Safe and Sound Travel

Agency
Feasibility Study
The Business Profile

• Name of business: Safe and Sound Travel Agency

• Business logo:

• Location of the business: Araneta Center, Cubao, Quezon City

• Project rationale:
Market Study

Service Description
• Offers ticketing on international and domestic airline companies,
passport processing, and visa assistance.
• The service is directed to bringing together the airline company
and the prospective client for the benefit of all parties.
• Target market is market is would be travellers who are:
o Traveling with a group;
o Not sure where to go;
o Traveling internationally.
Market Study

Demand Situation
• Historical Demand
Market Frequency of
Year Population Acceptability Availing Annual Demand
Rate Annually
2010 919,169 34% 1 312,517
2011 934,795 34% 1 317,830
2012 950,686 34% 1 323,233
2013 966,848 34% 1 328,728
2014 983,284 34% 1 334,317
Market Study

To compute for the estimated projected demand, least square

method was used. The formula for the least square method is shown below:
Least Square Method:
Formula : Yc = a + Yi -1
a = (Yn-Yc)/(N-1)
Where:
Yc = initial value (1st year)
Yn = final value (last year)
N = number of years
Yi = value for the year past
Market Study

Demand Situation
• Projected Demand

Year A Yi-1 Yc
2015 5,450 334,317 339,767
2016 5,450 339,767 345,217
2017 5,450 345,217 350,667
2018 5,450 350,667 356,117
2019 5,450 356,117 361,567
Market Study

Supply Situation
• Historical Supply

Year Demand Situation Rate Annual Supply

2010 312,517 92% 287,516

2011 317,830 92% 292,404

2012 323,233 92% 297,374
2013 328,728 92% 302,430

2014 334,317 92% 307,572

Market Study

Supply Situation
• Projected Supply
Supply Situation
Year Demand Annual Supply
Rate
2015 339,767 92% 312,585
2016 345,217 92% 317,599
2017 350,667 92% 322,614
2018 356,117 92% 327,628
2019 361,567 92% 332,642
Market Study

Market Share Analysis

Market Share for Five Years

Annual Annual Demand Target Target Annual
Year Population
Demand Supply Gap Percentage Market Share
2015 1,000,000 339,767 312,586 27,181 7% 1,903
2016 1,017,000 345,217 317,600 27,617 7.7 % 2,127
2017 1,034,289 350,667 322,614 28,053 8.47% 2,376
2018 1,051,872 356,117 327,628 28,489 9.32% 2654
2019 1,069,753 361,567 332,642 28,925 10.25% 2964
Market Study

Demand-Supply Situation

Demand-Supply Gap for Five Years

Year Population Annual Demand Annual Supply Demand Gap
2015 1,000,000 339,767 312,586 27,181
2016 1,017,000 345,217 317,600 27,617
28,053
2017 1,034,289 350,667 322612

28,489
2018 1,051,872 356,117 327,628

28,925
2019 1,069,753 361,567 332,642
Market Study

Appropriate Marketing Program or Strategy

• Product-provide services with affordable prices; accredited by the
Department of Tourism.
• Price
• Domestic Ticketing: P300 commission per ticket
• International Ticketing: P800 commission per ticket
• Passport Processing: P300 –regular; P500 –rush
• Visa assistance- P500

• Place- Within Araneta Center, Cubao, Quezon City

• Promotion-Ribbon Cutting, flyers, promotional posters, tarpaulin, leaflets
and the like.
Technical Study

Service Process
• Operations
• The business must submit a letter of application to the airline companies that
they are dealing with.
• The business can now be able to get the tickets that will be issued depending
on the reservation and the quantity of customers.
• Instead of going to an airline company to apply for an agent, the business will
just have to fax it.
• For reservation purposes, the client can transact through phones or the use of
the computer rather than going to the agency.
Technical Study

• Automated Reservation
• The airlines have developed computer software system called Computerized
Reservation System (CRS).
• This software provides instant information of flights schedules, class for
service and pricing in addition to hotel accommodations and other services.
Technical Study

