Chapter I

INTRODUCTION

Cacao differs greatly from what most have experienced in the form of processed

chocolate. Cacao is a very interesting in that it has the most complex make up of

any known natural food source. It is an excellent source of magnesium and very

high levels of antioxidants. Cacao is the Mayan root word to describe the tree

and its product. It is grown mainly for its seeds known as the cocoa beans which

are used to make cocoa mass, cocoa powder and chocolate.

In the Philippines, there are three major cultivar groups being grown by farmers.

These are the Criollo, Forastero, and Trinitario cultivars:

The Criollo is considered as the most prized, rare and expensive variety. It

is native to Central and South America. It is believed that the 1st cacao

seed planted in the Philippines was the Criollo variety brought via the

Acapulco-Manila Galleon Trade in 1670. Only 5% of the world’s cacao

production is Criollo. This variety is difficult to grow, as extremely

susceptible to pests and diseases. The beans are white to pale pink in

color and recognized as a superior quality, less bitter and more aromatic.

Considered as the “Prince of Cocoas,” Criollo is an ingredient in premium

chocolates.

1
 The Forastero, a native of the Amazon basin, is the most versatile variety

and most commonly grown cocoa. It is mainly grown in Africa, Ecuador

and Brazil and accounts for 80% of the worlds cocoa supply. It is

significantly harder, disease resistant and high yielding. Beans are purple-

colored and mainly used to give chocolate its full-bodied flavor. They have

bitter taste, thus, often blended with superior cocoas.

Trinitario, the hybrid of Criollo and Forastero combines the best of the two

other main varieties: the hardiness and high yield of Forastero and the

refined taste of Criollo. It is the predominant fine flavor cocoa and can be

found in all the countries where Criollo cocoa was once grown including

Southeast Asia and the Philippines. It is being used in about 10% of the

world cacao supply.

The Philippines is among the countries in Asia seen to have a competitive

advantage on cacao production given its strategic location and climatic condition.

The two (2) million (M) hectares of coconut farms ideal for cacao intercropping

supplement the industry’s competitive advantage. The first cacao in Asia was

planted in the Philippines in 1670 while commercial farms developed in the

1950s. Production level reached 35,000 MT by 1990. However, production

started to decline due to several factors such as weather and climatic condition,

pests and diseases infestation, and aging trees. The decline was further

aggravated by decreasing world market price and competition with other

plantation crops such as banana and palm oil.

2
 Furthermore, if we’re being ask why Cacao plantation is the crop business

we would like to start with- This is the primary question being asked by those

who have reservations as to the real potentials of the cacao industry. Basically,

cacao may significantly contribute to poverty alleviation and inclusive growth

through livelihood and job generation. This is because cacao production only

requires small monetary investment or start-up capital. According to agricultural

engineers this explains why 90% of the growers are of small farm holdings. The

suitability of cacao as an intercrop for coconut and banana, the two-week harvest

interval, and the early gestation period of 18 months are some of the most valued

advantages of this high value crop. The early return of investments and high

profitability of the product also ensure good income augmentation potentials.

Above all, the industry is market-driven considering that cacao has no product

substitute.

3
Objectives

General Objectives

The study is intended to determine the feasibility of putting up a Cacao

production in Polomolok, South Cotabato. 1. Industry Analysis

2. Management Feasibility

3. Marketing Feasibility

4. Technical/ Operational Feasibility

5. Financial Feasibility

6. Corporate and Social Responsibility

Specific Objectives

1. To produce a quality in any varieties of cacao that will help the chocolates

producers to make a unique well blend taste chocolates.

2. To ensure availability of cocoa beans to support and sustain value-adding

activities; and to contribute to the goal of attaining inclusive growth and poverty

alleviation through increase in farmers and other employees.

3. To earn profit out of this kind of business.

4
Scope and Delimitation

The scope of the study is production and distribution of cacao to all. The study is

up to the extent of planting of cacao tress until they are ready for processed

product up to distribution. The main purpose of this study is to establish a

sustainable and competitive cacao industry that is environmentally sound,

economically viable and socially desirable.

Locale of the Study

The study is plan to be located at Pagalungan, Municipality of Polomolok, South

Cotabato. It is an agricultural land where it is far from residential houses; the land

has a wide area of 8.2 hectares. We do consider the health and safety of the

people residing there. The area has approximately 2 kilometers from residential

area.

Figure 1: Local of the Study

5
Benefits of the Study

The result of the study will benefits the numerous stakeholders presented the

following:

Local Government - The study could be an opportunity to have an additional

fund by way of paying taxes. And taxes paid by the business owners will serve as

the lifeblood of the government to be use for the projects innovation.

Owner and Management- By making this study possible, the person invested

himself and the management will gain and acquire ideas on how to run a cacao

production. It is expected that this will be beneficial to those who wanted to

engage

in farming crops, so that they can create some ways and plans to manage such

business for profitable venture. This study will also provide information about

financial and marketing aspect of business to satisfy the need of the customer.

6
Farmer- this will serve as a great opportunity to all the farmers within the

community to apply and showcase their knowledge and skills about farming for

the continuous growth of the business.

Chocolate Manufactures- This will beneficial to all producers to have enough

supply of production of any kinds of cacao. There will be no more out shortage of

inventories.

Future Researcher- This research will give them the idea to put up their own

business in a cost effective manner as well as the utilization of the acquired

knowledge in pursuit of their prospective careers.

Definition of Term

The following terms are defined operationally:

Cacao farming- this refers to cultivation cacao, plants are first grown from seeds

or cuttings and transplanted.

Cultural Management- refers to the process of cultivating and scaling work

culture inside an organization.

Drying- the drying process interferes with biochemical reactions initiated during

fermentation, leading to a reduction of bitterness.

Fertilizing- refers to supply the soil or water with minerals or organic nutrients to

aid the growth of plants.

Fermentation - refers to fermenting cacao bean so as to destroy the deed coat,

kill the germ and give the cocoa a good taste.

7
Harvesting- is the act of removing a crop from where it was growing and moving

it to a more secure location for processing, consumption or storage.

Pruning- refers to the aids in balancing the trade-off between shade cover and

yields.

Seed Selection – collect a seeds from ripe and healthy pods and preferably

collected from the seed garden. Choice a seeds that are uniform in size. Select

big seeds since the possibility are high that they would produce vigorous and fast

growing seeds.

Seed germination – the usual practice is to plant the prepared seeds directly

into the prepared poly bags in the nursery.

Chapter II

INDUSTRY ANALYSIS

Rival Industry

The Philippine cacao industry is composed mostly of smallholder farmers

who supply dry cacao beans to the processors/manufacturers. Manufacturers are

mostly small to medium scale enterprises. Some of the larger players are into

cocoa powder and cocoa butter. Davao Region has the dominant number of

supplying cacao beans in the Philippines. Since Davao is located in the

Mindanao, we can try to penetrate to the distribution of cacao beans and also

one of the supplier outside and inside the country, As we all know that every new

business are also having a hard time in establishing the trust of the consumers.

Through the help of the government we can be able to sustain and produce

8
quality of cacao beans for better tasting. By continuous outstanding performance

in cacao production, we can surely assure to get the trust of the consumer.

Strength

Free extension and technical services to farmers. Also, favorable climate and soil

for high cocoa production capacity Available vast land and resources for cocoa

production. Well-functioning national cocoa management board. Right now Cocoa

industry is prioritized by government.

Weakness

The low levels of technology adaptation in cocoa production are still issue.

Little capital and high cost of production inputs for farmers.

