KAMAYO

TRAVEL AND TOURS

 Kamayo travel and tours is a partnership kind of business that

offers packaged tours within the province of Davao Oriental. The

agency offers quality service to customers who are in need of

assistance regarding their travel. The travel is exclusive only in

around the province of Davao Oriental and the customers are to be

guided by a tour guide throughout the trip.

 IDENTIFY THE INDUSTRY

ECONOMIC CHARACTERISTICS
 We use value chain analysis to set activities that the organization

carries out to create value for its customer. Porter’s value chain focuses

on systems, and how inputs are changed into the outputs purchased by

consumers using primary and support activities.

 PRIMARY ACTIVITIES

INBOUND LOGISTICS

 Consultation

 Collection of payment

 Booking/Reservation

 Service Proper

 Accommodation
OPERATION

The reservation staff provide clients the information needed regarding the

schedule of trip, mode of transportation, specific destination according to the

package chosen, and the required payment for the overall cost of the travel. On

the scheduled day, the travelers will gather data the specified place where the

vans will wait for them to arrive. The tour guide has the list of travelers on that

trip and makes sure all the passenger have their sets and baggage arranged.

When all is set, the ride starts and ends a scheduled time.
OUTBOUND LOGISTICS

 providing a good customer experience and reliability during transactions.

 Evaluation of their feedback about the service.

 Deliver them to their respective homes.

MARKETING AND SALES

 Personal Selling

 Tarpaulins
• Social Media
SUPPORT ACTIVITIES

Infrastructure – the Kamayo travel and tours was located at MDI Square Rizal Extension

Mati City because it is convenient for the clients to visit the area and have enough space to

park the transportation to be used for travel.

Human Resource Management- the Kamayo travel and tours offers an above minimum

salary and commission in every transaction. The company also offers a double pay on

holiday and free meal.

PORTER FIVE FORCES
IDENTIFY THE COMPANY STRATEGIES
Promotional Strategy – the business will be promoted through the following:

 Personal Selling

 Flyers/Tarpaulin

 Radio Advertisement

 Social Media
• Brochures
Pricing Strategy – the prices in every packaged tour is based on the

expenses incurred all throughout the travel including the entrance

fees, room rates, fuel expenses and other related expenses.

ASSESS THE QUALITY OF

FINANCIAL STATEMENT
 Horizontal Analysis is the method of comparing and analyzing financial results of

different accounting periods in each financial statement account.

BALANCE SHEET
CY-PY Amount change/base year
Assets YEAR 1 YEAR 2 Amount Change Percentage Change
Cash 4,621,773.09 9,240,956.01 4,619,182.92 49.99%
Transportion Equipment 6,480,000.00 5,760,000.00 (720,000.00)
Building 45,000.00 40,000.00 (5,000.00) -12.50%
Store Equipment 155,700.00 138,400.00 (17,300.00) -12.50%
Furniture and Fixture 35,640.00 31,680.00 (3,960.00) -12.50%
Total Assets 11,338,113.09 15,211,036.01 3,872,922.92 25.46%

Liabilities and Owner's Equity

Long-term debt payable 1,847,798.39 1,847,798.39 - 0.00%
Issuance of Bonds
Total Liabilities 1,847,798.39 1,847,798.39 - 0.00%
Partners Equity
Initial Investment 9,490,314.70 13,363,237.62 3,872,922.92

Total Liability & Owner's Equity 11,338,113.09 15,211,036.01 3,872,922.92 25.46%

INCOME STATEMENT CY-PY Amount change/base year
YEAR 1 YEAR 2 Amount Change Percentage Change
Sales Revenue 8,428,800.00 8,850,240.00 421,440.00 4.76%
Less: Variable Cost 3,628,800.00 4,050,240.00 421,440.00 10.41%
Gross Profit 4,800,000.00 4,800,000.00 - 0.00%
Less: Operating Expenses 1,499,779.00 1,157,204.95 (342,574.05) -29.60%
Income Before Tax 3,300,221.00 3,642,795.05 342,574.05 9.40%
Less: Income Tax Expense(30%) 638,706.30 867,910.52 229,204.22 26.41%
Net Income 1,490,314.70 2,025,124.54 534,809.84 26.41%
 

Vertical Analysis is the method of analyzing financial results expressing each financial statement

account and element as a component of a base.

