purchases on other products is 70% on its projected sale
Miscellaneous expense is worth PHP6000.00 annually
Pre-operation Miscellaneous expense is worth PHP3000.00
Promotional Expense is worth PHP6000.00 annually
Pre-operation Promotional expense is worth PHP3500.00
Telecommunication Cost will increase by 2% annually
Telecommunication cost on pre-operation is worth PHP500.00
Transportation Cost will increase 3% annually
Repair and Maintenance of the motorcycle will increase by 1% annually
Rent expense is worth PHP10,000.00 monthly
Purchases of supplies will increase 1% annually
Motorcycle Registration cost is paid annually

Depreciation Formula used:

WF. Straight-line Method = Depreciable Amount/Useful Life


WG. Schedules

WH. Schedule 2 Business Permit

WI. Parti WJ. A


culars mount
WK. Billb WL. 25
oard Fee 0.00
WM. Sanit WN. 30
ary Fee 0.00
WO. Muni
WP. 30
cipal
0.00
ecology
WQ. May WR. 50
or's Permit 0.00
WS. Weig
WT. 50
ht and
.00
Measure
WU. Zoni WV. 50
ng Fee .00
WW. Basi
WX. 1,
c Tax
000.00
Clearance
WZ. 2,
WY. Total
450.00
XA.

XB. Schedule 3 Permits and Licenses

XF.Y
XD. XE. XG. XH.
XC. Partic e
Year Year Year Year
ulars ar
1 2 4 5
3
XJ.2,
4 XK. XL. XM. XN.
XI. Business 5 2,450 2,450 2,450 2,450
Permit 0. .0 .0 .0 .0
0 0 0 0 0
0
XP.5
1 XT.0.
XO. DTI XQ. XR. XS.
5. 0
Registration 0.00 0.00 0.00
0 0
0
XY.7
XU. Cedul XV. XW. XX. 5. XZ.
a 75.00 75.00 75.00 0 75.00
0
YA. Purok YB. YC. YD. YE. YF.1
0.
Clearance 10.00 10.00 10.00 10.00 0
0
YI. 5 YJ.5
YG. Baran
YH. 0. 0. YK. YL.
gay
50.00 0 0 50.00 50.00
Clearance
0 0
YP.2,
YN. YO. 5 YQ. YR.
3,100 2,585 8 2,585 2,585
YM. Total
.0 .0 5. .0 .0
0 0 0 0 0
0
YS.

YT.Schedule 4 LP Gas Cost

YU. YV. D YW. YX. M


Particu aily Weekly onthly YY.Yearly
lar Cost Cost Cost Cost
YZ.
LP
Ga
s ZA. ZB. ZC. ZD.
Sol 10,600 74,200 296,80 3,561,
d .00 .00 0.00 600.00
ZI.
ZE. 3,561,
Total ZF. ZG. ZH. 600.00
ZJ.

ZK. Schedule 5 Salaries and Wages

ZL. Description ZM. Salary per Month


ZN. Manager ZO. 9,000.00
ZP.Cashier ZQ. 9,000.00
ZR. Marketing Specialist ZS. 9,000.00
ZT.Delivery Man ZU. 8,500.00
ZV.Total ZW. 35,500.00
ZX.

ZY.Schedule 6 PhilHealth and SSS Contribution

AAA. AAD.
Salary AAC. P SSS
ZZ. D per hilHealth Contr
escript Mont AAB. Contribut ibutio
ion h Qty. ion n
AAE. M AAF. AAG. AAH. AAI.
anager 225.00
9,00 1,00
1
0.00 0.00
AAK. AAN.
AAL.
AAJ. C 9,00 AAM. 1,00
1
ashier 0.00 225.00 0.00
AAO. M
arketin AAP. AAQ. AAS.
g
Special 9,00 1 AAR. 1,00
ist 0.00 225.00 0.00
AAU. AAX.
AAT. D AAV.
elivery 8,50 AAW. 1,89
2
Man 0.00 400.00 0.00
AAZ.
ABC.
35,5
AAY. T 00.0 ABA. ABB. 4,89
otal 0 1,075.00 0.00
ABD.

