1

PROJECT
FEASIBILITY
STUDY

Submitted by:
Arcena, Hannah Joyce S.
Canda, Sheena Feye S.
Pareñas, Eda Mae M.
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TABLE OF CONTENTS

Executive Summary 4

Chapter 1 : Project Summary

Name of the Firm 5

Location of the Business 5

Brief Description of the Business 6

Organizational Chart 6

Staffing 7

Chapter 2 : Marketing Aspect

Market Description 9

Demand Analysis 13

Supply Analysis 16

Competitive Position 18

Selling Price 19

Marketing Mix 19

Projected Sales per Unit/Volume 20

Chapter 3 : Technical Aspect

Product Description 21

Production Process 22

Production Schedule 22

Equipment/Facilities 23

Floor plan 24
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Utilities Needed 25

Waste Disposal 25

Production Cost 25

Chapter 4 : Financial Aspect

Financial Assumptions 27

Projected Statement of Financial Position 28

Projected Profit/Loss Statement 29

Projected Statement of Cash Flow 30

Projected Changes in Equity 31

Notes to Financial Statements 31

Financial Ratio Analysis 35

Capital Budgeting 35

Chapter 5 : Socio Economic Aspect 36

Chapter 6 37

Findings 37

Conclusions 37

Recommendations 37

References 38

Appendices 38
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Executive Summary

The goal of this feasibility study is to outline with the strategies, tactics, and
programs that will make the sales goals outlined in this proposed business plan. The name of
the business is Crisp N’ Cream. The business offers sweet-salty frozen treat to satisfy the
customers who crave for desserts. The study conducted by the proponents served to
organize the activities that must be applied for the operation. This includes the following
aspects:

The marketing aspects view that the target market is students and young adults. It
will help satisfy the needs of those who crave for desserts. The main competitor is
companies who have the same line of industry. In this aspect, it is found out that based on
our survey conducted, there is a great demand for desserts. The business also uses
promotional strategies through flyers and social media to inform our potential customers.

The technical aspect states that the business is located at Building 1, 97 Gen.
Douglas MacArthur Highway, Talomo, Davao City, next 7-Eleven and in front RD Pawnshop.
It is the best place because it is surrounded of various commercial and service business
establishments. In the store layout, machinery and equipment are arranged in a way that
will save space and have a nice ambience.

The management aspect view that the Crisp N’ is a partnership business which has
three owners who equally contributed money equally contributed capital, cash, for the
business to operate. The business will operate for 10 hours, starting eleven (11) in the
morning until nine (9) in the evening. There will be six (6) working days from Monday to
Saturday, thus, Sunday will be allotted for the rest day of all employees. One of the partners
offers her knowledge and skills to facilitate. The business will also have a bookkeeper,
cashier, cook, and server.

The financial aspect, the beginning capital of the business is Php 1,200,000.00 which
includes the property, equipment and other operational cost. This capital is used for
purchasing tools and equipments that are used for day-to-day operations and also for the
renovation of the building.

The socio-economic aspect views that this study contributes to the community,
government and the economy through paying taxes and licenses. The business will surely
provide direct employment and guarantees the right benefits given to employees.
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CHAPTER 1
PROJECT SUMMARY

This section introduces the name, area and the brief history of the business,
including its inclination of industry, sort of organization and the structure of the
organization.

NAME OF THE FIRM

The business proponents came up with “Crisp N’ Cream” as the name of the
business. The word ‘crisp’ is a French word which means ‘fries’. The word ‘cream’ is derived
from one of the dessert delicacies in the market, which the business proponents plan to sell
which is ice cream.

LOCATION OF THE BUSINESS

The business is located at Building 1, 97 Gen. Douglas MacArthur Highway, Talomo,

Davao City, 8000, Davao del Sur, next to 7-Eleven and in fronting RD Pawnshop.
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BRIEF DESCRIPTION OF THE BUSINESS

Crisp N’ Cream’s main product offered is the one of the most famous dessert which
is ice cream. It is served in a cup and is uniquely topped with French fries and chocolate
syrup. It is a perfect sweet treat to lighten up someone’s mood from a tough day.

The business operates as a partnership comprising three (3) total numbers of

investors/partners who have equally contributed capital, cash or non-cash assets and who
have agreed that profit and losses are to be divided equally among the partners. Crisp N’
Cream’s main product offered is a new variety of ice cream. It is usually served in a cup and
is uniquely made with French fries on top.

In the commencement of operation, one of the partners offers her knowledge and
skills to facilitate the operation and production of the business. The business will also have a
bookkeeper, cashier, server, and cook.

ORGANIZATIONAL CHART

Partners

Operation Manager Bookkeeper

Cook Server Cashier

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STAFFING

Job Title Job Specification Job Description

▪ Responsible in the entire
• College graduate
operation of the business
• Graduate of business-related
▪ Manage day – to – day
courses
business activities
• Has 3 years working experience in
▪ Recommend business
Operation business operation and
tactics
Manager management
▪ In – charge in acquisition of
• Computer Literate
materials
• With pleasing personality and good
▪ Account suitably the best
moral character
possible utilization of
• At most 23 – 35 years old
materials
• College/High school graduate
• Graduate of
▪ Responsible for
accountancy/accounting technology
recordkeeping of the
• Computer Literate and a
business transactions
bookkeeping NC III holder
Bookkeeper ▪ Responsible for the
• Reliable, trustworthy with a pleasing
compliance of
personality and good moral
administrative
character
prerequisites
• Has 2 – 3 years working experience
• At most 20 -35 years old
• College/High school graduate ▪ Manage money exchanges;
• Preferably Female receipts and payment
• Computer Literate ▪ Responsible in taking care
• Has 2 – 3 years working experience of money and must be
Cashier
• Reliable and trustworthy with a aware of the client who pay
pleasing personality and good moral for their product
character ▪ Responsible for the inflow

