CENTRAL PHILIPPINE UNIVERSITY

SCHOOL OF GRADUATE STUDIES

THE FEASIBILITY STUDY OF DAWN’S LAYER EGG FARM AT LAY-AHAN,

POTOTAN, ILOILO

A PROJECT FEASIBLITY PRESENTED TO

THE SCHOOL OF GRADUATE STUDIES
CENTRAL PHILIPPINE UNIVERSITY

IN PARTIAL FULFILLMENT FOR THE REQUIREMENTS OF THE COURSE

MBA 622 MANAGERIAL ACCOUNTING

SUBMITTED BY:
JOHN REV J. TABOBO
ROBERT S. DIAZ
JOVELEN G. BANDOJO
JENMARK P. CALUMBA

SUBMITTED TO:
DR. TERESITA E. CRUCERO
 PART I

INTRODUCTION

Background and Rationale of the Study

Agriculture plays a significant role in Philippine economy. The Agriculture

industry, which shared 84.0 percent in the total AHFF (Agriculture, Hunting, Forestry

and Fishing), grew by 0.2 percent in the second quarter of 2018 compared with the 8.0

percent growth in the comparable period of 2017. Contributors to the growth in

Agriculture were: Poultry 5.1 percent; Agricultural activities and services, 4.3 percent;

Livestock, 1.8 percent; Banana, 3.7 percent; Coconut including copra, 4.0 percent;

Pineapple, 3.3 percent; Rubber, 2.9 percent; and Other Crops, 0.1 percent (2 nd quarter

2018, psa.gov.ph).

Layer poultry farming means raising egg laying poultry birds for the purpose of

commercial egg production. Layer chickens are such a special species of hens, which

need to be raised from they are one day old. They start laying eggs commercially from

18-19 weeks of age. They remain laying eggs continuously till their 72-78 weeks of age.

They can produce about one kilogram of egg by continuously consuming about 2.25kg

of food during egg laying period (growelagrovet.com).

Layer egg farming can be done in a backyard which requires little space and

maintenance. Layer egg business provides eggs to customers like sari-sari store,

grocery stores, food house and catering services, and etc. this kind of business also

requires a small amount of capital as initial investment compared to other business

ventures.
 Statistical data shows that there is an opportunity in poultry business being the

top contributor of growth in Agriculture industry. It indicates demand for the commodity

as a result of the growing industry that needs the product as their input. Thus, this study

was conducted to measure the opportunity small poultry farmers to expand their

business.

Objectives of the Study

This study was conducted to determine the viability of the proposed business in

Brgy. Lay-ahan, Pototan, Iloilo

Specifically, this study aims to:

1. Determine the target market’s current and future needs for layer eggs;

2. Examine the proposed business strengths, weaknesses and position in the

market;

3. Determine the financial benefits of the proposed business versus its cost.

Scope and Limitation

This study was conducted in the proposed location of the business at Brgy. Lay-

ahan, Pototan, Iloilo and a food house in Manduriao, Iloilo. Sari-sari stores existing in

the barangay and the food house in Manduriao will serve as the respondents and

proposed target market for the product.

 PART II

FEASIBILITY STUDY

CHAPTER I

EXECUTIVE SUMMARY

NAME OF THE PROPONENT

The proprietor of the proposed business is Mr. Dawn Dave Tayo, 26 years old

and a resident of Lay-ahan, Pototan, Iloilo.

NAME OF THE BUSINESS

The proposed business will be named Dawn’s Layer Egg Farm

LOCATION OF THE PROJECT

Brgy. Lay-ahan, Pototan, Iloilo

Highlights of major assumptions and summary of findings and conclusions

regarding the following:

 Market Feasibility

 Management Aspect

The proposed business will be in the form of sole/single proprietorship. Dawn’s

Layer Egg Farm will be managed by the owner that will oversee the overall operation

and will hire one (1) helper to do the chores in the poultry farm.

 Technical Feasibility

 Financial Feasibility
 CHAPTER II

MARKETING ASPECT

The purpose of this section is to discuss the marketing study of the business. It

includes the analysis of the supply and demand of eggs in the target area. This also

includes the marketing program, prices of the product to be sold and the proposed

promotion of the product.

Executive Summary

The Dawn’s Layer Egg Farm is a small scale egg production that presents an

opportunity to the owner with vacant lot to utilize the land for a profiting venture. The

venture will add additional income to owner while waiting for harvest season to come

by. The egg farm has a high chance of expansion, given that neighbouring barangays

can also be a potential market in the future.

This business targets the stores within the barangay of Lay-han, Pototan, Iloilo. It

will supply the demand of eggs in the barangay. The aim is to be the sole supplier of

eggs for targeted stores. The egg farm will also supply the eggs to a food house in

Megaworld. The eggs will be sold per tray.

The promotion of business will focus more on word of mouth since it’s an

effective way of establishing the name of the business in rural areas. Flyers are also

considered.

Currently no egg farm is present in the vicinity so there is less competition in the

market.
Product Name and Reasons of Choosing

The name of the business will be Dawn’s Layer Egg Farm. The business will be a

production of eggs through egg laying chickens. This kind of business was

conceptualized since egg is a commodity that is present in every home. Egg is an easy

to prepare food that is very common for students and working parents. It is also given

that eggs has a variety of ways to cook and even used as ingredients for other Filipino

loved dishes. Eggs are one of the best and most affordable sources of protein. Eggs are

considered one of the healthiest foods that can be eaten. They provide nutritional

benefits and are rich in vitamins and proteins. The chickens raised in local farms receive

more attention and care. Buying local eggs help support local farms, which can only

benefit the area.

This type of product was chosen since it is easy to put up especially in rural

areas with enough space to accommodate the housing and set-up of the poultry.

