Ateneo de Davao University

A Project Feasibility Study on establishing a Dog Grooming, Hotel and Spa in

Davao City

FURRY TALES DOG GROOMING, HOTEL AND SPA

In partial fulfillment of the requirements in ACC 12: Management

Consultancy

Submitted by:

Bancaco, Karen Joy Catan, Susmitha Dawn

Baylosis, Jovelyn Cortes, Ohanna Jean
Belicario, Allyn Van Cosare, Mariah Florelaine
Betia, Chilyn Gela Mae Cruz, Chielsea Mae
Catamco, Julia Nel Lamban, Jude Denzel

January 2017

0
 EXECUTIVE SUMMARY

Financial Aspect

Financial feasibility of the project is considered attained when it has met the following

criteria: (1) the business ability to maintain its capital structure, mainly considering the cost of

capital and its liquidity, (2) the projects profitability, using the rate of return, profitability ratios,

independent financial analysis and payback period, (3) the enterprises capability to provide

significant help in Davao City through giving employment, (4) the ability of the entity to manage

risks in its line of business.

Socio-Economic Aspect

Socio-economic feasibility established three important considerations: (1) to be able to

give employment to the citizens of Davao City, (2) to be able to share in the welfare of the

citizens of the country and growth of its economy, (3) environmental value.

Market Aspect

Market feasibility will primarily be determined by the demand of the customers in Davao

City. A demand and supply analysis will be performed to determine the forces to be considered in

the allocation of resources. A SWOT analysis will be conducted in evaluating the entitys

opportunities and weaknesses. Moreover, determining the level of competition among its

competitors. Also, in determining its marketability, the business will establish properly its

marketing mix, which are the price, place of distribution, promotion and product, which in this

enterprise is considered to be its services.

Technical Aspect

The data gathered in this aspect aims to provide information for the internal operations of

the business. This will guide the business in having organized and orderly operations that will be

ran by the employers together with their employees. The costs presented will help the business in

providing a reasonable price for the services that they offer. The building and facilities shown in

this aspect gives the idea of what Furry Tales building looks like which is planned to suit for the

liking of the customers.

 TABLE OF CONTENTS

Title page

Approval sheet

Executive summary

Acknowledgment

Table of contents

List of Tables

List of Figures

I. Introduction
I.1 Vision and Mission
I.2 Projects Long Range Objectives
I.3 Descriptive Definition of the Project
I.4 Projects Long Range Objectives
I.5 Scope and Limitation
II. Market Feasibility
2.1 Service Description
2.2 SWOT
2.3 Market Description
2.4 Demand
2.5 Supply
2.6 Demand and Supply analysis
II.7Price study
II.8Marketing Program
III. Technical Feasibility
III.1 The Service
III.2 Service Process
III.3 Service Schedule
III.4 Building and Facilities
III.5 Office Supplies
III.6 Utilities
III.7 Waste and Disposal
III.8 Service Cost
III.9 Business Organization Requirements
III.10 Labor Requirements
IV. Management Feasibility
IV.1 Legal Form of business
IV.2 Proposed Organizational Structure
IV.3 Description of the kind of human resources required
V. Socio Economic Feasibility
 V.1 Estimate of Employee Creation Effect
V.2 Taxes that will accrue to the government
V.3 Effect on environment
VI. Financial Feasibility
VI.1 Major Assumptions
VI.2 Total Project Cost
VI.3 Sources of Financing
VI.4 Pro forma Financial Statements (5 years)
VI.5 Accounting and Control Plan
VI.6 Financial Analysis

LIST OF TABLES:

Table 2.1 SWOT Analysis

Table2.2 Total Competitors Sales

Table 2.3 Dog Population

Table 2.4 Competitors Prices

Table 2.5 Furry Tales Dog Grooming, Hotel & Spa Offered Services & Prices

Table 2.6 Advertising Cost

Table 3.1Process of each service

Table 3.2Number of minutes per service

Table 3.3Number of dogs to accommodate in a day/week

Table 3.4Employees daily schedule

Table 3.5Total Cost for Materials & Inputs

Table 3.6Labor Requirements

Table 3.7Total Cost on Tools & Equipments

Table 3.8Total Cost on Furniture & Fixtures

Table 3.9Total Cost on Utilities

Table 6.1 Investment Cost

Table 6.2 Pre-operating Cost

Table 6.3 Net Working Capital

Table 6.4 Balance Sheet

Table 6.5 Income Statement

Table 6.6 Cash flows

Table 6.7 Changes in equity

Table 6.8 Cash

Table 6.9 Inventory

Table 6.10 Depreciation for Leasehold

Table 6.11 Tools & equipment

Table 6.12 Furniture & Fixture

Table 6.13 VAT Payable

Table 6.14 Capital Contribution

Table 6.15 Service Revenue

Table 6.16 Service Cost

Table 6.17 rental Expense

Table 6.18 Salaries Expense year 1

Table 6.19 Salaries Expense year 2

Table 6.20 Salaries Expense year 3

Table 6.21 Salaries Expense year 4

Table 6.22 Salaries Expense year 5

Table 6.23 Taxes & Licenses

Table 6.24 Advertising Expense

Table 6.25 Depreciation Expense

Table 6.26 Utilities Expense

Table 6.27 Training Expense

Table 6.28 Professional Fees

Table 6.29 Withholding Tax

Table 6.30 SSS, PHIC & HDMF Contribution

Table 6.31 13th Month Pay

Table 6.32 Horizontal Analysis Balance Sheet Year 1 & 2

Table 6.33 Horizontal Analysis Balance Sheet Year 2 & 3

Table 6.34 Horizontal Analysis Balance Sheet Year 3 & 4

Table 6.35 Horizontal Analysis Balance Sheet Year 4 & 5

Table 6.36 Horizontal Analysis Income Statement Year 1 & 2

Table 6.37 Horizontal Analysis Income Statement Year 2 & 3

Table 6.38 Horizontal Analysis Income Statement Year 3 & 4

Table 6.39 Horizontal Analysis Income Statement Year 4 & 5

Table 6.40 Vertical Analysis Balance Sheet Year 1 & 2

Table 6.41 Vertical Analysis Balance Sheet Year 3 & 4

Table 6.42 Vertical Analysis Balance Sheet Year 5

Table 6.43 Vertical Analysis Income Statement Year 1 & 2

Table 6.44 Vertical Analysis Income Statement Year 3 & 4

Table 6.45 Vertical Analysis Income Statement Year 5

Table 6.46 Current Ratio

Table 6.47 Quick Ratio

Table 6.48 Fixed Asset Ratio

Table 6.49 Operating Margin

Table 6.50 Gross Margin

Table 6.51 Ratio of Net Sales to Asset

Table 6.52 Rate Earned on Equity

Table 6.53 Rate Earned on Total Assets

Table 6.54 Return on Investment

Table 6.55 Cash Payback Period

Table 6.56 Net Present value

Table 6.57 Internal Rate of Return

LIST OF FIGURES

Figure 1.1 Location of the business

Figure 3.1 Flowchart of service process

Figure 3.2 Exterior of the Enterprise

Figure 3.3 Aerial view of the enterprise

Figure 3.4 reception area

Figure 3.5 Hotel, Massage & Spa Area

Figure 3.6 Map

Figure 4.1 Organizational Chart

Figure 6.1Revenue Cycle

Figure 6.2 Payroll System

Figure 6.3 Expenditure Cycle

Figure 6.4 Current Ratio Graph

Figure 6.5 Quick Ratio graph

CHAPTER I

INTRODUCTION
VISION STATEMENT

To be one of the leading dog grooming, hotel and spa service provider in Davao City.

MISSION STATEMENT

To provide dog owners of Davao City with quality services for the wellness of their pet dogs. To be

adaptive and flexible to the technological advancement to dog grooming, hotel and spa services. The

business values integrity and compassion in its business and instillsit to its employees.

OBJECTIVES

The main objective of the study is to be able to determine whether if its feasible or not for a proposed

business. As a business, its main purpose is to consistently give satisfaction to the needs of the pet owners

and their dogs by providing professional, excellent and outstanding serviceat areasonable price, and to

establish a long-term customer relationship. It is also the business' objective to ensure a continuous

progress by determining possible ways of maximizing the companys profit while minimizing the costs.

Also, to maintain a friendly and promotework environment that respects diversity, ideas and hard work.

Name of the Project and Location

Name of the Project

The name of the business is Furry Tales Dog Grooming, Hotel and Spa. It was derived from the word

fairy tale, for it can entice the target market. The name was changed from fairy to furry to symbolizethe

pet dog and the services it will receive e.g. dog grooming, hotel and spa services.

Location

The enterprise will be established in a wide-range community known as the El Rio Subdivision. It

can be found at the second floor of a convenience store across Anisabel Suites along the highway. It will

cater a wide array of dog services in the subdivision, nearby villages and will capture customers from the

Northern and Downtown area of Davao City. The place is nearby the metropolitan area of the city which

will allow day and overnight care for dogs.

The exact location of the enterprise is at Second Floor of 7 Start Mini mart, Corner Iba Street and

Bacaca Road, Phase 1 El Rio Subdivision, Bacaca, 8000 Davao City. (See Figure 1.1)

Figure 1.1 Location of the business

Description of the Project

At the current time, there have been an increasing number of people who are much devoted to
their pets. Furry Tales Dog Grooming, Hotel and Spa offers services that helps take care of the sanitation,

health and cleanliness of the pets. It will consistently provide high customer satisfaction by rendering

excellent service and quality pet care at an reasonable price. It also offers professional services that can

cater the other needs of the pets and the owners as well. This will be located at corner Iba Street and

Bacaca Road at Phase 1 El Rio Subdivision. This establishment plans to make sure that every pet under

our custody will be well taken care of. The clients best interest for their dog would be its priority , and it

will be guided by the business' values and professional ethics.

The business will ensure that it will be accountable to the highest standards by meeting the clients

needs precisely and completely. The business will cultivate a working environment that provides a

human, sustainable approach to earning a living.

Scope and Limitations of the Study

Scope

This study will cover the short term and long term goal of the business and it will be conducting surveys

to probable customers in order to gather more precise and accurate data that will be helpful in establishing

the proposed business. The study shall cover a type of respondent who will be the future target market

which are the pet owners in the vicinity of Davao City. It will be based in the marketing, financial,

technical, management and socioeconomic aspect of the business.

Limitations

This study will be limited with the outcome of the surveys from pet owners and information gathered
from various pet shops and other dog related enterprises, also acknowledging that there is no accurate

dog population. The survey will only be restricted to the residents in Davao City. The dog owners will be

the major part of the respondents and the study will be limited within the outcome of the survey.

CHAPTER II

MARKET FEASIBILITY
 A. SERVICE DESCRIPTION

Dogs are included in the most common pet owned by individuals and families. Owning a dog

entails responsibility, nonetheless it could also bring fun. Dogs usually become the confidant of man

because of their friendly nature and their ability to co-habit. In addition, they could provide security to

their owner.

Our business offers variety of services, and these are grooming, hotel and spa. Our grooming

services help the owners maintain the cleanliness and neatness of their pet dogs. The hotel service helps

provide comfort and basic needs to dogs while their owner is away. Lastly, our spa service is a service

made for both the dog and their owner for their relaxation and bonding.

B. MARKET DESCRIPTION

In the past, owning a dog is just plain and simple. Individuals and families, who have dogs, just

feed them, bathe them occasionally, and play with them. However, as time goes by, the population of dogs

increased and most individuals and families own dogs that are high breed, which are of high maintenance.

Along with these changes, there is a need for dog grooming centers.

Furry Tales Dog Grooming, Hotel and Spa aims to serve Davao City, specifically the community

living in the Poblacion District. The ideal customer ages ranging from 18 years old and above, and both

female and male members of the population of Poblacion District, Davao belonging from middle to

highest class who are willing to spend much to groom their dogs.

Throughout the years, dog-grooming centers are rising in Davao City. As of now, five known (5)

dog-grooming centers exist in Davao City. Each of these businesses has their own edge against others.

Obviously, it would be a great challenge to the researchers to establish a name as a new entrant to this

kind of industry. On the other hand, it would also be an advantage to us because we have a prior

knowledge as to what type of services we should offer.

 C. SWOT ANALYSIS

Table 2.1 SWOT Analysis

Name of Strengths Weaknesses Opportunities Threats

competitors
Established Some Customers Products used
One Fab market employees may also in servicing the
Pooch reputation do not treat avail of clients may
New the dogs the lack in quality
branches for well products Products used
greater Lack of they are may tend to
accessibility employees selling increase in
for the which Increase price due to
customers results to advertisin economic
Loyal slow g thru the decline
customers services help of Clients may
Pick-up and Negative word-of- reduce its
delivery for feedbacks mouth spending to
dogs Expand their pets due
services to economic
offered decline
Growing
competition
with other
local pet shops
Yanas Dog They can be They have Increase Products used
Salon and located a small advertisin may tend to
Spa easily area/ g thru the increase in
They are the limited help of price due to
first one to space word-of- economic
penetrate They have mouth decline
the market only Expand Clients may
limited services reduce its
services offered spending to
(Grooming their pets due
only) to economic
decline
Designerdog
The place is Their Expand Clients may
s Salon and very services are services reduce its
Suites convenient very offered spending to
and expensive their pets due
attractive to to economic
those who decline
are fond of
designer
brands
D. DEMAND

The researchers conducted a survey on the dog owners who avail grooming services that was

mostly comprises of students and professionals. There are two-hundred seventy-two (274) respondents in

this survey. One hundred seventy-two (172) respondents are female, while the remaining one hundred two

(102) are male respondents. Most of them are aged between eighteen (18) years old to twenty (20) years

old. Out of 274 respondents, one- hundred eighty-eight (188) have already availed services of dog

grooming or hotel or other services for their pet dogs. Survey shows that most people avail dog services at

One Fab Pooch, a well-known dog grooming business in Davao City. It also shows that the respondents

look most into the services that the dog grooming businesses offer.

The second factor that is also important is the price, third is the accessibility of the place, and

lastly, the ambiance of the place. When availing the services in a dog grooming center or hotel, people

usually spend around four hundred one pesos (P401.00) to six hundred pesos (P600.00), according to the

survey. The top five (5) services that are usually availed by the respondents are the following: Bathing,

Nail Cutting, Ear Cleaning, Hair Cutting and Teeth Cleaning. They also avail services such as Tick and

Flea treatment, Detangling, Pedicure for dogs, Hair dye for dogs and the Hotel for dogs also. Aside from

the survey, we also based our demand in the number of customers a grooming business usually served by

our competitors.
 According to the tally, 68.6% of our respondent avail grooming services. The potential customers

are those dog owners who want and are willing to groom their and who are located in the Poblacion

District, Davao City.

E. SUPPLY

The group identified four competitors, namely: One Fab Pooch, Designer Dogs Salon and Suites,

Yanas Dog Salon and Spa and Lil Heroes Enterprise. The Furry Tales Grooming, Hotel and Spa as a

new entrant into the dog grooming business, achieving the desired market share is one of the major

challenges since there are many existing competitors in the market. Each competitor offers almost the

same services but only differ as to their promotional technique, pricing strategies and service quality. The

researchers competitive advantage will be the spa service, which comprises of massage and pedicure for

the dog and the dog owner.

Table2.2Total Competitors Sales

Name of Competitor Starting Sales per Day (Dog Count)

Year Starting Year Present Year

One Fab Pooch 2012 10 30

Yana's Dog 2006 10 20

Salon and Spa

Designer Dogs Salon and Aug, 2016 20 20

Suites

The table shows the increase in the number of dogs

The table shows the sales of each competitor from their respective starting year up to the present

year. The data were gathered through an interview with the supervisor in charge of each dog grooming

salon stated above.

 A. DEMAND AND SUPPLY ANALYSIS

In the past five (5) years, there is an increasing population of dogs in Davao City as illustrated in

the Table 2.3 below. Due to an increase in population of dogs, there is also an increase of dog owners

demand for dog grooming services around the city. As shown in the operation of each competitor (Table

2.2), there is an increase in sales from the starting year up to the current year. This gives the fact that

many people are availing of the services and it causes an increase of demand per year.

In Davao City, there are only a few businesses that offer dog grooming services because of high

investment cost in putting up this type of business, and it is a luxury service that not all individuals are

potential customers. Due to high investment cost, there are only a few entrants in the market and results to

lack of supply in catering the demand. In fact, the leading dog grooming salon (One Fab Pooch) in Davao

City branch out already in order to supply the increasing demand.

Table 2.3 Dog Population

Year Number of Dogs

2012 50,000

2013 76,250

2014 102,500

2015 128,750

2016 155,000

The table shows the estimated population of dogs per year in Davao City. There was an increase

of 26, 250 dogs per year.

B. PRICE STUDY

COMPETITOR GROOMING SERVICES

 PACKAGES SERVICES PRICE
Designer Bath Bath S = P 600

Blow-dry M = P 700
L = P 800
Hair trim
XL = P 1000
Nail care
Designer Dogs XXL = P 1600
Salon & Suites Teeth care and
rump care
Designer Cut Designer bath + haircut S = P 800
M = P 900
L = P 1000
XL = P 1200
XXL = P 1900

Designer Fix Designer cut+ Moderate Fix = P

detangling 1100
Power Fix =P
1400
Suites Daytime stay of dogs P 200
Overnight stay of dogs P 700

COMPETITOR GROOMING SERVICES

PACKAGES SERVICES PRICE

Simple Pamper Wash Bathe S = P 200
M = P 300
Blow-dry L = P 400
XL = P 500
Tidy

One Fab Pooch Ultimate Pamper Wash Bathe S= P 300

M= P 400
Ear cleaning L= P 500
XL= P 700
Nail Cut
Snare Genital Area
Paw trim
Add-on to grooming Creative styling P 200
DE matting P 300
Detangling(Regular) P 400
 Detangling (severely matted) P 600
Coat whitening P 250

Anal sac cleaning P100

Tick & flea removal P 250

GROOMING SERVICES
COMPETITOR
PACKAGES SERVICES PRICE
Express Teeth cleaning P 150
Ear cleaning P 100
Nail cut P 100
One Fab Pooch Nail cut (extra P 150

short)
Tick & flea P 150
removal
Hotel Daytime or overnight Standard= P 350
stay of dogs Deluxe= P 450
Suite= P 550
Extra guest= P 250
Day care= P 200

Yanas Dog Salon and Complete Groom Bath P250-P450

Spa Ear Clean
Nail Trim
Hair Detangle
Hair Trim
Trimming Ear Clean P250-P350
Nail Trim
Hair Detangle
 Bathing Ear Clean P250-P450
Nail Trim
Hair Detangle
Extra Services Treatment for P200-P400
Infestation of
Tick and Flea
Hi-white Bath P50

Table 2.4 Competitors Prices

Furry Tales Grooming, Hotel & Spa Prices:

Packages Services PRICE

Bathing Ear cleaning Teeth cleaning Hair

Full dog grooming package cutting/trimming P 450

Bathing Flea & tick control/removal Hair

Semi-full dog grooming package cutting/trimming 350

Other services:

Dog Massage 80

Dog owner's massage 250

Pawdicure 80

Spa Manicure & Pedicure 150

Day stay of dogs 200

Hotel Services Overnight Stay of dogs 350

Tick & Flea removal/treatment 200

Individual Service Detangling/de-matting 300

Table 2.5 Furry Tales Dog Grooming, Hotel & Spa Offered Services & Prices
 C. MARKETING STRATEGY

The researchers will create a Facebook page and an Instagram account. Through Facebook,

people will know about our business (e.g., business hours, offered services, location, etc.) and so that they

may know the thoughts and reviews of each customer. In this way, it will help them correct their lapses

and eventually improve the business. Through Instagram, they will post pictures that may persuade

customers to visit the business. Another way of promoting their business is through giving of flyers and

posting of tarpaulins in different areas where people will immediately notice it.

