Post on 02-Jun-2018
transcript
8/10/2019 Feasibility-travel agency
1/35
Safe and Sound Travel
AgencyFeasibility Study
8/10/2019 Feasibility-travel agency
2/35
The Business Profile
Name of business: Safe and Sound Travel Agency Business logo:
Location of the business: Araneta Center, Cubao, Quezon Ci
Project rationale:
8/10/2019 Feasibility-travel agency
3/35
Market Study
Service Description Offers ticketing on international and domestic airline compa
passport processing, and visa assistance.
The service is directed to bringing together the airline compand the prospective client for the benefit of all parties.
Target market is market is would be travellers who are:o Traveling with a group;
o Not sure where to go;
o Traveling internationally.
8/10/2019 Feasibility-travel agency
4/35
Market Study
Year Population
Market
Acceptability
Rate
Frequency of
Availing
Annually
Annual Dem
2010
919,169
34%
1
312,5172011 934,795 34% 1 317,830
2012 950,686 34% 1 323,233
2013 966,848 34% 1 328,728
2014 983,284 34% 1 334,317
Demand Situation Historical Demand
8/10/2019 Feasibility-travel agency
5/35
Market Study
To compute for the estimated projected demand, leastmethod was used. The formula for the least square method is shown
Least Square Method:
Formula : Yc = a + Yi -1
a = (Yn-Yc)/(N-1)
Where:
Yc = initial value (1st year)
Yn = final value (last year)
N = number of years
Yi = value for the year past
8/10/2019 Feasibility-travel agency
6/35
Market Study
Demand Situation Projected Demand
Year A Yi-1 Yc
2015 5,450 334,317 339,767
2016
5,450
339,767
345,217
2017
5,450
345,217
350,667
2018 5,450 350,667 356,117
2019 5,450 356,117 361,567
8/10/2019 Feasibility-travel agency
7/35
Market Study
Supply Situation Historical Supply
Year Demand Situation Rate Annual Su
2010
312,517 92%
287,516
2011 317,830 92% 292,404
2012 323,233 92% 297,374
2013 328,728 92% 302,430
2014 334,317 92% 307,572
8/10/2019 Feasibility-travel agency
8/35
Market Study
Supply Situation Projected Supply
Year DemandSupply Situation
RateAnnual Sup
2015 339,767 92% 312,585
2016
345,217
92%
317,599
2017 350,667 92% 322,614
2018 356,117 92% 327,628
2019 361,567 92% 332,642
8/10/2019 Feasibility-travel agency
9/35
Market Study
Market Share Analysis
Market Share for Five Years
Year PopulationAnnual
Demand
Annual
Supply
Demand
Gap
Target
Percentage
Target A
Market
2015 1,000,000 339,767 312,586 27,181 7% 1,90
2016
1,017,000
345,217
317,600
27,617 7.7 %
2,12
2017 1,034,289 350,667 322,614 28,053 8.47% 2,37
2018 1,051,872 356,117 327,628 28,489 9.32% 265
2019 1,069,753 361,567 332,642 28,925 10.25% 296
8/10/2019 Feasibility-travel agency
10/35
Market Study
Demand-Supply Situation
Demand-Supply Gap for Five Years
Year Population Annual Demand Annual Supply Demand
2015
1,000,000
339,767 312,586
27,18
2016 1,017,000 345,217 317,600 27,61
2017 1,034,289 350,667 322612 28,053
2018
1,051,872 356,117 327,62828,48
2019 1,069,753 361,567 332,64228,925
8/10/2019 Feasibility-travel agency
11/35
Market Study
Appropriate Marketing Program or Strategy
Product-provide services with affordable prices; accredited by theDepartment of Tourism.
Price
Domestic Ticketing: P300 commission per ticket
International Ticketing: P800 commission per ticket
Passport Processing: P300 regular; P500 rush Visa assistance- P500
Place- Within Araneta Center, Cubao, Quezon City
Promotion-Ribbon Cutting, flyers, promotional posters, tarpaulinand the like.
8/10/2019 Feasibility-travel agency
12/35
Technical Study
Service Process Operations
The business must submit a letter of application to the airline companthey are dealing with.
The business can now be able to get the tickets that will be issued depon the reservation and the quantity of customers.
Instead of going to an airline company to apply for an agent, the businjust have to fax it.
For reservation purposes, the client can transact through phones or ththe computer rather than going to the agency.
8/10/2019 Feasibility-travel agency
13/35
Technical Study
Automated Reservation The airlines have developed computer software system called Compu
Reservation System (CRS).
This software provides instant information of flights schedules, class fservice and pricing in addition to hotel accommodations and other ser
8/10/2019 Feasibility-travel agency
14/35
Technical Study
Machinery and Equipment Requirements
Office Equipment- Computer, Printer, Fax Machine, etc.