Chickens start laying eggs in 5 months. Poultry farming is a continuous source of

income. It is not seasonal and can produce income for the entire year. Poultry farming

requires very little water for both drinking and cleaning. A gallon of water is sufficient for

48 birds in 2 days. Poultry droppings are rich in nitrogen and organic material and

hence, are considered valuable fertilizers. This is very advantageous for farmer since

they also grow crops. Poultry offers good full time or part-time employment opportunity

to farmers, so during non-harvest season farmers have other source of income.

Target Market

The main target market of the egg farm will be stores within the barangay. Dawn

Layer Egg Farm business will also supply eggs to a food house in Megaworld named

Mega Kusina.

Stores owner usually buy their supply of eggs in the town which is two barangays

away. On the other hand Mega Kusina’s owner is a relative so being a supplier to the

business is secured.

Market Description

The market of this business will be the stores in Lay-ahan, Pototan and a food

house owned by a relative in Megaworld , Mandurriao, Iloilo. The target was determined

since the project area will be in Lay-ahan Pototan Iloilo.

Aside from the stores around the area, the business will connect to a food house

named Mega Kusina in Megaworld, Mandurriao. The demand for egg in this business is

currently high since eggs have always been an ingredient for snacks and dishes. Also

the food house is currently expanding its kitchen to cater more customers thus it will be

an opportunity for egg farm to be the supplier of the food house. There are also schools

with canteens surrounding the area that can be targeted in the future.

The population of Lay-ahan is 1,296 in 2015. Lay-Ahan is situated at

approximately 10.9698, 122.6071, in the island of Panay. Lay‑ahan shares a common

border with the following barangays; Pitogo, Nabitasan, Palanguia, Sinuagan, Capul-an,

Mina, Danao, and Naslo. Dawn’s Layer Egg Farm business is intended to be put up in a

strategic location where is it surrounded by barangays which can also be considered as

potential markets.
Market Demand

Since egg is a commodity that is always present in every home, the demand for

its consumption will never cease. Store owner in the barangay always stock egg since

there is always a need for eggs. The snack house on the other needs a constant and

reliable supply of eggs for their business operation.

The school canteens around the barangays can also be a potential market.

There are three schools around the barangays, aside from that there are also stores

that can be a potential market. Individual households in the barangay can also be a

potential consumer of the product.

Projected Demand

The projected demand of the eggs is 200 trays per month, supplying 9 stores in

the barangay and the food house in Megaworld.

One egg tray will be supplied to every target store every other day and 14 trays

of egg to the food house once a week. The Dawn’s Layer Egg Farm can averagely

produce 200 trays of egg per month enough to provide the projected demand of eggs.

Promotions

Dawn’s Layer Egg Farm fresh farm eggs will use promotions for the business.

Promotion of the business can be done through word of mouth, the most reliable

advertising in the rural areas. In rural areas, promoting the farms will be easy so the

best way to promote the product is to create a good relationship with the store owners.
Conducting good business with them will help support the promotion of the business. A

flyer is a also effective. Social media will also be used as platform for advertising.

Products and Prices

The product will be sold at every store targeted at Php.170.00 per tray of eggs.

The eggs can be sold from Php.7.50 to Php.8.00 per egg. This is the standard range of

egg price in Iloilo.

Competitors

Currently there are no egg farms within the vicinity of the barangay, so no tough

competitors are identified. Store owners are buying their supply of eggs in the town, so

if the egg farm is established challenges from competitors are minimal.

SWOT Analysis

Strength Weakness

 The only egg farm in the area  Low supply of eggs during the first

 Enough number of stores to supply egg month

 Less taxing type of business  Production capacity of chicken

 Small capital needed decreases as they grow older

 Other source of income for the owner  Need to change chicken annually to

 Can produce income for the entire year maintain production rate high and

quality of the eggs.

Opportunities Threats

 Surrounded by barangays which can

be considered as potential market

 Business can be expanded by adding

more sets of egg layers

 Business can expand market during  Infectious diseases

yuletide seasons  Food safety pathogen

 Can tap schools for supplies of eggs in  Potential competitors opening in the

school canteens. area/location

 Unproductive chicken can be sold in  Theft

the market at live price  Bio-security risk

 CHAPTER III

MANAGEMENT ASPECT

FORM OF OWNERSHIP

Proposed business will be in form of sole proprietorship since the investment will

come from a single owner who will also pay personal income tax on profits earned from

the business. The owner will be the manager and will hire one helper to do the chores in

the poultry under his supervision.

VISION

An established provider of fresh farm eggs that promotes local backyard farming

in the community

MISSION

To provide fresh farm eggs in the community

A. ORGANIZATIONAL CHART

OWNER/MANAGER

HELPER
B. JOB DESCRIPTION

PERSONNEL QUALIFICATIONS JOB DESCRIPTION

Owner/Manager  Already existing  Oversees overall

business

operation

Helper  Male  Maintain and

 Legal age monitor

 Willing to do his cleanliness of the

work poultry

 Feeds chicken

 Collect eggs

 Deliver eggs to

the stores

C. MANPOWER COST

Required Number of Status of Salary per

Personnel Workers Employment month Total

Manager/Owner 1 Full-time - -

Helper 1 Full-time ₱ 4,500.00 ₱ 54,000.00

 CHAPTER IV

TECHNICAL ASPECT

The Technical aspect is the discussion of the basic and operation flow of the project.

The technical aspect is one of the essentials of this study because this factor responds to the

technicalities and basic structure of the proposed study. This includes the list of equipment,

materials, structure plan and also the source of the supplies use in the proposed project.

Utilities, facilities, layout designs and location includes in this chapter.

A. Project Location

The proposed Ta-ala Egg Machine Farm will be located at Brgy. Lay-ahan,

Pototan, Iloilo. The site has an estimated area of 10,000 square meters. The location of

the site is 500 meters from the national highway. The proposed location is feasible to

cater the needs of every businesses in the area.