BALANCE SHEET

Assets YEAR 1 year 1 common size YEAR 2 year 2 common size

Cash 4,621,773.09 40.76% 9,240,956.01 60.75%
Transportion Equipment 6,480,000.00 57.15% 5,760,000.00 37.87%
Building 45,000.00 0.40% 40,000.00 0.26%
Store Equipment 155,700.00 1.37% 138,400.00 0.91%
Furniture and Fixture 35,640.00 0.31% 31,680.00 0%
Total Assets 11,338,113.09 100.00% 15,211,036.01 100%

Liabilities and Owner's Equity

Long-term debt payable 1,847,798.39 16% 1,847,798.39 12.15%
Issuance of Bonds
Total Liabilities 1,847,798.39 16% 1,847,798.39 12.15%
Partners Equity
Initial Investment 9,490,314.70 84% 13,363,237.62 87.85%

Total Liability & Owner's Equity 11,338,113.09 100% 15,211,036.01 100%

INCOME STATEMENT
YEAR 1 year 1 common size AS 1` PESO YEAR 2 year 1 common size AS 1 PESO
Sales Revenue 8,428,800.00 100.00% 1 8,850,240.00 100% 1.00
Less: Variable Cost 3,628,800.00 43.05% 43% 4,050,240.00 46% 0.46
Gross Profit 4,800,000.00 56.95% 57% 4,800,000.00 54% 0.54
Less: Operating Expenses 1,499,779.00 17.79% 0.18 1,157,204.95 13% 0.13
Income Before Tax 3,300,221.00 39.15% 0.39 3,642,795.05 41% 0.41
Less: Income Tax Expense(30%) 638,706.30 8% 0.08 867,910.52 10% 0.10
Net Income 1,490,314.70 18% 0.18 2,025,124.54 23% 0.23
ANALYZE PROFITABILITY

AND RISK
Financial Ratios Year 1 Year 2 Year 3 Year 4 Year 5

Gross Profit
= Gross Profit
Margin
Sales Revenue

3,628,800.00 4,050,240.00 4,492,752.00 4,957,389.60 5,445,259.08

=
8,428,800.00 8,850,240.00 9,292,752.00 9,757,389.60 10,245,259.08
0.43 0.46 0.48 0.51 0.53
=

Net Income
Net Profit Margin =
Sales Revenue

1,490,314.70 2,025,124.54 2,330,894.86 2,651,953.70 2,989,065.49

=
8,428,800.00 8,850,240.00 9,292,752.00 9,757,389.60 10,245,259.08

0.18 0.23 0.25 0.27 0.29

Return on Net Income

=
Investment Initial Investment
1,490,314.70 2,025,124.54
=
8,000,000.00 8,000,000.00
= 0.19 0.25

Year 1: For every Php1.00 invested in this project will yield Php0.19
Year 2: For every Php1.00 invested in this project will yield Php0.25
PREPARE FORECASTED FINANCIAL STATEMENT
 ASSUMPTION
• Sales will increase 5% a year

• The partnership signed a long term debt of Php8,000,000 as initial investment.

• Depreciation expense will be computed in straight line basis.

• All operating expenses will increase 5% a year except salaries and wages.

• The discounted payback will be computed at 10% a year.

 SALES FORECAST
Package No. of clients Monthly Yearly
Package Price
Type monthly Revenue Revenue
A 3,100.00 80 248,000.00 2,976,000.00