Table 2.6 Advertising Cost

Flyers Layout: No service fee

500 sheets: P 270 P 270.00

Tarpaulin Two (2) 4x5 feet: P 350 with layout P 700.00

Total Cost P 970.00

CHAPTER III
 TECHNICAL FEASIBILITY

This aspect discusses the definition of services that the Furry Tales Grooming, Hotel and Spa

offers together with the processes and production schedule of each service. It also presents the

materials/supplies, machinery & equipment and furniture and fixtures that will be used by the business in

its operations. The chapter presents the costs of these equipment and computation of the service costs of

each service. It also discusses the requirements of workers to be hired since it is essential that the partners

should hire good and right staff for the business.

A. Service

Grooming

One of Furry Tales services includes grooming. Pets can be pampered with grooming and spa

services, and can stay at their respective rooms. Grooming services includes bathing, brushing, blow

drying, hair cutting or trimming, coat condition spray and perfume, paw pads trimming, teeth cleaning,

ear cleaning.

Furry Tales also offer packages: Full dog grooming package which includes bathing, ear cleaning, teeth

cleaning, hair cutting/trimming, nail trimming and trimming of sanitary area. The second package is the

semi-full dog grooming package which includes bathing and hair trimming/cutting. It offers add-ons such

as detangling and tick & flea treatment and removal.

Hotel

Furry Tales offers the highest quality of comfort and care for pets who will stay overnight at the

hotel. It is the best alternative for the dog owners rather than leaving their dogs alone at home while they

are on vacation. The facility provides the pet with a fun, safe, relaxing and healthy experience. The hotel

services make sure that the pet will be provided with the utmost comfortable sleeping arrangements for it

cares about the pets safety, security and comfort. The kennel is fully equipped to handle dogs of all
shapes and sizes. Each dog will have its own personal kennel for the duration of its stay where they will

be comfortable and happy to enjoy their own personal space and to maintain a calm atmosphere at the dog

hotel. The kennels are designed to suit the dogs needs whatever size it will be. The hotel also has food

services for the dog that is already included if they will avail the service. The owner can bring or supply

their own dog food, but the charges will still be same whether they will bring one for their dog.

Spa Treatment

Furry Tales Spa has services that the owner and their pet dog will love. The spa is designed to

cater the dog and the owners needs for there are fantastic services and treatments for the both of them.

The spa treatments can pamper and style the pet to ensure their well-being. For pets, it could include

pawdicure or nail painting or polish and dog massage. There are also services for the owner too. The

owner could choose from having a basic massage and having a manicure and pedicure.
B. Service Process
 Figure 3.1Flowchart of service process

The program flowchart shows the service process for the grooming salon, hotel and spa. The

customer arrives at the store and will be served by the store-in charge. The system will process whether

the customer is a new customer or loyal customer whom availed of the services before. If the customer is
a new customer, the customer will be given a customer sheet for the data needed which will be stored in

the system. After storing the data in the system, the customers dog will be assessed for its behavior. If the

dogs behavior failed to pass the assessment, Furry Tales will decline the service requested by the dog

owner and with that, the service process will end.

On the other hand, if the dog passed the test and has proper behavior, the customer will choose

what services will be performed. The customer shall render payment to the cashier for the fees and the

staff will perform the services chosen. If the customer is waiting, the staff will return the dog to the

customer immediately after the performance of the services. If not, the staff will put the dog in the cage

and will return it upon the arrival of the customer.

Process in Each Service:

Services Process
Bathing Dog will be bathed with warm water through a
hand-held showerhead. They will be bathed
twice. During the second bathing, shampoo and
conditioner will be applied to the dog. Then, rinse
to wash off the residue of the shampoo and
conditioner.

Ear Cleaning The dogs ears will be cleaned. The ear flaps
should be inside out and the hair around the
external opening of the ear should be quickly
removed. A light amount of medicated ear
powder may be sprayed in the dogs ears which
can help the dogs ear hairs be pulled easier. If
there is hair in the ear canal, it should be
removed given that there are no signs of ear
health problems. Hair that is more than one-half
inch down to the ear opening shouldnt be
removed or cleaned. If it will be removed, a
 medicated ear powder must be sprayed into the
ear. The powder absorbs moisture and dries ear
wax and hairs. If there are still ear wax, moisten
cotton ball with a small amount of ear cleaning
solution and swab and clean the ear canal area
outward to the ear flap.

Teeth Cleaning Groomer will gently massage the dogs gum to

prepare the dog for brushing of teeth. The
groomer will put a small amount of toothpaste on
the dogs lips to get him used to the taste. The
groomer will apply directly to the dogs teeth and
gently brush with toothbrush.

Hair Cutting/Trimming The groomer will thoroughly brush and/or

comb to remove tangles and mats. Using clippers,
trim the excess fur off the dogs body. Groomers
will start with the shoulders and progress towards
the tail. Cutting/Clipping should depend based on
how it is desired, leaving at least a half-inch or
more to protect the dogs skin. Next, clip hair
around the paws and tail. Chest should be
inspected to determine if any trimming is
needed. Clip any excess fur that is hanging to the
rest of the dogs body. The dogs head and face
should be clipped last. The clipper should be
placed flat against the top of the dogs head with
the blade spokes facing to the rear. After, the
clippers must be pulled towards the back to push
fur away from the upper brow. Clip or trim
between the eyes by placing the clipper guide
comb or the trimmer flat against the forehead
with the blade spokes facing the nose. The
 groomer should progress to clip towards the nose
going to the chin. After, trim the ear tip and
repeat along the edges of the ear. If necessary,
the groomer may gently trim excess hair in the
inside of ears, using a smaller trimmer. The ear
canal of the dog must always be avoided.

Nail Trimming The groomer should massage dogs feet before

starting to trim or cut the dogs nails. After, the
groomer should gently hold and squeeze the
dogs paw to show the dogs nail. The groomer
should start cutting the nails little by little than
cut too much in one clipping. In case that the
dogs nail bleeds, apply styptic powder and a
small amount of pressure to the end of the nail.

Trimming of Sanitary Area The groomer will prepare a clipper with a

certain blade attached to it. The dog will be raised
up on his hind feet so that the groomer can see
his stomach. The groomer will start and take the
clipper. In the case of a female dog, the groomer
will start about four nipples up on her body. For
male dogs, the groomer will start above the
penis. The hair must be clipped away, working
from the middle down and from the middle out.
The groomer will work his way down cleaning the
hair away from all the private areas. When the
groomer gets to the area of the flank where the
skin hangs, they will run their clippers across any
ridge of skin. If the area has already been
cleaned, the groomer can remove about 1/8 th of
an inch of his coat from around the anus
Detangling/Dematting The groomer will use a detangling/dematting
 spray for the mats and the groomer should let it
sit for about 20 minutes before working on the
dogs matted hair. After 20 minutes, the groomer
will use his/her fingers to work with the matted
hair first on the outside part then working
towards the inside, gently pulling the matted hair
apart. During this process, the groomer will use a
slicker brush and repeat the outside working on
the inside process in dematting/detangling dogs
matted hair.

Flea and Tick Control Treatment/Removal Removal process: The groomer should steady
the dog and keep him calm to prepare for
removal of flea and/or tick. Using a pointy pair of
tweezers, grab hold of the flea and/or tick as
close to the dogs skin without pinching it. Using
pressure, pull the flea and/or tick using a straight
motion. After pulling, kill the flea and/or tick by
placing it in a container with rubbing alcohol.
Treatment process: The treatment process is
simply putting spot-on treatments near the dogs
neck to kill the flea and tick residing in the dogs
body.

Dog Hotel The dog hotel offers different types of room to

cater different types of dogs, depends on what
their owners would like to avail. The dog hotel
offers overnight and daycare services for dogs.
Each dog has assigned attendee to make sure that
the dogs are taken care. For daycare services, the
dogs are catered for the whole day. Daycare
provides dogs with a safe and fun environment
where they can play inside their room or the
 attendees can walk the dogs during their stay.
They are also fed with dog food. The dog owner
has the choice to bring dog food for his or her
dog, or to avail dog food at the shop. The daycare
is from 10 A.M. until 7 P.M. On the other hand,
overnight services offer room for dogs 24/7. The
dog owner may choose what type of room he or
she wants for his or her dog. The attendee of the
dog feeds the dog, still, the owner has a choice of
bringing a dog food for his or her dog or just to
avail at the shop. The attendee can walk the dogs
during the stay. Attendees check the dogs round
the clock whenever the dogs are already in their
respective rooms.
Dog Massage Dog massage for dogs is basically massaging its
body. The dogs should undergo assessment
before proceeding to the massage. The duration
for dogs massage lasts for 10 minutes. During
this massage, the dog may enjoy being massaged
along with his or her owner.
Dog Owners Massage The dog owners massage contains body
massage that lasts for 1 hour. The masseuse or
masseur is equipped with essential oils that cater
the needs of the dog owner. During this massage,
the owner may enjoy being massaged along with
his or her dog.
Pawdicure (Pedicure for dogs) Pawdicure offers different kinds of nail polish
color that suits the dog. The trained manicurist
will apply dog nail polish on each dogs nails.
After, the painted nails of the dog will be dried
using nail dryer. The dog may also enjoy this
pawdicure along with his or her owner.
Manicure and Pedicure for Dog Owners The dog owner can choose either manicure or
 pedicure. The owner may also choose both. The
trained manicurist will apply the desired nail
polish chosen by the owner on the owners nails.
After, nail dryer will be used to let the nail polish
dry. The owner may also enjoy this manicure
and/or pedicure along with his or her dog.
Table 3.1Process of each service

Table 3.1 explains the step by step process of each service that Furry Tales offers. These

processes should be followed by the assigned staff according to what service they will perform. This is for

the purpose of having harmonious operations in the business.

C. Plant Capacity/Size and Production Schedule

SERVICES Number of minutes/hours per service

Full Dog Grooming Package

Bathing 60 minutes

Ear Cleaning 10 minutes

Teeth Cleaning 5 minutes

Hair Cutting/Trimming 20 minutes

Nail Trimming 15 minutes

Trimming of Sanitary Area 10 minutes

Total minutes per package 120 minutes

Semi-Full Dog Grooming Package

Bathing 60 minutes

Hair Cutting/Trimming 20 minutes

Total minutes per package 80 minutes

 Individual Services

Flea and Tick Removal 45 minutes

Flea and Tick Treatment 15 minutes

Detangling/Dematting 30 minutes

Other Services

Dog Hotel 24 hours

Day Care for dogs 9 hours

Dog Massage 10 minutes

Dog Owner's Massage 60 minutes

Pawdicure 30 minutes

Manicure/Pedicure 90 minutes

Table 3.2Number of minutes per service

The grooming service is split into packages, the full dog grooming package and the semi-full dog
grooming package. The first package includes bathing, ear and teeth cleaning, hair cutting/trimming, nail
trimming and trimming of sanitary area. The second package includes bathing and hair cutting/trimming.
The dog hotel is divided into day care and overnight stay of dogs. The spa includes dog massage, dog
owners massage, pawdicure and manicure/pedicure each and individually treated. Furry Tales Grooming,
Hotel and Spa also offer individual services if the dog owners wish not to avail the packages that are
offered.

MAXIMUM NO. OF DOGS TO

SERVICES ACCOMMODATE

Full Dog Grooming Package 3 per day

Semi-Full Dog Grooming Package 4 per day

Flea and Tick Treatment 2 per day

Detangling/Dematting 3 per day

Dog Hotel 6 per week

Day Care for dogs 2 per week

Dog Massage 5 per day

 Dog Owner's Massage 8 per day

Pawdicure 3 per day

Manicure/Pedicure 5 per day

Table 3.3Number of dogs to accommodate in a day/week

Table 3.3 shows the number of dogs that will be accommodated in a day. These numbers are
based on the estimated total number of dogs that will be catered in a day which is 20 dogs.

Daily Schedule

Business Operation
Employees Time In Time Out
Day Time Lunch Break

Store In-Charge Mon - Sat 10AM - 7PM 9:30AM 8PM 12:00NN 1:00PM

Cashier Mon - Sat 10AM - 7PM 10AM 7:30PM 12:00NN 1:00PM

Groomer 1 Fri-Wed 10AM - 7PM 10AM 7:30PM 12:00NN 1:00PM

Groomer 2 Thu-Tue 10AM - 7PM 10AM 7:30PM 12:00NN 1:00PM

Groomer 3 Wed-Mon 10AM-7PM 10AM 7:30

Pedicurist &
Mon-Sat 10AM - 7PM 10AM 7:30PM 12:00NN 1:00PM
Manicurist

Masseuse Sun-Fri 10AM - 7PM 10AM 7:30PM 12:00NN 1:00PM

Other Personnel Mon - Sat 10AM - 7PM 9:30AM 8PM 12:00NN 1:00PM

Table 3.4Employees daily schedule

The business has 8 employees: one (1) store in-charge, one (1) cashier, three (3) dog groomers, one (1)

masseuse, one (1) pedicurist/manicurist and one (1) other personnel. The employee works eight hours a

day starting 10AM to 7PM and six days per week each were given one rest day. Lunch will be at 12NN to

1PM.
 D. Materials & Inputs

Materials and Inputs list the needed materials for the grooming; quantity, description that is

needed per dog, sources for each supplier, price of each material, the total cost monthly and yearly.

Quantit Descriptio
Materials & Inputs y n (per dog) Price Total Yearly

20ml per PHP PHP PHP

Calming Shampoo (450ml) 27 dog 168.00 4,536.00 54,432.00

PHP PHP PHP

Disposal Gloves (100 pairs/pack) 6 450.00 2,700.00 32,400.00

PHP PHP PHP

Dog Ear Cleanser (120ml) 10 2ml per dog 290.00 2,900.00 34,800.00

8pcs per PHP PHP PHP

Dog Earbuds (100pcs/pack) 48 dog 10.50 504.00 6,048.00

PHP PHP PHP

Nail Polish (10ml) 15 33.00 495.00 5,940.00

PHP PHP PHP

Parfume - Liquid (125ml) 24 5ml per dog 175.00 4,200.00 50,400.00

PHP PHP PHP

Parfume - Powder (250ml) 12 5ml per dog 220.00 2,640.00 31,680.00

20ml per PHP PHP PHP

Regular Shampoo (1gal/3785ml) 4 dog 1,920.00 7,680.00 92,160.00

Tick & Flea Shampoo 20ml per PHP PHP PHP

(1gal/3785ml) 4 dog 1,950.00 7,800.00 93,600.00

Tick & Flea Treatment - Liquid 20ml per PHP PHP PHP
(1gal/3785ml) 4 dog 30.00 120.00 1,440.00

PHP PHP PHP

Toothbrush (3 pcs/pack) 200 1pc per dog 89.00 17,800.00 213,600.00

Toothpaste (75ml) 16 2ml per dog PHP PHP PHP

 95.00 1,520.00 18,240.00

PHP PHP PHP

Trash Bag (30 pcs/pack) 10 184.50 1,845.00 22,140.00

Whitening Lightening Shampoo 20ml per PHP PHP PHP

(1gal/3785ml) 4 dog 2,160.00 8,640.00 103,680.00

PHP PHP
Total 63,380.00 760,560.00

Table 3.5 Total Cost for Materials & Inputs

Table 3.5 summarizes the total cost of materials and inputs. The quantity given is based on the

dogs per day which is 20. The business gives the exact amount of millilitre (ml) to be consumed per dog.

The source of these materials is from Lil Heroes Enterprise, which offers products at an affordable price.

The monthly cost is Php 63,380.00 and the yearly cost is Php 760,560.00.

E. Labor Requirements

The store in-chargeis responsible for the operations of the business and is also responsible

for attending customers, visitors and clients. The cashier is responsible for handling cash from

customers and will also be responsible for attending the customers if the store in-charge is not

around. There are three groomers who are in charge of grooming the dogs and maintaining

cleanliness of the area. There is only one worker who is responsible for massage and pedicure in

order to avoid idleness and is also responsible in keeping their area clean. The other personnel is

responsible for taking care of the dogs during their overnight and day stay in the dog hotel.

NUMBER OF
EMPLOYEES QUALIFICATIONS
EMPLOYEES
 Male or female.

Store In-Charge 1 A graduate of any related business course.

Good communication skills.

At least high school graduate and 18 years old and

Other personnel 1 above.

Must be male and good at handling dogs.

Male or female.

At least a high school graduate.

Cashier 1
At least 20 years old.

Must be honest.

Must be male and at least a high school graduate.

Groomer 3 Good at handling dogs, at least 20 years old and has
experienced in grooming.

Must be female, experienced and a physical

Pedicurist & therapist.
1
Masseuse
At least 20 years old.

Table 3.6 Labor Requirements

Main Job Tasks and responsibilities:

Store in-charge - the store in-charge is responsible of the activities of the business that

includes the actual execution of the services against the standard quality and performance

of a given service. He/she must have good communication skills, and must have an

attitude to motivate employees. He/she will attend to any customers, visitors and clients

with any information they might want to inquire. He/she is also in charge of opening and

closing the store, checking the inventory of the materials and the possible equipment to

be disposed.
 Cashier- the cashier is responsible for the receipt of cash or payments from customers.

He/she may not be a degree holder.

Groomers - the groomers are responsible for grooming the dog which includes bathe or

washing, teeth and ear cleaning, nail cutting, haircut, flea treatment.