Location Map
The business equipment and materials will be depreciated in a straight line basis with

useful life as follows:

Fixed Asset Useful Life

Egg Machine House 10 years

Galvanized wire cages 15 years

PVC feeders 3 years

Nipple drinkers 3 years

Water drum 3 years

LED lights 1 year

Schedule 1. Cost Estimates of Building Construction

Project Title: Ta-ala Egg Machine

Project Location: Brgy. Lay-ahan, Pototan

Subject: Cost Estimation of building and construction

Project Duration: 1 month

Bill of Materials and Cost Estimates

Forms and Scaffolding 9,000

Concrete works 1,000

Roofing 8,340

Electrical 2,000

Material cost 20,340

Total labor cost and equipment cost 8,400

 Contingencies = 15% of labour 1,260

Total Project Cost = 30,000

B. Floor Lay-out

The proposed project will have its own egg machine house and galvanized

wire cages with a 30 sq. Meters and the land area is 100 sq. Meters

C. Utilities

Ta-ala Farms, Inc. will set up the Galvanized wire cages, PVC feeders,

and Nipple drinkers. The owner will set up the egg machine house with water and

electricity.
PERSPECTIVE
FLOOR PLAN
 D. Project Cost

Project Cost is the total funds needed to complete the project or work that consists of

a Direct Cost andIndirect Cost. The Project Costs are any expenditures made or estimated to

be made, or monetary obligations incurred or estimated to be incurred to complete the project

which are listed in a project baseline.

The project cost of the business will include the egg house machine and the Ta-ala

Farms., Inc. Package. The package includes (48 heads fully vaccinated, galvanized wire cages,

PVC feeders, nipple drinker and water drum)

Egg House Machines 30,000

Ta-ala Farms., Inc package 160,000

Motorcycle 60,000

Total Project Cost 250,000

Schedule 3: Pre-operating Expenses

BIR Annual Registration + Doc stamp 600

DTI Business Name Registration 200

Obtain Community Tax Certificate (CTC) 500

Business Permit 2,500

Barangay Clearance 200

Total Operating Expenses 4,000

 E. Operational Procedures

Egg house machine will be constructed for 8 days with 3 workers. The house should be

open-sided, closed wall, water drum will be put inside the egg machine house and roof should

also be wider to avoid from direct sunlight.

Ta-ala Farms., Inc. will set up the galvanized wire cages ( length 8 ft. horizontal, height 7

ft. vertical and with 3.5 ft.), PVC feeders, Nipple drinkers and water drum. After setting up the

cages of the chicken, 48 heads will be delivered to your location of business. These chickens

are fully vaccinated, 22 week old and ready to produce egg right away.

Hens are delivered 4.5 to 5 months old, and are starting to lay. First month production is

when hens are 5 to 6 months old.

Age % of production

5 to 6 months 50%

6 to 7 months 90%

7 to 8 months 95%

8 to 9 months 93%

9 to 10 months 92%

10 to 11 months 91%

11 to 12 months 90%

12 to 13 months 89%

13 to 14 months 87%
 14 to 15 months 83%

15 to 16 months 79%

16 to 18 months 75%

18 to 22 months 70%

One set of chicken is 48 heads and can consume 5 kilograms of feeds per day. Feeds

should be distributed once a day, every 6 in the morning but equalize the feed 3 times a day.

PILMICO feeds chicken layex 1 is recommended by Ta-ala Farms., Inc. to use to produce more

eggs.

Feed consumption is 100-105 grams per head per day. A total of 4.8 kilograms per set

per day for 48 heads (1 set). Approximately 1 bag of feeds for every 10 days per set of 48

heads layer chicken.

Harvesting of eggs will be collected every 11 in the morning.

For lighting procedures, 7 watts LED light or fluorescent light inside. No lights until the

hen reach 80% production or 38 egg per unit if egg machine (48 heads).
 CHAPTER V

FINANCIAL ASPECT

This chapter will discuss the financial viability of the proposed project. It includes

the projected income statement, balance sheet, cash flows, and the financial analysis of

the project.

Starting capital needed for the project is broken down as follows:

ITEM AMOUNT

Poultry House 30,000

Motorcycle-Delivery Equipment 60,000

Starting inventory of 4 sets of 160,000

Chickens w/ Cage (192 heads)

Total CAPITAL 250,000

GENERAL ASSUMPTIONS:

1. Projected financial statements include Statement of Financial Position, Income

Statement, Statement of Owner’s Capital and Cash Flow Statement. The accounting

period that will be using will be a calendar year which ends in December 31. Five (5)

year’s projected statement was prepared in order to analyze carefully the viability of the

project. Cash basis of accounting is used. Monthly forecasts per year are also presented

for detailed evaluation.

2. Egg Supply Forecast:

a. An average of ten (10) stores located in the area are willing to buy the eggs on a

consistent basis. The average trays that are needed by the nine stores are four (4)

trays per week per store. Thus they need an average of 144 trays per month. (9
 stores x 4 trays x 4 weeks/month). The other store is expected to consume an

average of 14 trays per week. Thus it needs an average of 56 trays per month (2

trays x 7 days x 4 weeks/month). The total trays needed by the 10 stores average

about 200 per month. Therefore, average estimated annual supply needed would be

2,400 (200 trays x 12 months).

3. Depreciation

a. Depreciation of fixed assets will commence once the assets are available for use.

b. Fixed assets are to be depreciated using straight line method over the estimated

useful life with no salvage value. Estimated useful life are as follows;

Assets Estimated Useful Life

Poultry House 5 years

Motorcycle 5 years

4. Statement of Financial Position

a. Petty Cash is maintained at Php 5,000.00 to cover small expenses.

b. Accounts Receivable – Sales are made on a cash basis only. No credit sales. Cash

collections are collected every end of the week. Therefore, no accounts receivable

balance by the end of the month.

c. There are no inventories since major purchases (feeds and sets of chicken) are

already estimated based on the actual consumption and demand, therefore all

purchases are utilized for production, and such purchases are paid outright through

cash basis, incurring no liabilities.

d. Fixed assets, subsequent to initial recognition, are carried at cost less

accumulated depreciation.