Furniture and Fixtures- Office Table, Couch, Shelf, ReservatCounter, etc
8/10/2019 Feasibility-travel agency
15/35
Total Cost
Equipment and Supplies Quantity Unit Cost Total Cost Yearly Depreciatio
Office Equipment
Computer 4 19,000.00 76,000.00 13,680.00
Computer Software 1 50,000.00 50,000.00 9,000.00
Printer
1
6,800.00
6,800.00
1,224.00
Fax Machine 1 11,800.00 11,800 2,124
Television 1 33,000.00 33,000.00 5940.00
Air Conditioner 3 8,000.00 24,000.00 4,320.00
Water Dispenser 1 5,000.00 5,000.00 900.00
Furniture and Fixtures
Office Table 2 5,100.00 10,200.00 1,836.00
Clerical Chair 3 1,600.00 4,800.00 864.00
Customers chair 2 1,100.00 2,200.00 396.00
Couch 2 12,900.00 25,800.00 4,644.00
Shelf 2 11,200.00 22,400.00 4,032.00
Reservation Counter 1 10,000.00 10,000.00 1,800.00
Center Table 1 13,400.00 13,400.00 2,412.00
Table 1 24,600.00 24,600.00 4,428.00
Mini Vault 1 5,000.00 5,000.00 900.00
Total 325,000.00 58,500.00
8/10/2019 Feasibility-travel agency
16/35
Technical Study
Office Layout
8/10/2019 Feasibility-travel agency
17/35
8/10/2019 Feasibility-travel agency
18/35
Technical Study
Utility Requirements
Electricity-for purposes of estimating expenses, we separatecost into a variable component and a fixed component.
Water-consumption-is less than 10 cubic meters per month
Telecommunication-PLDT Subscription Plan, Postpaid-Glo
Postpaid-Smart
8/10/2019 Feasibility-travel agency
19/35
Projected Utilities Expense
Utilities
2015
2016
2017
2018
2
Electrical Fixed P62,375 P63,622 P64,895 P66,192 P6
Water
2,272
2,295
2,318
2,341
2
Telecommunications
37,164
37,164
37,164
37,164
3
Annual Utilities
Expense
P106,011
P107,281
P108,576
P109,897
P1
Technical Study
8/10/2019 Feasibility-travel agency
20/35
Technical Study
Project CostCosts Amoun
Leasehold Improvements
Materials
Labor
Overhead
200,000.00
150,000.00
80,000.00 P43
Office Equipment 20
Furniture and Fixtures 11
Office Supplies 1
Initial Operating Expense
Business Registration
Prepaid Rent (2 months)
Marketing and Advertising
Hiring and Training
Total
20,365.00
77,600.00
45,000.00
5,000.00
14
Total Initial Cost P91
Cash Reserved for Operations 10
Total Project Cost P1,01
8/10/2019 Feasibility-travel agency
21/35
Management and Legal Study
PARTNERS
MANAGER
RESERVATIONOFFICER
ACCOUNTANT LIAISON
Organizational Chart
8/10/2019 Feasibility-travel agency
22/35
Management and Legal Study
Job Specification and Functions
Manager-Plans, directs and coordinates the operations business. Duties and responsibilities is generalized sformulating business policies, managing daily operationplanning and implementing strategic management in opfinancial, marketing, human resource and administrative asp
Liaison Officer-Establishes and maintains mutual undersand cooperation as between the company and other enwhom the company transacts with.
Accountant-In-charge of the general accounting functions preparations of reports that are vital to the business.
8/10/2019 Feasibility-travel agency
23/35
Management and Legal Study
On-call Computer Technician-A skilled professional who cquality technical support. Responsible for maintenacomputers.
On-call Electrician-Responsible for any electrical problemsthe office.
On-call Janitor-Responsible for the cleanliness and orderl
the office.
8/10/2019 Feasibility-travel agency
24/35
Management and Legal Study
Company Rules and Policies
Personnel Policies
The management will set qualification for the different job position.
Every applicant should undergo screening, examination, and interview.
After careful selection, those who have been hired will undergo training aorientation.
Generally, employee are allowed and paid only for 8 hours of work. Employees are required to work on their respective schedule hour.
A one-hour break shall be given between the working hours.
In case of absent employee/s, the manager will take the duties and respon
The officers and employees will be paid every 15thand 30thof the month.
The cut-off for the computation of payroll is on the 10th and 25thday of the
8/10/2019 Feasibility-travel agency
25/35
Management and Legal Study
Service Policies
The store will be opened at 8:00 am and will be close at 4:00 pm.
Cleanliness inside the company should be maintained.