• Age between 20 – 27 years old and outpouring of cash in

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the business
• College/High school graduate
▪ Setting up workstations
• Male/Female
with all needed ingredients
• Preferably good in communication
and cooking equipment
• Knowledge of various cooking
Cook ▪ Makes the ice cream and
procedures and methods
cooks the fries
• Ability to follow all sanitation
▪ Responsible for the food
procedures
presentation
• Age between 20 – 35 years old
▪ Perform basic cleaning tasks
as needed or directed by
▪ At least high school graduate
supervisor
▪ Male/Female
▪ Promptly address customer
▪ Good communication skills
service issues and refer
Server ▪ With pleasing personality and good
customers to management
moral character
when necessary
▪ Age between 20 – 30 years old
▪ Serves the product to the
customer
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CHAPTER 2
MARKETING ASPECT

This chapter provides the description of the product’s target market, the demand
and supply analysis and its edge on other business of the same industry.

MARKET DESCRIPTION

Fries Cream is a snack that people, regardless of their age, gender, and status in life,
would love to enjoy. They can also share it with their friends, family, and even love ones.
With its affordable price, everyone can taste this salty-sweet treat that will make your day
complete.

The ideal customers for Fries Cream are those who are willing to take a little extra
money to eat a cup of frozen treat topped with French fries. More specifically, those
students and employees of the University of Mindanao and residents around the near
barangay Gravahan, New Matina, Davao City who does deserve a treat though of their busy
schedules.

The business’ geographic target is in Davao City primarily located at this University
of Mindanao Drive, Davao City as a primary market. This location is composed of schools like
University of Mindanao and Elementary School. Also, from these components we will
determine the population of those living in apartments and boarding houses where our
target market is situated.

Crisp N’ Cream is an ice cream parlor business that is selling their product in an
establishment, they use social media and flyers to call the attention of consumers and then
they are peddled with the consumers to buy and eat Fries Cream.
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DEMAND AND SUPPLY

Table 1
Profile of the Respondents according to Gender
Gender Frequency % of Distribution
Male 24 24%
Female 76 76%
Total 100 100%
Table 1 shows that there are 24 male respondents or 24% and the total of 76 female
respondents, which is 76% of the total percentage. Base of the percentage distribution
according to gender, for a total of 24 male respondents often purchase a cup of ice cream
and a higher total number of female respondents are most likely buy a cup of ice cream.

Table 2
Profile of the Respondents according to Age
Age Frequency % of Distribution
Below 18 years old 12 12%
18 years old and above 88 88%
Total 100 100%

Table 2 shows 12% of the respondents are aged below 18 years old, making it the
lowest frequency of respondents, while ages 18 years old and above garnered 88% of the
totality of respondents. Most of the buyers are people of the ages 18 years old and above.

Table 3
Profile of the Respondents according to whether they like to eat ice cream

Do they like to eat ice cream Frequency % of Distribution

Yes 99 99%
No 1 1%
Total 100 100%
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Based on the survey conducted it shows that 99 out of 100 of the respondents often
eat ice cream. On the other hand, only 1 out of 100 does not eat ice cream. It could be
concluded that most people eat ice cream.

Table 4
Profile of the Respondents according to the how often do they eat ice cream

How often do they eat ice cream Frequency % of Distribution

Once a week 63 63%

Twice a week 29 29%
Thrice a week 5 5%
Four times a week or more 3 3%
Total 100 100%

Based on the table, it shows that 63% of the total percentage eats ice cream once a
week. 29% stating that they eat ice cream thrice a week. 5% are stated that they eat ice
cream four times a week. And lastly, 3% asserted that they eat ice cream five times a week
or more. Based on the result, it can be inferred that most likely customers would buy ice
cream once a week.

Table 5
Profile of the Respondents according to how many servings of ice cream can they consume
in a day

How many servings of ice cream can

Frequency % of Distribution
they consume in a day

1 to 3 servings 83 83%
4 to 6 servings 12 12%
More than 6 servings 5 5%
Total 100 100%

According to the data which was shown above, 83% of the total percentage states
that they can consume 1 to 3 servings of ice cream in a day. 12% stating that they can
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consume 4 to 6 servings of ice cream a day. And lastly 5% states that they can consume
more than 6 servings in a day. It can be concluded that the majority of the customer would
buy 1 to 3 servings of ice cream in a day.

Table 6
Profile of the Respondents according to how much are they willing to pay for a cup of ice
cream

How much are they willing to pay for

Frequency % of Distribution
a cup of ice cream

Below Php 20.00 27 27%

Php 20.00 to Php 40.00 32 32%

Php 41.00 to Php 60.00 27 27%

Php 61.00 or more 14 14%

Total 100 100%

According to the data above, 27% of the total percentage would be willing to pay a
cup of ice cream for a price of below Php 20.00. Another 27% of the total percentage stated
that they are willing to buy a cup of ice cream for a price ranging Php 41.00 to Php 60.00.
32% of the total percentage claimed that they are willing to buy a cup of ice cream for a
price ranging Php 20.00 to Php 40.00. Lastly, 14% of the respondents asserted that they are
willing to pay for a cup of ice cream in the amount ranging Php 61.00 or more. In conclusion,
most people would be willing to buy a cup of ice cream for an amount ranging Php 20.00 to
Php 40.00.

