Fitness Unlimited Health Club

.
ATENEO DE DAVAO UNIVERSITY
A Project Feasibility Study on Health Club Establishment

In Southern Area of Davao City
“FITNESS UNLIMTED HEALTH CLUB”
By
Castaneda, John Eric C.

Cipriano, Shaira Karissa J.
Del Norte, Pamela Denise L.
Derecho, Venus Angelica J.
Padua, Fretzel Mae L.
Rapisura, Coleen M.
Tarranza, Jvannesic A.
Viloria, Katrina Angelica J.
Presented to:
Ryan Morales, CPA, MBA
Management Consultancy Instructor

ACKNOWLEDGEMENT
In pursuit of the success of this study, the researchers solicited information from
different individuals and businesses. We met people, who, when asked, readily offered their
help in various ways. Through their assistance, the researchers were able to accomplish what
needs to be. Rightly, this success is best shared with them. We want to extend our deepest
gratitude to the following:
 First and most importantly, to the Almighty Father, the source of everything. He who is present
not only through the course of this study but also in our everyday endeavor. The ultimate giver
of all that we have, to Him we offer all praises and glory.
 To Mr. Ryan Morales who challenged us to have a well-made output of our feasibility study. He
who inspired and redirected us to the right track by correcting our mistakes, giving suggestions
and answering our questions.
 To the faculty and staff of the Accountancy department headed by Mr. Leopoldo Medina, for
introducing to us the language of business and for imparting their knowledge to us. More
importantly, for molding us into fair and just future professionals.
 To the staff of the Ateneo gym headed by Sir Bemi Garcia Jr. for disclosing some relevant
information about their daily operation.
 To our friends, Czarina Mae Jancilan and Jamil Al Enrique who shared their architectural skills by
designing the first and second floors of our proposed business establishment, respectively.
 To the staff of the banks BPI and BDO who respectfully answered our informal inquiries about
their loan interest rates and terms.
 To the employees of NCCC and Victoria Plaza who patiently gave us the specifications of the
gym and electronic equipment
 To our competitors, K1 spa, Holiday gym and spa and Ateneo gym who are generous enough to
share the information that we needed.
 To Mr. Carlo Vicci Tarranza for helping us determine the renovation cost.
 To Mr. Onofre Padua and Mr. Elmer Derecho for accommodating us during the course of our all-
nighters.
 To Mr. James Castaneda, Mr. Arnel Cipriano & Mr. Elmer Derecho for showing the willingness to
invest in the proposed project.
 To our supportive parents for continuously encouraging us to do better and for not giving up,
though we, ourselves, already felt like giving up.
 To the researchers, ourselves, for taking the challenge positively and for having the
determination to pursue this study despite the difficulties being experienced.
The Researchers
Table of Contents
Acknowledgement ................................................................................................... i
Chapter 1 Summary of the Project........................................................................... 1

1.1 Name of the Project............................................................................................... .. 1
1.2 Location................................................................................................................. 2
1.3 Descriptive Definition of the Project.......................................................................... 5
1.4 Project’s Long Range Objectives .............................................................................. 6
1.5 Feasibility Criteria ................................................................................................... 6
1.6 Highlights of the Project......................................................................................... .. 8
1.7 Major Assumptions and Summary of Findings and Conclusion..................................... 10
Chapter 2 Market Study ........................................................................................... 14

2.1 Product Description ................................................................................................ 14
2.2 Market Description.................................................................................................. 18
2.3 Major Competitors.................................................................................................. 24
2.4 Demand ................................................................................................................ 25
2.5 Supply ……………………............................................................................................. 32
2.6 Demand – Supply Analysis...................................................................................... 32
2.7 Price Study ............................................................................................................ 34
2.8 Marketing Program ................................................................................................. 40
Chapter 3 Technical Feasibility ............................................................................... 44

3.1 The Product and Service ........................................................................................ 44
3.2 Production / Service Process................................................................................... 45
3.3 Facility Size and Operation Schedule ........................................................................ 48
3.4 Facility Location ...................................................................................................... 49
3.5 Facility Layout........................................................................................................ 51
3.6 Machinery and Equipment ....................................................................................... 53
3.7 Building and Facilities .............................................................................................. 64
3.8 Supplies................................................................................................................. 65
3.9 Utilities .................................................................................................................. 73
3.10 Waste Disposal..................................................................................................... 73
3.11 Labor Requirements .............................................................................................. 74
3.12 Service Cost ......................................................................................................... 77
Chapter 4 Financial Feasibility................................................................................. 78
4.1 Major Assumptions ................................................................................................. 78
4.2 Total Project Cost ................................................................................................... 84
4.3 Initial Working Capital Requirements ......................................................................... 84
4.4 Alternative Sources of Financing .............................................................................. 85
4.5 Sources of Financing the Project .............................................................................. 86
4.6 Pro-forma Financial Statements................................................................................ . 87
4.7 Financial Analyses.................................................................................................... 119
4.8 Accounting Control and Policies................................................................................ . 137
Chapter 5 Socio-Economic Study.............................................................................. 150

5.1 Employment……………………………….......................................................................... .. 150
5.2 Taxes and Other Legal Fees...................................................................................... 150
5.3 Income and Spending Trends................................................................................... 150
5.4 Corporate Social Responsibility……………………………………………………………………………… 150
Chapter 6 Organization and Management Study .................................................... 152

6.1 Basic Consideration in Forming the Organization........................................................ 152
6.2 Form of Ownership ................................................................................................. 153
6.3 Organizational Chart............................................................................................... 154
6.4 Officers and Key Personnel...................................................................................... 154
6.5 Organizational Policy .............................................................................................. 155
APPENDIX A……………………………………………………………………….…………………………………. 158

APPENDIX B……………………………………………………………………….………………………….….….. 159
APPENDIX C ………………………………………………………………………………………………………….. 159
APPENDIX D ……………………………………………………………………….………………………………... 161
APPENDIX E ……………………………………………………………………….…………………………….…… 163
APPENDIX F ……………………………………………………………………….……………………………….... 166
APPENDIX G ……………………………………………………………………….…………………………….….. 168
APPENDIX H ……………………………………………………………………….……………………..….…..... 171
APPENDIX I ……………………………………………………………………….……………………………..….. 182
APPENDIX J ……………………………………………………………………….……………………………..….. 206
APPENDIX K ……………………………………………………………………….…………………………….….. 211
APPENDIX L ………………………………………………………………………………………………………….. 212
APPENDIX M …………………………………………………………………………………………………………. 215
APPENDIX N …………………………………………………………………………………………………………. 220
APPENDIX O ………………………………………………………………………………………………………… 223
APPENDIX P …………………………………………………………………………………………………………. 230
APPENDIX Q ……………………………………………………………………………………………………… 233
BIBLIOGRAPHY ………………………………………………………………………………………………..….. 235

List of Figures
Figure 1.1 Project Logo ……………………………………….………………………………………..……………. 1
Figure 1.2 Project Location (Aerial) …………………………………………………………………..….……... 2
Figure 1.3 Project Location (Map) ……………………………………………………………………..….…….. 2
Figure 1.4 Architect’s Design……………………………………………………………………………………….. 3
Figure 1.5 Project Location (Actual Image)……………………………………………………………………. 3
Figure 2.1 Prospective Gym Interior …………………………………....……………………………………… 14
Figure 2.2 Prospective Spa Service ……………………………………………………….……………….……. 15
Figure 2.3 Prospective Studio Dance Service ……………………………..………….………....…….…… 16
Figure 2.4 Graph on Respondent’s Gender………………………………………….………………….…….. 19
Figure 2.5 Graph on Respondent’s Age……………..……………………………………………....…………. 20
Figure 2.6 Graph on Respondent’s Occupation……………………………………………………….….….. 20
Figure 2.7 Graph on Respondent’s Location………………………….…………….…………....…….……. 20
Figure 2.8 Graph on Respondent’s Willingness to be Fit………………………………………………….. 20
Figure 2.9 Graph on Respondent’s Willingness to Enroll in a Health Club………………………….. 21
Figure 2.10 Graph on Respondent’s Willingness to Buy Fitness Supplements………………….... 21
Figure 2.11a Graph on Respondent’s Preferred Dance Studio Activities …………………………… 21
Figure 2.11b Graph on Respondent’s Preferred Spa Related Activities …….……………………… 21
Figure 2.12 Perceptual Mapping…………………………………………………………………………………… 22
Figure 2.13 Supply for Gym Supplements……………………………………………………………………… 32
Figure 2.14 Demand and Supply Analysis for Gym…………………………………………………………. 33
Figure 2.15 Demand and Supply Analysis for Spa………………………………………………………….. 33
Figure 2.16 Demand and Supply Analysis for Gym Supplements……………………………………… 33
Figure 2.17 Demand and Supply Analysis for Dance Studio…………………………………………….. 34
Figure 2.18 Sample Flyers……………………………………………………………………………………………. 42
Figure 2.19 Facebook Page ……………………………………………………………………………....….……. 42
Figure 3.1 Process Flow Diagram – Gym/Fitness Center …………………………………………..……. 45
Figure 3.2 Process Flow Diagram – Spa …………………………………......………………………….…… 46
Figure 3.3 Process Flow Diagram – Dance Studio ……………………………………………..…….……. 47
Figure 3.4 Process Flow Diagram – Gym Supplements …………………………………….....……….. 47
Figure 3.5 Satellite Map Location ………………………………………………………………….…..….……. 49
Figure 3.6 2D Map Location …………………………………………………………………………………….... 50
Figure 3.7 Ground Floor Facility Layout …………….……………………………………………………..…. 51
Figure 3.8 Second Floor Facility Layout …………………………………..………………………………….. 52
Figure 3.9 Front View of Building – Architect’s Perspective …………………………..………….…… 64
Figure 3.10 Actual Building ……….……………………..………….………....…………………………….….. 65
Figure 4.1 Current Ratio and Quick Ratio Graph ………………………………………………………….. 119
Figure 4.2 Debt-to-Equity and Debt-to-Asset Graph …………………………………………………….. 121
Figure 4.3 Long-term Debt-to-Equity and Times-Interest-Earned Graph ………………………… 122
Figure 4.4 GPM, OPM and NPM Graph ………………………………………………………………………… 124
Figure 4.5 ROTA, ROE and BEP Graph ……………………………………………………………….………. 125
Figure 4.6 ROI Graph ………………………………………………….…………………………………………… 126
Figure 4.7 Revenue Cycle (General) …………………………………………………………………………… 137
Figure 4.8 Revenue Cycle (Gym / Fitness Center)…………………………………………..….………… 138
Figure 4.9 Revenue Cycle (Therapeutic Massage and Spa) ………………………………….………… 139
Figure 4.10 Revenue Cycle (Dance Studio) ………………………………………………………….….….. 140
Figure 4.11 Revenue Cycle (Gym Supplements) ……………………………………………..….………… 141
Figure 4.12 Expenditure Cycle (General) …………………………………………………….……….………. 142
Figure 4.13 Expenditure Cycle (Gym / Fitness Center) …………………………………………..……… 143
Figure 4.14 Expenditure Cycle (Therapeutic Massage and Spa) ……………………………………… 144
Figure 4.15 Expenditure Cycle (Dance Studio) ……………………………………………………………… 145
Figure 4.16 Expenditure Cycle (Gym Supplement) …………………………………………………..……. 146
Figure 6.1 Gantt Chart………………………………………………………………………………………………… 153
Figure 6.2 Organizational Chart ……………………………………………………………………..…………… 154
List of Tables
Table 1.1 Total Investment Cost ……………………………………….……………...…………..………….. 10
Table 2.1 List of Gym Supplements …………………………………………………………………..….……. 17
Table 2.2 Market Segmentation ………………………………………………………………..……..….…….. 23
Table 2.3 SWOT Analysis: Holiday Gym and Spa ………………….………………………….………….. 24
Table 2.4 SWOT Analysis: Metro Lifestyle Davao ………………………………….……………….…….. 25
Table 2.5 Past Demand – ML Fitness Gym ……………………………..…………..………....……..…... 27
Table 2.6 Past Demand – Happy Massage and Spa ………………..………….…….………………….. 27
Table 2.7 Past Demand – Kite Dance Studio …………………………………………….........…….…… 27
Table 2.8 Projected Demand for Gym ………………………………………..……………………….….….. 29
Table 2.9 Projected Demand for Spa …………….…………....……………………………………….……. 30
Table 2.10 Projected Demand for Dance Studio …………………..…………………….……….….…… 31
Table 2.11 Projected Demand for Gym Supplements ………….…………………..……....….………. 31
Table 2.12 Metro Lifestyle Davao Gym Rates ……………………………………………………....……… 35
Table 2.13 Holiday Gym & Spa Gym Rates ………………………………….…………..…………….…… 35
Table 2.14 Planet Infinity Gym Rates ……………………………………………..…….……………….….. 35
Table 2.15 Holiday Gym & Spa Rates …………………………………….....………………………………. 36
Table 2.16 K1 Spa Rates ………………………………………………………………….…..…………..……… 36
Table 2.17 Metro Lifestyle Fitness – Dance Studio Rates …………………………………………...... 37
Table 2.18 KITE Dance Studio Spa Rates …………….………………….……………………………..….. 37
Table 2.19 Happy Fit Nutrition Hub – Rates for Supplements …………..…………………………… 37
Table 2.20 –GNC Davao Rates …………………………..………….…….....…………….....………….….. 38
Table 2.21 Proposed Gym Rates ……….……………………..………….………......………………….….. 39
Table 2.22 Proposed Spa Rates ….....…………….....…………….....…………….....…………………… 39
Table 2.23 Proposed Dance Studio Rates ….....…………….....…………….....……………………….. 40
Table 2.24 Proposed Gym Supplements Rates ….....…………….....…………….....………………… 40
Table 3.1 Daily Time Schedule for Receptionist ….....…………….....…………….....………………. 48
Table 3.2 Daily Time Schedule for Gym Instructors ….....…………….....……………......……….. 48
Table 3.3 Daily Time Schedule for Dance Instructor ….....…………….....…………….....….……. 48
Table 3.4 Daily Time Schedule for Spa Services ….....…………….....…………….....…….…………. 49
Table 3.5 List of Furniture and Fixtures ….....…………….....…………….....……………......………… 53
Table 3.6 List of Office Equipment ….....…………….....…………….....…………….....………………… 55
Table 3.7a List of Property Plant and Equipment – Gym/Fitness Center ….....…………………… 55
Table 3.7b List of Property Plant and Equipment –Spa ….....…………….....…………….....………. 63
Table 3.7c List of Property Plant and Equipment – Dance Studio ….....……………......…………. 63
Table 3.8a List of Supplies – Office ….....…………….....…………….....…………….....……………….. 65
Table 3.8b List of Supplies – Spa ….....…………….....…………….....…………….....………………….. 67
Table 3.8c List of Supplies – Maintenance ….....…………….....…………….....……………………….. 70
Table 3.9 List of Suppliers ….....…………….....…………….....…………….....…………….....…………. 73
Table 3.10 Labor Requirement…………………………………………………………………………………….. 77
Table 4.1 Useful Life – Gym ….....…………….....…………….....…………….....…………….....………. 80
Table 4.2 Useful Life – Spa ….....…………….....…………….....…………….....………………………….. 81
Table 4.3 Useful Life – Dance Studio ….....…………….....…………….....…………….....……………. 81
Table 4.4 Useful Life – Furniture and Fixture ….....…………….....…………….....………………….. 81
Table 4.5 Useful Life – Office Equipment ….....…………….....…………….....……………………….. 81
Table 4.6 Initial Project Cost ….....…………….....…………….....…………….....…………….....…….. 84
Table 4.7 BPI Rates ….....…………….....…………….....…………….....…………….....…………………. 85
Table 4.8 BDO Rates ….....…………….....…………….....…………….....…………….....……………….. 85
Table 4.9 Cost of Capital Allocation ….....…………….....…………….....…………….....……………… 86
Table 4.10 Profit/Loss Ratio ….....…………….....…………….....…………….....…………….....…….. 86
Table 4.11 Chart of Accounts – Financial Position ….....…………….....…………….....…………… 87
Table 4.12 Chart of Accounts – Financial Performance ….....…………….....…………….....……. 88
Table 4.13 Undiscounted Payback Period ….....…………….....…………….....……………......……. 134
Table 4.14 Discounted Payback Period ….....…………….....…………….....……………….………….. 134
Table 4.15 Net Present Value ….....…………….....…………….....…………….....…………….....……. 135
Table 4.16 Internal Rate of Return ….....…………….....…………….....…………….....………………. 136
Chapter 1
Summary of the Project
1.1 Name of the Enterprise
Figure 1.1 Project Logo
The name of the enterprise is “Fitness Unlimited Health Club”. The

enterprise focuses mainly on giving an all-in fitness and health services for the clients
such as the use of gym equipment, access to fitness supplements, usage of spa services
and dance studios, thus the name was created. “Unlimited” because it allows the client
to avail particular services unlimitedly in a given a period of time. Moreover, the
proposed health club has a target market from different generations, thus called “Health
Club for All Ages”.
The enterprise aims to be the first well established health club in southern area
of Davao City and be one of the most popular gyms or health clubs in entire Davao City,
Philippines. The project intends to level to its competitors in the fitness industry existing
in the city. Its goal is to be a customer-friendly environment that offer its clients with a
more-than-satisfactory level of servicing to which it should serve its purpose and that is
to bring or introduce healthy and fit lifestyle to its clients. The enterprise also aims to be
an unwavering business that is able to maintain its financials in a stable status. Every
business wants to be a financially-successful one to which the enterprise also sets its
eyes upon.
FITNESS UNLIMITED HEALTH CLUB 1

A Project Feasibility Study on Establishment of Health Club in Southern Area of Davao City
1.2 Location
The “Fitness Unlimited Health Club’s” proposed location is at Building C, Golden

Matina Complex, MacArthur Highway, Matina, Davao City, Philippines with approximately
407 square meters both in the first and second floors.
Figure 1.2 Project Location – Aerial
Figure 1.3 Project Location – Map

Figure 1.4 Architect’s Design
Figure 1.5 Project Location – Actual Image

The following are factors that affect the viability of the project location:
1.2.1 Sources of Labor and Utilities
The project site is located in the bustling highway of Matina, Davao City
with easy access to public transportation which will make it reasonably easy for
the enterprise’s labor force to report to their designated jobs.
The proposed health club will need utilities such as electricity, water,
telephone, cable television and internet subscription.
Electricity will be serviced by Davao Light and Power Company (DLPC)

which, on average, provides a stable source of power throughout the city. The
water source for the project location will be the Davao City Water District
(DCWD). DCWD supplies potable and affordable water 24 hours a day.
Telecommunication and Internet Subscription services will be serviced by the
Philippine Long Distance Company (PLDT). Cable subscription will be provided by
Sky Cable.
1.2.2 Proximity to the Market

The site was chosen as the business’ location for its operations mainly
because there is barely a health club in such area. The south side of Davao has
only one known health club located in Centerpoint, Matina Crossing, Davao City
Philippines, which seems to be considered old since its facilities look like such.
The area is located in the north side’s “booming” place as it is surrounded

by known enterprises such as schools, a convenience store, fast-food
restaurants, malls, and many more. With approximately 8 to 10 minutes of travel
time from the city’s center point and such enterprises surrounding the proposed
business, easy access to the market will make people tend to go to such places.
Enterprises and landmarks such as University of Mindanao, Ateneo de Davao
High School, McDonald’s and Jollibee Fast-Food Restaurants, Matina Town
Square, NCCC Mall, and S&R Membership Shopping surround the area. Also,
Golden Matina Complex itself is already considered a known landmark in the area

as well having stores such as 7-11 Convenience Store and many more stores
occupying the side buildings.
1.2.3 Nature of Available Transportation
The project location is very accessible and convenient. It is situated

where public vehicles are available on a 24/7 schedule. The location is easily
accessed in terms of transportation mainly because it’s situated in a highway,
that is, many vehicles go in and out of the location’s street. Public Utility
Jeepneys (PUJs) with routes going to Matina, taxis, and private vehicles are the
main transportation that passes through the location.
1.2.4 Cost of Land and Building
For the cost of real estate, the chosen location is a commercial site with a
building already and is on a rental basis, with annual rental cost of
₱3,907,200.00. The interior renovation and facilities are subject to cost estimates
approved and verified by engineers and architects which are estimated to be
approximately ₱ 6,680,000.00.
1.3 Descriptive Definition of the Project
Health clubs are a trend nowadays especially in the booming City of Davao since
it provides fit and healthy lifestyle to its clients which is quite the pursuit nowadays.
Living a healthy lifestyle is considered a good way of living life since researches have
said that a healthy and fit lifestyle proves to be a good way of avoiding sicknesses, being
fit, and enables you to live a long life.
The project aims to offer its clients a health club which is very conducive for a
healthy and fit lifestyle. It wants its clients, especially in the south side of Davao City, to
experience fitness in an easy manner given the different types of being fit such as the
use of new gym equipment, entering into different dance exercises, relaxation of the
body by the use of the spa services, being provided access to fitness supplements that
will help more on being healthy and fit, there is also easy accesses to the market and
many more.

The project also intends to level with its other competitors when it comes to
being a top-tiered health club in terms of services and environment it offers. Its
objective is to allow its clients to experience a hassle-free avenue for healthy and fit
lifestyle by providing an all-in service for their own convenience.
1.4 Long Range Objectives
In order for the business to remain and compete in the industry in the long run,
these objectives will be the motivation to move forward from its starting point:
1. The Fitness Unlimited Health Club will be one of the top health club establishment in
Davao City.
2. The Fitness Unlimited Health Club can compete with other gym establishment not
only in Davao but also around the country.
3. The establishment will provide for a better resource of wellness and fitness to its
customers.
4. The establishment will produce competent personal trainers, masseuse and dance
instructors that can better tend to the needs of its customers.
5. The establishment would have created a better environment where the customers
can exercise in pursuit of their personal health and fitness goals.
1.5 Feasibility Criteria
1.5.1 Market
 The company’s target market focuses on students and adults who are
interested in being fit and healthy especially on the south side of Davao City.
 The company has a potential set of clients because of the increasing demand
for health clubs in view of the emergence of the new and growing trend of
being fit and healthy.
 The company has enough supply of gym, dance studio and spa services to
offer and has adequate supply of fitness supplements.
 The fees and rates does not substantially differ from other gyms, spas, dance
studios and fitness supplements retailers. The fees and rates are fixed, but it
is within the capacity to pay of the target market.

 The proposed project will gain enough competitive advantage due to several
factors including geographical location, costs and quality of facilities and
services offered.
1.5.2 Technical
 The new and latest set of facilities and equipment offered provides greater
satisfaction to the clients.
 There is an assurance of quality service in the form of a relaxing ambiance
for overnight stays away from the clients’ homes.
 The strategic location of the project is of great convenience to the public
since it is near the downtown area, has easy transportation, and has easy
access to the market.
 The facilities offered are of latest issues and are offered with minimal cost for
the clients compared to competitors.
 The inventories are of high quality with dependable suppliers that guarantees
customer’s satisfaction.
1.5.3 Financial
 The project’s preliminary costs and capital requirements can be readily
identified and defined.
 The project results to a net loss in its first year, but it gains net profit for the
next years and is on an increasing trend.
 The rate of return on the first year resulted to a negative since the project
incurred a net loss, but was able to result to a positive for the next years and
is on an increasing trend as well due to the net profits incurred for the next
years.
 The project is positive of gaining profits during its operations with just a
limited amount of risk involved.
 The payback period is estimated to be between 6 to 7 years.
 There are several emerging sources of financing available for the project. The
type of financing the project intends to enter into is both debt and equity
financing. For the debt financing, loans are offered in banks if you want to
start a business and the project intends to enter into a loan with Bank of the

Philippine Islands. On the other hand, there are available investment for the
partners in terms of equity financing since the project intends to enter into a
partnership type of business.
1.5.4 Socio-Economic
 Fitness Unlimited Health Club, a gym for all ages affects the socio-economic
aspect of Davao City as the business promotes employment, pays taxes and
other statutory fees.
 As the business starts, management will hire people thus promoting
employment.
 The business will also allocate a portion of its income to the government in
the form of taxes which will be used to provide better services to the public.
 Every year, the management will also renew its business permit and pay the
necessary fees which will also form part of the government’s revenue.
1.5.5 Organization and Management
 Being a start-up business, Fitness Unlimited Health Club needs careful
supervision of the partners as the introduction phase is a very crucial part.
This is the stage where the business creates impression as it penetrates the
market.
 In order to give more attention to the results of the day-to-day operations,
the business will adapt a horizontal form of organization where all the
employees will report directly to the general partners and there is no middle
level of management.
 One of the qualifications to be hired as an employee of the company is work
experience. There is no need for training during the start of the business.
However, trainings and conventions maybe helpful in some time in the future,
just to broaden the knowledge of the employees.
1.6 Highlights
1.6.1 History of the Project
Fitness Unlimited is a health club primarily conceptualized as a fitness

gym. The health club aims to help its customers to stay fit with the help of well-
trained fitness experts and the usage of exercise equipment. However, in order

to widen the services that Fitness Unlimited offers and to better achieve the
club’s aim, the proponents plan to include a therapeutic massage and spa, dance
studio and fitness supplements retailing.
In considering which location the fitness club is to be established, the

proponents considered the demand for fitness services and the existing
competitors. The survey results showed that 86.25% of the respondents are
willing to avail health club services and most of the respondents (98.5%) are
either residing or attending school near the Southern Area of Davao City. (See
Appendix E) As of today, there are only one known existing fitness center in the
Southern Area and such centers are not entirely well established. By establishing
the health club at the Southern Area of Davao specifically in the Matina Area,
Fitness Unlimited will be the more accessible because it can cater the students
studying in the three universities located in the downtown area as well as the
residents and employees of the Southern Area of Davao.
1.6.2 Nature and Problems of the Industry
The Philippine health and fitness industry has been booming in the past
decade. This industry growth is due to the rising consciousness of the Filipino
people regarding their health and fitness. This shift is evidenced by consumers
shifting to organic products and engaging in various exercise programs. Because
of such rising demand for fitness, people would easily search the internet for
ways on how to become more fit. This practice however poses a huge risk to the
said individuals. Misapplication of an exercise routine or exercise intensity and
even misapplication of massage procedures could result to injury rather than
wellness. There is also misuse of fitness supplements or intake of fitness
supplements that are not so known that can result to unnecessary body sickness.
In order to cope with the existing demand, the proposed health club will
hire adequate well-trained and certified personnel to readily assist its members
on their fitness regimen, state of the art equipment to ensure the safety of the
members availing the services of Fitness Unlimited, and well-known fitness
supplements that will help more on the clients’ way to healthy living.

1.6.3 Mode of Financing
The proposed project shall be financed both by debt and equity. The debt
portion will be materialized through a bank loan. The bank loan from Banco de
Oro will provide for the 20% of the needed initial capital (₱ 3,600,000.00) and
such proceeds will be allocated to the building renovation. The remaining 80%
shall be financed through the investment of each partner of ₱4,725,210.35.
(Refer to Table 4.8)
1.6.4 Investment Cost
The proposed project will require a total investment of ₱ 20,000,000.00.

The breakdown of the total investment is as follows:
Particulars Amount
Cash ₱ 2,224,368.98
Building Renovation ₱ 6,680,000.00
Inventory - Gym Supplements ₱ 588,050.00
Inventory - Snack Bar ₱ 124,503.00
Spa Supplies ₱ 51,732.00
Maintenance Supplies ₱ 6,404.00
Office Supplies ₱ 16,503.00
Annual Rent Fees ₱ 3,907,200.00
Office Equipment ₱ 23,599.00
Cleaning Supplies ₱ 6,404.00
Furniture and Fixtures ₱ 186,026.75
PPE - Gym ₱ 5,936,500.00
PPE - Spa ₱ 106,150.00
PPE – Dance Studio ₱ 51,096.00
SEC Registration fees ₱ 61,852.00
Local Business tax ₱ 27,096.30
BIR Registration fees ₱ 2,515.00
Total Investment Cost ₱ 20,000,000.00
Table 1.1 Total Investment Cost
1.7 Major Assumptions and Summary of Findings and Conclusion

1.7.1 Market
The health club is located in Golden Matina Complex, McArthur Highway

Matina, Davao City. The location is chosen primarily due to its close proximity to

the target market particularly the students, employees, adults and residents
especially those located in southern parts of Davao City.
Using the demand projections made using competitor’s data regarding

the users and demand of the health club, there is an opportunity for the
proposed health club to penetrate in the market due to its increasing demand
shown in the study.
In conclusion, there is enough unfilled demand for the health club, the
gym, spa, supplements and dance studio with proximity as its primary selling
factor.
1.7.2 Technical
The proposed resort contains a health club, have a two (2) storey
building rented in Golden Matina Complex, which offers three (3) main services.
Firstly, the gym, which is located on the second floor of the building and
comprised approximately 407 sq. meters of space which is significantly larger
compared to other gyms. The equipment offered are new and modernized which
is one of the advantages offered by the proposed gym. Secondly, the spa, similar
to the gym, it attributes a large area which is bigger than other spa in Davao
City. The spa offers more than of what the other spas in Davao City. One of
which is sauna bath. Lastly, the dance studio, it is located in the first floor beside
the spa. Yoga and Zumba dances as well as Modern dances are offered in the
health club. This is done by hiring dance instructors specifically in each class.
The health club also offers gym supplements for those who wish to avail.
These products are not exclusive for the members of the gym only. It is also
offered to the walks-ins customers and outsiders who are not members of the
health club. So far, there is no well-established store for gym supplements in
Davao City.
The health club is designed for those people who wish to have a relaxing
time despite of their busy schedules. Gym, Spa and Dance Studio are services
offered in the health club.

Given the facts stated above, the health club is feasible enough in terms
of its technical aspect due to the design of the health club and its services
offered.
1.7.3 Financial
The financial statements of Fitness Unlimited Health Club show that the
business will incur losses in the first year of operation. Nevertheless, starting in
the second year onwards, income shall be achieved and shall continue to grow in
the succeeding years.
As shown in the study, in the discounted payback period, it only 6.72

years in order to achieve its break-even point. The business shall take more than
5 years in order to take over the costs and in order to earn profit as time goes
by. Nevertheless, the overall financial picture of the business is positive thus
rendering it feasible to undertake. (Refer to 4.8 Financial Analysis)
1.7.4 Socio-Economic
The planned number of employees to be hired is 16 and is composed of:

two receptionists, five gym instructors, a Zumba instructor, a dance
choreographer, a yoga instructor and five spa workers. Two janitors and a
security guard will also be outsourced. The health club will alleviate the lives of
many people, for it offers job opportunities, thus it helps to the economy of
Davao City. The operation of the resort shall contribute to the city’s economy
through the business and real property taxes it pays to the Davao City
government. Also, to the national government through the withholding and
value-added taxes paid.
Based on the information presented, the project is feasible in terms of the

socio-economic aspect for it contributes not only in the recreational aspect of the
person but also in the economy of the city and the country.

1.7.5 Organization and Management
The proposed business will take the form of partnership. There will be
three partners who will automatically be the owners of the business.
The owners will have their share in the profit or loss based on their
individual contribution, in this case, equally. There is no manager so every
partner will take part in the supervision of the company. The three partners will
be liable for each other’s decisions and all of the employees will report directly to
them.
The front desk clerk is assigned to the membership and concerns of the
guests.
The Yoga and Zumba Instructor and Dance Choreographer will be in-
charged on their specific dance classes of expertise.
The Gym Instructors will guide the clients of the gym in recommending
the right work outs needed and appropriate dietary schedules. They are the ones
who are in-charged in the well-being of the clients to make them fit and healthy.
The Spa Workers will cater each customer’s preference service whether
whole body massage, facial massage or etc. The will ensure that the customers
feel relaxed.
The Janitors will ensure the cleanliness and orderliness of the Health
Club, both first floor and second floor, especially on the locker rooms and comfort
rooms. They will make sure that the equipment and supplies are organized.
The Security guard will secure the area, making sure that every personnel
and customers are safe. They will politely check the bags and other things of the
clients. Also, the will look after the equipment and the cars of the customers if
necessary. In the aspect of management feasibility, the project is feasible for the
business is maintained by qualified personnel.

Chapter 2
Market Study
The important points and factors to be considered in opening a business are

highlighted in this chapter. One of which is how to penetrate to the market, considering
the competitors’ presence in the current market. This study also presents the size of the
demand for the products and services offered, current supply situation, price study and
the marketing program which are highly considered for successful establishment of the
business.
2.1 PRODUCT AND SERVICE DESCRIPTION
“Fitness Unlimited” Health Club will offer the following products and services:
2.1.1 Gym/Fitness Center
Figure 2.1 Prospective Gym Interior

Fitness Centers are established to house exercise equipment for the
purpose of physical exercise. People work out for many reasons such as weight
control, muscle building, health, stress relief and plain old vanity. Indeed,
working out at home can be effective and may even save money.
However, regularly attending fitness center offers numerous advantages.
First, in terms of availability of appropriate fitness equipment, the proposed
business offers variety of tools necessary to execute sets of exercise properly.
Second, for safety and comfort purposes, fitness centers hire employees referred
to as gym instructors to assist them throughout the execution of the exercise as

well as advice fitness activities recommended for each client. Third, Group
Exercise Classes are offered as it becomes popular nowadays. Training alone may
be very effective but it pays a lot to interact with others while doing the exercise.
A friendly competition among the group may help motivate people to work
harder. Thus, clients are grouped into beginners, intermediate, and advanced.
Others are also grouped according to their respective skills and expertise
particularly in sports.
Finally, fitness centers promote camaraderie. It allows client to meet
other people whom they can share and mingle with along with friendly and
interactive environment. Thus, it’s easier to cope up with the fitness process
since clients are able to establish harmonious relationship with one another.
2.1.2 Therapeutic Massage and Spa
Figure 2.2 Prospective Spa Service

A commercial establishment designed to manually manipulate soft body
tissues to promote person’s well-being is now popularly known as therapeutic
massage and spa. Various health and beauty treatment namely steam baths,
exercise equipment and massages are programmed to rejuvenate one’s senses

by providing soothing atmosphere that brings so much relaxation and comfort.
The proposed business will provide foot and body spa, body wax and scrub as
well as sauna services.
Nowadays, people demand for services that will help them unwind while
taking off from work or any exhausting activities. The proposed service offered
allows the body to regenerate, improves blood circulation hence sending more
oxygen and nutrients through the body and cells. Moreover, such services
stimulate the lymphatic system to get rid of the body toxins. Study shows that
therapeutic massage and spas help people release serotonin, a hormone which
makes people feel good and happy after availing such services.
2.1.3 Dance Studio
Figure 2.3 Prospective Studio Dance Service
A dance studio is where people learn or rehearse dances. The term is

typically used to describe space that has either been built or equipped for that
purpose. A dance studio includes soft floor covering or a hardwood floor. It offers
dance classes like Zumba, Yoga and other Modern dances like Hip-hop, Jazz,
Social Dances and Ballet. Dance Studio accommodates those who are interested

to learn dances and also improves body fitness. Zumba and Yoga are highly
recommended for adults but not necessarily exclusive for them.
Modern dance classes are usually availed by young adults especially
those who are dance enthusiasts. They often create dance groups to participate
in some competitions and any other entertainment programs and activities and
oftentimes they need dance studios for dance rehearsals. Others also dance for
fun and recreational purposes thus a dance studio will be very useful for them.
2.1.4 Fitness Supplements
Bodybuilding supplements are dietary supplements specifically marketed
to those involved in bodybuilding, weightlifting, and athletics. These are
important to boost people’s immune system and body system in order to keep up
with your workout and daily activities.
Fitness Supplements Description / Benefits
Gold Standard ONWHEY
Each serving offers 24 grams of fast digesting whey

protein with low levels of fat, cholesterol, lactose and
etc.
Mutant Mass
Mutant Mass is a supplement for those individuals who

wants to gain slabs of lean muscle mass faster. It is
one of the best sources of protein.
Muscle Pharm Combat Powder is precision engineered

with whey protein concentrates, hydrolysates and
Muscle Pharm Combat
isolates, egg albumen, and micellar casein.
Powder

Hydrox
Pre-work out supplement, to boost your muscles and

systems. It is recommended to take up such
supplement before having your workout.
C4 Regular
Harnessing unmatched NO3 technology and premium
ingredients such as Creatine Nitrate, C4 Extreme is an
advanced pre-workout supplement, possessing the
power to ignite your mind, muscles, and workout
regimen, workout after workout after workout.
C4 Ripped
C4 Ripped is a pre-workout supplement that combines
the explosive energy of C4 with ingredients specific to
fat loss. This formula helps you train harder while
supporting your body’s ability to burn fat.
Table 2.1 List of Gym Supplements
2.2 MARKET DESCRIPTION
2.2.1 Market Demographics
Major consumers of gym, spa, fitness supplements and dance studio

based on research conducted by the proponents generally include students from
Ateneo de Davao University, University of Mindanao, University of Immaculate
Conception and employees who work on southern areas of Davao City (Matina-
Toril-Mintal) and Downtown Areas of Davao City (Bankerohan-Roxas-Gmall).

Proposed products and services offered are not limited to the groups of people
stated. It is available for all the people who wish to make their body fit and
healthy. All products and services offered are highly recommended for people
with age 18 to 40 years old. However, dance studio and spa are still available for
people above 40 years old.
The target market of “Fitness Unlimited” Health Club includes students

and employees here in Davao City, especially places near University of Mindanao
Matina Campus, Ateneo de Davao University Matina Campus, University of
Immaculate Conception Bankerohan Campus, SM City Ecoland, NCCC Mall, S&R
Membership Shopping Center, Matina Town Square and southern areas of Davao
City. “Fitness Unlimited” Health Club is available for all ages.
Based on the survey conducted out of 400 respondents, there are

45.25% male and 54.75% female (Refer to figure 2.4). Among these
percentages, there are 54.50 % are students and 15.60% of them came from
Ateneo de Davao University, 58.25% from University of Mindanao (Matina
Campus) and 26.15% from University of Immaculate Conception. The other
43.00% are people who are employed, 63.74% among them are from Southern
Mindanao (Matina-Toril-Mintal), 32.96% from Downtown Area (Bankerohan-
Roxas-Gmall) and 3.30% from Northern Mindanao (Torres-Lanang-Sasa). And
lastly 2.50% are unemployed (Refer to figure 2.7). The survey results gives
94.50% people who wants to be physically fit, and 61.75% of them are not yet
enrolled into a certain gym (Refer to figure 2.8).
The following are the graphical representation of the results of the survey
conducted by the proponents: (See Appendix E for computations)
Gender
45.25% Male
54.75% Female
Figure 2.4 Graph on Respondents’ Gender

Age
4.25%
5.75% 16.75%
16 -18
13.00%
19-21
10.75% 22-25
35.75% 26-30
13.75%
Figure 2.5 Graph on Respondents’ Age
Occupation
2.50%
Student
43.00% Employed
54.50%
Unemployed
Figure 2.6 Graph on Respondents’ Occupation
Location
1.50%
15.00% 8.50%
AdDU
UM
31.75%
29.00% UIC
Southern Davao
14.25%
Figure 2.7 Graph on Respondents’ Location
Wants to be fit
5.50%
Yes
No
94.50%
Figure 2.8 Graph on Respondents’ Willingness to be Fit

Willing to enroll in a Health Club
13.75%
Yes
No
86.25%
Figure 2.9 Graph on Respondents’ Willingness to Enroll in a Health Club
Willing to buy fitness supplements
41.50% Yes
58.50% No
Figure 2.10 Graph on Respondents’ Willingness to Buy Fitness Supplements
Dance Studio Activities
14.29%
25.00% Yoga
Zumba
Dance Lessons
32.14%
Figure 2.11a Graph on Respondents’ Preferred Dance Studio Activities
Dance Studio Activities

6.41%
16.23% 28.46% Body Massage
Sauna
Body Wax
22.24%
26.65% Body Scrub
Figure 2.11b Graph on Respondents’ Preferred Spa Related Activities

2.2.2 Geographical Areas of Dispersion
PERCEPTUAL MAPPING
Accessibility to residents of
Major Competitors Affordability (y)
Southern Davao (x)
Metro Lifestyle and Fitness Center 4 3
Holiday Gym and Spa 4 4
Target Market 2 3
Assuming that 1 is the highest and 5 is the lowest.
Perceptual Mapping
5
4
Affordability
3
Metro
2
Holiday
1 Target Market
0
0 1 2 3 4 5
Accessibility to residents of Southern Davao
Figure 2.12 Perceptual Mapping
The proposed health club is located in Golden Matina Complex, McArthur

Highway Matina, Davao City, Philippines. It will be accessible to students,
employees, teenagers, adults and etc. in the Southern Area of Davao.
Furthermore, the place is in close proximity to University of Mindanao Matina
Campus, Ateneo de Davao University Matina Campus, University of Immaculate
Conception Bankerohan Campus, SM City Ecoland, NCCC Mall, S&R Membership
Shopping Center, Matina Town Square and southern residential areas of Davao
City.
Since Golden Matina Complex is a newly established commercial building.

It gives new opportunities to businesses that seek to operate within the southern
areas of Davao City. It will be a very advantageous for gym and spa business
because it is located at the center of big public and private establishments. In
terms of the affordability and accessibility, there is no immediate competitor
present.

2.2.3 Market Segmentation
The target market of the proposed health club can be segmented into
different types of people. For the purposes of this study, they will be classified
as students, employees, young adults (20 – 40 years old) and adults (40 years
old and up).
Type Description
 A person who attends school, college or
university; a person who studies
Students something (Meriam-Webster Dictionary)
 It comprises of people who attend
school in Davao City. People who came
from Davao City proper, and other
Provinces.
 On the average, a student has 10-12
hours vacant time for leisure and
4,000php – 5,000php Monthly
Allowance exclusive of miscellaneous
expenses.
 Target market for Gym, Dance Studio
and Fitness Supplements
Employees  A person who works for another person
or for a company for wages or a salary.
(Meriam-Webster Dictionary)
 On the average, an employee has 8-10
hours vacant time for leisure and
8,000php – 15,000php Monthly Salary.
 Target market for Gym, Spa, Dance
Studio and Fitness Supplements
Young Adults (20 – 40 years old)
 A person who has high spirit and
energy, it is so called the Golden Years
of Life.
 Young Adults are known to be extreme
in activities. They want to explore and
experience a lot of activities.
 Target market for Gym, Spa, Dance
Studio and Fitness Supplements

Adults (40 years old and up)
 Biologically, an adult is a human being

that has reached sexual maturity.
 Adults are more conscious on their

health.
 Target Market for Spa and Dance Studio
Table 2.2 Market Segmentation
2.3 Major Competitors
2.3.1 SWOT Analysis – Holiday Gym and Spa Davao
Strengths 1.) Sophisticated Equipment

2.) Location is accessible because it’s only located in
downtown area
3.) Only gym in Davao that offers boxing and basketball
court to gym users
4.) Already established their brand in the gym industry
Weakness 1.) High Membership fee
2.) Large volume of members
3.) Small space for large number of members
4.) More waiting time for users when using the equipment
Opportunities 1.) Expand in the future
2.) Develop customer loyalty
Threats 1.) Other established gyms in Davao City
2.) New and booming fitness activity like cross-fit
3.) Cheap membership fees of other local gyms
Table 2.3 SWOT Analysis: Holiday Gym and Spa

2.3.2 SWOT Analysis- Metro Lifestyle Davao
Strengths 1.) Almost complete gym equipment for all types of workout
2.) Location Accessibility
3.) Customer loyalty because of good service and promos
4.) One of the oldest business in the industry
Weakness 1.) Large volume of gym members (super crowded during
peak hours)
2.) Expensive membership fee
3.) More waiting time for users when using the equipment
4.) Gym equipment are already deteriorating
Opportunities 1.) Offer recreational activities like basketball, badminton,
swimming, etc.
2.) Expand and buy new set of equipment
Threats 1.) Other established gyms in Davao City
2.) New and booming fitness activity like cross-fit
3.) Cheap membership fee of local gyms.
Table 2.4 SWOT Analysis: Metro Lifestyle Davao
2.4 DEMAND
The demand for health and fitness has been continually rising for the past years.
According to Juanchit Jose (2014), “Filipinos started to become health-conscious as early
as 1995. The fitness industry is not going anywhere but up.” Health and Fitness in the
Philippines maintained its positive development in 2015, with the current value of sales
growth for the entirety of the market on a common level with 2013 and 2014. Products
connecting to health and fitness continued to perform very strongly in the Philippines in
2015.
Due to insufficient data available, the proponents projected the demand for the
first year of operations based on the survey conducted with 400 total respondents. Out
of the total respondents, 345 respondents are willing to become members of the health
club, and this number is used for the demand of the gym area for the first year. It is
because the membership fee of the health club is also the payment needed to use the
gym area of the business. Also, 234 respondents are willing to buy the supplements that
will be sold in the health club. In the spa area of the health club, the survey results are
142 respondents for body massage, 133 respondents for sauna, 111 respondents for
body wax, 81 respondents for body scrub, and 32 respondents for foot spa. In the dance

studio of the health club, 162 respondents are willing to try yoga, 154 respondents are
willing to try zumba, and 166 respondents are willing to try having dance lessons. These
results for both the spa and dance studio of the health club are assumed to be the walk-
in customers of the health club. (See Appendix N)
For future operations, the proponents used the growth rates decided to rely on
the growth rates determined by the study of Digital Market Outlook (2016) for
gym/fitness center, Philbeute (2014) for therapeutic massage and spa, and Maltz and
Saljoughian (2013) for the dance studio. Since the dance studio and gym supplements
are relatively new in the industry, the Trading Economics’ established growth rate was
used. (Refer to 2.4.3 Projected Demand)
2.4.1 Factors Affecting Demand
The following are some of the factors that currently affect the demand of the
fitness industry:
 There is growth in the demand because of the high pressure lifestyles that the
society has and the stress it puts on the bodies and brains of the citizens.
 The aging population has both a negative and positive effect on the demand.
The baby boom generation is growing older and trying to love longer, and their
doctors are recommending them to remain active. Unfortunately, they have the
tendency to stay away from commercial gyms for they are looking for an
environment that supplies privacy and an old-fashioned level of customer service.
 The obesity among adults and children also greatly affects the rising demand of
the fitness industry. Nowadays, there is a need for fitness professionals to
provide health and fitness services to help the against the obesity epidemic.
 There is also a growing trend toward social networking in the health and fitness
world and websites that provide information on tracking workouts.
 Multinational companies and manufacturers continues to develop new products
that are both healthy and also offered at a greater convenience to consumers.