5. Income Statement

a. Estimated price per tray of eggs will increase by 5% annually.

b. Price of major purchases such as feeds and sets of chicken (price per head on
 original supplier will increase starting 2nd year) will increase by 5% annually

based on inflation rate.

c. Starting 2nd year up to 5th year, new sets will of chicken will be purchased with

the same number of heads from the supplier. This is done to maintain the

chicken’s efficiency in egg production. Therefore, at the end of the year, they

must be sold or culled. A market price was established with incremental

increase of 5% per annum for the resale value of the chickens. This forms part

of additional income of the business. Also, an established price was made with

incremental increase of 5% per annum for the purchase price of chickens on

the supplier.

d. Only 1 helper will be hired, and his salary will be fixed per month, but is

increasing by 5% annually.

e. Taxes, licenses and other processing fees will remain constant at Php 4,000

annually.

f. All other expenses, except depreciation, will increase by 5% inflation rate

annually.

6. Statement of Cash Flows

a. Indirect method is used in computing for the cash flows.

7. Statement of Owner’s Equity

a. No retained earnings to be maintained since the business is a sole

proprietorship type.

8. Cost of Capital and rate of return used in this study is 10%.

Dawn Layer Egg Farm
Projected Statement of Financial Position
For the Period ended Year 1 to Year 5

Note Year 1 Year 2 Year 3 Year 4 Year 5

ASSETS
Current Assets
Cash 193,632.70 331,608.44 476,878.26 628,601.17 788,441.73
Petty Cash Fund 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Total Current Assets 198,632.70 336,608.44 481,878.26 633,601.17 793,441.73
Non current Assets
Poultry House(net of Accum. Depr'n) 6 24,000.00 18,000.00 12,000.00 6,000.00 -
Motorcycle(net of Accum. Depr'n) 7 48,000.00 36,000.00 24,000.00 12,000.00 -
Total Non Current Assets 72,000.00 54,000.00 36,000.00 18,000.00 -

TOTAL ASSETS 270,632.70 390,608.44 517,878.26 651,601.17 793,441.73

LIABILITIES & CAPITAL

Accounts Payable - - - - -
Total Liabilities - - - - -

Capital
Owner's Equity 270,632.70 390,608.44 517,878.26 651,601.17 793,441.73
Total Capital 270,632.70 390,608.44 517,878.26 651,601.17 793,441.73

TOTAL LIABILITIES & CAPITAL 270,632.70 390,608.44 517,878.26 651,601.17 793,441.73

Dawn Layer Egg Farm
Projected Income Statement
For the period ended Year 1 to Year 5

REVENUES Note Year 1 Year 2 Year 3 Year 4 Year 5

Sales 1 419,220.00 466,374.00 489,912.00 513,450.00 539,454.00
Less: Cost of Sales 2 312,208.00 256,800.00 269,664.00 283,200.00 297,360.00
Gross Profit 107,012.00 209,574.00 220,248.00 230,250.00 242,094.00

Less: Operating Expenses

Salaries and Wages 3 54,000.00 56,700.00 59,535.00 62,511.75 65,637.34
Fuel and Oil 8,329.70 8,746.19 9,183.49 9,642.67 10,124.80
Taxes and Licenses 4 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00
Electricity 1,149.60 1,207.08 1,267.43 1,330.81 1,397.35
Depreciation 5 18,000.00 18,000.00 18,000.00 18,000.00 18,000.00
Water 900.00 945.00 992.25 1,041.86 1,093.96
Total Operating Expenses 86,379.30 89,598.27 92,978.18 96,527.09 100,253.44

NET INCOME 20,632.70 119,975.74 127,269.82 133,722.91 141,840.56

Dawn Layer Egg Farm
Projected Cash Flow Statement
For the Period ended Year 1 to Year 5
Year 1 Year 2 Year 3 Year 4 Year 5
Cash Flow from Operating Activities:
Net Income 20,632.70 119,975.74 127,269.82 133,722.91 141,840.56
Add: Depreciation 18,000.00 18,000.00 18,000.00 18,000.00 18,000.00
Cash Provided in operating activities 38,632.70 137,975.74 145,269.82 151,722.91 159,840.56

Cash Flow from Investing Activities:

Construction of Poultry House (30,000.00) - - - -
Purchase of Motorcycle (60,000.00) - - - -
Cash Used in Investing Activities (90,000.00) - - - -

Cash Flow from Financing Activities:

Owner's Capital 250,000.00 - - - -
Cash Provided by Financing Activities 250,000.00 - - - -

Net Cash Inflow/(Outflow) 198,632.70 137,975.74 145,269.82 151,722.91 159,840.56

Add: Beginning Cash Balance - 198,632.70 336,608.44 481,878.26 633,601.17
Ending Cash Balance 198,632.70 336,608.44 481,878.26 633,601.17 793,441.73
Petty Cash Fund 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Cash Balance per sheet 193,632.70 331,608.44 476,878.26 628,601.17 788,441.73
Dawn Layer Egg Farm
Projected Statement of Changes in Owner's Capital
For the Period ended Year 1 to Year 5
Year 1 Year 2 Year 3 Year 4 Year 5

Owner's Capital, beginning 250,000.00 270,632.70 390,608.44 517,878.26 651,601.17

Add(Deduct): Net Income(Net Loss) 20,632.70 119,975.74 127,269.82 133,722.91 141,840.56
Owner's Capital, ending 270,632.70 390,608.44 517,878.26 651,601.17 793,441.73