ABE. Schedule 7 Utility Cost

ABG.
Pre-
op
ABF. er ABH. ABI. ABJ. ABK. ABL.
Particu ati Year Year Year Year Year
lars on 1 2 3 4 5
ABP.
ABO. 1,81 ABQ. ABR. ABS.
1,80 8 1,83 1,85 1,87
ABN. 0. . 6. 4. 2.
ABM. 150.0 0 0 0 0 0
Water 0 0 0 0 0 0
ABW.
ABV. 7,27 ABX. ABY. ABZ.
7,20 2 7,34 7,41 7,49
ABT. ABU. 0. . 4. 8. 2.
Electri 600.0 0 0 7 1 3
city 0 0 0 2 7 5
ACD.
ACC. 9,09 ACE. ACF. ACG.
9,00 0 9,18 9,27 9,36
ACB. 0. . 0. 2. 4.
ACA. 750.0 0 0 7 1 3
Total 0 0 0 2 7 5
ACH.
ACI. Schedule 8 Office Supplies Cost

ACM.
Unit
ACJ. ACK. ACL. C ACN. Total ACO. Tot
Particul Q o Cost per al Cost
ars st Month per Year
ACP. ACQ. ACR. ACS.
Receipt 3 10.0 ACT. 300. ACU.
s 0 00 3,600.00
ACV.
Record ACW. ACX. ACY.
Boo 1 20.0 ACZ. 20.0 ADA.
k 0 0 240.00
ADB. ADC. ADD.
Ball 6 ADE. ADF. 42.0 ADG.
Pen 7.00 0 504.00
ADH. ADI. ADJ. ADK. ADL. 362. ADM.
Total 00 4,344.00
ADN.

ADO. Schedule 9 Transportation Cost

ADP. C
ost of ADQ. A
gasoline mount
ADR. W ADS. 98
eekly 0.00
ADT. M ADU. 3,
onthly 920.00
ADV. Ye ADW. 47
arly ,040.00
ADX.

ADY.

ADZ.

AEA.

AEB. Schedule 10 Motorcycle Registration

AEC. P
articular AED. C AEE. Qt AEF. To
s ost y tal Cost
AEG. R
egistratio AEH. 28 AEI. 2. AEJ. 56
n 0.00 00 0.00
AEK. E
mmissio AEL. 20 AEM. 2. AEN. 40
n Test 0.00 00 0.00
AEO. In AEP. 25 AEQ. 2. AER. 50
surance 0.00 00 0.00
AES. To AET. 73 AEV. 1,
tal 0.00 AEU. 460.00
AEW.

AEX. Schedule 11 Administrative Cost

AEZ. AFA. AFB. AFC. AFD.


AEY. Pa Year Year Year Year Year
rticulars 1 2 3 4 5
AFF. AFH. AFI.
AFG. AFJ.
52 52 52
8, 52 8, 8, 52
AFE. Sa 00 8,0 00 00 8,0
lary and 0. 00. 0. 0. 00.
Wages 00 00 00 00 00
AFK. Pe AFL. AFM. AFN. AFO. AFP.
rmits and 3,100. 2,585. 2,585. 2,585. 2,585.
Licenses 00 00 00 00 00
AFQ. S AFR. AFS. AFT. AFU. AFV.
SS 58,68 58,68 58,68 58,68 58,68
Contribut 0. 0.0 0. 0. 0.0
ion 00 0 00 00 0
AFX. AFZ. AGA.
AFY. AGB.
12 12 12
AFW. Ph ,9 12, ,9 ,9 12,
ilHealth 00 90 00 00 90
Contribut .0 0.0 .0 .0 0.0
ion 0 0 0 0 0
AGD. AGE. AGF. AGG. AGH.
AGC. Fir
e 90 90 90 90 90
Extinguis 0. 0.0 0. 0. 0.0
her Refill 00 0 00 00 0
AGJ. AGL. AGM.
AGK. AGN.
AGI. Te 4, 4, 5,
lecommu 80 4,8 99 09 5,1
nication 0. 96. 3. 3. 95.
Cost 00 00 92 80 67
AGP. AGR. AGS.
AGQ. AGT.
AGO. Pu 4, 4, 4,
rchases 34 4,3 43 47 4,5
of Office 4. 87. 1. 5. 20.
Supplies 00 44 31 63 38
AGU. Fir AGV. AGW. AGX. AGY. AGZ.
1, 1, 1,
e 50 1,5 50 50 1,5
Insuranc 0. 00. 0. 0. 00.
e 00 00 00 00 00
AHB. AHC. AHD. AHE. AHF.
AHA. Uti 9,000. 9,090. 9,180. 9,272. 9,364.
lities 00 00 72 17 35
AHH. AHJ. AHK.
AHI. AHL.
62 62 62
3, 62 3, 3, 62
22 2,9 17 40 3,6
AHG. To 4. 38. 0. 6. 45.
tal 00 44 95 59 41
AHM.