2.4.2 Past Demand of Competitors
2.4.2.1 Gym/Fitness Center
The past demand for the gym is based on the 2011 to 2015 membership
of ML Fitness Gym, located at Damosa, Davao City. (Refer to Appendix N for
Computations)
Past Demand - ML Fitness Gym

2011 2012 2013 2014 2015
Members 51 63 79 101 129
Growth 23.53% 25.40% 27.85% 27.72%
Average Growth Rate 26.12%
Table 2.5 Past Demand of ML Fitness Gym
2.4.2.2 Therapeutic Massage and Spa
The past demand is based on the 2011 to 2015 customers of Happy

Massage and Spa, located at McArthur Highway, Matina Crossing, Davao City.
(Refer to Appendix N for Computations)
Past Demand - Happy Massage and Spa

2011 2012 2013 2014 2015
Customers 225 245 264 281 302
Growth 8.89% 7.76% 6.44% 7.47%
Table 2.6 Past Demand - Happy Massage and Spa
2.4.2.3 Dance Studio
The past demand for the dance Studio is based on the 2011 to 2015
membership of KITE Dance Studio. Since it is considered fairly new in the
industry, the expected growth rate is 7% per annum. (Maltz and Saljoughian,
2013) (Refer to Appendix N for Computations)
Past Demand (Previous 5 Years)

2011 2012 2013 2014 2015
Members 110 118 126 135 145
Growth 7.27% 6.78% 7.14% 7.41%
Table 2.7 Past Demand –Kite Dance Studio

2.4.2.4 Gym Supplements
Buy and sell of gym supplement is fairly new in the industry, thus the
expected growth rate is 7% per annum. (Maltz & Saljoughian, 2013 and Trading
Economics, 2016)
2.4.3 Projected Demand
Eight out of the top ten products in the market had health and fitness as
their main function. (Euromonitor International, 2016) According to a study done
by the Digital Market Outlook (2016), the revenue in the fitness segment is
expected to show an annual growth rate of 26.37% for the years 2016 to 2020.
In the article created by Philbeaute (2014), the Philippine cosmetics industry
registered an average growth rate of 7.7% per year. Since the retail of
supplements and use of dance studio is fairly new, the proponents used the
industry growth rate of 7% per annum, which is the standard growth rate for new
businesses and establishments. (Maltz and Saljoughian, 2013) According to
Trading Economics (2016), the average growth rate of new businesses in the
Philippines grew to an annual 7.0% in the second quarter of the Philippines that is
higher than the average growth rate of 6.8% from the previous year. This data
was reported by the Philippine Statistical Coordination Board.
Philbeaute or The Philippines International Beauty, Spa and Wellness Show

is the biggest showcase of international beauty, spa, health and wellness
companies in Asia, including China, Japan, Korea, Taiwan, Malaysia, Singapore
and Thailand, in the Philippines. It is where the industry of beauty, spa, health
and wellness gather to network and get updated on the trends of the industry.
They also conduct studies on the countries that will host their showcases.
Digital Market Outlook is a convenient web tool designed for marketing

and business development professionals, who want reliable, comprehensive and
immediate access to the most recent market data. They conduct primary
researches, preselect and compare the most reliable data sources available in the
market.

Upon careful evaluation of the aforementioned studies, the proponents
decided to rely on the growth rates in terms of projecting the demand. To prove
that these rates are applicable in Davao City particularly in the southern areas, a
historical data of relative businesses in the city with the same nature are being
gathered. The trend of the rates for the past demand of respective businesses is
relatively similar to the rates provided in the studies, thus the proponents decided
to use these rates in determining the future demand. (See 2.4.2 Past Demand
and Appendix O)
The projected demand is shown in Table 2.6 below for the gym assuming
that industry growth rate of 26.37% per annum, based on a study made by the
Digital Market Outlook (2016), is used.
Projected Demand (in 5 years)

Percentage of
Members Changes MEMBERSHIP FEE TOTAL
Change
2016 345 ₱ 1200.00 ₱ 4,968,000.00
2017 436 91 26.37% ₱ 1200.00 ₱ 6,278,062.00
2018 551 115 26.37% ₱ 1200.00 ₱ 7,933,586.00
2019 696 145 26.37% ₱ 1200.00 ₱ 10,025,673.00
2020 880 184 26.37% ₱ 1200.00 ₱ 12,669,443.00
2021 1112 232 26.37% ₱ 1200.00 ₱ 16,010,375.00
Table 2.8 Projected Demand for Gym
The projected demand is shown in Table 2.7 below for the spa assuming
that industry growth rate of 7.70% per annum, based on the study made by
Philbeaute (2014), is used.

Percentage
SERVICES Members Changes PRICE TOTAL
of Change
2016 Body Massage 142 ₱ 300.00 ₱ 511,200.00
Sauna 133 ₱ 380.00 ₱ 606,480.00
Body Wax 111 ₱ 400.00 ₱ 532,800.00
Body Scrub 81 ₱ 500.00 ₱ 486,000.00
Foot Spa 32 ₱ 200.00 ₱ 76,800.00
2017 Body Massage 153 11 7.7% ₱ 300.00 ₱ 550,562.00
Sauna 143 10 7.7% ₱ 380.00 ₱ 653,179.00
Body Wax 120 9 7.7% ₱ 400.00 ₱ 573,826.00
Body Scrub 87 6 7.7% ₱ 500.00 ₱ 523,422.00
Foot Spa 34 2 7.7% ₱ 200.00 ₱ 82,714.00
2018 Body Massage 165 12 7.7% ₱ 300.00 ₱ 592,956.00
Sauna 154 11 7.7% ₱ 380.00 ₱ 703,474.00
Body Wax 129 9 7.7% ₱ 400.00 ₱ 618,010.00
Body Scrub 94 7 7.7% ₱ 500.00 ₱ 563,725.00
Foot Spa 37 3 7.7% ₱ 200.00 ₱ 89,083.00
2019 Body Massage 177 13 7.7% ₱ 300.00 ₱ 638,613.00
Sauna 166 12 7.7% ₱ 380.00 ₱ 757,641.00
Body Wax 139 10 7.7% ₱ 400.00 ₱ 665,597.00
Body Scrub 101 7 7.7% ₱ 500.00 ₱ 607,132.00
Foot Spa 40 3 7.7% ₱ 200.00 ₱ 95,942.00
2020 Body Massage 191 14 7.7% ₱ 300.00 ₱ 687,787.00
Sauna 179 13 7.7% ₱ 380.00 ₱ 815,980.00
Body Wax 149 11 7.7% ₱ 400.00 ₱ 716,848.00
Body Scrub 109 8 7.7% ₱ 500.00 ₱ 653,882.00
Foot Spa 43 3 7.7% ₱ 200.00 ₱ 103,329.00
2021 Body Massage 206 15 7.7% ₱ 300.00 ₱ 740,746.00
Sauna 193 14 7.7% ₱ 380.00 ₱ 878,810.00
Body Wax 161 11 7.7% ₱ 400.00 ₱ 772,045.00
Body Scrub 117 8 7.7% ₱ 500.00 ₱ 704,230.00
Foot Spa 46 3 7.7% ₱ 200.00 ₱ 111,286.00
Table 2.9 Projected Demand for Spa
The projected demand is shown in Table 2.8 below for the service catered
by our dance studio assuming that industry growth rate of 7.00% per annum,
based on the study made by Maltz and Saljoughian (2013), is used. The price
used in the projected demand is the price that the costumers are willing to pay
based on the prices available in the market.

Percentage
SERVICES Member Changes PRICE TOTAL
of Changes
2016 Zumba 154 ₱ 400.00 ₱ 739,200.00
Yoga 162 ₱ 400.00 ₱ 777,600.00
Dance Lessons 166 ₱ 350.00 ₱ 697,200.00
2017 Zumba 165 11 7% ₱ 400.00 ₱ 790,944.00
Yoga 173 11 7% ₱ 400.00 ₱ 832,032.00
Dance Lessons 178 12 7% ₱ 350.00 ₱ 746,004.00
2018 Zumba 176 12 7% ₱ 400.00 ₱ 846,310.00
Yoga 185 12 7% ₱ 400.00 ₱ 890,274.00
Dance Lessons 190 12 7% ₱ 350.00 ₱ 798,224.00
2019 Zumba 189 12 7% ₱ 400.00 ₱ 905,552.00
Yoga 198 13 7% ₱ 400.00 ₱ 952,593.00
Dance Lessons 203 13 7% ₱ 350.00 ₱ 854,100.00
2020 Zumba 202 13 7% ₱ 400.00 ₱ 968,940.00
Yoga 212 14 7% ₱ 400.00 ₱ 1,019,275.00
Dance Lessons 218 14 7% ₱ 350.00 ₱ 913,887.00
2021 Zumba 216 14 7% ₱ 400.00 ₱ 1,036,766.00
Yoga 227 15 7% ₱ 400.00 ₱ 1,090,624.00
Dance Lessons 233 15 7% ₱ 350.00 ₱ 977,859.00
Table 2.10 Projected Demand for Dance Studio
The projected demand is shown in Table 2.9 below for the retail of
supplements assuming that industry growth rate of 7.00% per annum, based on
the study made by Maltz and Saljoughian (2013), is used. The price used in the
projected demand is the price that the buyers are willing to pay according to the
survey, since the demand of each specific type of supplement is highly
improbable to obtain through surveying.

Percentage of
BUYERS Changes PRICE TOTAL
Change
2016 234 ₱ 2,000.00 ₱ 24,336,000.00
2017 250 16 7% ₱ 2,000.00 ₱ 26,039,520.00
2018 268 18 7% ₱ 2,000.00 ₱ 27,862,286.00
2019 287 19 7% ₱ 2,000.00 ₱ 29,812,646.00
2020 307 20 7% ₱ 2,000.00 ₱ 31,899,532.00
2021 328 21 7% ₱ 2,000.00 ₱ 34,132,499.00
Table 2.11 Projected Demand for Gym Supplements

The regression method is used to determine whether there are any outliers in
the future demand. There are no outliers in the projected demand. (See Appendix O for
computation)
2.5 SUPPLY
As of 2016, there is only one existing fitness center which is not well established
entirely. The said fitness center is located in Matina Crossing. Thus, for the past five
years since 2011, only the said fitness center is readily accessible to the customers
located in the southern area of Davao City. This is also why some of these customers
avail the services of fitness centers located in the northern area of Davao City. Given this
data, the projected supply or capacity from 2016 to 2021, assuming that the number of
fitness centers available in the Southern Area of Davao is constant, the available
capacity of fitness centers would remain unchanged at 100%.
For the retail of supplements, the supply will also be 100% for the next five
years assuming that no other fitness center would offer supplements within their
respective establishments.
Supply/Capacity
120%
100%
80%
60%
40%
20%
0%
2016 2017 2018 2019 2020 2021
Figure 2.13 Supply for gym supplements
2.6 DEMAND SUPPLY ANALYSIS
To show that the industry has enough demand and supply for the prospective
fitness center to be established, a demand-supply analysis was done.
(Refer to Appendix P)

120%
100%
80%
Supply
60%
Demand
40%
20%
0%
Figure 2.14 Demand and Supply Analysis for Gym
Data was produced assuming that the total capacity of the gym is 2,500 members only.
2.6.2 Therapeutic Massage and Spa
120%
Supply
100%
Body Massage
80%
60% Sauna
40% Body Wax
20% Body Scrub
0%
Foot Spa
2016 2017 2018 2019 2020 2021
Figure 2.15 Demand and Supply Analysis for Spa
The chart was produced assuming that the capacity of the spa is 250 customers only.
2.6.3 Gym Supplements
120%
100%
80%
60% Supply
40% Demand
20%
0%
2016 2017 2018 2019 2020 2021
Figure 2.16 Demand and Supply Analysis for Gym Supplements
Data was produced assuming that the supply capacity is only 400 buyers.

2.6.4 Dance Studio
120%
100%
80% Supply
60% Zumba
Yoga
40%
Dance Studio
20%
0%
2016 2017 2018 2019 2020 2021
Figure 2.17 Demand and Supply Analysis for Dance Studio
Data was produced assuming that the dance studio’s capacity is only 300 members.
2.7 PRICE STUDY
Fitness Unlimited Health Club offers spa and gym services with fitness programs
like Zumba, yoga, and dance lessons. Moreover, the business attempts to provide an
unforgettable experience for its customers by providing high-end gym equipment, bigger
dance studio and more space for the spa to accommodate customers simultaneously.
Being the first and only fitness center to sell fitness supplements is an advantage.
However, having this first mover strategy is not an assurance of the non-existence of
competitors as these services are already offered but just not on the same business
establishment. The following are the identified major competitors:
2.7a Gym/Fitness Center
2.7a.1 Metro Lifestyle Fitness Center
Metro Lifestyle Fitness Center Davao is like an all-in fitness center as they
have various equipment available for use. The clients have just about almost
anything they need. The location is also very convenient since it is located in the
center of the city.

Metro Lifestyle Fitness Center Regular Rates (Membership Fee)
One Month ₱ 1,700.00/person
Three Months ₱ 4,500.00/person
Six Months ₱ 8,000.00/person
Annual ₱ 14,000.00/person
Table 2.12 Metro Lifestyle Davao Gym Rates
2.7a.2 Holiday Gym & Spa
Holiday Gym & Spa Davao is just a few meters away from Metro Lifestyle
Fitness Center. This place offers value for money. The clients are bestowed with
an array of benefits in exchange for their money. Holiday gym & spa is the most
popular establishment to offer boxing in Davao City.
Holiday Gym & Spa Davao Regular Rates (Membership Fee)

Table 2.13 Holiday Gym & Spa Gym Rates
2.7a.3 Planet Infinity
Planet Infinity Davao is also a high-end gym to date. It’s not as big as the
other gyms but offers the latest facilities. The rates already include body fat,
muscle & fitness analysis and a personalized exercise program. These perks will
help you have the most suitable and effective program for the client’s body type.
Planet Infinity Davao Regular Rates (Membership Fee)

Table 2.14 Planet Infinity Gym Rates

2.7b Therapeutic Massage and Spa
2.7b.1 Holiday Gym & Spa
Holiday Gym and Spa Regular Rates

Oil Massage/Aroma Therapy (60 Mins) ₱ 450.00/session
Oil Massage/Aroma Therapy (90 Mins) ₱ 650.00/session
Stone Massage (60 Mins) ₱ 500.00/session
Ventosa Massage (60 Mins) ₱ 500.00/session
Slimming Massage (90 Mins) ₱ 650.00/session
Foot Massage (60 Mins) ₱ 300.00/session
Foot Spa (60 Mins) ₱ 320.00/session
Foot Spa (90 Mins) ₱ 480.00/session
EAR CANDLING ₱ 450.00/session
BODY SCRUB ₱ 800.00/session
Table 2.15 Holiday Gym & Spa Rates
All services include Sauna, Jacuzzi (for men only) & shower.
2.7b.2 K1 Spa
K1 Spa Regular Rates
Body Massage Services
Body massage (1hr) ₱ 300.00/session
Aroma Body massage (1hr) ₱ 350.00/session
Twin Massage (1hr) ₱ 500.00/session
Ventosa massage (1hr & 15min) ₱ 500.00/session
Body Scrub Services
Milk salt ₱ 500.00/session
Chocoloco ₱ 500.00/session
Coffee ₱ 550.00/session
Oatmeal ₱ 550.00/session
Honey and sugar ₱ 550.00/session
Spa Packages
Pack1 – foot scrub and foot massage ₱ 400.00/session
Pack 2 – organic facial and special foot massage ₱ 450.00/session
Pack 3 – deep cleansing facial and foot scrub ₱ 430.00/session
Pack 4 – aroma body massage and foot scrub ₱ 530.00/session
Pack 5 – body scrub (Milksalt) and foot scrub ₱ 680.00/session
Table 2.16 K1 Spa Rates

2.7c Dance Studio
2.7c.1 Metro Lifestyle Center Davao

Metro Lifestyle Fitness Center Davao also offers Dance Studio services.
However, they offer it exclusively to walk-in costumers paying separate rate from
their membership fee in the fitness center.
Metro Lifestyle Fitness Center Davao - Dance Studio Rate

Small Dance Studio ₱ 800.00/hour
Big Dance Studio ₱ 1000.00/hour
Salary of Part time Instructor ₱ 400.00/hour
Salary of Full time Instructor ₱ 500.00-600.00/hour
Table 2.17 Metro Lifestyle Fitness Rates
2.7c.2 KITE Dance Studio
KITE Dance Studio Rates
Weekdays Dance Class Weekends Dance Class
Genre Rate Genre Rate
Hip-hop ₱ 2000.00 / month Hip-hop ₱ 1500.00 / month
Jazz ₱ 2001.00 / month Jazz ₱ 1501.00 / month
Dance sport ₱ 1501.00 / month
Walk-in: ₱ 200.00/ Session
Table 2.18 KITE Dance Studio Spa Rates
2.7d Gym Supplements
2.7d.1 Happy Fit Nutrition Hub
Located in F.Torres street Davao City, the Happy Fit Nutrition Hub can be
your choice in buying gym supplements. They also offer healthy shakes, drinks
and food are on the go. You can dine in while you enjoy your supplements.
Happy Fit Nutrition Hub – Rates for Supplements
Product Description Price
Hydrox (100tablets) Next Generation ₱ 1700.00
Elite ₱ 2300.00
Mutant Mass 5lbs ₱ 1600.00
15lbs ₱ 2900.00
C4 Ripped ₱ 1700.00
MP Combat Powder 4lbs ₱ 2300.00
Optimum Nutrition Whey 5lbs ₱ 3000.00
Promatrix Mass 6lbs ₱ 2200.00
Table 2.19 Happy Fit Nutrition Hub – Rates for Supplements

2.7d.2 GNC Davao
GNC is the world's largest manufacturer and retailer of nutritional
supplements (also known as natural health food products) such as vitamins,
minerals, herbal, beauty, wellness supplements, preventive nutrition, diet, weight
management and sports nutrition products. In the Philippines, GNC is the largest
health food specialty retail store with over 30 branches nationwide strategically
located in major malls. GNC Davao are located in SM Lanang and SM City Davao.
GNC Davao Rates
Product Description Price
Optimum Nutrition Whey 2lbs ₱ 1999.00
5lbs ₱ 2499.00
Optimum Nutrition Serious Mass 6lbs- ₱ 2299.00
MP Combat Powder 2lbs- ₱ 1999.00
4lbs- ₱ 2599.00
C4 Regular ₱ 1899.00
C4 - Ripped (50 x 45 servings) ₱ 2699.00
Table 2.20 –GNC Davao Rates
2.7.2 Methods of Setting Price

Based on the interview conducted with the aforementioned companies,
the proponents became aware of the following information concerning their
pricing strategy:
In setting the membership of the fitness center, the proponents decided

to use the result of the survey conducted and referred also to Price Anchoring
Method. According to the survey, majority of the respondents are willing to pay a
price within the range of P1200-P1500. This result can be associated with the
Price Anchoring Method that explains the tendency where people prefer the
“middle” price range when being asked to choose among price ranges. While in
Price Anchoring Method, people tend to choose the average “middle” price based
on the highest price set in the market. The proponents used the minimum price
offered by our competitors and set our price in the middle to make it more
attractive.

Fitness Unlimited Health Club Regular Rates (Membership Fee)
Table 2.21 Proposed Gym Rates
Prices were set out using Penetration Pricing wherein the business sets a
low price to increase sales and market share. The most preferable time to use
this method is when the business has a lot of competition within close
proximities. As compared to the prices of the competitors mentioned above, the
prices set out by the proponents are lower, to gain more competitive advantage
and attract more customers.
Fitness Unlimited Health Club Regular Spa Rates

Whole body massage (1hr) ₱ 300.00/session
Whole body massage w/ Sauna (1hr) ₱ 380.00/session
Whole body massage w/ hot stone (1hr) ₱ 400.00/session
Swedish massage (1hr) ₱ 400.00/session
Dry massage (1hr) ₱ 500.00/session
Back massage (1hr) ₱ 300.00/session
Back massage (30min) ₱ 200.00/session
Foot massage (1hr) ₱ 300.00/session
Foot massage (30min) ₱ 200.00/session
Foot massage w/ Paraffin Wax (30min) ₱ 300.00/session
Hand Paraffin Wax w/ slight massage (30min) ₱ 300.00/session
Foot spa w/ Paraffin Wax ₱ 300.00/session
Foot spa ₱ 200.00/session
Foot blush ₱ 150.00/session
Body Scrub ₱ 500.00/session
Table 2.22 Proposed Spa Rates
Prices were set out using Full Cost Pricing wherein all relevant variable
costs in setting a products price and allocates the fixed costs not directly
attributed to the service. The following rates are applicable only to walk-in
customers during vacant hours. Members of the fitness center whose
membership profile was already set in the database system has unlimited access
to the dance studio until the membership expires.

Fitness Unlimited Health Club Regular Dance Studio Rates
Zumba ₱ 400.00/session
Yoga ₱ 400.00/session
Dance Classes ₱ 350.00/session
Table 2.23 Proposed Dance Studio Rates
Prices were set out using Cost Plus Pricing wherein the business uses a
base-cost figure per unit and adds a markup to cover unassigned costs and to
provide a profit. Gym Supplements shall be bought from suppliers then sold at
a markup price for each product.
FITNESS UNLIMITED HEALTH CLUB – Gym Supplements

Product Product Cost Mark Up Selling Price
Gold Standard ON Whey (5 lb) ₱ 3200.00 ₱ 300.00 ₱ 3,500.00
Mutant Mass (5 lb) ₱ 1800.00 ₱ 200.00 ₱ 2000.00
Mutant Mass (15 lb) ₱ 3200.00 ₱ 300.00 ₱ 3,500.00
MP Combat Powder (4 lb) ₱ 2500.00 ₱ 500.00 ₱ 3,000.00
MP Combat Powder (2 lb) ₱ 1750.00 ₱ 500.00 ₱ 2,250.00
Hydrox (100 caps) ₱ 1800.00 ₱ 200.00 ₱ 2000.00
Table 2.24 Proposed Gym Supplements Rates
2.8 MARKETING PROGRAM
2.8.1 Service Features
 Cardiovascular equipment - One of the considerations of the gym users in

choosing the gym is the quality of the cardiovascular equipment. The business
offers a variety of cardiovascular equipment for gym users to assure better gym
experience.
 Dance Studio – The Dance Studio shall be used as an avenue for those who
want to try fitness programs like Zumba and Yoga. There can also be exclusive
dance lessons for walk-in customers and dance tutorials for registered dance
crews.

 Wi-Fi Access – The business will provide the customers an access to the
internet. Wi-Fi routers will be placed in selected areas of the gym. With this,
gym users can update their acquaintances about their gym experience by
posting online. The business shall offer wireless internet for clients who are
staying in the reception area and most parts of the gym. Routers will be placed
in selected areas where gym users can share in real time their experiences.
 Locker Area- To assure the safety of the clients’ belongings, there will be
lockers for the gym and studio users. Respective keys will be given to users to
avoid theft and loss of belongings.
 Spa Services – Together with the gym services, the business also offers spa
services for those clients who want to relax and pamper themselves after a
tiring workout in the gym. Members are given a number of free services if they
will avail of the spa services, for example, each member can avail 5 free
massages per month. Walk-in clients are also accepted.
 Fitness Supplements – directly selling fitness supplements inside a fitness

center is an advantage. Most of the gym users are having a hard time finding a
supplement store for their needed supplements. The business wants to take
away that hassle and conveniently offer them what they need.
 Women only gym – There is a part in the gym that is exclusive for our
conservative gym users. This will help them focus on their workout and will not
be bothered by other people looking at them.
2.8.2 Advertisement and Promotion
 Word of Mouth - According to the survey conducted, most of the respondents

prefer word of mouth as their main source of information. With this, the
business must develop a relationship with their customers to turn them into
loyal advocates to improve public image.
 Flyers – These would contain the features and rates of the services offered by
the business. These would be given out to different schools and public places
to widen the range of the promotional areas. This way, potential customers

who do not have access to the internet or do not have a Facebook account can
know the business’ features and rates. The flyers would also be available in the
reception area to be readily accessible by walk-in customers or new customers.
This strategy would not render high amount of advertising costs, since it would
be the main promotional strategy of the business.
Figure 2.18 Sample Flyers

 Facebook page – Features and rates of the services offered by the business
could be accessed on their official Facebook page. This strategy gives a big
advantage to the business because it reduces advertising cost. In today’s
generation, social media has become the primary source of information for most
people. Thus, the use of Facebook in advertising will influence a lot of probable
clients. Moreover, it would also be helpful to encourage clients to post current
updates in the official Facebook page to share their experience.
Figure 2.19 Facebook Page

 Automated Reminders for a Gym/Spa Visit- one of the features of mobile
phones is that they allow us to send scheduled messages. The company may
want to take advantage of this feature as this would help in promoting the
services of the business and would help the clients keep track of their gym and
spa visits. As for the gym members, we want them to be updated as to when
they had their last workout session so we will send them reminders. And as for
the spa clients, knowing that spa sessions does not require visits as frequent as
that of the gym, sending the customers scheduled messages reminds them that
the business still exists.
In the long-run, when the company already has enough cash inflows to
finance an more costly advertising, the company will resort to the following
marketing strategies.
 Sponsor a Body Builder or an Athlete- another way of advertising is to

sponsor an athlete or someone who can promote the business’ name wherever
he/she goes. To sponsor an athlete who works out in Fitness Unlimited Health
Club would bring the company’s identity to competitions thus making its
services known to many.
 Sponsor a Competition- nowadays, body building become so popular

especially that many people have been so conscious about their health. The
company may want to use this trend to its advantage. In the long run, the
business can sponsor such competitions. It can collaborate with other gym
businesses in the city and organize activities like this.
 Barkada or Family Promos- people love discounts and/or freebies. In order

to entice more customers, the business plans to offer discounts and/or freebies
to a group or friends or a family who could bring more members. The business
could offer barkada or family packages that would fit them.
 Refer a Friend- the company could also offer an incentive to current clients
who could bring another friend. Say for example, if a gym user could encourage
three friends to subscribe in the gym for three months that said gym user could
have his/her one month gym subscription free.

Chapter 3
Technical Feasibility
This chapter encompasses the details needed for establishing the business. It covers
the operating costs and materials needed for the day-to-day process. Furthermore, this will
serve as the blueprint for it discusses the technical requirements needed for the renovation of
the facility, materials and labor needed, and the process of the service that will serve as guide
for daily operations.
3.1 THE PRODUCT AND SERVICE
There are three main services the business offers and one product that the firm
sells. First is gym services which is located on the second floor of the building. It boasts
of 409 sq. meters of space which is significantly larger in space than most gyms. This is
no ordinary gym, unlike other gym establishments around downtown and South of
Davao City, it is complete with sophisticated equipment and urbane locker rooms and
shower. In addition, the establishment employ competent personnel that would cater to
the needs of the customers.
The second service the business offers is the spa. Similar to the gym, it also
boast with its large space, which is bigger than most spa around Davao. This is why
most services offered by spa are more than most of the services offered by spas around
Davao. One of the facilities offered by the spa is the sauna, there are few spas around
Davao City that has this facility.
The dance studio is the third service the firm will offer. It is located at the first
floor of the building beside the spa. Yoga and Zumba dances as well as modern dances
shall be rendered by hiring dance instructors. During vacant hours, walk in costumers
can also avail in using the studio. Members of the Health Club can avail unlimited
services from the dance studio while non-members referred as walk in costumers shall
be a separate rate per hour.
Finally, the business shall also sell gym supplements for those who wish to avail.
These products are not exclusive for gym members. Even walk in costumers can buy the
said product. So far, there is only one well-established store for gym supplements here

in Davao City and was recently launched as well. Most of those who wish to avail makes
an online purchase. Hence, the business shall engage in direct selling of these gym
supplements to the target market.
3.2 PRODUCTION/SERVICE PROCESS
The Client will inquire with the Receptionist about his/her interest of
being a member of the establishment. The Receptionist will then give the Client a
registration form for him/her to fill-up. After completing the registration form, the
Client will give the form back to the Receptionist along with the corresponding
payment for the membership. The Receptionist shall transfer the Client’s
information from the registration form to the database of the establishment to
set up the Client’s member profile. When the transfer is done, the Receptionist
will then sign-up the Client in the establishment’s biometrics system so that the
Client will be able to avail of his/her privileges as a member of the establishment.
After all the inquiry, registration, payment, database transfer, and the biometrics,
the Client is now ready to use his/her privileges as a member of the
establishment.
CLIENT FILL-UP REGISTRATION FORM +

PAYMENT OF MEMBERSHIP +
OFFICIAL RECEIPT
RECEPTIONIST
ENTERS CLIENT’S INFORMATION IN
THE DATABASE
SIGN-UP FOR THE

BIOMETRICS
CLIENT IS NOW A MEMBER
Figure 3.1 Process Flow Diagram – Gym/Fitness Center

3.2.2 Therapeutic Massage and Spa Process Flow Diagram
The Client will inquire to the Receptionist about his/her interest in availing
the Spa Services. The Receptionist shall tell him/her the mechanics and rates
when availing the Spa Services. The Client then will pay such rate to the
Receptionist who will then issue an official receipt to serve as evidence of the
transaction and give the original to the Client and keep the duplicate for auditing
purposes. After the payment, the Receptionist will then assist the Client to the
spa area and introduce him/her to a Spa Therapist available at the time for the
availing of the Spa Services offered by the establishment.
CLIENT PAYMENT FOR USE OF SPA SERVICES

+ OFFICIAL RECEIPT
RECEPTIONIST
ASSIST CLIENT TO THE SPA +
INTRODUCE TO SPA THERAPISTS
CLIENT CAN NOW AVAIL OF

SPA SERVICES
Figure 3.2 Process Flow Diagram - Spa
3.2.3 Dance Studio Process Flow Diagram
The Client will inquire to the Receptionist about his/her interest in availing
of the Dance Studio. The Receptionist shall tell him/her the mechanics and rates
when availing of the dance studio. The Client then will pay such rate to the
Receptionist who will then issue an official receipt to serve as evidence of the
transaction and give the original to the Client and keep the duplicate for auditing
purposes. After the payment, the Receptionist will then assist the Client to the
dance studio for the availing of the dance lessons offered by the establishment.
This process only applies to walk-in customers or those clients that do not avail

to the membership privileges of the club. Members can automatically access the
dance studio without undergoing the process below.
CLIENT PAYMENT FOR USE OF DANCE STUDIO

+ OFFICIAL RECEIPT
RECEPTIONIST
ASSIST CLIENT TO THE DANCE

STUDIO
CLIENT CAN NOW USE

DANCE STUDIO
Figure 3.3 Process Flow Diagram – Dance Studio
3.2.4 Gym Supplements Process Flow Diagram
The Client will inquire to the Receptionist about his/her interest in buying
the gym supplements. The Receptionist shall tell him/her the prices of the gym
supplements. The Client then will pay such price to the Receptionist who will
then issue an official receipt to serve as evidence of the transaction and give the
original to the Client and keep the duplicate for auditing purposes. After the
payment, the Receptionist will then give the gym supplements the Client bought.
CLIENT PAYMENT FOR BUYING GYM

SUPPLEMENTS + OFFICIAL RECEIPT
RECEPTIONIST
GIVE CLIENT THE GYM SUPPLEMENTS
BOUGHT
Figure 3.4 Process Flow Diagram – Gym Supplements

3.3 FACILITY SIZE/OPERATION SCHEDULE
3.3.1 Daily Time Schedule for Receptionist
Time Monday Tuesday Wednesday Thursday Friday Saturday Sunday

6:00 - 10:00
10:00 - 2:00
2:00 - 6:00
6:00 - 10:00
Table 3.1 Daily Time Schedule for Receptionist
Legend: Receptionist 1
Receptionist 2
3.3.2 Daily Time Schedule for Gym Instructors
Monday Tuesday Wednesday Thursday Friday Saturday Sunday

8:00 - 12:00 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3
11:00 - 3:00 4 5 6 4 5 6 4 5 6 4 5 6 4 5 6 4 5 6 4 5 6
2:00 - 6:00 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3
5:00 - 9:00 4 5 6 4 5 6 4 5 6 4 5 6 4 5 6 4 5 6 4 5 6
Table 3.2 Daily Time Schedule for Gym Instructors
Legend: First Shift
Second Shift
3.3.3 Daily Time Schedule for Dance Instructor
Time Monday Tuesday Wednesday Thursday Friday Saturday Sunday

6:00 -8:00
10:00 - 12:00 VACANT
12:00 - 1:00 LUNCH BREAK
1:00 - 4:00 VACANT
4:00 - 6:00
6:00 - 8:00
Table 3.3 Daily Time Schedule for Dance Instructor
Legend:
Zumba Dance Instructor
Yoga Instructor
Dance Instructor

3.3.4 Daily Time Schedule for Spa Services
Monday Tuesday Wednesday Thursday Friday Saturday Sunday

3:00 - 7:00
7:00 - 7:30 Dinner Break
7:30 - 10:00
Table 3.4 Daily Time Schedule for Spa Services
Legend:
Spa Therapists (5)
3.4 FACILITY LOCATION
The main site of the business is located in MacArthur Highway, Matina, Davao
City. The two-storey commercial space is available in Golden Matina Complex expected
to operate in the last quarter of 2016.
Figure 3.5 Satellite Map Location

Figure 3.6 2D Map Location
The spa along with the dance studio is located on the first floor with exactly 407
square meters while the fitness gymnasium is located at the second floor with 407
square meters as well. The said site was chosen because it is easily accessible to the
target market, with three universities located near the site namely University of
Mindanao, University of Immaculate Concepcion - Bangkerohan Campus and Ateneo de
Davao University as well as shopping centers particularly NCCC Matina, SM Ecoland and
S&R Membership Shopping Center.

3.5 FACILITY LAYOUT
3.5.1 First Floor: Spa and Dance Studio Center Area: 407 m2
Figure 3.7 Ground Floor Facility Layout

Legend: 1 Lobby 7 Body Wax and Body Scrub Room 11 Supply Room/Maintenance
2 Reception Desk 7a Dressing Area - Body Scrub/Wax 12 Dance Studio
3 Lounge 8 Sauna 13 Dressing Area - Men
4 Supplements Area 8a Dressing Area - Sauna 14 Dressing Area - Women
5 Foot Spa Area 8b Shower Area - Sauna 15 Toilet for Men
6 Body Spa Room 9 Toilet for Women 16 Toilet for Women
6a Dressing Area - Body Spa 10 Toilet for Men 17 Lockers for Women
18 Lockers for Men
3.5.2 Second Floor: Fitness Gymnasium Area: 407 m2
Figure 3.8 Second Floor Facility Layout

Legend:
1 Low-Impact Treadmill 10 Bicep Curl 19 Flat Bench
2 Elliptical Cross-trainer 11 Leg Extension or Leg Curl 20 Multi-purposed Bench
3 Adoptive Motion Trainer 12 Inner/ Outer Thigh 21 Vertical Knee Raise
4 Recumbent Bike 13 Abdominal/Back Extension 22 Back Extension
5 Upright Bike 14 Leg Press/Calf Extension 23 Olympic Flat Bench
6 Stretch Trainer 15 Adjustable Cable Cross Over 24 Olympic Incline Bench
7 Multi-Press 16 Glide Functional Trainer 25 Olympic Decline Bench
8 Rear Delt or Pec Fly 17 Switch Machine 26 Seated Preacher Curl
9 Lat Pulldown or Seated Row 18 Angled Leg Press 27 Super Bench
28 Rubberized Dumbbells (5-100 lbs)
3.6 MACHINERY AND EQUIPMENT
3.5.1 Furniture and Fixtures
Name/Photo of
Description Qty Price Amount
Equipment
Purifies the room even to
Panasonic the smallest deatil with
Airconditioning Unit removal of particles
with basic inverter feature and deactivation
of adhesive micro- 3
₱ 32,998.00 ₱ 98,994.00
organisms. with 5-star pcs
enery rating along with
Automcomfort Feature.
Saves Energy upto 30%
than other brand.
ZKTeco F8-C Features Time &

Fingerprint Attendance and access
Attendance and Door control device
Access Control (w/ Incorporates high
RFID) precision ZK Sensor.
Stores up to 30.000 users
1pc ₱ 7,480.00 ₱ 7,480.00
and 2.200 fingerprint
templates. For access
control, it allows time
zones and groups,
holidays management,
anti-passback functions.
Look forward to
mesmerizing colour, clarity
SONY Bravia 32 in.
and detail with the
KLV-32R422B LED TV
BRAVIA KLV. Featuring a
wide sound range and
built-in WiFi for streaming
3
connectivity, redefine ₱ 16,699.00 ₱ 33,897.00
pcs
entertainment and access
a multitude of online
content for the enjoyment
of everyone at home.
FITNESS UNLIMITED HEALTH CLUB

53
Name/Photo of
Equipment
SHARP SJ-X66ST
Power Input: 280W
Hybrid Fan Cooling

System
Touch Button Display
1 pc ₱10,755.00 ₱ 10,755.00
Digital Smart Control
Turbo x Cooling
Spill-Proof Shelves
Express Chiller (for
Canned Drinks)
Cascade Reception
Desk
A counter where guests
are received. 1 pc ₱ 9,000.00 ₱ 9,000.00
Waiting Chairs
Chairs where clients are
able to sit while waiting or 2
₱ 7,999.00 ₱ 15,998.00
while resting. pcs
Receptionist’s Chair
Chair available for

receptionists while they
1pc ₱ 3,600.00 ₱ 3,600.00
are on duty.
Shelving Units
A furniture for organizing
2
materials such as books, ₱ 1,320.00 ₱ 2,640.00
pcs
files etc.
Table 3.5 – List of Furniture and Fixtures

54
3.5.2 Office Equipment
Name and Photo of

Equipment
Acer Aspire ZC-700
The Aspire ZC Series
Desktop Computer
presents superb touch1
and the ultimate balance
between features and 1 pc ₱ 23,599.00 ₱ 23,599.00
affordability when it
comes to styling your
daily digital life.
Table 3.6 – List of Office Equipment
3.5.3 Property Plant and Equipment
3.5.3.1 Gym Equipment
Name and Photo of

Equipment
Precor C932i Low-
impact Treadmill
A low-impact treadmill or
treadmill alternative will
4
allow you to get exercise ₱ 266,900.00 ₱ 1,067,600.00
pcs
with little or no joint
pain.
Precor EFX 536i

It is a stationary exercise
Elliptical Crosstrainer
machine used to simulate
stair climbing, walking,
or running without 2
₱ 278,000.00 ₱ 556,000.00
causing excessive pcs
pressure to the joints,
hence decreasing the risk
of impact injuries.

55
Precor AMT 813 Users can go from short
Adaptive Motion stride to long stride,
Trainer walking to running,
climbing to lunging,
allowing them to target
2
different muscle groups. ₱ 382,000.00 ₱ 764,000.00
pcs
Pushing and pulling the
moving handlebars will
engage the upper body,
resulting in a total body
workout.
Multi-Press Multi-Press features 3
machines in one: bench
press, incline press, and
shoulder press.
1 pc ₱ 173,000.00 ₱173,000.00
Comfortable, oversized
grips make it easy for
users to get in position
for proper exercise form.
The pec fly machine, also
called the pec deck fly
Rear Delt or Pec Fly machine, is a type of
gym equipment that
targets the pectoral
muscles in the chest.
While primarily working
the pectoralis major
1 pc ₱ 173,000.00 ₱ 173,000.00
muscles, using a pec fly
machine requires some
support from the
pectoralis minor muscles
in the chest, the deltoid
muscles in the shoulders,
and the serratus muscles
in the rib cage.
The pulldown exercise is
Lat Pulldown or
a strength training
Seated Row
exercise designed to
develop the latissimus
dorsi muscle. It performs
the functions of 1 pc ₱173,000.00 ₱ 173,000.00
downward rotation and
depression of the
scapulae combined with
adduction and extension
of the shoulder joint.

56
Glide Functional The FTS Glide offers
Trainer resistance training with
freedom of motion to
increase core strength,
balance, stability and
1 pc ₱190,000.00 ₱ 190,000.00
coordination. Designed
with a compact footprint
and low height to fit any
fitness facility, the FTS
Glide is easy to use.
Smith Machine
The Smith machine is a
piece of equipment used
in weight training. It
consists of a barbell that 1 pc ₱ 188,000.00 ₱ 188,000.00
is fixed within steel rails,
allowing only vertical or
near-vertical movement.
Angled Leg Press The Discovery Series

Plate Loaded Angled Leg
Press features a 45
degree angle and a three
1 pc ₱ 184,000.00 ₱ 184,000.00
position, anatomically
optimized seat design for
precise body positioning
and support.
Flat Bench A piece of equipment
that is designed for use
in weight training with 4
₱ 24,000.00 ₱ 96,000.00
great resemblance with pcs
normal bench in the
park.
The Vitality Series
Abdominal/Back
Abdominal/Back Extension is a dual-
Extension function machine
designed so the user can
perform both exercises
without getting out of
the machine. 1 pc ₱ 173,000.00 ₱ 173,000.00
Comfortable, padded
shoulder straps are used
with both exercises. Easy
position adjustment
offers two start positions
for back extension, and
one for abdominal.

57
The Vitality Series Leg
Press/Calf Extension
Leg Press/Calf features an articulating
Extension foot pad that stays
vertical to mimic a squat
movement and allows for
full extension during calf
1 pc ₱ 190,000.00 ₱ 190,000.00
exercise. Ratcheting seat
back allows for desired
start position. Large,
non-slip wear-resistant
rubber foot pad allows
user to easily perform
both exercises.
The 407B Adjustable
Cable Crossover is a
stand-alone cable
Adjustable Cable
crossover machine with
Cross Over
two adjustable high/low
pulley stations and a
1 pc ₱ 194,000.00 ₱ 194,000.00
connector that offers
dual chin-up bar options.
The Crossover adjusts
quickly to give users a
wide range of exercise
options.
The Vitality Series Dual
Bicep Curl/ Tricep Bicep Curl/Tricep
Extension Extension features a
combination auto-adjust
bicep/tricep grip and
convenient start position
1 pc ₱ 173,000.00 ₱ 173,000.00
adjustment while seated
on the machine. Single
seat adjustment ratchets
for proper exercise
positioning and optimal
comfort.

58
Leg Extension or Leg curl and leg
Leg Curl extension machines both
exercise your legs, but
each works muscles on
different sides. The leg
extension machine 1 pc ₱ 173,000.00 ₱ 173,000.00
involves straightening
your leg against
resistance and working
the muscles on the front
or anterior of the leg.
The inner/outer-thigh—
a.k.a.
Inner/ Outer Thigh
adductor/abductor—
machine is the result of
too many trainees
overstretching and
spraining knee ligaments
by using cables attached
1 pc ₱ 173,000.00 ₱ 173,000.00
to their ankles for inner-
and outer-thigh-muscle
training. The machine
pads by the knees and
ankles reduce or
eliminate stress on the
ligament on the inner
side of the knee.
Recumbent bikes are
Precor RBK 815 easier on the lower back
Recumbent Bike (lumbar spine) due to
the way that you sit in
the bike. Recumbent
bikes are generally safer 2
₱ 172,000.00 ₱ 344,000.00
because you cannot pcs
stand up on the pedals.
This eliminates many of
the injuries that occur
when using an upright
bike.

59
An upright bike gives you
Precor UBK 815 a more consistent
Upright Bike workout when relating to
outdoor riding, since the
upright places the rider
2
in a similar body ₱ 153,000.00 ₱ 306,000.00
pcs
position. Upright bikes
have a smaller footprint,
therefore take up less
space in your home or
gym.
Precor C240i Stretch
Trainer Improve your flexibility,
coordination and overall
athletic performance by 3
₱ 49,500.00 ₱ 148,500.00
stretching daily, whether pcs
before or after a workout
or as a start to your day.
The 116 Multi-Purpose

Multi-purposed
Bench is a rugged and
Bench
durable piece of
equipment that supports
4
a broad range of ₱ 25,000.00 ₱ 100,000.00
pcs
exercises. Consider it an
essential element of any
club. Tripod base with
foot rest adds stability.
The Vertical Knee Raise

machine isn't just for
Vertical Knee Raise
developing your lower
abs. The knee raise
station can also be used
for pectoral and triceps
development as it comes 1 pc ₱ 58,000.00 ₱ 58,000.00
with built-in dip handles.
You can also work on
getting rid of those love
handles by doing side
raises which will target
your obliquus.

60
The back extension
bench is a time-tested
Back Extension
core builder, but its
mechanical twin is the
black sheep of back
exercises, strengthen 1 pc ₱ 43,000.00 ₱ 43,000.00
your lower back with
exercises that force you
to maintain the natural
arch of your lumbar
spine.
The Signature Olympic

Flat Bench features
molded urethane
Olympic Flat Bench protective racking that
limits noise and protects
the bar from wear for a 1 pc ₱ 42,000.00 ₱ 42,000.00
stable and precise
workout. It has an
adjustable kneepad to
accommodate users of all
sizes.
Olympic Incline
Bench
Same purpose and use of
Olympic flat bench, but it 1 pc ₱ 51,000.00 ₱ 51,000.00
is in inclined position.
Olympic Decline
Bench Same purpose and use of
Olympic flat bench, but is 1 pc ₱ 55,000.00 ₱ 55,000.00
it in declined position.
The biomechanically
Seated Preacher correct design of the 202
Curl Seated Preacher Curl
delivers a targeted
workout for the user. The
seat is adjustable to
1 pc ₱ 43,000.00 ₱ 43,000.00
accommodate a range of
sizes. Built for durability,
it also has a small
footprint and guards to
protect the bar and
frame.