Monthly Projections

Year 1 - Monthly Projections

Schedule 1- Sales January February March April May June July August September October November December TOTAL
Sales @ Php 170 per tray 21,080.00 34,340.00 40,120.00 37,910.00 38,760.00 37,060.00 37,910.00 37,570.00 35,530.00 35,020.00 32,300.00 31,620.00 419,220.00
Less: COGS 172,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 312,208.00
Gross Profit (151,604.00) 21,656.00 27,436.00 25,226.00 26,076.00 24,376.00 25,226.00 24,886.00 22,846.00 22,336.00 19,616.00 18,936.00 107,012.00

Schedule 2- COGS
Beg. Inventory - - - - - - - - - - - - -
Add: 4 New set of Chickens 160,000.00 - - - - - - - - - - - 160,000.00
Purchases of feeds @ Php 1,057 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 152,208.00
Total GAS 172,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 312,208.00
End. Inventory - - - - - - - - - - - - -
Total COGS 172,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 12,684.00 312,208.00
Year 2 - Monthly Projections
Schedule 1- Sales January February March April May June July August September October November December TOTAL
Sales @ Php 179 per tray 22,196.00 36,158.00 42,244.00 39,917.00 40,812.00 39,022.00 39,917.00 39,559.00 37,411.00 36,874.00 34,010.00 33,294.00 441,414.00
Other income on resale value of Chicken @ Php 130 24,960.00 24,960.00
Total Sales 47,156.00 36,158.00 42,244.00 39,917.00 40,812.00 39,022.00 39,917.00 39,559.00 37,411.00 36,874.00 34,010.00 33,294.00 466,374.00
Less: COGS 110,280.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 256,800.00
Gross Profit (63,124.00) 22,838.00 28,924.00 26,597.00 27,492.00 25,702.00 26,597.00 26,239.00 24,091.00 23,554.00 20,690.00 19,974.00 209,574.00

Schedule 2- COGS
Beg. Inventory - - - - - - - - - - - - -
Purchases of Feeds @ Php 1,110 5% increase 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 159,840.00
Add: Purchase of New sets of
chickens at Php 505 96,960.00 96,960.00
Total GAS 110,280.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 256,800.00
End. Inventory - - - - - - - - - - - - -
Total COGS 110,280.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 13,320.00 256,800.00
Year 3 - Monthly Projections
Schedule 1- Sales January February March April May June July August September October November December TOTAL
Sales @ Php 188 per tray 23,312.00 37,976.00 44,368.00 41,924.00 42,864.00 40,984.00 41,924.00 41,548.00 39,292.00 38,728.00 35,720.00 34,968.00 463,608.00
Other income on resale value of Chicken @ Php 137 26,304.00 26,304.00
Total Sales 49,616.00 37,976.00 44,368.00 41,924.00 42,864.00 40,984.00 41,924.00 41,548.00 39,292.00 38,728.00 35,720.00 34,968.00 489,912.00
Less: COGS 115,752.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 269,664.00
Gross Profit (66,136.00) 23,984.00 30,376.00 27,932.00 28,872.00 26,992.00 27,932.00 27,556.00 25,300.00 24,736.00 21,728.00 20,976.00 220,248.00

Schedule 2- COGS
Beg. Inventory - - - - - - - - - - - - -
Purchases of Feeds @ Php 1,166 5% increase 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 167,904.00
Add: Purchase of New sets of
chickens at Php 530 101,760.00 101,760.00
Total GAS 115,752.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 269,664.00
End. Inventory - - - - - - - - - - - - -
Total COGS 115,752.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 13,992.00 269,664.00

Year 4 - Monthly Projections

Schedule 1- Sales January February March April May June July August September October November December TOTAL
Sales @ Php 197 per tray 24,428.00 39,794.00 46,492.00 43,931.00 44,916.00 42,946.00 43,931.00 43,537.00 41,173.00 40,582.00 37,430.00 36,642.00 485,802.00
Other income on resale value of Chicken @ Php 144 27,648.00 27,648.00
Total Sales 52,076.00 39,794.00 46,492.00 43,931.00 44,916.00 42,946.00 43,931.00 43,537.00 41,173.00 40,582.00 37,430.00 36,642.00 513,450.00
Less: COGS 121,632.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 283,200.00
Gross Profit (69,556.00) 25,106.00 31,804.00 29,243.00 30,228.00 28,258.00 29,243.00 28,849.00 26,485.00 25,894.00 22,742.00 21,954.00 230,250.00

Schedule 2- COGS
Beg. Inventory - - - - - - - - - - - - -
Purchases of Feeds @ Php 1,224 5% increase 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 176,256.00
Add: Purchase of New sets of
chickens at Php 557 106,944.00 106,944.00
Total GAS 121,632.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 283,200.00
End. Inventory - - - - - - - - - - - - -
Total COGS 121,632.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 14,688.00 283,200.00
Year 5 - Monthly Projections
Schedule 1- Sales January February March April May June July August September October November December TOTAL
Sales @ Php 207 per tray 25,668.00 41,814.00 48,852.00 46,161.00 47,196.00 45,126.00 46,161.00 45,747.00 43,263.00 42,642.00 39,330.00 38,502.00 510,462.00
Other income on resale value of Chicken @ Php 151 28,992.00 28,992.00
Total Sales 54,660.00 41,814.00 48,852.00 46,161.00 47,196.00 45,126.00 46,161.00 45,747.00 43,263.00 42,642.00 39,330.00 38,502.00 539,454.00
Less: COGS 127,740.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 297,360.00
Gross Profit (73,080.00) 26,394.00 33,432.00 30,741.00 31,776.00 29,706.00 30,741.00 30,327.00 27,843.00 27,222.00 23,910.00 23,082.00 242,094.00