Pedicurist & Masseuse - they are responsible for the spa and massage services of the

business and must have an experience in the job. She will also have a training provided

by the business on grooming a dog.

Other Personnel- he or she is responsible for watching, providing food and cleans the

cages/rooms for the overnight stay of the dogs in the dog hotel.

F. Tools & Equipment

 Tools and equipments are used to achieve particular fields and activities in the business. These

given tools and equipments are needed to operate the business. The quantity, price and estimated cost are

specified.

Tools & Equipment Quantity Price Total Amount

Broom 1 PHP 100.00 PHP 100.00

Disposal Container 3 PHP 899.75 PHP 2,699.25

Dog Bed Large 8 PHP 510.00 PHP 4,080.00

Dog Collar & Leash 5 PHP 200.00 PHP 1,000.00

Dog Food Bowl

Small 8 PHP 125.00 PHP 1,000.00

Medium 8 PHP 150.00 PHP 1,200.00

Large 16 PHP 175.00 PHP 2,800.00

Dog Hair Dryer 4 PHP 4,670.00 PHP 18,680.00

Faucets 2 PHP 329.75 PHP 659.50

Grooming Cart 3 PHP 3,995.00 PHP 11,985.00

Grooming Table 3 PHP 6,700.00 PHP 20,100.00

Mop 1 PHP 550.00 PHP 550.00

Muzzle

Small 2 PHP 90.00 PHP 180.00

Big 2 PHP 105.00 PHP 210.00

Nail Clippers 4 PHP 182.00 PHP 728.00

Pet Hair Clipper 4 PHP 750.00 PHP 3,000.00

Pet Towel 20 PHP 55.00 PHP 1,100.00

Regular Brush 4 PHP 145.00 PHP 580.00

Rubber Massage Brush 4 PHP 125.00 PHP 500.00

Shower Head 2 PHP 999.75 PHP 1,999.50

Slicker Brush 4 PHP 98.00 PHP 392.00

 Sterilizer 1 PHP 4,498.00 PHP 4,498.00

Tick & Flea Comb 4 PHP 98.00 PHP 392.00

Water Tank 1 PHP 16,200.00 PHP 16,200.00

Massage Bed 1 PHP 9,995.00 PHP 9,995.00

Total PHP 104,628.25

Table 3.7 Total Cost on Tools & Equipments

Table 3.7 gives the specific data needed for the tools and equipment; quantity, price and total cost.

It is depreciated in a straight-line method. The estimated cost is Php 104,628.25.

G. Furniture & Fixtures

 Furniture & fixtures is movable that has no permanent structure of a building and utilities. These

are necessary for the operation of the business. The estimated cost and quantity needed is specified in the

table.

Quantit
Furniture & Fixture y Price Total

Bar Stool 4 PHP 4,300.00 PHP 17,200.00

Centralized Air-conditioning Unit 1 PHP 60,000.00 PHP 60,000.00

Desktop Computer 1 PHP 33,000.00 PHP 33,000.00

Emergency Light 5 PHP 1,395.00 PHP 6,975.00

Exhaust Fan

Ceiling 8 PHP 899.00 PHP 7,192.00

Wall 1 PHP 799.00 PHP 799.00

Fire Extinguisher 1 PHP 1,250.00 PHP 1,250.00

Generator 1 PHP 8,500.00 PHP 8,500.00

Safe 1 PHP 1,199.00 PHP 1,199.00

Sofa 1 PHP 18,000.00 PHP 18,000.00

Wall Clock 1 PHP 995.00 PHP 995.00

Total PHP 155,110.00

Table 3.8 Total Cost on Furniture & Fixtures

Table 3.8 specifies the quantity and price of each furniture and fixtures. The total cost is Php

155,110.00. The depreciation used for the furniture and fixtures is straight-line method.

H. Utilities
 Public utility is an everyday necessity that will help the operation of the business. These

utilities are used to maintain the business entirety to be able to produce a great service to the

customers. Stated below, is the total cost of the utilities which includes the electricity, water,

telephone and internet connection. These are necessities for the operations of the business.

Davao Light Monthly Yearly

Estimated wattage 5000kWh

Estimated kWh use monthly 0.555555556

Average quantity of equipment/appliances 17.11111111

Average hours per day 4.444444444

kWh 6.9168 PHP 8,766.97 PHP 105,203.67

Davao City Water District

Minimum charge 0-10 cu.m. PHP 439.90

Above 40 cu.m. PHP 72.00 PHP 511.90 PHP 6,142.80

PLDT Home DSL

Plan Landline + Internet PHP 1,995.00 PHP 1,995.00 PHP 23,940.00

Total PHP 11,273.87 PHP 135,286.47

Table 3.9 Total Cost on Utilities

Table 3.9 shows the total cost, monthly and yearly, on utilities for Davao light, Davao City

Water District and PLDT Home DSL. For Davao light, the estimated kWh consumed by the business is

5000. The cost is calculated by multiplying the estimated kWh per month, average quantity of

equipment/appliances and average hour per day which is Php 8,766.97 monthly. For the water, the basis

of the cost is the cubic meter given which is above 40 cu.m. and the total cost is Php 511.90. Lastly for

PLDT Home DSL, plan Php 1,995.00 with landline and internet connection up to 8 Mbps. The yearly

total cost on utilities is Php 135,286.47.

I. Building and Facilities

 The Furry Tales Grooming, Hotel & Spa is on an improved room in a building which is designed for

grooming, hotel and spa. The room is divided into of four (4) areas which are the grooming area, hotel

area, spa area and reception. The total area of the store is 95 square meter. The fairly divided size and

design of the four major areas is made by an architect.

Figure 3.2 Floor Plan

Figure 3.2 shows the floor plan of the business, the detailed plan and the process. It shows different

areas such as lobby and reception, hotel, spa and massage, grooming and bathing, dog queue, staffs

lounge and storage room. The figure illustrates the meters in each area, the position of the equipments and

quantity.
 Figure 3.3 Exterior of the Enterprise

Figure 3.1 shows the exterior design of Furry Tales Dog Grooming, Hotel & Spa. The enterprise

is located at the second floor of a convenience store. The staircase found in front of the building leads to

the entrance of the store where the reception/lobby is located. The enterprise has glass wall which is

visible inside by the customer.

Figure 3.4 Aerial View of the Enterprise

 Upon entering the lobby, you would find the reception area on the left side. The hotel, massage

and spa are adjacent to the reception area. Customers can see the partition between grooming and bathing

area on the right side from the reception area. The waiting area would be across from the reception area

and the dogs will be visible for the dog owners since the partition for the grooming and bathing area is a

glass wall. Along the hotel, massage and spa, the right side of the end hallway is the dog queue area and

at the left is a single door for fire exit and existing comfort room. Near the dog queue area, there is a room

for staffs lounge. The staffs lounge is connected to another room which is the storage area.

Figure 3.5 Reception Area

Figure 1.2 highlights the reception/lobby area wherein the receptionist will entertain the

customers. The customers can enter through the door, located at the right side of the figure, leading to the

hotel, massage and spa area. The waiting area is located at the opposite side of the receptionists desk.

Beside the waiting area for the customers located at the lobby, the grooming and bathing area enclosed

with a glass wall that can directly be seen to allow our customers to see the dogs being groomed.
 Figure 3.6 Hotel, Massage and Spa Area

The left side of Figure 1.3 is the hotel for dogs. The concept for each room is the famous tourist

spot of the countries; San Francisco, Monaco, Las Vegas and Rio de Janeiro. The right side part of the

layout is the spa and massage area for owners. This is where the massage, manicure and pedicure service

is located separately.
 Figure 3.7 Grooming & Bathing Area

Figure 3.7 is the grooming and bathing area of the business. The illustration shows the grooming

table on the right side area and on the left is the bath tub. The area is adjacent to the staffs lounge and

storage room on the left side of the layout. While on the right side of the layout is the hotel, massage and

spa area.

Figure 3.8 Staffs Lounge

 Figure 3.8 is the staffs lounge of the business wherein employees can relax and unwind during or

after the working hours. The door located at the right side of the figure is the storage room. While on the

left side is the exit door from the staff lounges leading to the dog queue area.

J. Waste Disposal

Furry Tales Grooming, Hotel and Spas waste disposal must be in accordance with the

requirements of the local government authority. The hair or fur, feces and used litter should be

placed in sealed plastic bags for proper disposal. The solid waste products such as hair or fur,

nails and other sediment may be disposed of in general garbage. However, the wastes can avoid

incineration for these wastes can also be recycled. The feces can be used as an organic fertilizer.

The hair or fur clippings can be donated to authorized organizations to help maintain an oil spill-

free ocean.

K. Location

Figure 3.9Map
 The business is located at Corner Iba St. & Bacaca Rd., Phase 1 El Rio Subdivision, Bacaca,

8000 Davao City. The monthly rental of the said location is 25,000 pesos for the 95 square meter

room.The location is suitable for the business because it is located near at the heart of Davao, and is

nearer to the residential area. Although the business has at least ten direct competitors and most of them

are located near our location, it is still possible that the business will be able to have a market gap or

market share from the market of the dog grooming.

There were a lot factors that the researchers considered in choosing the location for the business.

First, they made sure that the business is located in the center of Davao City. This will make the business

accessible to the people living either in the north and south part of Davao City. Second, they chose a place

near villages and subdivisions. Third, the place they chose does not have a strong competition. Fourth, the

building has an adequate parking area and lastly, the location of the business has a less or light traffic than

the other places in Davao City.

L. Service Cost

FULL DOG GROOMING PACKAGE

Supplies cost:

Shampoo (P 1920/3785 mL per gal x 20 mL per dog) 10.15

Whitening
Shampoo (P 2160/3785 mL per gal x 20 mL per dog) 11.41

Ear Bud (P 10.50/100 pcs per pack x 8 pcs per dog) 0.84

Ear Wash (P 290/120 mL in a bottle x 2 mL per dog) 4.83

Toothpaste (P 95/75 mL per piece x 2 mL per dog) 2.53

Toothbrush (P 89/3 per pack x 1 per dog) 29.67

Trash Bag (P 184.5/30 pcs= P 6.15/pc x 1 per dog) 6.15

Parfume(liquid) (P 175/125 mL= P1.4 x 5mL per dog) 7.00

Disposal Gloves (P 450/100 pairs per pack x 1 pair per dog) 4.50 77.08
Labor cost:

120 min/60 min x P 42.5 hourly rate (P 340

Dog groomer min. wage/8 hours) 85.00

Total cost 162.08

SEMI-FULL DOG GROOMING PACKAGE:

Supplies cost:

Shampoo (P 1920/3785 mL per gal x 20 mL per dog) 10.15

Trash Bag (P 184.5/30 pcs= P 6.15/pc x 1 per dog) 6.15

Disposal Gloves (P 450/100 pairs per pack x 1 pair per dog) 4.5

Perfume(powder) (P 220/250 mL= P.88 x 5mL per dog) 4.4 25.20

Labor cost:

80 min/60 min x P 42.5 hourly rate (P 340

Dog groomer: 56.67
min. wage/8 hours)

Total cost 81.87

FLEA AND TICK TREATMENT/REMOVAL:

Supplies cost: (p 1950/3785 Ml per gal x 20 Ml per dog) 10.3

P 30/3785 Ml per gal x 20 mL per dog) 0.16 10.46

Labor cost: (15 min/60 min x P 42.5 hourly rate) 10.65

(45 min/60 min x P 42.5 hourly rate) 31.88 42.53

Total cost 52.99

DETANGLING/DEMATTING:

30 min/60 min x P 42.5 hourly rate(P 340 min

Direct Labor: wage/8 hours) 21.25

Total cost 21.25

DOG MASSAGE:

10 min/60 min x P 42.5 hourly rate (P 340min

Direct Labor:
wage/8 hours) 7.08

Total cost 7.08

DOG OWNERS MASSAGE:

Supplies cost:

Calming Oil (P 168/450 mL per bottle x 20 mL per person) 7.47

Labor cost:

Masseuse: 90 min/60 min x P 42.5 hourly rate (P 340min wage/8 hours) 63.75

Total cost 71.22

PAWDICURE:

Supplies cost:

Nail polish (P 33/10 mL= P 3.3 mL per dog x 2 mL per dog) 6.60

Labor cost:

30 min/60 min x P 42.5 hourly rate (P 340min

Dog groomer
wage/8 hours) 21.25

Total cost 27.85

PEDICURE & MANICURE:

Supplies cost:

(P33/10mL= P 3.3 mL per person x 5 mL per

Nail polish
dog) 16.50

Labor cost:

Pedicurist/Manicurist 60 min/60 min x P 42.5 hourly rate (P 340min wage/8 hours) 42.50

Total cost 59

DOG HOTEL (NIGHT):

Direct Materials:

Dog Food(puppy) (P 1985/15000 g per kl x 300 g per dog) 39.7

Dog Food(adult) (P 1975/20000 g per kl x 380 g per dog) 37.53

Average cost of dog

foodx3 38.615 115.85

Direct Labor:

Other Personnel: P 42.5 hourly rate (P 340min wage/8 hours) 42.50

TOTAL COST DOG 158.35

DOG HOTEL (DAY):

Supplies cost:

Dog Food(puppy) (P 1985/15000 g per kl x 300 g per dog) 39.7

Dog Food(adult) (P 1975/20000 g per kl x 380 g per dog) 37.53

Average cost of dog

food x 2 38.615 77.23

Labor cost:

Other Personnel: P 42.5 hourly rate (P 340min wage/8 hours) 42.5

Total cost 119.73

CHAPTER IV

MANAGEMENT FEASIBILITY

The dog grooming business here in Davao is still new, given that there areonly few established grooming

salons located downtown. We believe that the business owners will be able to enter the market
successfully as long as they have a competitive advantage compared to the existing grooming salons. The

business will offer services that are new, unique, affordable and will prioritize the high quality of service

and care for the dogs.

A. Legal Form of Business

The Furry Tale Groomers is a partnership consisting of ten general partners. All partners are

managing and capitalist partners. Each partner will contribute equal amount of money which is P 200,

000 in order to have a total of P 2,000,000 investment capital; thus each will share equally in the

distribution of profit or loss. All partners shall exercise the rights given to general partners and all of them

will be the managing partner.

B. Proposed Organizational Structure

The organizational structure of Furry Tale Dog Grooming Hotel and Spa Services shall be presented

through an organizational chart, presented below:

Figure 4.1 Organizational Chart

 As shown in the chart, the management of Furry Tale Dog Grooming, Hotel and Spa Services

Partners

Groomers
Groomers
Cashier
Cashier Store Masseuse Other Personnel
Store In-Charge
In-Charge Masseuse
Pedicurist/manicurist
Pedicurist/manicurist
consists of all the ten partners, the store in-charge, cashier, groomers, pedicurist, and masseuse. The

partners are responsible for the decision making of the business. Under them is the cashier, store in-

charge, groomers, masseuse, and pedicurist or manicurist. The Store In-charge is responsible for the

management of the operational activities and should made sure that the employees are providing the

quality of service the said business promised. The cashier would record transactions of the business. The

groomers, pedicurist, and masseuse is responsible for the actual or execution of the services. The other

personnel is responsible for the needs and the safety of the dogs staying in the hotel.

C. Description of the kind of Human Resources Required (Job Description)

In a business, the abilities, skills and attitude of the employees is one of the key success for the

business. That is why, the business has given requirements and job description for hiring appropriate

employees for a specific area. With that, itll assure the owners of the business that they would have

competent and skilled employees.

Store in-chargeThe store in-charge must be an extrovert person. They are the first one to greet the

customer and entertain them so they must be approachable. They should be prepared in presenting the
services available and are also capable of marketing it to the customers. The store in-charge must also

have a good leadership skill since he/she will be the one to motivate other employees and the one to make

sure that they are performing the services accordingly. As a leader, he/she should also take corrective

action when a situation arise and should listen to others concerns for improvements.

The store in-charge dont need to have a degree holder but he/she must have a training or experience in

management. Lastly, he/she is willing to learn about this kind of business so the job will be efficient and

effective.

Cashier. The cashier must have instilled the value of integrity to be able to do the job well. Cashier

handles the financial transactions within business hours, and that includes receiving payments and risking

the security of cash by giving out change. Through this values, the owners would be able to trust and be

confident in the cashier.

The cashier does not need to hold a college degree, given that the basic requirement for this job is to have

good knowledge in basic math and bookkeeping. Also, the cashier must be able to provide basic customer

service and to be approchable for they are always in constant contact with the customers. It would also be

better to know all the details of the services offered so they can multitask.

Groomers. Dogs are unpredictable when it comes to a new environment and are uncomfortable when

they receive care from unfamiliar people; that is why we need our groomers to have patience and empathy

towards grooming dogs.

The groomers do not need to hold a college degree, given that requirement for this job is to have basic

knowledge about grooming pets that is why the enterprise will require them to attend seminars and

trainings.
Pedicurist & Masseuse. The Pedicurist & Masseuse do not have to hold a college degree as long as they

will attend the seminars and trainings provided by the enterprise. They must have basic knowledge about

manicuring or massaging and willing to enhance their skills to provide the best quality of services.

The Pedicurist & Masseuse like a groomer, must also be compassionate to dogs since they will also tend

their needs. They are also highly encouraged to practice proper hygiene in attending the customers.

They also must be approachable to the dog owners and assure them the quality that the Furry Tales Dog

Grooming, Hotel and Spa Services promised.

Other Personnel.The hotel designed for dogs will be taken care of the other personnels. That is why, the

other personnels need not to be a degree holder as long as they should be reliabe and dependable when it

comes to taking care of the dogs. When a customer aquires an overnight stay for their pet, these other

personnels are liable for the safety and security of the dogs. Hence, they should be attentive to the needs

of the dogs in order to handle the situation well.

Brief explanation of the project schedule

The schedule of creating the business- from the feasibility study to advertising the business would

be reliable for almost fifteen months. First is the feasibility study that would start from the first week of

November which is conducted by the proponents, will be finished in at least sixteen weeks to make sure

that the business is feasible. Next in the schedule is the registration of business. This activity includes the

registration of the business; filing of documents in BIR; payments of registration fees; etc. This will take

about at least four weeks. Next to the business registration is the setting up of the leased room. The

business owners may need to hire an engineer and an architect to set the room for a grooming shop or

design the room a pet- friendly one. They can also make some improvements in the room that may add to

the convenience of those who will avail of the service and it would take to eight weeks. After the space is

set up, they can now canvass for the equipments, supplies and the furniture and fixture which can be done

in two weeks each for the equipment, supplies, and furniture and fixtures. When the business owners
finish the canvassing and have already decided what equipments, supplies and furniture and fixtures will

be used during the operation of the business, they may already acquire those and wait for at least two

weeks each for the equipment, supply, furniture and fixtures for the delivery and the arrangement of the

said acquisition.