61
Rubberized The dumbbell, a type of
Dumbbells free weight, is a piece of
(5-100 lbs) equipment used in
1
weight training. It can be ₱ 75,000.00 ₱ 75,000.00
set
used individually or in
pairs, with one in each
hand.
The Super Bench adjusts
Super Bench from 90 degrees upright
to flat, with seven total
positions for working
2
your chest, shoulders, ₱ 52,000.00 ₱ 104,000.00
pcs
biceps, and triceps. The
bench also offers
separate seat and back
adjustments.
EZ Curl Bar with Collar
EZ Curl Bar is a bar used
to hold Olympic
2
rubberized plates, with ₱ 7,000.00 ₱ 14,000.00
sets
curl form. And also used
for weight lifting.
Olympic Bar with

Olympic Bar is a bar used
Collar
to hold Olympic
3
rubberized plates. And ₱ 9,500.00 ₱ 28,500.00
sets
also used for weight
lifting.
Olympic Rubberized 2.5kgs 2 ₱ 800.00 ₱ 1,600.00

Plates:
5kgs 2 ₱ 2,100.00 ₱ 4,200.00
10kgs 2 ₱ 3,900.00 ₱ 7,800.00
15kgs 2 ₱ 6,400.00 ₱ 12,800.00
20kgs 2 ₱ 7,000.00 ₱ 14,000.00
25kgs 2 ₱ 8,000.00 ₱ 16,000.00
Table 3.7a– List of Property Plant and Equipment – Gym/Fitness Center

62
Name and Photo of

Equipment
Portable Reflexology A portable chair
Chair specifically adapted for
the unique needs of a
professional reflexology
3
therapy session. The chair ₱ 12,800.00 ₱ 38,400.00
pcs
is collapsible and provides
numerous adjustments to
fit the particular anatomy
of each individual client.
Portable Massage Bed A portable Massage Bed
specifically built for having
a body massage. The
5
patient is being lied in the ₱12,800.00 ₱ 64,000.00
pcs
table then the
professional reflexologist
will start the session.
Kendall All in one Foot
This All in One Foot Spa
Spa Bath Massager
from Kendal offers a wide
array of features that you
would expect from a high-
5
end appliance. Vibration ₱ 750.00 ₱ 3750.00
pcs
along with bubbles are
sure to ensure that your
feet are soothed and
relaxed.
Table 3.7b– List of Property Plant and Equipment –Spa
Name and Photo of

Equipment
Sam Won SA 536
Speaker
Speaker is defined as an
electrical device used to 2
₱ 2,999.00 ₱ 5,998.00
make sound or music sets
louder.

63
Samwon SW-K1BT An Audio Power Amplifier
Stereo Karaoke is an electric amplifier that
Amplifier (Black) amplifies low power
electronic audio signals to 2
₱2,599.00 ₱5,198.00
a level strong enough for pcs
driving loudspeakers and
making the sound audible
to the listeners.
Portable Player all types 1

Champs Titanium of media files ₱ 9,975.00 ₱ 39,900.00
3.5Kw Sound System pcs
Table 3.7c– List of Property Plant and Equipment – Dance Studio
3.7 BUILDING FACILITIES
The gym and spa will be located at the Golden Matina Complex. The gym will
occupy the whole second floor inclusive of lockers, shower rooms, and a lobby. The first
floor will be comprised of the spa, which will occupy half of the whole first floor. The half
of the floor will comprise the reception, with supplements, and finally the dance studio.
The building is located at McArthur Highway Matina, Davao City. The building has
total space of 409 sq. meters for both floors. The building is commercial type with rent
of 302,600 every month. (Refer to Appendix Q for Rent or Construct Analysis)
Figure 3.9 Front view of building – Architect’s Perspective

64
Figure 3.10 Actual building
3.8 SUPPLIES
3.8.1 List of Supplies
3.8.1.1 Office Supplies
Photo Particular Price Qty Amount
Pair of Scissors
₱30.00 2 ₱60.00
Stapler
₱115.00 2 ₱230.00
Stationery Clip
Fastener ₱25.00 1 ₱25.00
Paper Clip (box)

₱35.00 1 ₱35.00
Receipt Stub Pad

₱250.00 3 ₱750.00

65
Short Bond Paper
(ream) ₱180.00 6 ₱1,080.00
Long Bond Paper ₱200.00 3 ₱600.00

(ream)
Permanent
Marker (box) ₱453.00 1 box ₱453.00
Ballpen (box)
₱171.00 2 ₱342.00
Pencil (box)
₱45.00 2 ₱90.00
Eraser
₱12.00 3 ₱36.00
Sharpener
₱150.00 2 ₱300.00
Staple Wire (box)

₱39.00 3 ₱117.00
Scotch Tape
₱15.00 3 ₱45.00

66
Tape Dispenser
₱80.00 2 ₱160.00
Short Folder
₱8.00 30 ₱240.00
Long Folder
₱10.00 30 ₱300.00
Short Envelope
₱5.00 30 ₱150.00
Long Envelope
₱8.00 30 ₱240.00
Table 3.8a– List of Supplies – Office
3.8.1.2 Spa Supplies
Name and Photo of

Description Price Qty Amount
Equipment
Salt Glow
Sea salt rich in trace
minerals is mixed with
warm massage oil to
exfoliate the top layers of ₱698/kilo 4 ₱2792.00
dead skin from the whole
body (except for the
face). It leaves your skin
moist, glowing, and satin-
smooth.

67
Paraffin Wax
A white or colourless soft
solid derivable from
petroleum, coal or oil
shale, that consists of a ₱698/kilo 4 ₱2792.00
mixture of hydrocarbon
molecules containing
between twenty and forty
carbon atoms.
Body Lotion
A lotion is a low-viscosity
topical preparation ₱298.00 3 ₱894.00
intended for application to
unbroken skin.
Light Mineral Oil

Any of various colorless,
odorless, light mixtures of
higher alkanes from a ₱348.00 2 ₱696.00.00
mineral source,
particularly a distillate of
petroleum.
Toilet Paper
Toilet Paper is a sanitary
paper that is produced ₱25.00 24 ₱600.00
from pulp or recovered
paper.
Foot Lotion
Eases aches and pains
and treats extremely dry ₱498.00 4 ₱1,992.00
skin -- making feet look
younger and feel softer.

68
Black Granite Stones
Common type of felsic
intrusive igneous rock that ₱408.00 24 ₱9792.00
is granular and phaneritic
in ... permeability.
Foot Soak
₱398/liter 4 ₱1,592.00
Used for soaking feet
Hand Towel
A piece of absorbent
fabric or paper used for
drying or wiping a body or ₱150.00 30 ₱4,500.00
a surface. It draws
moisture through direct
contact
Foot Scrub
For moisturizing and
exfoliating. It contains all ₱498.00 4 ₱1,992.00
natural ingredients and
provides magnesium.
Sweet Almond Oil

Sweet almond oil is made
from edible almonds. This ₱1,200.00 2 ₱2,400.00
oil is used extensively for
skin and hair.
Hazelnut Oil
A good oil for acne-prone
skin, since its natural ₱2,800.00 2 ₱5,600.00
astringent properties help
calm over-active oil
glands.

69
Towel
A piece of absorbent
fabric or paper used for
drying or wiping a body or ₱280.00 30 ₱8,400.00
a surface. It draws
moisture through direct
contact.
Hand Soap Liquid

A soap that is in liquid ₱75.00 8 ₱600.00
form, usually used for
hand soap dispenser
Bentosa Cup
A form of alternative
medicine in ₱233.00 12 ₱2,796.00
which cups are placed on
the skin to create
suction.
Thai Herbal Ball

Special blend of herbs are ₱280.00 10 ₱2,800.00
put into a muslin cloth,
and tied into a ball.
Body Wash/Bath Gel

The general term for ₱498/liter 3 ₱1,494.00
liquid products used for
cleaning the body.
Table 3.8b List of Supplies – Spa
3.8.1.3 Maintenance Supplies
Photo Description Price Qty Amount
Hand Gloves
₱65.00 3 ₱195.00

70
Cotton Mop
₱82.00 5 ₱410.00
Soft Broom
₱45.00 3 ₱135.00
Dipper
₱15.00 3 ₱45.00
Stick Broom
₱30.00 4 ₱120.00
Dust Pan
₱150.00 2 ₱300.00
Cleaning Towel
₱15.00 15 ₱225.00
Garbage Bag
₱315.00 3 ₱945.00

71
Trash bin
₱175.00 3 ₱525
Detergent Powder (2
kls.) ₱150.00 1 ₱150.00
Plunger
₱185.00 2 ₱370.00
Toilet brush
₱96.00 4 ₱384.00
Zonrox (5L)
₱650.00 3 ₱1,950.00
Pail
₱45.00 3 ₱135.00
Table 3.8c– List of Supplies – Maintenance

72
3.8.2 List of Suppliers:
Suppliers
Location Basis of Choice
NCCC Mall Matina, Davao City Convenience
Online Store BodyOptions.net Availability of items and
Trusted Store
Healthy Options SM Ecoland, Davao City Trusted Store
BrawnFuel Davao City Trusted Store
Table 3.9 List of Suppliers
3.9 UTILITIES
The daily operation of the business will avail such utilities as electricity and water.
Electricity needed will be provided by Davao Light and Power Company. The total
electricity consumption is approximately ₱ 21,312.84. This amount is for the usage of
gym, spa and dance studio equipment. In case of power failure, a generator set is
readily available. On the other hand, water will be supplied by Davao City Water District.
The estimated water consumption will amount to ₱ 4530.00 per month.
Internet, telephone and cable subscriptions are not necessarily needed. However,
the proponents of this study decided to avail such in order to provide better services to
the customers. With this, there is a monthly payment of ₱ 1,299.00 for the internet and
telephone subscription which will be provided by Philippine Long Distance
Telecommunications Company and an additional ₱ 500.00 for the cable services which
will be provided by Sky Cable. (See Appendix F)
3.10 WASTE DISPOSAL
The establishment doesn’t heavily consume wastes in terms of the services

offered except maybe on the spa services. Usual daily garbage is expected to be
produced as wastes such as typical plastics, tissues, gloves, and other spa-related
wastes.

73
According to the city’s Ecological Solid Waste Management Ordinance of 2009,
the establishment would follow the required segregation of wastes into biodegradable,
recyclable, and residual.
Biodegradable Wastes: Recyclable Wastes: Residual Wastes:
 Food Wastes  Plastic Bottles  Tetra Packs

 Green Wastes  Papers  Sachets
 Tissue Papers  Plastics  PVC
 Barbecue Sticks  Rubber (PolyVinyl Chloride)
 Glass  Sanitary Napkins
 Diapers
Sanitary procedures for the spa services will be strictly followed such as the
usage of gloves, proper hand washing, and other hygiene procedures.
3.11 LABOR REQUIREMENTS
The following are the labor requirements in establishing the business:

Description  Qualifications # of employees Salary/Wage
Receptionists
Receptionists are the  21-35 years old 2 Receptionists Fixed Monthly
ones who are in charge  Preferably Female are needed Salary of Php
of welcoming the  Preferably a College which will be 9,500.00
clients, describing the graduate or still taking a separated
services offered by the College course. through 4 shifts Overtime Pay is
establishment,  Has a friendly personality, consisting of 25% of the
assisting the clients in smart appearance, good the following: regular salary.
their needs and spoken and written  6:00AM-
questions, and enlisting communication, and 10:00AM
the clients for customer service skills.  10:00AM-
membership or the  Has the ability to stay calm 2:00 PM
ones operating the under pressure and be polite  2:00PM-
database. but firm when dealing with 6:00PM
difficult situations  6:00 PM -
concerning the clients. 10:00 PM
 Has good organizational
skills and basic IT skills.

74
Gym Instructors
Gym Instructors are  Preferably Male 5 Gym Fixed Monthly
the ones who are in  At least 25 years old Instructors are Salary of Php
charge of being the  At least 2 year experience in needed for the 12,000.00
fitness teachers of the the related field. establishment Overtime Pay is
clients and instructing  Graduate of fitness relative which will be 25% of the
the clients on how to degree or has physical separated regular salary.
use the equipment. education background or at through
least must possess at least a overlapping
Vocational Diploma/Short schedules.
Course Certificate.
 Has relative fitness
certifications and fitness
program experiences.
 Has good leadership,
communications and
customer service skills.
Dance Instructors
Dance Choreographer  20-35 years old. 1 Dance Fixed Monthly
is the one in charge of  Male/Female Choreographer Salary of Php
being the dance  Must have a strong is needed for 6,000.00
teacher of the clients background, training and the
and leads them in experiences in different establishment
making it to a types of dances. with a schedule
choreography.  Preferably has a degree in that is
choreography. applicable
 Preferably during
 Has creative, leadership, weekends.
communications and
Yoga Instructor
Yoga Instructor is the  20-35 years old. 1 Yoga Fixed Monthly
one in charge of  Preferably Female Instructor is Salary of Php
leading the clients in  Must have completed a needed for the 6,000.00
their yoga sessions. vocational training or establishment
certificate program in yoga with a schedule
instructions. that is
 At least 1 year of working applicable
experience in the related during Tuesdays
field. and Thursdays.
communication and

75
Zumba Instructor
Zumba Instructor is the  20-35 years old. 1 Zumba Fixed Monthly
one in charge of  Male/Female Instructor is Salary of Php
leading the clients in  Must have at least a needed for the 8,000.00
their zumba sessions. vocational training or short establishment
course certificate for zumba with a schedule
instructions. applicable
 At least 1 year of working during
experience in the related Mondays,
field. Wednesdays,
 Has good leadership, and Fridays.
communication and
Spa Therapists
Spa Therapists are the  21-35 years old. 5 Spa Salary is based
ones in charge of doing  Preferably Female Therapists are on a 20%
the spa services to the  At least 1 year of working needed for the commission.
clients. experience in the related establishments
field. which will be
 Must have at least a scheduled
vocational training or starting from
certificate program in spa- 3:00 PM to
related services. 7:00PM and
 Has good communication 7:30 PM to
and customer service skills. 10:00 PM given
a 30 minute
break.
Security Guard
Security Guard is the  25-45 years old. 1 Security The
one responsible for  Preferably Male Guard is establishment
keeping the place, its  At least 5’5 Height needed for the would use
employees, and its  At least 1 year of working establishment. outsourcing of
clients feel safe and experience in the related security
secured. field. services: Php
 Has good communication 317.00 per day
and customer service skills. plus 10% for
 With complete 201 File and the
SG License. administrative
purposes which
totals to Php
348.70 per day.

76
Janitors
Janitors are responsible  At least 21 years old. 2 Janitors are The
for providing cleaning  Male/Female needed for the establishment
services to the  Has good cleaning skills and establishment. would use
establishment and knowledge, well versed in outsourcing of
maintaining the inspecting premise and janitorial
cleanliness and order building, and able to services: Php
of such establishment. operate janitorial tools well. 317.00 per day
 Has good communication plus 10% for
skills, customer service the
skills, and demonstrated administrative
ability to prioritize and purposes which
perform multiple tasks totals to Php
simultaneously. 348.70 per day.
 At least 1 year of working
experience in the related
field.
 With complete government
requirements.
Table 3.10 Labor Requirement
3.12 SERVICE COST
The cost of providing the service ona daily basis is ₱ 8,416.92. (Refer to Appendix F)

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Chapter 4
Financial Feasibility
The financial aspects of the project are presented in this chapter. One is the major
assumptions related to company’s financial statement. Second, the financial ratios and its
respective analysis that are necessary to measure the company’s performance. Third, the
financial strategies as well as accounting policies and procedures applied.
4.1 MAJOR ASSUMPTIONS
4.1.1 Operations
The fitness center will be operating for one whole year, except on Good
Friday, All Saints Day, Christmas Day and New Year. The gym will start its
operation from 6:00am to 10:00pm while the spa renders its services from
3:00pm to 10:00pm every day. There is a total of 16 operating hours a day for the
gym and a total of 7 operating hours for the spa. The schedule for shifting of
employees is stated in Table 3.1 for receptionists, Table 3.2 for Gym, Table 3.3 for
the Dance Studio and Table 3.4 for the Spa Therapists. The said schedules will be
presented to the members of the gym upon enrollment.
 Both dance studio and fitness center are open exclusively for the members of the
health club. Upon payment of the membership fee and setting up of their
membership profile at the database system, they can now avail unlimited service
of the gym until their membership expires. However, the dance studio may
accommodate walk in costumers/non-members during vacant hours as stated in
Table 3.3.
 Upon enrollment of the members, their information will be saved in the database
system of the health. A members’ profile is set up to monitor the member’s
availability of the services. A biometrics every time they will use the gym is also
set up to affirm members’ profile in the database system and monitor the duration
of their membership whether it has expired or not.
 All transactions made by the members and users of the fitness center should be in
cash. No checks and credit cards will be accepted. Transactions made by the
company should be in checks for record purposes, except for small amount
transactions, it will be taken from petty cash fund.

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 The petty cash fund shall be utilized for small amount transactions and for
emergency purchases of goods and supplies.
 The sources of the capital of the business shall be both debt and equity.
4.1.1.1 Financial Position

4.1.1.1a Current Assets
 The cash account of the fitness center will be composed of ₱ 50,000.00 Petty
Cash Fund for small amount transactions for everyday operations as stated. A
commercial banking account which is composed of Cash in Bank is also
maintained.
 The inventory is measured using Weighted Average Method. These inventories
are sold at a markup price to determine the gross profit.
 Supplies shall be composed of office, maintenance and spa. Office Supplies are
those materials for the front desk officers recording purposes. Maintenance
Supplies is composed of housekeeping supplies for cleaning and maintaining the
fitness center and spa supplies for spa activities. Spa Supplies are composed of
materials necessary to render the service. All supplies shall be purchased every
beginning of the year and decrease by 8% per month and the remaining 4% at
the end of the year shall be carried forward to the succeeding year.
 Prepaid Rent shall be recognized upon payment of Rental Fees for the entire year
every December 31. The advance payment for the entire year is capitalized and
amortized monthly, thus records the credit account of Prepaid Rent for the
amortized amount.
4.1.1.1b Non-Current Assets

 The land and building of the fitness center will be rented. The cost of building
renovation shall be capitalized. The lease term is ten years thus leasehold
improvement is amortized for ten amortized for ten years because it is shorter
than the life of the improvement. It is a two-storey commercial space available
in Golden Matina Complex, in McArthur Highway, Matina, Davao City. The spa and
dance studio is located in the first floor with 407 square meters and the fitness
gym is located in the second floor with 407 square meters as well.

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 All property plant and equipment, furniture and fixtures as well as office
equipment shall be depreciated using straight line method. The salvage value for
all equipment is 5% of its cost except for the dance studio. A schedule of
depreciation is presented in the Notes to Financial Statement. The following table
shall present the useful life of the asset:
 GYM EQUIPMENT
PRODUCT DESCRIPTION QTY. Useful Life TOTAL PRICE
Precor C932i Low-impact Treadmill 4 15 years ₱ 1,067,600.00
Precor EFX 536i Elliptical Crosstrainer 2 15 years ₱ 556,000.00
Precor UBK 815 Upright Bike 2 15 years ₱ 306,000.00
Precor RBK 815 Recumbent Bike 2 15 years ₱ 344,000.00
Precor AMT 813 Adaptive Motion Trainer 2 15 years ₱ 764,000.00
Precor C240i Stretch Trainer 2 15 years ₱ 99,000.00
PRECOR S-LINE DUAL EXERCISES
Multi Press 1 15 years ₱ 173,000.00
Rear Delt/Pec Fly 1 15 years ₱ 173,000.00
Lat Pulldown/Seated Row 1 15 years ₱ 173,000.00
Bicep Curl/Tricep Extension 1 15 years ₱ 173,000.00
Leg Extension/Leg Curl 1 15 years ₱ 173,000.00
Leg Press/Calf Extension 1 15 years ₱ 190,000.00
Inner/Outer Thigh 1 15 years ₱ 173,000.00
Abdominal/Back Extension 1 15 years ₱ 173,000.00
Adjustable Cable Crossover 1 15 years ₱ 194,000.00
FTS Glide Functional Trainer 1 15 years ₱ 190,000.00
Smith Machine 1 15 years ₱ 188,000.00
Angled Leg Press 1 15 years ₱ 184,000.00
Flat Bench 2 15 years ₱ 48,000.00
Multi Purpose Bench 1 15 years ₱ 25,000.00
Vertical Knee Up 1 15 years ₱ 58,000.00
Back Extension 1 15 years ₱ 43,000.00
Super Bench 2 15 years ₱ 104,000.00
Olympic Flat Bench 1 15 years ₱ 42,000.00
Olympic Incline Bench 1 15 years ₱ 51,000.00
Olympic Decline Bench 1 15 years ₱ 55,000.00
Seated Preacher Curl 1 15 years ₱ 43,000.00
Rubberized Dumbbells (5-50lbs w/ Rack) 1 15 years ₱ 75,000.00
Olympic Bar w/ Collar 3 15 years ₱ 28,500.00
EZ Curl Bar w/ Collar 2 15 years ₱ 14,000.00
Olympic Rubberized Plates:2.5kgs 2 15 years ₱ 1,600.00
Olympic Rubberized Plates:5kgs 2 15 years ₱ 4,200.00
Table 4.1 Useful Life – Gym

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 SPA RELATED EQUIPMENT
Equipment Qty Useful Life Total Amount

Portable Reflexology Chair 3 10 years ₱ 38,400.00
Portable Massage Bed 5 10 years ₱ 64,000.00
Kendall All in one Foot Spa Bath Massager 5 10 years ₱ 3,750.00
Table 4.2 Useful Life – Spa
 DANCE STUDIO EQUIPMENT

Sam Won SA 536 Speaker 2 10 years ₱ 5,998.00
Samwon SW-K1BT Stereo Karaoke
2 10 years ₱ 5,198.00
Amplifier (Black)
Champs Titanium 3.5Kw 4 10 years ₱ 39,900.00
Table 4.3 Useful Life – Dance Studio
 FURNITURE AND FIXTURES

Panasonic Airconditioning Unit with basic
3 10 years ₱ 98,994.00
inverter
ZKTeco F8-C Fingerprint Attendance and Door
1 10 years ₱ 7,480.00
Access Control (with RFID Function)
SONY Bravia 32 in. KLV-32R422B LED TV 3 10 years ₱ 9,870.00
SHARP SJ-X66ST 1 10 years ₱ 10,755.00
Water Dispenser 1 10 years ₱ 4,982.75
Receptionist Table 1 10 P 9,000.00
Waiting Chairs 2 10 P 15,998.00
Office Chair 1 10 P 3,600.00
Shelving Units 2 10 P 2,640.00
Table 4.4 Useful Life – Furniture and Fixture
 OFFICE EQUIPMENT

Acer Aspire ZC-700 Desktop Computer 1 10 years ₱ 23,599.00
Table 4.5 Useful Life – Office Equipment
4.1.1.1c Current Liabilities
 The accounts payable represents the current amount of loan payable.

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 The salaries and wages shall be accrued in every month. Salaries and wages
payable shall be paid on the 15th and 30th day of the month.
 Liability accounts shall be recognized on the month that they are incurred and
paid on their respective deadlines or due date.
 Value-added taxes payable shall be accrued at month-end and reconciled every
quarter for taxation purposes. Input Vat for acquired property, plant and
equipment exceeding one million was claimed.
 Income taxes payable shall be recognized every quarter (March 31, June 30 and
September 30 of every year) and shall be reconciled for the annual income tax
payable for the April 15 deadline of the succeeding year. The Net Operating Loss
Carry Over was also considered in computing the Income Tax Payable.
4.1.1.1d Non-Current Liabilities
 The loans payable ending balance shall be the outstanding balance of the
principal of the loan based on the amortization schedule.
4.1.1.1e Equity
 The equity accounts are composed of the partner’s capital balances and drawing
accounts.
 The required capital shall be provided by the prospective investors equally. A ₱
200,000.00 additional investment starting 2017 for each partner is required.
Partners can withdraw 8,000 monthly and shall serve as their compensation.
 The profit and loss sharing ratio of partners shall be based on their respective
capital contributions.
4.1.1.2 Financial Performance

4.1.1.2a Revenue
 Revenue shall be recognized upon receipt of cash. All sales transactions are cash
basis.
 The peak months are May, June, July, August, September and October. The
normal months are February, March and April. The slack months are November,
December and January.

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4.1.1.2b Supplies
 All supplies shall be purchased every beginning of the year. It shall decrease by
8% monthly or 96% annually. The remaining 4% is carried forward to the
succeeding year.
 Suppliers who provide a premiums and discounts with the fitness center will be
prioritized. A list of suppliers was already provided in Table 3.9
4.1.1.2c Salaries and Wages
 Receptionists, Gym Instructors, Dance Choreographer, Yoga Instructor, Zumba

Instructor shall be paid with fixed monthly salaries.
 Spa Therapists shall be paid based on a 20% commission on their service.
 Withholding taxes and statutory contributions are paid on their respective due
dates as prescribed by law.
4.1.1.2d Operating Expenses

 An accounting firm shall be paid with a monthly fee of P 2,500 for the
preparation of tax returns and other government forms, and to keep the books of
accounts. A yearly audit fee of P 15,000 shall also be paid during the deadline of
the annual income tax return.
 The Janitors and Security Guards will be outsourced and shall be paid with the
prevailing minimum wage. Wages shall increase by three (3) percent every two
(2) years and subject to the regional wage order issued by the Department of
Labor and Employment (DOLE).
 Periodic maintenance shall be done at least once a year for the equipment and
the building. Repairs and maintenance expenses shall be ten (10) percent of the
depreciation expense incurred annually and is subject to increase/decrease
depending on the impact of projected inflation rates.
 The repairs and maintenance expense shall consist of gym equipment
maintenance, spa equipment maintenance, dance studio equipment
maintenance, furniture and fixtures and office equipment.
 Utilities expenses namely electricity and water shall be adjusted every year
depending on the usage and operations of the fitness center.

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 Telecommunications expense shall consist of telephone line with DSL Internet
connection with a monthly cost of P 1,596. Television cable connection with a
monthly cost of P500.
4.1.1.2e Interest Expenses

 Annual interest expense shall be based on the outstanding balance of the loan
for the said calendar year times the agreed effective interest rate set by the bank
which is 7 percent per annum in five years.
4.1.1.2f Income Tax Expenses

 Income tax expense shall only be recognized starting on the fifth year of
operations due to the Net Operating Loss Carry-over (NOLCO) accumulated
during the initial operations phase.
4.2 TOTAL PROJECT COST
The following costs are necessary to establish the project:
Particulars Amount
Cash ₱ 2,224,368.95
Building Renovation ₱ 6,680,000.00
Inventory - Gym Supplements ₱ 588,050.00
Inventory - Snack Bar ₱ 124,503.00
Spa Supplies ₱ 51,732.00
Maintenance Supplies ₱ 6,404.00
Office Supplies ₱16,503.00
Annual Rent Fees ₱ 3,907,200.00
Office Equipment ₱ 23,599.00
Furniture and Fixtures ₱ 186,026.75
PPE - Gym ₱ 5,936,500.00
PPE - Spa ₱ 106,150.00
PPE - DS ₱ 51,096.00
Cleaning Supplies ₱ 6,404.00
Total Project Cost ₱ 20,000,000.00
Table 4.6 Initial Project Cost
4.3 INITIAL WORKING CAPITAL REQUIREMENTS

4.3.1 Cash Management
The cash balance of the business is composed of Petty Cash, Cash on
Hand and Cash in Bank. The Petty Cash fund will be used for transactions related

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to the day-to-day operations that require a small amount of money. This fund will
have a maintaining balance of 50,000. The Cash on Hand account is composed
of receipts from customers and will be deposited every week for control purposes
and will be added to the Cash in Bank balance.
4.3.2 Inventory Management
Office, spa supplies and fitness supplements is the composition of the
business’ inventory. Office supplies will be purchased according to the nature of
its use. For example, a box of ball point pens will last for a month while a piece
of marker will last for three months. On the other hand, the procurement of spa
supplies will be on a monthly basis and will be done every first week of the
month. Lastly, the company will purchase fitness supplements if the minimum
inventory level is reached.
4.4 ALTERNATIVE SOURCES OF FINANCING
Aside from each partner’s contribution, the business will borrow money. The
bank loan will provide for the 20% of the needed initial capital. The proponents have
Banco de Oro, Bank of the Philippine Islands and LandBank of the Philippines as the
prospective lenders. After having considered the necessary factors such as the interest
rates and credit terms and policies, the proponents chose Bank of Philippine Island.
As part of the negotiation process, the proponents will present the project plan
to the chosen lending institution. The proponents opted to loan for 5 years for it would
be beneficial because interest expenses incurred would help increase tax savings.
4.4.1 Bank of the Philippine Islands
Term Interest Rates
1 year 5.5 %
2-3 years 6.5 %
4-5 years 7.00 %
6-10 years 9.00 %
Table 4.7 BPI Interest Rates
4.4.2 Banco de Oro
Term Interest Rates
1 year 7.00 %
2 years 7.00 %
3 years 7.00 %
4 years 8.5 %
5 years 8.5%
Table 4.8 BDO Interest Rates

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4.5 SOURCES OF FINANCING THE PROJECT
4.5.1 Capital Structure Policy
The agreed capital structure is 18% debt and 82% partner’s equity. The
total initial capital requirement of ₱ 20,000,000.00 will be financed partly by a
loan of ₱ 3,600,000.00 and partly by the partners’ total contribution of
₱16,148,000.00.
4.5.2 Cost of Capital

The proceeds from the bank loan will be entirely allocated to the
renovation of the renovation of the building. The project costs and modes of
financing are as follows:
Asset/Expense Classification Cost Mode of Financing
Cash ₱ 2,224,368.95 Partner’s Equity
Building Renovation ₱ 3,600,000.00 Debt/Bank Loan
₱ 3,080,000.00 Partner’s Equity
Supplies, Equipment, and Furniture ₱ 7,096,967.75 Partner’s Equity
and Fixture
Business Registration Fees ₱ 91463.30 Partners’ Equity
Annual Rent Fees ₱ 3,907,200.00 Partners’ Equity
TOTAL ₱ 20,000,000.00
Table 4.9 Cost of Capital Allocation
4.5.3 Profit/Loss Sharing Ratio

Since there are three partners and only 75% of the total capital will be
financed by partner’s equity, each of them will contribute 25ss% of the total
start-up cost. This ratio, too, will be the basis for their share of the profit or loss
of the company.
Partners Contribution Profit/Loss Ratio
James Castañeda ₱ 5,382,666.67 27.33%
Arnel Cipriano ₱ 5,382,666.67 27.33%
Elmer Derecho ₱ 5,382,666.67 27.33%
TOTAL ₱ 16,148,000.00 82% of the total capital requirement
Table 4.10 Profit/Loss Ratio

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4.6 PROFORMA FINANCIAL STATEMENTS
4.6.1 Chart of Accounts
ASSETS
Current Assets:
Cash in Bank
Inventory - Snack Bar
Inventory - Gym Supplemennts
Spa Supplies
Maintenance Supplies
Office Supplies
Petty Cash
Prepaid Rent
Noncurrent Assets
Office Equipment
Accumulated Depreciation - Office Equipment
Furniture and Fixtures
Accumulated Depreciation - Furnitures and Fixtures
Property Plant and Equipment - Gym
Accumulated Depreciation - Gym
Property Plant and Equipment - Spa
Accumulated Depreciation - Spa
Property Plant and Equipment - Dance Studio
Accumulated Depreciation-Dance Studio
Leasehold Improvement
Accumulated Amortization - Leasehold Improvement
LIABILITIES
Current Liabilities
Accounts Payable
Due to SSS, PHIC, HDMF
Interest Payable
Withholding Tax Payable
VAT Payable
Income Tax Payable
Noncurrent Liabilities
Loan Payable
PARTNERS' EQUITY
James Castañeda, Capital
Arnel Cipriano, Capital
Elmer Derecho, Capital
Table 4.11 Chart of Accounts – Financial Position

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REVENUE
Service Revenue - Gym and Dance Studio
Service Revenue - Spa
Sales - Supplements
Other Income
COST OF PRODUCT AND SERVICE
Cost of Services - Gym and Dance Studio
Cost of Services - Spa
Cost of Sales – Gym Supplements
EXPENSES
Salaries and Wages
SSS
PHIC
HDMF
Employee's Compensation
Spa Supplies
Office Supplies
Electricity
Water
Telecommunication
Security
Janitorial
Taxes and Licenses
Accounting and Auditing Expenses
Advertising
Rent
Interest
Repairs and Maintenance
Amortization Expense - Leasehold Improvement
Depreciation Expense
Table 4.12 Chart of Accounts – Financial Performance

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4.6.1a Financial Position
Current Assets
 Cash in Bank – The sum of all coins, currency and cash items that have been
placed on deposit with a financial institution.
 Petty Cash – Cash kept on hand for purchases or reimbursements too small to
be worth submitting to the more rigorous purchase and reimbursement
procedures of the agency.
 Inventory –Snack Bar – These are goods considered to be a portion of the
business’ assets that are ready for sale that includes food and water to be
consumed by the clients.
 Inventory –Gym Supplements – These are goods considered to be a portion
of the business’s assets that are ready for sale that includes dietary supplements.
 Spa Supplies – These are consumable items found and used inside the spa
area.
 Maintenance Supplies – These are consumable items used to maintain the
cleanliness and orderliness of the establishment.
 Office Supplies – These are consumable items used for general purposes, like,
staplers, pens and the likes.
 Prepaid Rent – The amount of future rent payments for the office space that
was paid in advance of the rental period. The amount reported on the balance
sheet is the amount that has not yet been used or expired as of the balance
sheet date.
Non-Current Assets
 Furniture and Fixture – This includes of the air conditioning unit, receptionist
table, office desks, office chair, and water dispenser.
 Office Equipment –This includes equipment or items that are used in
processing and recording business and administrative transactions.
 Property, Plant and Equipment - Gym – This includes the machineries and
equipment used inside the gym area.
 Property, Plant and Equipment - Spa – This includes the machineries and
equipment used inside the spa area.

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 Property, Plant and Equipment – Dance Studio – This includes the
equipment used inside the dance studio, like the sound system.
 Accumulated Depreciation-furniture and fixture – This is the accumulated
amount of the annual depreciation expense provided for furniture and Fixture.
This is a contra account which shall be deducted to the cost of the entire
furniture and Fixture asset to arrive at their carrying amounts.
 Accumulated Depreciation – Office Equipment – This is the accumulated
amount of the annual depreciation expense provided for office equipment. This is
a contra account which shall be deducted to the cost of the office equipment to
arrive at their carrying amounts.
 Accumulated Depreciation – Gym – This is the accumulated amount of the
annual depreciation expense provided for property, plant and equipment - gym.
This is a contra account which shall be deducted to the cost of the property, plant
and equipment -gym to arrive at their carrying amounts.
 Accumulated Depreciation – Spa – This is the accumulated amount of the
annual depreciation expense provided for property, plant and equipment - spa.
This is a contra account which shall be deducted to the cost of the property, plant
and equipment - spa to arrive at their carrying amounts.
 Accumulated Depreciation – Dance Studio – This is the accumulated
amount of the annual depreciation expense provided for property, plant and
equipment – dance studio. This is a contra account which shall be deducted to
the cost of the property, plant and equipment – dance studio to arrive at their
carrying amounts.
 Leasehold Improvements – This includes the amount of the renovations and
improvements done to the leased property.
 Accumulated Amortization – Leasehold Improvements - This is the
accumulated amount of the annual amortization expense provided for leasehold
improvements. This is a contra account which shall be deducted to the cost of
the leasehold improvements to arrive at their carrying amounts.
Current Liabilities
 Accounts Payable – The amount of short-term obligation to be paid to
creditors.

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 Due to SSS, PHIC, HDMF – This comprises the employees’ and employer‘s
contribution to the Social Security System, Philippine Health Insurance Company
and Home Development Mutual Fund project.
 Withholding Tax Payable – This comprises the tax withheld to be paid on the
tenth day of the next month
 VAT Payable – This is the amount of the Value-Added Tax payable to the
government for the goods sold and services offered. This amount is computed by
deducting the Input VAT to the Output VAT.
 Interest Payable – This comprises the interest on the loan to be paid monthly.
 Income Tax Payable – This is the amount payable to the government based on
the net taxable income of the entity and is payable every April 15 of the next
period.
 Loan Payable – This comprises the long term debt or the loan to be paid to the
bank.
Partner’s Equity
 James Castañeda, Capital – This represents the investment and of James
Castañeda and the share of the partner of the partnership’s income/(loss).
 Arnel Cipriano, Capital – This represents the investment of Arnel Cipriano and
the share of the partner of the partnership’s income/ (loss).
 Elmer Derecho, Capital – This represents the investment of Elmer Derecho
and the share of the partner of the partnership’s income/ (loss).
4.6.1b Financial Performance
Revenue
 Service Revenue-Gym and Dance Studio – This pertains to the revenue
gained from the services rendered in the gym and dance studio.
 Service Revenue - Spa – This pertains to the revenue gained from the services
rendered in the spa area.
 Sales - Supplements – This pertains to the total operating revenues earned for
selling gym supplements.
 Other Income – This pertains to the income of the sale of snack bars.

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Cost of Product and Service
 Cost of Service-Gym and Dance Studio – This represents the costs
necessary to perform gym and dance studio services. This includes salaries and
wages of employees deployed; employer’s contribution in statutory contributions
for employees deployed; training expenses, and other training expenses
(includes payment for training location, and food and meals for trainers and
recruits during training).
 Cost of Service-Spa – This represents the costs necessary to perform spa
services. This includes salaries and wages of employees deployed; employer’s
contribution in statutory contributions for employees deployed; training
expenses, and other training expenses (includes payment for training location,
and food and meals for trainers and recruits during training).
 Cost of Sales – This represent the costs to purchase the inventory that is to be
sold.
 Gross Profit – This is the profit after deducting the cost of service from gross
service revenue but before deducting all the expenses.
Expenses
 Salaries and Wages – This represents the amount of salaries for
employees/personnel.
 SSS, PHIC, HDMF – This represents the amount of contribution by the
employer to the Social Security System, Philippine Health Insurance Corporation
and Home Development Mutual Fund.
 Spa Supplies Expense – This pertains to spa supplies consumed during the
period.
 Office Supplies Expenses – This pertains to office supplies consumed during
the period.
 Maintenance Supplies Expense – This pertains to maintenance supplies
consumed during the period.
 Electricity Expenses – This represents the cost of electricity consumption for
the month.
 Water Expense – This represents the cost of water consumption for the month.

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 Telecommunication Expenses – This includes the amount of landline and
internet connection fees to be paid each month.
 Security Expense – This represents the amount paid for the security guards as
a result of the contract with the security agency.
 Janitorial Expense – This represents the amount paid for the janitors as a
result of the contract with the janitorial agency.
 Business Licenses Expense– This is an amount incurred for business licenses
incurred for the legal operations of the business.
 Advertising Expense – This represents the amount paid for advertising the
business.
 Rent Expenses – This pertains to the amount paid for occupying the space
where the business is located.
 Interest Expense – This pertains to the amount paid for the payment of the
interest on the loan.
 Repairs and Maintenance Expenses – This represents the cost of repairs and
maintenance for the various property, plant and equipment or capital assets.
 Depreciation Expenses – These are non-cash expenses which reduces the
value of the furniture and fixture and property, plant and equipment as a result
of the asset‘s wear and tear.
 Net Income before Interest and Tax– This is the amount of gross profit in
excess of the total expenses but before deducting interest expense and income
tax.
 Net Income after Interest Expense – This refers to the net income after
deducting interest expense but before deducting income tax.
 Provision for Income Tax – The amount of tax which is based on net taxable
income.
 Net Income (Net Loss) – This is the amount of income after deducting income
taxes due and payable from net income from operations.