B 2,600.00 80 208,000.00 2,496,000.00

C 3,080.00 80 246,400.00 2,956,800.00
Total 8,780.00 240 702,400.00 8,428,800.00

VARIABLE COST
Package No. of clients Monthly Yearly
Variable Cost
Type monthly Revenue Revenue
A 1,750.00 80 140,000.00 1,680,000.00
B 1,420.00 80 113,600.00 1,363,200.00
C 1,830.00 80 146,400.00 1,756,800.00
Total 5,000.00 240 400,000.00 4,800,000.00
 Income Statement
For Five Year Projection
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue
Service Income 8,428,800.00 8,850,240.00 9,292,752.00 9,757,389.60 10,245,259.08
Less: Varaiable Cost
Package A 1,680,000.00 1,680,000.00 1,680,000.00 1,680,000.00 1,680,000.00
Package B 1,363,200.00 1,363,200.00 1,363,200.00 1,363,200.00 1,363,200.00
Package C 1,756,800.00 1,756,800.00 1,756,800.00 1,756,800.00 1,756,800.00
Total 4,800,000.00 4,800,000.00 4,800,000.00 4,800,000.00 4,800,000.00
Contribution Margin 3,628,800.00 4,050,240.00 4,492,752.00 4,957,389.60 5,445,259.08
Less: Operating Expenses
Supplies Expense 26,796.00 28,135.80 29,542.59 31,019.72 32,570.71
Advertising Expense 1,500.00 1,575.00 1,653.75 1,736.44 1,823.26
Rent Expense 60,000.00 180,000.00 180,000.00 180,000.00 180,000.00
Communication Expense 10,000.00 10,500.00 11,025.00 11,576.25 12,155.06
Salaries and Wages 585,000.00 117,000.00 117,000.00 117,000.00 117,000.00
Utilities Expense 32,278.00 33,891.90 35,586.50 37,365.82 39,234.11
Repairs and Maintainance 27,700.00 29,085.00 30,539.25 32,066.21 33,669.52
Permits and Licenses 10,245.00 10,757.25 11,295.11 11,859.87 12,452.86
Depreciation Expense 746,260.00 746,260.00 746,260.00 746,260.00 746,260.00
Total Operating Expenses 1,499,779.00 1,157,204.95 1,162,902.20 1,168,884.31 1,175,165.52
Income Before Tax 2,129,021.00 2,893,035.05 3,329,849.80 3,788,505.29 4,270,093.56
Less: Income Tax Expense(30%) 638,706.30 867,910.52 998,954.94 1,136,551.59 1,281,028.07
Net Income 1,490,314.70 2,025,124.54 2,330,894.86 2,651,953.70 2,989,065.49
Amortization Schedule and Loan Summary
Annual Interest Rate: 5%
Loan Term: 5
Payment per Year: 1,847,798.39

Loan Amount: 8,000,000.00

Annual Principal Remaining

YEAR Beg Amount Installment Interest Payment Balance
1 8,000,000.00 1,847,798.39 400,000.00 1,447,798.39 6,552,201.61
2 6,552,201.61 1,847,798.39 327,610.08 1,520,188.30 5,032,013.31
3 5,032,013.31 1,847,798.39 251,600.67 1,596,197.72 3,435,815.59
4 3,435,815.59 1,847,798.39 171,790.78 1,676,007.61 1,759,807.99

5 1,759,807.99 1,847,798.39 87,990.40 1,759,807.99 -

 STATEMENT OF CASH FLOW
FIVE YEAR PROJECTION

OPERATING ACTIVITIES Pre Operating Year 1 Year 2 Year 3 Year 4 Year 5

Net Income: 1,490,314.70 2,025,124.54 2,330,894.86 2,651,953.70 2,989,065.49
Add: Depreciation 746,260.00 746,260.00 746,260.00 746,260.00 746,260.00
Cash Flow from Operating 2,236,574.70 2,771,384.54 3,077,154.86 3,398,213.70 3,735,325.49

INVESTING ACTIVITIES
Building Renovation 50,000.00 - - - - -
Offi ce Equipment 173,000.00 - - - - -
Transportation Equipment 7,200,000.00
Furniture and Fixture 39,600.00 - - - - -
Cash Flow from Investing 7,462,600.00 - - - - -

FINANCING ACTIVITIES
Long-term debt payable 1,847,798.39 1,847,798.39 1,847,798.39 1,847,798.39 1,847,798.39
ISSUANCE OF BONDS 8,000,000.00 - - - - -
INITIAL INVESTMENT - - - - -

Cash Flow from Financing 8,000,000.00 1,847,798.39 1,847,798.39 1,847,798.39 1,847,798.39 1,847,798.39

Net Cash Flow 537,400.00 4,084,373.09 4,619,182.92 4,924,953.25 5,246,012.09 5,583,123.88

Cash Balance Beginning 537,400.00 4,621,773.09 9,240,956.01 14,165,909.25 19,411,921.34
Cash Balance Ending 537,400.00 4,621,773.09 9,240,956.01 14,165,909.25 19,411,921.34 24,995,045.22
 Projected Balance Sheet
For Five Year Projection
Assets Pre-Operating Year 1 Year 2 Year 3 Year 4 Year 5
Current Assets:
Cash 537,400.00 4,621,773.09 9,240,956.01 14,165,909.25 19,411,921.34 24,995,045.22
Total Current Assets 537,400.00 4,621,773.09 9,240,956.01 14,165,909.25 19,411,921.34 24,995,045.22