AHN. Schedule 12 Repairs and Maintenance Cost

AHO. Particulars AHP. Amount


AHQ. Repairs and Maintenance Cost AHR. 10,000.00
AHS.

AHT. Schedule 13 Rent Expense

AHV. M AHW. Y
AHU. P onthly early
articulars Cost Cost
AHX. R AHY. AHZ.
ent 10,000.0 120,000.
Expense 0 00
AIA.

AIB. Schedule 14 Projected Sales

AIC.
Partic
ula AID. AIE. AIF. AIG. AIH.
rs Year 1 Year 2 Year 3 Year 4 Year 5
AII. AIJ. AIK. AIL. AIM. AIN.
LP
Ga 5,2 5,3 5,4 5,5 5,6
s 41, 46, 53, 62, 73,
Sa 600 432 360 427 676
les .00 .00 .64 .85 .41
AIO. AIP. AIQ. AIR. AIS. AIT.
Other
Pr 506 516 527 537 548
od ,56 ,69 ,03 ,57 ,32
uct 6.2 7.5 1.4 2.1 3.5
s 0 2 7 0 5
AIV. AIW. AIX. AIY. AIZ.

AIU. 5,7 5,8 5,9 6,0 6,2


Total 48, 63, 80, 99, 21,
Sa 166 129 392 999 999
les .20 .52 .11 .96 .96
AJA.

AJB. Schedule 15 Depreciation Expense of Office Equipment

AJD. D AJF. D
AJC. P epreciab AJE. U epreciati
articular le seful on
s Amount Life Expense
AJG. Of
fice
Equipme AJH. 11 AJJ.
nt ,398.00 AJI. 7 1,628.29
AJK. To AJN.
tal AJL. AJM. 1,628.29
AJO.

AJP. Schedule 16 Depreciation Expenses of Tools, Machinery and


Equipment

AJQ. P AJR. Depre AJS.


articular ciable Useful AJT. Depreci
s Amount Life ation Expense
AJU. Ta
nk AJV. 47,400 AJW. AJX.
(11kg) .00 7 6,771.43
AJY. Ta AJZ. 8,880. AKA. AKB.
nk (7kg) 00 7 1,268.57
AKC. Fi
re
Extinguis AKD. 1,200. AKE. AKF.
her 00 5 240.00
AKG. Cl
eaning AKI. AKJ.
Tools AKH. 450.00 5 90.00
AKK. S
crew AKM. AKN.
Driver AKL. 899.00 10 89.90
AKO. P AKP. 3,600. AKQ. AKR.
ush Cart 00 10 360.00
AKS. To AKU. AKV.
tal AKT. 8,819.90
AKW.

AKX. Schedule 17 Depreciation Expenses of Furniture and Fixtures


AKZ. ALA. ALB. ALC. ALD.
AKY. Particul Year Year Year Year Year
ars 1 2 3 4 5
ALF. ALG. ALH. ALI. ALJ.
23,0 23,0 23,0 23,0 23,0
ALE. Furnitur 0 0 0 0 0
e and Fixtures 0. 0. 0. 0. 0.
0 0 0 0 0
0 0 0 0 0
ALL. ALM. ALN. ALO. ALP.
23,0 23,0 23,0 23,0 23,0
0 0 0 0 0
0. 0. 0. 0. 0.
ALK. Total 0 0 0 0 0
Cost 0 0 0 0 0
ALV.
ALS. ALT. ALU. 13,1
3,28 6,57 9,85 4
5. 1. 7. 2.
ALQ. Residual ALR. 7 4 1 8
Value 0.00 1 3 4 6
ALW. Life in
Number of ALX. ALY. ALZ. AMA. AMB.
Periods 7 6 5 4 3
AMD. AME. AMF. AMG. AMH.
3,28 3,28 3,28 3,28 3,28
5. 5. 5. 5. 5.
AMC. Annual 7 7 7 7 7
Depreciation 1 1 1 1 1
AMI.

AMJ.