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Statement of Financial Position
As of December As of December As of December As of December As of December

ASSETS Note 2016 2017 2018 2019 2020
Current Assets:
Cash in Bank 3 ₱ 2,455,399.59 ₱ 4,176,708.68 ₱ 6,128,751.31 ₱ 9,525,464.92 ₱ 14,895,570.30
Inventory - Snack Bar 10 ₱ - ₱ - ₱ - ₱ - ₱ -
Inventory - Gym Supplements 10 ₱ 30,950.00 ₱ 31,155.51 ₱ 23,924.93 ₱ 24,054.41 ₱ 23,938.00
Spa Supplies 9 ₱ 2,069.28 ₱ 2,152.05 ₱ 2,155.36 ₱ 2,155.49 ₱ 2,155.50
Maintenance Supplies 8 ₱ 256.16 ₱ 266.41 ₱ 266.82 ₱ 266.83 ₱ 266.83
Office Supplies 7 ₱ 660.12 ₱ 686.52 ₱ 687.58 ₱ 687.62 687.62
Petty Cash 3 ₱ 50,000.00 ₱ 50,000.00 ₱ 50,000.00 ₱ 50,000.00 ₱ 50,000.00
Prepaid Rent 11 ₱ 3,907,200.00 ₱ 3,907,200.00 ₱ 3,907,200.00 ₱ 3,907,200.00 ₱ 3,907,200.00
Total Current Assets ₱ 6,446,535.15 ₱ 8,168,169.18 ₱ 10,112,986.00 ₱ 13,509,829.28 ₱ 18,879,818.26
Noncurrent Assets
Office Equipment 17 ₱ 23,599.00 ₱ 23,599.00 ₱ 23,599.00 ₱ 23,599.00 ₱ 23,599.00
Accumulated Depreciation - Office Equipment 19 ₱ (2,241.91) ₱ (4,483.81) ₱ (6,725.72) ₱ (8,967.62) ₱ (11,209.53)
Furniture and Fixtures 5 ₱ 186,026.75 ₱ 186,026.75 ₱ 186,026.75 ₱ 186,026.75 ₱ 186,026.75
Accumulated Depreciation -Furniture and Fixtures 19 ₱ (17,672.54) ₱ (35,345.08) ₱ (53,017.62) ₱ (70,690.17) ₱ (88,362.71)
Property Plant and Equipment - Gym 17 ₱ 5,936,500.00 ₱ 5,936,500.00 ₱ 5,936,500.00 ₱ 5,936,500.00 ₱ 5,936,500.00
Accumulated Depreciation - Gym 19 ₱ (375,978.33) ₱ (751,956.67) ₱ (1,127,935.00) ₱ (1,503,913.33) ₱ (1,879,891.67)
Property Plant and Equipment - Spa 17 ₱ 106,150.00 ₱ 106,150.00 ₱ 106,150.00 ₱ 106,150.00 ₱ 106,150.00
Accumulated Depreciation - Spa 19 ₱ (10,084.25) ₱ (20,168.50) ₱ (30,252.75) ₱ (40,337.00) ₱ (50,421.25)
Property Plant and Equipment - Dance Studio 17 ₱ 51,096.00 ₱ 51,096.00 ₱ 51,096.00 ₱ 51,096.00 ₱ 51,096.00
Accumulated Depreciation-Dance Studio 19 ₱ (5,109.60) ₱ (10,219.20) ₱ (15,328.80) ₱ (20,438.40) ₱ (25,548.00)
Leasehold Improvement 25 ₱ 6,680,000.00 ₱ 6,680,000.00 ₱ 6,680,000.00 ₱ 6,680,000.00 ₱ 6,680,000.00
Accumulated Amortization- Leasehold Improvement 26 ₱ (634,600.00) ₱ (1,269,200.00) ₱ (1,903,800.00) ₱ (2,538,400.00) ₱ (3,173,000.00)
Total Noncurrent Assets ₱ 11,937,685.12 ₱ 10,891,998.49 ₱ 9,846,311.86 ₱ 8,800,625.23 ₱ 7,754,938.60
TOTAL ASSETS ₱ 18,384,220.27 ₱ 19,060,167.67 ₱ 19,959,297.86 ₱ 22,310,454.52 ₱ 26,634,756.86
As of December As of December As of December As of December As of December

LIABILITIES Note 2016 2017 2018 2019 2020
Current Liabilities
Accounts Payable 18 ₱ 720,000.00 ₱ 720,000.00 ₱ 720,000.00 ₱ 720,000.00 ₱ -
Due to SSS, PHIC, HDMF 6 ₱ 18,951.00 ₱ 18,951.00 ₱ 18,951.00 ₱ 18,951.00 ₱ 18,951.00
Interest Payable 18 ₱ 201,600.00 ₱ 151,200.00 ₱ 100,800.00 ₱ 50,400.00 ₱ -
Withholding Tax Payable 6 ₱ 21,025.40 ₱ 21,025.40 ₱ 21,025.40 ₱ 21,025.40 ₱ 21,025.40
VAT Payable 27 ₱ 98,533.98 ₱ 1,290,825.19 ₱ 1,533,568.80 ₱ 1,829,198.81 ₱ 2,196,097.23
Income Tax Payable - ₱ - ₱ - ₱ 162,359.37 ₱ 318,847.34 ₱ 518,228.47
Total Current Liabilities ₱ 1,060,110.38 ₱ 2,202,001.59 ₱ 2,556,704.57 ₱ 2,958,422.55 ₱ 2,754,302.10
Loan Payable 18 ₱ 2,160,000.00 ₱ 1,440,000.00 ₱ 720,000.00 ₱ - ₱ -
Total Noncurrent Liabilities ₱ 2,160,000.00 ₱ 1,440,000.00 ₱ 720,000.00 ₱ - ₱ -
OWNER'S EQUITY
James Castañeda, Capital 12 ₱ 5,054,703.30 ₱ 5,139,388.69 ₱ 5,560,864.43 ₱ 6,450,677.33 ₱ 7,960,151.59
Arnel Cipriano, Capital 12 ₱ 5,054,703.30 ₱ 5,139,388.69 ₱ 5,560,864.43 ₱ 6,450,677.33 ₱ 7,960,151.59
Elmer Derecho, Capital 12 ₱ 5,054,703.30 ₱ 5,139,388.69 ₱ 5,560,864.43 ₱ 6,450,677.33 ₱ 7,960,151.59
Total Equity ₱ 15,164,109.90 ₱ 15,418,166.07 ₱ 16,682,593.29 ₱ 19,352,031.99 ₱ 23,880,454.77
TOTAL LIABILITIES AND EQUITY ₱ 18,384,220.27 ₱ 19,060,167.67 ₱ 19,959,297.86 ₱ 22,310,454.52 ₱ 26,634,756.86
Statement of Financial Performance
Notes For the Year Ended For the Year Ended For the Year Ended For the Year Ended For the Year Ended
Revenue 2016 2017 2018 2019 2020
Service Revenue - Gym and Dance Studio 15 ₱ 7,182,000.00 ₱ 8,647,041.60 ₱ 10,468,395.04 ₱ 12,737,918.39 ₱ 15,571,415.26
Service Revenue - Spa 15 ₱ 2,213,280.00 ₱ 2,382,480.00 ₱ 2,568,240.00 ₱ 2,758,800.00 ₱ 2,976,240.00
Sales - Supplements 15 ₱ 634,500.00 ₱ 682,250.00 ₱ 735,000.00 ₱ 840,750.00 ₱ 893,750.00
Total ₱ 10,029,780.00 ₱ 11,711,771.60 ₱ 13,771,635.04 ₱ 16,337,468.39 ₱ 19,441,405.26
Cost of Sales and Services
Cost of Services - Gym and Dance Studio 29 ₱ (1,238,130.32) ₱ (1,238,130.32) ₱ (1,238,130.32) ₱ (1,238,130.32) ₱ (1,238,130.32)
Cost of Services - Spa 29 ₱ (738,996.20) ₱ (738,996.20) ₱ (738,996.20) ₱ (738,996.20) ₱ (738,996.20)
Cost of Sales 29 ₱ (557,100.00) ₱ (599,350.00) ₱ (647,650.00) ₱ (738,600.00) ₱ (785,050.00)
Total ₱ (2,534,226.52) ₱ (2,576,476.52) ₱ (2,624,776.52) ₱ (2,715,726.52) ₱ (2,762,176.52)
Gross Profit ₱ 7,495,553.48 ₱ 9,135,295.08 ₱ 11,146,858.52 ₱ 13,621,741.87 ₱ 16,679,228.74
Other Income 30 ₱ 12,450.00 ₱ 12,450.00 ₱ 12,450.00 ₱ 12,450.00 ₱ 12,450.00
Total Income ₱ 7,508,003.48 ₱ 9,147,745.08 ₱ 11,159,308.52 ₱ 13,634,191.87 ₱ 16,691,678.74
Expenses
Salaries and Wages 16 ₱ (1,840,141.60) ₱ (1,840,141.60) ₱ (1,840,141.60) ₱ (1,840,141.60) ₱ (1,840,141.60)
SSS,PHIC,HDMF 16 ₱ (113,706.00) ₱ (113,706.00) ₱ (113,706.00) ₱ (113,706.00) ₱ (113,706.00)
Employee's Compensation 16 ₱ (1,920.00) ₱ (1,920.00) ₱ (1,920.00) ₱ (1,920.00) ₱ (1,920.00)
Spa Supplies 9 ₱ (49,662.72) ₱ (49,662.72) ₱ (49,662.72) ₱ (49,662.72) ₱ (49,662.72)
Office Supplies 7 ₱ (15,842.88) ₱ (15,842.88) ₱ (15,842.88) ₱ (15,842.88) ₱ (15,842.88)
Maintenance Supplies 8 ₱ (6,147.84) ₱ (6,147.84) ₱ (6,147.84) ₱ (6,147.84) ₱ (6,147.84)
Utilities 31 ₱ (335,265.96) ₱ (335,265.96) ₱ (335,265.96) ₱ (335,265.96) ₱ (335,265.96)
Security 22 ₱ (293,832.00) ₱ (293,832.00) ₱ (293,832.00) ₱ (293,832.00) ₱ (293,832.00)
Janitorial 23 ₱ (146,916.00) ₱ (146,916.00) ₱ (146,916.00) ₱ (146,916.00) ₱ (146,916.00)
Taxes and Licenses 21 ₱ (91,463.30) ₱ (91,463.30) ₱ (91,463.30) ₱ (91,463.30) ₱ (91,463.30)
Accounting and Auditing Expenses 24 ₱ (45,000.00) ₱ (45,000.00) ₱ (45,000.00) ₱ (45,000.00) ₱ (45,000.00)
Advertising 20 ₱ (18,000.00) ₱ (18,000.00) ₱ (18,000.00) ₱ (18,000.00) ₱ (18,000.00)
Rent 11 ₱ (3,907,200.00) ₱ (3,907,200.00) ₱ (3,907,200.00) ₱ (3,907,200.00) ₱ (3,907,200.00)
Interest 18 ₱ (252,000.00) ₱ (201,600.00) ₱ (151,200.00) ₱ (100,800.00) ₱ (50,400.00)
Repairs and Maintenance 14 ₱ (41,108.66) ₱ (82,217.33) ₱ (123,325.99) ₱ (164,434.65) ₱ (205,543.31)
Amortization Expense-Leasehold Improvement 26 ₱ (634,600.00) ₱ (634,600.00) ₱ (634,600.00) ₱ (634,600.00) ₱ (634,600.00)
Depreciation 19 ₱ (411,086.63) ₱ (822,173.26) ₱ (1,233,259.89) ₱ (1,644,346.52) ₱ (2,055,433.15)
Total Expenses ₱ (8,203,893.59) ₱ (8,605,688.89) ₱ (9,007,484.18) ₱ (9,409,279.47) ₱ (9,811,074.76)
Net Income before Tax ₱ (695,890.11) ₱ 542,056.19 ₱ 2,151,824.34 ₱ 4,224,912.40 ₱ 6,880,603.98
Net Operating Loss Carry Over ₱ - ₱ (695,890.11) ₱ (153,833.92) ₱ - ₱ -
Net Income before Tax after NOLCO ₱ (695,890.11) ₱ (153,833.92) ₱ 1,997,990.42 ₱ 4,224,912.40 ₱ 6,880,603.98
Provision for Income Tax (30%) ₱ - ₱ 599,397.13 ₱ 1,267,473.72 ₱ 2,064,181.19
Net Income/(Loss) ₱ (695,890.11) ₱ 542,056.19 ₱ 1,552,427.21 ₱ 2,957,438.68 ₱ 4,816,422.78
Shared as follows:
₱(231,963.37) ₱180,685.40 ₱517,475.74 ₱985,812.89 ₱1,605,474.26
James Castañeda
₱(231,963.37) ₱180,685.40 ₱517,475.74 ₱985,812.89 ₱1,605,474.26
Arnel Cipriano
₱(231,963.37) ₱180,685.40 ₱517,475.74 ₱985,812.89 ₱1,605,474.26
Elmer Derecho
Statement of Cash Flow
For the Year Ended For the Year Ended For the Year Ended For the Year Ended For the Year Ended
2016 2017 2018 2019 2020
Net Income ₱ (695,890.11) ₱ 542,056.19 ₱ 1,552,427.21 ₱ 2,957,438.68 ₱ 4,816,422.78
Cash Flows from Operating Activities
Depreciation - Office Equipment ₱ 2,241.91 ₱ 2,241.91 ₱ 2,241.91 ₱ 2,241.91 ₱ 2,241.91
Depreciation - Furniture and Fixtures ₱ 17,672.54 ₱ 17,672.54 ₱ 17,672.54 ₱ 17,672.54 ₱ 17,672.54
Depreciation - PPE – Gym ₱ 375,978.33 ₱ 375,978.33 ₱ 375,978.33 ₱ 375,978.33 ₱ 375,978.33
Depreciation - PPE – Spa ₱ 10,084.25 ₱ 10,084.25 ₱ 10,084.25 ₱ 10,084.25 ₱ 10,084.25
Depreciation - PPE – Dance Studio ₱ 5,109.60 ₱ 5,109.60 ₱ 5,109.60 ₱ 5,109.60 ₱ 5,109.60
Amortization -Leasehold Improvements ₱ 634,600.00 ₱ 634,600.00 ₱ 634,600.00 ₱ 634,600.00 ₱ 634,600.00
Increase/Decrease in Inventory – Snack Bar ₱ - ₱ - ₱ - ₱ - ₱ -
Increase/Decrease in Inventory – Gym Supplements ₱ (30,950.00) ₱ (205.51) ₱ 7,230.58 ₱ (129.48) ₱ 116.41
Increase/Decrease in Petty Cash ₱ (50,000.00) ₱ - ₱ - ₱ - ₱ -
Increase/Decrease in Spa Supplies ₱ (2,069.28) ₱ (82.77) ₱ (3.31) ₱ (0.13) ₱ (0.01)
Increase/Decrease in Maintenance Supplies ₱ (256.16) ₱ (10.25) ₱ (0.41) ₱ (0.01) ₱ -
Increase/Decrease in Office Supplies ₱ (660.12) ₱ (26.40) ₱ (1.06) ₱ (0.04) ₱ -
Increase/Decrease in Prepaid Rent ₱ (3,907,200.00) ₱ - ₱ - ₱ - ₱ -
Increase/Decrease in Accounts Payable ₱ 720,000.00 ₱ - ₱ - ₱ - ₱ (720,000.00)
Increase/Decrease in Interest Payable ₱ 201,600.00 ₱ (50,400.00) ₱ (50,400.00) ₱ (50,400.00) ₱ (50,400.00)
Increase/Decrease in Due to SSS,PHIC,HDMF ₱ 18,951.00 ₱ - ₱ - ₱ - ₱ -
Increase/Decrease in Income Tax Payable ₱ - ₱ 162,359.37 ₱ 156,487.97 ₱ 199,381.13
Increase/Decrease in VAT Payable ₱ 98,533.98 ₱ 1,192,291.21 ₱ 242,743.61 ₱ 295,630.01 ₱ 366,898.42
Increase/Decrease in Expanded WHT Payable ₱ 21,025.40 ₱ - ₱ - ₱ - ₱ -
Net Cash Flows from Operating Activities ₱ (2,581,228.66) ₱ 2,729,309.10 ₱ 2,960,042.62 ₱ 4,404,713.63 ₱ 5,658,105.36
Cash Flows from Investing Activities
Increase/Decrease in Office Equipment ₱ (23,599.00) ₱ - ₱ - ₱ - ₱ -
Increase/Decrease in Furniture and Fixtures ₱ (186,026.75) ₱ - ₱ - ₱ - ₱ -
Increase/Decrease in PPE - Gym ₱ (5,936,500.00) ₱ - ₱ - ₱ - ₱ -
Increase/Decrease in PPE - Spa ₱ (106,150.00) ₱ - ₱ - ₱ - ₱ -
Increase/Decrease in PPE – Dance Studio ₱ (51,096.00) ₱ - ₱ - ₱ - ₱ -
Increase/Decrease Leasehold Improvements ₱ (6,680,000.00) ₱ - ₱ - ₱ - ₱ -
Net Cash Flows from Investing Activities ₱ (12,983,371.75) ₱ - ₱ - ₱ - ₱ -
Cash Flows from Financing Activities
Increase/Decrease in Loans Payable ₱ 2,160,000.00 ₱ (720,000.00) ₱ (720,000.00) ₱ (720,000.00) ₱ -
Increase/Decrease in Partners' Equity ₱ 13,887,631.05 ₱ 312,000.00 ₱ 312,000.00 ₱ 312,000.00 ₱ 312,000.00
Net Cash Flows from Financing Activities ₱ 16,047,631.05 ₱ (408,000.00) ₱ (408,000.00) ₱ (408,000.00) ₱ 312,000.00
Total Net Cash Flows ₱ 2,455,399.59 ₱ 1,721,309.10 ₱ 1,952,042.62 ₱ 3,396,713.63 ₱ 5,370,105.36
Cash, Beg of the year ₱ - ₱ 2,455,399.59 ₱ 4,176,708.69 ₱ 6,128,751.31 ₱ 9,525,464.94
Cash, end of the year ₱ 2,455,399.59 ₱ 4,176,708.69 ₱ 6,128,751.31 ₱ 9,525,464.94 ₱ 14,895,570.30
Statement of Changes in Equity
For the Year Ended For the Year Ended For the Year Ended For the Year Ended For the Year Ended
2016 2017 2018 2019 2020
James Castañeda, Beginning Capital ₱ 5,382,666.67 ₱ 5,054,703.30 ₱ 5,139,388.69 ₱ 5,560,864.43 ₱ 6,450,677.33

Less: Withdrawal ₱ (96,000.00) ₱ (96,000.00) ₱ (96,000.00) ₱ (96,000.00) ₱ (96,000.00)
Add: Net Income/Loss Share ₱ (231,963.37) ₱ 180,685.40 ₱ 517,475.74 ₱ 985,812.89 ₱ 1,605,474.26
James Castañeda, Ending Capital ₱ 5,054,703.30 ₱ 5,139,388.69 ₱ 5,560,864.43 ₱ 6,450,677.33 ₱ 7,960,151.59
2016 2017 2018 2019 2020

Arnel Cipriano, Beginning Capital ₱ 5,382,666.67 ₱ 5,054,703.30 ₱ 5,139,388.69 ₱ 5,560,864.43 ₱ 6,450,677.33
Less: Withdrawal ₱ (96,000.00) ₱ (96,000.00) ₱ (96,000.00) ₱ (96,000.00) ₱ (96,000.00)
Arnel Cipriano, Ending Capital ₱ 5,054,703.30 ₱ 5,139,388.69 ₱ 5,560,864.43 ₱ 6,450,677.33 ₱ 7,960,151.59
2016 2017 2018 2019 2020

Elmer Derecho, Beginning Capital ₱ 5,382,666.67 ₱ 5,054,703.30 ₱ 5,139,388.69 ₱ 5,560,864.43 ₱ 6,450,677.33
Less: Withdrawal ₱ (96,000.00) ₱ (96,000.00) ₱ (96,000.00) ₱ (96,000.00) ₱ (96,000.00)
Elmer Derecho, Ending Capital ₱ 5,054,703.30 ₱ 5,139,388.69 ₱ 5,560,864.43 ₱ 6,450,677.33 ₱ 7,960,151.59
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – Business Information
FITNESS UNLIMITED HEALTH CLUB is a service type of business. The

enterprise is organized as a partnership under the law of the Republic of the
Philippines. It is located at Golden Matina Complex, MacArthur Highway, Matina
Davao City. The service is centered in the offering of different ways of staying
healthy and fit. Clients are served through memberships or walk-ins based on the
service they want to avail. The business will employ 19 workers: 2 Receptionists,
5 Gym Instructors, a Dance Choreographer, a Zumba Instructor, a Yoga
Instructor, 5 Spa Therapists, a Security Guard, 2 Janitors, and a book keeper in
which the last three mentioned are outsourced. The business will also get the
service of an auditing firm for the audit of the former.
NOTE 2 - Summary of Significant Accounting Policies
i. Compliance
All the financial statements in this paper were prepared in accordance with the
Generally Accepted Accounting Principles (GAAP) as set forth by the Philippine
Accounting Standard (PAS).
ii. Basis of Preparing the Financial Statements
The financial statements have been prepared on the basis of historical cost.
Moreover, it does not take into account the changing current costs of noncurrent asset.
iii. Presentation of Currency
The financial statements are presented in Philippine peso currency. All values
used represent absolute amount, except when it is otherwise stated.

NOTE 3 – Cash
The cash account is comprised of petty cash fund worth ₱ 50,000.00 and cash in bank.
Cash on hand is deposited before the month ends thus closed to Cash in Bank account. The
breakdown and projections are as follows:
Petty Cash Cash in Bank Total
2016 ₱ 50, 000.00 ₱ 483,030.64 ₱ 533,030.60
2017 ₱ 50, 000.00 ₱ 2,804,339.73 ₱ 2,854,339.73
2018 ₱ 50, 000.00 ₱ 5,793,420.12 ₱ 5,843,420.12
2019 ₱ 50, 000.00 ₱ 10,301,722.36 ₱ 10,351,722.36
2020 ₱ 50, 000.00 ₱ 16,869,154.07 ₱ 16,919,154.07
NOTE 4 – Office Equipment

The office equipment is comprise of one desktop computer including the software cost.
The fixed assets in this account is pegged at historical cost with salvage value equal to 5% of
its cost and depreciated using straight line method with useful life of 10 years. The following is
the schedule of the carrying amount of the aforementioned components of the account:
Desktop Computer (10 years) 2016
Cost ₱23,599.00
Salvage Value (5%) ₱(1,179.95)
Depreciable Amount ₱22,419.05
Accumulated Depreciation ₱(2,241.91)
Carrying Amount ₱ 20,177.15
NOTE 5 – Furniture and Fixtures

All furniture and fixtures are carried at historical cost with salvage value equal to 5% of
the cost and depreciated using straight line method. The following are the composition of
furniture and fixtures:
Furniture and Fixtures Qty Total Cost
Panasonic Air conditioning Unit with basic inverter 3 ₱ 98,994.00
SONY Bravia 32 in. KLV-32R422B LED TV 3 ₱ 33,897.00
Fingerprint Attendance and Door Access Control 1 ₱ 7,480.00
SHARP SJ-X66ST Refrigerator 1 ₱ 10,755.00
Receptionist Table 1 ₱ 9,000.00
Waiting Chairs 2 sets ₱ 15,998.00
Shelving Units 1 ₱ 1,320.00
Office Chair 1 ₱ 3,600.00
Water Dispenser 1 ₱ 4,982.75
Total ₱ 186,026.75

NOTE 6 – Statutory Contributions
The annual amount of statutory contributions that are part of salary deductons to be
remitted annually are as follows:
Contributions Employee Employer Total

PHIC ₱ 2,025.00 ₱ 2,025.00 ₱ 4,050.00
HDMF ₱ 1,600.00 ₱ 1,600.00 ₱ 3,200.00
SSS ₱ 5,850.50 ₱ 5,850.50 ₱ 11,701.00
Withholding Tax ₱ 10,512.70 ₱ 10,512.70 ₱ 21,025.40
NOTE 7 – Office Supplies

Office Supplies are purchased annually. It decreases by 8% per month. The remaining
4% at the end of the year is the carried forward to the succeeding year.
Particular Unit Price Qty Total
Pair of Scissors ₱ 30.00 2 ₱ 60.00
Stapler ₱ 115.00 3 ₱ 345.00
Paper Clip (box) ₱ 35.00 1 ₱ 35.00
Fastener ₱ 25.00 1 ₱ 25.00
Receipt Stub ₱ 25.00 500 ₱ 12,500.00
Short Bond Paper (ream) ₱ 180.00 6 ₱ 1,080.00
Long Bond Paper (ream) ₱ 200.00 3 ₱ 600.00
Permanent Marker (box) ₱ 453.00 1 ₱ 453.00
Ball pen (box) ₱ 171.00 2 ₱ 342.00
Pencil (box) ₱ 45.00 2 ₱ 90.00
Eraser ₱ 12.00 3 ₱ 36.00
Sharpener ₱ 150.00 1 ₱ 150.00
Staple Wire (box) ₱ 39.00 3 ₱ 117.00
Scotch Tape ₱ 15.00 3 ₱ 45.00
Tape Dispenser ₱ 80.00 2 ₱ 160.00
Short Folder ₱ 8.00 15 ₱ 120.00
Long Folder ₱ 10.00 15 ₱ 150.00
Short Envelope ₱ 5.00 15 ₱ 75.00
Long Envelope ₱ 8.00 15 ₱ 120.00
Total ₱ 16,503.00
Office Supplies 1-Jan Purchases Dec 31 (4% of Available Supplies)
2016 ₱ - ₱ 16,503.00 ₱ 660.12
2017 ₱ 660.12 ₱ 16,503.00 ₱ 686.52
2018 ₱ 686.52 ₱ 16,503.00 ₱ 687.58
2019 ₱ 687.58 ₱ 16,503.00 ₱ 687.62
2020 ₱ 687.62 ₱ 16,503.00 ₱ 687.62
NOTE 8 – Maintenance Supplies

Maintenance Supplies are purchased annually. It decreases by 8% per month.
The remaining 4% at the end of the year is the carried forward to the succeeding year.

Hand Gloves ₱ 65.00 3 ₱ 195.00
Cotton Mop ₱ 410.00 1 ₱ 410.00
Soft Broom ₱ 45.00 3 ₱ 135.00
Dipper ₱ 15.00 3 ₱ 45.00
Stick Broom ₱ 30.00 4 ₱ 120.00
Dust Pan ₱ 150.00 2 ₱ 300.00
Window Brush ₱ 175.00 2 ₱ 350.00
Cleaning Towel ₱ 15.00 15 ₱ 225.00
Garbage Bag (Pack) ₱ 315.00 3 ₱ 945.00
Trash Bin ₱ 175.00 3 ₱ 525.00
Detergent Powder ₱ 150.00 1 ₱ 150.00
Plunger ₱ 185.00 2 ₱ 370.00
Toilet Brush ₱ 96.00 4 ₱ 384.00
Zonrox ₱ 650.00 3 ₱ 1,950.00
Liquid Hand Soap ₱ 100.00 3 ₱ 300.00
Total ₱ 6,404.00
Maintenance
1-Jan Purchases Dec 31 (4% of Available Supplies)
Supplies
2016 ₱ - ₱ 6,404.00 ₱ 256.16
2017 ₱ 256.16 ₱ 6,404.00 ₱ 266.41
2018 ₱ 266.41 ₱ 6,404.00 ₱ 266.82
2019 ₱ 266.82 ₱ 6,404.00 ₱ 266.83
2020 ₱ 266.83 ₱ 6,404.00 ₱ 266.83
NOTE 9 – Spa Supplies

Spa Supplies are purchased annually. It decreases by 8% per month. The
remaining 4% at the end of the year is the carried forward to the succeeding year
Salt Glow ₱ 698.00 4 ₱ 2,792.00
Paraffin Wax ₱ 698.00 4 ₱ 2,792.00
Body Lotion ₱ 298.00 3 ₱ 894.00
Body Wash ₱ 498.00 3 ₱ 1,494.00
Light Mineral Oil ₱ 348.00 2 ₱ 696.00
Sweet Almond Oil ₱ 1,200.00 2 ₱ 2,400.00
Hazelnut Oil ₱ 2,800.00 2 ₱ 5,600.00
Balck Granite Stones ₱ 408.00 24 ₱ 9,792.00
Thai Herbal Ball ₱ 280.00 10 ₱ 2,800.00
Bentosa Cup ₱ 233.00 12 ₱ 2,796.00
Foot Soak ₱ 398.00 4 ₱ 1,592.00
Foot Scrub ₱ 498.00 4 ₱ 1,992.00
Foot Lotion ₱ 498.00 4 ₱ 1,992.00
Toilet Paper ₱ 25.00 24 ₱ 600.00
Hand Towel ₱ 150.00 30 ₱ 4,500.00
Towel ₱ 280.00 30 ₱ 8,400.00
Hand Soap Liquid ₱ 75.00 8 ₱ 600.00
Total ₱ 51,732.00

Spa Supplies 1-Jan Purchases Dec 31 (4% of Available Supplies)
2016 ₱ - ₱ 51,732.00 ₱ 2,069.28
2017 ₱ 2,069.28 ₱ 51,732.00 ₱ 2,152.05
2018 ₱ 2,152.05 ₱ 51,732.00 ₱ 2,155.36
2019 ₱ 2,155.36 ₱ 51,732.00 ₱ 2,155.49
2020 ₱ 2,155.49 ₱ 51,732.00 ₱ 2,155.50
NOTE 10 – Inventory
There are only two items included in the inventory account namely Gym Supplements
and goods sold in the Snack Bar.
Gym Supplements
On Whey/ 5 lbs. ₱ 3,200.00 19 ₱ 60,800.00
On Whey/ 2 lbs. ₱ 1,800.00 19 ₱ 34,200.00
On Whey/ 10 lbs. ₱ 5,600.00 19 ₱ 106,400.00
Mutant Mass/ 15 lbs ₱ 3,200.00 19 ₱ 60,800.00
Mutant Mass/ 5 lbs ₱ 1,800.00 19 ₱ 34,200.00
Mass PM/ 5 lbs ₱ 1,800.00 19 ₱ 34,200.00
Mass PM/ 6 lbs ₱ 1,900.00 19 ₱ 36,100.00
Mass PM/ 11 lbs ₱ 2,400.00 19 ₱ 45,600.00
MP Combat/ 4 lbs ₱ 2,500.00 19 ₱ 47,500.00
MP Combat/ 2 lbs ₱ 1,750.00 19 ₱ 33,250.00
C4 Ripped/R ₱ 1,600.00 19 ₱ 30,400.00
C4 Ripped/ripped ₱ 1,600.00 19 ₱ 30,400.00
Hydrox ₱ 1,800.00 19 ₱ 34,200.00
Total ₱ 588,050.00
Snack Bar (Other Income)
Mineral Water ₱ 24.45 600 ₱ 14,670.00
Gatorade ₱ 30.50 567 ₱ 17,293.50
Tiger ₱ 15.67 650 ₱ 10,185.50
Pocari ₱ 84.00 550 ₱ 46,200.00
Sky ₱ 4.20 620 ₱ 2,604.00
Beng-Beng ₱ 9.23 700 ₱ 6,461.00
Fit ₱ 25.00 580 ₱ 14,500.00
Straw ₱ 1.00 36 ₱ 36.00
Power ₱ 17.29 700 ₱ 12,103.00
Total ₱ 124,053.00
NOTE 11 – Rent
An advance payment of rental fee for one year is made every end December 32 to be
accrued for the succeeding year. (Refer to Appendix P)
Rental Fee ₱ 400.00 per meter square per month
Area ₱ 814.00 meter square
Total Monthly Fee ₱ 325,600.00
Annual Rent ₱ 3,907,200.00

NOTE 12 – Capital Accounts
The matters affecting the capital account over five years are the following:
2016 2017 2018 2019 2020
James Castañeda,
₱ 5,382,666.67 ₱5,054,703.30 ₱5,139,388.69 ₱5,560,864.43 ₱6,450,677.33
Beginning Capital
Additional
₱ 200,000.00 ₱ 200,000.00 ₱ 200,000.00 ₱ 200,000.00
Investment
Add: Net
₱ (231,963.37) ₱ 180,685.40 ₱ 517,475.74 ₱ 985,812.89 ₱1,605,474.26
Income/Loss Share
James Castañeda,
₱5,054,703.30 ₱5,139,388.69 ₱5,560,864.43 ₱6,450,677.33 ₱7,960,151.59
Ending Capital
2016 2017 2018 2019 2020
Arnel Cipriano,
₱ 5,382,666.67 ₱5,054,703.30 ₱5,139,388.69 ₱5,560,864.43 ₱6,450,677.33
Beginning Capital
Additional
₱ 200,000.00 ₱ 200,000.00 ₱ 200,000.00 ₱ 200,000.00
Investment
Add: Net
₱ (231,963.37) ₱ 180,685.40 ₱ 517,475.74 ₱ 985,812.89 ₱1,605,474.26
Income/Loss Share
Arnel Cipriano,
₱5,054,703.30 ₱5,139,388.69 ₱5,560,864.43 ₱6,450,677.33 ₱7,960,151.59
Ending Capital
2016 2017 2018 2019 2020
Elmer Derecho,
₱ 5,382,666.67 ₱5,054,703.30 ₱5,139,388.69 ₱5,560,864.43 ₱6,450,677.33
Beginning Capital
Additional
₱ 200,000.00 ₱ 200,000.00 ₱ 200,000.00 ₱ 200,000.00
Investment
Add: Net
₱ (231,963.37) ₱ 180,685.40 ₱ 517,475.74 ₱ 985,812.89 ₱1,605,474.26
Income/Loss Share
Elmer Derecho,
₱5,054,703.30 ₱5,139,388.69 ₱5,560,864.43 ₱6,450,677.33 ₱7,960,151.59
Ending Capital
NOTE 13 – Business Licenses

The following are the licenses paid to the government during 2016:
Cost
NOTE 14 – Repairs and Maintenance

The allotted cost for the repairs and maintenance would be 10% of the depreciation of
their respective service line. The 10% will also apply to furniture and fixtures and office
equipment in their respective service line as well.
2016 2017 2018 2019 2020
Depreciation ₱ 411,086.63 ₱ 822,173.26 ₱1,233,259.89 ₱1,644,346.52 ₱ 2,055,433.15
Percentage 10% 10% 10% 10% 10%
Total 41,108.66 82,217.33 123,325.99 164,434.65 205,543.31

NOTE 15 – Product and Service Revenue
GYM AREA 2016 2017 2018 2019 2020
Forecasted
345 members 436 members 551 members 696 members 880 members
Annual Demand
*Annual
₱ 14400.00 ₱ 14400.00 ₱ 14400.00 ₱ 14400.00 ₱ 14400.00
Contract Price
Service Revenue ₱ 4,968,000.00 ₱ 6,278,061.60 ₱ 7,933,586.44 ₱10,025,673.19 ₱12,669,443.21
DANCE STUDIO AREA 2016
Forecasted Demand Monthly Price Annual Total
Zumba 154 ₱ 400.00 ₱ 739,200.00
Yoga 162 ₱ 400.00 ₱ 777,600.00
Dance Lessons 166 ₱ 350.00 ₱ 697,200.00
Total Service Revenue ₱ 2,214,000.00
Zumba 165 ₱ 400.00 ₱ 792,000.00
Yoga 173 ₱ 400.00 ₱ 830,400.00
Dance Lessons 178 ₱ 350.00 ₱ 747,600.00
Zumba 176 ₱ 400.00 ₱ 844,800.00
Yoga 185 ₱ 400.00 ₱ 888,000.00
Dance Lessons 190 ₱ 350.00 ₱ 798,000.00
Zumba 189 ₱ 400.00 ₱ 907,200.00
Yoga 198 ₱ 400.00 ₱ 950,400.00
Dance Lessons 203 ₱ 350.00 ₱ 852,600.00
Zumba 202 ₱ 400.00 ₱ 969,600.00
Yoga 212 ₱ 400.00 ₱ 1,017,600.00
Dance Lessons 218 ₱ 350.00 ₱ 915,600.00
SPA AREA 2016
Body Massage 142 ₱ 300.00 ₱ 511200.00
Sauna 133 ₱ 380.00 ₱ 606,480.00
Body Wax 111 ₱ 400.00 ₱ 532,800.00
Body Scrub 81 ₱ 500.00 ₱ 486,000.00
Foot Spa 32 ₱ 200.00 ₱ 76,800.00
Total Service Revenue ₱2,213,280.00

SPA AREA 2017
Body Massage 153 ₱ 300.00 ₱ 550,800.00
Sauna 143 ₱ 380.00 ₱ 652,080.00
Body Wax 120 ₱ 400.00 ₱ 576,000.00
Body Scrub 87 ₱ 500.00 ₱ 522,000.00
Foot Spa 34 ₱ 200.00 ₱ 81,600.00
SPA AREA 2018
Body Massage 165 ₱ 300.00 ₱ 594,000.00
Sauna 154 ₱ 380.00 ₱ 702,240.00
Body Wax 129 ₱ 400.00 ₱ 619,200.00
Body Scrub 94 ₱ 500.00 ₱ 564,000.00
Foot Spa 37 ₱ 200.00 ₱ 88,800.00
SPA AREA 2019
Body Massage 177 ₱ 300.00 ₱ 637,200.00
Sauna 165 ₱ 380.00 ₱ 752,400.00
Body Wax 139 ₱ 400.00 ₱ 667,200.00
Body Scrub 101 ₱ 500.00 ₱ 606,000.00
Foot Spa 40 ₱ 200.00 ₱ 96,000.00
SPA AREA 2020
Body Massage 191 ₱ 300.00 ₱ 687,600.00
Sauna 179 ₱ 380.00 ₱ 816,240.00
Body Wax 149 ₱ 400.00 ₱ 715,200.00
Body Scrub 109 ₱ 500.00 ₱ 654,000.00
Foot Spa 43 ₱ 200.00 ₱ 103,200.00
GYM SUPPLEMENTS 2016

Particular Sales Price Qty Sold Total
On Whey/ 5 lbs. ₱ 3,500.00 18 ₱ 63,000.00
On Whey/ 2 lbs. ₱ 2,000.00 18 ₱ 36,000.00
On Whey/ 10 lbs. ₱ 6,000.00 18 ₱ 108,000.00
Mutant Mass/ 15 lbs ₱ 3,500.00 18 ₱ 63,000.00
Mutant Mass/ 5 lbs ₱ 2,000.00 18 ₱ 36,000.00
Mass PM/ 5 lbs ₱ 2,000.00 18 ₱ 36,000.00
Mass PM/ 6 lbs ₱ 2,250.00 18 ₱ 40,500.00
Mass PM/ 11 lbs ₱ 2,750.00 18 ₱ 49,500.00
MP Combat/ 4 lbs ₱ 3,000.00 18 ₱ 54,000.00
MP Combat/ 2 lbs ₱ 2,250.00 18 ₱ 40,500.00
C4 Ripped/R ₱ 1,800.00 18 ₱ 32,400.00
C4 Ripped/ripped ₱ 2,000.00 18 ₱ 36,000.00
Hydrux ₱ 2,200.00 18 ₱ 39,600.00
Total ₱ 634,500.00

On Whey/ 5 lbs. ₱ 3,500.00 19 ₱ 66,500.00
On Whey/ 2 lbs. ₱ 2,000.00 19 ₱ 38,000.00
On Whey/ 10 lbs. ₱ 6,000.00 20 ₱ 120,000.00
Mutant Mass/ 15 lbs ₱ 3,500.00 20 ₱ 70,000.00
Mutant Mass/ 5 lbs ₱ 2,000.00 19 ₱ 38,000.00
Mass PM/ 5 lbs ₱ 2,000.00 19 ₱ 38,000.00
Mass PM/ 6 lbs ₱ 2,250.00 19 ₱ 42,750.00
Mass PM/ 11 lbs ₱ 2,750.00 19 ₱ 52,250.00
MP Combat/ 4 lbs ₱ 3,000.00 20 ₱ 60,000.00
MP Combat/ 2 lbs ₱ 2,250.00 19 ₱ 42,750.00
C4 Ripped/R ₱ 1,800.00 19 ₱ 34,200.00
C4 Ripped/ripped ₱ 2,000.00 19 ₱ 38,000.00
Hydrux ₱ 2,200.00 19 ₱ 41,800.00
Total ₱ 682,250.00
On Whey/ 5 lbs. ₱ 3,500.00 20 ₱ 70,000.00
On Whey/ 2 lbs. ₱ 2,000.00 20 ₱ 40,000.00
On Whey/ 10 lbs. ₱ 6,000.00 22 ₱ 132,000.00
Mutant Mass/ 15 lbs ₱ 3,500.00 22 ₱ 77,000.00
Mutant Mass/ 5 lbs ₱ 2,000.00 20 ₱ 40,000.00
Mass PM/ 5 lbs ₱ 2,000.00 20 ₱ 40,000.00
Mass PM/ 6 lbs ₱ 2,250.00 21 ₱ 47,250.00
Mass PM/ 11 lbs ₱ 2,750.00 21 ₱ 57,750.00
MP Combat/ 4 lbs ₱ 3,000.00 22 ₱ 66,000.00
MP Combat/ 2 lbs ₱ 2,250.00 20 ₱ 45,000.00
C4 Ripped/R ₱ 1,800.00 20 ₱ 36,000.00
C4 Ripped/ripped ₱ 2,000.00 20 ₱ 40,000.00
Hydrux ₱ 2,200.00 20 ₱ 44,000.00
Total ₱ 735,000.00
On Whey/ 5 lbs. ₱ 3,500.00 23 ₱ 80,500.00
On Whey/ 2 lbs. ₱ 2,000.00 23 ₱ 46,000.00
On Whey/ 10 lbs. ₱ 6,000.00 25 ₱ 150,000.00
Mutant Mass/ 15 lbs ₱ 3,500.00 25 ₱ 87,500.00
Mutant Mass/ 5 lbs ₱ 2,000.00 23 ₱ 46,000.00
Mass PM/ 5 lbs ₱ 2,000.00 23 ₱ 46,000.00
Mass PM/ 6 lbs ₱ 2,250.00 23 ₱ 51,750.00
Mass PM/ 11 lbs ₱ 2,750.00 24 ₱ 66,000.00
MP Combat/ 4 lbs ₱ 3,000.00 25 ₱ 75,000.00
MP Combat/ 2 lbs ₱ 2,250.00 24 ₱ 54,000.00
C4 Ripped/R ₱ 1,800.00 23 ₱ 41,400.00
C4 Ripped/ripped ₱ 2,000.00 23 ₱ 46,000.00
Hydrux ₱ 2,200.00 23 ₱ 50,600.00
Total ₱ 840,750.00

On Whey/ 5 lbs. ₱ 3,500.00 25 ₱ 87,500.00
On Whey/ 2 lbs. ₱ 2,000.00 25 ₱ 50,000.00
On Whey/ 10 lbs. ₱ 6,000.00 26 ₱ 156,000.00
Mutant Mass/ 15 lbs ₱ 3,500.00 26 ₱ 91,000.00
Mutant Mass/ 5 lbs ₱ 2,000.00 25 ₱ 50,000.00
Mass PM/ 5 lbs ₱ 2,000.00 25 ₱ 50,000.00
Mass PM/ 6 lbs ₱ 2,250.00 25 ₱ 56,250.00
Mass PM/ 11 lbs ₱ 2,750.00 25 ₱ 68,750.00
MP Combat/ 4 lbs ₱ 3,000.00 26 ₱ 78,000.00
MP Combat/ 2 lbs ₱ 2,250.00 25 ₱ 56,250.00
C4 Ripped/R ₱ 1,800.00 25 ₱ 45,000.00
C4 Ripped/ripped ₱ 2,000.00 25 ₱ 50,000.00
Hydrux ₱ 2,200.00 25 ₱ 55,000.00
Total ₱ 893,750.00

NOTE 16 – Salaries and Wages
Name Daily rate Basic Pay Gross Pay W/Htax HDMF PHIC
Receptionist -1 ₱ 633.33 ₱ 8,000.00 ₱ 8,000.00 ₱ 334.68 ₱ 100.00 ₱ 100.00
Receptionist -2 ₱ 633.33 ₱ 8,000.00 ₱ 8,000.00 ₱ 334.68 ₱ 100.00 ₱ 100.00
Gym Instructor -1 ₱ 400.00 ₱ 12,000.00 ₱ 12,000.00 ₱ 971.13 ₱ 100.00 ₱ 150.00
Gym Instructor -2 ₱ 400.00 ₱ 12,000.00 ₱ 12,000.00 ₱ 971.13 ₱ 100.00 ₱ 150.00
Gym Instructor -3 ₱ 400.00 ₱ 12,000.00 ₱ 12,000.00 ₱ 971.13 ₱ 100.00 ₱ 150.00
Gym Instructor -4 ₱ 400.00 ₱ 12,000.00 ₱ 12,000.00 ₱ 971.13 ₱ 100.00 ₱ 150.00
Gym Instructor -5 ₱ 400.00 ₱ 12,000.00 ₱ 12,000.00 ₱ 971.13 ₱ 100.00 ₱ 150.00
Gym Instructor -6 ₱ 400.00 ₱ 12,000.00 ₱ 12,000.00 ₱ 971.13 ₱ 100.00 ₱ 150.00
Dance Instructor ₱ 200.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 99.87 ₱ 100.00 ₱ 100.00
Yoga Instructor ₱ 200.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 99.87 ₱ 100.00 ₱ 100.00
Zumba Instructor ₱ 200.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 99.87 ₱ 100.00 ₱ 100.00
Total ₱ 106,000.00 ₱ 106,000.00 ₱ 6,795.75 ₱ 1,100.00 ₱ 1,400.00
Name Daily rate Basic Pay Gross Pay W/Htax HDMF PHIC
Spa Therapist -1 ₱ 360.00 ₱ 10,800.00 ₱ 10,800.00 ₱ 743.39 ₱ 100.00 ₱ 125.00
Spa Therapist -2 ₱ 360.00 ₱ 10,800.00 ₱ 10,800.00 ₱ 743.39 ₱ 100.00 ₱ 125.00
Spa Therapist -3 ₱ 360.00 ₱ 10,800.00 ₱ 10,800.00 ₱ 743.39 ₱ 100.00 ₱ 125.00
Spa Therapist -4 ₱ 360.00 ₱ 10,800.00 ₱ 10,800.00 ₱ 743.39 ₱ 100.00 ₱ 125.00
Spa Therapist -5 ₱ 360.00 ₱ 10,800.00 ₱ 10,800.00 ₱ 743.39 ₱ 100.00 ₱ 125.00
Total ₱ 54,000.00 ₱ 54,000.00 ₱ 3,716.95 ₱ 500.00 ₱ 625.00
NOTE 17 – Property, Plant and Equipment
Property Plant and Equipment is composed of gym equipment, spa-related equipment
and dance studio equipment. All were carried at historical cost and depreciated using straight
line method.
Gym Equipment QTY. Useful Life TOTAL PRICE
Precor C932i Low-impact Treadmill 4 15 ₱ 1,067,600.00
Precor EFX 536i Elliptical Crosstrainer 2 15 ₱ 556,000.00
Precor UBK 815 Upright Bike 2 15 ₱ 306,000.00
Precor RBK 815 Recumbent Bike 2 15 ₱ 344,000.00
Precor AMT 813 Adaptive Motion Trainer 2 15 ₱ 764,000.00
Precor C240i Stretch Trainer 2 15 ₱ 99,000.00
Multi Press 1 15 ₱ 173,000.00
Rear Delt/Pec Fly 1 15 ₱ 173,000.00
Lat Pulldown/Seated Row 1 15 ₱ 173,000.00
Bicep Curl/Tricep Extension 1 15 ₱ 173,000.00
Leg Extension/Leg Curl 1 15 ₱ 173,000.00
Leg Press/Calf Extension 1 15 ₱ 190,000.00
Inner/Outer Thigh 1 15 ₱ 173,000.00
Abdominal/Back Extension 1 15 ₱ 173,000.00
Adjustable Cable Crossover 1 15 ₱ 194,000.00
FTS Glide Functional Trainer 1 15 ₱ 190,000.00
Smith Machine 1 15 ₱ 188,000.00
Angled Leg Press 1 15 ₱ 184,000.00
Flat Bench 2 15 ₱ 48,000.00
Multi Purpose Bench 1 15 ₱ 25,000.00
Vertical Knee Up 1 15 ₱ 58,000.00
Back Extension 1 15 ₱ 43,000.00
Super Bench 2 15 ₱ 104,000.00
Olympic Flat Bench 1 15 ₱ 42,000.00
Olympic Incline Bench 1 15 ₱ 51,000.00
Olympic Decline Bench 1 15 ₱ 55,000.00
Seated Preacher Curl 1 15 ₱ 43,000.00
Rubberized Dumbbells (5-50lbs w/ Rack) 1 15 ₱ 75,000.00
Olympic Bar w/ Collar 3 15 ₱ 28,500.00
EZ Curl Bar w/ Collar 2 15 ₱ 14,000.00
Olympic Rubberized Plates: 15
2.5kgs 2 15 ₱ 1,600.00
5kgs 2 15 ₱ 4,200.00
10kgs 2 15 ₱ 7,800.00
15kgs 2 15 ₱ 12,800.00
20kgs 2 15 ₱ 14,000.00
25kgs 2 15 ₱ 16,000.00
Spa Related Equipment Qty Useful Life Total Amount

Portable Reflexology Chair 3 10 ₱ 38,400.00
Portable Massage Bed 5 10 ₱ 64,000.00
Kendall All in one Foot Spa Bath Massager 5 10 ₱ 3,750.00
Total ₱ 106,150.00

Dance Studio Equipment Qty Useful Life Total Amount
Sam Won SA 536 Speaker 2 10 ₱ 5,998.00
Samwon SW-K1BT Stereo Karaoke Amplifier (Black) 2 10 ₱ 5,198.00
Champs Titanium 3.5Kw Water Heater (White/Gold) 4 10 ₱ 39,900.00
Total ₱ 51,096.00
NOTE 18 – Loan
Loan Payable of 720,000 per year is paid every first day of the month at the amount of
Php 60,000 excluding interest in 2016. Interest at 7% is also paid monthly.
Year Principal Interest (7%) Principal Repayment Total Annual Payment

2016 ₱ 3,600,000.00 ₱252,000.00 ₱ 720,000.00 ₱ 972,000.00
2017 ₱ 2,880,000.00 ₱201,600.00 ₱ 720,000.00 ₱ 921,600.00
2018 ₱ 2,160,000.00 ₱151,200.00 ₱ 720,000.00 ₱ 871,200.00
2019 ₱ 1,440,000.00 ₱100,800.00 ₱ 720,000.00 ₱ 820,800.00
2020 ₱ 720,000.00 ₱ 50,400.00 ₱ 720,000.00 ₱ 770,400.00
NOTE 19 – Accumulated Depreciation

Office Equipment, Furniture and Fixtures as well as Property Plant and Equipment are
depreciated using straight line method.
Office Equipment
(10 years) 2016 2017 2018 2019 2020
Cost ₱23,599.00 ₱23,599.00 ₱23,599.00 ₱23,599.00 ₱23,599.00
Salvage Value (5%) ₱(1,179.95) ₱(1,179.95) ₱(1,179.95) ₱(1,179.95) ₱(1,179.95)
Depreciable Amount ₱22,419.05 ₱ 22,419.05 ₱ 22,419.05 ₱ 22,419.05 ₱ 22,419.05
Accumulated
Depreciation ₱(2,241.91) ₱(4,483.81) ₱(6,725.72) ₱(8,967.62) ₱(11,209.53)
Carrying Amount ₱ 20,177.15 ₱ 19,115.19 ₱ 16,873.29 ₱ 14,631.38 ₱ 12,389.48
Furniture and Fixture