Schedule 2- COGS
Beg. Inventory - - - - - - - - - - - - -
Purchases of Feeds @ Php 1,285 5% increase 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 185,040.00
Add: Purchase of New sets of
chickens at Php 585 112,320.00 112,320.00
Total GAS 127,740.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 297,360.00
End. Inventory - - - - - - - - - - - - -
Total COGS 127,740.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 15,420.00 297,360.00
Notes to Projected Financial Statements

Note 1: Sales Year 1 Year 2 Year 3 Year 4 Year 5

Expected no. of trays sold 2,466 2,466 2,466 2,466 2,466

Sales price per tray 170.00 179.00 188.00 197.00 207.00
Total 419,220.00 441,414.00 463,608.00 485,802.00 510,462.00
Add:Other income on resale value of Chicken
No. of Heads 192 192 192 192
Market price per head 130.00 137.00 144.00 151.00
- 24,960.00 26,304.00 27,648.00 28,992.00
Gross Sales 419,220.00 466,374.00 489,912.00 513,450.00 539,454.00

Note 2: Cost of Goods Sold Year 1 Year 2 Year 3 Year 4 Year 5

Beginning inventory - - - - -
No. of Sacks per month 144.00 144.00 144.00 144.00 144.00
Sales Price per sack 1,057.00 1,110.00 1,166.00 1,224.00 1,285.00
152,208.00 159,840.00 167,904.00 176,256.00 185,040.00
Add: Purchase of new sets of chickens
No. of Heads 192.00 192.00 192.00 192.00 192.00
Purchase price per head 833.33 505.00 530.00 557.00 585.00
Total Purchases 160,000 96,960.00 101,760.00 106,944.00 112,320.00
Total Goods available for Sale 312,208 256,800.00 269,664.00 283,200.00 297,360.00
less: ending inventory - - - - -
Total Cost of Goods Sold 312,208 256,800.00 269,664.00 283,200.00 297,360.00
Note 3: Salaries Year 1 Year 2 Year 3 Year 4 Year 5

1 Helper 54,000.00 56,700.00 59,535.00 62,511.75 65,637.34

Total 54,000.00 56,700.00 59,535.00 62,511.75 65,637.34

Note 4: Taxes and Licenses Year 1 Year 2 Year 3 Year 4 Year 5

BIR annual Reg. + Doc. Stamp 600.00 600.00 600.00 600.00 600.00
DTI Business Name Registration 200.00 200.00 200.00 200.00 200.00
Community Tax Certificate 500.00 500.00 500.00 500.00 500.00
Business Permit 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00
Barangay Clearance 200.00 200.00 200.00 200.00 200.00
Total 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00

Note 5: Depreciation
Equipment Cost Estimated Life Annual Depreciation
Poultry House 30,000.00 5 6,000.00
Motorcycle 60,000.00 5 12,000.00
Total 90,000.00 18,000.00

Note 6: Poultry House, net of Depreciation Year 1 Year 2 Year 3 Year 4 Year 5
Cost 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00
Less: Accum. Depr'n 6,000.00 12,000.00 18,000.00 24,000.00 30,000.00
Total 24,000.00 18,000.00 12,000.00 6,000.00 -

Note 7: Motorcycle, net of Depreciation Year 1 Year 2 Year 3 Year 4 Year 5

Cost 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00
Less: Accum. Depr'n 12,000.00 24,000.00 36,000.00 48,000.00 60,000.00
Total 48,000.00 36,000.00 24,000.00 12,000.00 -
Ratio Analysis

Analysis of financial ratios is critical in order to understand the financial

statements, for identifying trends over time, and for measuring the overall

financial status of the business. Ratios are critical quantitative analysis tool. The

information of the trend analysis provides and allows the management to make

and implement ongoing financial plans and, when necessary, make course

corrections to short-term financial plans. The business uses cash basis of

accounting, wherein all its sales are made on a cash basis and are collected

outright, as well as its purchases are paid outright on time. Therefore no

inventories and outstanding current liabilities are incurred, making the business

more liquid. However, activity ratios and profitability ratios are computed, as

follows:

Actitivty Ratios Formula Year 1 Year 2 Year 3 Year 4 Year 5

Total Asset Sales 419,220.00 466,374.00 489,912.00 513,450.00 539,454.00
turnover Total Assets 270,632.70 390,608.44 517,878.26 651,601.17 793,441.73
1.55 1.19 0.95 0.79 0.68

Profitability Ratios Formula Year 1 Year 2 Year 3 Year 4 Year 5

Net Income 20,632.70 119,975.74 127,269.82 133,722.91 141,840.56
Net Profit Margin
Sales 419,220.00 466,374.00 489,912.00 513,450.00 539,454.00
4.92% 25.73% 25.98% 26.04% 26.29%

Formula Year 1 Year 2 Year 3 Year 4 Year 5

Return on Net Income 20,632.70 119,975.74 127,269.82 133,722.91 141,840.56
Assets/Investment Average Total Assets 270,632.70 330,620.57 454,243.35 584,739.71 722,521.45
7.62% 36.29% 28.02% 22.87% 19.63%
Payback Period

The payback period is the length of time required to recover the cost of an

investment. It is an important determinant whether to undertake the project or not.

Payback Period
Cost of Investment Net Cash Flow Balance Payback

Year 1 250,000 38,632.70 211,367.30 1

Year 2 250,000 137,975.74 73,391.57 1
Year 3 250,000 145,269.82 - 0.51
Payback Period 2.51
2 years and 6 months

Net Present Value

Net present Value of Cash Inflows for 5 years using 10% cost of capital:

NPV @ 10% for 5 yrs

Cash Inflow PV factor Net Present Value
Year 1 38,632.70 0.909 35,117.12
Year 2 137,975.74 0.826 113,967.96
Year 3 145,269.82 0.751 109,097.64
Year 4 151,722.91 0.683 103,626.75
Year 5 159,840.56 0.621 99,260.99
Net Present Value 461,070.45

Discounted Payback Period

Discounted Payback Period

Cost of Investment Net Cash Flow Balance Payback

Year 1 250,000 35,117.12 214,882.88 1

Year 2 250,000 113,967.96 100,914.92 1
Year 3 250,000 109,097.64 - 0.92
Payback Period 2.92
2 years and 11 months
Internal rate of Return

This is a capital budgeting technique to measure the potential profitability of an

investment. It is the interest rate that makes Net Present Value of all cash flows from

investment equal to zero.