AMK. Schedule 18 Depreciation Expense of Plant Renovation

AMM. D AMO. D
AML. P epreciab AMN. U epreciati
articular le seful on
s Amount Life Expense
AMP. Pl
ant
Renovati AMQ. 10 AMS.
on ,000.00 AMR. 10 1,000.00
AMT. To AMW.
tal AMU. AMV. 1,000.00
AMX.

AMY. Schedule 19 Depreciation Expense of Motorcycle

AMZ. P ANA. D ANB. U ANC. D


epreciab epreciati
articular le seful on
s Amount Life Expense
AND. M ANE. 12 ANG.
otorcycle 8,800.00 ANF. 15 8,586.67
ANH. To ANK.
tal ANI. ANJ. 8,586.67
ANL.

ANM. Schedule 20 Depreciation Expense of Motorcycle Extension

ANO. D ANQ. D
epreciab ANP. U epreciati
ANN. Parti le seful on
culars Amount Life Expense
ANR. Motor
cycle ANS. 5, ANU.
Extension 000.00 ANT. 10 500.00
ANY.
ANV. Total ANW. ANX. 500.00
ANZ.

AOA. Schedule 21 Total Depreciation Expense

AOC. AOD. AOE. AOF. AOG.


Yea Yea Yea Yea Yea
r r r r r
AOB. Particulars 1 2 3 4 5
AOI. AOJ. AOK. AOL. AOM.
8,81 8,81 8,81 8,81 8,81
9 9 9 9 9
AOH. Tools, . . . . .
Machinery and 9 9 9 9 9
Equipment 0 0 0 0 0
AOO. AOP. AOQ. AOR. AOS.
8,58 8,58 8,58 8,58 8,58
6 6 6 6 6
. . . . .
6 6 6 6 6
AON. Motorcycle 7 7 7 7 7
AOU. AOV. AOW. AOX. AOY.
1,62 1,62 1,62 1,62 1,62
8 8 8 8 8
. . . . .
AOT. Office 2 2 2 2 2
Equipment 9 9 9 9 9
AOZ. Furniture APA. APB. APC. APD. APE.
and Fixtures 3,28 3,28 3,28 3,28 3,28
5 5 5 5 5
. . . . .
7 7 7 7 7
1 1 1 1 1
APG. APH. API. APJ. APK.
500. 500. 500. 500. 500.
APF. Motorcycle 0 0 0 0 0
Extension 0 0 0 0 0
APM. APN. APO. APP. APQ.
1,00 1,00 1,00 1,00 1,00
0 0 0 0 0
. . . . .
APL. Plant 0 0 0 0 0
Renovation 0 0 0 0 0
APS. APT. APU. APV. APW.
23,8 23,8 23,8 23,8 23,8
2 2 2 2 2
0 0 0 0 0
. . . . .
APR. Total 5 5 5 5 5
Depreciation Cost 7 7 7 7 7
APX.

APY.

APZ. Schedule 22 Accumulated Depreciation

AQB. AQC. AQD. AQE.


Yea Yea Yea Yea
r r r r AQF.
Year
AQA. Particulars 1 2 3 4 5
AQH. AQI. AQJ. AQK. AQL.
23, 47, 71, 95, 119,
8 6 4 2 1
2 4 6 8 0
0 1 1 2 2
AQG. Accumulated . . . . .
Depreciation 5 1 7 2 8
Expense 7 3 0 7 3
AQM.
AQN. Schedule 23 Telecommunication Expense

AQR. AQT.
AQO. Unit Pre-
Partic AQP. AQQ. C AQS. Total opera
ula Qt os Cost per tion
rs t Month
AQU. AQZ.
Load AQV. AQW. AQX. 500.00
Ca 4. 100.0
rd 0 AQY. 400.00
ARA. ARB. ARC. ARD. ARF.
Total ARE. 400.00
ARG.
ARH. Schedule 24 Reserved LP Gas Cost

ARM.
ARI. L ARJ. Uni ARK. ARL. Total
P Gas t Cost Qty. Qly. Co
st
ARN. 1
ARR.
1 kg ARO. ARP. ARQ.
8,900.
contain 445.00 20 Tank
00
er
ARS. 7
ARW.
kg. ART. ARU. ARV.
1,700.
contain 340.00 5 Tank
00
er
ASA. ASB.
TOT 10,60
A 0.0
ARX. ARY. ARZ. L 0
ASC.

ASD. Schedule 25 Sales of Other Products

ASF. ASG. ASH. M ASI. A


ASE. Partic Pric Qty. of onthly nnual
ulars e Sold Sales Sales
ASK.