(10years) 2016 2017 2018 2019 2020
Total Cost ₱ 186,026.75 ₱186,026.75 ₱186,026.75 ₱186,026.75 ₱ 186,026.75
Salvage Value (5%) ₱ (9,301.34) ₱ (9,301.34) ₱ (9,301.34) ₱ (9,301.34) ₱ (9,301.34)
Accumulated
Depreciation ₱ (18,602.68) ₱(37,205.35) ₱(55,808.03) ₱(74,410.70) ₱(93,013.38)
Carrying Amount ₱213,930.76 ₱232,533.44 ₱251,136.11 ₱269,738.79 ₱288,341.46
Property Plant and Equipment – Gym
(15 years) 2016 2017 2018 2019 2020
Cost ₱5,936,500.00 ₱5,936,500.00 ₱5,936,500.00 ₱5,936,500.00 ₱5,936,500.00
Salvage Value
(5%) ₱ (296,825.00) ₱ (296,825.00) ₱ (296,825.00) ₱ (296,825.00) ₱ (296,825.00)
Depreciable
Amount ₱5,639,675.00 ₱5,639,675.00 ₱5,639,675.00 ₱5,639,675.00 ₱5,639,675.00
Accumulated
Depreciation ₱(375,978.33) ₱ (751,956.67) ₱(1,127,935.00) ₱(1,503,913.33) ₱(1,879,891.67)
Carrying
Amount ₱5,560,521.67 ₱5,184,543.33 ₱4,808,565.00 ₱4,432,586.67 ₱4,056,608.33

Property Plant and Equipment – Spa
(10 years) 2016 2017 2018 2019 2020
Cost ₱106,150.00 ₱106,150.00 ₱106,150.00 ₱106,150.00 ₱106,150.00
Salvage Value
(5%) ₱ (5,307.50) ₱ (5,307.50) ₱ (5,307.50) ₱ (5,307.50) ₱ (5,307.50)
Depreciable
Amount ₱ 100,842.50 ₱ 100,842.50 ₱ 100,842.50 ₱ 100,842.50 ₱ 100,842.50
Accumulated ₱
Depreciation (10,084.25) ₱ (20,168.50) ₱ (30,252.75) ₱ (40,337.00) ₱ (50,421.25)
Carrying
Amount ₱ 96,065.75 ₱ 85,981.50 ₱75,897.25 ₱ 65,813.00 ₱ 55,728.75
Property Plant and Equipment – Dance Studio
(10 years) 2016 2017 2018 2019 2020
Cost ₱ 51,096.00 ₱ 51,096.00 ₱ 51,096.00 ₱ 51,096.00 ₱ 51,096.00
Salvage Value
(5%) ₱ (2,554.80) ₱ (2,554.80) ₱ (2,554.80) ₱ (2,554.80) ₱ (2,554.80)
Depreciable
Amount ₱ 48,541.20 ₱ 48,541.20 ₱ 48,541.20 ₱ 48,541.20 ₱ 48,541.20
Accumulated
Depreciation ₱ (5,109.60) ₱ (10,219.20) ₱ (15,328.80) ₱ (20,438.40) ₱ (25,548.00)
Carrying
Amount ₱ 45,986.40 ₱40,876.80 ₱35,767.20 ₱ 30,657.60 ₱ 25,548.00
NOTE 20 - Advertising Expenses

Flyers will be used to advertise the business. The advertising expense for each year is
computer as follows:
Advertising Expenses
Flyers
Annual ₱ 6,000.00
Cost per piece 3
Total Amount ₱ 18,000.00
NOTE 21 – Taxes and Licenses

This includes transactions to legalize the business. The taxes and licenses expense
comprises the following for 2016:
Taxes and Licenses
SEC Registration ₱ 61,852.00
Local Business Tax ₱ 27,096.00
BIR Registration ₱ 2,515.30
Total ₱ 91,463.30

NOTE 22 – Security Services
The business would use agencies for security services. The expense for each year would
be computed as follows:
Security Services
Monthly Payment ₱ 24,468.00
Annual Payment ₱ 293,832.00
NOTE 23 – Janitorial Services

The business would use agencies for janitorial services. The expense for each
year would be computed as follows:
Janitorial Services
Monthly Payment ₱ 12,243.00
Annual Payment ₱ 146,916.00
NOTE 24 – Accounting and Auditing Expenses

The accounting fees would be paid monthly, while the auditing fees would be
paid yearly. The expense comprises the following for 2016:
Particular Cost
Accounting Fee
Monthly ₱ 2,500.00
Yearly ₱ 30,000.00
Auditing Fee ₱ 15,000.00
Total ₱ 45,000.00
NOTE 25 – Leasehold Improvement

The term of lease is 10 years which is shorter than the life of the improvement. Thus,
leasehold improvement is capitalized and amortized in 10 years.
Particulars Description Amount

Area 32.50 sq m. x 12.00 sq m.
Concreting ₱ 1,500,000.00
Steel Decking and Matting Second Floor ₱ 240,000.00
Steel Matting First Floor ₱ 100,000.00
Filing and Plastering ₱ 500,000.00
Tiling ₱ 540,000.00
Plumbing ₱ 300,000.00
Ceiling ₱ 420,000.00
Electrical Include Wires and Transformers ₱ 400,000.00
Electrical Light and Outlets ₱ 350,000.00

Painting ₱ 600,000.00
Glass and Aluminum ₱ 600,000.00
Door and Window Panels ₱ 350,000.00
Stainless and Design ₱ 300,000.00
Closet Pawl and Lavatory ₱ 480,000.00
TOTAL RENOVATION COSTS ₱ 6,680,000.00
NOTE 26 – Amortization
The amortization expense is composed of leasehold improvement amortized for the

period of ten years with salvage value equal to 5% of the cost.
2016 2017 2018 2019 2020
Total Cost ₱6,680,000.00 ₱6,680,000.00 ₱6,680,000.00 ₱6,680,000.00 ₱6,680,000.00
Salvage Value
(5%) ₱(334,000.00) ₱ (334,000.00) ₱ (334,000.00) ₱ (334,000.00) ₱ (334,000.00)
Depreciable
Amount ₱6,346,000.00 ₱6,346,000.00 ₱6,346,000.00 ₱6,346,000.00 ₱6,346,000.00
Accumulated ₱(3,173,000.00
Depreciation ₱(634,600.00) ₱(1,269,200.00) ₱(1,903,800.00) ₱(2,538,400.00) )
Carrying
Amount ₱ 6,045,400.00 ₱5,410,800.00 ₱4,776,200.00 ₱ 4,141,600.00 ₱3,507,000.00
Note 27 – Value Added Tax

For the first year, the value-added tax is lesser than the following year because
of a higher amount of input tax due to the presence of purchasing equipment. The
value-added tax to be paid by the business for each year is computed as follows:
2016 2017 2018 2019 2020

Output VAT:
Gym and Dance
Studio ₱861,840.00 ₱ 1,037,644.99 ₱ 1,239,160.30 ₱ 1,510,309.81 ₱ 1,849,068.24
Spa ₱ 265,593.60 ₱ 285,897.60 ₱ 308,188.80 ₱ 331,056.00 ₱ 357,148.80
Supplements ₱ 76,140.00 ₱ 81,870.00 ₱ 88,200.00 ₱ 100,890.00 ₱ 107,250.00
Total ₱ 1,203,573.60 ₱ 1,405,412.59 ₱ 1,635,549.10 ₱ 1,942,255.81 ₱ 2,313,467.04
Less: Input VAT
Equipment ₱ 756,404.61 ₱ - ₱ - ₱ - ₱ -
Inventory
Purchased ₱ 70,566.00 ₱ 71,922.00 ₱ 76,362.00 ₱ 88,632.00 ₱ 94,206.00
Supplies ₱ 8,956.68 ₱ 8,956.68 ₱ 8,956.68 ₱ 8,956.68 ₱ 8,956.68
Telecommunication ₱ 3,018.24 ₱ 3,018.24 ₱ 3,018.24 ₱ 3,018.24 ₱ 3,018.24
Electricity ₱ 30,690.48 ₱ 30,690.48 ₱ 30,690.48 ₱ 30,690.48 ₱ 30,690.48
Total ₱ 869,636.01 ₱ 114,587.40 ₱ 119,027.40 ₱ 131,297.40 ₱ 136,871.40
VAT PAYABLE ₱ 333,937.59 ₱ 1,290,825.19 ₱ 1,516,521.70 ₱ 1,810,958.41 ₱ 2,176,595.64

Jan Feb March Apr May June
Output VAT:
Gym and Dance Studio ₱ 71,820.00 ₱ 71,820.00 ₱ 71,820.00 ₱ 71,820.00 ₱ 71,820.00 ₱ 71,820.00
Spa ₱ 22,132.80 ₱ 22,132.80 ₱ 22,132.80 ₱ 22,132.80 ₱ 22,132.80 ₱ 22,132.80
Supplements ₱ 5,856.75 ₱ 5,531.37 ₱ 5,856.75 ₱ 8,134.37 ₱ 8,134.37 ₱ 4,229.88
₱ 99,809.55 ₱ 99,484.17 ₱ 99,809.55 ₱ 102,087.17 ₱ 102,087.17 ₱ 98,182.68
Less: Input VAT
Equipment ₱ 756,404.61 ₱ - ₱ - ₱ - ₱ - ₱ -
Inventory Purchased ₱ 70,566.00 ₱ - ₱ - ₱ - ₱ - ₱ -
Supplies ₱ 746.39 ₱ 746.39 ₱ 746.39 ₱ 746.39 ₱ 746.39 ₱ 746.39
Telecommunication ₱ 251.52 ₱ 251.52 ₱ 251.52 ₱ 251.52 ₱ 251.52 ₱ 251.52
Electricity ₱ 2,557.54 ₱ 2,557.54 ₱ 2,557.54 ₱ 2,557.54 ₱ 2,557.54 ₱ 2,557.54
₱ 830,526.06 ₱ 3,555.45 ₱ 3,555.45 ₱ 3,555.45 ₱ 3,555.45 ₱ 3,555.45
VAT PAYABLE ₱ (730,716.51) ₱ 95,928.72 ₱ 96,254.10 ₱ 98,531.72 ₱ 98,531.72 ₱ 94,627.23
Tax Refund ₱ - ₱ (730,716.51) ₱ (634,787.79) ₱ (538,533.69) ₱ (440,001.97) ₱ (341,470.25)
VAT PAYABLE (net) ₱ (730,716.51) ₱(634,787.79) ₱ (538,533.69) ₱ (440,001.97) ₱ (341,470.25) ₱ (246,843.02)
July Aug Sept Oct Nov Dec

Output VAT:
Gym and Dance Studio ₱ 71,820.00 ₱ 71,820.00 ₱ 71,820.00 ₱ 71,820.00 ₱ 71,820.00 ₱ 71,820.00
Spa ₱ 22,132.80 ₱ 22,132.80 ₱ 22,132.80 ₱ 22,132.80 ₱ 22,132.80 ₱ 22,132.80
Supplements ₱ 4,229.88 ₱ 5,856.75 ₱ 4,880.62 ₱ 7,809.01 ₱ 7,483.62 ₱ 8,136.63
₱ 98,182.68 ₱ 99,809.55 ₱ 98,833.42 ₱ 101,761.81 ₱ 101,436.42 ₱ 102,089.43
Less: Input VAT
Equipment ₱ - ₱ - ₱ - ₱ - ₱ - ₱ -
Inventory Purchased ₱ - ₱ - ₱ - ₱ - ₱ - ₱ -
Supplies ₱ 746.39 ₱ 746.39 ₱ 746.39 ₱ 746.39 ₱ 746.39 ₱ 746.39
Telecommunication ₱ 251.52 ₱ 251.52 ₱ 251.52 ₱ 251.52 ₱ 251.52 ₱ 251.52
Electricity ₱ 2,557.54 ₱ 2,557.54 ₱ 2,557.54 ₱ 2,557.54 ₱ 2,557.54 ₱ 2,557.54
₱ 3,555.45 ₱ 3,555.45 ₱ 3,555.45 ₱ 3,555.45 ₱ 3,555.45 ₱ 3,555.45
VAT PAYABLE ₱ 94,627.23 ₱ 96,254.10 ₱ 95,277.97 ₱ 98,206.36 ₱ 97,880.97 ₱ 98,533.98
Tax Refund ₱ (246,843.02) ₱ (152,215.79) ₱ (55,961.69) ₱ - ₱ - ₱ -
VAT PAYABLE (net) ₱ (152,215.79) ₱ (55,961.69) ₱ 39,316.28 ₱ 98,206.36 ₱ 97,880.97 ₱ 98,533.98
NOTE 28 – Income Tax Payable
In 2016 and 2017 the company incurred a loss thus there is no income tax payable. All
Income taxes are payable quarterly. The remaining income tax payable balances at the end of
the year represents the last quarter income tax payable incurred.
2016 2017 2018 2019 2020
Net Income before Tax ₱ (695,890.11) ₱542,056.19 ₱2,151,824.34 ₱4,224,912.40 ₱6,880,603.98
NOLCO ₱ - ₱ (695,890.11) ₱(153,833.92) ₱ - ₱ -
Net Income before Tax
₱(695,890.11) ₱ (153,833.92) ₱1,997,990.42 ₱4,224,912.40 ₱6,880,603.98
after NOLCO
Income Tax (30%) ₱ - ₱599,397.13 ₱1,267,473.72 ₱2,064,181.19
st nd
2018 Annual 1 Quarter 2 Quarter 3rd Quarter 4th Quarter
Net Income before Tax ₱2,151,824.34 ₱539,383.60 ₱538,663.15 ₱532,579.70 ₱541,197.89
NOLCO ₱(153,833.92) ₱ (153,833.92) ₱ - ₱ - ₱ -
₱1,997,990.42 ₱385,549.69 ₱538,663.15 ₱ 532,579.70 ₱541,197.89
after NOLCO
Income Tax (30%) ₱599,397.13 ₱ 115,664.91 ₱161,598.95 ₱159,773.91 ₱ 162,359.37
st nd rd
2019 Annual 1 Quarter 2 Quarter 3 Quarter 4th Quarter
Net Income before Tax ₱4,224,912.40 ₱1,055,433.55 ₱1,056,857.67 ₱1,049,796.72 ₱1,062,824.46
NOLCO ₱ - ₱ - ₱ - ₱ - ₱ -
₱4,224,912.40 ₱1,055,433.55 ₱ 1,056,857.67 ₱1,049,796.72 ₱1,062,824.46
after NOLCO
Income Tax (30%) ₱1,267,473.72 ₱ 316,630.07 ₱ 317,057.30 ₱314,939.02 ₱318,847.34
st nd rd
2020 Annual 1 Quarter 2 Quarter 3 Quarter 4th Quarter
Net Income before Tax ₱6,880,603.98 ₱1,719,103.37 ₱1,720,788.69 ₱1,713,283.68 ₱ 1,727,428.24
NOLCO ₱ - ₱ - ₱ - ₱ - ₱ -
₱6,880,603.98 ₱1,719,103.37 ₱1,720,788.69 ₱1,713,283.68 ₱ 1,727,428.24
after NOLCO
Income Tax (30%) ₱2,064,181.19 ₱515,731.01 ₱516,236.61 ₱ 513,985.10 ₱ 518,228.47
NOTE 29 – Cost of Sales and Services

The following computations are related to cost of sales and services:
GYM SUPLEMENTS 2016 2017 2018 2019 2020
Beginning Inventory ₱ - ₱ 30,950.00 ₱ 30,950.00 ₱ 19,650.00 ₱ 19,650.00
Purchases ₱ 588,050.00 ₱ 599,350.00 ₱ 636,350.00 ₱738,600.00 ₱785,050.00
Total ₱ 588,050.00 ₱ 630,300.00 ₱ 667,300.00 ₱758,250.00 ₱804,700.00
Ending Inventory ₱ 30,950.00 ₱ 30,950.00 ₱ 19,650.00 ₱ 19,650.00 ₱ 19,650.00
Cost of Sales ₱ 557,100.00 ₱ 599,350.00 ₱ 647,650.00 ₱738,600.00 ₱785,050.00

GYM AREA 2016 2017 2018 2019 2020
A. Employee
Net Pay ₱ 1,032,036.12 ₱ 1,032,036.12 ₱ 1,032,036.12 ₱ 1,032,036.12 ₱ 1,032,036.12
COLA ₱ 32,400.00 ₱ 32,400.00 ₱ 32,400.00 ₱ 32,400.00 ₱ 32,400.00
13th month ₱ 90,000.00 ₱ 90,000.00 ₱ 90,000.00 ₱ 90,000.00 ₱ 90,000.00
5 days service incentive leave pay ₱ 18,167.00 ₱ 18,167.00 ₱ 18,167.00 ₱ 18,167.00 ₱ 18,167.00
SUBTOTAL ₱1,172,603.12 ₱ 1,172,603.12 ₱ 1,172,603.12 ₱ 1,172,603.12 ₱ 1,172,603.12
B. Employer's Contribution
SSS Contribution ₱ 39,247.20 ₱ 39,247.20 ₱ 39,247.20 ₱ 39,247.20 ₱ 39,247.20
PhilHealth Contribution ₱ 14,400.00 ₱ 14,400.00 ₱ 14,400.00 ₱ 14,400.00 ₱ 14,400.00
Employee Compensation (EC) ₱ 1,080.00 ₱ 1,080.00 ₱ 1,080.00 ₱ 1,080.00 ₱ 1,080.00
Pag-IBIG Contribution ₱ 10,800.00 ₱ 10,800.00 ₱ 10,800.00 ₱ 10,800.00 ₱ 10,800.00
SUBTOTAL ₱ 65,527.20 ₱ 65,527.20 ₱ 65,527.20 ₱ 65,527.20 ₱ 65,527.20
COST OF SERVICE ₱ 1,238,130.32 ₱ 1,238,130.32 ₱ 1,238,130.32 ₱ 1,238,130.32 ₱ 1,238,130.32
SPA AREA 2016 2017 2018 2019 2020

A. Employee
Net Pay ₱ 619,914.60 ₱ 619,914.60 ₱ 619,914.60 ₱ 619,914.60 ₱ 619,914.60
COLA ₱ 18,000.00 ₱ 18,000.00 ₱ 18,000.00 ₱ 18,000.00 ₱ 18,000.00
13th month ₱ 54,000.00 ₱ 54,000.00 ₱ 54,000.00 ₱ 54,000.00 ₱ 54,000.00
5 days service incentive
₱ 9,000.00 ₱ 9,000.00 ₱ 9,000.00 ₱ 9,000.00 ₱ 9,000.00
leave pay
SUBTOTAL ₱ 700,914.60 ₱ 700,914.60 ₱ 700,914.60 ₱ 700,914.60 ₱ 700,914.60
B. Employer's Contribution
SSS Contribution ₱ 23,982.00 ₱ 23,982.00 ₱ 23,982.00 ₱ 23,982.00 ₱ 23,982.00
PhilHealth Contribution ₱ 7,500.00 ₱ 7,500.00 ₱ 7,500.00 ₱ 7,500.00 ₱ 7,500.00
Employee Compensation
₱ 600.00 ₱ 600.00 ₱ 600.00 ₱ 600.00 ₱ 600.00
(EC)
Pag-IBIG Contribution ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00
SUBTOTAL ₱ 38,082.00 ₱ 38,082.00 ₱ 38,082.00 ₱ 38,082.00 ₱ 38,082.00
COST OF SERVICE ₱ 738,996.60 ₱ 738,996.60 ₱ 738,996.60 ₱ 738,996.60 ₱ 738,996.60
NOTE 30 – Other Income
The health club shall install a snack bar which is the only source of other income. The
following computations related to projected sales and profit of the snack bar:
2016 2017 2018 2019 2020
Sales ₱ 136,953.00 ₱ 136,953.00 ₱ 136,953.00 ₱136,953.00 ₱ 136,953.00
Cost of Sales ₱ 124,503.00 ₱ 124,503.00 ₱ 124,503.00 ₱ 124,503.00 ₱ 124,503.00
Gross Profit ₱ 12,450.00 ₱ 12,450.00 ₱ 12,450.00 ₱ 12,450.00 ₱ 12,450.00
NOTE 31 – Utilities Expense

The electricity expense would be paid monthly with the rate of 8.9767 per kilowatt hour.
The expense comprises the following for 2016:
Expense per
Electricity Hours Units month (@8.9767) Yearly Expense
Treadmill 18 kWh 12 4 ₱ 7,755.86 ₱ 93,070.32
Elliptical Cross Trainer 15 kWh 12 2 ₱ 3,231.61 ₱ 38,779.32
Adaptive Cross Trainer 15 kWh 12 2 ₱ 3,231.61 ₱ 38,779.32
Heaters 1.33 kWh 16 2 ₱ 382.05 ₱ 4,584.60
Air-conditioning unit 14.5 kWh 16 2 ₱ 4,165.19 ₱ 49,982.28
Refrigerator 12.5 kWh 16 192 ₱ 1,795.34 ₱ 21,544.08
Speaker 500 watt 12 144 ₱ 107.72 ₱ 1,292.64
Television 180 watt 12 3 ₱ 58.17 ₱ 698.04
Computer 200 watt 16 1 ₱ 28.73 ₱ 344.76
Light Bulbs
25 watts 25 watt 16 50 ₱ 179.53 ₱ 2,154.36
50 watts 50 watt 16 30 ₱ 215.44 ₱ 2,585.28
Fluorescent Lights
75 watts 75 watt 16 15 ₱ 161.58 ₱ 1,938.96
Total ₱ 21,312.83 ₱255,753.96
The water expense for each year is computed as follows:

WATER EXPENSES Cost
Monthly Consumption ₱ 4,530.00
Number of Months 12
Annual Consumption ₱ 54,360.00
The business provides additional routers to provide internet connection to the whole
building. The telecommunication expense comprises the following for 2016:
Telecommunication Expenses Monthly Consumption Yearly Consumption
Telephone and Internet Subscription ₱ 1,299.00 ₱ 15,588.00
Cable ₱ 500.00 ₱ 6,000.00
Additional Routers ₱ 297.00 ₱ 3,564.00
Total ₱ 2,096.00 ₱ 25,152.00

4.7 FINANCIAL ANALYSIS
4.7.1 Financial Ratios
4.7.1.1 Liquidity Ratios:
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
4.7.1.1.1 Current Ratio =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
Current Assets Current Liabilities Current Ratio
2016 ₱6,446,535.15 ₱1,060,110.38 6.0810
2017 ₱8,168,169.18 ₱2,202,001.59 3.7094
2018 ₱10,112,986.00 ₱2,556,704.57 3.9555
2019 ₱13,509,829.28 ₱2,958,422.55 4.5666
2020 ₱18,879,818.26 ₱2,754,302.10 6.8547
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 𝑚𝑖𝑛𝑢𝑠 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦

4.7.1.1.2 Quick Ratio =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
Current Assets Inventory Current Liabilities Quick Ratio
2016 ₱6,446,535.15 30,950.00 1,060,110.38 6.0518
2017 ₱8,168,169.18 31,155.51 2,202,001.59 3.6953
2018 ₱10,112,986.00 23,924.93 2,556,704.57 3.9461
2019 ₱13,509,829.28 24,054.41 2,958,422.55 4.5584
2020 ₱18,879,818.26 23,938.00 2,754,302.10 6.8460
8.0000
6.0000
4.0000
2.0000
0.0000
2016 2017 2018 2019 2020
Current Ratio Quick Ratio
Figure 4.1 Current Ratio and Quick Ratio Graph
The ratio between the current assets and current liabilities decreased for
the second year. Same goes to the ratio between the current assets and current
liabilities without relying to the inventory. Even though current assets are
increasing yearly since the business doesn’t rely that much to its current assets
for its revenues, the increase of current liabilities for the next year is greater than
that of the increase of current assets. For the year 2017, the increase of current
liabilities is 108% as compared to that of the 28% increase in current assets.
Although for the next two years, it was able to improve and increased. For the
year 2018, current assets increased by 23% as compared to the current liabilities
increase of 16%. And for the fifth year following the decrease and slow increase,
current and quick ratios increased gradually respectively. It is probably due to the
bigger percentage increase of current assets compare to that of the current
liabilities which is due to the gradual increase of cash from the business.
Nevertheless, the business still proves to be liquid for the first five years of
operation. It is because the normal or acceptable result of the current and quick
ratio is 1. If the business reaches the ratio of 1 and above, it only means that the
business is liquid enough to pay its debts since its current assets are greater than
that of its current liabilities. As for the proposed business, the current and quick
ratios for the first five years are above the acceptable ratio which only means that
the business is more than liquid and can pay its debts for the first five years of
operations.
4.7.1.1.3 Leverage Ratios:

𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
4.7.1.1.3a Debt-to-Total Assets Ratio =
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
Total Liabilities Total Assets Debt-to-Total
Assets Ratio
2016 3,220,110.38 18,384,220.27 0.1752
2017 3,642,001.59 19,060,167.67 0.1911
2018 3,276,704.57 19,959,297.86 0.1642
2019 2,958,422.55 22,310,454.52 0.1326
2020 2,754,302.10 26,634,756.86 0.1034
𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
4.7.1.1.3b Debt-to-Equity Ratio =
𝑇𝑜𝑡𝑎𝑙 𝑂𝑤𝑛𝑒𝑟𝑠 ′𝐸𝑞𝑢𝑖𝑡𝑦
Total Liabilities Total Owners’ Equity Debt-to-Total Equity Ratio
2016 3,220,110.38 15,164,109.89 0.2124
2017 3,642,001.59 15,418,166.08 0.2362
2018 3,276,704.57 16,682,593.30 0.1964
2019 2,958,422.55 19,352,031.98 0.1529
2020 2,754,302.10 23,880,454.76 0.1153
0.3000
0.2000
0.1000
0.0000
2016 2017 2018 2019 2020
Debt-to-Equity Debt-to-Assets
Figure 4.2 Debt-to-Equity and Debt-to-Asset Graph
The trend of the ratios between debt to equity and debt to assets
increased for the next year but consistently decreased for the next three years.
For debt to assets ratio, it only shows that the business’ assets is greater than
that of its debts. The business’ assets can cover up and pay for its debts as it
continually increases for the first five years of operations. The business would
not need to worry about its debts overshadowing its operations since it can rely
on its assets enough. Also, it only means that the business’ operations doesn’t
rely much on its debts and it can stand fairly on its own since the funding doesn’t
mainly come from creditors.
As for debt to equity ratio, it only proves that the business can stand on
its own as time goes. Since the business’ equity is greater than that of its
liabilities, it only means that the continuation of the business’ operations does
not rely on its liabilities or creditors but rather to its equity. Having greater equity
only means that the business can stand on its own even when the debts are
already paid. It is good since relying on debts and creditors is not a good sign for
a business to continue its operations. The risk of being overpowered by debt is
low. The greater equity also proves that ownership of the business is secured
and that operations can freely continue as time goes.
𝐿𝑜𝑛𝑔−𝑇𝑒𝑟𝑚 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
4.7.1.1.3c Long-Term Debt-to-Equity Ratio =
𝑇𝑜𝑡𝑎𝑙 𝑂𝑤𝑛𝑒𝑟𝑠 ′𝐸𝑞𝑢𝑖𝑡𝑦
Long-Term Total Owners’ Equity L-T Debt-to-Total
Liabilities Equity Ratio
2016 2,160,000.00 15,164,109.89 0.1424
2017 1,440,000.00 15,418,166.08 0.0934
2018 720,000.00 16,682,593.30 0.0432
2019 - 19,352,031.98 -
2020 - 23,880,454.76 -
𝑃𝑟𝑜𝑓𝑖𝑡𝑠 𝑏𝑒𝑓𝑜𝑟𝑒 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑡𝑎𝑥𝑒𝑠

4.7.1.1.3d Times-Interest-Earned Ratio =
𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶ℎ𝑎𝑟𝑔𝑒𝑠
EBIT Total Interest Times-Interest-

Charges Earned Ratio
2016 (443,890.11) 252,000.00 (1.7615)
2017 743,656.19 201,600.00 3.6888
2018 2,303,024.34 151,200.00 15.2316
2019 4,325,712.40 100,800.00 42.9138
2020 6,931,003.98 50,400.00 137.5199
150.0000
100.0000
50.0000
0.0000
2016 2017 2018 2019 2020
-50.0000
LT Debt-to-Equity TIE
Figure 4.3 Long-term Debt-to-Equity and Times-Interest-Earned Graph
The ratio between long-term debt and equity is on a decreasing trend. It is

probably due to the constant decrease of the business’ long-term debt as
compared to the consistent increase of its equity. It only shows that the business
is less risky since its equity is greater than that of its long-term debt. The
business does not rely much on its long-term debt and can pay it since the table
above shows that after three years, the long-term debt is already paid since it
doesn’t show any balance anymore. It only proves that the business can pay its
debts. The less risky potential makes the business’ trust factor good for potential
creditors as well.
As for the ratio between the earnings before interest and taxes or net
operating income and interest charges, the trend for such is increasing. It is
probably due to the increasing trend of the net operating income as compared to
the decreasing trend of the interest charges incurred by the business. Even
though the business resulted to a negative result of times-interest-earned ratio
for the first year, it improved gradually for the next four years. It only means that
the business can pay its interest charges from its debt on a pretax earnings
basis.
4.7.1.1.4 Profitability Ratios

𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡
4.7.1.1.4a Gross Profit Margin =
𝑆𝑎𝑙𝑒𝑠
Gross Profit Sales Gross Profit Margin
2016 7,495,553.48 10,029,780.00 0.7473
2017 9,135,295.08 11,711,771.60 0.7800
2018 11,146,858.52 13,771,635.04 0.8094
2019 13,621,741.87 16,337,468.39 0.8338
2020 16,679,228.74 19,441,405.26 0.8579
𝑁𝑒𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐼𝑛𝑐𝑜𝑚𝑒

4.7.1.1.4b Operating Profit Margin =
Net Operating Sales Operating Profit

Income Margin
2016 (443,890.11) 10,029,780.00 (0.0443)
2017 743,656.19 11,711,771.60 0.0635
2018 2,303,024.34 13,771,635.04 0.1672
2019 4,325,712.40 16,337,468.39 0.2648
2020 6,931,003.98 19,441,405.26 0.3565
𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
4.7.1.1.4c Net Profit Margin =
Net Income Sales Net Profit Margin

2016 (695,890.11) 10,029,780.00 (0.0694)
2017 542,056.19 11,711,771.60 0.0463
2018 1,552,427.21 13,771,635.04 0.1127
2019 2,957,438.68 16,337,468.39 0.1810
2020 4,816,422.78 19,441,405.26 0.2477
1.0000
0.8000
0.6000
0.4000
0.2000
0.0000
-0.2000 2016 2017 2018 2019 2020
GPM OPM NPM
Figure 4.4 GPM, OPM and NPM Graph
The gross profit ratio, operating profit ratio, and the net profit ratio all
have increasing trend for the first five years of operations. For the gross profit
margin, given such increasing ratios, it is probably due to the increasing sales of
the project and constant cost of services that causes the gross profit to increase
consistently as well. It only shows that the proposed project has the capacity to
cover up its operating expenses and produce net income after it had already
deducted its cost of services. It also shows that the project is stable to be able to
cover up its expenses.
As for the operating margin, the increase shows that the project is
operating efficiently. Although the first year resulted to a negative due to the net
operating loss and the increase for the next four years are not that gradual, still
it is safe to say that the project has the capacity to operate efficiently. Also, the
project’s pricing strategy can be considered good since the net sales was able to
cover up the operating expenses incurred despite such pricing. And for the net
profit margin, the increase only means that the net income of the project also
increases as the sales increase. Even though the net profit margin for the first
year resulted in a negative ratio due to a net loss, the increase in sales helped
the profit margin have a positive result which made a net income for the
business. As long as sales increase, the net income of the business will increase
as well along with the profit margin which is good for the business since increase
in net income helps the business operate continuously and earn its payback
period fast.
4.7.1.1.4d Return on Total Assets =
Net Income Total Assets Return on Total

Assets
2016 (695,890.11) ₱18,384,220.27 (0.0379)
2017 542,056.19 ₱19,060,167.67 0.0284
2018 1,552,427.21 ₱19,959,297.86 0.0778
2019 2,957,438.68 ₱22,310,454.52 0.1326
2020 4,816,422.78 ₱26,634,756.86 0.1808
4.7.1.1.4e Return on Equity =
𝑇𝑜𝑡𝑎𝑙 𝑂𝑤𝑛𝑒𝑟𝑠 ′ 𝐸𝑞𝑢𝑖𝑡𝑦
Net Income Total Owners’ Equity Return on Equity

2016 (695,890.11) ₱15,164,109.89 (0.0459)
2017 542,056.19 ₱15,418,166.08 0.0352
2018 1,552,427.21 ₱16,682,593.30 0.0931
2019 2,957,438.68 ₱19,352,031.98 0.1528
2020 4,816,422.78 ₱23,880,454.76 0.2017
𝐸𝐵𝐼𝑇
4.7.1.1.4f Basic Earning Power =
EBIT Total Assets Basic Earning Power
2016 (443,890.11) ₱18,384,220.27 (0.0241)
2017 743,656.19 ₱19,060,167.67 0.0390
2018 2,303,024.34 ₱19,959,297.86 0.1154
2019 4,325,712.40 ₱22,310,454.52 0.1939
2020 6,931,003.98 ₱26,634,756.86 0.2602
0.3000
0.2000
0.1000
0.0000
2016 2017 2018 2019 2020
-0.1000
ROTA ROE BEP
Figure 4.5 ROTA, ROE and BEP Graph
The return on total assets ratio, return on equity ratio, and the basic
earning power ratio of the business all have an increasing trend. For the return
on total assets, the increase means that the business is using its assets
effectively in its operations. Although the first year resulted to a negative ratio, it
was able to increase for the next four years. Since the business mainly uses its
assets in its operations, especially its fixed assets, it is justifiable that the return
on total assets should be good. It only shows that the business’ assets are being
used effectively and efficiently in its operations and not just being put to waste.
For the return on equity, the increase means that the business is being
profitable. Despite the negative result in its first year, the increase positively for
the next four years means that the business shows profitability given the equity
of the owners. And as for the basic earnings power, even though it resulted to a
negative ratio for the first year, it was able to improve for the next four years
resulting to a positive ratio. The positive results for the next four years only
means that the business’ assets have the capacity to generate operating income
for the business. It shows that the business need not just rely on its services and
sales but it can also make its assets a way to generate revenue for the business.
4.7.1.1.4g Return on Investment =
𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡
Net Profit Investment Cost Return on

Investment
2016 (695,890.11) ₱20,000,000.00 (0.0348)
2017 542,056.19 ₱20,000,000.00 0.0271
2018 1,552,427.21 ₱20,000,000.00 0.0776
2019 2,957,438.68 ₱20,000,000.00 0.1479
2020 4,816,422.78 ₱20,000,000.00 0.2408
0.3
0.2
0.1
0
2016 2017 2018 2019 2020
-0.1
ROI
Figure 4.6 ROI Graph
The return on investment is keeping an increasing trend for the next five
years of operations. Despite the negative result in the first year, the business
maintained an increasing and positive return on investment for the next four
years of operations. It only shows that the business maintains an increasing
efficiency when it comes to its investment compared to its net income or
benefits. The investment proves to be efficient and profitable as well.
4.7.2 HORIZONTAL AND VERTICAL ANALYSIS
4.7.2.1 Horizontal Analysis
4.7.2.1a Balance Sheet
2016 2017 2018 2019 2020

ASSETS:
Current Assets:
Cash in Bank 100% 70% 150% 288% 507%
Inventory - Snack Bar 0% 0% 0% 0% 0%
Inventory - Gym Supplements 100% 1% -23% -22% -23%
Spa Supplies 100% 4% 4% 4% 4%
Maintenance Supplies 100% 4% 4% 4% 4%
Office Supplies 100% 4% 4% 4% 4%
Petty Cash 100% 0% 0% 0% 0%
Prepaid Rent 100% 0% 0% 0% 0%
Total Current Assets 100% 27% 57% 110% 193%
Noncurrent Assets
Office Equipment 100% 0% 0% 0% 0%
Accumulated Depreciation - Office Equipment 100% 100% 200% 300% 400%
Furniture and Fixtures 100% 0% 0% 0% 0%
Accumulated Depreciation -Furnitures and Fixtures 100% 100% 200% 300% 400%
Property Plant and Equipment - Gym 100% 0% 0% 0% 0%
Accumulated Depreciation - Gym 100% 100% 200% 300% 400%
Property Plant and Equipment - Spa 100% 0% 0% 0% 0%
Accumulated Depreciation - Spa 100% 100% 200% 300% 400%
Property Plant and Equipment - Dance Studio 100% 0% 0% 0% 0%
Accumulated Depreciation-Dance Studio 100% 100% 200% 300% 400%
Leasehold Improvement 100% 0% 0% 0% 0%
Accumulated Amortization - Leasehold Improvement 100% 100% 200% 300% 400%
Total Noncurent Assets 100% -9% -18% -26% -35%
TOTAL ASSETS 100% 4% 9% 21% 45%
LIABILITIES
Current Liabilities
Accounts Payable 100% 0% 0% 0% -100%
Due to SSS, Philhealth, Pag-IBIG 100% 0% 0% 0% 0%
Interest Payable 100% -25% -50% -75% -100%
Withholding Tax Payable 100% 0% 0% 0% 0%
VAT Payable 100% -25% -50% -75% -100%
Income Tax Payable 100% 0% 0% 0% 0%
Total Current Liabilities 100% 1210% 1456% 1756% 2129%
Loan Payable 100% -33% -67% -100% -100%
Total Noncurrent Liabilities 100% -33% -67% -100% -100%
OWNER'S EQUITY
James Castañeda, Capital 100% 2% 10% 28% 57%
Arnel Cipriano, Capital 100% 2% 10% 28% 57%
Elmer Derecho, Capital 100% 2% 10% 28% 57%
Total Equity 100% 2% 10% 28% 57%
TOTAL LIABILITIES AND EQUITY 100% 4% 9% 21% 45%
This analysis will show how the business has grown over the five years. For this
analysis, it shows that cash in bank have increased from the years 2017 to 2020,
having an approximate increase of 437% starting 2017. The inventory of gym
supplements drops as the year progresses, it’s because of the decreasing supplies as
the demands rise up. All in all, there is a steep increase in the total current assets,
which is the same with the total noncurrent assets.
In contrast with the total assets, the total current and noncurrent liabilities has a
decreasing percentage as the year progresses. This is because of the principle debts
are paid every year. When it comes to the total equity, there is an increase in
percentage as the year progresses. It helped also that there are minimal withdrawals
from the partners.
To sum it up, there is an increase of percentage for the last five years in total
assets and total liabilities and equity.
4.7.2.1b Income Statement

In comparison with the financial position horizontal analysis, it can be observed
that the income statement does not have the same constant increase of percentage as
with the balance sheet. After having a 12% increase of net income from year 2016, the
net income dropped down to ₱3,486,492.46 in 2018 resulting to a -74% decrease of
percentage from year 2016. However, net income increased to ₱13,963,601.75 in 2019
resulting to a 2% increase of net income from 2016. The increase of percentage in the
net income is continued until 2020 with an 18% rise from the 2016 net income.
2016 2017 2018 2019 2020
Revenue:
Service Revenue - Gym and Dance Studio 100% 20% 46% 77% 117%
Service Revenue - Spa 100% 8% 16% 25% 34%
Sales - Supplements 100% 8% 16% 33% 41%
Total
Cost of Services
Cost of Services - Gym and Dance Studio 100% 0% 0% 0% 0%
Cost of Services - Spa 100% 0% 0% 0% 0%
Cost of Sales 100% 8% 16% 33% 41%
Total 100% 2% 4% 7% 9%
Gross Profit 100% 22% 49% 82% 123%
Other Income 100% 0% 0% 0% 0%
Total Income 100% 22% 49% 82% 122%
Expenses
Salaries and Wages 100% 0% 0% 0% 0%
PHIC 100% 0% 0% 0% 0%
HDMF 100% 0% 0% 0% 0%
SSS 100% 0% 0% 0% 0%
Employee's Compensation 100% 0% 0% 0% 0%
Spa Supplies 100% 0% 0% 0% 0%
Office Supplies 100% 0% 0% 0% 0%
Maintenance Supplies 100% 0% 0% 0% 0%
Electricity 100% 0% 0% 0% 0%
Water 100% 0% 0% 0% 0%
Telecommunication 100% 0% 0% 0% 0%
Security 100% 0% 0% 0% 0%
Janitorial 100% 0% 0% 0% 0%
Taxes and Licenses 100% 0% 0% 0% 0%
Miscellaneous Expense 100% 0% 0% 0% 0%
Advertising 100% 0% 0% 0% 0%
Rent 100% 0% 0% 0% 0%
Interest 100% -20% -40% -60% -80%
Repairs and Maintenance 100% 0% 0% 0% 0%
Amortization Expense - Leasehold Improvement 100% 0% 0% 0% 0%
Depreciation 100% 0% 0% 0% 0%
Total Expenses 100% 1% 2% 2% 3%
Net Income before Tax 100% 12% 27% 46% 69%
Net Operating Loss Carry Over 0% 100% 112% 0% 0%
Net Income before Tax after NOLCO 100% 112% 240% 46% 69%
Provision for Income Tax (30%) 0% 0% 100% -57% -50%
Income Tax Benefit 100% 0% 0% 0% 0%
Net Income/(Loss) 100% 12% -74% 2% 18%
4.7.2.2 Vertical Analysis
4.7.2.2a Balance Sheet
Assets 2016 2017 2018 2019 2020