Bargaining Power of Suppliers

Suppliers of the Cacao beans can be CacaJuan, WestPhil Trading, 3tops

Trading, and Kalinga Bean. Having more option as a source of cacao seedlings

has significant negotiating power over suppliers because it can easily switch to

other suppliers this will have more negotiating room with the suppliers.

Bargaining Power of Customers

Criollo variety of cacao is considered as the best variety among all the cacao

kinds. This is expected that the customer will continue to purchase our product

because the chocolate makes also wanted to produce fine tasting chocolates.

9
Since we are producing the best kind of cacao then the customer will continue

avail our product.

Government Policy

Permits

The required permits for establishing a Cacao Production are the

following:

SEC Registration Certificate- Corporation and partnering have to secure a

Certificate of Incorporation or Certificate of Partnership with Securities and

Exchange Commission (SEC).

Barangay Clearance- this clearance certifies that the business companies with

the requirements of the local barangay where the business operates.

10
Bureau of Internal Revenue (BIR) - this is an important requirements, business

must submit tax statement at the end of each fiscal year and having a tax

identification number.

Business Permit- to secure a Mayor’s business permit of the local government

office where the business is located and generated.

Environmental Compliance Certificate- the document issued by the DENR-

EMB that allows the project to proceed to the next stage of project planning,

which is the acquisition of approvals from other government agencies and LGUs,

after which the project can start implementation.

Municipal Building Permits- is an official approval issued by the local

government agency that allows you or your contractor to proceed with a

construction or remodeling project on your property. It is intended to ensure that

the project plans to comply with local standards for land use, zoning, and

construction.

Sanitation Permits- a permit issued by the health department for the installation

of a private on-site waste-water treatment system, privy, composting toilet or

incinerating toilet.

11
Building Plan- is useful when it comes to estimating how much a project will

cost, and preparing project budgets.

Licenses- Monarch Kosher Organic Broiler Chicken has certificate that all

requirements have passed to build up a business.

Table 2.1 Schedule of Permits and Licenses

Permits and Licenses Amount (₱)

1. SEC Registration P 14,100.00

2. BIR Registration 5,000.00

3. Business Permit/ Mayor’s Permit 10,000.00

4. Barangay Clearance 400.00

5. Bureau of Fire Clearance 1,500.00

6. Sanitation Permit 1,500.00

7. Environmental Compliance Certificate 1, 500.00

8. Municipal Building Permit 2,000.00

12
 9. Building Plan 3,000.00

10. Electrical Permit 2,000.00

Total P 40,900.00

Type of Business Organization

Since the composed of four (4) ladies each one of has agreed and decided
to be partners. The groups preferred to use partnership as a type of business
organization.

Partnership – is an organization where two or more person binds themselves to

contribute money, property, or industry into a common fund with the intention of
dividing profits among themselves.

Benefits of partnership type of business we are establishing:

Partnership is relatively easy to establish; however times should be invested in

developing the partnership agreement, in our case there’s no problem about it

13
because we are mostly friends and we are devoted to make our business
progress.

 With more than one owner, the ability to raise funds- Debt vs. Equity
maybe increased.

 Enhanced capital availability. Two or more people will be providing and

searching for capital. In addition, funding sources are more likely to
entertain financing request because of the broader capital base.

 The profit from the business flow directly to the business though the
partners personal tax return.

 Higher quality employees. Partnerships tend to attract better employees

because of the possibility of becoming a principal in the firm.

 Easy form. Procedures and expenses are minimized.

 The business usually benefit from partners who have complementary

skills.

Capitalist Partner – one who contributes capital in money or property.

Capitalist Industrial Partner – one who contributes in money, property, and

industry.

Industrial Partner – one who contributes industry, labor, skill or services.

The objective of this proposed project is to acquire the prospective

customers and to achieve the desired profit within the specific period of time, and

 To earn profit.
 To develop one’s skill to build up good relationship among
customer/supplier.

14
  To help the farmers and the Philippine cacao industry to continue a
sufficient supply of cacao production.
PARTNERS
 To be successful business partners.

Organizational Structure

A business organization cannot do its operation if the necessary

personnel/employees are not present. In an organization, the people behind are

the key for the improvement of the business. They are needed to attain the

projected goals of the organization and to satisfy the market’s necessities. The

organizational structure is very important because the operation of the business

is in their hand. That is why the firm must choose carefully the most qualified

individual for every position to be able to foresee best results of the organization

in the future. The business is just new that is why the best ways to build efficient

organization personnel must be surely done.

Organizational Chart

15
 Bookkeeper
Figure 2:
Sales and Marketing Farmers
managers

Logistic officers Organizational Chart

Sales and Marketing
Department
of The
Guards

Bean
Driver

Bar Cacao Production

Employees Profile

Employee profile must be required to a business. One of the factors, that must

consider is to select employees who have more experienced when it comes of

handling people. It is more advantage to a business owner if most of our

employees are knowledgeable enough and well dedicated to their works and

responsibilities.

Selection Process

16
Staffing

Staffing- is the process of filling and keeping filled all the positions in an

organization. The main managerial function of staffing involves orienting the

organization structure through proper and effective selection procedures,

appraisal and development of the personnel to fill in the roles given to the

employers/workforce.

A. Steps- in staffing

1. Labor requirements: The first process in staffing procedure is to

calculate the staffing requirement needed for the organization unit. It will involve

determining the future labor requirements for the organization.

2. Recruitment: Once the requirements are determined, the organization

publishes an open advertisement to the public. Any candidate applicable for that

post can apply for that job. Generally, Recruitments are done in two ways:

2.1 Internal Recruitment: An Internal recruitment is the one in

which selection occurs within the organization. Internal recruitment might

lead to increase in motivation level and thereby increasing their

productivity.

2.2 External Recruitment: External recruitment is the process by

which candidates applying for the job are selected based on screening

tests conducted by the management of the organization. The problem is

that it requires a lot of time and money. Organization approaches the

17
 public through various ways like advertisements in newspapers,

employment exchanges and agencies, educational institutions, etc.

3. Selection: This process involves conducting screening tests and

interviews in order to pick out the right candidate for the job. The screening

process takes place in the following manner:

3.1 Application Forms: The candidates who meet the required

eligibility criteria are required to fill the application form given to them. The

updated version of Curriculum Vitae of the candidate must be attached

with the application form.

3.2 Written Tests: Two levels of written tests are conducted during

the selection process. The first level of written tests will consist of

questions from Quantitative aptitude and verbal skills. The second level of

tests involves data interpretation and programming skills.

3.3 Technical Interviews: In this step of process, the candidate is

assessed by experienced and talented interviewers. Generally, the panel

consists of two to three interviewers. The candidate’s core competency

and interpersonal skills are analyzed.

3.4 Orientation and Placement: After the screening procedure,

the appointed candidates are introduced to the new work environment.

The newly appointed candidates are given training in different areas for six

to twelve months wherein they get exposed to work environment. Training

in our organization is based on four areas:

18
  The first level of training is to familiarize the newly appointed candidates

about the process involved in the organization.

 The existing workers are trained again to recollect the concepts so that

they will perform better.

 Generally, training to the existing workers is given only when there is an

up gradation in the current technology.

 Sometimes, training is given to the employees so that they can move into

a higher level where they are exposed to new challenges.

Evaluation based on performance: The performance evaluation is

normally done to monitor the activities going on in the organization. This keeps a

record of all the employee’s work progress and decline in the organization.

Promotion and transfer: Promotion is given to the employee who

performs well in the organization and also ready to take up the responsibility.