Machinery and Equipment Requirements

• Office Equipment- Computer, Printer, Fax Machine, etc.
• Furniture and Fixtures- Office Table, Couch, Shelf, Reservation
Counter, etc
Total Cost
Equipment and Supplies Quantity Unit Cost Total Cost Yearly Depreciation
Office Equipment
 Computer 4 19,000.00 76,000.00 13,680.00
 Computer Software 1 50,000.00 50,000.00 9,000.00
 Printer 1 6,800.00 6,800.00 1,224.00
 Fax Machine 1 11,800.00 11,800 2,124
 Television 1 33,000.00 33,000.00 5940.00
 Air Conditioner 3 8,000.00 24,000.00 4,320.00
 Water Dispenser 1 5,000.00 5,000.00 900.00
Furniture and Fixtures
 Office Table 2 5,100.00 10,200.00 1,836.00
 Clerical Chair 3 1,600.00 4,800.00 864.00
 Customers’ chair 2 1,100.00 2,200.00 396.00
 Couch 2 12,900.00 25,800.00 4,644.00
 Shelf 2 11,200.00 22,400.00 4,032.00
 Reservation Counter 1 10,000.00 10,000.00 1,800.00
 Center Table 1 13,400.00 13,400.00 2,412.00
 Table 1 24,600.00 24,600.00 4,428.00
 Mini Vault 1 5,000.00 5,000.00 900.00
Total 325,000.00 58,500.00
Technical Study

Office Layout
Technical Study

Utility Requirements
• Electricity-for purposes of estimating expenses, we separate this
cost into a variable component and a fixed component.
• Water-consumption- is less than 10 cubic meters per month.
• Telecommunication- PLDT Subscription Plan, Postpaid-Globe,
Postpaid-Smart
Technical Study

Projected Utilities Expense

Utilities 2015 2016 2017 2018 2019
Electrical – Fixed P62,375 P63,622 P64,895 P66,192 P67,516
Water 2,272 2,295 2,318 2,341 2,364
Telecommunicat 37,164 37,164 37,164 37,164 37,164
ions
Annual Utilities P106,011 P107,281 P108,576 P109,897 P111,245
Expense
Technical Study

Project Cost
Costs Amount
Leasehold Improvements
Materials 200,000.00
Labor 150,000.00
Overhead 80,000.00 P430,000.00
Office Equipment 206,600.00
Furniture and Fixtures 118,400.00
Office Supplies 12,680.00
Initial Operating Expense
Business Registration 20,365.00
Prepaid Rent (2 months) 77,600.00
Marketing and Advertising 45,000.00
Hiring and Training 5,000.00
Total 147,965.00
Total Initial Cost P915,645.00
Cash Reserved for Operations 100,000.00
Total Project Cost P1,015,645.00
Management and Legal Study

Organizational Chart

PARTNERS

MANAGER

RESERVATION
ACCOUNTANT LIAISON
OFFICER
Management and Legal Study

Job Specification and Functions

• Manager-Plans, directs and coordinates the operations of the
business. Duties and responsibilities is generalized such as
formulating business policies, managing daily operations, and
planning and implementing strategic management in operating,
financial, marketing, human resource and administrative aspects.
• Liaison Officer-Establishes and maintains mutual understanding
and cooperation as between the company and other entities to
whom the company transacts with.
• Accountant-In-charge of the general accounting functions and the
preparations of reports that are vital to the business.
Management and Legal Study

• On-call Computer Technician-A skilled professional who can offer

quality technical support. Responsible for maintenance of
computers.
• On-call Electrician-Responsible for any electrical problems within
the office.
• On-call Janitor-Responsible for the cleanliness and orderliness of
the office.
Management and Legal Study

Company Rules and Policies

• Personnel Policies
• The management will set qualification for the different job position.
• Every applicant should undergo screening, examination, and interview.
• After careful selection, those who have been hired will undergo training and
orientation.
• Generally, employee are allowed and paid only for 8 hours of work.
• Employees are required to work on their respective schedule hour.
• A one-hour break shall be given between the working hours.
• In case of absent employee/s, the manager will take the duties and responsibilities
• The officers and employees will be paid every 15th and 30th of the month.
• The cut-off for the computation of payroll is on the 10th and 25th day of the month.
Management and Legal Study

• Service Policies
• The store will be opened at 8:00 am and will be close at 4:00 pm.
• Cleanliness inside the company should be maintained.
• All information critical to the operation of the business are adequately
protected and secured.

• Collection Policies
• The payments made by the customers are non-refundable for the
unconsumed/unused tickets.
• Credits are not allowed.
Management and Legal Study

• Financial Policies
• Loans will be acquired if the company needs additional cash either for operations
expense or purchase of additional equipment.
• Payment of interest will be made at the end of each month. It assumed that a legal
per annum rate of 12% is the interest rate and the principal is payable in one year.
• Equipment Policies
• Equipment that is not working will be subject to repair immediately
• New equipment will be acquired 6 months before the old asset/s are obsolete or
fully-depreciated.
• New equipment will be acquired when the old equipment are damaged or cannot
be repaired.
• Old equipment will be disposed when the equipment is obsolete or fully-
depreciated.
• Old equipment will be disposed when the equipment is damaged and cannot be
repaired.
Management and Legal Study

Legal and Taxation Aspects]