Current Assets:
Cash in Bank 13.36% 21.91% 30.71% 42.70% 55.93%
Inventory - Snack Bar 0.00% 0.00% 0.00% 0.00% 0.00%
Inventory - Gym Supplements 0.17% 0.16% 0.12% 0.11% 0.09%
Spa Supplies 0.01% 0.01% 0.01% 0.01% 0.01%
Maintenance Supplies 0.00% 0.00% 0.00% 0.00% 0.00%
Office Supplies 0.00% 0.00% 0.00% 0.00% 0.00%
Petty Cash 0.27% 0.26% 0.25% 0.22% 0.19%
Prepaid Rent 21.25% 20.50% 19.58% 17.51% 14.67%
Total Current Assets 35.07% 42.85% 50.67% 60.55% 70.88%
Noncurrent Assets:
Office Equipment 0.13% 0.12% 0.12% 0.11% 0.09%
Accumulated Depreciation - Office Equipment -0.01% -0.02% -0.03% -0.04% -0.04%
Furniture and Fixtures 1.01% 0.98% 0.93% 0.83% 0.70%
Accumulated Depreciation -Furniture and Fixtures -0.10% -0.19% -0.27% -0.32% -0.33%
Property Plant and Equipment - Gym 32.29% 31.15% 29.74% 26.61% 22.29%
Accumulated Depreciation - Gym -2.05% -3.95% -5.65% -6.74% -7.06%
Property Plant and Equipment - Spa 0.58% 0.56% 0.53% 0.48% 0.40%
Accumulated Depreciation - Spa -0.05% -0.11% -0.15% -0.18% -0.19%
Property Plant and Equipment - Dance Studio 0.28% 0.27% 0.26% 0.23% 0.19%
Accumulated Depreciation-Dance Studio -0.03% -0.05% -0.08% -0.09% -0.10%
Leasehold Improvement 36.34% 35.05% 33.47% 29.94% 25.08%
Accumulated Amortization - Leasehold Improvement -3.45% -6.66% -9.54% -11.38% -11.91%
Total Noncurrent Assets 64.93% 57.15% 49.33% 39.45% 29.12%
TOTAL ASSETS 100% 100% 100% 100% 100%
Current Liabilities:
Accounts Payable 3.92% 3.78% 3.61% 3.23% 0.00%
Due to Pag-IBIG 0.02% 0.02% 0.02% 0.01% 0.01%
Due to PhilHealth 0.02% 0.02% 0.02% 0.02% 0.02%
Due to SSS 0.06% 0.06% 0.06% 0.05% 0.04%
Interest Payable 1.10% 0.79% 0.51% 0.23% 0.00%
Withholding Tax Payable 0.11% 0.11% 0.11% 0.09% 0.08%
VAT Payable 0.54% 6.77% 7.68% 8.20% 8.25%
Income Tax Payable 0.00% 0.00% 0.81% 1.43% 1.95%
Total Current Liabilities 5.77% 11.55% 12.81% 13.26% 10.34%
Noncurrent Liabilities:
Loan Payable 11.75% 7.56% 3.61% 0.00% 0.00%
Total Noncurrent Liabilities 11.75% 7.56% 3.61% 0.00% 0.00%
Total Liabilities 17.52% 19.11% 16.42% 13.26% 10.34%
Partners’ Equity
James Castañeda, Capital 27.49% 26.96% 27.86% 28.91% 29.89%
Arnel Cipriano, Capital 27.49% 26.96% 27.86% 28.91% 29.89%
Elmer Derecho, Capital 27.49% 26.96% 27.86% 28.91% 29.89%
Total Equity 82.48% 80.89% 83.58% 86.74% 89.66%
TOTAL LIABILITIES AND EQUITY 100% 100% 100% 100% 100%
The business’ current assets keeps on increasing for the first five years of
its operations despite the decreasing inventory and prepaid asset. This is
probably due to the increasing trend of the cash account. On the contrary, the
business’ noncurrent assets maintains a decreasing trend for the first five years
of operations. This is probably due to the equipment’s depreciating value as time
goes. The increase in current assets is indirectly proportional to the decrease of
noncurrent assets of the business for the first five years of operations.
On the other hand, the business’ total liabilities increased on its second
year but was able to maintain a decreasing trend for the next three years of
operations thereafter. Despite the increasing of the current liabilities for the first
four years, the current liabilities decreased on the fifth year and the noncurrent
liabilities keeps on decreasing as well for the first three years and was completely
paid on the fourth years giving it a zero result on the fourth and fifth year. On
the contrary, the business’ total equity keeps its increasing trend on the first five
years of its operations. This is probably due to the increase in net income as well
as the decrease of liabilities for the business. The decrease of the business’ total
liabilities is indirectly proportional to the increase of the business’ total equity.
4.7.2.2b Income Statement
The business’ net income or loss gives an increasing trend for the first
five years of its operations. This is probably due to the decreasing trends of the
business’ total cost of services rendered and the total expenses incurred by the
business. The decreases of the total cost of services rendered enables the
increase of the gross profit. Also, the decreases of the total expenses incurred by
the business allows the increase of the net income or loss. Despite the net loss
on its first year of operation, the business gained net income for the next four
years.
2016 2017 2018 2019 2020
Revenue
Service Revenue - Gym & Dance Studio 71.61% 73.83% 76.01% 77.97% 80.09%
Service Revenue - Spa 22.07% 20.34% 18.65% 16.89% 15.31%
Sales - Supplements 6.33% 5.83% 5.34% 5.15% 4.60%
Total 100% 100% 100% 100% 100%
Cost of Services
Cost of Services – Gym & Dance Studio 12.34% 10.57% 8.99% 7.58% 6.37%
Cost of Services - Spa 7.37% 6.31% 5.37% 4.52% 3.80%
Cost of Sales 5.55% 5.12% 4.70% 4.52% 4.04%
Total 25.27% 22.00% 19.06% 16.62% 14.21%
Gross Profit 74.73% 78.00% 80.94% 83.38% 85.79%
Other Income 0.12% 0.11% 0.09% 0.08% 0.06%
Total Income 74.86% 78.11% 81.03% 83.45% 85.86%
Expenses
Salaries and Wages 18.35% 15.71% 13.36% 11.26% 9.47%
PHIC 0.24% 0.21% 0.18% 0.15% 0.12%
HDMF 0.19% 0.16% 0.14% 0.12% 0.10%
SSS 0.70% 0.60% 0.51% 0.43% 0.36%
Employee's Compensation 0.02% 0.02% 0.01% 0.01% 0.01%
Spa Supplies 0.50% 0.42% 0.36% 0.30% 0.26%
Office Supplies 0.16% 0.14% 0.12% 0.10% 0.08%
Maintenance Supplies 0.06% 0.05% 0.04% 0.04% 0.03%
Utilities 3.34% 2.86% 2.43% 2.05% 1.72%
Security 2.93% 2.51% 2.13% 1.80% 1.51%
Janitorial 1.46% 1.25% 1.07% 0.90% 0.76%
Taxes and Licenses 0.91% 0.78% 0.66% 0.56% 0.47%
Accounting and Auditing Expenses 0.45% 0.38% 0.33% 0.28% 0.23%
Advertising 0.18% 0.15% 0.13% 0.11% 0.09%
Rent 38.96% 33.36% 28.37% 23.92% 20.10%
Interest 2.51% 1.72% 1.10% 0.62% 0.26%
Repairs and Maintenance 0.41% 0.70% 0.90% 1.01% 1.06%
Amortization Expense - Leasehold 6.33% 5.42% 4.61% 3.88% 3.26%
Improvements
Depreciation 4.10% 7.02% 8.96% 10.06% 10.57%
Total Expenses 81.80% 73.48% 65.41% 57.59% 50.46%
Net Income before Tax -6.94% 4.63% 15.63% 25.86% 35.39%
Net Operating Loss Carry Over 0.00% 5.94% 1.12% 0.00% 0.00%
Net Income before Tax after -6.94% -1.31% 14.51% 25.86% 35.39%
NOLCO
Provision for Income Tax (30%) 0.00% 0.00% 4.35% 7.76% 10.62%
Income Tax Benefit 0.00% 0.00% 0.00% 0.00%
Net Income/(Loss) -6.94% 4.63% 11.27% 18.10% 24.77%
4.7.3 Capital Budget Analysis
4.7.3a Undiscounted Payback Period
Initial Cash Outflow (Year 0) ₱ (15,564,600.41)
Net Cash Flow
Year 1 ₱ (2,581,228.66) ₱ (18,145,829.07)
Year 2 ₱ 2,728,309.10 ₱ (15,417,519.97)
Year 3 ₱ 2,960,042.62 ₱ (12,457,477.35)
Year 4 ₱ 4,404,713.63 ₱ (8,052,763.72)
Year 5 ₱ 5,658,105.36 ₱ (2,394,658.36)
Year 6 ₱ 9,025,027.33 ₱ 6,630,368.97
Year 7 ₱ 11,748,401.25 ₱ 18,378,770.22
Payback Period 6.83 Years
Table 4.13 Undiscounted Payback Period

The undiscounted period of the business is 6.83 years based on the
computations above. The standard payback period of the establishment, considering the
gym, spa and the dance studio, is within 6-8 years. It is clear that the business is within
the average payback period. The investors now will be more encourage to continue with
this venture knowing that their return of investment is within the standard time and it
assures them that the business can stand on it’s on in the long run.
4.7.3b Discounted Payback Period

Initial Cash Outflow (Year 0) ₱ (15,564,600.41)
Net Cash Flow
Year 1 ₱ (2,378,705.66) ₱ (17,943,306.07)
Year 2 ₱ 2,514,246.18 ₱ (15,429,059.89)
Year 3 ₱ 2,727,797.91 ₱ (12,701,261.98)
Year 4 ₱ 4,059,120.14 ₱ (8,642,141.84)
Year 5 ₱ 5,214,170.85 ₱ (3,427,970.99)
Year 6 ₱ 8,316,924.39 ₱ 4,888,953.40
Year 7 ₱ 10,826,622.60 ₱ 15,715,576.00
Payback Period 7.13 Years
Table 4.14 discounted Payback Period

The discounted payback period of the business is 7.13 years based on the
computations above. It is slightly longer than the undiscounted payback period but it is
still in the range of the standard payback period of gym establishments. The discount
rate used in the computation is the weighted average cost of capital of the business
which is 8.514%. It is computed by using the formula (% of debt)(after-tax cost of
debt) + (% of equity)(cost of equity). The cost of debt is derived from dividing the sum
of interest payable for the last 5 years from the amount of the loan, the result is 21%.
The cost of equity is the rate of return an investor requires from a stock before exploring
other opportunities. Since this is a partnership, the cost of equity that will be used is 9%
which is the average of the return of equity from 2016-2020. The debt-equity
percentage is 18-82.
WACC = (% of debt) (after tax cost of debt) + (% of equity) (cost of equity)

WACC = (18%) (1-30%) (21%) + (82%) (9%)
WACC = 8.514%
4.7.3c Net Present Value

This spreadsheet was created by either POM, QM or POM-QM for Windows, V4.
UNLIMITED FITNESS HEALTH CLUB

NPV
Capital Investment
Interest rate 0.085139997
Data
Initial investment ₱ 15,564,600.41
Cash flow Inflow Outflow

Period 1 ₱ - ₱ 2,581,228.66
Period 2 ₱ 2,728,309.10 ₱ -
Period 3 ₱ 2,960,042.62 ₱ -
Period 4 ₱ 4,404,713.63 ₱ -
Period 5 ₱ 5,658,105.36 ₱ -
Period 6 ₱ 9,025,027.33 ₱ -
Period 7 ₱ 11,748,401.25 ₱ -
Salvage value
Results
In/Out Net PV ₱ 23,729,237.20 ₱ 17,943,306.08
Total Net PV ₱ 5,785,931.12
Table 4.15 Net Present Value
The net present value of the business indicates how much it contributes to the
partner’s equity. The larger the net present value the more value it adds to the business.
In most cases, it is enough to know that business will do well if it would generate a
positive net present value. In this case, the net present value of ₱5,785,931.12
represents that the business will do well.
4.7.3d Internal Rate of Return
This spreadsheet was created by either POM, QM or POM-QM for Windows, V4.
UNLIMITED FITNESS HEALTH CLUB

IRR
Capital Investment
Data Results
Initial investment ₱ 15,564,600.41 IRR 15%
Cash flow Inflow outflow ₱ 15,564,600.41

Period 1 ₱ - ₱ 2,581,228.66 ₱ 2,581,228.66
Period 2 ₱ 2,728,309.10 ₱ - ₱ (2,728,309.10)
Period 3 ₱ 2,960,042.62 ₱ - ₱ (2,960,042.62)
Period 4 ₱ 4,404,713.63 ₱ - ₱ (4,404,713.63)
Period 5 ₱ 5,658,105.36 ₱ - ₱ (5,658,105.36)
Period 6 ₱ 9,025,027.33 ₱ - ₱ (9,025,027.33)
Period 7 ₱ 11,748,401.25 ₱ - ₱ (11,748,401.25)
Salvage value
In/Out Net PV ₱ 17,813,036.65 ₱ 17,813,036.65

Total Net PV ₱ -
Table 4.16 Internal Rate of Return
The business’s internal rate of return is the discount rate that forces the present
value of the inflows to equal the cost. In other words, this is equivalent to forcing the
net present value to be zero. For the computation of the internal rate of return, a
Quantitative Management for Windows (QM) were used. The business is acceptable
since its internal rate of return, which is 15%, is higher than its weighted average cost
of capital, which is 8.514%.
4.8 ACCOUNTING CONTROL AND POLICIES
4.8.1 Revenue and Expenditure Cycle
4.8.1.1 Revenue Cycle (General)
Figure 4.7 Revenue Cycle (General)
4.8.1.1a Gym/Fitness Center
Figure 4.8 Revenue Cycle (Gym/Fitness Center)
4.8.1.1b Therapeutic Massage and Spa
Figure 4.9 Revenue Cycle (Therapeutic Massage and Spa)
4.8.1.1c Dance Studio
Figure 4.10 Revenue Cycle (Dance Studio)
4.8.1.1d Gym Supplements
Figure 4.11 Revenue Cycle (Gym Supplements)
4.8.1.2 Expenditure Cycle (general)
Figure 4.12 Expenditure Cycle (general)
4.8.1.2a Gym/Fitness Center
Figure 4.13 Expenditure Cycle (Gym/Fitness Center)
4.8.1.2b Therapeutic Massage and Spa
Figure 4.14 Expenditure Cycle (Therapeutic Massage and Spa)
4.8.1.2c Dance Studio
Figure 4.15 Expenditure Cycle (Dance Studio)
4.8.1.2d Gym Supplements
Figure 4.16 Expenditure Cycle (Gym Supplements)
4.8.2 Internal Control Policies and Procedures
4.8.2.1 Physical Controls
4.8.2.1a Transaction Authorization
Major transactions like purchasing of new equipment, furniture, fixtures
and other transactions that need a huge amount of money should be checked
and authorized first by the owners/partners.
4.8.2.1b Segregation of Duties

Separation of duties especially authoritative, accounting and custodial
functions will still be segregated in the best way possible. The company will exert
more effort on supervision.
4.8.2.1c Supervision
There will be a close supervision on every transaction that will be made
by the employees. Also, surprise visits and supervisions will be conducted from
time to time in order to observe the flow and operation of the business.
4.8.2.1d Accounting Records

Accounting records must be kept from day-to-day bases, especially on
transactions involving new membership of the gym.
4.8.2.1e Access Control

Only authorized personnel shall have access to assets of the company of
to minimize misappropriation, damage and theft. Each personnel have their own
responsibility and authority.
4.8.2.1f Independent Verification

Owners/Partners should make regular checks on the system to identify
errors and misrepresentation. Supporting documents should be provided.
4.8.2.2 Other Control Activities

a) The owners are responsible for the over-all operation of the business.
b) As a pricing control, price rates must be reviewed and/or updated at
annually by the owners/partners.

c) As a stockroom control, there will be an employee who will check its
inventory, especially on spa supplies and supplements. These kind of job
will be given to the authorized employee and also the owners/partners will
have a surprise checking from time to time.
d) As an asset control, there shall be an asset register. Once any asset is
purchased, it should be recorded on an asset register with all relevant
details. The Security Personnel should know the location of these assets
and be responsible for it. He/She will ensure that all the assets are in the
building and ready for use. He/She will check daily the equipment in the
gym to secure that all assets are present. He/She will also secure the locks
of the building during closing time.
e) There would be a suggestion box in the front desk where guest can give
feedback of the service provided. In addition, if there are complaints.
f) As a safety control, the security guard is assigned to check whether
facilities are safe from physical peril. Also, he/she shall also check if all
safety equipment are in good condition.
1. Cash Receipts
a) Cash receipts must be deposited on the next banking day with approval of
the owners/partners of the business.
b) Official Receipts shall be issued to the customers upon payment of
membership fees. These official receipts are pre-numbered.
c) Service revenue paid by customers are collected by the front desk
employee, who is also the cashier. He/She shall solely have custody to this
asset.
d) The assigned accountant from the accounting firm shall counter check
whether amounts of the official receipts match the amounts in the cash
register. Any discrepancy of the amount or any missing sales invoice
number shall be investigated.
2. Cash Disbursements
a) All major expenditure requires the approval of the owners/partners.
b) All cash disbursements must be made by check, except for petty
transactions wherein it shall be taken out from the petty cash fund.

c) Petty cash fund shall be under imprest system. All disbursements from the
petty cash fund should be supported by approved vouchers.
d) Checks must be pre-numbered and all numbers are accounted for. It must
be signed by one of the partners. Signature plate/stamp is not allowed.
Check payable to “cash” or “bearer” are also prohibited.
e) Bookkeeper shall also update the Cash Register and General Journal for
any cash disbursement.
3. Payroll
a) The general manager shall be the payroll officer.
b) Salaries will be paid every 15th and 30th of the month.

Chapter 5
Socio-Economic Study
The proposed project will be influenced by and will have an impact on the socio-
economic aspect of Davao City. An immediate contribution of the business is on the area of
employment because it will hire people for the business’ operations. The business will also pay
taxes for its income and other statutory fees in order to contribute to the city’s economic
growth. Moreover, factors like inflation and trends in income and spending will be considered.
5.1 Employment
It was already mentioned that the business will employ people who will be
responsible for the daily operations of the business. The planned number of employees
to be hired is 16 and is composed of: two receptionists, five gym instructors, a Zumba
instructor, a dance choreographer, a yoga instructor and five spa workers. Two janitors
and a security guard will also be outsourced. Each of them will receive a compensation
appropriate for the type of work that they will have. Except for the outsourced
employees, the others will enjoy personnel benefits like Pag-IBIG, Phil Health and SSS
(Refer to the Computations for Payroll).
5.2 Taxes and Other Legal Fees

In order to play its part in the economy’s growth, the business will allot a portion
of its income in paying taxes. Aside from the income tax, the business will pay a
registration fee for the government to grant the business its permit and an annual fee
for the renewal of the said permit.
5.3 Income and Spending Trends

The trends in income and spending are of great influence as these would affect
the company’s demand. Both trends are considered because the income of an individual
affects his/her spending pattern. Engel’s law states that as income increases, the
percentage spent on food decreases while that on luxury goods increases.
5.4 Corporate Social Responsibility

Aside from the factors mentioned above, the company should likewise consider
the expectations of consumers as to how well the business is doing its environmental and
social responsibility. Corporate social responsibility as defined in Investopedia, is a newly

developed business approach wherein aside from the profit which only satisfies the
interests of the company, it is also considering the impact of its operations to the well-
being of the society and the environment. Moreover, it is the company’s initiative to go
beyond the normal practices of the business, showing the willingness to incur short term
costs without expecting an immediate financial return. CSR is becoming a widely used
business approach especially nowadays that people are more concerned about the
environmental effects of a certain business. This isn’t a mandatory practice yet but it
would add to the company’s goodwill. In this manner, the business already has
responded to the call of society and environment, it may also expect long-term returns.
In order to accept the challenge imposed by societal expectations, the company

plans to implement a proper disposal of its waste. As simple as it may seem, segregation
of wastes is oftentimes left behind. It was mentioned in the technical feasibility aspect
that the company will strictly follow proper waste segregation. The nature of the business
produces not that much waste as the other companies so these wastes are simply
classified as biodegradable, residual and recyclable (discussion as to what waste belong
to each classification was already done in Chapter 3). Aside from the proper waste
disposal, the company should dwell on strategies that are not solely focused on earning
profit but also on developing values among its stakeholders. Also, if the company already
has enough money to fund philanthropic activities, it can engage in out-reach programs,
grant educational scholarships to the deserving children of the employees or give loyalty
incentives to the qualifying workers.

Chapter 6
Organizational Feasibility
6.1 Basic Considerations in Forming the Organization

Upon starting a business, one of the many considerations is the form of
organization. This will help in the supervision and management of the business
especially that the birth stage of the business is a crucial part as this is the stage where
customers make their impression. The factors being considered are the form of
ownership, the organizational structure, the person in-charge for the overall business
and others that may relate to business management and supervision. The proponents
decided not to assign a managing partner among the three but rather all of them will
take full responsibility. The employees, as shown in the organizational chart below, will
report directly to the general partners. Also, the business has a flat structure in order for
the partners to easily monitor each of the employees.
6.1.1 Project Schedule

Activities Duration Predecessor
(Days)
1 Project Brainstorming and Conceptualization 7 -
2 Making of the Proposal Letter 1 1
3 Acceptance of the Project Proposal 1 2
4 Survey (online, competitors, organizations, etc.) 7 3
5 Tallying of survey results 1 4
6 Overall Planning and Establishing the Project Work Plan 2 5
7 Making of the feasibility study 60 6
8 Building and Facilities Construction (including compliance 245 7
with legal requirements)
9 Purchasing of Equipment 20 8
10 Purchasing of Supplies 15 8
11 Verify and reserve the partnership name with the 1 8
Securities and Exchange Commission (SEC)
12 Register the partnership with the SEC 1 11
13 Obtain print-out of the encoded business permit 1 12
application form from the Business Bureau–Permits and
License Division (BBPLD)
14 Notarize the encoded business permit application form at 1 13
the City Legal Office
15 Obtain the Temporary Authority to Operate (TAO) and 1 14
Compliance Form from the BBPLD
16 Buy special books of account at bookstore 1 15
17 Apply for Certificate of Registration (COR) and Taxpayer 2 16

Identification Number (TIN) at the Bureau of Internal
Revenue (BIR)
18 Pay the registration fee and documentary stamp taxes 1 16
(DST) at the Authorized Agent Bank (AAB)
19 Obtain the authority to print receipts and invoices from 1 18
the BIR
20 Print receipts and invoices at the print shops 5 19
21 Have books of accounts and Printer’s Certificate of 1 20
Delivery (PCD) stamped by the BIR
22 Register with the Social Security System (SSS) 2 21
23 Register with the Philippine Health Insurance Company 1 16
(PhilHealth)
24 Hiring of Employees 5 21
25 Preparation for the Resort Opening 7 24
1 16 31 46 61 76 91 106 121 136 151 166 181 196 211 226 241 256 271 286 301 316 331 346 361
1
3
5
7
9
11
13
15
17
19
21
23
25
Figure 6.1 Gantt Chart
6.2 Form of Ownership

The proposed business will take the form of partnership. There will be three
partners who will automatically be the owners of the business. The owners will have
their share in the profit or loss based on their individual contribution, in this case,
equally.

6.3 Organizational Chart
The figure below explains the organizational structure of the company. There is
no managing partner because each employee will report directly to the partners.
General Partners
Yoga Instructor, Janitors and Security

Receptionist Spa Workers
Dance Guard
Choreographer,
Figure 6.2 Organizational Chart
6.4 Officers and Personnel

6.4.1 General Partners
As shown above, there is no manager so every partner will take part in
the supervision of the company. The three partners will be liable for each other’s
decisions and all of the employees will report directly to them.
6.4.2 Receptionist
The receptionists are trained individuals, knowledgeable enough to
answer the inquiries of the customers. Each of them will take their own shift,
morning and afternoon. They are responsible for the daily transactions:
explaining the services offered, keeping track of the membership records,
receiving cash, answering telephone calls and the like.
6.4.3 Yoga and Zumba Instructor, Dance Choreographer

These employees are in-charge of the dance studio. The yoga instructor
will assist the clients in finding their own spaces and effective ways of
meditating, giving them a worthwhile experience. The Zumba instructor, on the
other hand, will help the customers boost their enthusiasm and heighten their
energy by giving them dynamic steps as they move with the lively music, putting

a twist to the exercise. Lastly, the dance choreographer will teach dance moves
to the clients.
6.4.4 Gym Instructors

The gym instructors are the ones found in the gym. They will help the
clients in their fitness journey and will recommend the exercises appropriate for
each customer. They should be sincere enough to their job so as to motivate the
clients.
6.4.5 Spa Workers

Spa workers are trained individuals who will be responsible for the spa
services offered by the business. They will cater each customer’s preferred
service whether body massage, facial or foot massage. Also, they will help the
customers feel relaxed.
6.4.6 Janitors and Security Guard

The janitors will maintain the orderliness of every part of the
establishment from the reception area, dance studio, gym area, shower and
comfort rooms as well as the locker area. They will also keep the equipment and
supplies organized. On the other hand, the security guard will secure the area.
Nothing is more important than the security of every person inside the
establishment. The security guard will politely check the bags and other things of
the clients. He will also look after the cars of the customers, if there is.
6.5 Organizational Policy

6.5.1 Operating Hours
At 6:00 in the morning, the establishment will be opened and services will
be offered for those customers interested in using the dance studio. There will be
three instructors: one for the yoga, the other two for the Zumba and dance
lessons. However, these services will not be offered simultaneously. So, these
instructors will not stay in the business premises every day. They will have their
duties according to the schedule given to them.
It is the duty of the receptionists to ensure that all the needs of the
customers will be taken care of. There will be two receptionists since the

business will operate for fourteen hours daily. Each of them will take two shifts in
a day and there will be four hours for each shift.
The operation for the gym will start at 8:00a.m. Since there are six gym
instructors, they will be divided into two groups. Though they will also have
their shifts, both groups have an overlapping schedule. The second group will
start their working hours even if the first group is not yet done with the first
shift. There are also four shifts the gym instructors.
Because of its nature, spa services will be offered in the afternoon. It will
start to operate at 3:00pm. There will be five therapists and all of them will be
on duty simultaneously. There will be no shifts since the spa will only operate for
seven hours. But, there will be a dinner break in between. (See the operating
schedule table on Chapter 3 for a clearer view)
6.5.2 Meetings:
Since the proposed project is considered a partnership type of ownership,
the general partners or owners are automatically appointed as the general
managers of the business. And as the owners and general managers of the
proposed project, the general partners are to have weekly meetings for the
business’ operations. The weekly meetings are to be held every Monday morning
before the week officially starts to get the head start through the operations.
6.5.3 Paydays:
The proposed project’s proposed salary is fixed on a monthly basis. So,
the salary schedules for the employees are on every end of the month. If the
end of the month happens to fall on a necessary holiday, the payday will be
scheduled the day before such holiday.
6.5.4 Labor Policies:

6.5.4a General Policy
It is the proposed project’s policy to comply with all applicable laws and
regulations, including those concerning hours, compensation, opportunity, human
rights and working conditions. As per the labor code provides, employees are
provided the mandatory minimum wage rate for their work, rest periods as

provided by the operating schedule, and the appropriate increase in salary given
that employees do some overtime work. The organization strictly prohibits
discrimination or harassment against any employee because of the individual’s
race, color, religion, gender, sexual orientation, national origin, age, disability,
veteran’s status or any status protected by law. Hiring of under-aged people are
strictly prohibited as well. Forced or compulsory labor of any workers is also
prohibited. All employees work in a clean, orderly and safe environment. The
Company requires full compliance with applicable workplace safety.
6.5.4b Specific Policy

The proposed project’s employees are mandated by the firm to be able to
give a quality customer service and must keep in mind to work for the client’s
best interest since the business focuses mainly on servicing. They must be in
their best behavior and must be knowledgeable enough of things going around
the firm. All employees will comply with all laws and regulations governing our
company’s behavior. When this is not the case, it shall be reported to the general
managers in order to supply appropriate actions. Employees may not engage in
anti-competitive conduct nor are they permitted to take unfair advantage of any
customer, supplier, competitor or other person through manipulation,
concealment, and misrepresentation of material facts or other unfair-dealing
practice. Clients’ information are to be considered confidential whilst employees
that are in-charge of such information must not disclose such or else appropriate
actions will be taken into account. The proposed project is committed to
conducting our business in an environmentally sound manner. All of the project’s
employees are required to be familiar with environmental laws and regulations
relevant to their employment responsibilities and to comply with them.

Appendix A – Equipment, Furniture and Fixtures
Gym Equipment QTY. Useful Life TOTAL PRICE
Precor C932i Low-impact Treadmill 4 15 ₱ 1,067,600.00
Precor EFX 536i Elliptical Crosstrainer 2 15 ₱ 556,000.00
Precor UBK 815 Upright Bike 2 15 ₱ 306,000.00
Precor RBK 815 Recumbent Bike 2 15 ₱ 344,000.00
Precor AMT 813 Adaptive Motion Trainer 2 15 ₱ 764,000.00
Precor C240i Stretch Trainer 2 15 ₱ 99,000.00
Multi Press 1 15 ₱ 173,000.00
Rear Delt/Pec Fly 1 15 ₱ 173,000.00
Lat Pulldown/Seated Row 1 15 ₱ 173,000.00
Bicep Curl/Tricep Extension 1 15 ₱ 173,000.00
Leg Extension/Leg Curl 1 15 ₱ 173,000.00
Leg Press/Calf Extension 1 15 ₱ 190,000.00
Inner/Outer Thigh 1 15 ₱ 173,000.00
Abdominal/Back Extension 1 15 ₱ 173,000.00
Adjustable Cable Crossover 1 15 ₱ 194,000.00
FTS Glide Functional Trainer 1 15 ₱ 190,000.00
Smith Machine 1 15 ₱ 188,000.00
Angled Leg Press 1 15 ₱ 184,000.00
Flat Bench 2 15 ₱ 48,000.00
Multi-Purpose Bench 1 15 ₱ 25,000.00
Vertical Knee Up 1 15 ₱ 58,000.00
Back Extension 1 15 ₱ 43,000.00
Super Bench 2 15 ₱ 104,000.00
Olympic Flat Bench 1 15 ₱ 42,000.00
Olympic Incline Bench 1 15 ₱ 51,000.00
Olympic Decline Bench 1 15 ₱ 55,000.00
Seated Preacher Curl 1 15 ₱ 43,000.00
Rubberized Dumbbells (5-50lbs w/ Rack) 1 15 ₱ 75,000.00
Olympic Bar w/ Collar 3 15 ₱ 28,500.00
EZ Curl Bar w/ Collar 2 15 ₱ 14,000.00
Olympic Rubberized Plates: 2.5kgs 2 15 ₱ 1,600.00
5kgs 2 15 ₱ 4,200.00
10kgs 2 15 ₱ 7,800.00
15kgs 2 15 ₱ 12,800.00
20kgs 2 15 ₱ 14,000.00
25kgs 2 15 ₱ 16,000.00
Total ₱ 5,936,500.00
Spa Related Equipment Qty Useful Life Total Amount
Portable Reflexology Chair 3 10 ₱ 38,400.00
Portable Massage Bed 5 10 ₱ 64,000.00
Kendall All in one Foot Spa Bath Massager 5 10 ₱ 3,750.00
Total ₱ 106,150.00
Dance Studio Equipment Qty Useful Life Total Amount
Sam Won SA 536 Speaker 2 10 ₱ 5,998.00
Samwon SW-K1BT Stereo Karaoke Amplifier
(Black) 2 10 ₱ 5,198.00
Champs Titanium 3.5Kw Water Heater
(White/Gold) 4 10 ₱ 39,900.00
Total ₱ 51,096.00

Appendix B – Renovation Cost
Particulars Description Amount
Area 32.50 sq m. x 12.00 sq m.
Concreting P 1,500,000.00
Steel Decking and Matting Second Floor P 240,000.00
Steel Matting First Floor P 100,000.00
Filing and Plastering P 500,000.00
Tiling P 540,000.00
Plumbing P 300,000.00
Ceiling P 420,000.00
Electrical Include Wires and Transformers P 400,000.00
Electrical Light and Outlets P 350,000.00
Painting P 600,000.00
Glass and Aluminum P 600,000.00
Door and Window Panels P 350,000.00
Stainless and Design P 300,000.00
Closet Pawl and Lavatory P 480,000.00
TOTAL RENOVATION COSTS P 6,680,000.00
Appendix C – Supplies Purchases

Office Supplies
Pair of Scissors ₱ 30.00 2 ₱ 60.00
Stapler ₱ 115.00 3 ₱ 345.00
Paper Clip (box) ₱ 35.00 1 ₱ 35.00
Fastener ₱ 25.00 1 ₱ 25.00
Receipt Stub ₱ 25.00 500 ₱ 12,500.00
Short Bond Paper (ream) ₱ 180.00 6 ₱ 1,080.00
Long Bond Paper (ream) ₱ 200.00 3 ₱ 600.00
Permanent Marker (box) ₱ 453.00 1 ₱ 453.00
Ball pen (box) ₱ 171.00 2 ₱ 342.00
Pencil (box) ₱ 45.00 2 ₱ 90.00
Eraser ₱ 12.00 3 ₱ 36.00
Sharpener ₱ 150.00 1 ₱ 150.00
Staple Wire (box) ₱ 39.00 3 ₱ 117.00
Scotch Tape ₱ 15.00 3 ₱ 45.00
Tape Dispenser ₱ 80.00 2 ₱ 160.00
Short Folder ₱ 8.00 15 ₱ 120.00
Long Folder ₱ 10.00 15 ₱ 150.00

Short Envelope ₱ 5.00 15 ₱ 75.00
Long Envelope ₱ 8.00 15 ₱ 120.00
Total ₱ 16,503.00
Hand Gloves ₱ 65.00 3 ₱ 195.00
Cotton Mop ₱ 410.00 1 ₱ 410.00
Soft Broom ₱ 45.00 3 ₱ 135.00
Dipper ₱ 15.00 3 ₱ 45.00
Stick Broom ₱ 30.00 4 ₱ 120.00
Dust Pan ₱ 150.00 2 ₱ 300.00
Window Brush ₱ 175.00 2 ₱ 350.00
Cleaning Towel ₱ 15.00 15 ₱ 225.00
Garbage Bag (Pack) ₱ 315.00 3 ₱ 945.00
Trash Bin ₱ 175.00 3 ₱ 525.00
Detergent Powder ₱ 150.00 1 ₱ 150.00
Plunger ₱ 185.00 2 ₱ 370.00
Toilet Brush ₱ 96.00 4 ₱ 384.00
Zonrox ₱ 650.00 3 ₱ 1,950.00
Liquid Hand Soap ₱ 100.00 3 ₱ 300.00
Total ₱ 6,404.00
Spa Supplies
Salt Glow ₱ 698.00 4 ₱ 2,792.00
Paraffin Wax ₱ 698.00 4 ₱ 2,792.00
Body Lotion ₱ 298.00 3 ₱ 894.00
Body Wash ₱ 498.00 3 ₱ 1,494.00
Light Mineral Oil ₱ 348.00 2 ₱ 696.00
Sweet Almond Oil ₱ 1,200.00 2 ₱ 2,400.00
Hazelnut Oil ₱ 2,800.00 2 ₱ 5,600.00
Balck Granite Stones ₱ 408.00 24 ₱ 9,792.00
Thai Herbal Ball ₱ 280.00 10 ₱ 2,800.00
Bentosa Cup ₱ 233.00 12 ₱ 2,796.00
Foot Soak ₱ 398.00 4 ₱ 1,592.00
Foot Scrub ₱ 498.00 4 ₱ 1,992.00
Foot Lotion ₱ 498.00 4 ₱ 1,992.00
Toilet Paper ₱ 25.00 24 ₱ 600.00
Hand Towel ₱ 150.00 30 ₱ 4,500.00
Towel ₱ 280.00 30 ₱ 8,400.00
Hand Soap Liquid ₱ 75.00 8 ₱ 600.00
Total ₱ 51,732.00

Appendix D – Survey Questionnaire
Ateneo de Davao University

Name (optional): _____________
Gender: Age: ______
 F
 M
Occupation: __________________
Location of Occupation: _________
1. Do you want to be physically fit?
 Yes
 No
2. Do you go to the gym?
 Yes
 No
3. If you are offered fitness supplements, are you willing to avail?
 Yes
 No
If yes, how much are you willing to pay?
 Php1000-1500
 Php 1500-2000
 Php2000-2500
 2500
4. Have you heard of a health club (All-in-one Gym?)
 Yes
 No
5. Are you willing to go to such health club monthly?
 Yes
 No
6. If No, what activities would you prefer to be in such a health club (check as many)?
If Dance Studio Services, what kind of services would you avail twice a month?
 Yoga
If Yoga, how often?
o Once a Week
o Twice a Week
 Zumba
If Zumba, how often?
o Once a Week
o Twice a Week
 Dance Lessons
If Dance Lessons, choose below:
o Hip-hop
If Hip-hop, how often?
o Once a Week

o Twice a Week
o Jazz
If Jazz, how often?
o Once a Week
o Twice a Week
o Ballet
If Ballet, how often?
o Once a Week
o Twice a Week
Spa-related services are offered, which will you avail (check as many)?
 Body Massage
 Sauna
 Body Wax
 Body Scrub
 Foot Spa
7. How much are you willing to pay for a health club membership?
 Php 600.00 – 800.00
 Php +800.00 – 1,000.00
 Php +1,000.00 – 1,200.00
 Php +1,200.00 – 2,000.00
8. Where do you get information about a new service offer?
 Television
 Flyers
 Online
 Word of Mouth
9. How are you influenced in availing a service?
 Peers/friends
 Trends/crowd influence
 Advertisements
 Price
 Quality
10. In a rate of 1- to 5, what do you look for in a health club (1 being the highest)?
___ equipment
___ location
___ price
___ ambiance
___ service

Appendix E – Survey Results

Appendix F – Service Cost
Number of Number Expense Daily Expense
Electricity Expenses
Hours of Units (@8.9767/kWh)
Treadmill 18 kW 12 4 ₱ 7,755.87 ₱ 258.52
Elliptical Cross Trainer 15 kW 12 2 ₱ 3,231.61 ₱ 107.72
Adaptive Cross Trainer 15 kW 12 2 ₱ 3,231.61 ₱ 107.72
Heaters 1.33 kW 16 2 ₱ 382.05 ₱ 12.73
Air-conditioning unit 14.5 kW 16 2 ₱ 4,165.19 ₱ 138.83
Refrigerator 12.5 kW 16 1 ₱ 1,795.34 ₱ 59.84
Speaker 500 watt 12 2 ₱ 107.72 ₱ 3.59
Television 180 watt 12 3 ₱ 58.17 ₱ 1.93
Computer 200 watt 16 1 ₱ 28.73 ₱ 0.95
Light bulbs
*25 watt 25 watt 16 50 ₱ 179.53 ₱ 5.98
*50 watt 50 watt 16 30 ₱ 215.44 ₱ 7.18
Fluorescent lights
*75 watt 75 watt 16 15 ₱ 161.58 ₱ 5.38
Water Expenses Number of Hours Number of Units Expense Daily Expense

Water ₱ 4,530.00 ₱ 151.00
Number Number of Electricity
Telecommunication Expenses Expense Daily Expense
of Hours Units Expenses
Telephone and Internet
1299/mo. ₱ 43.30
Subscription
Cable 500/mo. ₱ 16.67
Additional Routers 297/mo. ₱ 9.90
Total Utilities ₱27,938.84 ₱ 931.29

Service Cost
Spa Supplies
Unit Cost Monthly Expense Daily Expense
Salt Glow ₱ 698/kilo ₱ 698.00 ₱ 23.27
Paraffin Wax ₱ 698/kilo ₱ 698.00 ₱ 23.27
Body Lotion ₱ 298/bottle ₱ 298.00 ₱ 9.93
Body Wash/ Bath Gel ₱ 498/liter ₱ 498.00 ₱ 16.60
Light Mineral Oil ₱ 348/bottle ₱ 348.00 ₱ 11.60
Sweet Almond Oil ₱ 1200/bottle ₱ 1,200.00 ₱ 40.00
Hazelnut Oil ₱ 2800/bottle ₱ 2,800.00 ₱ 93.33
Black Granite Stones ₱ 408.00 ₱ 408.00 ₱ 13.60
Thai Herbal Oil ₱ 280.00 ₱ 280.00 ₱ 9.33
Ventosa Cup 2796(1dozen) ₱ 2,796.00 ₱ 93.20
Foot Soak ₱ 398.00 ₱ 398.00 ₱ 13.17
Foot Scrub ₱ 498.00 ₱ 498.00 ₱ 16.60
Foot Lotion ₱ 498.00 ₱ 498.00 ₱ 16.60
Toilet Paper ₱ 25.00 ₱ 375.00 ₱ 12.50
Hand Towel ₱ 150.00 ₱ 4,500.00 ₱ 150.00
Towel ₱ 280.00 ₱ 8,400.00 ₱ 280.00
Hand Soap Liquid ₱ 75.00 ₱ 150.00 ₱ 5.00
Total Spa Supplies ₱ 24,843.00 ₱ 828.00
Salaries and Wages Number of Employees Monthly Expense Daily Expense
Receptionist ₱ 2.00 ₱ 19,000.00 ₱ 633.33
Gym Instructor ₱ 6.00 ₱ 72,000.00 ₱ 2,400.00
Dance Instructor ₱ 1.00 ₱ 6,000.00 ₱ 200.00
Yoga Instructor ₱ 1.00 ₱ 6,000.00 ₱ 200.00
Zumba instructor ₱ 1.00 ₱ 6,000.00 ₱ 200.00
Spa Therapist ₱ 5.00 ₱ 54,000.00 ₱ 1,800.00
Janitorial Services ₱ 2.00 ₱ 24,486.00 ₱ 816.20
Security Services ₱ 1.00 ₱ 12,243.00 ₱ 408.10
Total Salaries and Wages ₱ 199,729.00 ₱ 6,657.63
GRAND TOTAL ₱ 8,416.92

Appendix G – Labor Requirement
Description  Qualifications # of employees Salary/Wage

Receptionists
Receptionists are the  21-35 years old 2 Receptionists Fixed Monthly
ones who are in charge  Preferably Female are needed Salary of Php
of welcoming the  Preferably a College which will be 9,500.00
clients, describing the graduate or still taking a separated
services offered by the College course. through 4 shifts Overtime Pay is
establishment,  Has a friendly personality, consisting of 25% of the
assisting the clients in smart appearance, good the following: regular salary.
their needs and spoken and written  6:00AM-
questions, and enlisting communication, and 10:00AM
the clients for customer service skills.  10:00AM-
membership or the  Has the ability to stay calm 2:00 PM
ones operating the under pressure and be polite  2:00PM-
database. but firm when dealing with 6:00PM
difficult situations  6:00 PM -
concerning the clients. 10:00 PM
 Has good organizational
skills and basic IT skills.
Gym Instructors
Gym Instructors are  Preferably Male 5 Gym Fixed Monthly
the ones who are in  At least 25 years old Instructors are Salary of Php
charge of being the  At least 2 year experience in needed for the 12,000.00
fitness teachers of the the related field. establishment Overtime Pay is
clients and instructing  Graduate of fitness relative which will be 25% of the
the clients on how to degree or has physical separated regular salary.
use the equipment. education background or at through
least must possess at least a overlapping
Vocational Diploma/Short schedules.
Course Certificate.
 Has relative fitness
certifications and fitness
program experiences.
communications, and

Dance Instructors
Dance Choreographer  20-35 years old. 1 Dance Fixed Monthly
is the one in charge of  Male/Female Choreographer Salary of Php
being the dance  Must have a strong is needed for 6,000.00
teacher of the clients background, training and the
and leads them in experiences in different establishment
making it to a types of dances. with a schedule
choreography.  Preferably has a degree in that is
choreography. applicable
 Preferably during
 Has creative, leadership, weekends.
communications, and
Yoga Instructor
Yoga Instructor is the  20-35 years old. 1 Yoga Fixed Monthly
one in charge of  Preferably Female Instructor is Salary of Php
leading the clients in  Must have completed a needed for the 6,000.00
their yoga sessions. vocational training or establishment
certificate program in yoga with a schedule
instructions. that is
 At least 1 year of working applicable
experience in the related during Tuesdays
field. and Thursdays.
communication, and
Zumba Instructor
Zumba Instructor is the  20-35 years old. 1 Zumba Fixed Monthly
one in charge of  Male/Female Instructor is Salary of Php
leading the clients in  Must have at least a needed for the 8,000.00
their zumba sessions. vocational training or short establishment
course certificate for zumba with a schedule
instructions. applicable
 At least 1 year of working during
experience in the related Mondays,
field. Wednesdays,
 Has good leadership, and Fridays.
communication, and

Spa Therapists
Spa Therapists are the  21-35 years old. 5 Spa Salary is based
ones in charge of doing  Preferably Female Therapists are on a 20%
the spa services to the  At least 1 year of working needed for the commission.
clients. experience in the related establishments
field. which will be
 Must have at least a scheduled
vocational training or starting from
certificate program in spa- 3:00 PM to
related services. 7:00PM and
 Has good communication 7:30 PM to
and customer service skills. 10:00 PM given
a 30 minute
break.
Security Guard
Security Guard is the  25-45 years old. 1 Security The
one responsible for  Preferably Male Guard is establishment
keeping the place, its  At least 5’5 Height needed for the would use
employees, and its  At least 1 year of working establishment. outsourcing of
clients feel safe and experience in the related security
secured. field. services: Php
 Has good communication 317.00 per day
and customer service skills. plus 10% for
 With complete 201 File and the
SG License. administrative
purposes which
totals to Php
348.70 per day.
Janitors
Janitors are responsible  At least 21 years old. 2 Janitors are The
for providing cleaning  Male/Female needed for the establishment
services to the  Has good cleaning skills and establishment. would use
establishment and knowledge, well versed in outsourcing of
maintaining the inspecting premise and janitorial
cleanliness and order building, and able to services: Php
of such establishment. operate janitorial tools well. 317.00 per day
 Has good communication plus 10% for
skills, customer service the
skills, and demonstrated administrative
ability to prioritize and purposes which
perform multiple tasks totals to Php
simultaneously. 348.70 per day.
 At least 1 year of working
experience in the related
field.
 With complete government
requirements.