Table 7
Profile of the Respondents according to their willingness to buy ice cream with French fries

Willingness to buy ice cream with

Frequency % of Distribution
French fries

Yes 98 98%

No 2 2%

Total 100 100%

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The table shows that 98% of the total percentage would like to buy ice cream with
French fries. 2 respondents would be willing to buy ice cream with French fries. Based on the
survey, it can be concluded that the majority of the customers would like to buy a cup of ice
cream with French fries.

DEMAND ANALYSIS

According to the data gathered, 98% of the respondents are willing to buy ice cream
with French fries. With this demand, we need to find a nice strategy to further promote our
product and therefore increase the demand of such dessert.
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Aside from the high demand for ice cream alone, there’s a feature that may
somehow pull the demand up since most of the respondents preferred ice cream with
French fries. Around 98% of the respondents would like to buy such dessert. There’s a need
to find the right market to be able to meet target sales since preference is high.

Past Demand

Note: Growth rates based on the same period of the previous year | Source: PSA, 2014

Gross Value Added and Growth Rates of Food Manufacturing per Quarter, 2012-2014

This data shows the fluctuating demand on food manufacturing. The growth rate has
been very significant from late 2012 to 2013. This clearly shows that the market for food
manufacturing has been growing despite economic crises. There are various sources of
demand for food manufactured products in the country. The economy is growing fast tied to
tourism-based enterprises such as restaurants, hotels and other leisure providers, there is a
growing demand for unique and tasty frozen desserts. Food manufacture continues to be
the largest Subsector with 36% share, followed by radio, tv, communication equipment with
17% share, chemicals are third with 11% share of total manufacturing value added (MVA) in
2014.

99% of the Frequency of Number of Total

Demand
Respondents % Students eats Consumption Weeks per Servings
Population
Ice cream per Week Year per Year
(number of
(a) (a/100) (x*99%) 18,365 times) (weeks)
63 63.00% 62.37% 11,454 1 52 595,608
29 29.00% 28.71% 5,273 2 52 548,392
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5 5.00% 4.95% 909 3 52 141,804

3 3.00% 2.97% 545 4 52 113,360
100 100% 99.00% 18,181 1,399,164

Demand Projection for the next 5 years

Previous Years Projected Yearly

Projected Years Average Population Growth
Demand Demand

(a) (b)=a*8%(**) (c)=a+b

2020 1,399,164 111,933 1,511,097
2021 1,511,097 120,888 1,631,985
2022 1,631,985 130,559 1,762,544
2023 1,762,544 141,003 1,903,547
2024 1,903,547 152,284 2,055,831
**We are expecting 8% increase in demand per year
2012 5.40%
2013 10.30%
2014 8.10%
Average Growth 8%
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SUPPLY ANALYSIS

According to the data gathered, 63% of the respondents preferred to buy ice cream
only once a week. With this supply, we need to find a nice strategy to promote our product
and therefore increase the supply of ice cream.

Previous Supply

Note: Growth rates from 2012-2015 | Source: PSA, 2015

Growth Rates of Manufacturing Industry in Various Lines of Business, 2012-2015

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Based on the 2015 statistics, other food products industry leads in terms of number
of establishments. With this data presented, it is clearly defined that there’s a growing
demand in the food industry since the number of suppliers grows rapidly. There are many
people who tend to buy desserts nowadays.

Supply Projection for the next 5 years

Previous Years Average Population Projected Yearly

Projected Years
Supply Growth Supply

(a) (b)=a*4%(**) (c)=a+b

2020 1,158,510 46,340 1,204,850
2021 1,204,850 48,194 1,253,044
2022 1,253,044 50,122 1,303,166
2023 1,303,166 52,127 1,355,293
2024 1,355,293 54,212 1,409,505
**We are expecting 4% increase in supply per year

2012-2015 12%
Divided by no. of years 3
Average growth per year 4%

Competitors Approximate Yearly Sales

Alchriz Ice Cream 52,560

Seven Eleven 65,700
Villa Sante 91,250
Ice Giants 127,750
Donna's Ice Cream 52,195
Miguelito's Ice Cream 120,450
Mang Danny's Ice Cream 124,830
Carmen's Best Ice Cream 36,500
Noonsaram 73,000
McDo 153,300
Jollibee 109,500
Chilzz Fried Ice Cream 36,500
Keepsakes Café 114,975
TOTAL 1,158,510
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Demand and Supply Analysis

Years Demand Supply Demand-Supply Gap

2019 1,399,164 1,158,510 240,654
2020 1,511,097 1,204,850 306,247
2021 1,631,985 1,253,044 378,940
2022 1,762,544 1,303,166 459,377
2023 1,903,547 1,355,293 548,254
2024 2,055,831 1,409,505 646,326

COMPETITIVE POSITION
Food is a basic need and food service industry will always continue in demand. This
industry includes restaurants, fast foods, and cafeterias, catering opportunities, food carts,
food trunks and the like. Filipinos love to eat. This love for food and eating is the major
reason why the food industry has flourished well in the Philippines and why you will see a lot
of restaurants and fast foods scattered all over the country.

Our target customer will be:

• Students
• Young adults
No matter where you are in life, whether you are a student, professional, a retiree, or
in a growing family, everyone can have a taste of Fries Cream. It is a sweet-salty frozen
dessert that allows people to enjoy and bond with their loved ones at any time of the day. It
will also help you relax from a stressful day.