After the place of the business is ready, the business owners will now proceed to the hiring of

their employees. They have to look for job seekers who are qualified for the grooming shop business.

Including the application and interviews, it may last for more than a month since it is a difficult task to

find personnel who are skilled, willing to be trained, a dog lover and responsible and honest at the same

time. After the hiring, the employees will now undergo a training which is a very important activity

because it is where the quality of service of the business will be established. This activity may also be at

least a month. After the training of the employees, the business is now ready for selling itself. From the

third week of September, the business owners will be advertising their business to the different streets of

Davao especially on the downtown area.

CHAPTER V

SOCIO-ECONOMIC FEASIBILITY
Estimate of Employment-creation effect

The Furry Tales Grooming, Hotel and Spa is willing to accept eight employees: store manager/

supervisor, cashier, groomers and other personnel. The business will offer jobs for anyone who is

interested in taking care of dogs, highly encouraged that they have experience or skills in grooming dogs.

The business is going to train newly-hired groomers that will be provided by the enterprise, until they

become proficient at the services offered.

Furry Tales' will conduct businesses from Monday to Sunday; from 10 am to 7 pm and a lunch break

between 12:00 nn to 1:00 pm. Each employee will be given one rest day every week following the Labor

Code of the Philippines.

Taxes that will accrue to the Government

Since the government mandated businesses to pay taxes for public purposes, it makes the business not

exempted for paying taxes such as the income tax, requiring Furry Tales Grooming, Hotel and Spa to pay

it monthly or quarterly. With the money paid to the government we are also helping to the growth of our

economy. And as our business grow bigger then the taxes that we will pay would be higher since the

payment is based from the sales that we will incur.

The taxes that we will pay would be a big help for the projects of the government concerning health,

education, livelihood and other plans of the government for our country to develop it through the years.

And the taxes paid will be of great help also to the construction of infrastructures for the public use and

faster operations which includes roads, bridges and buildings such as public hospitals and schools that

will help and bring efficiency and progress to the government and the state of the Republic of the

Philippines.

Effect on the Environment

Furry Tales Grooming, Hotel and Spa aims to earn profit and at the same time promote good

environmental practices. The business shall comply with the requirements of the environment legislation.

Tools and Equipment.The equipment are expected to last and to be well maintained. Through this, there

will be less expenses in repairs and maintenance.

Waste.Hair of fur clippings will be donated to the authorized organization that helps maintain an oil spill-

free ocean. Feces will also be used as organic fertilizer. The business would also follow proper waste

disposal of garbage such as shampoo bottle implemented and imposed by the government.

Grooming Products. The grooming products that the business offers (shampoo, conditioner, etc.) are all

biodegradable, contain natural ingredients and free from pesticides. Each bottles or container of products

will also be recycled. e.g. designed as pots for plants, pen holder or to be sold or given to

businesses/people who buy plastic bottles.

Cleaning. Instead of using vacuum cleaners for cleaning the salon, the business will be using the

traditional way maps, water, baking soda and the like since theres a new finding in Environmental

Science & Technology that vacuum cleaners releases dust and allergens.

Space. The business will also make sure that each dog will be given enough space for them to sit, stand,

lie or move around the hotel for the dogs to be comfortable and to avoid unnecessary injury.

CHAPTER VI
 FINANCIAL FEASIBILITY

A. MAJOR ASSUMPTIONS

Business Operations

The business will operate from Monday to Sunday, or seven days a week.
The business hours for grooming services, spa and check-in and check-out for the hotel

will be from 10AM to 7PM, 12 NN to 1:00 PM as lunch break.

The number of operating days per year is 355 days excluding the chosen holidays which

the business will close.

The business holidays are All Saints Day, All Souls Day, December 24 th, Christmas Day,

December 31st, New Years Day, Holy Thursday, Good Friday, Black Saturday and

Election Day.
The capital of the business will come from contributions from the partners, each will

equally contribute 200, 000 PHP and their share of the profit or losses will be

proportionate to their capital contribution.

The business will follow the 2.6% inflation rate.
The method of computing the depreciation is straight line method.
The useful life of the tools & equipment is 3.5 years and 7 years for the furniture &

fixtures.
The drawing will be done starting the second year of operation.
Leasehold Improvement has a useful life of ten years.
The lease contract is at 25, 000 PHP per month with one-month deposit and one-month

advance.
Service revenue is estimated to be 75% of the total sales on the first year of operations

and will likely increase 5% every year starting from the second year of operations.
The business will have maximum of 20 dogs per day: 3 dogs for full dog grooming

package, 4 dogs for semi-full dog grooming package, 5 for dog massage, 3 for pawdicure,

2 for tick & flea treatment/removal and 3 dogs for detangling.

The business will only accept 8 dogs for dog hotel, 8 persons for dog owners massage

and 5 persons for manicure and pedicure.

 Dog groomers, masseuse, manicurist/pedicurist, store in-charge, cashier and other

personnel are contracted on a yearly basis for five years, and their salaries are constant at

340Php a day.
The salaries of employees are inclusive of SSS, PhilHealth, Pag-IBIG and withholding

tax contribution.
Utilities are adjusted to inflation starting from the second year with the same inflation

rate of 2.6% per year.

Internet and phone fee is assumed to be fixed per PLDT quotation.
Advertisement is composed of tarpaulin, flyers and social media and prices are assumed

to be fixed.
The business is subject to 12% vat.
Income tax rate 35% for 5 years.
Repairs and maintenance is assumed to be amounted to 10,000Php in the first year and

increase by 2.6% in the succeeding years.

B. PROJECT COST

Initial Fixed Investment Cost:

The investment cost is consisting of Net working Capital, investment cost and pre-operating cost.

Table 6.1 Investment Cost

Investment Cost Cost

Acquisition of tools & equipment P 104,628

Leasehold Improvement 760,000

Acquisition of Furniture & fixture 158,860

P 1,023,488

Pre-operating cost:

The pre-operating cost is consisting of taxes & licenses and acquisition of tools & equipment and
supplies.

Table 6.2 Pre-operating cost

 Pre-operating Cost Amount

Acquisition of supplies P 405,810

Taxes & licenses 19,138

Training Expense 10,000

Advertising 970

Professional Fee 1,000

P 436,918

Minimum Net Working Capital Investment:

Working capital= current assets- current liabilities

Table 6. 3 Net Working Capital

Year 1 Year 2 Year 3 Year 4 Year 5

Working 1,164, 840.97 1,356, 739.64 1,511, 732.64 1,683, 461.89 1,889, 429.97
capital
Current asset 1,256,187 1,456,618 1,646,879 1,857,242 2,111,411

Current 91,346.03 99,878.36 135,146.36 173,780.11 221,981.03

liabilities

The business will have to choose the conservative policy because the business wants to be solvent

every time and avoid possible stoppages in operations. The business would like to deposit most (85%) of

their funds in a bank as savings and 15% as cash on hand.

 C. SOURCES OF FINANCING

Alternative financing Considered:

External financing

For the start-up of the business, the partners could consider borrowing from a bank with the

lowest interest offered. It is lower interest on medium to long term compared on short term because this

kind of load, the bank had asked for collateral for the purpose of security of the said bank. The amount

loaned is based on the fair value of the real estate.

Partners might also consider finance lease where leasing an equipment like the grooming table

and water tank, and the payment is on installment basis so the large cash outflow would be avoided. And

instead paying large amount of money for the purchase of equipment, partners could use some of it for

another transaction for the operation of the business.

Internal Financing

For the ten partners of the business, they have to share certain amount to come up with the capital

needed to start their business and they must contribute equally. When they already start their operation
 and gained income, they can delay distribution of the profit. With this, the income can be used for

additional investment and to increase the fund.

D. PROFORMA FINANCIAL STATEMENTS

Furry Tales Grooming, Hotel & Spa

Statement of Financial Position

ASSETS

CURRENT ASSET: Note Year 1 Year 2 Year 3 Year 4 Year 5

Cash 1 P 1,127,443 P 1,325,826 P 1,513,987 P 1,722,195 P 1,974,153

Prepaid rent 50,000 50,000 50,000 50,000 50,000

Inventory 2 78,744 80,791 82,892 85,047 87,258

TOTAL CURRENT
ASSETS 1,256,187 1,456,618 1,646,879 1,857,242 2,111,411

NON CURENT
ASSET:

Tools &
Equipment 4 104,628 104,628 104,628 104,628 104,628

Less:
Accumulated
Depreciation 4 29,959 59,918 89,877 119,837 149,796

Furniture and
Fixture 5 158,860 158,860 158,860 158,860 158,860
 Less:
Accumulated
Depreciation 5 23,696 47,392 71,088 94,784 118,480

Leasehold
Improvements 3 760,000 760,000 760,000 760,000 760,000

Less:
Accumulated
Depreciation 76,000 152,000 228,000 304,000 380,000

TOTAL NON
CURRENT ASSET 893,833 764,178 634,523 504,868 375,213

TOTAL ASSETS P 2,150,020 2,220,796 2,281,402 2,362,110 2,486,624

LIABILITIES AND PARTNER'S EQUITY

CURRENT
LIABILITIES:

Income Tax
Payable 30,323 34,787 67,490 103,425 148,784

VAT Payable 6 16,516 17,006 18,320 19,736 21,262

SSS/PHIC/HDMF
contribution(ER) 7,071 7,255 7,443 7,637 7,835

Withholding Vat 39,797 40,832 41,893 42,982 44,100

TOTAL CURRENT
LIABILITIES 93,707 99,878 135,146 173,780 221,981

PARTNER'S EQUITY: 7

A, Capital 205,631 212,092 214,626 218,833 226,464

B, Capital 205,631 212,092 214,626 218,833 226,464

c, Capital 205,631 212,092 214,626 218,833 226,464

D, Capital 205,631 212,092 214,626 218,833 226,464

E, Capital 205,631 212,092 214,626 218,833 226,464

F, Capital 205,631 212,092 214,626 218,833 226,464

G, Capital 205,631 212,092 214,626 218,833 226,464

 H, Capital 205,631 212,092 214,626 218,833 226,464

I, Capital 205,631 212,092 214,626 218,833 226,464

J, Capital 205,631 212,092 214,626 218,833 226,464

TOTAL PARTNERS'
EQUITY 2,056,314 2,120,917 2,146,256 2,188,330 2,264,643

TOTAL LIABILITIES
AND EQUITY 2,150,020 2,220,796 2,281,402 2,362,110 2,486,624

Table 6.4 BALANCE SHEET

Furry Tales Grooming, Hotel & Spa

Statement of Financial Performance

Year 1 Year 2 Year 3 Year 4 Year 5

Note

Service Revenue 8 P 2,070,900 P 2,230,981 P 2,403,435 P 2,589,221 P 2,789,368

Less: Service Cost 9 419,276 530,430 571,432 615,603 663,190

Gross Profit 1,651,624 1,700,551 1,832,004 1,973,618 2,126,178

Less:

Operating Expenses

Rental Expense 10 300,000 307,800 315,803 324,014 332,438

Salaries Expense 11 758,006 776,449 794,908 815,460 834,982

 Repairs &
Maintenance 10,000 10,260 10,527 10,800 11,081

Taxes and Licenses 12 19,138 19,636 20,146 20,670 21,207

Advertising
Expense 13 970 995 1,021 1,048 1,075

Depreciation
Expense 14 129,655 129,655 129,655 129,655 129,655

Utilities Expense 15 135,286 138,804 142,413 146,116 149,915

Training expense 16 10,000 10,260 10,527 10,800 11,081

Professional Fees 17 12,000 12,312 12,632 12,961 13,298

Withholding Tax 18 27,751 29,320 30,892 32,639 34,301

SSS/PHIC/HDMF
contribution(ER) 19 91,235 92,878 95,968 97,331 83,431

13th month pay 20 70,947 72,791 74,684 76,626 78,618

Total Operating Expense 1,564,988 1,601,161 1,639,175 1,678,118 1,701,081

Net Income/Loss Before

Tax 86,636 99,390 192,828 295,499 425,097

Income Tax
Less: expense 30,323 34,787 67,490 103,425 148,784

Net Income/Loss After

Tax 56,314 64,604 125,338 192,075 276,313

Table 6.5 INCOME STATEMENT

Furry Tales Grooming, Hotel & Spa

Statement of Cash Flows

CASH FLOW FROM

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

Net income/ loss P 56,314 P 64,604 P 125,338 P 192,075 P 276,313

Adjustments:
 Depreciation 129,655 129,655 129,655 129,655 129,655

Changes in Assets and

Liabilities:

Inventory -78,744 -2,047 -2,101 -2,155 -2,211

Prepaid Rent -50,000 0 0 0 0

SSS/PHIC/HDMF
Payable 7,071 184 189 194 199

Income Tax Payable 30,323 4,464 32,703 35,935 45,359

VAT Payable 16,516 489 1,315 1,416 1,526

Withholding Tax 39,797 1,035 1,062 1,089 1,118

TOTAL CASH FROM

OPERATING ACTIVITIES 150,931 198,383 288,161 358,208 451,958

CASH FLOW FROM

INVESTING

Acquisition of Property and -

Equipment 1,023,488 0 0 0 0

CASH FLOW FROM

FINANCING

Capital Contribution 2,000,000 0 0 0 0

Drawing 0 0 100,000 150,000 200,000

TOTAL CASH FROM

FINANCING ACTIIVITIES 2,000,000 0 100,000 150,000 200,000

NET INCREASE/ DECREASE 3,174,419 198,383 188,161 208,208 251,958

CASH AT BEGINNING OF
YEAR 0 1,127,443 1,325,826 1,513,987 1,722,195

CASH AT END OF YEAR 1,127,443 1,325,826 1,513,987 1,722,195 1,974,153

Table 6.6 CASH FLOWS

Furry Tales Grooming, Hotel & Spa

Statement of Partner's Equity

Year 1 Year 2 Year 3 Year 4 Year 5

Initial Investment

Partner A P 200,000 P 205,631 P 212,092 P 214,626 P 218,833

Partner B 200,000 205,631 212,092 214,626 218,833

Partner C 200,000 205,631 212,092 214,626 218,833

Partner D 200,000 205,631 212,092 214,626 218,833

Partner E 200,000 205,631 212,092 214,626 218,833

Partner F 200,000 205,631 212,092 214,626 218,833

Partner G 200,000 205,631 212,092 214,626 218,833

Partner H 200,000 205,631 212,092 214,626 218,833

Partner I 200,000 205,631 212,092 214,626 218,833

Partner J 200,000 205,631 212,092 214,626 218,833

Total 2,000,000 2,056,314 2,120,917 2,146,256 2,188,330

Add/less: Shares in income /loss

Partner A 5,631 6,460 12,534 19,207 27,631

Partner B 5,631 6,460 12,534 19,207 27,631

Partner C 5,631 6,460 12,534 19,207 27,631

Partner D 5,631 6,460 12,534 19,207 27,631

Partner E 5,631 6,460 12,534 19,207 27,631

Partner F 5,631 6,460 12,534 19,207 27,631

Partner G 5,631 6,460 12,534 19,207 27,631

Partner H 5,631 6,460 12,534 19,207 27,631

Partner I 5,631 6,460 12,534 19,207 27,631

Partner J 5,631 6,460 12,534 19,207 27,631

Total 56,314 64,604 125,338 192,075 276,313

Less: Withdrawals

Partner A - 0 10,000 15,000 20,000

Partner B - 0 10,000 15,000 20,000

Partner C - 0 10,000 15,000 20,000

 Partner D - 0 10,000 15,000 20,000

Partner E - 0 10,000 15,000 20,000

Partner F - 0 10,000 15,000 20,000

Partner G - 0 10,000 15,000 20,000

Partner H - 0 10,000 15,000 20,000

Partner I - 0 10,000 15,000 20,000

Partner J - 0 10,000 15,000 20,000

Total 0 0 100,000 150,000 200,000

Partner's Equity,
Dec.31 1,943,686 2,120,917 2,146,256 2,338,330 2,264,643

Table 6.7 CHANGES IN EQUITY

Furry Tales Grooming, Hotel & Spa

Notes to Financial Statements

Year 1 Year 2 Year 3 Year 4 Year 5

Cash on Hand 169,116 198,874 227,098 258,329 296,123

Cash in Bank 948,327 1,116,952 1,276,889 1,453,866 1,668,030

Petty Cash Fund 10,000 10,000 10,000 10,000 10,000

TOTAL 1,127,443 1,325,826 1,513,987 1,722,195 1,974,153

NOTE 1: CASH

Table 6.8 Cash

CASH ON
HAND: 15% of the cash woud be allotted for this account

CASH IN
BANK The remaining amount of cash would go directly on the business bank account

The bank account of the business would be in the and the rate per annum is

PETTY
CASH FUND The amount would be P 10, 000

Used for the expenses for the operation daily. It can be transportation or health assistance for
employees when it comes to dog bites

NOTE 2: INVENTORY

SUPPLIES Year 1 Year 2 Year 3 Year 4 Year 5

Calming Oil (450ml) P 31,808 32,635 33,484 34,354 35,247

Disposal Gloves (100 pairs/pack) 0 0 0 0 0

Dog Ear Cleanser (120ml) 0 0 0 0 0

Dog Earbuds (100pcs/pack) 76 78 80 82 84

Nail Polish (10ml) 634 650 667 684 702

 Parfume - Liquid (125ml) 1,680 1,724 1,768 1,814 1,862

Parfume - Powder (250ml) 1,056 1,083 1,112 1,141 1,170

Regular Shampoo (1gal/3785ml) 10,683 10,961 11,246 11,538 11,838

Tick & Flea Shampoo (1gal/3785ml) 0 0 0 0 0

Tick & Flea Treatment - Liquid

(1gal/3785ml) 0 0 0 0 0

Conditioner (3785 ml/gallon) 11,573 11,874 12,183 12,500 12,825

Toothbrush (3 pcs/pack) 0 0 0 0 0

Toothpaste (75ml) 228 234 240 246 253

Trash Bag (30 pcs/pack) 0 0 0 0 0

Dog Food 8,988 9,222 9,462 9,708 9,960

Whitening Lightening Shampoo

(1gal/3785ml) 12,018 12,331 12,651 12,980 13,318

Total Inventory P 78,744 80,791 82,892 85,047 87,258

The inventory is subject to increase of 2.6% per year

Table 6.9 InventoryX

NOTE 3: LEASEHOLD IMPROVEMENT

The partners decided to lease a commercial building and incurred costs in improving the building. The

building and the leasehold improvements amounted to and it is assumed to have a useful life of 10 years.