19
 Table 3.1 Total Number of employees of The Bean Bar Cacao

Production

Job Position Number of Employees

Sales and Marketing managers 1

Sales and Marketing Department 1

Bookkeepers 1
Logistic officers 1
Farmers/Caretakers/laborers 10
Truck Drivers 2
Security Guards 2
Total 18

Compensation and Benefits

The management of the proposed business shall comply with the

Department of Labor and Employment (DOLE) compensation law for the regular

employee. Every employee will enjoy the basic mandatory benefits of SSS,

PHILHEALTH, PAG-IBIG and 13th month pay.

Depending on the position, all employees of the company will be paid in

accordance to the mandates of Labor Code of the Philippines for an eight-hour

working days for six (6) days a week. They will also entitle to have a vacation,

sick and other mandatory leaves.

Table 3.2 Compensation and Benefits

Compensation and benefits

Position Monthly SSS PHILHEALTH PAG-IBIG
Salary Employer Employer Employer
Rate (₱) Share (₱) Share (₱) Share (₱)
Sales and Marketing 12,500 1,040 150 260
managers

20
Bookkeeper 10,000 800 150 200

Logistic officers 9,500 640 150 200

Truck Driver 8,000 640 150 200
Security Guards 8,500 640 150 200
Sales and Marketing Dep’t 10,500 800 150 200
personnel

Farmers/Caretakers/labore 9,000 640 150 `200

r
Total 68,000 5,200 1,350 1,460

Company Policies

 Company employees are bound to follow the Employee Code of

Conduct in

Performing their duties.

 All employees are expected to be punctual and regular in performance

of his/her duty.

 Unauthorized leave of absence of 48 hours or (2) consecutive working

days are considered absent without leave (AWOL) unless the absence

is for a valid reason as verified by the manager. Absences shall be

deemed habitual when incurred in excess of four (4) times a month.

Habitual absenteeism is subject to disciplinary action.

 Tardiness shall mean coming to work past the designated starting

time. There is one peso (5.00) charge in every minute in the first 15

minutes and considered half day in excess to 15 minutes tardy and to

be deducted to the salary.

21
  Any employee who wants to resign from the company is required,

pursuant to law, to give a written notice of such intention at least one

(1) month in advance of the intended effective date of resignation. Any

employee who leaves or terminates himself from his employment at

anytime without having secured prior approval of, or acceptance by his

employment and, as a consequence, all benefits, which have been

credited, shall automatically be forfeited.

 All employees should treat our company’s property, whether tangible

or intangible with respect and care. Employees should protect

company facilities and other material property from damage and

vandalism, whenever possible.

 The employees should avoid any personal, financial or other interest

that might hinder their capability or willingness to perform their job.

 Employees should be friendly and collaborative. They should try not to

disrupt the workplace or present obstacles to their colleagues’ work.

 Employees should not abuse their employment benefits. This can refer

to time off, insurance, facilities or other benefits our company offers.

 All employees should read and follow our company policies.

Terms and Conditions

1. Check -in

22
 The farm site will provide Date and Time Record (DTR) for the

tracing of everydays in and out of the employees also for monitoring and

basis for salaries. Only authorize person are allowed to enter the restricted

area of the establishments.

2. Alcohol, Drug and Tobacco Policy

No persons are allowed to enter the farm site while under the

influences of harmful chemicals and substances.

3. Food and Beverages

Food and beverages are allowed inside farm site. But, we will strictly

implement the responsibility of your waste.

4. Pricing Policy

Validity

All information and prices shown are accurate at the time of

print.

Pricing Trends Normally, the local price of the country’s

cacao beans is correlated with the international commodities

pricing. However, when there is an increased volume in local

cacao processing on a certain period .

Mode of Payments

Payment to us may be in cash, bank transfer or cheques.

Pricing Accuracy to ensure accuracy in billing, our policy is to

clearly list all relevant prices in our invoices and communication

23
 materials; we will also clearly notify our customer if ever there is

a price increase.

Receipt

We will issue a detailed receipt for each and every payment

made.

5. Marketing Communication

We endeavour to ensure that all of our marketing communications

contain sufficient and accurate information regarding on our product

prices and promotions.

6. Professional Ethics

As part of our corporate responsibilities towards our customers, we

strive to adopt ethical business practices, as well as accurate

marketing communications at all times.

7. Confidentiality and Privacy

We will comply with all relevant obligations under the Personal Data

Protection Act of 2012(PDPA) governing the collection, use disclosure and

care of personal data in accordance with privacy statement.

Chapter IV

MARKETING FEASIBILITY

This chapter discusses the company logo, positioning, target market,

projected

24
market share, location, and price scheme and product description at the same

time market activity.

Product Description

The Bean Bar Cacao Production provides quality cacao beans in any

forms of variety. There are seven cacao products sold to local and international

markets. These are the wet beans, dried beans, dried fermented beans, cacao

nibs, tablea, cocoa powder, and cocoa butter. Value of each product generally

depends on the value-added inputs and demand in the market.

Company Name

The name of the business is The Bean Bar Cacao Production it is being

composed by the agreeing partners because it’s perfectly suited to the cacao

business plantation. The business wants to make sure that the quality of every

variety of cacao beans are fit to the standard set by the Cacao plantation in the

Philippines. Offering an excellent quality service and satisfactory to the needs of

the consumers.

Vision

The Philippine cacao stakeholders envision a competitive and sustainable

Philippine Cacao Industry by 2024.

Mission To achieve this vision, the Philippine cacao stakeholders are committed

to:

25
  Use commodity development to pursue poverty alleviation, job generation

and environmental protection while advancing to economic development

and inclusive growth;

 Mobilize all stakeholders for concerted industry-wide development efforts;

and,

 Participate in the global cacao value chain.

Goals

The vision is expected to be achieved through the realization of the 2025 Cacao

Challenge. Under this challenge, the goal is to produce 100,000 MT of fermented

beans by succeeding years for the export and domestic markets through a higher

percentage of annual increase in production. To achieve this goal, the following

objectives of the 2022-2030 road map are deemed to be attained, to wit:

  To increase production of cacao by 40% per year;

  To increase production productivity to 2 kg/tree/year;

  To ensure availability of cocoa beans to support and sustain value-

adding activities; and,

 To contribute to the goal of attaining inclusive growth and poverty

alleviation through:

26
Company Logo

Figure 4: Company Logo

Positioning

The Bean Bar Cacao Production promote or position itself as one of the primary

large supplier of Cacao beans from Polomolok. The competitive advantage of

The Bean Bar Cacao Production is that the business will help to continue and

adding a number of suppliers of Cacao beans here in Polomolok, we will produce

a Criollo variety of cacao, which consider as the most flavorful variety.

Target Market

During the process in making this study, we thorough research who will be the

primary target market of our Cacao beans. The Region here in Mindanao who

27
dominates the purchasing power of Cacao beans whether wet or dry beans are

the Davao Region. Here is the list of prospect market:

1. Daega International Exim Inc.

2. MS3 Agri-Venture

3. Kennemer Foods international Inc.

These are the 3 potential buyers of our very own cacao beans.

Projected Market Share

Figure 5: Projected Market Share

Chart Title
12.48 Competitor 1
16.41
Competitor 2
Competitor 3
Competitor 4
24.96
The Bean Bar Cacao Production
26.87

19.28

Bean Bar Cacao Production will be the first Cacao producer to incorporate the

highest variety of cacao beans In Davao region but the awareness of the said

Business industry is limited. Numerous competitors are produce more than 1

variety of Cacao beans. For this reason, the business has only 12.48% of

agricultural market share.

28
 Table 4.1 Projected Supply and Demand of Internet Services.

Year Daily sales Weekly sales The Bean Bar Cacao

Expected Production
2023 P2.800.00 22,000.00 12.48%

Place Location

The Bean Bar Cacao Production will be located at Brgy. Pagalungan, Polomolok,

South Cotabato. This proposed location will be a great and advantage because it

is accessible, the road are already cement so that there will be no problem with

regards to trucking during harvesting and delivery time. Therefore, we can

29
assume that the business give less to none concern with the people in the

community where the business is located.