4
9
9
. ASM. ASN.
ASJ. Regul 0 ASL. 2,495. 29,940
ator 0 5 00 .00
ASP.

2
,
3
0
0
ASO. Regul . ASR. ASS.
ator with 0 ASQ. 11,500 138,00
Safety Valve 0 5 .00 0.00
AST. Stand ASU. ASV. ASW. ASX.
ard LPG 5 2,845. 34,140
Hose 5 00 .00
6
9
.
0
0
ASZ.

1
,
4
5
9
. ATB. ATC.
ASY. Singl 0 ATA. 7,295. 87,540
e Burner 0 5 00 .00
ATE.

2
,
8
1
0
. ATG. ATH.
ATD. Doubl 0 ATF. 14,05 168,60
e Burner 0 5 0.00 0.00
ATJ.

5
0
0
. ATL. ATM.
ATI. LPG 0 ATK. 2,500. 30,000
Lighter Gun 0 5 00 .00
ATO.

1
6
.
ATN. Teflo 4 ATP. ATQ. ATR.
n Tape 0 5 82.00 984.00
ATT.

2
8
9
. ATV. ATW.
ATS. Hook 3 ATU. 1,446. 17,362
pin with nut 7 5 85 .20
AUA. AUB.
ATX. ATZ. 42,21 506,56
TOTAL ATY. 3.85 6.20
AUC.

AUD. Schedule 26PhilHealth Contribution Table


AUE.

AUF.
AUG.

AUH.

AUI.

AUJ. Schedule 27 SSS Contribution Table


AUK.
AUL.

AUM.

AUN.

AUO. Schedule 28BIR Policy

AUP. If Taxable Income is: AUQ. Tax Due is


AUR. Not over 10, 000.00 AUS. 5%
AUT. Over 10, 000.00 but AUU. 500+10% of the excess
not over 30,000.00 over 10,000
AUV. Over 30,000.00 but not AUW. 2,500+15% of the
over 70,000.00 excess over 30,000
AUX. Over 70,000.00 but not AUY. 8,500+20% of the
over 140,000.00 excess over 70,000
AUZ. Over 140,000.00 but AVA. 22,500+25% of the
not over 250,000.00 excess over 140,000
AVB. Over 250,000.00 but AVC. 50,000+30% of the
not over 500,000.00 excess over 250,000
AVE. 125,000+32% of the
AVD. Over 500,000.00
excess over 500,000
AVF.

AVG. Schedule 29 Tax Expense

AVI. AVJ. AVK. AVL. AVM.


AVH. Part Year Year Year Year Year
iculars 1 2 3 4 5
AVO.
994,
7
7 AVP. AVQ. AVR. AVS.
5 1,043, 1,079, 1,116, 1,153,
AVN. Inco . 68 68 39 83
me Before 2 2. 2. 5. 3.
Tax 9 25 68 27 98
AVU.
500,
0
0 AVV. AVW. AVX. AVY.
0 500,0 500,0 500,0 500,0
AVT. Less . 00 00 00 00
: Basic 0 .0 .0 .0 .0
Amount 0 0 0 0 0
AVZ. Exc AWA. AWB. AWC. AWD. AWE.
ess 494, 543,6 579,6 616,3 653,8
7 82 82 95 33
7 .2 .6 .2 .9
5 5 8 7 8
.
2
9
AWF. Multi
ply: Tax AWG. AWH. AWI. AWJ. AWK.
Percentage 0.32 0.32 0.32 0.32 0.32
AWM.
158,
3
2 AWN. AWO. AWP. AWQ.
8 173,9 185,4 197,2 209,2
. 78 98 46 26
AWL. Sub- 0 .3 .4 .4 .8
Total 9 2 6 9 7
AWS.
125,
0
0 AWT. AWU. AWV. AWW.
0 125,0 125,0 125,0 125,0
. 00 00 00 00
AWR. Add: 0 .0 .0 .0 .0
Basic Tax 0 0 0 0 0
AWY.
283,
3
2 AWZ. AXA. AXB. AXC.
8 298,9 310,4 322,2 334,2
AWX. Inco . 78 98 46 26
me Tax 0 .3 .4 .4 .8
Due 9 2 6 9 7
AXD.

AXE.

AXF.

AXG.

AXH.

AXI.

AXJ.

AXK.