Internal Rate of Return (Using Financial Calculator) --- 36.24%

The projected internal rate of return is above the required rate of return of 10%

set by the researchers. This affirms that the proposed egg laying farm is profitable and

is beneficial.
 CHAPTER VI

LEGAL AND TAXATION ASPECT

The legal aspect portion contains the process of registering the business and

making it legal and binding. It also shows the requirements and fees that need to be

complied to accomplish the desired permit and licenses.

The following procedures are followed regarding the legal aspect of the business

Bureau of Internal Revenue Documentary Requirements for Registration of Single

Proprietor:

 Duly accomplished BIR application Form 1901

One (1) photocopy of the following:

 Tax payer’s Identification Number

 Mayor’s Permit

 DTI Registration

 Birth Certificate(s) of Filer and his/her Qualified Dependents (NSO certified

copy)

 Sketch of Business Address

 Certificate of Attendance from Tax Briefing every Wednesday (9 - 11am)

 Documentary Stamp - P15 at the Collection

 Long Folder & Fastener

City Hall Documentary Requirements for Business Registration - Mayor’s Permit

 Duly Accomplished Form

 Barangay Clearance

 Community Tax Certificate

 Barangay Clearance for Business Purpose

 Vicinity Map/ Location Sketch of Business Establishment

 DTI or SEC Registration or CDA

Other Requirements:

A. Barangay Clearance

This clearance is obtained from the barangay where the business is located and

is required to obtain the business permit from the city or municipality. Barangay fees

vary for each barangay since they have the discretion to impose their own fees and

chargers for as long as these fees are reasonable and within the limits set by the local

government code and city ordinances. Barangay fees may depend on:

a. Location and the area (size in square meters) of the place of business; or

b. The company’s paid-up capital and the area it occupies; or

c. Whether they issue clearance plates or certificates.

 B. Bureau of Internal Revenue Books Registration

a. Annual registration fee payment with official receipt

b. BIR Certificate of Registration

c. Tax payer record update (TRU 1901)

d. Journal, Ledger, Cash Receipts, Cash Disbursements

C. Printing of Invoices and Official Receipts

a. Annual registration fee with O.R.

b. BIR Certificate of Registration

c. Tax payer record update (TRU 1901)

Value-Added Tax (VAT) is a form of sales tax. It is a tax on consumption levied on the sale,

barter, exchange or lease of goods or properties and services in the Philippines and on importation of

goods into the Philippines. It is an indirect tax, which may be shifted or passed on to the buyer, transferee

or lessee of goods, properties or services.

On sale of goods and properties - twelve percent (12%) of the gross selling price or gross value in

money of the goods or properties sold, bartered or exchanged.

The business is subject to Value Added Tax of 12%. VAT is paid monthly and quarterly and

derived by deducting total input tax of 12% from total output tax. Quarterly income tax for business is

imposed and together with the withholding taxes for compensation of employees who are earning above

the minimum wage. The owner is subject to graduated income tax for individuals.
Income Tax Rates

For Individual Citizens and Resident Aliens Earning Purely Compensation Income and Individuals

Engaged in Business and Practice of Profession.

Graduated Income Tax Rates under Section 24(A)(2) of the Tax Code of 1997, as amended by

Republic Act No. 10963

Amount of Net Taxable Income Rate

Over But Not Over

- P250,000 0%

P250,000 P400,000 20% of the excess over P250,000

P400,000 P800,000 P30,000 + 25% of the excess over P400,000

P800,000 P2,000,000 P130,000 + 30% of the excess over P800,000

P2,000,000 P8,000,000 P490,000 + 32% of the excess over P2,000,000

P8,000,000 P2,410,000 + 35% of the excess over P8,000,000

 CHAPTER VIII

SENSITIVITY AND RISK ANALYSIS

Layer chicken is the most important input in the poultry business and though they

are fully vaccinated, once mishandled they can still be prone to some bio-security risk

that can affect their production. Infectious diseases and food safety pathogens can

enter or spread within a poultry farm in many ways.

The following are the possible bio-security risk for poultry farms:

 Contaminated people

People who visit your poultry farm and enter the production area (including sheds and

free-range areas) can potentially be carriers of disease and food safety pathogens that may

threaten the health and productivity of your flock.

Diseases or food safety pathogens may be carried in a person's:

 hair and hands

 clothing

 footwear

 personal items such as mobile phones and jewelry.

Visitors can include neighbors, contractors, suppliers, vets, delivery drivers, maintenance

and service personnel.

To reduce bio-security risks from visitors:

 shut the gate of the property and lock whenever practical

  place a bio-security sign at the entry gate that contains information on

how to contact the farm manager before entry

 check where your visitors have been and if they have had any contact

with other poultry or birds in the last 2 days.

 keep a visitors log outlining details of visitors' name and date and

recent contact with poultry

 restrict access to your poultry unless necessary

 provide protective clothing, footwear and hand wash for visitors that

come inside your production area

Showering before entry and changing into freshly laundered clothes and farm boots, and

then showering out, is the highest level of protection for poultry production facilities. If visitors

have had recent contact with other poultry, this option should be used.