Pricing Scheme

The Bean Bar Cacao Production will have its first production after 16 to 24

months. We assume that after 24 months or 2 years we will begin to harvest and

produce cacao beans. According to study cacao harvest season is between 10-

15 days and we assume that there is a regular harvest every two weeks.

Table 4.2 Pricing Scheme

Product Total cost of Dried beans Price (₱) Scheme

every 1 Cacao Per Description
seedling Kilo Basis of
(Dried Beans Pricing
Criollo Cacao 60 P120 Well-dried Market price
Dried beans Cacao beans Range from
(Grafted) 110 to 125

Marketing Strategy

In an agricultural ways, numerous cacao beans production are already

present locally, so a promotional activity is highly recommended in order for The

Bean Bar Cacao Production can cope up. The business will then make use the

following promotional strategies for target positioning. These promotional

streams will provide the business with a good platform to reach possible

customers.

30
Social Media posting could give a great help in promoting the business online.

Since the used of social media is in trend at the present time, the reach of the ad

will widen and it give high awareness rate to use social media as a promotional

tool. The business will going to put up a signage were the farm is located. It will

also have a public relation as a promotion, If they is a barangay officials who

wants to have a sports tournament then we are pleasure to donates t-shirts were

our business name is printed.

In addition, the business will be involve with the cooperatives that supports and

advocate organic/natural farming. Conducting consumer awareness/seminars

about the product and its great benefits.

Table 4.3 Advertising and Promotion

Advertising & Promotions

Item/Particulars Amount
Signage 10,000.00
Tarpaulin 10,000.00
Basketball Jersey Sponsorship 5,000.00
Flyers 5,000.00 5,000.00
Seminars 15,000.00
Total P 45,000.00

Projected Sales

Table 4.5 shows the analysis of sales of Monarch Kosher Organic Broiler

Chicken for the five years of its operation and Table 4.5 for the projected sales

performance of the business. It indicates that for the second year of operation it

notably generates a gross income of eight million six hundred forty thousand

(₱8,640,000.00). For the Third year and succeeding years the business assumes

31
and base an elevation of five percent (5%) in annual gross income in its

operation based on studies.

Table 4.4 Analysis of Sale

Analysis of Sales
Product Price Volume Average Every 2 Monthly Annually
Number of Weight Weeks
Production
Criollo 120/kilo Estimated 2kg 2 kg multiply 360.000.00 720,000.00 8,640,000.00
Cacao Dried dried beans per by 3,000
Beans tree trees= 6,000
(Open Area 1 kilograms
hectare – 1,100 per 2 weeks
trees. We have
7 hectares
allocated for
cacao
plantation)

Total 360.000.00 720,000.00 8,640,000.00

Table 4.5 Projected Sales Forecast

Projected Sales Forecast

Year 3 Year 4 Year 5 Year 6 Year 7

Criollo 8,640,000.00 9,072,000.00 9,525,600.00 10,001,880 10,501,974

Cacao
Dried
Beans
Total 8,640,000.00 9,072,000.0 9,525,600.00 10,001,880 10,501,974

Table 4.6 Assumption Percent Increase in Succeeding Year

Assumption Percent Increase in Succeeding Year

Year Criollo Cacao Dried Total
Beans
20A 2,016,000.00 2,016,000.00

32
 20B 2,620,800.00 2,620,800.00 30%
20C 3,407,040.00 3,407,040.00 30%
20D 4,429,152.00 4,429,152.00 30%
20E 5,757,898.00 5,757,898.00 30%
Chapter V

TECHNICAL OPERATIONAL FEASIBILITY

This chapter discusses and shows about the technical viability of

proposed business which comprises the layout of the business, Preparation of

land, seedlings and other operational activities, suppliers, raw materials and

procurement t, machineries, furniture and fixtures. It also represents the

operational process and waste disposal management.

Financial and Profitability Analysis

Production Consistent with the promising market opportunities of the industry is

the promising return on investments (ROI) for those who are or will be engaged

in cacao production. As illustrated in the table below, production cost of planting

cacao (monocrop or intercrop) is relatively low. For monocrop production, initial

production cost for the first year is at PhP67,320.00 per hectare while intercrop

planting is estimated to be at PhP47,454.00 per hectare (equivalent to 600 cacao

trees). Table 3: Cost of Production Per Hectare.

Unlike other crops, ROI of cacao production can be gained within three (3)

years both for monocrop and intercrop areas since harvest may be done within

18 months for well-managed farms. Profitability is higher on the third year as net

income doubles relative with the production cost. The promising income the

33
industry can offer accompanied with the numerous employments (being a labour-

intensive industry) it can generate through cacao production will ultimately help in

the government goal for countryside development and poverty alleviation.

Documents: https://www.da.gov.ph)

34
Procurement Schedule

Table 5.1 Budget Allocation

Building Infrastructure 328,105.00

Land Acquisition 6,000,000.00
Machineries 1,026,405.00
Furniture’s and Fixture 30,100.00
Cash on Hand 2,615,390.00
Total 10,000,000.00

Table 5.2 Schedule of Equipment and Machineries

Particulars Specificatio Quantit Unit Price Total Estimate Depreciatio

n/ Brand y Amount d n
Life
Shovel Bully Tools 12 400.00 4,800.00 5 960.00
Hammer Bully tools 5 320.00 1,600.00 5 320.00
Rake Eagle 10 600.00 6,000.00 5 1,200.00
Light cargo Hyundai 2 420,000.0 840,000.00 5 168,000.00
truck 0
Drip Pipe DN16 5 sets 2, 375.00 11,875.00 5 2,375.00
CCTV 1 45,910.00 45,910,00 5 9,182.00
package
Installation
Computer Samsung 2 26,000.00 52,000.00 5 10,400.00
Set
Flat Screen Samsung 1 4,000.00 4,000.00 5 800.00
Television
Telephone 1 1,500.00 1,500.00 5 300.00
Fire 1 1,100.00 1.100.00 5 220.00
Extinguish
er
Electric Camel 2 1,800.00 3.600.00 5 720.00

35
Stand Fan
Air- Daikkin 1 6,975.00 6,795.00 5 1,395.00
condition
Water First tank 40 1 38,725.00 38,725.00 5 7,745.00
Tank gallons
Heavy Dymo M2 1 8,500.00 8,500.00 5 1,700.00
Scale
Total of Equipment and 558,205.0 1,026,405.0 410,598.00
Machinery 0 0

Table 5.3 Schedule of Furniture & Fixture

Particular Specification Quantit Unit Price Total Estimate Depreciatio

s / Brand y Amount d n
Life
Chairs Uratex 5 420.00 2100.00 5 420.00
Table 2 1,500.00 3,000.00 5 600.00
Cabinet 3 2,500.00 7,500.00 5 1,500.00
Sofa 1 17,500.0 17,500.0 5 3,500.00
0 0
Total Furniture and fixture 25,700.0 30,100.0 6,020.00
0 0