USEFUL ANNUAL
YEAR COST LIFE DEPRECIATION

1 P 760,000 10 76,000

2 684,000 9 76,000

3 608,000 8 76,000

4 532,000 7 76,000

5 456,000 6 76,000

TABLE 6.10 DEPRECIATION FOR

LEASEHOLD
X

NOTE 4: TOOLS & EQUIPMENT

Tools and Equipment are the fixed assets of the business.

PARTICULARS USEFUL LIFE TOTAL COST DEPRECIATION

Broom 1 100 100

Disposal Container 5 2,699 540

Dog Bed - Large 2 4,080 2,040

Dog Collar & Leash 1 1,000 1,000

Dog Food Bowl

Small 3 1,000 333

Medium 3 1,200 400

Large 3 2,800 933

Dog Hair Dryer 2 18,680 9,340

Faucets 10 660 66

Grooming Cart 10 11,985 1,199

Grooming Table 5 20,100 4,020

Mop 1 550 1,100

Muzzle

Small 2 180 90

Big 2 210 105

Nail Clippers 3 728 243

Pet Hair Clipper 2 3,000 1,500

Pet Towel 1 1,100 1,100

Regular Brush 2 580 290

Rubber Massage Brush 2 500 250

Shower Head 5 2,000 400

Slicker Brush 2 392 196

Sterilizer 5 4,498 900

Tick & Flea Comb 2 392 196

Water Tank 10 16,200 1,620

Massage Bed 5 9,995 1,999

Total Depreciation 104,628 29,959

Table 6.11 Tools and Equipment

NOTE 5: FURNITURE & FIXTURE

USEFUL
PARTICULARS LIFE TOTAL COST DEPRECIATION

Bar Stool 3 PHP 17,200.00 5,733

Centralized Air-conditioning Unit 10 PHP 60,000.00 6,000

Desktop Computer 10 PHP 33,000.00 3,300

Emergency Light 5 PHP 6,975.00 1,395

Exhaust Fan

Ceiling 5 PHP 7,192.00 1,438

Wall 5 PHP 799.00 160

Fire extinguisher 5 PHP 5,000.00 1,000

Generator 10 PHP 8,500.00 850

Safe 10 PHP 1,199.00 120

Sofa 5 PHP 18,000.00 3,600

Wall Clock 10 PHP 995.00 100

Total Cost on F&F PHP 158,860.00 23,696

Table 6.12 Furniture & Fixture

NOTE 6: VAT PAYABLE

VAT PAYABLE Year 1 Year 2 Year 3 Year 4 Year 5

Output VAT P 248,508 267,718 288,412 310,707 334,724

less: Input VAT 50,313 63,652 68,572 73,872 79,583

Yearly VAT Payable 198,195 204,066 219,840 236,834 255,141

Monthly VAT Payable P 16,516 17,006 18,320 19,736 21,262

Table 6.13 VAT Payable

NOTE 7: CAPITAL CONTRIBUTION

Capital contribution is the money contribution of the partners.

Partners Contribution

A P 200,000

b 200,000

B 200,000

C 200,000

D 200,000

E 200,000

F 200,000

G 200,000

H 200,000

I 200,000
 P 2,000,000

Table 6.14 capital Contribution

NOTE 8: SERVICE REVENUE

Revenue is computed as to the maximum number of dogs the store can accommodate. The

maximum number of dogs per day is 20 dogs. Revenue for the first year is 75% of the total maximum and

will increase by 5% for the succeeding years.

# of
dogs
per Year
SERVICES day Prices Monthly Yearly 1(75%) Year 2 Year 3 Year 4 Year 5

Full Dog
Grooming
Package 3 P 450 39,938 479,250 359,438 387,222 417,154 449,400 484,139

Semi-full dog
grooming 4 350 41,417 497,000 372,750 401,564 432,604 466,045 502,070

Dog massage 5 80 11,833 142,000 106,500 114,732 123,601 133,156 143,449

Pawdicure 3 80 7,100 85,200 63,900 68,839 74,161 79,893 86,069

Dog Owner's
massage 8 250 59,167 710,000 532,500 573,662 618,006 665,778 717,243

Manicure &
Pedicure 5 150 22,188 266,250 199,688 215,123 231,752 249,667 268,966

Tick & flea

treatment &
removal 2 200 11,833 142,000 106,500 114,732 123,601 133,156 143,449

Detangling 3 300 26,625 319,500 239,625 258,148 278,103 299,600 322,759

Dog hotel(day
Stay) 2 200 1,600 19,200 14,400 15,513 16,712 18,004 19,396

Dog
Hotel(overnight
stay) 6 350 8,400 100,800 75,600 81,444 87,739 94,522 101,828

Total Service
Revenue 230,100 2,761,200 2,070,900 2,230,981 2,403,435 2,589,221 2,789,368

Table 6.15 Service Revenue

NOTE 9: SERVICE COST

Service cost is consisting of computing the materials and supplies used at end the end of the year.

Cost of Service Year 1 Year 2 Year 3 Year 4 Year 5

Materials & supplies used:

Inventory, beginning 0 78,744 84,831 91,388 98,453

536,51
Purchases 498,020 6 577,989 622,668 670,800

less: Inventory, end 78,744 84,831 91,388 98,453 106,063

Total Materials & supplies 530,43

Used 419,276 0 571,432 615,603 663,190

530,43
TOTAL COST OF SERVICE 419,276 0 571,432 615,603 663,190

Table 6.16 Service Cost

NOTE 10: RENTAL EXPENSE

 Rental expense is subject to 2.6% increase for the succeeding years.

Rental Expense Year 1 Year 2 Year 3 Year 4 Year 5

307,80
Commercial Space P 300,000 0 315,803 324,014 332,438

Table 6.17 Rental Expense

NOTE 11: SALARIES EXPENSE

The salaries are computed P 340 per day for 28 days and deducted by the SSS, PHIC and HDMF
contributions.

No. Of Monthly TOTAL

Employees Salary SSS PHIC HDMF TAX SALARIES

Store in-charge 1 8,868 327 100 177 368 7,896

Cashier 1 8,868 327 100 177 368 7,896

Groomer 3 8,868 327 100 177 368 23,688

Pedicurist/Manicurist 1 8,868 327 100 177 368 7,896

Masseuse 1 8,868 327 100 177 368 7,896

Other Personnel 1 8,868 327 100 177 368 7,896

Total monthly 70,947 2,208 63,167

TOTAL YEARLY 851,360 26,501 758,006

Table 6.18 Salaries expense year 1

Year 2

No. Of
Employee Monthly TOTAL
s Salary SSS PHIC HDMF TAX SALARIES
Storein-charge 1 9,099 327 113 182 389 8,088
Cashier 1 9,099 327 113 182 389 8,088
Groomer 3 9,099 327 113 182 389 24,264
Pedicurist/Manicuris
t 1 9,099 327 113 182 389 8,088
Masseuse 1 9,099 327 113 182 389 8,088
Other Personnel 1 9,099 327 113 182 389 8,088
Total monthly 72,791 2,336 64,704
TOTAL YEARLY 873,495 28,038 776,449
Table 6.19 Salaries expense year 2

Year 3

No. Of Monthly TOTAL

Employees Salary SSS PHIC HDMF TAX SALARIES

Storein-charge 1 9,335 345 113 187 411 8,280

Cashier 1 9,335 345 113 187 411 8,280

Groomer 3 9,335 345 113 187 411 24,841

Pedicurist/Manicurist 1 9,335 345 113 187 411 8,280

Masseuse 1 9,335 345 113 187 411 8,280

Other Personnel 1 9,335 345 113 187 411 8,280

Total monthly 74,684 2,465 66,242

TOTAL YEARLY 896,206 29,576 794,908

Table 6.20 Salaries expense year 3

Year 4

No. Of Monthly TOTAL

Employees Salary SSS PHIC HDMF TAX SALARIES

Storein-charge 1 9,578 345 113 192 435 8,494

Cashier 1 9,578 345 113 192 435 8,494

Groomer 3 9,578 345 113 192 435 25,483

Pedicurist/Manicuris
t 1 9,578 345 113 192 435 8,494

Masseuse 1 9,578 345 113 192 435 8,494

Other Personnel 1 9,578 345 113 192 435 8,494

Total monthly 76,626 2,607 67,955

31,28
TOTAL YEARLY 919,507 9 815,460

Table 6.21 Salaries expense year 4

Year 5

No. Of Monthly TOTAL

Employees Salary SSS PHIC HDMF TAX SALARIES

Store in-charge 1 9,827 363 113 197 457 8,698

Cashier 1 9,827 363 113 197 457 8,698

Groomer 3 9,827 363 113 197 457 26,093

Pedicurist/Manicurist 1 9,827 363 113 197 457 8,698

Masseuse 1 9,827 363 113 197 457 8,698

Other Personnel 1 9,827 363 113 197 457 8,698

Total monthly 78,618 2,743 69,582

TOTAL YEARLY 943,414 32,915 834,982

Table 6.22 Salaries expense year 5

NOTE 12: TAXES & LICENCES

Particulars Amount

SEC verification P 40

Notarize Articles of partnership 500

Filing Fee 1,668

Documentary Stamp Tax 10, 000

Barangay Clearance 800

Community Stamp Tax 500

Sanitary permit fee 900

License fee 4,000

Garbage collection Fee 2,500

Occupational Tax 360

health Clearance 905

Plumbing Inspection Fee 1,500

Electrical Inspection Fee 850

Sign Board permit 400

TIN registration fee 615

Print receipts & invoices(20 booklet) 3,600

Total P 19,138

Table 6.23 Taxes & Licenses

NOTE 13: ADVERTISING EXPENSE

Advertising expense is subject to 2.6% inflation rate.

Year
Particulars Year 1 Year 2 Year 3 Year 4 5

Flyers P 270 277 284 292 299

Tarpaulin 700 718 737 756 776

Total advertising expense P 970 995 1,021 1,048 1,075

Table 6.24 Advertising Expense

NOTE 14: DEPRECIATION EXPENSE

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Depreciation on Equipment P 29,959 29,959 29,959 29,959 29,959

Depreciation on F&F 23,696 23,696 23,696 23,696 23,696

Depreciation on Leasehold
Improvements 76,000 76,000 76,000 76,000 76,000
 129,65 129,65
TOTAL DEP'N P 129,655 129,655 129,655 5 5

Table 6.25 Depreciation Expense

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Davao Light P 105,204 107,939 110,745 113,625 116,579

PLDT 6,143 6,303 6,466 6,635 6,807

Water District 23,940 24,562 25,201 25,856 26,529

Total Utilities expense P 135,286 138,804 142,413 146,116 149,915

NOTE 15: UTILITIES EXPENSE

Utilities expense is subject to 2.6% increase for the succeeding years.

Table 6.26 Utilities Expense

NOTE 16: TRAINING EXPENSE

Training expense is expense incurred by the business to train employees.

Training Expense Year 1 Year 2 Year 3 Year 4 Year 5

P 10,000 10,260 10,527 10,800 11,081

Table 6.27 Training Expense

NOTE 17: PROFESSIONAL FEES

The business will only professional fees for the accountant.

Professional Fees Year 1 Year 2 Year 3 Year 4 Year 5

Accountant P 12,000 12,312 12,632 12,961 13,298

Table 6.28 Professional FeesX

NOTE 18: WITHHOLDING TAX

Withholding tax is a tax withhold from the salaries of employees and rent of commercial space.

Withholding Tax Year 1 Year 2 Year 3 Year 4 Year 5

Rent P 1,250 1,283 1,316 1,350 1,385

Salaries 26,501 28,038 29,576 31,289 32,915

Total P 27,751 29,320 30,892 32,639 34,301

Table 6.29 Withholding Tax

NOTE 19: SSS, PHIC &HDMF CONTRIBUTION

The contribution are deductions to the employees salaries.

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

SSS Employer Contribution P 64,608 64,608 68,141 68,141 53,762

Philhealth 9,600 10,800 10,800 10,800 10,800

PAG-IBIG Contribution 17,027 17,470 17,028 18,390 18,868

Total Contribution P 91,235 92,878 95,968 97,331 83,431

Table 6.30 SSS, PHIC & HDMF Contribution

NOTE 20: 13TH MONTH PAY

13TH Month Pay Year 1 Year 2 Year 3 Year 4 Year 5

P 70,947 72,791 74,684 76,626 78,618

 Table 6.31 13th Month PayX

E. ACCOUNTING AND CONTROL PLAN

 REVENUE CYCLE

Figure 6.1 Revenue Cycle

BRIEF EXPLANATION OF THE CHART

 Revenue cycle presents the steps from the time when the entity receives payment from customers.

Upon entering the grooming shop, the customer will be accommodated by the store in-charge. The

store in-charge will give a customer sheet form to the customer tofill out the necessary information

about their dogs and will give a list of services to the customer. When the customer has already

chosen a service for their dog, the store in-charge may calculate fees for payment. The customer will

then pay to the cashier and the cashier will prepare two copies of official receipt, one will be given to

the customer and the other one will be filed as a copy. After the issuance, the customer receipt will be

used to claim their dogs when the service is already done for their dogs.
 PAYROLL SYSTEM

EXPENDITURE CYCLE
 after approval, three copies
employees will provide of Purchase Order will be
Purchase Requisition for provided. (vendor, one of
approval the partners, and store-in-
charge

the store-in -charge will

count and update the Receiving of the Order/
inventory and report to the payment by the partners
partners

the Partners will check if

the inventory records
corresponds to the actual
count of the inventory

BRIEF EXPLANATION OF THE CHART:

Before purchasing of the materials needed for the business operations, the partners must first

agree with what to purchase and how much will they spend for the purchases. Since the employees are the

ones who are present in actual operations, they will be the one to demand the needed materials. They must

provide a purchase requisition. The partners will decide if they will approve the PR and then if it is

approved, the partners will provide Purchase order. The partners or one of the partners (assigned by the

other partners) will pay for the order and then the store in charge will count the inventory and update the

inventory records. The partners will also check if the inventory records correspond with the actual count

of inventory.
ACCOUNTING POLICY:

Segregation of Duties

The store in-charge is responsible for accommodating the customers and will manually check and

recount the inventories. The inventories will be kept in the storage room by the other personnel. The

cashier is responsible for the receipt of cash and issuing official receipts to customers.

Supervision

The managers/partners will be the one who will supervise the employees. They are also the ones who

purchases things that are needed in the store and checking its quality and quantity.

Accounting Records

Only the managers are able to gain access to the accounting records of the business such as journals,

ledgers and financial statements. These documents are confidential because competitors may gain

knowledge about the business strengths and weaknesses if accounting records are held public.

Access Control

The store will have two padlocks; one will be given to the store in-charge and the other to the other

personnel. In this way, the fraudulent act to be committed by the employees will be minimized.

Transaction Authorization

Since the store in-charge is responsible for the checking and recounting of the available

inventories, there should an authorization from the managers to purchase inventory and other things to be

purchased by the business.

 F. FINANCIAL ANALYSIS

HORIZONTAL ANALYSIS

Horizontal analysis is the comparison of financial information over a series of reporting periods.

It will assist on how to analyze complete trend of operational results on a companys financial condition

over a review period.

This analysis will compare two periods where the earlier period is the base year and the later

periods are compared with the base period for it to show changes in the amounts of corresponding

financial statements through peso and percentage form for the forecasted year as shown in the tables

below.

Example: 1,321,442.25 1,120,698.60 = 200,743.85

200,743.85 1,120,698.60 = 17.91%

Other percentages in this section are computed by the same formula.

 HORIZONTAL ANALYSIS BALANCE SHEET YEAR 1 AND 2

Furry Tales Grooming

Statement of Financial Position

YEAR 2 YEAR 1 DIFFERENCE PERCENTAGE

ASSETS

CURRENT ASSET:

Cash 1,321,442.45 1,120,698.60 200,743.85 17.91%

Prepaid rent 50,000.00 50,000.00 0.00 0.00%

Inventory 80,791.27 78,743.93 2,047.34 2.60%

TOTAL CURRENT ASSETS 1,452,233.72 1,249,442.53 202,791.19 16.23%

NON CURENT ASSET:

Equipment 104,628.25 104,628.25 0.00 0.00%

Less: Accumulated
Depreciation 59,918.27 29,959.13 29,959.13 100.00%

Furniture and Fixture 158,860.00 158,860.00 0.00 0.00%

Less: Accumulated
Depreciation 47,391.86 23,695.93 23,695.93 100.00%

Leasehold Improvements 760,000.00 760,000.00 0.00 0.00%

Less: Accumulated
Depreciation 152,000.00 76,000.00 76,000.00 100.00%

TOTAL NON CURRENT ASSETS 764,178.12 893,833.19 -129,655.06 -14.51%

TOTAL ASSETS 2,216,411.85 2,143,275.72 73,136.13 3.41%

LIABILITIES AND PARTENER'S EQUITY

CURRENT LIABILITIES:

Income Tax Payable 34,786.64 27,962.14 6,824.51 24.41%

 VAT Payable 17,005.51 16,516.24 489.27 2.96%

SSS/PHIC/HDMF
contribution(ER) 7,254.69 7,070.85 183.84 2.60%

Withholding Vat 40,831.52 39,796.80 1,034.72 2.60%

TOTAL CURRENT LIABILITIES 99,878.36 91,346.03 8,532.33 9.34%

PARTNER'S EQUITY:

A, Capital 211,653.34 205,192.97 6,460.38 3.15%

B, Capital 211,653.34 205,192.97 6,460.38 3.15%

c, Capital 211,653.34 205,192.97 6,460.38 3.15%

D, Capital 211,653.34 205,192.97 6,460.38 3.15%

E, Capital 211,653.34 205,192.97 6,460.38 3.15%

F, Capital 211,653.34 205,192.97 6,460.38 3.15%

G, Capital 211,653.34 205,192.97 6,460.38 3.15%

H, Capital 211,653.34 205,192.97 6,460.38 3.15%

I, Capital 211,653.34 205,192.97 6,460.38 3.15%

J, Capital 211,653.34 205,192.97 6,460.38 3.15%

TOTAL PARTNERS' EQUITY 2,116,533.44 2,051,929.68 64,603.76 3.15%

TOTAL LIABILITIES AND

EQUITY 2,216,411.80 2,143,275.71 73,136.09 3.41%

Table 6.32 Horizontal Analysis Balance Sheet Year 1 and 2

From Year 1 to Year 2, there is a relatively small increase in total assets which is only 3.41%. The

small increase in total assets is due to a very low increase of inventory which is only 2.60% and high

percentage of accumulated depreciation of the non-current assets which totaled to 14.51%. The total

liability increased by 9.34% and an increase of partners equity by only 3.15% which results to a very low

increase in the total liability and partners equity by 3.41%.