Non-Current Assets
Building 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00
Accumulated Depreciation (Building) (5,000.00) (10,000.00) (15,000.00) (20,000.00) (25,000.00)
Transportation Equipment 7,200,000.00 7,200,000.00 7,200,000.00 7,200,000.00 7,200,000.00 7,200,000.00
Accumulated Depreciation (Transpo Equipment) (720,000.00) (1,440,000.00) (2,160,000.00) (2,880,000.00) (3,600,000.00)
Equipment 173,000.00 173,000.00 173,000.00 173,000.00 173,000.00 173,000.00
Accumulated Depreciation (Equipment) (17,300.00) (34,600.00) (51,900.00) (69,200.00) (86,500.00)
Furniture and Fixture 39,600.00 39,600.00 39,600.00 39,600.00 39,600.00 39,600.00
Accumulated Depreciation (F&F) (3,960.00) (7,920.00) (11,880.00) (15,840.00) (19,800.00)
Total Non-Current Assets 7,462,600.00 6,716,340.00 5,970,080.00 5,223,820.00 4,477,560.00 3,731,300.00

Total Assets 8,000,000.00 11,338,113.09 15,211,036.01 19,389,729.25 23,889,481.34 28,726,345.22

Liabilities and Owner's Equity

Liabilities
Issuance of Bonds 8,000,000.00
Long-term debt payable 1,847,798.39 1,847,798.39 1,847,798.39 1,847,798.39 1,847,798.39
Total Liabilities

Partners Equity
Initial Investment 8,000,000.00 11,338,113.09 15,211,036.01 19,389,729.25 23,889,481.34

Add: Net Income 1,490,314.70 2,025,124.54 2,330,894.86 2,651,953.70 2,989,065.49

Total Liability & Owner's Equity 8,000,000.00 11,338,113.09 15,211,036.01 19,389,729.25 23,889,481.34 28,726,345.22
VALUE THE FIRM
Capital Budgeting Decision
Payback Period
Cash flow Year 1 Year 2 Year 3 Year 4 Year 5
Net Income 1,490,314.70 2,025,124.54 2,330,894.86 2,651,953.70 2,989,065.49
Add: Depreciation exp. 746,260.00 746,260.00 746,260.00 746,260.00 746,260.00
2,236,574.70 2,771,384.54 3,077,154.86 3,398,213.70 3,735,325.49

Year Annual Cash Inflow Unrecoverd Cost Solution

0 (8,000,000.00) 2,992,040.77
2 +
1 2,236,574.70 (5,763,425.30) 3,077,154.86
2 2,771,384.54 (2,992,040.77)
3 3,077,154.86 85,114.10 2 + 0.972340002
4 3,398,213.70 3,483,327.80
5 3,735,325.49 7,218,653.29

Payback Period 2.97 2 year and

11 months the investment will be recovered
Discounted Payback at 10%

Cashflow Unrecoverd
Year Annual Cash Inflow Solution
(1+Rate)^Years Cost

0 (8,000,000.00) 3 + 1,364,437.84
1 2,236,574.70 2,033,249.73 (5,966,750.27) 2,321,025.68
2 2,771,384.54 2,290,400.44 (3,676,349.83)
3 3,077,154.86 2,311,911.99 (1,364,437.84) 3 + 0.587859862
4 3,398,213.70 2,321,025.68 956,587.85
5 3,735,325.49 2,319,343.25 3,275,931.09 3.59
Total 11,275,931.09
3 year and
7 months the investment will be recovered.
 Cashflow
Year Cash Flow
(1+Rate)^Years
0 (8,000,000.00) (8,000,000.00)
1 2,236,574.70 2,033,249.73
2 2,771,384.54 2,290,400.44
3 3,077,154.86 2,311,911.99
4 3,398,213.70 2,321,025.68
5 3,735,325.49 2,319,343.25
Total 11,275,931.09

NPV = 3,275,931.09
 ANALY
SIS
Based on the data gathered in survey it shows that the business is
effective and profitable.The business would be feasibly generated and
estimated annual income after tax-profit of Php1,490,314.70 in one year
operation. Return on Investment on Year 1 shows that Php0.19 of the
investment cost was converted into profits during period. The payback
period of the investment is 2.97 years this means that after 2 years and 11
months the initial investment will be recovered.