Appendix H – Monthly Financial Statements 2016

As of 2016 - First Quarter
Note January February March
ASSETS:
Current Assets:
Cash in Bank 3 ₱ 2,561,552.35 ₱ 2,808,061.27 ₱ 3,056,950.97
Inventory - Snack Bar 10 ₱ 113,737.98 ₱ 103,422.96 ₱ 93,107.94
Inventory - Gym Supplements 10 ₱ 545,196.15 ₱ 504,723.08 ₱ 461,869.23
Spa Supplies 9 ₱ 47,593.44 ₱ 43,454.88 ₱ 39,316.32
Maintenance Supplies 8 ₱ 5,891.68 ₱ 5,379.36 ₱ 4,867.04
Office Supplies 7 ₱ 15,182.76 ₱ 13,862.52 ₱ 12,542.28
Petty Cash 3 ₱ 50,000.00 ₱ 50,000.00 ₱ 50,000.00
Prepaid Rent 11 ₱ 3,581,600.00 ₱ 3,256,000.00 ₱ 2,930,400.00
Total Current Assets ₱ 6,920,754.36 ₱ 6,784,904.07 ₱ 6,649,053.78
Noncurrent Assets
Office Equipment 17 ₱ 23,599.00 ₱ 23,599.00 ₱ 23,599.00
Accumulated Depreciation - Office
19 ₱ (186.83) ₱ (373.65) ₱ (560.48)
Equipment
Furniture and Fixtures 5 ₱ 186,026.75 ₱ 186,026.75 ₱ 186,026.75
Accumulated Depreciation - Furniture
19 ₱ (1,472.71) ₱ (2,945.42) ₱ (4,418.14)
and Fixtures
Property Plant and Equipment - Gym 17 ₱ 5,936,500.00 ₱ 5,936,500.00 ₱ 5,936,500.00
Accumulated Depreciation - Gym 19 ₱ (31,331.53) ₱ (62,663.06) ₱ (93,994.58)
Property Plant and Equipment - Spa 17 ₱ 106,150.00 ₱ 106,150.00 ₱ 106,150.00
Accumulated Depreciation - Spa 19 ₱ (840.35) ₱ (1,680.71) ₱ (2,521.06)
Property Plant and Equipment - Dance
17 ₱ 51,096.00 ₱ 51,096.00 ₱ 51,096.00
Studio
Accumulated Depreciation-Dance Studio 19 ₱ (425.80) ₱ (851.60) ₱ (1,277.40)
Leasehold Improvement 25 ₱ 6,680,000.00 ₱ 6,680,000.00 ₱ 6,680,000.00
Accumulated Amortization - Leasehold
26 ₱ (52,883.33) ₱ (105,766.67) ₱ (158,650.00)
Improvement
Total Noncurrent Assets ₱ 12,896,231.20 ₱ 12,809,090.65 ₱ 12,721,950.09
TOTAL ASSETS ₱ 19,816,985.56 ₱ 19,593,994.71 ₱ 19,371,003.87
LIABILITIES
Current Liabilities
Accounts Payable 18 ₱ 660,000.00 ₱ 600,000.00 ₱ 540,000.00
Due to SSS, PhilHealth, Pag-IBIG 6 ₱ 18,951.00 ₱ 18,951.00 ₱ 18,951.00
Interest Payable 18 ₱ 231,000.00 ₱ 210,000.00 ₱ 189,000.00
Withholding Tax Payable 6 ₱ 21,025.40 ₱ 21,025.40 ₱ 21,025.40
VAT Payable 27 ₱ - ₱ - ₱ -
Income Tax Payable - ₱ - ₱ - ₱ -
Total Current Liabilities ₱ 930,976.40 ₱ 849,976.40 ₱ 768,976.40
Loan Payable 18 ₱ 2,820,000.00 ₱ 2,760,000.00 ₱ 2,700,000.00
Total Noncurrent Liabilities ₱ 2,820,000.00 ₱ 2,760,000.00 ₱ 2,700,000.00
PARTNERS' EQUITY
James Castañeda, Capital 12 ₱ 5,355,336.39 ₱ 5,328,006.10 ₱ 5,300,675.82
Arnel Cipriano, Capital 12 ₱ 5,355,336.39 ₱ 5,328,006.10 ₱ 5,300,675.82
Elmer Derecho, Capital 12 ₱ 5,355,336.39 ₱ 5,328,006.10 ₱ 5,300,675.82
Total Equity ₱ 16,066,009.16 ₱ 15,984,018.31 ₱ 15,902,027.47
TOTAL LIABILITIES AND EQUITY ₱ 19,816,985.56 ₱ 19,593,994.71 ₱ 19,371,003.87

As of 2016 – Second Quarter
ASSETS Note April May June

Current Assets:
Cash in Bank 3 ₱ 3,322,555.64 ₱ 3,588,160.32 ₱ 3,825,146.16
Spa Supplies 9 ₱ 35,177.76 ₱ 31,039.20 ₱ 26,900.64
Office Supplies 7 ₱ 11,222.04 ₱ 9,901.80 ₱ 8,581.56
Petty Cash 3 ₱ 50,000.00 ₱ 50,000.00 ₱ 50,000.00
Prepaid Rent 11 ₱ 2,604,800.00 ₱ 2,279,200.00 ₱ 1,953,600.00
Noncurrent Assets
Accumulated Depreciation - Office
19 ₱ (747.30) ₱ (934.13) ₱ (1,120.95)
Equipment
Accumulated Depreciation - Furniture
19 ₱ (5,890.85) ₱ (7,363.56) ₱ (8,836.27)
and Fixtures
Accumulated Depreciation - Spa 19 ₱ (3,361.42) ₱ (4,201.77) ₱ (5,042.13)
Property Plant and Equipment - Dance
17 ₱ 51,096.00 ₱ 51,096.00 ₱ 51,096.00
Studio
Accumulated Depreciation-Dance Studio 19 ₱ (1,703.20) ₱ (2,129.00) ₱ (2,554.80)
Accumulated Amortization - Leasehold
26 ₱ (211,533.33) ₱ (264,416.67) ₱ (317,300.00)
Improvement
TOTAL ASSETS ₱ 19,148,013.03 ₱ 18,925,022.19 ₱ 18,702,031.34
LIABILITIES
Current Liabilities
VAT Payable 27 ₱ - ₱ - ₱ -
Loan Payable 18 ₱ 2,640,000.00 ₱ 2,580,000.00 ₱ 2,520,000.00
PARTNERS' EQUITY
Total Equity ₱ 15,820,036.63 ₱ 15,738,045.79 ₱ 15,656,054.94

As of 2016 – Third Quarter
Note July August September

ASSETS:
Current Assets:
Cash in Bank 3 ₱ 4,062,132.02 ₱ 4,311,021.71 ₱ 4,592,085.39
Spa Supplies 9 ₱ 22,762.08 ₱ 18,623.52 ₱ 14,484.96
Office Supplies 7 ₱ 7,261.32 ₱ 5,941.08 ₱ 4,620.84
Petty Cash 3 ₱ 50,000.00 ₱ 50,000.00 ₱ 50,000.00
Prepaid Rent 11 ₱ 1,628,000.00 ₱ 1,302,400.00 ₱ 976,800.00
Noncurrent Assets
Accumulated Depreciation - Office Equipment 19 ₱ (1,307.78) ₱ (1,494.60) ₱ (1,681.43)
Accumulated Depreciation - Furnitures and
19 ₱ (10,308.98) ₱ (11,781.69) ₱ (13,254.41)
Fixtures
Property Plant and Equipment - Dance Studio 17 ₱ 51,096.00 ₱ 51,096.00 ₱ 51,096.00
Accumulated Amortization - Leasehold Improvement 26 ₱ (370,183.33) ₱ (423,066.67) ₱ (475,950.00)
TOTAL ASSETS ₱ 18,479,040.50 ₱ 18,256,049.66 ₱ 18,072,375.10
LIABILITIES
Current Liabilities
VAT Payable 27 ₱ - ₱ - ₱ 39,316.28
Loan Payable 18 ₱ 2,460,000.00 ₱ 2,400,000.00 ₱ 2,340,000.00
PARTNERS' EQUITY
Total Equity ₱ 15,574,064.10 ₱ 15,492,073.26 ₱ 15,410,082.42

As of 2016 – Fourth Quarter
Not
October November December
e
ASSETS:
Current Assets:
Cash in Bank 3 ₱ 4,914,199.36 ₱ 5,174,717.11 ₱ 2,455,399.59
Inentory - Snack Bar 10 ₱ 20,754.02 ₱ 10,389.41 ₱ -
Spa Supplies 9 ₱ 10,346.40 ₱ 6,207.84 ₱ 2,069.28
Maintenance Supplies 8 ₱ 1,280.80 ₱ 768.48 ₱ 256.16
Office Supplies 7 ₱ 3,300.60 ₱ 1,980.36 ₱ 660.12
Petty Cash 3 ₱ 50,000.00 ₱ 50,000.00 ₱ 50,000.00
Prepaid Rent 11 ₱ 651,200.00 ₱ 325,600.00 ₱ 3,907,200.00
Noncurrent Assets
Accumulated Depreciation - Office Equipment 19 ₱ (1,868.25) ₱ (2,055.08) ₱ (2,241.91)
Accumulated Depreciation - Furnitures and
19 ₱ (14,727.12) ₱ (16,199.83) ₱ (17,672.54)
Fixtures
Property Plant and Equipment - Dance Studio 17 ₱ 51,096.00 ₱ 51,096.00 ₱ 51,096.00
Accumulated Amortization - Leasehold Improvement 26 ₱ (528,833.33) ₱ (581,716.67) ₱ (634,600.00)
TOTAL ASSETS ₱ 17,908,274.33 ₱ 17,684,958.10 ₱ 18,384,220.27
LIABILITIES
Current Liabilities
VAT Payable 27 ₱ 98,206.36 ₱ 97,880.97 ₱ 98,533.98
Total Current Liabilities ₱ 300,182.76 ₱ 218,857.37 ₱ 1,060,110.38
Loan Payable 18 ₱ 2,280,000.00 ₱ 2,220,000.00 ₱ 2,160,000.00
PARTNERS' EQUITY
Total Equity ₱ 15,328,091.57 ₱ 15,246,100.73 ₱ 15,164,109.89

Note: A separate Statement of Financial Performance for each type of service rendered is prepared.
1. Gym/Fitness Center & Dance Studio

Statement of Financial Performance – Gym/Fitness Center & Dance Studio
For the Month ended - January to April
For the Month Ended For the Month Ended For the Month Ended For the Month Ended
Note
January February March April
Service Revenue - GYM 15 ₱ 414,000.00 ₱ 414,000.00 ₱ 414,000.00 ₱ 414,000.00
Service Revenue - DANCE STUDIO 15 ₱ 184,500.00 ₱ 184,500.00 ₱ 184,500.00 ₱ 184,500.00
Total ₱ 598,500.00 ₱ 598,500.00 ₱ 598,500.00 ₱ 598,500.00
Cost of Services 29 ₱ (94,163.61) ₱ (94,163.61) ₱ (94,163.61) ₱ (94,163.61)
Gross Profit ₱ 504,336.39 ₱ 504,336.39 ₱ 504,336.39 ₱ 504,336.39
Expenses
Salaries and Wages 16 ₱ (78,503.01) ₱ (78,503.01) ₱ (78,503.01) ₱ (78,503.01)
Due to SSS,PHIC,HDMF 16 ₱ (5,370.60) ₱ (5,370.60) ₱ (5,370.60) ₱ (5,370.60)
Employee's Compensation 16 ₱ (90.00) ₱ (90.00) ₱ (90.00) ₱ (90.00)
Repairs & Maintenance 14 ₱ (3,340.64) ₱ (3,340.64) ₱ (3,340.64) ₱ (3,340.64)
Depreciation 19 ₱ (33,406.36) ₱ (33,406.36) ₱ (33,406.36) ₱ (33,406.36)
Total Expenses ₱ (120,710.60) ₱ (120,710.61) ₱ (120,710.61) ₱ (120,710.61)
Net Income before Tax ₱ 383,625.79 ₱ 383,625.78 ₱ 383,625.78 ₱ 383,625.78

For the Month ended – May to August
Note
May June July August
Total ₱ 598,500.00 ₱ 598,500.00 ₱ 598,500.00 ₱ 598,500.00
Cost of Services 29 ₱ (94,163.61) ₱ (94,163.61) ₱ (94,163.61) ₱ (94,163.61)
Gross Profit ₱ 504,336.39 ₱ 504,336.39 ₱ 504,336.39 ₱ 504,336.39
Expenses
Repairs and Maintenance 14 ₱ (75.00) ₱ (3,340.64) ₱ (3,340.64) ₱ (3,340.64)
Depreciation 19 ₱ (272.55) ₱ (33,406.36) ₱ (33,406.36) ₱ (33,406.36)
Total Expenses ₱ (81,040.56) ₱ (120,710.61) ₱ (120,710.61) ₱ (120,710.61)

For the Month ended – September to December
Note For the Month Ended For the Month Ended For the Month Ended For the Month Ended
September October November December
Total ₱ 598,500.00 ₱ 598,500.00 ₱ 598,500.00 ₱ 598,500.00
Cost of Services 29 ₱ (94,163.61) ₱ (94,163.61) ₱ (94,163.61) ₱ (202,330.56)
Gross Profit ₱ 504,336.39 ₱ 504,336.39 ₱ 504,336.39 ₱ 396,169.44
Expenses
Repairs & Maintenance 14 ₱ (3,340.64) ₱ (3,340.64) ₱ (3,340.64) ₱ (3,340.64)
Depreciation 19 ₱ (33,406.36) ₱ (33,406.36) ₱ (33,406.36) ₱ (33,406.36)
Total Expenses ₱ (120,710.61) ₱ (120,710.61) ₱ (120,710.61) ₱ (210,710.61)
2. Therapeutic Massage & Spa

Statement of Financial Performance – Therapeutic Massage & Spa
For the Month ended – January to April
Note
Service Revenue 15 ₱ 184,440.00 ₱ 184,440.00 ₱ 184,440.00 ₱ 184,440.00
Less: Cost of Services 29 ₱ (56,333.05) ₱ (56,333.05) ₱ (56,333.05) ₱ (56,333.05)
Gross Profit ₱ 128,106.95 ₱ 128,106.95 ₱ 128,106.95 ₱ 128,106.95
Less: Expenses
Repairs & Maintenance 14 ₱ (88.46) ₱ (88.46) ₱ (88.46) ₱ (88.46)
Spa Supplies 14 ₱ (4,138.56) ₱ (4,138.56) ₱ (4,138.56) ₱ (4,138.56)
Depreciation 19 ₱ (884.58) ₱ (884.58) ₱ (884.58) ₱ (884.58)
Total Expenses ₱ (55,444.65) ₱ (55,444.65) ₱ (55,444.65) ₱ (55,444.65)

Note
Service Revenue 15 ₱ 184,440.00 ₱ 184,440.00 ₱ 184,440.00 ₱ 184,440.00
Less: Cost of Services 29 ₱ (56,333.05) ₱ (56,333.05) ₱ (56,333.05) ₱ (56,333.05)
Gross Profit ₱ 128,106.95 ₱ 128,106.95 ₱ 128,106.95 ₱ 128,106.95
Less: Expenses
Employee's
₱ (50.00) ₱ (50.00) ₱ (50.00) ₱ (50.00)
Compensation 16
Repairs & Maintenance 14 ₱ (88.46) ₱ (88.46) ₱ (88.46) ₱ (88.46)
Spa Supplies 9 ₱ (4,138.56) ₱ (4,138.56) ₱ (4,138.56) ₱ (4,138.56)
Depreciation 19 ₱ (884.58) ₱ (884.58) ₱ (884.58) ₱ (884.58)
Total Expenses ₱ (55,444.65) ₱ (55,444.65) ₱ (55,444.65) ₱ (55,444.65)

Service Revenue 15 ₱ 184,440.00 ₱ 184,440.00 ₱ 184,440.00 ₱ 184,440.00
Cost of Services 29 ₱ (56,333.05) ₱ (56,333.05) ₱ (56,333.05) ₱ (119,332.67)
Gross Profit ₱ 128,106.95 ₱ 128,106.95 ₱ 128,106.95 ₱ 65,107.33
Expenses
Due to
16 ₱ (3,123.50) ₱ (3,123.50) ₱ (3,123.50) ₱ (3,123.50)
SSS,PHIC,HDMF
Repairs &
₱ (88.46) ₱ (88.46) ₱ (88.46) ₱ (88.46)
Maintenance 14
Spa Supplies 9 ₱ (4,138.56) ₱ (4,138.56) ₱ (4,138.56) ₱ (4,138.56)
Depreciation 19 ₱ (884.58) ₱ (884.58) ₱ (884.58) ₱ (884.58)
Total Expenses ₱ (55,444.65) ₱ (55,444.65) ₱ (55,444.65) ₱ (109,444.65)
Net Income before Tax ₱ 72,662.30 ₱ 72,662.30 ₱ 72,662.30 ₱ (44,337.32)
3. Gym Supplements
Statement of Financial Performance – Gym Supplements
Sales 15 ₱ 48,806.25 ₱ 46,094.78 ₱ 48,806.25 ₱ 67,786.45
Cost of Sales:
Inventory, beg 29 - ₱ 545,196.15 ₱ 504,723.08 ₱ 461,869.23
Purchases 29 ₱ 588,050.00 - - -
Total ₱ 588,050.00 ₱ 545,196.15 ₱ 504,723.08 ₱ 461,869.23
Inventory, end 29 ₱ (545,196.15) ₱ (504,723.08) ₱ (461,869.23) ₱ (402,350.00)
Cost of Sales ₱ 42,853.85 ₱ 40,473.07 ₱ 42,853.85 ₱ 59,519.23
Gross Profit ₱ 5,952.40 ₱ 5,621.71 ₱ 5,952.40 ₱ 8,267.22
Less: Expenses
Advertising Expenses 20 ₱ (1,500.00) ₱ (1,500.00) ₱ (1,500.00) ₱ (1,500.00)

Sales 15 ₱ 67,786.45 ₱ 35,248.96 ₱ 35,248.96 ₱ 48,806.25
Cost of Sales:
Inventory, beg 29 ₱ 402,350.00 ₱ 342,830.77 ₱ 311,880.77 ₱ 280,930.77
Purchases 29 - - - -
Total ₱ 402,350.00 ₱ 342,830.77 ₱ 311,880.77 ₱ 280,930.77
Inventory, end 29 (342,830.77) ₱ (311,880.77) ₱ (280,930.77) ₱ (238,076.92)
Cost of Sales ₱ 59,519.23 ₱ 30,950.00 ₱ 30,950.00 ₱ 42,853.85
Gross Profit ₱ 8,267.22 ₱ 4,298.96 ₱ 4,298.96 ₱ 5,952.40
Less: Expenses

Sales 15 ₱ 40,671.87 ₱ 65,074.99 ₱ 62,363.53 ₱ 67,805.26
Cost of Sales:
Inventory, beg 29 ₱ 238,076.92 ₱ 202,365.38 ₱ 145,226.92 ₱ 90,469.23
Purchases 29 ₱ - - - -
Total ₱ 238,076.92 ₱ 202,365.38 ₱ 145,226.92 ₱ 90,469.23
Ending Inventory 29 ₱ (202,365.38) ₱ (145,226.92) ₱ (90,469.23) ₱ (30,950.00)
Cost of Sales ₱ 35,711.54 ₱ 57,138.46 ₱ 54,757.69 ₱ 59,519.23
Gross Profit ₱ 4,960.33 ₱ 7,936.53 ₱ 7,605.84 ₱ 8,286.03
Less: Expenses


Net Income -57,990.84 -57,990.84 -57,990.84 -57,990.84
Adjustments:
Add back depreciation/amortization
Office Equipment 186.83 186.83 186.83 186.83
Furniture and Fixtures 1,472.71 1,472.71 1,472.71 1,472.71
PPE – Gym 31,331.53 31,331.53 31,331.53 31,331.53
PPE – Spa 840.35 840.35 840.35 840.35
PPE – Dance Studio 425.8 425.8 425.8 425.8
Leasehold Improvements 52,883.33 52,883.33 52,883.33 52,883.33
Increase/Decrease in Inventory – Snack Bar -113,737.98 10,315.02 10,315.02 10,364.61
Increase/Decrease in Inventory – Gym
-545,196.15 40,473.08 42,853.85 59,519.23
Supplements
Increase/Decrease in Petty Cash -50,000.00 0.00 0.00 0.00
Increase/Decrease in Spa Supplies -47,593.44 4,138.56 4,138.56 4,138.56
Increase/Decrease in Maintenance Supplies -5,891.68 512.32 512.32 512.32
Increase/Decrease in Office Supplies -15,182.76 1,320.24 1,320.24 1,320.24
Increase/Decrease in Prepaid Rent -3,581,600.00 325,600.00 325,600.00 325,600.00
Increase/Decrease in Accounts Payable 660,000.00 -60,000.00 -60,000.00 -60,000.00
Increase/Decrease in Interest Payable 231,000.00 -21,000.00 -21,000.00 -21,000.00
Increase/Decrease in Due to SSS,PHIC,HDMF 18,951.00 0.00 0.00 0.00
Increase/Decrease in Income Tax Payable 0.00 0.00 0.00 0.00
Increase/Decrease in VAT Payable 0.00 0.00 0.00 0.00
Increase/Decrease in Expanded WHT Payable 21,025.40 0.00 0.00 0.00
Net Cash Flows from Operating Activities -3,399,075.90 330,508.93 332,889.70 349,604.67
Increase/Decrease in Office Equipment -23,599.00 0.00 0.00 0.00
Increase/Decrease in Furniture and Fixtures -186,026.75 0.00 0.00 0.00
Increase/Decrease in PPE - Gym -5,936,500.00 0.00 0.00 0.00
Increase/Decrease in PPE - Spa -106,150.00 0.00 0.00 0.00
Increase/Decrease in PPE – Dance Studio -51,096.00 0.00 0.00 0.00
Increase/Decrease in Leasehold
-6,680,000.00 0.00 0.00 0.00
Improvements
Net Cash Flows from Investing Activities 12,983,371.75 0.00 0.00 0.00
Increase/Decrease in Loans Payable 2,820,000.00 -60,000.00 -60,000.00 -60,000.00
Increase/Decrease in Partners' Equity 14,151,631.05 -24,000.00 -24,000.00 -24,000.00
Net Cash Flows from Financing Activities 16,971,631.05 -84,000.00 -84,000.00 -84,000.00
Total Net Cash Flows 589,183.40 246,508.93 248,889.70 265,604.67
Cash, Beg of the month 589,183.40 835,692.32 1,084,582.02
Cash, end of the month 589,183.40 835,692.32 1,084,582.02 1,350,186.69

179

Net Income -57,990.84 -57,990.84 -57,990.84 -57,990.84
Adjustments to determine Cash Flow from
Operating Activities
PPE – Gym 31,331.53 31,331.53 31,331.53 31,331.53
PPE – Spa 840.35 840.35 840.35 840.35
PPE – Dance Studio 425.80 425.80 425.80 425.80
Increase/Decrease in Inventory – Snack Bar 10,364.61 10,315.02 10,315.02 10,315.02
59,519.23 30,950.00 30,950.00 42,853.85
Supplements
Increase/Decrease in Petty Cash 0.00 0.00 0.00 0.00
Increase/Decrease in Spa Supplies 4,138.56 4,138.56 4,138.56 4,138.56
Increase/Decrease in Maintenance Supplies 512.32 512.32 512.32 512.32
Increase/Decrease in Office Supplies 1,320.24 1,320.24 1,320.24 1,320.24
Increase/Decrease in Prepaid Rent 325,600.00 325,600.00 325,600.00 325,600.00
Increase/Decrease in Accounts Payable -60,000.00 -60,000.00 -60,000.00 -60,000.00
Increase/Decrease in Interest Payable -21,000.00 -21,000.00 -21,000.00 -21,000.00
Increase/Decrease in Due to SSS,PHIC,HDMF 0.00 0.00 0.00 0.00
Increase/Decrease in VAT Payable 0.00 0.00 0.00 0.00
Increase/Decrease in Expanded WHT Payable 0.00 0.00 0.00 0.00
Net Cash Flows from Operating Activities 349,604.67 320,985.85 320,985.85 332,889.70
Increase/Decrease in Office Equipment 0.00 0.00 0.00 0.00
Increase/Decrease in Furniture and
0.00 0.00 0.00 0.00
Fixtures
Increase/Decrease in PPE - Gym 0.00 0.00 0.00 0.00
Increase/Decrease in PPE - Spa 0.00 0.00 0.00 0.00
Increase/Decrease in PPE – Dance Studio 0.00 0.00 0.00 0.00
Net Cash Flows from Investing Activities 0.00 0.00 0.00 0.00
Increase/Decrease in Loans Payable -60,000.00 -60,000.00 -60,000.00 -60,000.00
Increase/Decrease in Partners' Equity -24,000.00 -24,000.00 -24,000.00 -24,000.00
Net Cash Flows from Financing Activities -84,000.00 -84,000.00 -84,000.00 -84,000.00
Total Net Cash Flows 265,604.67 236,985.85 236,985.85 248,889.70
Cash, Beg of the month 1,350,186.69 1,615,791.36 1,852,777.21 2,089,763.06
Cash, End of the month 1,615,791.36 1,852,777.21 2,089,763.06 2,338,652.76

180

Net Income -57,990.84 -57,990.84 -57,990.84 -57,990.84
Adjustments to determine Cash Flow from
Operating Activities
PPE – Gym 31,331.53 31,331.53 31,331.53 31,331.53
PPE – Spa 840.35 840.35 840.35 840.35
PPE – Dance Studio 425.8 425.8 425.8 425.8
Increase/Decrease in Inventory – Snack Bar 10,315.02 10,364.61 10,364.61 10,389.41
35,711.54 57,138.46 54,757.69 59,519.23
Supplements
Increase/Decrease in Petty Cash 0.00 0.00 0.00 0.00
Increase/Decrease in Spa Supplies 4,138.56 4,138.56 4,138.56 4,138.56
Increase/Decrease in Maintenance Supplies 512.32 512.32 512.32 512.32
Increase/Decrease in Office Supplies 1,320.24 1,320.24 1,320.24 1,320.24
Increase/Decrease in Prepaid Rent 325,600.00 325,600.00 325,600.00 -3,581,600
Increase/Decrease in Accounts Payable -60,000.00 -60,000.00 -60,000.00 660,000.00
Increase/Decrease in Interest Payable -21,000.00 -21,000.00 -21,000.00 180,600.00
Increase/Decrease in Due to SSS,PHIC,HDMF 0.00 0.00 0.00 0.00
Increase/Decrease in VAT Payable 39,316.28 58,890.08 -325.39 653.01
Increase/Decrease in Expanded WHT Payable 0.00 0.00 0.00 0.00
Net Cash Flows from Operating Activities 365,063.67 406,113.98 344,517.74 -2,635,317.52
Increase/Decrease in Office Equipment 0.00 0.00 0.00 0.00
Increase/Decrease in Furniture and Fixtures 0.00 0.00 0.00 0.00
Increase/Decrease in PPE - Gym 0.00 0.00 0.00 0.00
Increase/Decrease in PPE - Spa 0.00 0.00 0.00 0.00
Increase/Decrease in PPE – Dance Studio 0.00 0.00 0.00 0.00
Net Cash Flows from Investing Activities 0.00 0.00 0.00 0.00
Increase/Decrease in Loans Payable -60,000.00 -60,000.00 -60,000.00 -60,000.00
Increase/Decrease in Partners' Equity -24,000.00 -24,000.00 -24,000.00 -24,000.00
Net Cash Flows from Financing Activities -84,000.00 -84,000.00 -84,000.00 -84,000.00
Total Net Cash Flows 281,063.67 322,113.98 260,517.74 -2,719,317.52
Cash, Beg of the month 2,338,652.76 2,619,716.43 2,941,830.41 3,202,348.16
Cash, End of the month 2,619,716.43 2,941,830.41 3,202,348.16 483,030.64

181
Appendix I – Government Forms
Letter addressed to Ateneo de Davao University

182
Letter addressed to established competitor

183
Business Permits

184
185
186
Articles of Partnership

187
188
189
Registration Data Sheet

190
191
Application for Business Permits

192
Application for Occupational Permit and Mayors Clearance

193
Application for Registration (City Tourism Operations Office)

194
195
196
Application for Registration (BIR Form 1903)

197
Payment Form (BIR Form 0605)

198
Application for Authority to Print (BIR Form 1906)

199
SSS Employer Registration (SSS Form R-1)

200
SSS Employer Report (SSS Form R-1A)

201
Employer Data Record (Philhealth Form ER1)

202
Employer Data Record (Philhealth Form ER1)

203
Employer’s Data Form (Pag-IBIG Fund)

204
Member’s Data Form (Pag-IBIG Fund)

205
Appendix J – Statutory Contribution Schedule
Withholding Tax Schedule

206
SSS Contributions Schedule

207
Philhealth Contributions Schedule

208
Pag-IBIG Contributions Schedule

209
DOLE Wage Order for Region XI in 2014

210
Appendix K - Taxes and Licenses
a. Business Registration Fees
SEC
Name Reservation Fee ₱ 40.00

Partnership Fee ₱ 61,200.00
Legal Research Fee ₱ 612.00
Total ₱ 61,852.00
Business Bureau
Business Tax ₱ ₱ 18,000.00

Electrical Fee ₱ 335.30
Garbage Fee ₱ 1,500.00
Health Cert. Fee ₱ 210.00
Lab Fee ₱ 210.00
Mechanical Fee ₱ 891.00
Mayor's Permit ₱ 3,000.00
Sign Permit Fee ₱ 50.00
Occupational Permit Fee ₱ 350.00
Plumbing Fee ₱ 220.00
Sanitary Permit ₱ 300.00
Building Inspection Fee ₱ 660.00
Community Tax Certificate ₱ 500.00
City Tourism Fee ₱ 870.00
Total ₱ 27,096.30
BIR
Annual Registration Fee ₱ 500.00
Documentary Stamps Tax ₱ 15.00
Certificate of Registration ₱ 100.00
Books of Accounts ₱ 150.00
Official Receipts ₱ 1,750.00
Total ₱ 2,515.00
Total Bus. Registration ₱
91,463.30
Fees

211
Appendix L –Income Tax Payable Computations
Revenue: 2018 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Service Revenue - Gym and Dance
₱ 10,468,395.04 ₱ 2,617,098.76 ₱ 2,617,098.76 ₱ 2,617,098.76 ₱ 2,617,098.76
Studio
Service Revenue - Spa ₱ 2,568,240.00 ₱ 642,060.00 ₱ 642,060.00 ₱ 642,060.00 ₱ 642,060.00
Sales - Supplements ₱ 735,000.00 ₱ 190,759.76 ₱ 184,852.46 ₱ 134,971.65 ₱ 224,416.14
Total ₱ 13,771,635.04 ₱ 3,449,918.52 ₱ 3,444,011.22 ₱ 3,394,130.41 ₱ 3,483,574.90
Cost of Services:
Cost of Services - Gym ₱ (1,238,130.32) ₱ (309,532.58) ₱ (309,532.58) ₱ (309,532.58) ₱ (309,532.58)
Cost of Services - Spa ₱ (738,996.20) ₱ (184,749.05) ₱ (184,749.05) ₱ (184,749.05) ₱ (184,749.05)
Cost of Sales ₱ (647,650.00) ₱ (167,494.74) ₱ (162,307.89) ₱ (118,510.53) ₱ (199,336.84)
Total ₱ (2,624,776.52) ₱ (661,776.37) ₱ (656,589.52) ₱ (612,792.16) ₱ (693,618.47)
Gross Profit ₱ 11,146,858.52 ₱ 2,788,142.15 ₱ 2,787,421.70 ₱ 2,781,338.24 ₱ 2,789,956.43
Other Income ₱ 12,450.00 ₱ 3,112.50 ₱ 3,112.50 ₱ 3,112.50 ₱ 3,112.50
Total Income ₱ 11,159,308.52 ₱ 2,791,254.65 ₱ 2,790,534.20 ₱ 2,784,450.74 ₱ 2,793,068.93
Expenses
Salaries and Wages ₱ (1,840,141.60) ₱ (460,035.40) ₱ (460,035.40) ₱ (460,035.40) ₱ (460,035.40)
PHIC ₱ (24,300.00) ₱ (6,075.00) ₱ (6,075.00) ₱ (6,075.00) ₱ (6,075.00)
HDMF ₱ (19,200.00) ₱ (4,800.00) ₱ (4,800.00) ₱ (4,800.00) ₱ (4,800.00)
SSS ₱ (70,206.00) ₱ (17,551.50) ₱ (17,551.50) ₱ (17,551.50) ₱ (17,551.50)
Employee's Compensation ₱ (1,920.00) ₱ (480.00) ₱ (480.00) ₱ (480.00) ₱ (480.00)
Spa Supplies ₱ (49,662.72) ₱ (12,415.68) ₱ (12,415.68) ₱ (12,415.68) ₱ (12,415.68)
Office Supplies ₱ (15,842.88) ₱ (3,960.72) ₱ (3,960.72) ₱ (3,960.72) ₱ (3,960.72)
Maintenance Supplies ₱ (6,147.84) ₱ (1,536.96) ₱ (1,536.96) ₱ (1,536.96) ₱ (1,536.96)
Electricity ₱ (255,753.96) ₱ (63,938.49) ₱ (63,938.49) ₱ (63,938.49) ₱ (63,938.49)
Water ₱ (54,360.00) ₱ (13,590.00) ₱ (13,590.00) ₱ (13,590.00) ₱ (13,590.00)
Telecommunication ₱ (25,152.00) ₱ (6,288.00) ₱ (6,288.00) ₱ (6,288.00) ₱ (6,288.00)
Security ₱ (293,832.00) ₱ (73,458.00) ₱ (73,458.00) ₱ (73,458.00) ₱ (73,458.00)
Janitorial ₱ (146,916.00) ₱ (36,729.00) ₱ (36,729.00) ₱ (36,729.00) ₱ (36,729.00)
Taxes and Licenses ₱ (91,463.30) ₱ (22,865.83) ₱ (22,865.83) ₱ (22,865.83) ₱ (22,865.83)
Miscellaneous Expense ₱ (45,000.00) ₱ (11,250.00) ₱ (11,250.00) ₱ (11,250.00) ₱ (11,250.00)
Advertising ₱ (18,000.00) ₱ (4,500.00) ₱ (4,500.00) ₱ (4,500.00) ₱ (4,500.00)
Rent ₱ (3,907,200.00) ₱ (976,800.00) ₱ (976,800.00) ₱ (976,800.00) ₱ (976,800.00)
Interest ₱ (151,200.00) ₱ (37,800.00) ₱ (37,800.00) ₱ (37,800.00) ₱ (37,800.00)
Repairs & Maintenance ₱ (123,325.99) ₱ (30,831.50) ₱ (30,831.50) ₱ (30,831.50) ₱ (30,831.50)
Amortization Expense ₱ (634,600.00) ₱ (158,650.00) ₱ (158,650.00) ₱ (158,650.00) ₱ (158,650.00)
Depreciation ₱ (1,233,259.89) ₱ (308,314.97) ₱ (308,314.97) ₱ (308,314.97) ₱ (308,314.97)
Total Expenses ₱ (9,007,484.18) ₱ (2,251,871.04) ₱ (2,251,871.04) ₱ (2,251,871.04) ₱ (2,251,871.04)
Net Income before Tax ₱ 2,151,824.34 ₱ 539,383.60 ₱ 538,663.15 ₱ 532,579.70 ₱ 541,197.89
NOLCO ₱ (153,833.92) ₱ (153,833.92) ₱ - ₱ - ₱ -
Net Income before Tax after NOLCO ₱ 1,997,990.42 ₱ 385,549.69 ₱ 538,663.15 ₱ 532,579.70 ₱ 541,197.89
Provision for Income Tax (30%) ₱ 599,397.13 ₱ 115,664.91 ₱ 161,598.95 ₱ 159,773.91 ₱ 162,359.37
2019 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Revenue:
Service Revenue - Gym and Dance Studio ₱ 12,737,918.39 ₱ 3,184,479.60 ₱ 3,184,479.60 ₱ 3,184,479.60 ₱ 3,184,479.60
Total ₱ 16,337,468.39 ₱ 4,077,057.57 ₱ 4,088,734.52 ₱ 4,030,838.76 ₱ 4,140,837.54
Cost of Services
Cost of Services - Gym and Dance Studio ₱ (1,238,130.32) ₱ (309,532.58) ₱ (309,532.58) ₱ (309,532.58) ₱ (309,532.58)
Cost of Sales ₱ (738,600.00) ₱ (178,135.02) ₱ (188,387.85) ₱ (137,553.04) ₱ (234,524.08)
Total ₱ (2,715,726.52) ₱ (672,416.65) ₱ (682,669.48) ₱ (631,834.67) ₱ (728,805.71)
Gross Profit ₱ 13,621,741.87 ₱ 3,404,640.92 ₱ 3,406,065.04 ₱ 3,399,004.09 ₱ 3,412,031.83
Other Income ₱ 12,450.00 ₱ 3,112.50 ₱ 3,112.50 ₱ 3,112.50 ₱ 3,112.50
Total Income ₱ 13,634,191.87 ₱ 3,407,753.42 ₱ 3,409,177.54 ₱ 3,402,116.59 ₱ 3,415,144.33
Expenses
PHIC ₱ (24,300.00) ₱ (6,075.00) ₱ (6,075.00) ₱ (6,075.00) ₱ (6,075.00)
HDMF ₱ (19,200.00) ₱ (4,800.00) ₱ (4,800.00) ₱ (4,800.00) ₱ (4,800.00)
SSS ₱ (70,206.00) ₱ (17,551.50) ₱ (17,551.50) ₱ (17,551.50) ₱ (17,551.50)
Spa Supplies ₱ (49,662.72) ₱ (12,415.68) ₱ (12,415.68) ₱ (12,415.68) ₱ (12,415.68)
Office Supplies ₱ (15,842.88) ₱ (3,960.72) ₱ (3,960.72) ₱ (3,960.72) ₱ (3,960.72)
Electricity ₱ (255,753.96) ₱ (63,938.49) ₱ (63,938.49) ₱ (63,938.49) ₱ (63,938.49)
Water ₱ (54,360.00) ₱ (13,590.00) ₱ (13,590.00) ₱ (13,590.00) ₱ (13,590.00)
Security ₱ (293,832.00) ₱ (73,458.00) ₱ (73,458.00) ₱ (73,458.00) ₱ (73,458.00)
Janitorial ₱ (146,916.00) ₱ (36,729.00) ₱ (36,729.00) ₱ (36,729.00) ₱ (36,729.00)
Advertising ₱ (18,000.00) ₱ (4,500.00) ₱ (4,500.00) ₱ (4,500.00) ₱ (4,500.00)
Rent ₱ (3,907,200.00) ₱ (976,800.00) ₱ (976,800.00) ₱ (976,800.00) ₱ (976,800.00)
Interest ₱ (100,800.00) ₱ (25,200.00) ₱ (25,200.00) ₱ (25,200.00) ₱ (25,200.00)
Repairs and Maintenance ₱ (164,434.65) ₱ (41,108.66) ₱ (41,108.66) ₱ (41,108.66) ₱ (41,108.66)
Amortization Expense - Leasehold Improvement ₱ (634,600.00) ₱ (158,650.00) ₱ (158,650.00) ₱ (158,650.00) ₱ (158,650.00)
Depreciation ₱ (1,644,346.52) ₱ (411,086.63) ₱ (411,086.63) ₱ (411,086.63) ₱ (411,086.63)
Total Expenses ₱ (9,409,279.47) ₱ (2,352,319.87) ₱ (2,352,319.87) ₱ (2,352,319.87) ₱ (2,352,319.87)
Net Income before Tax ₱ 4,224,912.40 ₱ 1,055,433.55 ₱ 1,056,857.67 ₱ 1,049,796.72 ₱ 1,062,824.46
Net Operating Loss Carry Over ₱ - ₱ - ₱ - ₱ - ₱ -
Net Income before Tax after NOLCO ₱ 4,224,912.40 ₱ 1,055,433.55 ₱ 1,056,857.67 ₱ 1,049,796.72 ₱ 1,062,824.46
Provision for Income Tax (30%) ₱ 1,267,473.72 ₱ 316,630.07 ₱ 317,057.30 ₱ 314,939.02 ₱ 318,847.34
2020 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Revenue:
Service Revenue - Gym and Dance Studio ₱ 15,571,415.26 ₱ 3,892,853.82 ₱ 3,892,853.82 ₱ 3,892,853.82 ₱ 3,892,853.82
Total ₱ 19,441,405.26 ₱ 4,851,143.21 ₱ 4,864,961.94 ₱ 4,803,425.15 ₱ 4,921,874.96
Cost of Services
Cost of Services - Gym and Dance Studio ₱ (1,238,130.32) ₱ (309,532.58) ₱ (309,532.58) ₱ (309,532.58) ₱ (309,532.58)
Cost of Sales ₱ (785,050.00) ₱ (188,102.03) ₱ (200,235.42) ₱ (146,203.65) ₱ (250,508.90)
Total ₱ (2,762,176.52) ₱ (682,383.66) ₱ (694,517.05) ₱ (640,485.28) ₱ (744,790.53)
Gross Profit ₱ 16,679,228.74 ₱ 4,168,759.56 ₱ 4,170,444.89 ₱ 4,162,939.87 ₱ 4,177,084.43
Other Income ₱ 12,450.00 ₱ 3,112.50 ₱ 3,112.50 ₱ 3,112.50 ₱ 3,112.50
Total Income ₱ 16,691,678.74 ₱ 4,171,872.06 ₱ 4,173,557.39 ₱ 4,166,052.37 ₱ 4,180,196.93
Expenses
PHIC ₱ (24,300.00) ₱ (6,075.00) ₱ (6,075.00) ₱ (6,075.00) ₱ (6,075.00)
HDMF ₱ (19,200.00) ₱ (4,800.00) ₱ (4,800.00) ₱ (4,800.00) ₱ (4,800.00)
SSS ₱ (70,206.00) ₱ (17,551.50) ₱ (17,551.50) ₱ (17,551.50) ₱ (17,551.50)
Spa Supplies ₱ (49,662.72) ₱ (12,415.68) ₱ (12,415.68) ₱ (12,415.68) ₱ (12,415.68)
Office Supplies ₱ (15,842.88) ₱ (3,960.72) ₱ (3,960.72) ₱ (3,960.72) ₱ (3,960.72)
Electricity ₱ (255,753.96) ₱ (63,938.49) ₱ (63,938.49) ₱ (63,938.49) ₱ (63,938.49)
Water ₱ (54,360.00) ₱ (13,590.00) ₱ (13,590.00) ₱ (13,590.00) ₱ (13,590.00)
Security ₱ (293,832.00) ₱ (73,458.00) ₱ (73,458.00) ₱ (73,458.00) ₱ (73,458.00)
Janitorial ₱ (146,916.00) ₱ (36,729.00) ₱ (36,729.00) ₱ (36,729.00) ₱ (36,729.00)
Advertising ₱ (18,000.00) ₱ (4,500.00) ₱ (4,500.00) ₱ (4,500.00) ₱ (4,500.00)
Rent ₱ (3,907,200.00) ₱ (976,800.00) ₱ (976,800.00) ₱ (976,800.00) ₱ (976,800.00)
Interest ₱ (50,400.00) ₱ (12,600.00) ₱ (12,600.00) ₱ (12,600.00) ₱ (12,600.00)
Repairs and Maintenance ₱ (205,543.31) ₱ (51,385.83) ₱ (51,385.83) ₱ (51,385.83) ₱ (51,385.83)
Amortization Expense - Leasehold Improvement ₱ (634,600.00) ₱ (158,650.00) ₱ (158,650.00) ₱ (158,650.00) ₱ (158,650.00)
Depreciation ₱ (2,055,433.15) ₱ (513,858.29) ₱ (513,858.29) ₱ (513,858.29) ₱ (513,858.29)
Total Expenses ₱ (9,811,074.76) ₱ (2,452,768.69) ₱ (2,452,768.69) ₱ (2,452,768.69) ₱ (2,452,768.69)
Net Income before Tax ₱ 6,880,603.98 ₱ 1,719,103.37 ₱ 1,720,788.69 ₱ 1,713,283.68 ₱ 1,727,428.24
Net Operating Loss Carry Over ₱ - ₱ - ₱ - ₱ - ₱ -
Net Income before Tax after NOLCO ₱ 6,880,603.98 ₱ 1,719,103.37 ₱ 1,720,788.69 ₱ 1,713,283.68 ₱ 1,727,428.24
Provision for Income Tax (30%) ₱ 2,064,181.19 ₱ 515,731.01 ₱ 516,236.61 ₱ 513,985.10 ₱ 518,228.47
Appendix M – Income Statement Segmented
2016
Gym/Studio Spa Supplements General Total
Revenue:
Service Revenue - Gym and Dance Studio ₱ 7,182,000.00 ₱ - ₱ - ₱ - ₱ 7,182,000.00
Service Revenue - Spa ₱ - ₱ 2,213,280.00 ₱ - ₱ - ₱ 2,213,280.00
Sales - Supplements ₱ - ₱ - ₱ 634,500.00 ₱ - ₱ 634,500.00
Total ₱ 7,182,000.00 ₱ 2,213,280.00 ₱ 634,500.00 ₱ - ₱ 10,029,780.00
Cost of Services
Cost of Services - Gym and Dance Studio ₱ (1,238,130.32) ₱ - ₱ - ₱ - ₱ (1,238,130.32)
Cost of Services - Spa ₱ - ₱ (738,996.20) ₱ - ₱ - ₱ (738,996.20)
Cost of Sales ₱ - ₱ - ₱ (557,100.00) ₱ - ₱ (557,100.00)
Total ₱ (1,238,130.32) ₱ (738,996.20) ₱ (557,100.00) ₱ - ₱ (2,534,226.52)
Gross Profit
Other Income ₱ - ₱ - ₱ - ₱ - ₱ 12,450.00
Total Income ₱ 5,943,869.68 ₱ 1,474,283.80 ₱ 77,400.00 ₱ - ₱ 7,508,003.48
Expenses
Salaries and Wages ₱ (1,032,036.12) ₱ (619,914.60) ₱ - ₱ (188,190.88) ₱ (1,840,141.60)
PHIC ₱ (14,400.00) ₱ (7,500.00) ₱ - ₱ (2,400.00) ₱ (24,300.00)
HDMF ₱ (10,800.00) ₱ (6,000.00) ₱ - ₱ (2,400.00) ₱ (19,200.00)
SSS ₱ (39,247.20) ₱ (23,982.00) ₱ - ₱ (6,976.80) ₱ (70,206.00)
Employee's Compensation ₱ (1,080.00) ₱ (600.00) ₱ - ₱ (240.00) ₱ (1,920.00)
Spa Supplies ₱ - ₱ (49,662.72) ₱ - ₱ - ₱ (49,662.72)
Office Supplies ₱ - ₱ - ₱ - ₱ (15,842.88) ₱ (15,842.88)
Maintenance Supplies ₱ - ₱ - ₱ - ₱ (6,147.84) ₱ (6,147.84)
Electricity ₱ - ₱ - ₱ - ₱ (255,753.96) ₱ (255,753.96)
Water ₱ - ₱ - ₱ - ₱ (54,360.00) ₱ (54,360.00)
Telecommunication ₱ - ₱ - ₱ - ₱ (25,152.00) ₱ (25,152.00)
Security ₱ - ₱ - ₱ - ₱ (293,832.00) ₱ (293,832.00)
Janitorial ₱ - ₱ - ₱ - ₱ (146,916.00) ₱ (146,916.00)
Business Licenses ₱ - ₱ - ₱ - ₱ (91,463.30) ₱ (91,463.30)
Miscellaneous Expenses ₱ - ₱ - ₱ - ₱ (45,000.00) ₱ (45,000.00)
Advertising ₱ - ₱ - ₱ (18,000.00) ₱ - ₱ (18,000.00)
Rent ₱ - ₱ - ₱ - ₱ (3,907,200.00) ₱ (3,907,200.00)
Interest ₱ - ₱ - ₱ - ₱ (252,000.00) ₱ (252,000.00)
Repairs and Maintenance ₱ (38,108.79) ₱ (1,008.43) ₱ - ₱ (1,991.44) ₱ (41,108.66)
Amortization - Leasehold Improvement ₱ (634,600.00) ₱ (634,600.00)
Depreciation ₱ (381,087.93) ₱ (10,084.25) ₱ - ₱ (19,914.45) ₱ (411,086.63)
Total Expenses ₱ (1,516,760.05) ₱ (718,752.00) ₱ (18,000.00) ₱ (5,950,381.55) ₱ (8,203,893.59)
Net Income before Tax ₱ 4,427,109.63 ₱ 755,531.81 ₱ 59,400.00 ₱ (5,950,381.55) ₱ (695,890.11)
Provision for Income Tax (30%) ₱ (1,328,132.89) ₱ (226,659.54) ₱ (17,820.00) ₱ -
Income Tax Benefit ₱ -
Net Income/(Loss) ₱ 3,098,976.74 ₱ 528,872.26 ₱ 41,580.00 ₱ (5,950,381.55) ₱ (695,890.11)
2017
Revenue:
Total ₱ 8,647,041.60 ₱ 2,382,480.00 ₱ 682,250.00 ₱ - ₱ 11,711,771.60
Cost of Services
Cost of Sales ₱ - ₱ - ₱ (599,350.00) ₱ - ₱ (599,350.00)
Total ₱ (1,238,130.32) ₱ (738,996.20) ₱ (599,350.00) ₱ - ₱ (2,576,476.52)
Gross Profit
Other Income ₱ - ₱ - ₱ - ₱ - ₱ 12,450.00
Total Income ₱ 7,408,911.28 ₱ 1,643,483.80 ₱ 82,900.00 ₱ - ₱ 9,147,745.08
Expenses
PHIC ₱ (14,400.00) ₱ (7,500.00) ₱ - ₱ (2,400.00) ₱ (24,300.00)
HDMF ₱ (10,800.00) ₱ (6,000.00) ₱ - ₱ (2,400.00) ₱ (19,200.00)
SSS ₱ (39,247.20) ₱ (23,982.00) ₱ - ₱ (6,976.80) ₱ (70,206.00)
Spa Supplies ₱ - ₱ (49,662.72) ₱ - ₱ - ₱ (49,662.72)
Office Supplies ₱ - ₱ - ₱ - ₱ (15,842.88) ₱ (15,842.88)
Electricity ₱ - ₱ - ₱ - ₱ (255,753.96) ₱ (255,753.96)
Water ₱ - ₱ - ₱ - ₱ (54,360.00) ₱ (54,360.00)
Security ₱ - ₱ - ₱ - ₱ (293,832.00) ₱ (293,832.00)
Janitorial ₱ - ₱ - ₱ - ₱ (146,916.00) ₱ (146,916.00)
Advertising ₱ - ₱ - ₱ (18,000.00) ₱ - ₱ (18,000.00)
Rent ₱ - ₱ - ₱ - ₱ (3,907,200.00) ₱ (3,907,200.00)
Interest ₱ - ₱ - ₱ - ₱ (201,600.00) ₱ (201,600.00)
Depreciation ₱ (762,175.87) ₱ (20,168.50) ₱ - ₱ (39,828.89) ₱ (822,173.26)
Total Expenses ₱ (1,935,956.77) ₱ (729,844.67) ₱ (18,000.00) ₱ (5,921,887.44) ₱ (8,605,688.89)
Net Income before Tax ₱ 5,472,954.51 ₱ 913,639.13 ₱ 64,900.00 ₱ (5,921,887.44) ₱ 542,056.19
Provision for Income Tax (30%) ₱ (1,641,886.35) ₱ (274,091.74) ₱ (19,470.00) ₱ -
Income Tax Benefit ₱ -
Net Income/(Loss) ₱ 3,831,068.15 ₱ 639,547.39 ₱ 45,430.00 ₱ (5,921,887.44) ₱ 542,056.19
2018
Revenue:
Total ₱ 10,468,395.04 ₱ 2,568,240.00 ₱ 735,000.00 ₱ - ₱ 13,771,635.04
Cost of Services
Cost of Sales ₱ - ₱ - ₱ (647,650.00) ₱ - ₱ (647,650.00)
Total ₱ (1,238,130.32) ₱ (738,996.20) ₱ (647,650.00) ₱ - ₱ (2,624,776.52)
Gross Profit
Other Income ₱ - ₱ - ₱ - ₱ - ₱ 12,450.00
Total Income ₱ 9,230,264.72 ₱ 1,829,243.80 ₱ 87,350.00 ₱ - ₱ 11,159,308.52
Expenses
PHIC ₱ (14,400.00) ₱ (7,500.00) ₱ - ₱ (2,400.00) ₱ (24,300.00)
HDMF ₱ (10,800.00) ₱ (6,000.00) ₱ - ₱ (2,400.00) ₱ (19,200.00)
SSS ₱ (39,247.20) ₱ (23,982.00) ₱ - ₱ (6,976.80) ₱ (70,206.00)
Spa Supplies ₱ - ₱ (49,662.72) ₱ - ₱ - ₱ (49,662.72)
Office Supplies ₱ - ₱ - ₱ - ₱ (15,842.88) ₱ (15,842.88)
Electricity ₱ - ₱ - ₱ - ₱ (255,753.96) ₱ (255,753.96)
Water ₱ - ₱ - ₱ - ₱ (54,360.00) ₱ (54,360.00)
Security ₱ - ₱ - ₱ - ₱ (293,832.00) ₱ (293,832.00)
Janitorial ₱ - ₱ - ₱ - ₱ (146,916.00) ₱ (146,916.00)
Advertising ₱ - ₱ - ₱ (18,000.00) ₱ - ₱ (18,000.00)
Rent ₱ - ₱ - ₱ - ₱ (3,907,200.00) ₱ (3,907,200.00)
Interest ₱ - ₱ - ₱ - ₱ (151,200.00) ₱ (151,200.00)
Depreciation ₱ (1,143,263.80) ₱ (30,252.75) ₱ - ₱ (59,743.34) ₱ (1,233,259.89)
Total Expenses ₱ (2,355,153.50) ₱ (740,937.35) ₱ (18,000.00) ₱ (5,893,393.33) ₱ (9,007,484.18)
Net Income before Tax and NOLCO ₱ 6,875,111.22 ₱ 1,088,306.46 ₱ 69,350.00 ₱ (5,893,393.33) ₱ 2,151,824.34
NOLCO ₱ (153,833.92)
Net Income before Tax ₱ 1,997,990.42
Provision for Income Tax (30%) ₱ (599,397.13)
Net Income/(Loss) ₱ 6,875,111.22 ₱ 1,088,306.46 ₱ 69,350.00 ₱ (5,893,393.33) ₱ 1,552,427.21
2019
Revenue:
Total ₱ 12,737,918.39 ₱ 2,758,800.00 ₱ 840,750.00 ₱ - ₱ 16,337,468.39
Cost of Services
Cost of Sales ₱ - ₱ - ₱ (738,600.00) ₱ - ₱ (738,600.00)
Total ₱ (1,238,130.32) ₱ (738,996.20) ₱ (738,600.00) ₱ - ₱ (2,715,726.52)
Gross Profit
Other Income ₱ - ₱ - ₱ - ₱ - ₱ 12,450.00
Total Income ₱ 11,499,788.07 ₱ 2,019,803.80 ₱ 102,150.00 ₱ - ₱ 13,634,191.87
Expenses
PHIC ₱ (14,400.00) ₱ (7,500.00) ₱ - ₱ (2,400.00) ₱ (24,300.00)
HDMF ₱ (10,800.00) ₱ (6,000.00) ₱ - ₱ (2,400.00) ₱ (19,200.00)
SSS ₱ (39,247.20) ₱ (23,982.00) ₱ - ₱ (6,976.80) ₱ (70,206.00)
Spa Supplies ₱ - ₱ (49,662.72) ₱ - ₱ - ₱ (49,662.72)
Office Supplies ₱ - ₱ - ₱ - ₱ (15,842.88) ₱ (15,842.88)
Electricity ₱ - ₱ - ₱ - ₱ (255,753.96) ₱ (255,753.96)
Water ₱ - ₱ - ₱ - ₱ (54,360.00) ₱ (54,360.00)
Security ₱ - ₱ - ₱ - ₱ (293,832.00) ₱ (293,832.00)
Janitorial ₱ - ₱ - ₱ - ₱ (146,916.00) ₱ (146,916.00)
Advertising ₱ - ₱ - ₱ (18,000.00) ₱ - ₱ (18,000.00)
Rent ₱ - ₱ - ₱ - ₱ (3,907,200.00) ₱ (3,907,200.00)
Interest ₱ - ₱ - ₱ - ₱ (100,800.00) ₱ (100,800.00)
Depreciation ₱ (1,524,351.73) ₱ (40,337.00) ₱ - ₱ (79,657.79) ₱ (1,644,346.52)
Total Expenses ₱ (2,774,350.23) ₱ (752,030.02) ₱ (18,000.00) ₱ (5,864,899.22) ₱ (9,409,279.47)
NOLCO ₱ -
Provision for Income Tax (30%) ₱ (1,267,473.72)
Net Income/(Loss) ₱ 8,725,437.84 ₱ 1,267,773.78 ₱ 84,150.00 ₱ (5,864,899.22) ₱ 2,957,438.68
2020
Revenue:
Total ₱ 15,571,415.26 ₱ 2,976,240.00 ₱ 893,750.00 ₱ - ₱ 19,441,405.26
Cost of Services
Cost of Sales ₱ - ₱ - ₱ (785,050.00) ₱ - ₱ (785,050.00)
Total ₱ (1,238,130.32) ₱ (738,996.20) ₱ (785,050.00) ₱ - ₱ (2,762,176.52)
Gross Profit
Other Income ₱ - ₱ - ₱ - ₱ - ₱ 12,450.00
Total Income ₱ 14,333,284.94 ₱ 2,237,243.80 ₱ 108,700.00 ₱ - ₱ 16,691,678.74
Expenses
PHIC ₱ (14,400.00) ₱ (7,500.00) ₱ - ₱ (2,400.00) ₱ (24,300.00)
HDMF ₱ (10,800.00) ₱ (6,000.00) ₱ - ₱ (2,400.00) ₱ (19,200.00)
SSS ₱ (39,247.20) ₱ (23,982.00) ₱ - ₱ (6,976.80) ₱ (70,206.00)
Spa Supplies ₱ - ₱ (49,662.72) ₱ - ₱ - ₱ (49,662.72)
Office Supplies ₱ - ₱ - ₱ - ₱ (15,842.88) ₱ (15,842.88)
Electricity ₱ - ₱ - ₱ - ₱ (255,753.96) ₱ (255,753.96)
Water ₱ - ₱ - ₱ - ₱ (54,360.00) ₱ (54,360.00)
Security ₱ - ₱ - ₱ - ₱ (293,832.00) ₱ (293,832.00)
Janitorial ₱ - ₱ - ₱ - ₱ (146,916.00) ₱ (146,916.00)
Advertising ₱ - ₱ - ₱ (18,000.00) ₱ - ₱ (18,000.00)
Rent ₱ - ₱ - ₱ - ₱ (3,907,200.00) ₱ (3,907,200.00)
Interest ₱ - ₱ - ₱ - ₱ (50,400.00) ₱ (50,400.00)
Depreciation ₱ (1,905,439.67) ₱ (50,421.25) ₱ - ₱ (99,572.23) ₱ (2,055,433.15)
Total Expenses ₱ (3,193,546.95) ₱ (763,122.70) ₱ (18,000.00) ₱ (5,836,405.11) ₱ (9,811,074.76)
NOLCO ₱ -
Provision for Income Tax (30%) ₱ (2,064,181.19)
Net Income/(Loss) ₱ 11,139,737.99 ₱ 1,474,121.11 ₱ 90,700.00 ₱ (5,836,405.11) ₱ 4,816,422.78
Appendix N – Demand and Supply Analysis
DEMAND AND SUPPLY ANALYSIS