 HORIZONTAL ANALYSIS BALANCE SHEET YEAR 2 AND 3

Furry Tales Grooming

Statement of Financial Position

YEAR 3 YEAR 2 DIFFERENCE PERCENTAGE

ASSETS

CURRENT ASSET:

Cash 1,509,603.31 1,321,442.45 188,160.86 14.24%

Prepaid rent 50,000.00 50,000.00 0.00 0.00%

 Inventory 82,891.85 80,791.27 2,100.57 2.60%

TOTAL CURRENT ASSETS 1,642,495.16 1,452,233.72 190,261.44 13.10%

NON CURENT ASSET:

Equipment 104,628.25 104,628.25 0.00 0.00%

Less: Accumulated
Depreciation 89,877.40 59,918.27 29,959.13 50.00%

Furnitures and Fixture 158,860.00 158,860.00 0.00 0.00%

Less: Accumulated
Depreciation 71,087.79 47,391.86 23,695.93 50.00%

Leasehold Improvements 760,000.00 760,000.00 0.00 0.00%

Less: Accumulated
Depreciation 228,000.00 152,000.00 76,000.00 50.00%

TOTAL NON CURRENT ASSETS 634,523.06 764,178.12 -129,655.06 -16.97%

TOTAL ASSETS 2,277,018.22 2,216,411.85 60,606.37 2.73%

LIABILITIES AND PARTENER'S EQUITY

CURRENT LIABILITIES:

Income Tax Payable 67,489.87 34,786.64 32,703.23 94.01%

VAT Payable 18,320.04 17,005.51 1,314.53 7.73%

SSS/PHIC/HDMF
contribution(ER) 7,443.31 7,254.69 188.62 2.60%

Withholding Vat 41,893.14 40,831.52 1,061.62 2.60%

TOTAL CURRENT LIABILITIES 135,146.36 99,878.36 35,268.00 35.31%

PARTNER'S EQUITY:

A, Capital 214,187.18 211,653.34 2,533.83 1.20%

B, Capital 214,187.18 211,653.34 2,533.83 1.20%

C, Capital 214,187.18 211,653.34 2,533.83 1.20%

D, Capital 214,187.18 211,653.34 2,533.83 1.20%

E, Capital 214,187.18 211,653.34 2,533.83 1.20%

 F, Capital 214,187.18 211,653.34 2,533.83 1.20%

G, Capital 214,187.18 211,653.34 2,533.83 1.20%

H, Capital 214,187.18 211,653.34 2,533.83 1.20%

I, Capital 214,187.18 211,653.34 2,533.83 1.20%

J, Capital 214,187.18 211,653.34 2,533.83 1.20%

TOTAL PARTNERS' EQUITY 2,141,871.78 2,116,533.44 25,338.34 1.20%

TOTAL LIABILITIES AND EQUITY 2,277,018.14 2,216,411.80 60,606.34 2.73%

Table 6.33 Horizontal Analysis Balance Sheet Year 2 and 3

From Year 2 and Year 3, the increase in total assets is 0.68% lower than the last year. This is

because the cash was also decreased by 3.67% in the current year, the inventory had no change and the

accumulated depreciation for the non-current assets had increased by 2.46%. There was a huge increase in

total liabilities due to very high increase in income tax payable. Also, partners equity had decreased. By

this, increase in total liabilities and partners equity is only 2.73% for the current year.

HORIZONTAL ANALYSIS BALANCE SHEET YEARS 3 TO 4

Furry Tales Grooming

Statement of Financial Position

YEAR 4 YEAR 3 DIFFERENCE PERCENTAGE

ASSETS

CURRENT ASSET:

Cash 1,717,811.49 1,509,603.31 208,208.18 13.79%

Prepaid rent 50,000.00 50,000.00 0.00 0.00%

Inventory 85,047.04 82,891.85 2,155.19 2.60%

TOTAL CURRENT ASSETS 1,852,858.53 1,642,495.16 210,363.37 12.81%

NON CURENT ASSET:

Equipment 104,628.25 104,628.25 0.00 0.00%

 Less: Accumulated
Depreciation 119,836.53 89,877.40 29,959.13 33.33%

Furnitures and Fixture 158,860.00 158,860.00 0.00 0.00%

Less: Accumulated
Depreciation 94,783.72 71,087.79 23,695.93 33.33%

Leasehold Improvements 760,000.00 760,000.00 0.00 0.00%

Less: Accumulated
Depreciation 304,000.00 228,000.00 76,000.00 33.33%

TOTAL NON CURRENT

ASSETS 504,868.00 634,523.06 -129,655.06 -20.43%

TOTAL ASSETS 2,357,726.52 2,277,018.22 80,708.30 3.54%

LIABILITIES AND PARTENER'S EQUITY

CURRENT LIABILITIES:

Income Tax Payable 103,424.74 67,489.87 35,934.87 53.24%

VAT Payable 19,736.18 18,320.04 1,416.14 7.73%

SSS/PHIC/HDMF
contribution(ER) 7,636.84 7,443.31 193.53 2.60%

Withholding Vat 42,982.36 41,893.14 1,089.22 2.60%

TOTAL CURRENT LIABILITIES 173,780.11 135,146.36 38,633.75 28.59%

PARTNER'S EQUITY:

A, Capital 218,394.63 214,187.18 4,207.45 1.96%

B, Capital 218,394.63 214,187.18 4,207.45 1.96%

C, Capital 218,394.63 214,187.18 4,207.45 1.96%

D, Capital 218,394.63 214,187.18 4,207.45 1.96%

E, Capital 218,394.63 214,187.18 4,207.45 1.96%

F, Capital 218,394.63 214,187.18 4,207.45 1.96%

 G, Capital 218,394.63 214,187.18 4,207.45 1.96%

H, Capital 218,394.63 214,187.18 4,207.45 1.96%

I, Capital 218,394.63 214,187.18 4,207.45 1.96%

J, Capital 218,394.63 214,187.18 4,207.45 1.96%

TOTAL PARTNERS' EQUITY 2,183,946.29 2,141,871.78 42,074.52 1.96%

TOTAL LIABILITIES AND

EQUITY 2,357,726.41 2,277,018.14 80,708.27 3.54%

Table 6.34 Horizontal Analysis Balance Sheet Year 3 and 4

From Year 3 and Year 4, the total assets increased by 0.81% compared to last year, this very low

increase is due to high percentage of accumulated depreciation, and a decrease of 0.45% of the total cash

for the current year. Total liabilities have decreased by 6.72% compared from last year. This is a result of

a significant decrease in the income tax payable. Partners equity has a small increase. And is a result of a

low increase in total liabilities and partners equity.

 HORIZONTAL ANALYSIS BALANCE SHEET YEARS 4 AND 5

Furry Tales Grooming

Statement of Financial Position

YEAR 5 YEAR 4 DIFFERENCE PERCENTAGE

ASSETS

CURRENT ASSET:

Cash 1,969,769.34 1,717,811.49 251,957.85 14.67%

Prepaid rent 50,000.00 50,000.00 0.00 0.00%

Inventory 87,258.26 85,047.04 2,211.22 2.60%

TOTAL CURRENT ASSETS 2,107,027.60 1,852,858.53 254,169.07 13.72%

NON CURENT ASSET:

Equipment 104,628.25 104,628.25 0.00 0.00%

Less: Accumulated
Depreciation 149,795.67 119,836.53 29,959.13 25.00%

Furnitures and Fixture 158,860.00 158,860.00 0.00 0.00%

Less: Accumulated
Depreciation 118,479.65 94,783.72 23,695.93 25.00%

Leasehold Improvements 760,000.00 760,000.00 0.00 0.00%

 Less: Accumulated
Depreciation 380,000.00 304,000.00 76,000.00 25.00%

TOTAL NON CURRENT ASSETS 375,212.93 504,868.00 -129,655.06 -25.68%

TOTAL ASSETS 2,482,240.54 2,357,726.52 124,514.01 5.28%

LIABILITIES AND PARTENER'S EQUITY

CURRENT LIABILITIES:

Income Tax Payable 148,783.95 103,424.74 45,359.21 43.86%

VAT Payable 21,261.78 19,736.18 1,525.61 7.73%

SSS/PHIC/HDMF
Contribution(ER) 7,835.40 7,636.84 198.56 2.60%

Withholding Vat 44,099.90 42,982.36 1,117.54 2.60%

TOTAL CURRENT LIABILITIES 221,981.03 173,780.11 48,200.92 27.74%

PARTNER'S EQUITY:

A, Capital 226,025.93 218,394.63 7,631.31 3.49%

B, Capital 226,025.93 218,394.63 7,631.31 3.49%

c, Capital 226,025.93 218,394.63 7,631.31 3.49%

D, Capital 226,025.93 218,394.63 7,631.31 3.49%

E, Capital 226,025.93 218,394.63 7,631.31 3.49%

F, Capital 226,025.93 218,394.63 7,631.31 3.49%

G, Capital 226,025.93 218,394.63 7,631.31 3.49%

H, Capital 226,025.93 218,394.63 7,631.31 3.49%

I, Capital 226,025.93 218,394.63 7,631.31 3.49%

J, Capital 226,025.93 218,394.63 7,631.31 3.49%

TOTAL PARTNERS' EQUITY 2,260,259.35 2,183,946.29 76,313.06 3.49%

TOTAL LIABILITIES AND

EQUITY 2,482,240.38 2,357,726.41 124,513.97 5.28%

Table 6.35 Horizontal Analysis Balance Sheet Year 4 and 5

 From Year 4 to Year 5, the total assets have increased, it is already 5.28%. Their total liability has

decreased by 0.85% only. And its total liabilities and partners equity had also increased because its

partners equity also increased.

HORIZONTAL ANALYSIS INCOME STATEMENT

Showing changes between years by peso and percentage form will help the owners management

to evaluate the overall performance of the enterprise specifically its objectives and will help to analyze

unexpected increases and decreases in the financial statement.

HORIZONTAL ANALYSIS INCOME STATEMENTS FROM YEARS 1 TO 5

The service income of the enterprise has a stable increase of 7.73% each year which would mean

that the business is gaining profit every year. And that it will be able to compensate all the expenses of the

business each year.

The gross profit also had a stable increase of 7.73% each year after the second which is only

2.96%. This would mean that the enterprise can withstand all the expenses that it will incur. The total

operating expenses is also increasing each year except for the last where it decreases by 1% compared to

the year before it. And even if the net income is declining after the third year, the business is still liquid.
 HORIZONTAL ANALYSIS INCOME STATEMENTS FROM YEARS 1 TO 2

Furry Tales Grooming, Hotel & Spa

Statement of Financial Performance

YEAR 2 YEAR 1 DIFFERENCE PERCENTAGE

Service Revenue 2,230,980.57 2,070,900.00 160,080.57 7.73%

Less: Service Cost 530,429.50 419,275.57 111,153.93 26.51%

Gross Profit 1,700,551.07 1,651,624.43 48,926.64 2.96%

Less:

Operating Expenses

Rental Expense 307,800.00 300,000.00 7,800.00 2.60%

Salaries Expense 776,449.50 758,006.15 18,443.35 2.43%

Repairs & Maintenance 10,260.00 10,000.00 260.00 2.60%

Taxes and Licenses 19,635.58 19,137.99 497.59 2.60%

Advertising Expense 995.22 970.00 25.22 2.60%

Depreciation Expense 129,655.07 129,655.07 - 0.00%

Utilities Expense 138,803.92 135,286.47 3,517.45 2.60%

Training expense 10,260.00 10,000.00 260.00 2.60%

 Professional Fees 12,312.00 12,000.00 312.00 2.60%

Withholding Tax 29,320.22 27,750.75 1,569.47 5.66%

SSS/PHIC/HDMF
contribution(ER) 92,877.90 91,235.19 1,642.71 1.80%

13th month pay 72,791.25 70,946.64 1,844.61 2.60%

Total Operating Expense 1,601,160.67 1,571,732.62 29,428.05 1.87%

Net Income/Loss Before Tax 99,390.40 79,891.82 19,498.59 24.41%

Less: Income Tax Expense 34,786.64 27,962.14 6,824.51 24.41%

Net Income/Loss After Tax 64,603.76 56,313.51 8,290.25 14.72%

Table 6.36 Horizontal Analysis Income Statement From Year 1 to 2

HORIZONTAL ANALYSIS INCOME STATEMENTS FROM YEARS 2 TO 3

 Furry Tales Grooming, Hotel & Spa

Statement of Financial Performance

DIFFERENC
Year 3 Year 2 E PERCENTAGE

2,403,435.3 2,230,980.5
Service Revenue 7 7 172,454.80 7.73%

Less
: Service Cost 571,431.70 530,429.50 41,002.20 7.73%

1,832,003.6 1,700,551.0
Gross Profit 7 7 131,452.60 7.73%

Less:

Operating Expenses

Rental Expense 315,802.80 307,800.00 8,002.80 2.60%

Salaries Expense 794,908.01 776,449.50 18,458.51 2.38%

Repairs & Maintenance 10,526.76 10,260.00 266.76 2.60%

Taxes and Licenses 20,146.10 19,635.58 510.53 2.60%

Advertising Expense 1,021.10 995.22 25.88 2.60%

Depreciation Expense 129,655.07 129,655.07 0.00 0.00%

Utilities Expense 142,412.82 138,803.92 3,608.90 2.60%

Training expense 10,526.76 10,260.00 266.76 2.60%

Professional Fees 12,632.11 12,312.00 320.11 2.60%

Withholding Tax 30,891.78 29,320.22 1,571.55 5.36%

SSS/PHIC/HDMF contribution(ER) 95,968.32 92,877.90 3,090.42 3.33%

13th month pay 74,683.83 72,791.25 1,892.57 2.60%

1,639,175.4 1,601,160.6
Total Operating Expense 5 7 38,014.79 2.37%

Net Income/Loss Before Tax 192,828.21 99,390.40 93,437.81 94.01%

Less Income Tax expense 67,489.87 34,786.64 32,703.23 94.01%

:

Net Income/Loss After Tax 125,338.34 64,603.76 60,734.58 94.01%

Table 6.37 Horizontal Analysis Income Statement from Year 2 to 3

HORIZONTAL ANALYSIS INCOME STATEMENTS FROM YEARS 3 TO 4

Furry Tales Grooming, Hotel & Spa

Statement of Financial Performance

YEAR 4 YEAR 3 DIFFERENCE PERCENTAGE

2,589,220. 2,403,435.
Service Revenue 92 37 185,785.55 7.73%

615,603. 571,431.
Less: Service Cost 37 70 44,171.67 7.73%

1,973,617. 1,832,003.
Gross Profit 55 67 141,613.88 7.73%

Less:
Operating Expenses

324,013. 315,802.
Rental Expense 67 80 8,210.87 2.60%

815,459. 794,908.
Salaries Expense 80 01 20,551.79 2.59%

10,800. 10,526.
Repairs & Maintenance 46 76 273.70 2.60%

20,669. 20,146.
Taxes and Licenses 90 10 523.80 2.60%

1,047. 1,021.
Advertising Expense 64 10 26.55 2.60%

129,655. 129,655.
Depreciation Expense 07 07 0.00 0.00%

146,115. 142,412.
Utilities Expense 56 82 3,702.73 2.60%

10,800. 10,526.
Training expense 46 76 273.70 2.60%

12,960. 12,632.
Professional Fees 55 11 328.43 2.60%

32,638. 30,891.
Withholding Tax 64 78 1,746.86 5.65%

SSS/PHIC/HDMF 97,330. 95,968.

contribution(ER) 95 32 1,362.63 1.42%

76,625. 74,683.
13th month pay 60 83 1,941.78 2.60%

1,678,118. 1,639,175.
Total Operating Expense 29 45 38,942.84 2.38%

295,499. 192,828.
Net Income/Loss Before Tax 26 21 102,671.04 53.24%

103,424. 67,489.
Less: Income Tax expense 74 87 35,934.87 53.24%

Net Income/Loss After Tax 192,074. 125,338. 66,736.18 53.24%

 52 34

Table 6.38 Horizontal Analysis Income Statement from Year 3 to 4

HORIZONTAL ANALYSIS INCOME STATEMENTS FROM YEARS 4 TO 5

Furry Tales Grooming, Hotel & Spa

Statement of Financial Performance

YEAR 5 YEAR 4 DIFFERENCE PERCENTAGE

Service Revenue P 2,789,367.70 2,589,220.92 200,146.78 7.73%

Less: Service Cost 663,189.51 615,603.37 47,586.14 7.73%

Gross Profit 2,126,178.19 1,973,617.55 152,560.64 7.73%

Less:

Operating Expenses

Rental Expense 332,438.03 324,013.67 8,424.36 2.60%

Salaries Expense 834,982.10 815,459.80 19,522.30 2.39%

Repairs & Maintenance 11,081.27 10,800.46 280.81 2.60%

Taxes and Licenses 21,207.32 20,669.90 537.42 2.60%

Advertising Expense 1,074.88 1,047.64 27.24 2.60%

Depreciation Expense 129,655.07 129,655.07 0.00 0.00%

Utilities Expense 149,914.56 146,115.56 3,799.00 2.60%

Training expense 11,081.27 10,800.46 280.81 2.60%

Professional Fees 13,297.52 12,960.55 336.97 2.60%

Withholding Tax 34,300.60 32,638.64 1,661.96 5.09%

SSS/PHIC/HDMF contribution(ER) 83,430.69 97,330.95 -13,900.26 -14.28%

13th month pay 78,617.87 76,625.60 1,992.27 2.60%

Total Operating Expense 1,701,081.18 1,678,118.29 22,962.88 1.37%

Net Income/Loss Before Tax 425,097.01 295,499.26 129,597.75 43.86%

Less: Income Tax Expense 148,783.95 103,424.74 45,359.21 43.86%

276,313 192,074.
Net Income/Loss After Tax P .06 52 84,238.54 43.86%

Table 6.39 Horizontal Analysis Income Statement From Year 4 to 5

 VERTICAL ANALYSIS

Vertical Analysis is the percentage analysis of the relationship of each component in a financial

statement to a total within the statement.

Vertical Analysis in Balance Sheet

As shown in the table, it has been evident that the current asset has greater percentage compared

to the non-current asset. The percentage trend for cash is also uniformly increasing every year but some

factors stayed stagnant like prepaid rent and inventory under current assets. Looking at the non-current

asset, equipment, furniture and fixtures, and leasehold improvements has the same trend. It is slowly

decreasing but for the depreciations, it is very evident that it is increasing per year since it is

accumulating.