Table 5.4 List of Materials for Office, Staff-house, Stock Room, Nursery,
Drier and Fermenting Area
Particulars Specification/ Quantity Unit Price Total Amount
Brand
Roof 2x10 200 180.00 36,000.00
Plain sheet Galvalume 2 260.00 540.00
Nails 3 Inches 5kg 65.00 325.00
2 inches 5kg 65.00 325.00
1 inch 5kg 65.00 325.00
Umbrella 3kg 80.00 240.00
Cement Holcim 300 bags 215.00 64,500.00
Sand and gravel 7 loads 1,500.00 10,500.00
Hollow Blocks 2000 8 16,000.00
Screen 20m 100.00 2,000.00
Barbed wire 20 rolls 1,200.00 24,000.00
Coco Lumber 4x4x10 40 250.00 10,000.00
2x2x12 40 75.00 3,000.00
Nursery Net 2 rolls 1,875.00 3,750.00
Plywood 15 400.00 6,000.00
Toilet bowl 2 1,200.00 2,400.00
Sink Single sink 2 1,000.00 2,000.00

36
Tiles 60X60 80 115.00 9,200.00
PVC Pipes 20 250.00 5,00.00
Bulb Omni 15 100.00 1,500.00
Fluorescent Light Omni 2 250.00 500.00
Note: The Labor cost of Office, Staff -House and cages( housing) will be ₱100,000.00
Note: Total Installation of electricity P 15,000.00
Note: Total Installation of Water Supply 15,000.00
Total of materials for Office, Staff-house, 139,253.00 328,105.00
Stock Room, Nursery, Drier and Fermenting Area

Table 5.5 List of Plantation Supplies

Nursery and Cleaning Supplies

Particulars Specification/ Quantity Unit Price Total Amount

Brand
Gloves Crinkle 20 25.00 500.00

Pruning Shears Bernmann 30 145.00 4,350.00

Soil Knife Bernmann 30 95.00 2,850.00

Garden Scissors 15 75.00 1,125.00

Garden Hoe crocodile 5 850.00 4,250.00

Total Supply of Plantation 5,545.00 13,075.00

Table 5.6 List of Utilities

Utilities Expense Monthly Expense Annual Expense

Telephone and Internet 2,000.00 24,000.00
Water 4,000.00 48,000.00
Electricity 2,500.00 30,000.00
Fuel 2,000.00 24,000.00
Total expenses for 10,500.00 126,000.00
utilities

Production/Operation Process

37
Production and Operation process will provide an overview of the sequence of all

process activities and tasks involved in creation and delivery of quality product

and services.

Figure 8: Process Flow of a Cacao Production

38
Waste Disposal Management

Sustainable waste management will be implemented by Monarch Kosher. It will

be working to shrink our environment footprints and meet the expectation of the

customers by reducing waste associated of the business. It will conform to the

local government policies and guidelines in waste disposal management. There

is a research that the shell of a cacao bean is one of the cacao industry

byproducts that currently still became waste. Through this research, utilization of

cocoa bean shell for producing alkalized fiber powder was observed. This is

another source of income if ever. We have another income and less waste.

Construction and Other Civil Concern

Monarch Kosher Organic Broiler Chicken Farm will use standard materials to construct

the building from accredited contractor to ensure safety of customers, employees and

owner and to ensure that the building will last long Nirvana & Construction Supply will

contracted to provide the construction materials and construction management expertise.

The construction of the building will be overlook by their skilled and licensed engineers

39
and architects. Nevertheless, the construction of the premises at the location in

accordance to our structure plan, design, and layout.

Chapter VI

FINANCIAL FEASIBILITY

This chapter discussed the sources of funding, financial schedule,

financial assumption. Balance sheet, income statement, projected cash flows

statement, break-even return or investment and payback period.

Source of Funding

The source of funds of the proposed business is from the Partners’

contribution amounting to ₱ 15,000,000.00. The total amount from the partner’s

contribution and the shared amount are shown in the following;

Partner A Php 3,000,000.00

Partner B 3,000,000.00

Partner C 3,000,000.00

Partner D 3,000,000.00

Partner E 3,000,000.00

Total Contribution Php 15,000,000.00

Investment cost

40
 The investment will be used in the payment of building construction acquisition

of machine and equipment, furniture and fixtures and working capital needed for the

establishment of the propose business.

Table 6.1: Investment Cost

Building Infrastructure 328,105.00

Land Acquisition 6,000,000.00
Machineries 1,026,405.00
Furniture’s and Fixture 30,100.00
Cash on Hand 5,115,390.00
Total P15,000,000.00
Financial Schedule

Table 6.2 Schedule of Salaries and Wages Expense

Position No. of Monthly 13th Year 1 Year 2 Year 3 Year 4 Year 5

employee Salary month
Rate pay
Sales and 1 12,500 12,500 162,500 162,500 162,500 162,500 162,500
Marketing
managers

Bookkeeper 1 10,000 10,000 130,000 130,000 130,000 130,000 130,000

Logistic 1 9,500 9,500 123,500 123,500 123,500 123,500 123,500

officers
Truck Driver 2 8,000 16,000 208,000 208,000 208,000 208,000 208,000
Security 2 8,500 17,000 221,000 221,000 221,000 221,000 221,000
Guards
Sales and 1 10,500 10,500 136,500 136,500 136,500 136,500 136,500
Marketing
Dep’t
personnel

Farmers/ 10 9,000 90,000 1,170,000 1,170,000 1,170,000 1,170,000 1,170,000

Caretakers/
laborers
Total 18 68,000 68,000 2,151,500 2,151,500 2,151,500 2,151,500 2,151,500

41
 Table 6.3 Schedule of Employees Benefits (Employer Share)

Position No. of SSS employer PHILHEALTH PAG-IBIG Total Annual

employee Share employer employer Amount
Share Share
Sales and 1 1,040 150 260 1,450 17,400.00
Marketing
managers

Bookkeeper 1 800 150 200 1,150 13,800.00

Logistic 1 640 150 200 990 11,880.00

officers
Truck Driver 2 1,280 300 400 1,980 23,760.00

Security 2 1,280 300 400 1,980 23,760.00

Guards
Sales and 1 800 150 200 1,150 13,800.00
Marketing
Dep’t
personnel

Farmers/ 10 6,400 1,500 2,000 9,900 118,800.00

Caretakers/
laborers
Total 18 11,440 2,700 1,860 18,600 223,200.00

Table 6.4 Schedule of Utility Expenses

Utilities Expense Year 1 Year 2 Year 3 Year 4 Year 5

Internet and 24,000.00 25,200.00 26,460.00 27,783.00 29,172.00
Telephone PLDT

Water 48,000.00 50,400.00 52,920.00 55,566.00 58,344.00

consumption

42
 Electricity 30,000.00 31,500.00 33,075.00 34,729.00 36,465.00
Consumption
Fuel Consumption 24,000 25,200.00 26,460.00 27,783.00 29,172.00
TOTAL 126,000.00 132,300 138,915.00 145,861.00 153,153.00

Table 6.5 Schedule of Plantation Supplies

Position Specification/ Quantity Unit Year 1 Year 2 Year 3 Year 4 Year 5

Brand Price

Particulars 20 25.00 500.00 505.00 510.05 515.15 520.30

Gloves Used 30 145.00 4,350.00 4,393.50 4,437.44 4,481.81 4,526.63

Pruning 30 95.00 2,850.00 2,878.50 2,907.29 2,936.36 2,965.72

Shears
Soil Knife 15 75.00 1,125.00 1,136.25 1,147.61 1,159.09 1.170.68
Garden 5 850.00 4,250.00 4,292.50 4,335.43 4,378.78 4,422.57
Scissors
Total Cost of Plantation Supplies 1,190.00 13,075.00 13,205.75 13,381.17 13,471.19 13,605.90

Table 6.6 Schedule of Advertising & Promotion

Item/Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Signage 10,000.00 10,100.00 10,201.00 10,303.01 10,406.04