• The business will comply with all the necessary legal requirements
with an estimate cost of P20,365.00.
• The business will pay an income tax according to the provisions of
NIRC (30% regular corporate income tax).
• The business is also required to pay a value-added tax of 12% on its
gross receipts and must file the return not later than the 25th day
following the end of each month or 20th day following the end of
each quarter.
 Financial Study
SAFE AND SOUND TRAVEL AGENCY
Comparative Statement of Comprehensive Income
For the Periods Ended, December 31, 20XX
Schedule 2015 2016 2017 2018 2019
Commission Income 5.1 1,179,669 1,318,451 1,473,192 1,645,697 1,837,971
Service Income 5.2 361,664 404,212 451,652 504,539 563,486
Total Income 5.3 1,541,333 1,722,663 1,924,845 2,150,236 2,401,458
Operating Expenses
Salary Expense 6.1 839,600 839,600 839,600 839,600 839,600
Rent Expense 7 465,600 465,600 465,600 465,600 465,600
Depreciation Expense 9.4 144,500 144,500 144,500 144,500 144,500
Office Supplies Expense 10.2 12,046 11,195 11,364 11,589 11,820
Utilities Expense 11.5 106,011 107,281 108,576 109,897 111,245
Advertising Expense 12.2 45,000 45,900 46,818 47,754 48,709

Permit and Licenses 13.2 20,365 1,100 1,100 1,100 1,100

Miscellaneous Expense 14 70,000 65,000 65,000 65,000 65,000
Interest Expense 16 60,000 60,000 60,000 60,000 60,000
Net Income (221,788) (17,513) 182,286 405,196 653,883
Income Tax Expense (Benefit) 17 (88,715) (7,005) 72,914 162,078 261,553
Net Income after Taxes (133,073) (10,508) 109,372 243,117 392,330
 SAFE AND SOUND TRAVEL AGENCY
Comparative Statement of Partners’ Equity
For the Periods Ended, December 31, 20XX
Abariso, Dalangin, Espiritu, Fernandez,
Cruz, Capital Mateo, Capital Total
Capital Capital Capital Capital

Capital, 01/01/15 200,000 200,000 200,000 200,000 200,000 200,000 1,200,000

Net Income, 2015 (22,179) (22,179) (22,179) (22,179) (22,179) (22,179) (133,073)

Capital, 01/01/16 177,821 177,821 177,821 177,821 177,821 177,821 1,066,927

Net Income, 2016 (1,751) (1,751) (1,751) (1,751) (1,751) (1,751) (10,508)

Capital, 01/01/17 176,070 176,070 176,070 176,070 176,070 176,070 1,056,419

Net Income, 2017 18,229 18,229 18,229 18,229 18,229 18,229 109,372

Capital, 01/01/18 194,298 194,298 194,298 194,298 194,298 194,298 1,165,791

Net Income, 2018 40,520 40,520 40,520 40,520 40,520 40,520 243,117

Capital, 01/01/19 234,818 234,818 234,818 234,818 234,818 234,818 1,408,908

Net Income, 2019 65,388 65,388 65,388 65,388 65,388 65,388 392,330

Capital, 31/12/19 300,206 300,206 300,206 300,206 300,206 300,206 1,801,238

 SAFE AND SOUND TRAVEL AGENCY
Comparative Statement of Cash Flows
For the Periods Ended, December 31, 20XX
2015 2016 2017 2018 2019
Cash flow from Operating Activities
Gross Receipts 1,541,333 1,722,663 1,924,845 2,150,236 2,401,458
Salary Paid (750,359) (750,359) (750,359) (750,359) (750,359)
Rent Paid (465,600) (465,600) (465,600) (465,600) (465,600)
Office Supplies Paid (12,680) (11,150) (11,373) (11,600) (11,832)
Utilities Paid (106,011) (107,281) (108,576) (109,897) (111,245)
Advertising Paid (45,000) (45,900) (46,818) (47,754) (48,709)
Permit and Licences Paid (20,365) (1,100) (1,100) (1,100) (1,100)
Miscellaneous Paid (70,000) (65,000) (65,000) (65,000) (65,000)
Advances to Lessor (77,600) - - - -
SSS Contribution Paid - (17,440) (17,440) (17,440) (17,440)
PhilHealth Contribution Paid - (6,600) (6,600) (6,600) (6,600)
Pag-IBIG Contribution Paid - (3,600) (3,600) (3,600) (3,600)
Withholding Tax Paid - (61,601) (61,601) (61,601) (61,601)
Income Tax Paid - - - (22,806) (116,466)

Cash flow from Investing Activities

Purchase of Equipment (206,600) - - - -
Purchase of Furniture and Fixtures (118,400) - - - -
Purchase of Leasehold Improvements (430,000) - - - -