All information critical to the operation of the business are adequatelyprotected and secured.
Collection Policies
The payments made by the customers are non-refundable for theunconsumed/unused tickets.
Credits are not allowed.
8/10/2019 Feasibility-travel agency
26/35
Management and Legal Study
Financial Policies Loans will be acquired if the company needs additional cash either for op
expense or purchase of additional equipment.
Payment of interest will be made at the end of each month. It assumed thaper annum rate of 12% is the interest rate and the principal is payable in o
Equipment Policies Equipment that is not working will be subject to repair immediately
New equipment will be acquired 6 months before the old asset/s are obso
fully-depreciated. New equipment will be acquired when the old equipment are damaged o
be repaired.
Old equipment will be disposed when the equipment is obsolete or fully-depreciated.
Old equipment will be disposed when the equipment is damaged and canrepaired.
8/10/2019 Feasibility-travel agency
27/35
Management and Legal Study
Legal and Taxation Aspects]
The business will comply with all the necessary legal requirewith an estimate cost of P20,365.00.
The business will pay an income tax according to the provisNIRC (30% regular corporate income tax).
The business is also required to pay a value-added tax of 12%gross receipts and must file the return not later than the 25thfollowing the end of each month or 20thday following the eneach quarter.
8/10/2019 Feasibility-travel agency
28/35
Financial Study
Schedule 2015 2016 2017 2018
Commission Income 5.1 1,179,669 1,318,451 1,473,192 1,645,697
Service Income 5.2 361,664 404,212 451,652 504,539
Total Income 5.3 1,541,333 1,722,663 1,924,845 2,150,236
Operating Expenses
Salary Expense 6.1 839,600 839,600 839,600 839,600
Rent Expense 7 465,600 465,600 465,600 465,600
Depreciation Expense 9.4 144,500 144,500 144,500 144,500
Office Supplies Expense 10.2 12,046 11,195 11,364 11,589
Utilities Expense 11.5 106,011 107,281 108,576 109,897
Advertising Expense 12.2 45,000 45,900 46,818 47,754
Permit and Licenses 13.2 20,365 1,100 1,100 1,100
Miscellaneous Expense 14 70,000 65,000 65,000 65,000
Interest Expense 16 60,000 60,000 60,000 60,000
Net Income (221,788) (17,513) 182,286 405,196
Income Tax Expense (Benefit) 17 (88,715) (7,005) 72,914 162,078
Net Income after Taxes (133,073) (10,508) 109,372 243,117
SAFE AND SOUND TRAVEL AGENCYComparative Statement of Comprehensive Income
For the Periods Ended, December 31, 20XX
SAFE AND SOUND TRAVEL AGENCY
8/10/2019 Feasibility-travel agency
29/35
Abariso,Capital
Cruz, CapitalDalangin,
CapitalEspiritu,Capital
Fernandez,Capital
Mateo, C
Capital, 01/01/15 200,000 200,000 200,000 200,000 200,000 2
Net Income, 2015 (22,179) (22,179) (22,179) (22,179) (22,179) (
Capital, 01/01/16 177,821 177,821 177,821 177,821 177,821 1
Net Income, 2016 (1,751) (1,751) (1,751) (1,751) (1,751)
Capital, 01/01/17 176,070 176,070 176,070 176,070 176,070 1
Net Income, 2017 18,229 18,229 18,229 18,229 18,229
Capital, 01/01/18 194,298 194,298 194,298 194,298 194,298 1
Net Income, 2018 40,520 40,520 40,520 40,520 40,520
Capital, 01/01/19 234,818 234,818 234,818 234,818 234,818 2
Net Income, 2019 65,388 65,388 65,388 65,388 65,388
Capital, 31/12/19 300,206 300,206 300,206 300,206 300,206 3
SAFE AND SOUND TRAVEL AGENCYComparative Statement of Partners EquityFor the Periods Ended, December 31, 20XX
SAFE AND SOUND TRAVEL AGENCY
8/10/2019 Feasibility-travel agency
30/35
2015 2016 2017 2018
Cash flow from Operating Activities
Gross Receipts 1,541,333 1,722,663 1,924,845 2,15Salary Paid (750,359) (750,359) (750,359) (750
Rent Paid (465,600) (465,600) (465,600) (465Office Supplies Paid (12,680) (11,150) (11,373) (11
Utilities Paid (106,011) (107,281) (108,576) (109Advertising Paid (45,000) (45,900) (46,818) (47Permit and Licences Paid (20,365) (1,100) (1,100) (1