Our sense of taste is unlike any other. Scientific data supports the existence of the
sweet tooth in perhaps half of all humans. We’re born with established likes and dislikes.
Craving for sweet foods is partly hereditary. The enjoyment you feel from eating something
sweet is facilitated by the same morphine-like biochemical systems in the brain that are
thought to be the basis for all highly-rewarding activities. This is just one of the reasons why
people make room for desserts.
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Selling Price
The pricing of the product is based on its market competition. The competition is
tight in the food and business industry because the demand is not just based on the price
itself but also in its taste and presentation. To balance all the necessary factors needed to
formulate a considerable and reasonable price considering the supply availability, the price
is set up at 435 percent based on its cost for the initial year.

SELLING PRICE
Year 1 Php 35.10
Year 2 Php 36.00
Year 3 Php 36.98
Year 4 Php 37.99
Year 5 Php 39.00

Marketing Mix
• Product
Our product is sweet-salty frozen treat, perfect in any occasions and can be
enjoyed at any time of the day.
• Price
It’s very affordable that a high school student can afford to buy.
• Place
The partners decided to put the business beside 7-Eleven, Building 1, 97 Gen.
Douglas MacArthur Highway, Talomo, Davao City. The site is easy to locate since it’s
along the highway and the only ice cream parlor shop in the area. The location is a
commercial area which is very accessible to its target consumer. The area is not
quite big.
• Promotion
The partners believe that one of the initial key to success is to let the market know
the existence of the business so proper promotion and rigid dissemination of
information is needed.
The product of the business is the first of its kind. People will easily get attracted by
its taste and appearance the benefits that the client will get once they acquire the
product. To promote it, the partners decided to hand-out flyers and leaflets on the
street, and share the information using social media sites. All the information
disseminated will highlight what is the product, its characteristics and the benefits
that the user will get and the nature of the business and its location.
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Projected Sales per Volume/Unit

Projected Sales per Volume per
unit

Zero
Year 1st Year 2nd Year 3rd Year 4th Year 5th Year
Price Per
Unit - 35.10 36.00 36.98 37.99 39.00

No. of
Units Sold - 36,997 40,697 44,767 49,244 54,168

1,298,549.70 1,465,092.00 1,655,483.66 1,870,780.00 2,112,552.00

Note: The projected sales are estimated based on the normal capacity that the business is
expected to operate.
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CHAPTER 3
TECHNICAL ASPECT

This chapter presents the technical aspect of the study, including its product costing
and scheduling.

This chapter highlights all the things that are involved in the production and
operation of the business. This includes the product description and its uses, flow of the
food preparation process, equipment and ingredients used in the production, floor
plan/plant layout of the business, and utilities needed in the process.

PRODUCT DESCRIPTION
FRIES CREAM

Perfect for those who are a fan of desserts–be it sweets, salty delicacy, or frozen
treat. Fries Cream is a two-in-one product to which, crispy and salty French fries is combined
with creamy and delectable ice cream. Fries Cream appeals to people who enjoy a salty
snack together with a sweet treat. Perfect in any occasions, Fries Cream can be enjoyed at
any time of the day.

Fries Cream is a snack that people, regardless of their age, gender, and status in life,
would love to enjoy. They can also share it with their friends, family, and even love ones.
With its affordable price, everyone can taste this salty-sweet treat that will make your day
complete.

Product details:
• Container: disposable paper ice cream cup with plastic spoon
• Ice cream flavor: vanilla and chocolate
• Toppings: French fries
• Additional toppings: chocolate syrup, chocolate chips, or sprinkles (at the option of
the buyer)
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PRODUCTION PROCESS

For the production of the Fries Cream, the following steps are considered and observed by
the company’s workers and is divided into three major (3) steps, mixing, freezing, and
finishing.

Mixing
Mix all the ingredients (Powdered Milk, Evaporated Milk, and Sugar) using a mixer or egg
beater until the consistency is foamy. Pour the mixed ingredients in a stainless steel pan or
boiler. Let it boil for 15 minutes to kill any microbes or bacteria, then set aside to cool. Put
the desired flavor.

Freezing
After doing the mixing process, put the mixture into the freezer for half an hour or until half-
frozen. Remove it from the freezer and mix again until the consistency becomes a thick
mass. After mixing, transfer it in a round stainless container. Then, place it again in the
freezer and let it stay for 8 hours.

Finishing
After freezing the ice cream, it is now available for sale. This is the time to fry some French
fries for 5 to 10 minutes and sprinkle some salt. Scoop the ice cream and put it in a
disposable cup, topped with French fries and additional toppings desired by the buyer.

PRODUCTION SCHEDULE

ACTIVITIES DURATION
Purchase of ingredients 1 day
Making of ice cream 3 hours
Freezing of ice cream 8 hours
Frying of French fries 15 minutes
Finishing and decorating 10 minutes

Year 1 Year 2 Year 3 Year 4 Year 5

Projected demand for Fries
36,997 40,697 44,767 49,244 54,168
Cream
Operating Days in a Year 288 288 288 288 288
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EQUIPMENT/FACILITIES

Building and Facilities

A simple open typed building shall be constructed to house the activity area of the
business. The building will be semi concrete type, with the floorings at the kitchen and
dining area. The building will be provided with the necessary facilities needed such as
electricity and water.

Dining tables for the convenience of the customers shall be provided, adequate
ventilation, lighting systems shall be provided as well as, disposasl bins. The building is
projected to have a cost of 100,000 and a projected life span of 10 years.