Tarpaulin 10,000.00 10,100.00 10,201.00 10,303.01 10,406.04

Basketball Jersey 5,000.00 5,050.00 5,100.50 5,151.51 5,203.02

Sponsorship
Flyers 5,000.00 5,050.00 5,100.50 5,151.51 5,203.02

Seminars 15,000.00 15,150.00 15,301.50 15,454.52 15,609.06

TOTAL 45,000.00 45,450.00 45,904.50 46,363.56 46,827.18

Table 6.7 Schedule of Miscellaneous Expense

43
 Item/Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Miscellaneous 30,000 31,500.00 33,075.00 34,728.75 36,465.19
Expense

Total 30,000 31,500.00 33,075.00 34,728.75 36,465.19

Table 6.8 Schedule of Permits and Licenses

Item/Particulars Year 1 Year 2 Year 3 Year 4 Year 5

SEC Registration 14,000.00 14,700.00 15,435.00 16,206.75 17,071.08
BIR Registration 5,000.00 5,250.00 5,512.50 5,788.12 6,077.53
Business Permit/ 10,000.00 10,500.00 11,025.00 11,576.25 12,155.06
Mayor’s Permit
Barangay 400.00 420.00 441.00 463.05 486.20
Clearance
Bureau of Fire 1,500.00 1,575.00 1,653.75 1,763.44 1,851.61
Clearance
Sanitation Permit 1,500.00 1,575.00 1,653.75 1,763.44 1,851.61
Environmental 1,500.00 1,575.00 1,653.75 1,763.44 1,851.61
Compliance
Certificate
Municipal Building 2,000.00 2,100.00 2,205.00 2,315.25 2,431.01
Permit
Building Plan 3,000.00 3,150.00 3,307.50 3,472.87 3,646.52
Electrical Permit 2,000.00 2,100.00 2,205.00 2,315.25 2,431.01
Total 40,900.00 42,945.00 45,092.25 47,346.86 49,714.20

Table 6.9 Schedule of Insurance Expense

Insurance Expense
Particulars Amount
Employee 2,500.00
Building 5,000.00
Equipment 4,500.00
Total Insurance Expense 12,000.00

Table 6.10 Schedule of Repair and Maintenance

Item/Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Repairs and 30,000 31,500.00 33,075.00 34,728.75 36,465.19

Maintenance

44
Total 30,000 31,500.00 33,075.00 34,728.75 36,465.19

Table 6.11 Schedule of Office Supplies

Particular Unit
s Specification Quantity Price Year 1 Year 2 Year 3 Year 4 Year 5
Bond paper Hard Copy 4 289 1156 1213.8 1274.49 1338.21 1405.13
Ball pen HBW 1 box 190 190 199.5 209.48 219.95 230.95
Marker HBW 1 box 225 225 236.25 248.06 260.47 273.49
Calculator Casio 1 400 400 420 441.00 463.05 486.20

Receipts 10 10 100 105 110.25 115.76 121.55

Record
Book 2 50 100 105 110.25 115.76 121.55

Total 2,171.00 2,279.55 2,393.53 2,513.20 2,638.86

Table 6.12 Schedule of Depreciation Expense

Particulars Acquisition Estimated life Yearly
Cost Depreciation

Building Infrastructure 328,105.00 15 years 21,873.67

Equipment and Machineries 1,026,405.00 10 years 102,640.50

Furniture & Fixtures 30,100.00 5 years 6,020.00

Total 1,384,610.00 130,534.17

Table 6.13 Schedule of Land

Particular No. of Sqm Unit amount Total Amount (₱)

(₱)
Land 82,000 sqm 73/sqm 6,000,000.00

Total 6,000,000.00

45
 Table 6.14 Schedule of Equipment and Machineries

Particulars Specification Quantit Unit Price Total Estimate Depreciatio

/ Brand y Amount d n
Life
Shovel Bully Tools 12 400.00 4,800.00 5 960.00
Hammer Bully tools 5 320.00 1,600.00 5 320.00
Rake Eagle 10 600.00 6,000.00 5 1,200.00
Light cargo Hyundai 2 420,000.0 840,000.00 5 168,000.00
truck 0
Drip Pipe DN16 5 sets 2, 375.00 11,875.00 5 2,375.00
CCTV 1 45,910.00 45,910,00 5 9,182.00
package
Installation
Computer Samsung 2 26,000.00 52,000.00 5 10,400.00
Set
Flat Screen Samsung 1 4,000.00 4,000.00 5 800.00
Television
Telephone 1 1,500.00 1,500.00 5 300.00
Fire 1 1,100.00 1.100.00 5 220.00
Extinguishe
r
Electric Camel 2 1,800.00 3.600.00 5 720.00
Stand Fan
Air- Daikkin 1 6,975.00 6,795.00 5 1,395.00
condition
Water Tank First tank 40 1 38,725.00 38,725.00 5 7,745.00
gallons
Heavy Dymo M2 1 8,500.00 8,500.00 5 1,700.00
Scale
Total of Equipment and 558,205.0 1,026,405.0 410,598.00
Machinery 0 0

46
 Table 6.15 Schedule of Furniture & Fixture

Particular Specification Quantit Unit Price Total Estimate Depreciatio

s / Brand y Amount d n
Life
Chairs Uratex 5 420.00 2100.00 5 420.00
Table 2 1,500.00 3,000.00 5 600.00
Cabinet 3 2,500.00 7,500.00 5 1,500.00
Sofa 1 17,500.0 17,500.0 5 3,500.00
0 0
Total Furniture and fixture 25,700.0 30,100.0 6,020.00
0 0

Table 6.16 List of Materials for Office, Staff-house, Stock Room, Nursery,
Drier and Fermenting Area

Particulars Specification/ Quantity Unit Price Total Amount

Brand
Roof 2x10 200 180.00 36,000.00
Plain sheet Galvalume 2 260.00 540.00
Nails 3 Inches 5kg 65.00 325.00
2 inches 5kg 65.00 325.00
1 inch 5kg 65.00 325.00
Umbrella 3kg 80.00 240.00
Cement Holcim 300 bags 215.00 64,500.00
Sand and gravel 7 loads 1,500.00 10,500.00
Hollow Blocks 2000 8 16,000.00
Screen 20m 100.00 2,000.00
Barbed wire 20 rolls 1,200.00 24,000.00
Coco Lumber 4x4x10 40 250.00 10,000.00
2x2x12 40 75.00 3,000.00
Nursery Net 2 rolls 1,875.00 3,750.00
Plywood 15 400.00 6,000.00
Toilet bowl 2 1,200.00 2,400.00
Sink Single sink 2 1,000.00 2,000.00
Tiles 60X60 80 115.00 9,200.00
PVC Pipes 20 250.00 5,00.00
Bulb Omni 15 100.00 1,500.00
Fluorescent Light Omni 2 250.00 500.00
Note: The Labor cost of Office, Staff -House and cages( housing) will be ₱100,000.00
Note: Total Installation of electricity P 15,000.00
Note: Total Installation of Water Supply 15,000.00
Total of materials for Office, Staff-house, 139,253.00 328,105.00
Stock Room, Nursery, Drier and Fermenting Area
Table 6.17 Schedule of Projected Sales Forecast

47
 Projected Sales Forecast

Year 1 Year 2 Year 3 Year 4 Year 5

Criollo - - 8,640,000.00 9,072,000.00 9,525,600.00

Cacao Dried
Beans
Total 8,640,000.00 9,072,000.00 9,525,600.00 10,001,880 10,501,974

Table 6.18 Schedule Cost of sales

Schedule of cost of sale

Year 1 Year 2 Year 3 Year 4 Year 5

Beginning Inventory 100,000.00 105,000.0 110,250.00
0
Purchase (1) 471,240.00 171,710.00 319,550.00 368,830.00 424,270.00
Ending 105,000.00 110,250.00 115,762.50
Inventory
Cost of Sale 471,240.00 171,710.00 314,550.00 363,580.00 418,757.50

Purchases
Fertilizers and
395,784.43
other 294,675.00 341,700.89
chemicals 386,990.00 153,710.00
needed, etc.
Planting 36,750.00
Materials
Cacao pod 47,500.00 18,900.00 19,845.00 21,879.11 22,973.07
Wrap
Cellophane
Total 471,240.00 171,710.00 319,550.00 368,830.00 424,270.00

Financial Assumptions

1. The proposed business will be in form of partnership.

48
2. The sales will increase 5% annually

3. The surviving rate of grafted cacao seedlings is 95%

4. The cacao pods increase 10-20 pods annually.

5. The operating expenses will increase 5% annually except for the salaries and

wages, employees’ benefits, insurance expense and depreciation expense.