Cash Flow from Financing Activities

Original Investment 1,200,000 - - - -
Issuance of Notes payable 500,000 - - - -
Interest Paid (60,000) (60,000) (60,000) (60,000) (60,000)

Net Cash Flow 878,718 127,032 326,777 526,878 681,905

Cash Balance, beg - 878,718 1,005,750 1,332,527 1,859,405
Cash Balance, end 878,718 1,005,750 1,332,527 1,859,405 2,541,310
 SAFE AND SOUND TRAVEL AGENCY
Comparative Statement of Financial Position
For the Periods Ended, December 31, 20XX
Schedule 2015 2016 2017 2018 2019
Assets
Current Assets
Cash CF 878,718 1,005,750 1,332,527 1,859,405 2,541,310
Office Supplies 10.2 634 589 598 610 622

Noncurrent Assets
Advances to Lessor 8.0 77,600 77,600 77,600 77,600 77,600
Equipment, net 9.1 169,412 132,224 95,036 57,848 20,660
Furniture and Fixtures, net 9.2 97,088 75,776 54,464 33,152 11,840
Leasehold Improvements, net 9.3 344,000 258,000 172,000 86,000 -
Income Tax Benefit 17 88,715 95,721 22,806 - -

Total Assets 1,656,168 1,645,660 1,755,031 2,114,615 2,652,032

Liabilities
Current Liabilities
SSS Contribution Payable 6.3 17,440 17,440 17,440 17,440 17,440
PhilHealth Contribution Payable 6.4 6,600 6,600 6,600 6,600 6,600
Pag-IBIG Contribution Payable 6.5 3,600 3,600 3,600 3,600 3,600
Withholding Tax Payable 6.6 61,601 61,601 61,601 61,601 61,601
Income Tax Payable - - - 116,466 261,553
 Schedule 2015 2016 2017 2018 2019

Noncurrent Liabilities
Notes Payable 15 500,000 500,000 500,000 500,000 500,000

Total Liabilities 589,241 589,241 589,241 705,707 850,794

Shareholder's Equity
Abariso, Capital 177,821 176,070 194,298 234,818 300,206
Cruz, Capital 177,821 176,070 194,298 234,818 300,206
Dalangin, Capital 177,821 176,070 194,298 234,818 300,206
Espiritu, Capital 177,821 176,070 194,298 234,818 300,206
Fernandez, Capital 177,821 176,070 194,298 234,818 300,206
Mateo, Capital 177,821 176,070 194,298 234,818 300,206
Total Shareholer's Equity 1,066,927 1,056,419 1,165,791 1,408,908 1,801,238

Total Liabilities and Shareholder's Equity 1,656,168 1,645,660 1,755,031 2,114,615 2,652,032
 Financial Study

Financial Evaluation Measures

2015 2016 2017 2018 2019
Liquidity Ratio
A.Working Capital= Current Assets-Current Liabilities 790111.68 917098.60 1243884.70 1654308.27 2191138.22
B. Current Asset Ratio=Current Assets/Current Liabilities 9.85 11.28 14.94 9.04 7.25
C. Acid Test Ratio=Quick Assets/Current Liabilities 9.85 11.27 14.93 9.04 7.24

Profitability Ratio
A. Net Profit Margin = Net Income / Sales -9% -1% 6% 11% 16%
B. Return on Investment = Net Income / Capital -12% -1% 9% 17% 22%
C. Return on Asset = Net Income / Total Assets -8% -1% 6% 11% 15%

Asset Management Ratio

Total Assets Turnover = Sales / Total Assets 0.93 1.05 1.10 1.02 0.91

Debt Management Ratio

A. Debt Ratio = Total Liabilities / Total Assets 0.36 0.36 0.34 0.33 0.32
B. Debt/ Equity Ratio = Total Liabilities / Total Owner’s Equity 0.55 0.56 0.51 0.50 0.47
 Financial Study

Capital Budgeting Evaluation Measures

Remaining amount of
Payback Period: Year investment to recover Cash Flows
1 1,015,645 878,718
2 136,927 127,032
3 9,895
Payback Period: 2.03 years

Net Present Value: Required Rate of Return (assumption) 15%

Year Cash Flows
1 878,718
2 127,032
3 326,777
4 526,878
5 681,905
NPV= 699,644.72

Profitability Index: 1.69

Socio-Economic Study

• Provide opportunities for competent and qualified job seekers and

unemployed individuals.
• Will help generate income for the government through payment of
taxes.
• Will help our countrymen by promoting tourism within the
country.
• Coordinates with various organizations and groups that aim to
protect natural resources.