Machinery and Equipment

Only few simple tools are needed in the operation of the business. These tools have
an estimated life span of 5 years. The following tools and equipments needed:

Tools / Equipment Qty Cost

• Ice cream scoop 3 478.00
• Ice cream mixing bowls 1 520.00
• Electric blender 1 995.00
• Freezer 1 17,099.00
• Deep fryer 1 1,599.00
• Food warmer 1 7,999.00
• Stainless steel tray 3 2,115.00
TOTAL 30,805.00

Shop Equipment Unit Cost

• Ceiling fan 5 8,995.00
• Wall fan 2 2,760.00
• Dining set 5 21,205.00
• Cash registrar 1 18,200.00
• Fluorescent lamp 9 1,845.00
TOTAL 53,005.00
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FLOOR PLAN
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MATERIALS & SUPPLIES

Item Unit Cost

• Cooking oil (1 kg) P 65.00
• French fries (2 kg) 273.00
• Sugar (3 kg) 156.00
• Condensed Milk 51.00
• Evaporated Milk 36.00
• Flavorings 56.00
• Food coloring 32.00
• Toppings (Sprinkles, 1/4 kg) 39.50
• Salt (1/4 kg) 5.00
• Disposable paper cup (150 pcs.) 135.00
• Plastic spoon 125.00
TOTAL P 973.50

P973.50 X 24 days = P23,364 for one month

150 cups X 24 days = 3,600 servings in one month

UTILITIES NEEDED

The operation of the project will be need the following utilities: electricity and
water.
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WASTE DISPOSAL

Food waste is generated before, during or after meal preparation in the household,
and in the manufacture, distribution, retail and food service activities (Rispo, Williams &
Shaw, 2015). The issue of food waste has implications for food security, environmental
sustainability, and global hunger. The restaurant sector includes many different types of
businesses—from managed-services, cafeteria operations to quick-service restaurants to
fine dining establishments (Alliance, 2014). The most common waste that the business is
expected to incur are the following:

• Tin cans

• Used plastic spoons

• Used cooking oil

• Used disposable cups

Tin cans are container of tin-coated sheet metal used especially for preserving food. It
can be recycled in numerous ways. It can be turned into storage containers, utensil holders,
luminaries, flower vase and more. Similar with the used tin cans, the used plastic spoons can
be recycled and turn into lanterns and other ornaments. With a little bit of creativity these
waste will turn into new things that will enhance the beauty of the store. Furthermore, it can
also be a source of income for the business. These waste can be sold to junk shops at a
certain rate.

Used cooking oil, on the other hand, can not be recycled anymore. To dispose the used
cooking oil, the following steps should be done: cool the cooking oil before handling it,
choose a non-breakable container with a resealable lid, toss the container of used oil in the
trash, freeze and scoop the oil into the trash, and pour the cooled oil into a plastic trash bag.

PRODUCTION COST
The product cost of making the ice cream is ₱ 973.50 per day.
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CHAPTER 4
FINANCIAL ASPECT

This chapter presents the financial aspects of the study including its assumptions. To
determine whether this product will remain profitable regardless of competition and
unfavorable market condition, the researchers projected a five year financial statement.
This chapter includes the projected statement of financial position, statement of
comprehensive income, statement of changes in equity and notes to financial statement.
This all projection will cover from zero (0) year to five (5) year of operation. We also include
financial ratios to evaluate the various aspects of the company’s operating and financial
performance such as its efficiency, liquidity, profitability and solvency.

FINANCIAL ASSUMPTIONS
The following assumptions were agreed in this proposed project:
Initial Capital Requirements
Initial Capital Requirements

Partners Ratio Amount Invested

33.33% Php 400,000.00

33.33% Php 400,000.00

33.33% Php 400,000.00

TOTAL 100% Php 1,200.000.00

1. Initial capital for the project is agreed to be Php 1,200,000.00 which includes the
property, equipment and other operational cost.
2. The building cost is 100,000 and has an estimated useful life of 10 years.
3. Cost of machinery & equipment Php 30,805.00 and has an estimated useful life of 5
years.
4. Cost of furnitures & fixtures Php 53,005.00 and estimated useful life of 5 years.
5. A straight-line depreciation method will be applied to all fixed assets.
6. Prices are projected to increase by 5 percent annually.
7. All expenses will increase by 2 percent annually.
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PROJECTED STATEMENT OF FINANCIAL POSITION

PROJECTED BALANCE SHEET

Year 1 Year 2 Year 3 Year 4 Year 5

P P P P
Cash 1,120,134.68 1,148,495.78 P 73,940.64 108,893.69 144,061.07

Supplies 30,805.00 30,805.00 30,805.00 30,805.00 30,805.00

Inventory 5,841.00 6,024.00 6,216.00 6,414.00 6,618.00

Property, Plant and
Equipment 53,005.00 53,005.00 53,005.00 53,005.00 53,005.00
Less: Accumulated
Depreciation 171,048.00 213,810.00
(Schedule 1) 42,762.00 85,524 128,286.00

P P P P
TOTAL ASSETS 1,252,547.68 1,323,853.78 P 292,252.64 370,165.69 448,299.07
OWNER'S EQUITY

Villa Sante, Capital 1,252,547.68 1,323,853.78 292,252.64 370,165.69 448,299.07

TOTAL LIABILITIES
AND OWNER’S P P P P
EQUITY 1,252,547.68 1,323,853.78 P 292,252.64 370,165.69 448,299.07
 29

PROJECTED PROFIT/LOSS STATEMENT

Pro Forma
5 year Projection of Statement of Comprehensive Income
Crisp N’ Cream Fries Cream
Zero Year Year 1 Year 2 Year 3 Year 4 Year 5
Schedule
Sales - 1,182,729.60 1,213,056.00 1,246,078.08 1,280,111.04 1,314,114.00
2
Schedule
Cost of Goods Sold - 280,368.00 289,097.96 298,291.27 307,776.93 317,564.25
3
Gross Profit - 902,361.60 923,958.04 947,786.81 972,334.11 996,579.75