6. The straight line method will be used in computation in the computation of

depreciation.

7. The profit/loss will be divided equally

8. The partners will withdraw 30% of the net income

49
 The Bean Bar Cacao Production
ProjectedStatement of Financial Performance
For the year ended Dec. 31, 20A, 20B, 20C,20D,20E

20A 20B 20C 20D 20E

8,640,000.00 9,072,000.00 9,525,600.00
Sales

Cost of Sales 471,240.00 171.710.00 314,550.00 361,580.00 418,757.50

Gross Income
(471,240.00) (171.710.00) 8,325,450.00 8,710,420.00 9,106,842.50

Operating
Expenses
Salaries and
Wages
2,151,500.00 2,151,500.00 2,151,500.00 2,151,500.00 2,151,500.00
SSS/PHIC/HDMF 223,200.00 223,200.00 223,200.00 223,200.00 223,200.00

Utilities 126,000.00 132,300 138,915.00 145,861.00 153,153.00

Expense
Plantation Supplies 13,075.00 13,205.75 13,381.17 13,471.19 13,605.90
expense
Advertising Expense 45,000.00 45,450.00 45,904.50 46,363.56 46,827.18

Miscellaneous 30,000 31,500.00 33,075.00 34,728.75 36,465.19

Expense
Permits and 40,900.00 42,945.00 45,092.25 47,346.86 49,714.20
Licenses
Insurance Expense 12,000.00 12,000.00 12,000.00 12,000.00 12,000.00

Repair and 30,000 31,500.00 33,075.00 34,728.75 36,465.19

Maintenance
Office Supplies
Expense 2,171.00 2,279.55 2,393.53 2,513.20 2,638.86
Depreciation 130,534.17 130,534.17 130,534.17 130,534.17 130,534.17
Expense
Total Operating 2,804,380.17 2,816,414.47 2,829,070.62 2,842,247.48 2,856,103.69
Expenses
Net Income (2,804,380.17) (2,816,414.47) 5,496,378.38 5,868,172.52 6,250,738.81
Table 6.19 Statement of Financial Performance (5 years)

50
 The Bean Bar Cacao Production
Projected Statement of Financial Position
As of December 31, 20A, 20B, 20C,20D,20D,20E
ASSETS 20E
20A 20B 20C 20D

Current Assets

4,953,544.00 2,267,663.70 10,483,917.67 14,989,969.01

Cash 6,245,662.74

Total Current Assets 4,953,544.00 2,267,663.70 10,483,917.67 14,989,969.01

6,245,662.74
Non-current Assets

Building 328,105.00 328,105.00 328,105.00 328,105.00 328,105.00

Equipment 1,026,405.00 1,026,405.00 1,026,405.00 1,026,405.00 1,026,405.00

Furniture & Fixtures 30,100.00 30,100.00 30,100.00 30,100.00 30,100.00

Land 6,000,000.00 6,000,000.00 6,000,000.00 6,000,000.00 6,000,000.00

Less: Accumulated (130,534.17) (261,068.34) (391,602.51) (522,136.68) (652,670.85)
Depreciation

Total
Non-current Assets 7,254,075.83 7,123,541.66 6,993,007.49 6,862,473.32 6,731939.15

Total Assets 12,207,619.83 9,391,205.36 13,238,670.23 17,346,390.99 21,721,908.16

Liabilities
SSS/PHIC/HDMF Payable 12,000.000 12,000.000 12,000.000 12,000.000 12,000.000

Total Liabilities 12,000.000 12,000.000 12,000.000 12,000.000 12,000.000

Partner's equity

Partners, Capital 12,195,619.83 9,379,205.36 13,226,670.23 17,334,390.99 21,709,908.16

Total Partner's Equity

Total Liabilities & 12,207,619.83 9,391,205.36 13,238,670.23 17,346,390.99 21,721,908.16
Partner's Equity
6.20Statement of Financial Position (5 years)

51
 The Bean Bar Cacao Production 20E
Projected Statement of Cash Flow
As of December 31, 20A, 20B, 20C,20D,20D,20e

20A 20B 20C 20D

Operating Activities:

Net Income (2,804,380.17) (2,816,414.47) 5,496,378.38 5,868,172.52 6,250,738

Depreciation 130,534.17 130,534.17 130,534.17 130,534.17 130,534

SSS/PHIC/HDMF 12,000.00
Payable
Cash Flow from (2,661,846.00) (2,685,880.30) 5,626,912.55 5,998,706.69 6,381,272
Operating Activities

Investing Activities: - - - -
Building (328,105.00)
Construction

Purchase of Equipment (1,026,405.00) - - - -

Purchase of (30,100.00) - - - -
Furniture’s &
Fixtures

Land Acquisition (6,000,000.00) - - - -

Cash Flow from (7,384,610.00) - - - -

Investing Activities

Financing Activities: - - -

Investment from -
Partner's 15,000,000.00

Withdrawal of - - (1,648,913.51) (1,760,451.76) (1,875,221

Partner's
Cash Flow from 15,000,000.00 (1,648,913.51) (1,760,451.76) (1,875,221
Financing Activities
Net Change in Cash 2,453,544.00 (2,685,880.30) 3,977,999.04 4,238,254.93 4,506,051
Flows

Add: Beginning Cash - 4,953,544.00 2,267,663.70 6,245,662.74 10,483,91

Ending Cash 4,953,544.00 2,267,663.70 6,245,662.74 10,483,917.67 14,989,96

Balance

6.21 Cash Flow (5 years)

52
 6.22 Changes in Partners’ Equity (5 years)

The Bean Bar Cacao Production

Projected Statement of Changes in Owner's Equity
For the year ended Dec. 31, 20A, 20B, 20C,20D,20D,20E

20E
20A 20B 20C 20D

Beginning 15,000,000.00 12,195,619.83 9,379,205.36 13,226,670.23 17,334,390.99

Capital

Add:

Net Income (2,804,380.17) (2,816,414.47) 5,496,378.38 5,868,172.52 6,250,738.81

Additional
Investment - - - - -

Total 12,195,619.83 9,379,205.36 14,875,583.74 19,094,842.76 23,585,129.81

Less:

Withdrawal - (1,648,913.51) (1,760,451.76) (1,875,221.64)

-

Total Ending 12,195,619.83 9,379,205.36 13,226,670.23 17,334,390.99 21,709,908.16

Capital

53
Breakeven Analysis

The breakeven analysis analyzes the amount of sales or revenue of The Bean Bar

Cacao Production in a given operational where it will not gain any profit but will neither

incurred any lost. The breakeven analyses determined by multiplying the value of all fix

cost by the margin ratio which will be calculated as annual sales divided by the

contribution margin. The figure below describes that in order for Monarch Kosher to

recover cost even without earning profit. The following is the breakeven analysis of The

Bean Bar Cacao Production.