 Contaminated vehicles and equipment

Vehicles and equipment are a high risk for spreading pathogens. To reduce this risk:

 only have 1 entry point for vehicles

 have a designated visitors parking area that is well signed and located

outside of the production area

 don't share equipment between properties—if this is unavoidable,

make sure that ALL equipment is cleaned (removing all visible dirt) and

disinfected before and after use

  never share or re-use cardboard egg fillers or cartons

 don't allow delivery vehicles to come inside the production area—if this

is necessary such as for feed and gas deliveries, then drivers must

NOT enter sheds or ranges

 thoroughly clean and disinfect all housing, sheds and equipment

between batches

 clean and flush drinkers and feeders regularly

 clean and disinfect egg grading and washing equipment after use.

 Wild birds

Wild birds and waterfowl can be carriers of diseases and food safety pathogens, such as

avian influenza and salmonella. Keeping a poultry farm free of wild birds may be difficult.

To make the property unattractive to wild birds:

 only plant trees and shrubs that are non-flowering or non-bird attracting

 limit the amount of surface water on the farm

 make sheds that house poultry wild bird proof

 only provide feed and water for your flock indoors.

 Feral animals, insects, vermin, domestic livestock and animals

Insects, such as darkling beetles, and rodents can be carriers of infectious diseases and

food safety pathogens such as campylobacter and salmonella.

 In all poultry farms, it is important to:

 have a rodent control plan in place that is regularly monitored and baits

replaced as required. Bait stations should be positioned around the

outside of the sheds and range areas and should not be accessible by

other animals

 clean up any feed spills as soon as possible and keep the property

neat and tidy with grass mown around sheds and range areas

 store feed and bedding in a vermin proof area to avoid contamination

from rodents and wild birds

 treat insects with approved chemicals

 fence the range area with stock proof fencing to keep out livestock and

feral animals.

Do not:

 allow domestic animals inside poultry sheds or range areas. If using

guard animals in free-range situations make sure they have been

tested to ensure they are not carriers of disease before placing them

with your flock.

 graze livestock immediately surrounding the poultry sheds and range

areas.
 Other poultry

New birds are the most common way to introduce disease into your flock. To reduce

disease coming in with new birds you can take the following measures.

 Have an all-in and all-out policy (single-aged flock). This allows time to

clean and disinfect all housing and equipment before new birds come

in.

 Obtain new birds from a reliable supplier of healthy stock and request

vaccination certification.

 Only buy young birds, as older birds are more likely to carry disease.

 Dispose of dead birds in an environmentally approved method. If

collected from a contractor, have your storage and collection point

located as far away from the sheds and range as possible so that the

collection vehicle does not enter the production area. Never feed dead

poultry to domestic animals.

 Quarantine new birds from your existing flock for at least 1 month as

you may spread disease from one to the other. Watch for any signs of

illness, lice or mites.

 If exhibiting birds, make sure you do not take any birds to a show if

there are any signs of illness in your flock, even if the birds you are

taking appear well.

 Feed and water

Feed and water can also be a source of contamination. Disease carrying rodents or wild

birds may contaminate feed, while droppings and excretions from wild birds or waterfowl may be

the source of contamination for open water sources such as dam, tank and river water.

To reduce bio-security risks associated with feed and water contamination:

 always source feed from reputable suppliers

 have all water used for poultry tested

 treat all surface water and once treated, store it in a closed system,

from the point of treatment to the drinker to prevent re-contamination

 check and record chlorine and treatment levels daily.

 Air

Having a good buffer distance between other poultry farms and piggeries will help to

reduce any impact from airborne spread of disease. The minimum distance should be at least

1km between other poultry farms and at least 5km from breeder farms.

Planting non-bird attracting trees and shrubs as strategic windbreaks can also act as a

barrier.
 CHAPTER IX

SOCIO-ECONOMIC AND ENVIRONMENTAL ASPECT

A. SOCIAL IMPACT

Proposed business will augment the family’s income to sustain other needs and

to provide fresh farm eggs in their community. Stores within the barangay will not need

to buy from the town market for their supply of eggs since it will be delivered to their

door steps direct from the farm and can repurchase anytime as needed given that it will

be built within the community. It will also encourage and improve social interaction

within the community.

In addition, once Dawn’s Layer Egg Farm starts its operation, it will need a helper

that will do the chores and will be compensated accordingly. This will at least help

increase the helper’s financial security and is good for his physical and mental health

since he is doing something.

B. ENVIRONMENT AND WASTE MANAGEMENT

Poultry business faces a lot of environmental issues especially air pollution from

the chicken manure that attract flies. In order to minimize this if not eliminate, Dawn’s

Layer Egg Farm will have its own septic tank where waste from the poultry house go

directly to maintain its cleanliness. At the end of the year or when full, septic tank will be

emptied and dried manure can be used as soil fertilizers.

References

Gross National Income and Gross National Product. Retrieved from

https://psa.gov.ph/nap-press-

release/sector/Agriculture,%20Hunting,%20Forestry,%20Fishing

Layer Poultry Farming Guide for Beginners. Retrieved from

https://www.google.com/amp/s/growelagrivet.com/poultry-farming/amp

Bio-security Risk for Poultry Farms. Retrieved from

https://www.business.qld.gov.au/industries/farms-fishing-

forestry/agriculture/livestock/poultry/biosecurity-for-poultry-producers/biosecurity-risks-

poultry-farms

Business registration. Retrieved from

http://www.sas-ph.com/index.php?p=1_7_philippines-business-registration

Tax Information Retrieve from

https://www.bir.gov.ph/index.php/tax-information/income-tax.html

Lay-ahan, Population Retrieved from

https://www.philatlas.com/visayas/r06/iloilo/pototan/lay-ahan.html
Marketing and Selling Eggs. Retrieved from

https://poultrymanual.com/2016/11/20/marketing-selling-eggs-philippines/

Egg Facts. Retrieve from

https://www.healthline.com/nutrition/6-reasons-why-eggs-are-the-healthiest-food-on-the-

planet#section1

Poultry Farming. Retrieved from

https://www.poultrybazaar.net/benefits-poultry-farming/