Using vertical analysis in the balance sheet makes it easier to spot annual changes and this

analysis can compare all the sizes of any business. The percentage in this balance sheet is computed by

dividing the asset account to the total asset.

 Furry Tales Grooming, Hotel & Spa

Statement of Financial Performance

CURRENT ASSET: Year 1 % Year 2 %

1,120,698.6 1,321,442.4
Cash P 0 52.29% P 5 59.62%

Prepaid rent 50,000.00 2.33% 50,000.00 2.26%

Inventory 78,743.93 3.67% 80,791.27 3.65%

1,249,442.5 1,452,233.7
TOTAL CURRENT ASSETS 3 58.30% 2 65.52%

NON CURENT ASSET:

Equipment 104,628.25 4.88% 104,628.25 4.72%

Less: Accumulated Depreciation 29,959.13 1.40% 59,918.27 2.70%

Furnitures and Fixture 158,860.00 7.41% 158,860.00 7.17%

Less: Accumulated Depreciation 23,695.93 1.11% 47,391.86 2.14%

Leasehold Improvements 760,000.00 35.46% 760,000.00 34.29%

Less: Accumulated Depreciation 76,000.00 3.55% 152,000.00 6.86%

TOTAL NON CURRENT ASSETS 893,833.19 41.70% 764,178.12 34.48%

2,143,275.7 100.00 2,216,411.8 100.00

TOTAL ASSETS P 2 % 5 %

Table 6.40 Vertical Analysis Balance Sheet Year 1 and 2

Furry Tales Grooming, Hotel & Spa

 Statement of Financial Performance

% of % Year
CURRENT ASSET: Year 3 year 3 Year 4 4

1509603.3 1717811.4
cash P 1 66.30% P 9 72.86%

Prepaid rent 50000 2.20% 50000 2.12%

Inventory 82891.85 3.64% 85047.04 3.61%

1642495.1 1852858.5
TOTAL CURRENT ASSETS 6 72.13% 3 78.59%

NON CURENT ASSET:

Equipment 104628.25 4.59% 104628.25 4.44%

Less: Accumulated Depreciation 89877.4 3.95% 119836.53 5.08%

Furnitures and Fixture 158860 6.98% 158860 6.74%

Less: Accumulated Depreciation 71087.79 3.12% 94783.72 4.02%

Leasehold Improvements 760000 33.38% 760000 32.23%

Less: Accumulated Depreciation 228000 10.01% 304000 12.89%

TOTAL NON CURRENT ASSETS 634523.06 27.87% 504868 21.41%

2277018.2 100.00 2357726.5 100.00

TOTAL ASSETS 2 % 2 %

Table 6.41 Vertical Analysis Balance Sheet Year 3 and 4

Furry Tales Grooming, Hotel & Spa

Statement of Financial Performance

% year
CURRENT ASSET: Year 5 5

cash P 1969769. 79.35

 34 %

Prepaid rent 50000 2.01%

Inventory 87258.26 3.52%

2107027. 84.88
TOTAL CURRENT ASSETS 6 %

NON CURENT ASSET:

104628.2
Equipment 5 4.22%

149795.6
Less: Accumulated Depreciation 7 6.03%

Furnitures and Fixture 158860 6.40%

118479.6
Less: Accumulated Depreciation 5 4.77%

30.62
Leasehold Improvements 760000 %

15.31
Less: Accumulated Depreciation 380000 %

375212.9 15.12
TOTAL NON CURRENT ASSETS 3 %

2482240. 100.00
TOTAL ASSETS 54 %

Table 6.42 Vertical Analysis Balance Sheet Year 5

Vertical Analysis in Income Statementin Years 1 to 5

 For the Year 1, it is estimated that the business will maximize 75% of its total profit leading to

79.75% in gross profit. For years 2 to 5, it has been estimated that it will have an increase of 5% per year,

explaining to why the percentages for service cost and profit is constant. For operating expense, it is

decreasing every year due to the increase of service revenue and some operating expenses are fixed like

rental expense, taxes and licenses, advertising expense, depreciation expense, training expense,

professional fees, withholding tax, SSS/PHIC/HDMF contribution(ER). Net Income percentage is

increasing every year since the Net Income/Loss after tax is increasing.

Furry Tales Grooming, Hotel & Spa

Statement of Financial Performance

Year 1 % year 1 Year 2 % year 2

Service Revenue P 2,070,900.00 100.00% P 2,230,980.57 100.00%

Less: 419,275.57 20.25% 530,429.50 23.78%

Gross Profit 1,651,624.43 79.75% 1,700,551.07 79.75%

Less:

Operating Expenses:

Rental Expense 300,000.00 14.49% 307,800.00 13.80%

Salaries Expense 758,006.15 36.60% 776,449.50 34.80%

Repairs & Maintenance 10,000.00 0.48% 10,260.00 0.46%

Taxes and Licenses 19,137.99 0.92% 19,635.58 0.88%

Advertising Expense 970.00 0.05% 995.22 0.04%

Depreciation Expense 129,655.07 6.26% 129,655.07 5.81%

Utilities Expense 142,030.82 6.86% 138,803.92 6.22%

Training expense 10,000.00 0.48% 10,260.00 0.46%

Professional Fees 12,000.00 0.58% 12,312.00 0.55%

Withholding Tax 27,750.75 1.34% 29,320.22 1.31%

SSS/PHIC/HDMF contribution(ER) 91,235.19 4.41% 92,877.90 4.16%

13th month pay 70,946.64 3.43% 72,791.25 3.26%

Total Operating Expense 1,571,732.62 75.90% 1,601,160.67 71.77%

Net Income/Loss Before Tax 79,891.82 3.86% 99,390.40 4.46%

Less: 27,962.14 1.35% 34,786.64 1.56%

Net Income/Loss After Tax 51,929.68 2.51% 64,603.76 2.90%

Table 6.43 Vertical Analysis Income Statement Year 1 and 2

 Furry Tales Grooming, Hotel & Spa

Statement of Financial Performance

% year % year
Year 3 3 Year 4 4

2403435.36 100.00 2589220.92 100.00

Service Revenue P 8 % P 2 %

571431.701 615603.372
Less: 9 23.78% 4 23.78%

1832003.66
Gross Profit 6 76.22% 1973617.55 76.22%

Less:

Operating Expenses

324013.672
Rental Expense 315802.8 13.14% 8 12.51%

815459.799
Salaries Expense 794908.006 33.07% 8 31.49%

10800.4557
Repairs & Maintenance 10526.76 0.44% 6 0.42%

20146.1027 20669.9014
Taxes and Licenses 6 0.84% 3 0.80%

1047.64420
Advertising Expense 1021.09572 0.04% 9 0.04%

Depreciation Expense 129655.07 5.39% 129655.07 5.01%

142412.824 146115.557
Utilities Expense 4 5.93% 8 5.64%

Training expense 10526.76 0.44% 10800.4557 0.42%

 6

12960.5469
Professional Fees 12632.112 0.53% 1 0.50%

30891.7788 32638.6402
Withholding Tax 3 1.29% 8 1.26%

97330.9451
SSS/PHIC/HDMF contribution(ER) 95968.32 3.99% 2 3.76%

74683.8252 76625.6046
13th month pay 1 3.11% 6 2.96%

1639175.45 1678118.29
Total Operating Expense 5 68.20% 5 64.81%

192828.211
Net Income/Loss Before Tax 3 8.02% 295499.255 11.41%

67489.8739 103424.739
Less: 4 2.81% 3 3.99%

125338.337 192074.515
Net Income/Loss After Tax 3 5.21% 8 7.42%

Table 6.44 Vertical Analysis Income Statement Year 3 and 4

 Furry Tales Grooming, Hotel & Spa

Statement of Financial Performance

Year 5 % year 4

Service Revenue P 2789367.699 100.00%

Less: 663189.5131 23.78%

Gross Profit 2126178.186 76.22%

Less:

Operating Expenses

Rental Expense 332438.0283 11.92%

Salaries Expense 834982.1002 29.93%

Repairs & Maintenance 11081.26761 0.40%

Taxes and Licenses 21207.31887 0.76%

Advertising Expense 1074.882958 0.04%

Depreciation Expense 129655.07 4.65%

Utilities Expense 149914.5623 5.37%

Training expense 11081.26761 0.40%

Professional Fees 13297.52113 0.48%

Withholding Tax 34300.60013 1.23%

SSS/PHIC/HDMF contribution(ER) 83430.68889 2.99%

13th month pay 78617.87039 2.82%

Total Operating Expense 1701081.178 60.98%

Net Income/Loss Before Tax 425097.0078 15.24%

Less: 148783.9527 5.33%

Net Income/Loss After Tax 276313.0551 9.91%

Table 6.45 Vertical Analysis Income Statement Year 5

LIQUIDITY RATIOS

Liquidity ratios are used to determine the ability of a company to convert assets into cash

to meet its short-term debt obligations. Its ratios show the relationship of a firms cash and other

current assets to its current liabilities. It shows the number of times the short-term debt

obligations are covered by the cash and other current assets. Generally, the higher the liquidity

ratios are, the higher the margin of safety that the company possesses to meet its current

liabilities.If the value is greater than 1, it means that the short-term obligations are fully covered.

Examples of liquidity ratios include current ratio and quick ratio (acid test ratio).

CURRENT RATIO

The current ratio, also known as the working capital ratio, is a more reliable indicator of a

companys ability to pay its current liabilities than is working capital, and is much easier to

compute. The current ratio measures a companys current assets against its current liabilities that

indicate a companys ability to meet short-term debt obligations. This expresses the 'working
capital' relationship of current assets available to meet the company's current obligations. It

measures whether or not a firm has enough resources to pay its debts over the next 12 months.

The formula for the current ratio is as follows:

Current Ratio = Current Assets Current Liabilities

Year 1 Year 2 Year 3 Year 4 Year 5

Current 1,249,442.5 1,452,233.7 1,642,495.1 1,852,858.5 2,107,027.6
Assets 3 2 6 3 0
Current
Liabilitie
s 91,346.03 99,878.36 135,146.36 173,780.11 221,981.03
Current
Ratio 13.67812624 14.54002368 12.15345467 10.6620863 9.491926405
Table 6.46 Current Ratio
 Current Ratio Graph
18.75

15

11.25 Current Ratio Graph

7.5

3.75

0
Year1 Year 2 Year 3 Year 4 Year 5

Figure 6.4 Current Ratio Graph

Based on the graph presented above, the enterprise is experiencing high current ratios.

During year 2, the ratio increased implying that the enterprise has a higher amount of current

assets when compared to current liabilities and should be able to pay off its short-term debt.

From year 3 to 5, the current ratios are decreasing but it does not mean that the enterprise would

not be able to pay off its debts. This is because liquidity ratios greater than 1 indicate that the

company is in good financial health and it is less likely fall into financial difficulties.

QUICK RATIO
The quick ratio, also known as the acid-test ratio, is a liquidity ratio that is more refined

and more stringent than the current ratio. Instead of using current assets in the numerator, the

quick ratio uses a figure that focuses on the most liquid assets. The main asset left out is

inventory, which can be hard to liquidate at market value in a timely fashion. The quick ratio is

more conservative than the current ratio and focuses on cash, short-term investments and

accounts receivable. It expresses the true working capital relationship of its cash, accounts
receivables, prepaid and notes receivables available to meet the company's current obligations.

The formula is as follows:

Quick Ratio = (Cash & Equivalents + Short-Term Investments + Accounts Receivable)

Current Liabilities

Year 1 Year 2 Year 3 Year 4 Year 5

Quick 1,170,698.6 1,371,442.4 1,559,603.3 1,767,811.4 2,019,769.3
Assets 0 5 1 9 4
Current
Liabilitie
s 91,346.03 99,878.36 135,146.36 173,780.11 221,981.03
Quick
Ratio 12.81608626 13.73112704 11.54010593 10.17269174 9.09883759

Table 6.47 Quick ratio

Quick Ratio Graph

17.5

14

10.5 Quick Ratio Graph

3.5

0
Year 1 Year 2 Year 3 Year 4 Year 5

Figure 6.5 Quick Ratio Graph

 Based on the graph presented above, the enterprise is experiencing high quick ratios.

During year 2, the ratio increased but from year 3 to 5 the ratio decreased. With high quick

ratios, the enterprise will be able to meet its short-term obligations with its assets. This is because

liquidity ratios greater than 1 indicate that the company is in good financial health and it is less

likely fall into financial difficulties.

ASSET MANAGEMENT RATIO

Fixed Asset Ratio:

Net Fixed
Fixed Asset Ratio=
Asset

Sales

Year 1 Year 2 Year 3 Year 4 Year 4

Fixed Assets
2.32 2.92 3.79 5.13 7.43
Turnover

2,230,980.5 2,589,220.9
Sales 2,070,900.00 2,403,435.37 2,789,367.70
7 2

Net Fixed Asset 893,833.19 764,178.12 634,523.06 504,868.00 375,212.93

Table 6.48 Fixed Asset Ratio

 As shown in the table above, the fixed asset turnover ratio is increasing every year which is

desirable. It means that year by year, the business is not overinvesting in the property, plant and

equipment. For each unit of sales, there is less money absorbed in the fixed assets. This shows that the

business utilizes the fixed assets intensively to generate sales and that the business is efficient in

managing their fixed assets.

PROFITABILITY RATIO

Operating Margin:

OperatingMargin= Operating profit/Net Sales

Year 1 Year 2 Year 3 Year 4 Year 5

Operating
Margin 4.18% 4.46% 8.02% 11.41% 15.24%

Operating Profit 86,636.16 99,390.40 192,828.21 295,499.26 425,097.01

Net Sales 2,070,900.00 2,230,980.57 2,403,435.37 2,589,220.92 2,789,367.70

Table 6.49 Operating Margin

 The 3.86% represents the income from operations which take into account the costs incurred that

is unrelated to the performance of the service. The increasing operating margin means that the business is

generating more profit and minimizing costs. It also means that the business is becoming efficient.

Gross Margin:

Gross Profit/

Gross Margin = Net Sales

Year 1 Year 2 Year 3 Year 4 Year 5

Gross Margin 75.57% 76.22% 76.22% 76.22% 76.22%

1,651,624.4 1,700,551.0 1,832,003.6 1,973,617.5 2,126,178.1

Gross Profit 3 7 7 5 9

2,070,900.0 2,230,980.5 2,403,435.3 2,589,220.9 2,789,367.7

Net Sales 0 7 7 2 0

Table 6.50 Gross Margin

The high gross margin means that the income generated from the sale of services before

deducting operating expenses is far higher than the cost of service. It means that it has a higher margin for

the expenses that will be incurred in the operations. The difference is the percentage of cost of service

from the service revenue.

Ratio of Net Sales to Assets:

Operating profit/Net
Operating Margin= Sales

Year 1 Year 2 Year 3 Year 4 Year 5

Ratio Of Net Sales To

assets 0.97 1.02 1.07 1.12 1.15

2,179,843.7 2,317,372.3
Average Total assets 2,143,275.72 8 2,246,715.03 7 2,419,983.53

Net Sales 2,070,900.00 2,230,980.5 2,403,435.37 2,589,220.9 2,789,367.70

 7 2

Table 6.51 Ratio of Net Sales to Assets

Based on the computed ratio of net sales to assets, the ratio is increasing. This means, the

business is using their assets well to produce such sales. Since the ratio increases 0.05 every year, it

indicates that the revenue increases because of the ways of the management to promote the sales of the

business. On its first year, the ratio shows 0.97, because the assets were not used effectively for it shows

that the total assets of 2,143,275 only generated sales of 2,070,900 which is lower compared to the total

assets.

Rate Earned on Equity:

Rate Earned
on Equity= Net Income/Average Total Equity

Year 1 Year 2 Year 3 Year 4 Year 5

Rate Earned
on Equity 2.73% 3.10% 5.89% 8.29% 11.42%

Average Total 2,084,231.5 2,129,202.6 2,317,372.2 2,419,983.3

Equity 2,056,313.51 6 1 7 9

Net Income 51,929.68 64,603.76 125,338.34 192,074.52 276,313.06

Table 6.52 Rate Earned on Equity

The rate earned on stockholders equity from year one to year five is increasing. It shows that

from the invested capital of the partners, it earned 2.5% on its first year of operation, 3.1% for the second

year, 5.9 % for the third year, 8.3% for the fourth year, and 11.4% on its fifth year. So if a partner invested

200,000, the partner would gain 5,000 on its first year and 22,800 on its fifth year.

Rate Earned on Total Assets:

Rate Earned on Total

Assets= Net Income + Interest
 Average Total Assets

Year 1 Year 2 Year 3 Year 4 Year 5

Rate Earned on Total

Assets 0.03 0.03 0.06 0.08 0.11

Interest 0.00 0.00 0.00 0.00 0.00

Net Income 56,313.51 64,603.76 125,338.34 192,074.52 276,313.06

2,251,098.8 2,424,367.3
Average Total Assets 2,150,020.06 2,185,407.87 6 2,321,756.20 5

Table 6.53 Rate Earned on Total Assets

The rate earned on total assets is increasing every year. For the first year, it earned 2.4 %, 3% on

its second year, 5.6% on its third year, 8.3% on its fourth year and 11.42% on its fifth year. Since the

partners of the business did not borrow money, it didnt incur cost for the interest.

Return on Investment= Net Income

Long Term Liability + Equity

Year 1 Year 2 Year 3 Year 4 Year 5

Rate Earned on Total

Assets 2.74% 3.10% 5.89% 8.29% 11.42%

Net Income 56,313.51 64,603.76 125,338.34 192,074.52 276,313.06

Long Term Liability 0.00 0.00 0.00 0.00 0.00

2,133,586.4 2,424,367.2
Equity 2,056,313.51 2,088,615.39 4 2,321,756.10 2

Table 6.54 Return on Investment

The rate of return on investment is also increasing. It indicates the investment of the partners they
incurred generated sales that is increasing every year. It increased from the 2.53% on the first year to fifth
year which is 11.42%
CAPITAL BUDGETING

Cash Payback Period

The cash payback period determines the length of time the business will recover its costs.

Initial Investment 2,625, 246.97

Year Net Cash Flow Cumulative Net Cash Flow

1 1,120,698.60 1,120,698.60

2 1,321,442.45 2,442,141.05

3 1,509,603.31 3,951,744.36

4 1,717,811.49 5,669,555.85

5 1,969,769.34 7,639,325.19

Table 6.55 Cash Payback Period

Year unrecovered cost at the start of the year

Cash Payback Period=
Cash flow during the year

1,091,000.14
Cash Payback Period=1+
2,625,246.97
 Cash Payback Period=1.42 years

The cash payback period shows that each partner will take 1.42 years to get back their initial

investment. The period computed showed that the business is acceptable because it will recover the costs

in less than two (2) years.