Miscellaneous Paid (70,000) (65,000) (65,000) (65Advances to Lessor (77,600) - - SSS Contribution Paid - (17,440) (17,440) (17
PhilHealth Contribution Paid - (6,600) (6,600) (6Pag-IBIG Contribution Paid - (3,600) (3,600) (3Withholding Tax Paid - (61,601) (61,601) (61
Income Tax Paid - - - (22
Cash flow from Investing Activities
Purchase of Equipment (206,600) - - Purchase of Furniture and Fixtures (118,400) - -
Purchase of Leasehold Improvements (430,000) - -
Cash Flow from Financing Activities
Original Investment 1,200,000 - - Issuance of Notes payable 500,000 - - Interest Paid (60,000) (60,000) (60,000) (60
Net Cash Flow 878,718 127,032 326,777 52
Cash Balance, beg - 878,718 1,005,750 1,33
Cash Balance, end 878,718 1,005,750 1,332,527 1,85
SAFE AND SOUND TRAVEL AGENCYComparative Statement of Cash Flows
For the Periods Ended, December 31, 20XX
SAFE AND SOUND TRAVEL AGENCY
8/10/2019 Feasibility-travel agency
31/35
SAFE AND SOUND TRAVEL AGENCYComparative Statement of Financial PositionFor the Periods Ended, December 31, 20XX
Schedule 2015 2016 2017 2018 Assets
Current AssetsCash CF 878,718 1,005,750 1,332,527 1,85Office Supplies 10.2 634 589 598
Noncurrent AssetsAdvances to Lessor 8.0 77,600 77,600 77,600 7Equipment, net 9.1 169,412 132,224 95,036 5Furniture and Fixtures, net 9.2 97,088 75,776 54,464 3Leasehold Improvements, net 9.3 344,000 258,000 172,000 8Income Tax Benefit 17 88,715 95,721 22,806
Total Assets 1,656,168 1,645,660 1,755,031 2,11
Liabilities
Current LiabilitiesSSS Contribution Payable 6.3 17,440 17,440 17,440 1PhilHealth Contribution Payable 6.4 6,600 6,600 6,600 Pag-IBIG Contribution Payable 6.5 3,600 3,600 3,600 Withholding Tax Payable 6.6 61,601 61,601 61,601 6Income Tax Payable - - - 11
8/10/2019 Feasibility-travel agency
32/35
Schedule 2015 2016 2017 2018
Noncurrent Liabilities
Notes Payable 15 500,000 500,000 500,000 50
Total Liabilities 589,241 589,241 589,241 70
Shareholder's Equity
Abariso, Capital 177,821 176,070 194,298 23
Cruz, Capital 177,821 176,070 194,298 23
Dalangin, Capital 177,821 176,070 194,298 23
Espiritu, Capital 177,821 176,070 194,298 23
Fernandez, Capital 177,821 176,070 194,298 23
Mateo, Capital 177,821 176,070 194,298 23
Total Shareholer's Equity 1,066,927 1,056,419 1,165,791 1,40
Total Liabilities and Shareholder's Equity 1,656,168 1,645,660 1,755,031 2,11
8/10/2019 Feasibility-travel agency
33/35
Financial Study
2015 2016 2017 20
Liquidity Ratio
A.Working Capital= Current Assets-Current Liabilities 790111.68 917098.60 1243884.70 16
B. Current Asset Ratio=Current Assets/Current Liabilities 9.85 11.28 14.94
C. Acid Test Ratio=Quick Assets/Current Liabilities 9.85 11.27 14.93
Profitability Ratio
A. Net Profit Margin = Net Income / Sales -9% -1% 6%
B. Return on Investment = Net Income / Capital -12% -1% 9%
C. Return on Asset = Net Income / Total Assets -8% -1% 6%
Asset Management Ratio
Total Assets Turnover = Sales / Total Assets 0.93 1.05 1.10
Debt Management Ratio
A. Debt Ratio = Total Liabilities / Total Assets 0.36 0.36 0.34
B. Debt/ Equity Ratio = Total Liabilities / Total Owners Equity 0.55 0.56 0.51
Financial Evaluation Measures
8/10/2019 Feasibility-travel agency
34/35
Financial Study
Payback Period: YearRemaining amount ofinvestment to recover
1 1,015,645 2 136,927 3 9,895
Payback Period: 2.03 year
Net Present Value: Required Rate of Return (assumption)Year Cash Flows
1 878,718
2 127,0323 326,7774 526,8785 681,905
NPV= 699,644.72
Profitability Index: 1.69
Capital Budgeting Evaluation Measures
8/10/2019 Feasibility-travel agency
35/35
Socio-Economic Study
Provide opportunities for competent and qualified job seeke
unemployed individuals.
Will help generate income for the government through paymtaxes.
Will help our countrymen by promoting tourism within thecountry.
Coordinates with various organizations and groups that aimprotect natural resources.