Table 6.23 Breakeven Analysis

Sales (2,804,380.17 (2,816,414.47 5,496,378.38 5,868,172.52 6,250,738.81

) )
Variable 4,125,944.53 4,332,241.75 4,548,853.84
Cost
Contributio 5,410,239.47 5,680,751.45 5,964,789.02
n Margin

Fixed Cost 1,315,394.93 1,315,394.93 1,315,394.93

Net Income 4,094,844.54 4,365,356.52 4,649,394.09

Sales 1.00 1.00 1.00

Variable 0.43 0.43 0.43

Cost
Contributio 0.57 0.57 0.57
n Margin

Fixed Cost 1,315,394.93 1,315,394.93 1,315,394.93

Breakeven _ _ 2,318,538.42 2,318,538.42 2,318,538.42
in
Sales

54
Return of Investment
Probability is arguably one of the principal financial objectives of the project

the rate of return on (ROI) is a measure of the management efficiency in using

available source. Capital is a scares resource and must be used efficiently. ROI

will be determined by using the formula given on the page the higher the rate of

return the more profitable is the project. The following shows the ROI schedule of

Monarch Kosher.

Table 6.24 Return on Investment

Return on Investment

YEAR NET INCOME INVESTMENT Return on

Investment

20A (2,804,380.17) 15,000,000.00 -19%

20B (2,816,414.47) 15,000,000.00 -19%

20C 5,496,378.38 15,000,000.00 37%

20D 5,868,172.52 15,000,000.00 39%

20E 6,250,738.81 15,000,000.00 42%

55
Payback Period
The payback period is the length of time necessary to recover the entire cost

of an investment from the resulting annual cash flow. The program shall take

2.27 years to fully recoup its initial investment in the form of investment net cash

inflow. The payback period for the program is computed as follows.

Table 6.25 Payback Period

Payback Period

YEAR Annual Cash Flow Cumulative Total

15,000,000.00

20A 2,661,846.00 (12,338,154.00)

20B 2,685,880.30 (9,652,273.70)

20C 5,626,912.55 (4,025,361.15,)

-
20D 5,998,706.69

20E

Paybac
k Period 4.27 years

Financial Ratios

A financial ratio can be well defined as a comparative magnitude of two

selected statistical values taken from the financial statements of a business

56
enterprise. These financial ratios can be expressed in decimal as well as

percentage values. The main sources used to calculate financial ratio include

balance sheet, cash flow statement and income statement.

Gross Profit Margin

The gross profit margin (also known as gross profit rate) is a profitability

measure that shows the percentage of gross profit in comparison to sales. In

other words, it calculates the ratio of profit left of sales after deducting cost of

sales. Gross profit margin is calculated by subtracting cost of sales from total

revenue and dividing that number by total revenue. The table on the next page

shows the gross profit margin of the company in its first five years.

Table 6.26 Gross Profit Margin

Year Gross Income Revenue Ratio
20A (471,240.00) - 0.00
20B (171.710.00) - 0.00
20C 8,325,450.00 8,640,000.00 0.96

20D 8,710,420.00 9,072,000.00 0.96

20E 9,106,842.50 9,525,600.00 0.96

Debt Ratio

The debt ratio is the ratio between the liabilities and assets of the company.

A low debt ratio implies a conservative company. The table below shows the

debt ratio of the company in its first five years of operations.

Table 6.27 Debt Ratio

57
 Year Total Liability Total Assets Ratio
20A 12,000.00 12,207,619.83 0.00
20B 12,000.00 9,391,205.36 0.00
20C 12,000.00 13,238,670.23 0.00
20D 12,000.00 17,346,390.99 0.00
20E 12,000.00 21,721,908.16 0.00

Return on Asset

Return on asset measures the ability of the company to generate income

by utilizing its assets. It can be viewed as the centavo amount of net income

generated per peso value of the total assets of the company. The table below

shows the return on assets of the company.

Table 6.28 Return on Assets

Year Net Income Average total Ratio
asset

20A (2,804,380.17) 12,207,619.83 -0.22

20B (2,816,414.47) 9,391,205.36 0.29

20C 5,496,378.38 13,238,670.23 0.41

20D 5,868,172.52 17,346,390.99 0.33

20E 6,250,738.81 21,721,908.16 0.28

Chapter VII
Corporate Social Responsibility

Internal Common Reporting Standard

The Bean Bar Cacao Production agreed that the internal corporate social

responsibility is for the regular employees, to give them proper medical support

58
and assistance or for hospitalization. To provide the proper compensation and

benefits for the regular employees in terms of medication and other benefits. The

Bean Bar Cacao Production an employee deserves to be given the right

compensation for their effort, time and rendering their skills and talent to make

the business more productive and the right service to the consumers.

External CRS

The Bean Bar Cacao Production agreed that the external corporate social

responsibility is to conduct free seminars to stretch awareness about the benefits

and importance of organic products. In addition, the business will also do an

outreach program in order to help less fortune in the community and also to the

society. The Bean Bar Cacao Production agreed also to make a sponsorship in

sports activities such as providing jerseys. This activity will also give and help in

the promotion of the byproducts came from cacao.

Chapter VIII

Findings, Conclusion and Recommendation

Findings
The result of this research project show that the business will operate as

partnership. The source of funds of the proposed business is in form of partners’

59
contribution amounting to ten million pesos (10,000,000,000.00). Depreciation

will be computed using a straight-line method. The business generated an

annual net income of three million four hundred thirty five thousands six hundred

nineteen pesos and eighty three centavos (3,435,619.83) for the first year of

operation. On its second year the annual net income is three million six hundred

sixty five thousand five hundred eight five and fifty three centavos

(3,635,585.53). The business generated an annual net income of four million five

thousand five hundred twenty nine and thirty eight centavos (4,005,529.38) on

the third year of operation. During its fourth year of operation the annual net

income is four million two hundred seventy one thousand eighty two and fifty two

centavos hundred (4,271,082.52). On its fifth year of operation the annual net

income is four million five hundred forty three thousand eighteen pesos and

seventy eight centavos (4,543,018.78).

Conclusion
1. The proposed project is feasible because the results of the study are in

conformity with the specific objectives of the project which is to produce

finest and flavorful cacao beans, to continue increasing its supply the

farmers are well capable of everything and has a sufficient knowledge in

all aspects of cacao production.

60
 2. In relation to industry analysis aspect it shows that it has a good potential

in doing the business. The business was able to identify its competitors,

the strength and its weaknesses. It has also a strong bargaining power

both in suppliers and consumers.

3. In respect to its organization and management aspect it shows a sign of

positivity. The business will be easily managed and supervised since

there are only few workers to be hired to help the daily operation of the

business. There is 18 total number of personnel inside the business

4. In marketing aspect the business located in a proper place for cacao

production and it was able to identify the target market and was able to

determine its market share .Also the business was able to strategized its

promotional and advertisement, positioning and marketing strategy. More

so the business was able to project its sales within 5 years of operation.

5. In the corporate social responsibility, part of the revenue of the business

will do an outreach program in order to help less fortune in the community

and also to the society. The hired workers of the business will also

beneficial because the business will help improve their standard of living

through salaries and wages

Recommendation

1. To the Partners and management, as a result of the study conducted by

the researcher, it is valuable establishing this venture because cacao

61
 beans are one of the promising agricultural products due to the addiction

of people consuming chocolates, tablea and any byproduct produce by

cacao of the benefits and advantages that this project has to offer.

Therefore, the researchers highly recommend the implementation of the

proposed project The Bean Bar Cacao Production.

2. To the future researcher, a further study to obtain comparative study for

possible potential factors that could help the business to improve.

62