Operating Expenses
Schedule 448,800.00 493,680.00 543,048.00 597352.00 657,088.10
Salary expense -
3
Schedule 37,900.00 41,690.00 45,859.00 50,444.90 55,489.39
13th month -
4
Schedule 30,536.40 33,188.40 36,724.80 40,057.20 43,593.60
SSS contribution -
5
Schedule
PHIC contribution - 880.00 913.00 1,091.31 1,159.19 1,574.80
6
Schedule
HDMF contribution
7
- 798.00 877.80 965.58 1,062.14 1,168.35
Schedule 36,000.00 36,720.00 37,454.40 38,203.49 38,967.56
Utilities expense -
8
Schedule 7,200.00 7,344.00 7,490.88 7,640.70 7,793.51
Office Supplies -
9
Schedule 37,184.60 37,184.60 37,184.60 37,184.60 37,184.60
Depreciation expense -
10
Gasoline, Fuel & Oil Schedule 48,960.00 49,939.20 50,937.98 51,956.74 52,995.88
-
expense 11
Total Operating Expense - 648,259.00 701,537.00 760,756.55 825,060.96 895,855.79

Income before tax - 254,102.60 222,421.04 187,030.26 147,273.15 100,723.96

Income tax - 76,230.78 66,726.31 56,109.08 44,181.95 30,217.19

Net Income - 177,871.82 155,694.73 130,921.18 103,091.21 70,506.77

 30

PROJECTED STATEMENT OF CASH FLOW

Year 1 Year 2 Year 3 Year 4 Year 5

Cash Provided/Used
by Operating Activities
Cash Receipts from
Sales P 1,182,729.60 P 1,213,056.00 P 1,246,078.08 P 1,280,111.04 P 1,314,144.00
Payment of Supplies (30,805.00)
Payment of Taxes and
Licenses (3,230.00)
Payment of Employee
Commission (236,545.92) (242,611.20) (249,215.62) (256,022.21) (262,828.80)

Purchase of Inventory (286,209.00) (289,283.70) (298,482.92) (307,974.68) (317,768.28)

Payment of Utilities
Expense (52,800.00) (52,800.00) (52,800.00) (52,800.00) (52,800.00)
Net Cash Provided by
Operating Activities P 573,139.68 P 628,361.10 P 645,579.54 P 663,314.15 P 680,746.92

Cash Provided/Used
from Investing
Activities
Payment to acquire
equipment 53,005.00 - - - -
Net Cash Used in
Investing Activities P 53,005.00 P - P - P - P -

Cash Provided from

Financing Activities
Cash Received as
investment by owner 1,200,000.00 - - - -
Payment for
withdrawals by owner (600,000.00) (600,000.00) (600,000.00) (600,000.00) (600,000.00)
Net Cash Provided by
Financing Activities P 600,000.00 P 600,000.00 P 600,000.00 P 600,000.00 P 600,000.00

Net Cash Inflow

(Outflow) 1,120,134.68 28,361.10 45,579.54 63,314.15 80,746.92
Add: Beginning Cash
Balance 0.00 1,120,134.68 28,361.10 45,579.54 63,314.15

Ending Cash Balance P 1,120,134.68 P 1,148,495.78 P 73,940.64 P 108,893.69 P 144,061.07

 31

PROJECTED CHANGES IN EQUITY

Year 1 Year 2 Year 3 Year 4 Year 5

Crisp N’ Cream, Capital P 1,200,000.00 P 1,167,023.68 P 1,152,808.52 P 1,155,817.71 P 1,176,567.61

Additional: Investments

Net Income 567,023.68 585,784.84 603,009.19 620,749.90 638,188.95

Balance P 1,767,023.68 P 1,752,808.52 P 1,755,817.71 P 1,776,567.61 P 1,814,756.56

less: Withdrawals 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00

Loss - - - - -

Crisp N’ Cream, Capital P 1,167,023.68 P 1,152,808.52 P 1,155,817.71 P 1,176,567.61 P 1,214,756.56

SCHEDULES

• Schedule 1: Depreciation Expense

Life First Second Third Fourth Fifth

Property, Plant and Equipment Span Initial Cost Year Year Year Year Year

Building 10 100,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00

Ice cream scoop 5 478.00 95.60 95.60 95.60 95.60 95.60
Ice cream mixing bowls 5 520.00 104.00 104.00 104.00 104.00 104.00
Electric blender 5 995.00 199.00 199.00 199.00 199.00 199.00
Freezer 5 17,099.00 3,419.80 3,419.80 3,419.80 3,419.80 3,419.80
Deep fryer 5 1,599.00 319.80 319.80 319.80 319.80 319.80
Food warmer 5 7,999.00 1,599.80 1,599.80 1,599.80 1,599.80 1,599.80
Stainless steel tray 5 2,115.00 423.00 423.00 423.00 423.00 423.00
Ceiling fan 5 8,995.00 1,799.00 1,799.00 1,799.00 1,799.00 1,799.00
Wall fan 5 2,760.00 552.00 552.00 552.00 552.00 552.00
Dining set 5 21,205.00 4,241.00 4,241.00 4,241.00 4,241.00 4,241.00
Cash registrar 5 18,200.00 3,640.00 3,640.00 3,640.00 3,640.00 3,640.00
Flourescent lamp 5 1,845.00 369.00 369.00 369.00 369.00 369.00
Motorcycle 5 80,000.00 16,000.00 16,000.00 16,000.00 16,000.00 16,000.00