Net Present Value

The net present value is the difference between the present value and the initial investment.

Year Net Cash Flow PV IF @ 10% Present Value

1 1,104,182.35 0.909 1,003,701.756

2 1,224,550.58 0.826 1,011,478.779

3 1,383,113.62 0.751 1,038,718.329

4 1,552,934.66 0.683 1,060,654.373

5 1,763,102.15 0.621 1,094,886.435

Total Present Value 5,209,439.672

Initial Investment Cost (2,625, 246.97)

Net Present Value 2,404,192.70

Table 6.56 Net Present Value

The net present value computed is positive and that means the projected earnings generated by a
project exceed the costs. Positive net present value also means that this investment proposal is profitable
and acceptable.
 Internal Rate of Return

The internal rate of return is where the initial investment and net present value equates to zero.

Year Net Cash Flow PV IF @ 45% Present Value

1 1,120,698.60 0.6494 727781.6708

2 1,321,442.45 0.4217 557252.2812

3 1,509,603.31 0.2738 413329.3863

4 1,717,811.49 0.1778 305426.8829

5 1,969,769.34 0.1154 227311.3818

2231101.603

Year Net Cash Flow PV IF @ 46% Present Value

1 1,120,698.60 0.6452 723074.7367

2 1,321,442.45 0.4162 549984.3477

3 1,509,603.31 0.2685 405328.4887

4 1,717,811.49 0.1732 297524.9501

5 1,969,769.34 0.1118 220220.2122

2196132.735

Table 6.57 Internal Rate of Return

[ [ Investment Cost P 2,625,246.97 ]

]
x 0.45 P 2,638,791.65 P 13,544.68
0.01 P310,205.66
0.46 P2, 382,585.99
 x P 13,544.68
=
0.01 P 310,205.66

(0.01)(P 13,544.68)
x=
310,205.66

135.5468
x=
310,205.66

x=0.0004366354846

IRR=0.46+ x

IRR=0.46+0.0004366354846

IRR=0.4604366355 46.04

The estimated internal rate of return computed is 46.04 % and it is better than that of the required

rate of return which is 10 %. It means that the investment proposal is attractive.

 CHAPTER VII

SUMMARY, CONCLUSION AND RECOMMENDATION

Summary

This feasibility study was primarily conducted for the purpose of determining whether

this business venture would be attainable and would be an effective income-generating enterprise

that offers dog grooming, hotel and spa within Davao City. The group decided to conduct this

study through the arising concerns of pet owners with their current pet grooming salons; this is

why the group decided to take advantage of the situation by taking corrective action through this

feasibility study. This is to provide pet owners with a better choice in considering a pet salon.

The study was conducted at downtown of Davao City. The respondents under this survey

were people residing at this area whom are pet owners. The instrument used for collecting data

for this study was through the use of questionnaires. These surveys are for the people who own a

pet dog at the same time, the researchers were benchmarking the competitor's customers and

sales. Since dog owners are the target market of the business, the group decided to focus within

this type of population to narrow down the demand and supply analysis.

Based on the study, the business will yield a profit from the very first year of its

operations which results to a one year and four months payback period . The profit will continue

to increase every year since it is estimated that the revenue will increase 5% for the succeeding

years. The operating costs are subject to inflation rate. The partners will have an equal

contribution and in turn will share in the distribution of profits or losses in proportion to their

contribution and drawing of the partners will start on the third year of operations.
Conclusion

More than half of the respondents answered that they had availed dog grooming, hotel

and spa services which gives the business a better chance of achieving its maximum potential.

Since not all of the customers avail the services in a pet grooming salon, Furry Tales' created

packages and services based on the surveys gathered. The business came up with a full dog

grooming package, semi-full dog grooming package, individual services and other services. Full

dog grooming package includes bathing, ear cleaning, teeth cleaning, hair cutting/trimming, nail

trimming, and trimming of sanitary area. Semi-full dog grooming package includes bathing and

hair cutting/trimming. Individual services include flea and tick removal, flea and tick treatment,

and detangling/dematting. Other services include dog hotel, day care for dogs, dog massage, dog

owner's massage, pawdicure, and manicure/pedicure.

The researchers study had established that at the current time, it is feasible to put up this

kind of business venture because the business generates income on the first year and is

increasing for the next four years. Another proof of its feasibility is the short payback period that

the business will recover its investment. The ratios also presents or reflect positive results about

its profitability and its efficiency of the use of business resources. The internal rate of return of

46% means that the business is attractive for those who are interested to invest in the business.
Recommendation

The study shows that the financial aspect needs improvement to achieve a longer

business lifespan. The researchers highly encourage applying for non-life insurance for the

security of the dogs, assets, building and other important documents or files. If the business

income continues to increase every year, it is also probable to branch out within and outside

Davao City, with this, the business needs a bigger amount of money that they can obtain through

applying for a loan.

The researchers also noticed that almost all of Furry Tales competitors get their supplies

in this one particular pet grooming salon, Lil Hroes Enterprise. The next researchers should be

able to find their own direct supplier to cut down costs in purchasing supplies and the business

could also resell it.

To improve the marketing strategy, Furry Tales could dispense loyalty cards to every

customer after availing P300.00 and above worth of service. In every 5 logo stickers that they

get, they would have a freebie to be used or to be accumulated. These recommendations are for

the betterment of the business and would serve as a guide to the next researchers who would to

pursue the study.

 APPENDICES

Research Methodology

The research applied in this study includes survey questionnaire, which targeted the dog

owners in Davao City and research from different articles that discusses about dog grooming

were also considered in the data gathering. The proponents have also observed the business

operations of their existing competitors.

In analyzing the data, quantitative research is used through the formula in the financial

aspect. It aims to construct statistical model to clearly show the data needed. The group utilized

the gathered data by using it as a basis to know the demand and supply for the business.
Survey questionnaire
Furry Tales grooming, hotel and spa services
Greetings! We would like to conduct a survey regarding your activities when availing the
services of a dog grooming service business and your response about the study of Furry Tales
Groomers, a dog grooming, hotel and spa services business. This survey is solely for the
requirement of our subject, Management Consultancy. Rest assured that any information
gathered herein will be kept strictly confidential. Thank you for your time and cooperation.
Age: ____________
Sex: ____Male ____Female

Have you tried availing the services of any dog grooming, hotel, or basic training
business?
____Yes ____No

If yes, have you tried any of the businesses listed below? (You may choose more than
one)
o One Fab Pooch
o Lil' Heroes Enterprise-Pet shop
o Designerdogs Salon and Suites
o Others please specify: ____________
How often do you visit in a month? ______________
What time of the day do you usually want your dogs to be groomed?
Rank the following factors that will influence you in availing the services of a grooming
center. 1- Highest 4-Lowest
o Price
o Services Offered
o Accessibility
o Ambiance
o Others: _______
 How much do you usually spend for this/these service(s)?
o 200-400 601-900
401-600 901 and above
What services do you usually avail?
o Bathe
o Teeth Cleaning
o Ear Cleaning
o Tick & Flea Removal
o Nail Cutting
o Detangling
o Hotel
o Pawdicure
o Hair Dye
o Hair Cut Others: _____________
SURVEY RESULTS
REFERENCES
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philippines/.

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bir-philippines/.

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Pagibig Contribution Table 2017. (2017, January 10). Retrieved from

 https://philpad.com/pagibig-contribution-table/.

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over-rr-14-2001/.

Davao Light an Aboitiz Company. (2017, January 27). Retrieved from

http://www.davaolight.com/index.php/pages/rates.

Davao City Water District. (2017, January 27). Retrieved from

http://www.davao-water.gov.ph/web/web-responsive/.

Pet Grooming Tips. (2016, December 19). Retrieved from

https://pets.wahl.com/grooming-tips/nails/.

Puppies Care Grooming Dog. (2016, December 19). Retrieved from

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How to remove a tick from dog & cat. (2016, Decemver 19). Retrieved from

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Sanitary Trim. (2016, December 19). Retrieved from

http://www.you-can-do-it-dog-grooming.com/sanitarytrim.html.
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http://www.dogchicago.com

Aroma pet spa. (2016, Decemver 19). Retrieved from

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Davao del Sur 1EE0. (2017, January 24).Retrieved from

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City Vet Reminds Pet Owners. (2017, January 24).Retrieved from

http://davaotoday.com/main/todays-news-to-go/city-vet-reminds-pet-owners-on-

importance-of-vaccination/.

CURRICULUM VITAE
BANCACO, KAREN JOY B.

0909-631-0722 Didtaras, Lambayong, Sultan Kudarat

kjbbancaco@gmail.com

Education

Tertiary Ateneo de Davao University 2013-2017

E. Jacinto Street, Davao City 8016
Bachelor of Science in Accounting Technology

Secondary Notre Dame of Tacurong College, Inc. 2009-2013

Lapu-Lapu Street, Tacurong City

Elementary Saint Paul Learning Center 2003-2009

Poblacion, Lambayong , Sultan Kudarat

Affiliations and Work Experiences

Inigo-Lupon Accounting and Auditing Office June-October 2016 (160 hrs.)

Intern

Junior Philippine Institute of Accountants AdDU Local Chapter 2013-2014

Member

Association of Accounting Technology Students AdDU Local Chapter 2015-2017

Member

Association of Accounting Technology Students Creative Team 2016-2017

Member

Fourth Year Accountancy Students Executive Council Productions 2016-2017

Member

BAYLOSIS, JOVELYN P.
 0926-574-1814 Poblacion, Magsaysay, Davao del Sur
jovelynbaylosis@gmail.com

Education

Tertiary Ateneo de Davao University 2013-2017

E. Jacinto Street, Davao City 8016
Bachelor of Science in Accounting Technology

Secondary Holy Cross of Magsaysay 2009-2013

Poblacion, Magsaysay, Davao del Sur
2ndAcademic Excellence Awardee

Elementary Magsaysay Central Elementary School 2003-2009

Poblacion, Magsaysay, Davao del Sur
1st Honorable Mention

Affiliations and Work Experiences

Inigo-Lupon Accounting and Auditing Office June-October 2016 (160 hrs.)

Intern

Association of Accounting Technology Students AdDU Local Chapter 2015-2017

Member

Association of Accounting Technology Students Creative Team 2016-2017

Member

Ateneo Film Circle 2016-2017

Member

BELICARIO, ALLYN VAN F.

 0948-163-7157 Blk 8 Lot 16 Bronze St., Mineral Village
avfbelicario@gmail.com Bajada, Davao City

Education

Tertiary Ateneo de Davao University 2013-2017

E. Jacinto Street, Davao City 8016
Bachelor of Science in Accounting Technology

Secondary Davao City National High School 2009-2013

F. Torres St., Davao City

Elementary Thompson Christian School 2003-2009

Lopez Jaena St., Davao City
Batch Salutatorian

Affiliations and Work Experiences

Civil Service Examination Passer October 2015

Professional

Certified Bookkeeper September 2016

National Institute of Accounting Technician

Credo Auditing and Management Consultancy June-October 2016 (160 hrs.)

Intern

Association of Accounting Technology Students AdDU Local Chapter 2015-2017

Member

Association of Accounting Technology Students Executive Committee 2016-2017

Member

Campus Liturgical Ministry 2016-2017

Member

Fourth Year Accountancy Students Executive Council Productions 2016-2017

Member

Fourth Year Accountancy Students Executive Council Logistics 2016-2017

Member

BETIA, CHILYN GELA MAE C.

 0910-400-9694 Mlang, North Cotabato
chilynbetia@gmail.com

Education

Tertiary Ateneo de Davao University 2013-2017

E. Jacinto Street, Davao City 8016
Bachelor of Science in Accounting Technology

Secondary Mlang National High School 2009-2013

Rizal St., Mlang, North Cotabato

Elementary Mlang Pilot Elementary School 2003-2009

Mlang, North Cotabato

Affiliations and Work Experiences

Civil Service Examination Passer April 2016

Professional

Certified Bookkeeper September 2016

National Institute of Accounting Technician

Inigo-Lupon Accounting and Auditing Office June-October 2016 (160 hrs.)

Intern

Association of Accounting Technology Students AdDU Local Chapter 2015-2017

Member

Association of Accounting Technology Students Creative Team 2016-2017

Member

Ateneo Film Circle Productions Technical 2016-2017

Member

CATAMCO, JULIA NEL G.

 0977-497-8166 008 McArthur Street
Catamcojulianel@yahoo.com Kidapawan City

Education

Tertiary Ateneo de Davao University 2013-2017

E. Jacinto Street, Davao City 8016
Bachelor of Science in Accounting Technology

Secondary Kidapawan City National High School 2009-2013

Kidapawan City, North Cotabato

Elementary Kidapawan City Pilot Elementary School 2003-2009

Kidapawan City, North Cotabato

Affiliations and Work Experiences

Balagot CPAs & Co. June-October 2016 (160 hrs.)

Intern

Association of Accounting Technology Students AdDU Local Chapter 2015-2017

Member

Fourth Year Accountancy Students Executive Council 2016-2017

Finance Head

CATAN, SUSMITHA DAWN M.

 0907-168-7116 De Guzma St., Bulakanon
catansusmithadawn@gmail.com Makilala, North Cotabato

Education

Tertiary Ateneo de Davao University 2013-2017

E. Jacinto Street, Davao City 8016
Bachelor of Science in Accounting Technology

Secondary Notre Dame of Makilala, Inc. 2009-2013

Poblacion, Makilala, North Cotabato
Top 10

Elementary Makilala Central Elementary School 2003-2009

Poblacion, Makilala, North Cotabato
Batch Salutatorian

Honors and Awards

Deans Lister AY 2013-2014 (1st Semester)

Ateneo de Davao University

Affiliations and Work Experiences

Certified Bookkeeper September 2016

National Institute of Accounting Technician

Bulano Accounting and Auditing Firm June-October 2016 (160 hrs.)

Intern

Association of Accounting Technology Students AdDU Local Chapter 2016-2017

Member

Association of Accounting Technology Students Executive Committee 2016-2017

Member

Fourth Year Accountancy Students Executive Council Finance 2016-2017

Member

Ateneo Film Circle 2016-2017

Logistics Head

CORTES, OHANNA JEAN L.

 0932-860-6552 Bldg. 3 Unit 126 One Oasis Condominium
ohannajean@gmail.com Eco West Drive, Ecoland, Davao City

Education

Tertiary Ateneo de Davao University 2013-2017

E. Jacinto Street, Davao City 8016
Bachelor of Science in Accounting Technology

Secondary Davao Christian High School 2009-2013

V. Mapa Street, Davao City
With Honors

Elementary Davao Christian High School 2003-2009

V. Mapa Street, Davao City
With Honors

Honors and Awards

Installation Arts August 15, 2015

1st Runner-Up

Affiliations and Work Experiences

Bulano Accounting and Auditing Firm June-October 2016 (160 hrs.)

Intern

Association of Accounting Technology Students AdDU Local Chapter 2016-2017

Member

Association of Accounting Technology Students Executive Committee 2015-2017

Member

Ateneo Film Circle - Logistics 2016-2017

Member

Fourth Year Accountancy Students Executive Council Finance 2016-2017

Member

Junior Philippine Institute of Accountants AdDU Local Chapter 2013-2014

Member

COSARE, MARIAH FLORELAINE L.

 0995-031-3310 69-B Belen Rd., Pampanga
mflcosare@gmail.com Lanang, Davao City

Education

Tertiary Ateneo de Davao University 2013-2017

E. Jacinto Street, Davao City 8016
Bachelor of Science in Accounting Technology

Secondary University Immaculate Concepcion 2009-2013

J.P. Laurel, Bajada, Davao City
With Honors

Elementary University Immaculate Concepcion 2003-2009

J.P. Laurel, Bajada, Davao City

Affiliations and Work Experiences

Chinabank Davao Buhangin June-October 2016 (160 hrs.)

Intern

Association of Accounting Technology Students AdDU Local Chapter 2015-2017

Member

Association of Accounting Technology Students Executive Committee 2016-2017

Member

Ateneo Film Circle - Logistics 2016-2017

Member

Fourth Year Accountancy Students Executive Council Finance 2016-2017

Member

Junior Philippine Institute of Accountants AdDU Local Chapter 2013-2014

Member

Youth For Christ 2015-2017

Member

CRUZ, CHIELSEA MAE L.

 0995-031-3311 Blk 9 Lot 17 Bronze St., Mineral Village
chielseacruz@gmail.com Bajada, Davao City

Education

Tertiary Ateneo de Davao University 2013-2017

E. Jacinto Street, Davao City 8016
Bachelor of Science in Accounting Technology

Secondary University Immaculate Concepcion 2009-2013

J.P. Laurel, Bajada, Davao City
With Honors

Elementary University Immaculate Concepcion 2003-2009

J.P. Laurel, Bajada, Davao City

Honors and Awards

Deans Lister AY 2013-2014 (1st Semester)

Ateneo de Davao University

Affiliations and Work Experiences

Chinabank Davao Bajada June-October 2016 (160 hrs.)

Intern

Association of Accounting Technology Students AdDU Local Chapter 2015-2017

Member

Association of Accounting Technology Students Executive Committee 2016-2017

Member

Ateneo Film Circle - Logistics 2016-2017

Member

Fourth Year Accountancy Students Executive Council Finance 2016-2017

Member

Junior Philippine Institute of Accountants AdDU Local Chapter 2013-2014

Member

LAMBAN, JUDE DENZEL VENCE M.

 0932-310-5405 369 Dona Aurora Street
jdvmlamban@gmail.com Kabacan, North Cotabato

Education

Tertiary Ateneo de Davao University 2012-2017

E. Jacinto Street, Davao City 8016
Bachelor of Science in Accounting Technology

Secondary University of Southern Mindanao-University Laboratory School 2008-2012

Kabacan, North Cotabato

Elementary Enhanced Childhood Learning Center, Inc. 2002-2008

Diego Silang St., Kabacan, North Cotabato

Honors and Awards

Outstanding Accountancy Students Executive Council Member 2014-2015

Ateneo de Davao University

Affiliations and Work Experiences

Civil Service Exam Passer April 11, 2016

Professional

Department of Public Works and Highways Regional Office XI June-October 2016 (160 hrs.)
Intern

Accountancy Students Executive Council 2015-2016

3rd Year BSAT Representative

Association of Accounting Technology Students AdDU Local Chapter 2015-2017

Member

Fourth Year Accountancy Students Executive Council Productions Program 2014-2015

Member

General Assembly of Class Presidents 2016-2017

Member