GYM/FITNESS CENTER
Year Demand Supply Percentage
2016 345 2,500 13.80%
2017 436 2,500 17.44%
2018 551 2,500 22.04%
2019 696 2,500 27.84%
2020 880 2,500 35.20%
2021 1,112 2,500 44.48%

THERAPEUTIC MASSAGE AND SPA (Body Massage)
2016 142 250 56.80%
2017 153 250 61.20%
2018 165 250 66.00%
2019 177 250 70.80%
2020 191 250 76.40%
2021 206 250 82.40%

THERAPEUTIC MASSAGE AND SPA (Sauna)
2016 133 250 53.20%
2017 143 250 57.20%
2018 154 250 61.60%
2019 166 250 66.40%
2020 179 250 71.60%
2021 193 250 77.20%

THERAPEUTIC MASSAGE AND SPA (Body Wax)
2016 111 250 44.40%
2017 120 250 48.00%
2018 129 250 51.60%
2019 139 250 55.60%
2020 149 250 59.60%
2021 161 250 64.40%

THERAPEUTIC MASSAGE AND SPA (Body Scrub)
2016 81 250 32.40%
2017 87 250 34.80%
2018 94 250 37.60%
2019 101 250 40.40%
2020 109 250 43.60%
2021 117 250 46.80%

THERAPEUTIC MASSAGE AND SPA (Foot Spa)
2016 32 250 12.80%
2017 34 250 13.60%
2018 37 250 14.80%
2019 40 250 16.00%
2020 43 250 17.20%
2021 46 250 18.40%

GYM SUPPLEMENTS
2016 234 400 58.50%
2017 250 400 62.50%
2018 268 400 67.00%
2019 287 400 71.75%
2020 307 400 76.75%
2021 328 400 82.00%

DANCE STUDIO (Zumba)
2016 154 300 51.33%
2017 165 300 55.00%
2018 176 300 58.67%
2019 189 300 63.00%
2020 202 300 67.33%
2021 216 300 72.00%

DANCE STUDIO (Yoga)
2016 162 300 54.00%
2017 173 300 57.67%
2018 185 300 61.67%
2019 198 300 66.00%
2020 212 300 70.67%
2021 227 300 75.67%

DANCE STUDIO (Dance Lessons)
2016 166 300 55.33%
2017 178 300 59.33%
2018 190 300 63.33%
2019 203 300 67.67%
2020 218 300 72.67%
2021 233 300 77.67%

Appendix O – Demand Projection – Future Operations
Present Demand 1/n

GROWTH RATE= ( ) -
Past Demand 1
GYM /FITNESS CENTER
For
2012: GROWTH RATE= ( 63 ) 1/1 -
51 1
GROWTH RATE= ( 1.2352 ) 1 - 1
GROWTH RATE= 1.2352 - 1
GROWTH RATE= 0.2352 or 23.52%
For
2013: GROWTH RATE= ( 79 ) 1/1 -
63 1
GROWTH RATE= ( 1.254 ) 1 - 1
For
2014: GROWTH RATE= ( 101 ) 1/1 -
79 1
GROWTH RATE= ( 1.2785 ) 1 - 1
GROWTH RATE= 1.2784 -1
For
2015: GROWTH RATE= ( 129 ) 1/1 -
101 1
GROWTH RATE= ( 1.2772 ) 1 - 1
Therapeutic Massage and Spa
For
2012: GROWTH RATE= ( 245 ) 1/1 -
225 1
GROWTH RATE= ( 1.0889 ) 1 - 1
For
2013: GROWTH RATE= ( 264 ) 1/1 -
245 1
GROWTH RATE= ( 1.0776 ) 1 - 1
For
2014: GROWTH RATE= ( 281 ) 1/1 -
264 1
GROWTH RATE= ( 1.0644 ) 1 - 1
GROWTH RATE= 1.0644-1
For
2015: GROWTH RATE= ( 302 ) 1/1 -
281 1
GROWTH RATE= ( 1.0747 ) 1 - 1

Dance Studio
For
2012: GROWTH RATE= ( 118 ) 1/1 -
110 1
GROWTH RATE= ( 1.0727 ) 1 - 1
For
2013: GROWTH RATE= ( 126 ) 1/1 -
118 1
GROWTH RATE= ( 1.0678 ) 1 - 1
For
2014: GROWTH RATE= ( 135 ) 1/1 -
126 1
GROWTH RATE= ( 1.0714 ) 1 - 1
GROWTH RATE= 1.0714 -1
For
2015: GROWTH RATE= ( 145 ) 1/1 -
135 1
GROWTH RATE= ( 1.0741 ) 1 - 1
Regression Analysis
Variables
y Price
a Approximate Fixed Cost
x Members/Customers
b Growth Rate
R² Coefficient Correlation
n∑xy-∑x.∑y
Unit Variable Cost = b =
n∑x² - (∑x)²
∑y - b∑x
Total Fixed Cost = a =
n
Where,
n is number of pairs of units—total-cost used in the calculation;
Σy is the sum of total costs of all data pairs;
Σx is the sum of units of all data pairs;
Σxy is the sum of the products of cost and units of all data pairs; and
Σx2 is the sum of squares of units of all data pairs.

For the gym:
Year x y x² xy
2016 345 ₱ 14,400.00 119,025.00 4,968,000.00
2017 436 ₱ 14,400.00 190,096.00 6,278,400.00
2018 551 ₱ 14,400.00 303,601.00 7,934,400.00
2019 696 ₱ 14,400.00 484,416.00 10,022,400.00
2020 880 ₱ 14,400.00 774,400.00 12,672,000.00
2021 1,112 ₱ 14,400.00 1,236,544.00 16,012,800.00
Sum 4,020 ₱ 86,400.00 3,108,082.00 57,888,000.00
6(57,888,000)-(4,020)(86,400)
6(3,108,082) - (4,020)²
Unit Variable Cost = b = 0
2,488,092
Total Fixed Cost = a = 86,400 - (0)(4,020)

6
Total Fixed Cost = a = 86,400
6
Cost Formula is y =14,400 + 0x
r² = 1
For the spa:
Body Massage
Year X y x² xy
2016 142 ₱ 300.00 20,164.00 42,600.00
2017 153 ₱ 300.00 23,409.00 45,900.00
2018 165 ₱ 300.00 27,225.00 49,500.00
2019 177 ₱ 300.00 31,329.00 53,100.00
2020 191 ₱ 300.00 36,481.00 57,300.00
2021 206 ₱ 300.00 42,436.00 61,800.00
Sum 1,034 ₱ 1,800.00 181,044.00 310,200.00
6(310,200)-(1,034)(1,800)
6(181,044) - (1,034)²
0
17,108
1,800 - 0(1,034)
6
1,800
6
Total Fixed Cost = a = 300
Cost Formula is y = 300 + 0x
r² = 1

Sauna
Year x y x² xy
2016 133 ₱ 380.00 17,689.00 50,540.00
2017 143 ₱ 380.00 20,449.00 54,340.00
2018 154 ₱ 380.00 23,716.00 58,520.00
2019 166 ₱ 380.00 27,556.00 63,080.00
2020 179 ₱ 380.00 32,041.00 68,020.00
2021 193 ₱ 380.00 37,249.00 73,340.00
Sum 968 ₱ 2,280.00 158,700.00 367,840.00
Unit Variable Cost = b = 6(367,840)-(968)(2,280)

6(158,700) - (968)²
0
15,176
2,280 - 0(968)
6
2,280
6
r² = 1
Body Wax
Year x y x² xy
2016 111 ₱ 400.00 12,321.00 44,400.00
2017 120 ₱ 400.00 14,400.00 48,000.00
2018 129 ₱ 400.00 16,641.00 51,600.00
2019 139 ₱ 400.00 19,321.00 55,600.00
2020 149 ₱ 400.00 22,201.00 59,600.00
2021 161 ₱ 400.00 25,921.00 64,400.00
Sum 809 ₱ 2,400.00 110,805.00 323,600.00

6(110,805) - (809)²
0
10,349
2,400 - 0(809)
6
2,400
6
r² = 1

Body Scrub
Year x y x² xy
2016 81 ₱ 500.00 6,561.00 40,500.00
2017 87 ₱ 500.00 7,569.00 43,500.00
2018 94 ₱ 500.00 8,836.00 47,000.00
2019 101 ₱ 500.00 10,201.00 50,500.00
2020 109 ₱ 500.00 11,881.00 54,500.00
2021 117 ₱ 500.00 13,689.00 58,500.00
Sum 589 ₱ 3,000.00 58,737.00 294,500.00

6(58,737) - (589)²
0
5,501
3,000 - 0(589)
6
3,000
6
r² = 1
Foot Spa
Year x y x² xy
2016 32 ₱ 200.00 1,024.00 6,400.00
2017 34 ₱ 200.00 1,156.00 6,800.00
2018 37 ₱ 200.00 1,369.00 7,400.00
2019 40 ₱ 200.00 1,600.00 8,000.00
2020 43 ₱ 200.00 1,849.00 8,600.00
2021 46 ₱ 200.00 2,116.00 9,200.00
Sum 232 ₱ 1,200.00 9,114.00 46,400.00

6(9,114) - (232)²
0
860
1,200 - 0(232)
6
1,200
6
r² = 1

For the gym supplements
Year x y x² xy
2016 234 ₱ 2,000.00 54,756.00 468,000.00
2017 250 ₱ 2,000.00 62,500.00 500,000.00
2018 268 ₱ 2,000.00 71,824.00 536,000.00
2019 287 ₱ 2,000.00 82,369.00 574,000.00
2020 307 ₱ 2,000.00 94,249.00 614,000.00
2021 328 ₱ 2,000.00 107,584.00 656,000.00
Sum 1,674 ₱ 12,000.00 473,282.00 3,348,000.00
Unit Variable Cost = b = 6(3,348,000)-(1,674)(12,000)

6(473,282) - (1,674)²
0
37,416
12,000 - 0(1,674)
6
12,000
6
Cost Formula is y = 2,000 + 0x
r² = 1
For the dance studio:
Zumba
Year x y x² xy
2016 154 ₱ 400.00 23,716.00 61,600.00
2017 165 ₱ 400.00 27,225.00 66,000.00
2018 176 ₱ 400.00 30,976.00 70,400.00
2019 189 ₱ 400.00 35,721.00 75,600.00
2020 202 ₱ 400.00 40,804.00 80,800.00
2021 216 ₱ 400.00 46,656.00 86,400.00
Sum 1,102 ₱ 2,400.00 205,098.00 440,800.00
Unit Variable Cost = b = 6(440,800)-(1,102)(2,400)

6(205,098) - (1,102)²
0
16,184
2,400 - 0(1,102)
6
2,400
6
r² = 1

Yoga
Year x y x² xy
2016 162 ₱ 400.00 26,244.00 64,800.00
2017 173 ₱ 400.00 29,929.00 69,200.00
2018 185 ₱ 400.00 34,225.00 74,000.00
2019 198 ₱ 400.00 39,204.00 79,200.00
2020 212 ₱ 400.00 44,944.00 84,800.00
2021 227 ₱ 400.00 51,529.00 90,800.00
Sum 1,157 ₱ 2,400.00 226,075.00 462,800.00

6(226,075) - (1,157)²
0
17,801
2,400 - 0(1,157)
6
2,400
6
r² = 1
Dance Lessons
Year x y x² xy
2016 166 ₱ 350.00 27,556.00 58,100.00
2017 178 ₱ 350.00 31,684.00 62,300.00
2018 190 ₱ 350.00 36,100.00 66,500.00
2019 203 ₱ 350.00 41,209.00 71,050.00
2020 218 ₱ 350.00 47,524.00 76,300.00
2021 233 ₱ 350.00 54,289.00 81,550.00
Sum 1,188 ₱ 2,100.00 238,362.00 415,800.00

6(238,362) - (1,188)²
0
18,828
2,100 - 0(1,188)
6
2,100
6
r² = 1

Appendix P – Lease Contract
1 LEASE CONTRACT
KNOW ALL MEN BY THESE PRESENTS:
This CONTRACT OF LEASE is made and executed at the City of Davao, this day of June 27,
2016, by and between:
GOLDEN MATINA, Filipino, hereinafter referred to as the LESSOR.
-AND-
FITNESS UNLIMITED HEALTH CLUB, Filipino, hereinafter referred to as the LESSEE.
WITNESSETH; That
WHEREAS, the LESSOR is the owner of THE LEASED PREMISES, a residential property
situated at Golden Matina McArthur Highway, Matina, Davao City;
WHEREAS, the LESSOR agrees to lease-out the property to the LESSEE and the LESSEE is
willing to lease the same;
NOW THEREFORE, for and in consideration of the foregoing premises, the LESSOR leases
unto the LESSEE and the LESSEE hereby accepts from the LESSOR the LEASED premises,
subject to the following:
TERMS AND CONDITIONS
1. PURPOSES: That premises hereby leased shall be used exclusively by the LESSEE for
residential purposes only and shall not be diverted to other uses. It is hereby expressly agreed
that if at any time the premises are used for other purposes, the LESSOR shall have the right
to rescind this contract without prejudice to its other rights under the law.
2. TERM: This term of lease is for TEN (10) YEARS from June 30, 2016 to June 30, 2026.
Upon its expiration, this lease may be renewed under such terms and conditions as my be
mutually agreed upon by both parties, written notice of intention to renew the lease shall be
served to the LESSOR not later than seven (7) days prior to the expiry date of the period herein
agreed upon.
3. RENTAL RATE: The monthly rental rate for the leased premises shall be in PESOS:
THREE HUNDRED TWENTY FIVE THOUSAND SIX HUNDRED (P 325,600), Philippine
Currency. All rental payments shall be payable to the LESSOR. It shall be agreed that the
LESSEE shall pay the LESSOR in advance the annual rent before the start of the subsequent
year.

4. DEFAULT PAYMENT: In case of default by the LESSEE in the payment of the rent, such as
when the checks are dishonored, the LESSOR at its option may terminate this contract and
eject the LESSEE. The LESSOR has the right to padlock the premises when the LESSEE is in
default of payment for One (1) month and may forfeit whatever rental deposit or advances have
been given by the LESSEE.
5. SUB-LEASE: The LESSEE shall not directly or indirectly sublet, allow or permit the leased
premises to be occupied in whole or in part by any person, form or corporation, neither shall
the LESSEE assign its rights hereunder to any other person or entity and no right of interest
thereto or therein shall be conferred on or vested in anyone by the LESSEE without the
LESSOR'S written approval.
6. PUBLIC UTILITIES: The LESSEE shall pay for its telephone, electric, cable TV, water,
Internet, association dues and other public services and utilities during the duration of the
lease.
7. FORCE MAJEURE: If whole or any part of the leased premises shall be destroyed or
damaged by fire, flood, lightning, typhoon, earthquake, storm, riot or any other unforeseen
disabling cause of acts of God, as to render the leased premises during the term substantially
unfit for use and occupation of the LESSEE, then this lease contract may be terminated
without compensation by the LESSOR or by the LESSEE by notice in writing to the other.
8. INSURANCE OF THE BUILDING: The LESSOR shall obtain insurance coverage for the
Leased Properties, against all insurable risks applicable from a duly accredited and
reputable insurance company in an amount equal to the maximum insurable value of
the Leased Properties. The Contract of Lease shall not require any share of the
insurance on the part LESSEE.
9. LESSOR'S RIGHT OF ENTRY: The LESSOR or its authorized agent shall after giving due
notice to the LESSEE shall have the right to enter the premises in the presence of the LESSEE
or its representative at any reasonable hour to examine the same or make repairs therein or for
the operation and maintenance of the building or to exhibit the leased premises to prospective
LESSEE, or for any other lawful purposes which it may deem necessary.
10. EXPIRATION OF LEASE: At the expiration of the term of this lease or cancellation
thereof, as herein provided, the LESSEE will promptly deliver to the LESSOR the leased
premises with all corresponding keys and in as good and tenable condition as the same is now,
ordinary wear and tear expected devoid of all occupants, movable furniture, articles and effects
of any kind. Non-compliance with the terms of this clause by the LESSEE will give the LESSOR
the right, at the latter's option, to refuse to accept the delivery of the premises and compel the
LESSEE to pay rent therefrom at the same rate plus Twenty Five (25) % thereof as penalty until
the LESSEE shall have complied with the terms hereof. The same penalty shall be imposed in
case the LESSEE fails to leave the premises after the expiration of this Contract of Lease or
termination for any reason whatsoever.
11. JUDICIAL RELIEF: Should any one of the parties herein be compelled to seek judicial
relief against the other, the losing party shall pay an amount of One Hundred (100) % of the
amount clamed in the complaint as attorney's fees which shall in no case be less than
P50,000.00 pesos in addition to other cost and damages which the said party may be entitled
to under the law.

12. This CONTRACT OF LEASE shall be valid and binding between the parties, their
successors-in-interest and assigns.
IN WITNESS WHEREOF, parties herein affixed their signatures on the date and place above
written.
Golden Matina Complex Fitness Unlimited Health Club

LESSOR LESSEE
Signed in the presence of:
_____________________________ ______________________________
ACKNOWLEDGEMENT
Republic of the Philippines)

_________________________) S.S
BEFORE ME, personally appeared:
Name CTC Number Date/Place Issued
GOLDEN MATINA COMPLEX 10000000 February 24, 20__ / Davao City

FITNESS UNLIMITED HEALTH CLUB 10000000 January 07, 20__ / Davao City
Known to me and to me known to be the same persons who executed the foregoing instrument
and acknowledged to me that the same is their free and voluntary act and deed.
This instrument consisting of ____ page/s, including the page on which this acknowledgement
is written, has been signed on each and every page thereof by the concerned parties and their
witnesses, and and sealed with my notarial seal.
WITNESS MY HAND AND SEAL, on the date and place first above written.
Notary Public
Doc. No.______;
Page No. ______;
Book No.______;
Series of 20___.

Appendix Q – Buy or Rent Analysis
Semi Commercial Lot @ Juna Subdivision, near DCWD with lot of 783 square meters
COST:
The cost of the land is worth P18,000,000 exclusive of other expenses(clean-up costs
and etc.). The Building costs P50,000 per square meter for class AA inclusive of interior design
and furnishing the building, the rate in constructing commercial building in the Philippines. In
order to finish the prospective commercial building, with 783 square meters of land and within
the land, a building of two-storey 407 square meters each floor, a total of 1,190 square meters
needed to construct, a cost of P59,500,000 money is needed.
Compared to the proposed rental, with renovation cost of P6,680,000 and rental of
P3,907,200 a year, for a business to start, it is a cheaper to just rent for now than to buy a land
and construct a building.
For 15 years:
INITIAL COST FOR RENT INITIAL COST FOR CONSTRUCTING

Renovation P6,680,000 Land P18,000,000
Rental (15 years) P58,608,000 Building P59,500,000
Total P65,288,000 Total P77,500,000

Since the life of the equipment is 15 years, thus the business is also expected to fully
operate in 15 years.
LOCATION:
The commercial lot available is located in Juna Subdivision, Matina, Davao City near
DCWD. Transportation is quite difficult, for there are no Public Utility Jeeps (PUJ) will be able to
pass in this area. The location is not easy to access, in order to reach this destination, an extra
fare for tricycle is needed. The location is not in a booming area, where the prospective market

is available. The location is important form the market, since it is located nearby Ateneo de
Davao University Matina Campus, University of Mindano Matina Campus, University of
Immaculate Conception Bankerohan Campus, NCCC Mall, Matina Town Square and etc.
Compared to the proposed location, it is located in Golden Matina Complex in McArthur

Highway, Matina, Davao City. The location is very accessible for there are many PUJs that will
pass in the area. It is strategically located for the prospective market.
According to the survey results, location is one of the major concern of the market, thus
choosing the location of the establishment is also one of the major factor that need to be
considered in operating the business.

BIBLIOGRAPHY
AMB Events Group. (2014). Philippines international beauty, spa and health industry show.
Retrieved August 16, 2016 from
http://www.philbeaute.org/download/PHILBEAUTE%20BROCHURE1.pdf
Bank of the Philippine Islands. (2015). BPI family ka-negosyo loan interest rates. Retrieved
August 23, 2016 from www.bpiexpressonline.com/p/1/84/ka-negosyo-loan-interest
rates.
Berry, T. (2007). What is an acceptable rate of growth for a small business during first five
years. Retrieved August 04, 2016 from www.entrepreneur.com/answer/221233.
David, F. (2014). Strategic management concepts and cases: a competitive approach (14th e.d).
New York: Pearson
De Leon, K.M et al. (2014). A project feasibility study on a proposed resort with swimming pool
in Luisa cor. Aguho St., Juna Subdivision, Brgy. Bucana, Matina, Davao City. Davao City,
Ateneo: Print
Euromonitor International. (2016). The world’s most comprehensive market research on
consumer products, commercial industries, demographics trends and consumer lifestyles
in the Philippines. Retrieved August 18, 2016 from www.euromonitor.com/philippines.
Guay, G.G et al. (2014). A feasibility study on Davao del Norte government officials and
employees’ multi-purpose cooperative Shell refilling station. Davao City, Ateneo: Print

Investopedia. (2016)). Engel’s law. Retrieved August 23, 2016 from
www.investopedia.com/terms/e/engels-law.asp
Maltz, J. & Salgoujhian, P. (2013). How fast should you be growing. Retrieved August 18, 2016
from techcrunch.com/2013/08/24/how-fast-should-you-be-growing/.

NAME John Eric C. Castañeda
Address: Divine Savior Dormitory Juan Luna St. Davao City

Contact Number: 09425535457
Email: castanedajohnericc@gmail.com
=====================================================
Education:
Tertiary Ateneo de Davao University present -
Secondary Saint Michael’s School of Padada 2012

Salutatorian, Loyalty Award, Red Cross Award, Altar Server Award,
Best in Computer, Best in Math
Elementary Saint Michael’s School of Padada 2008

Valedictorian, Best in English, Best in Math,
Best in Computer Best in Science
PROFESSIONAL/CLUB ORGANIZATION SERVICE/CLUBS MEMBERSHIPS

June 2013-March 2016
Member, Junior Philippine Institute of Accountants (AdDU)

Scholar, Ateneo de Davao Scholar Society
June 2014-2016
Facilitator, Ateneo First Year Orientation Program

Member, Accountancy Students Executive Council Welfare

Member, ARETE Honor Society of Ateneo de Davao

COMMUNITY SERVICE
November 2013-March 2014
Member, National Service Training Program – Civic Welfare Training Service,
Immaculate
Pre-school Renovation in Landmark, Davao City
SKILLS
Computer Literate
Database Making
English Language Skills
Accounting Skills
REFERENCES
*Available upon request*

NAME Shaira Karissa J. Cipriano
Address: Km. 110 Sitio New Kalibo Brgy. Amas, Kidapawan City
Contact Number: 0942-276-8947
Email: ciprianoshairakarissa@gmail.com
=====================================================
EDUCATION
June 2012 - Present School of Business and Governance
BS in Accountancy Candidate;
Expected graduation: March 2017
June 2008 – March 2012 St. Mary’s Academy of Kidapawan
Kidapawan City, Philippines
Secondary
Class Valedictorian, Excellence in Mathematics, and
Excellence in Science, Leadership Awardee, Editor’s Guild
Awardee, and Congress Awardee
June 2002 – March 2008 Amas Central Elementary School
Kidapwan City, Philippines
Elementary
Class Salutatorian, Best in Mathematics, Best in Filipino
June 2000 – March 2002 Amas Baptist Stork Learning Center
Primary
PROFESSIONAL/CLUB ORGANIZATION SERVICE

Class Representative, Junior Philippine Institute of Accountants (AdDU)
 To ensure information dissemination and active participation for my class/section
News Editor, Account ‘n’ See, The Official Publication of Accountancy Division (AdDU)
 To write news articles about the Accountancy Division that will serve as an
avenue for publicizing matters and activities conducted
News Editor, LIYAB, The Official Publication of PIGLASAPAT (AdDU)
 To write news articles about current national events
Finance Committee Member, Accountancy Student Executive Council (AdDU)
 To monitor the finances of the council and make reports of the expenses
COMMUNITY SERVICE

Philippine Red Cross Youth Volunteer
 To render first aid in case emergency
Member, National Service Training Program – Civic Welfare Training Service
PROFESSIONAL/ORGANIZATIONS/CLUBS MEMBERSHIPS
2014-2017 Junior Philippine Institute of Accountants
2015-2017 Accountancy Students Executive Council
2015-2016 Fourth Year Accountancy Students Executive Council
2012-2017 Ateneo Scholars Society
2013-2014 ARETE Honors Society
SKILLS
News Writing
Feature Writing
Mandarin Language Skills
REFERENCES (List 2-3)

Arnel P. Cipriano
School Principal
Km.110, Sitio New Kalibo Brgy. Amas, Kidapawan City
0948-519-3615
Maria Nelly J. Cipriano

Registered Midwife
Km.110, Sitio New Kalibo Brgy. Amas, Kidapawan City
0907-213-7038

NAME: Pamela Denise L. Del Norte
Address: Apo Sandawa Homes Phase 1 Blk. 19 Lot 1, Kidapawan City

Telephone: 278-4067
Email: delnortedenisepamela@gmail.com
=====================================================
EDUCATION
June 2012-Present School of Business and Governance
BS in Accountancy Candidate; Expected graduation: March 2017
June 2008-March 2012 Kidapawan City National High School Science-Curriculum

Secondary
June 2006-March 2008 Notre Dame of Kidapawan College

Elementary
June 1998-March 2002 ABC- Educational Development Center

Primary

Accountancy Student Executive Committee (ASEC)
 Secretary General of the batch
June 2013-March 2017 Junior Philippine Institute of Accountants (JPIA)
June 2015-March 2017 Ateneo Cathetical Instruction League (ACIL)
June 2015-June 2016 AIESEC
SKILLS
Writing Skills
English Literacy
Mandarin Literacy
REFERENCES
Nida L. Del Norte
ASH Phase 1 Blk. 19 Lot 1, Kidapawan City
278-4067

NAME Venus Angelica J. Derecho
Address:#4 Libenly Compound, Kawayan Drive, Matina Davao

City, Davao del Sur
Email: venusderecho@gmail.com
=====================================================
EDUCATION
BS in Accountancy Candidate; Expected graduation: March
2017
June 2008 – March 2012 Ateneo de Davao University
Davao City, Philippines
Secondary
June 2002 – March 2008 Davao City Special School
Elementary
June 2000 – March 2002 Saint Mary's Initial Learning Experience
Primary

Welfare Committee Member, Accountancy Students Executive Council
 To provide support in the tasks of other committees in the organization.

Finance Committe Member , Accountancy Students Executive Council
 To provide support in handling the funds and ensuring that all transactions are
properly accounted for in the organization.

COMMUNITY SERVICE
Team Member, National Service Training Program – Civic Welfare Training Service,
Barangay Sasa, Davao City, Philippines
 To help in the team’s project and help in ensuring that such will be applied for
the good of the community
2014-2015 Ateneo Film Circle
SKILLS
Basic SAP Business One Skill
Database Making

Elmer P. Derecho
Accountant
Matina, Davao City
Lilian J. Derecho
Bank Employee
Matina, Davao City

NAME Coleen M. Rapisura
Address: Doña Salud Subd., Sasa, Davao City, Davao del Sur
Telephone: 235-8658
Email: ceci_rapisura@yahoo.com
=====================================================
EDUCATION
BS in Accountancy Candidate; Expected graduation:
March 2017
June 2008 – March 2012 Holy Child College of Davao
Secondary
June 2002 – March 2008 Holy Child College of Davao
Elementary
June 2000 – March 2002 Fatima de Davao School
Primary

Class Representative, Junior Philippine Institute of Accountants (AdDU)
 To ensure information dissemination and active participation for my class/section
Documentations Committee Member, Junior Philippine Institute of Accountants (AdDU)
 To take documentations of events of the organization
Productions Program Committee Member, Accountancy Students Executive Council
 To ensure the program flow of the events of the organization
Creative Pool Committee Member, Fourth Year Students Executive Council
 To provide technical support and produce videos or photos for the organization
Creative Pool Committee Member, Accountancy Students Executive Council
 To provide technical support and produce videos or photos for the organization

COMMUNITY SERVICE
Project Leader, National Service Training Program – Civic Welfare Training Service,
Immaculate Conception Chapel, Kadayawan Homes, NHA Bangkal, Davao City,
Philippines
 To supervise my team’s project and ensure that such will be applied for the good
of the community
2015-2016 Ateneo Film Circle
SKILLS
Video Editing
Database Making

Gicelle M. Rapisura
Registered Nurse
Doña Salud Subd., Sasa, Davao City
235-8658
Gimedina M. Rapisura
Engineer
Doña Salud Subd., Sasa, Davao City
235-8658

NAME: Fretzel Mae L. Padua
Address: Brgy. Ilomavis, Kidapawan City
Contact No.: 09326186738
Email: pfretzlemae@gmail.com
==========================================================
EDUCATION
June 2012-Present School of Business and Governance
BS in Accountancy Candidate; Expected graduation: March 2017

High School Deparment

Elementary Department

Junior Philippine Institute of Accountants (JPIA)
 Classroom Representative
Accountancy Students Executive Council (ASEC)
 Logistics Committee
Accountancy Students Executive Council (ASEC)
 Welfare Committee
June 2013-March 2017 Junior Philippine Institute of Accountants (JPIA)
SKILLS
Writing Skills
Computer Literacy
English Literacy
Mandarin Literacy
REFERENCES
Lovelle Jykka Orbeta
Davao City
09424969806

NAME: JVANNESIC A. TARRANZA
Address: #129 Starcross st., Davao Farm Village,

Brgy. Lapu-Lapu Jerome, Agdao, Davao City
Contact: 0943-061-8275
Email: jvannissick@gmail.com
=====================================================
EDUCATION
June 2012 - Present Ateneo de Davao University
 Bachelor of Science in Accountancy

 Dean’s Lister
 2012 - 2013 2nd semester
 2013 – 2014 1st and 2nd semester
 2014 – 2015 1st and 2nd semester
June 2010 – March 2012 Assumption College of Davao
 Honorable Mention
 Athlete of the Year (2011 – 2012)
June 2008 – March 2010 Holy Cross of Davao College
June 2002 – March 2008 F. Bangoy Central Elementary School
 Batch Salutatorian (2007-2008)

June 2012 – October 2012
Class President, General Assembly of Class Presidents
June 2013 – October 2013

Class Vice-President, General Assembly of Class Presidents
June 2013 – March 2014

Welfare Committee Member, Accountancy Student Executive Council (AdDU)

Overall Sports head, Junior Accountancy Student Executive Council (AdDU)

Outdoor Sports head, Accountancy Student Executive Council (AdDU)

Member, Junior Philippine Institute of Accountants (AdDU)

Member, Association of Accounting Technology Students (AdDU)

Varsity, Ateneo Basketball Men Varsity
2014-2015 Third Year Accountancy Students Executive Council
2016-2017 Ateneo Basketball Men Varsity
SKILLS
Fluent in speaking and writing English
Good in analytical and mathematical skills
Proficient in MS Word, Excel and PowerPoint
Knowledgeable in SAP Business 1
REFERENCES
Mr. Leopoldo Medina
Program Director and Accountancy Reviewer

E. Jacinto Street, Davao City
(0947) 738 2886
Ms. Jocelyn Gumpad
Professor, Internship Advisor

E. Jacinto Street, Davao City
(0922) 851 1345

NAME Katrina Angelica J. Viloria
Address: Saint Anthony Village, Lanang, Davao City, Davao del Sur
Telephone: 234-8044
Email: katrina_viloria@yahoo.com
=====================================================
EDUCATION
BS in Accountancy Candidate; Expected graduation: March
2017
June 2008 – March 2012 Stella Maris Academy of Davao

Secondary

Elementary

Primary

April 2016 – April 2017
Sports Committee Head, Accountancy Students Executive Council
 To ensure the welfare and development of the athletes playing for the
division

Griffin Boosters Member, Accountancy Students Executive Council
 To provide moral support for the athletes and the divisipon

Logistics Committee Member, Fourth Year Accountancy Students Executive Council
 To provide logistics assistance for the division
June 2013-April 2014

Class Representative, Junior Philippine Institute of Accountants
 To provide information regarding club events for the class

2015-2016 Ateneo Catechetical Instructions League
SKILLS
Video Editing
Database Making
Basic Computer Hardware Installation
Basic Computer Encoding (Visual Basic)
REFERENCES
Vilbian A. Viloria
Registered Guidance Counselor
Osias, Kabacan, North Cotabato
0946-839-3808
Carlos Miguel J. Viloria

KGJS Shipping Co., Third Officer
Saint Anthony Village, Lanang, Davao City
0932-083-0611


Fitness Unlimited Health Club

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What is the purpose of the project?

What is the purpose of the project?

What are the objectives of the project?

What are the objectives of the project?

.

ATENEO DE DAVAO UNIVERSITY

A Project Feasibility Study on Health Club Establishment

“FITNESS UNLIMTED HEALTH CLUB”

Castaneda, John Eric C.

Ryan Morales, CPA, MBA

Management Consultancy Instructor

Chapter 1 Summary of the Project........................................................................... 1

Chapter 2 Market Study ........................................................................................... 14

Chapter 3 Technical Feasibility ............................................................................... 44

Chapter 5 Socio-Economic Study.............................................................................. 150

Chapter 6 Organization and Management Study .................................................... 152

APPENDIX A……………………………………………………………………….…………………………………. 158

BIBLIOGRAPHY ………………………………………………………………………………………………..….. 235

Summary of the Project

1.1 Name of the Enterprise

Figure 1.1 Project Logo

The name of the enterprise is “Fitness Unlimited Health Club”. The

FITNESS UNLIMITED HEALTH CLUB 1

The “Fitness Unlimited Health Club’s” proposed location is at Building C, Golden

Figure 1.2 Project Location – Aerial

Figure 1.3 Project Location – Map

FITNESS UNLIMITED HEALTH CLUB 2

Figure 1.5 Project Location – Actual Image

FITNESS UNLIMITED HEALTH CLUB 3

1.2.1 Sources of Labor and Utilities

Electricity will be serviced by Davao Light and Power Company (DLPC)

1.2.2 Proximity to the Market

The area is located in the north side’s “booming” place as it is surrounded

FITNESS UNLIMITED HEALTH CLUB 4

1.2.3 Nature of Available Transportation

The project location is very accessible and convenient. It is situated

1.2.4 Cost of Land and Building

1.3 Descriptive Definition of the Project

FITNESS UNLIMITED HEALTH CLUB 5

1.4 Long Range Objectives

FITNESS UNLIMITED HEALTH CLUB 6

FITNESS UNLIMITED HEALTH CLUB 7

Fitness Unlimited is a health club primarily conceptualized as a fitness

FITNESS UNLIMITED HEALTH CLUB 8

In considering which location the fitness club is to be established, the

1.6.2 Nature and Problems of the Industry

FITNESS UNLIMITED HEALTH CLUB 9

1.6.4 Investment Cost

The proposed project will require a total investment of ₱ 20,000,000.00.

1.7 Major Assumptions and Summary of Findings and Conclusion

The health club is located in Golden Matina Complex, McArthur Highway

FITNESS UNLIMITED HEALTH CLUB 10

Using the demand projections made using competitor’s data regarding

FITNESS UNLIMITED HEALTH CLUB 11

As shown in the study, in the discounted payback period, it only 6.72

The planned number of employees to be hired is 16 and is composed of:

Based on the information presented, the project is feasible in terms of the

FITNESS UNLIMITED HEALTH CLUB 12

FITNESS UNLIMITED HEALTH CLUB 13