Total depreciation every year 263,810.00 42,762.00 42,762.00 42,762.00 42,762.00 42,762.00
• Schedule 2: Sales
Year 1: 117 servings per day x P35.10 each x 288 days = P 1,182,729.60
Year 2: 117 servings per day x P36.00 each x 288 days = P 1,213,056.00
Year 3: 117 servings per day x P36.98 each x 288 days = P 1,246,078.08
Year 4: 117 servings per day x P37.99 each x 288 days = P 1,280,111.04
 32

Year 5: 117 servings per day x P39.00 each x 288 days = P 1,314,144.00

• Schedule 3: Cost of Sales

1st 2nd 3rd 4th 5th

Raw
Materials,beginning P - P 5,841.00 P 6,026.74 P 6,218.39 P 6,416.14
Net Cost of Purchases 286,209.00 289,283.70 298,482.92 307,974.68 317,768.28
Raw Materials
Available for Sale P 286,209.00 P 295,124.70 P 304,509.66 P 314,193.07 P 324,184.42
Raw Materials,ending* 5,841.00 6,026.74 6,218.39 6,416.14 6,620.17

Materials Used P 280,368.00 P 289,097.96 P 298,291.27 P 307,776.93 P 317,564.25

Manufacturing
Overhead** 4,800.00 4,800.00 4,800.00 4,800.00 4,800.00
48,000.00 48,000.00 48,000.00 48,000.00 48,000.00

Cost of Sales P 333,168.00 P 341,897.96 P 351,091.27 P 360,576.93 P 370,364.25

Number of Servings 35,605.00 35,605.00 35,605.00 35,605.00 35,605.00

Cost Per Unit P 9.36 P 9.60 P 9.86 P 10.13 P 10.40

Mark-Up (375%) 3.75 3.75 3.75 3.75 3.75

Selling Price Per Unit P 35.10 P 36.00 P 36.98 P 37.99 P 39.00

Inflation Rate per

Year*** 3.18% 3.18% 3.18% 3.18% 3.18%
Ingredients Price every
year 973.5 1004.46 1036.40 1069.36 1103.36

Assumptions:

*Advanced purchase of Raw Materials good for 1 week

** Water (P400 per month for 12 months)
Electricity (P4,000 per month for 12 months)
***Inflation Rate – Based on recent actual inflation rate.
Source: https://www.statista.com/statistics/578717/inflation-rate-in-philippines/
 33

• Schedule 4: Salaries and Wages

Zero 1st Year 2nd Year 3rd Year 4th Year

Position 5th Year
Year
Operations
0 144,000.00 158,400.00 174,240.00 191,664.00 210,830.40
Manager
Cashier 0 96,000.00 105,600.00 116,160.00 127,776.00 140,553.60
Bookkeeper 0 100,800.00 110,880.00 121,968.00 134,164.80 147,581.30
Cook 0 72,000.00 79,200.00 87,120.00 95,832.00 105,415.20
Servers 0 36,000.00 39,600.00 43,560.00 47,916.00 52,707.60
Total 0 448,800.00 493,680.00 543,048.00 597,352.00 657,088.10

• Schedule 5: 13th Month Pay

Zero
Position 1st Year 2nd Year 3rd Year 4th Year 5th Year
Year
Operations
0 12,000.00 13,200.00 14,520.00 15,972.00 17,569.20
Manager
Cashier 0 8,400.00 9,240.00 10,164.00 11,180.40 12,298.44
Bookkeeper 0 7,500.00 8,250.00 9,075.00 9,982.50 10,980.75
Cook 0 6,000.00 6,600.00 7,260.00 7,986.00 8,784.60
Server 0 4,000.00 4,400.00 4,840.00 5,324.00 5,856.40
Total 0 37,900.00 41,690.00 45,859.00 50,444.90 55,489.39

• Schedule 6: SSS Contribution

Zero
Position 1st Year 2nd Year 3rd Year 4th Year 5th Year
Year
Operations
0 10,728.00 11,612.40 12,938.40 14,061.60 14,504.40
Manager
Cashier 0 7,634.40 8,076.00 8,960.40 9,843.60 11,169.60
Bookkeeper 0 6,750.00 7,634.40 8,076.00 8,960.40 9,843.60
Cook 0 5,424.00 5,865.60 6,750.00 7,191.60 8,076.00
Server 0 4,698.00 5,156.25 5,659.20 6,211.21 6,817.06
Total 0 35,234.40 38,344.65 42,384.00 46,268.41 50,410.66
 34

• Schedule 7: PHILHEALTH Contribution

Zero
Position 1st Year 2nd Year 3rd Year 4th Year 5th Year
Year
Operations
0 330.00 363.00 399.30 439.23 483.15
Manager
Cashier 0 137.50 137.50 279.51 307.46 338.21
Bookkeeper 0 137.50 137.50 137.50 137.50 137.50
Cook 0 137.50 137.50 137.50 137.50 307.97
Server 0 137.50 137.50 137.50 137.50 307.97
Total 0 880.00 913.00 1,091.31 1,159.19 1,574.80

• Schedule 8: PAG-IBIG Contribution

Zero
Position 1st Year 2nd Year 3rd Year 4th Year 5th Year
Year
Operations
0 240.00 264.00 290.40 319.44 351.38
Manager
Cashier 0 168.00 184.80 203.28 223.61 245.97
Bookkeeper 0 150.00 165.00 181.50 199.65 219.62
Cook 0 120.00 132.00 145.20 159.72 175.69
Server 0 120.00 132.00 145.20 159.72 175.69
Total 0 798.00 877.80 965.58 1,062.14 1,168.35

• Schedule 9: Taxes and Licenses

DTI 230.00
Business Permit 1,000.00
BIR 2,000.00
Taxes and Licenses P3,230.00

• Schedule 10: Commission Expense

Year 1 Year 2 Year 3 Year 4 Year 5

Gross Sales P 1,182,729.60 P 1,213,056.00 P 1,246,078.08 P 1,280,111.04 P 1,314,144.00
Commission (20%
of Gross Sales) 236,545.92 242,611.20 249,215.62 256,022.21 262,828.80

• Schedule 11: Utilities Expense

Water (P400 per month for 12 months) = P 4,800.00
Electricity (P4,000 per month for 12 months) = P 48,000
 35

FINANCIAL STATEMENT RATIO ANALYSIS

Projected Projected Projected Projected Projected

Year 1 Year 2 Year 3 Year 4 Year 5
Profitability Analysis
Sales P 1,182,729.60 P 1,213,056.00 P 1,246,078.08 P 1,280,111.04 P 1,314,144.00
Cost of Sales 280,368.00 289,097.96 298,291.27 307,776.93 317,564.25
Gross Profit P 902,361.60 P 923,958.04 P 947,786.81 P 972,334.11 P 996,579.75
Income from P 335,337.92 P 338,173.20 P 344,777.62 P 351,584.21 P 358,390.80
Operations
Net Income P 567,023.68 P 585,784.84 P 603,009.19 P 620,749.90 P 638,188.95
Gross Profit Margin 76% 76% 76% 76% 76%
Operating Profit 28% 28% 28% 27% 27%
Margin
Net Profit Margin 48% 48% 48% 48% 49%
Debt Ratios
Total Assets P 1,252,547.68 P 1,323,853.78 P 292,252.64 P 370,165.69 P 448,299.07
Total Liabilities 0.00 0.00 0.00 0.00 0.00
Total Owner’s Equity P 1,252,547.68 P 1,323,853.78 P 292,252.64 P 370,165.69 P 448,299.07
Debt to Assets 0% 0% 0% 0% 0%
Debt to Equity 0% 0% 0% 0% 0%
Investment Return
Net Income P 567,023.68 P 585,784.84 P 603,009.19 P 620,749.90 P 638,188.95
Total Assets P 1,252,547.68 P 1,323,853.78 P 292,252.64 P 370,165.69 P 448,299.07
Return on 0.45% 0.44% 2.06% 1.68% 1.42%
Investment
 36

CHAPTER 5
SOCIO – ECONOMIC ASPECT

This chapter includes the socio-economic benefits of the proposed project. It is

important that small entrepreneurs shall realize the importance of innovating and having a
business that would largely contribute to the socio-economic development of the country.

In this project, the researchers consider the whole part of the business of its impact
in the community.

Government

Crisp N’ Cream is expected to give a great contribution to the government in the

form of taxes. The tax payment made by the business will increase the government
revenue, which can help future projects which can benefit the locality. Having this type of
business can also attract tourists to visit the place. Through this, the government can then
earn more through these visitors.

Community

This business will implement the various Corporate Social Responsibility towards the
community. It will actively participate in any activities the government may request and take
part in any programs conducted by choosing non-profit organizations. Apart from that, the
business will now be able to provide a sweet-salty frozen treat to the members of the
community to lighten up their mood and to satisfy their sweet tooth.

Competitors

Through this business, other companies who have the same line of industry will be
encouraged to heighten up their offered services. Competition will be increased, therefore
allowing them to enhance what they have.
 37

CHAPTER 6

FINDINGS

Nowadays, people tend to seek new restaurants, café, luncheonette, snack bar and
more to satisfy their needs. This led to a massive increase in the development in the food
industry. Lots of food businesses were established to cater the demand of the people. This
provides a good opportunity for innovating brighter ideas to get the attention of the
consumers.

As we conducted the feasibility study, we are convinced that the geographical

location of the business and the variety of consumers would have a greater contribution for
this kind of business. Hence, this business will be successful and profitable given the good
geographical location and the cooperation of the people who will run the business and
eventually through our feasibility studies. Moreover, it will be an avenue for a greater
satisfaction for the craving of the consumers.

CONCLUSIONS

In conclusion, our feasibility study on sweet-salty frozen treat is recognized to bring

happiness to customers, due to its delicious taste and unique presentation that chases the
blue away. Furthermore, It would also increase government revenues.

RECOMMENDATIONS

In accordance to our conducted research, we highly recommend this kind of

business due to its greater return on cost. It would be a profitable business. The sweet-salty
frozen treat activates the brain of the customers wherein they will feel better. Eventually,
when customers feel less stress in life, it will lead them to be successful and more
productive.
 38

REFERENCES
Alliance, F. W. R. (2014). Analysis of US food waste among food manufacturers, retailers, and
restaurants. Food Waste Reduction Alliance, USA.
Rispo, A., Williams, I. D., & Shaw, P. J. (2015). Source segregation and food waste prevention
activities in high-density households in a deprived urban area. Waste management,
44, 15-27.

APPENDICES
Survey Questionnaire

Instruction: Please fill in or tick the boxes where appropriate.

Please be assured that none of your personal details would be shared with
anyone. We would be grateful if you could spare few minutes to answer the
questions. Thank you in advance.

Name (Optional): ___________________________________

Age: Below 18 years old 18 years old and above
Gender: Male Female

1. Do you like to eat ice cream?

Yes No

2. How often do you eat ice cream?

Once a week Thrice times a week
Twice a week Four times a week or more

3. How many servings of ice cream can you consume in a day?

1 serving More than 6 servings
4-6 servings

4. How much are you willing to pay for a cup of ice cream?
Php 20.00 and below Php 41.00 to 60.00
Php 21.00 to Php 40.00 Php 61.00 and more

5. If given a chance, are you willing to buy a cup of ice cream with French fries?
Yes No