Safe and Sound Travel

Agency
Feasibility Study

The Business Profile

Name of business: Safe and Sound Travel Agency
Business logo:

Location of the business: Araneta Center, Cubao, Quezon City

Project rationale:

Market Study
Service Description
Offers ticketing on international and domestic airline companies,
passport processing, and visa assistance.
The service is directed to bringing together the airline company
and 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.

Market Study
Demand Situation
Historical Demand
Year

Population

Market

Frequency of

Acceptability

Availing

Rate

Annually

Annual Demand

2010

919,169

34%

312,517

2011

934,795

34%

317,830

2012

950,686

34%

323,233

2013

966,848

34%

328,728

2014

983,284

34%

334,317

Market Study
To compute for the estimated projected demand, least square
method was used. The formula for the least square method is shown below:
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

Market Study
Demand Situation
Projected Demand
Year

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

Market Study
Supply Situation
Historical Supply
Year

Demand

Situation Rate

Annual Supply

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

Market Study
Supply Situation
Projected Supply
Supply Situation

Year

Demand

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

Rate

Annual Supply

Market Study
Market Share Analysis

Year

Population

2015
2016
2017
2018
2019

1,000,000
1,017,000
1,034,289
1,051,872
1,069,753

Annual
Demand
339,767
345,217
350,667
356,117
361,567

Market Share for Five Years

Annual Demand
Target
Supply
Gap
Percentage
312,586
27,181
7%
317,600
27,617
7.7 %
322,614
28,053
8.47%
327,628
28,489
9.32%
332,642
28,925
10.25%

Target Annual
Market Share
1,903
2,127
2,376
2654
2964

Market Study
Demand-Supply Situation
Demand-Supply Gap for Five Years
Year

Population

Annual Demand

Annual Supply

Demand Gap

2015

1,000,000

339,767

312,586

27,181

2016

1,017,000

345,217

317,600

27,617

2017

1,034,289

350,667

322612

2018

1,051,872

356,117

327,628

2019

1,069,753

361,567

332,642

28,053
28,489
28,925

Market Study
Appropriate Marketing Program or Strategy
Product-provide services with affordable prices; accredited by the
Department 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, tarpaulin, leaflets
and the like.

Technical Study
Service Process
Operations
The business must submit a letter of application to the airline companies that
they are dealing with.

The business can now be able to get the tickets that will be issued depending
on the reservation and the quantity of customers.
Instead of going to an airline company to apply for an agent, the business will
just have to fax it.
For reservation purposes, the client can transact through phones or the use of
the computer rather than going to the agency.

Technical Study
Automated Reservation
The airlines have developed computer software system called Computerized
Reservation System (CRS).
This software provides instant information of flights schedules, class for
service and pricing in addition to hotel accommodations and other services.

Technical Study
Machinery and Equipment Requirements
Office Equipment- Computer, Printer, Fax Machine, etc.
Furniture and Fixtures- Office Table, Couch, Shelf, Reservation
Counter, etc

Total Cost
Equipment and Supplies

Quantity

Unit Cost

Total Cost

Yearly Depreciation

Office Equipment

Computer

19,000.00

76,000.00

13,680.00

Computer Software

50,000.00

50,000.00

9,000.00

Printer

6,800.00

6,800.00

1,224.00

Fax Machine

11,800.00

11,800

2,124

Television

33,000.00

33,000.00

5940.00

Air Conditioner

8,000.00

24,000.00

4,320.00

Water Dispenser

5,000.00

5,000.00

900.00

Furniture and Fixtures

Office Table

5,100.00

10,200.00

1,836.00

Clerical Chair

1,600.00

4,800.00

864.00

Customers chair

1,100.00

2,200.00

396.00

Couch

12,900.00

25,800.00

4,644.00

Shelf

11,200.00

22,400.00

4,032.00

Reservation Counter

10,000.00

10,000.00

1,800.00

Center Table

13,400.00

13,400.00

2,412.00

Table

24,600.00

24,600.00

4,428.00

Mini Vault

5,000.00

5,000.00

900.00

325,000.00

58,500.00

Total

Technical Study
Office Layout

Technical Study
Utility Requirements
Electricity-for purposes of estimating expenses, we separate this
cost into a variable component and a fixed component.
Water-consumption- is less than 10 cubic meters per month.
Telecommunication- PLDT Subscription Plan, Postpaid-Globe,
Postpaid-Smart

Technical Study

Projected Utilities Expense

Utilities

2015

2016

2017

2018

2019

Electrical Fixed

P62,375

P63,622

P64,895

P66,192

P67,516

Water

2,272

2,295

2,318

2,341

2,364

Telecommunicat

37,164

37,164

37,164

37,164

37,164

P106,011

P107,281

P108,576

P109,897

P111,245

ions
Annual Utilities
Expense

Technical Study
Project Cost
Costs
Leasehold Improvements
Materials
Labor
Overhead
Office Equipment
Furniture and Fixtures
Office Supplies
Initial Operating Expense
Business Registration
Prepaid Rent (2 months)
Marketing and Advertising
Hiring and Training
Total
Total Initial Cost
Cash Reserved for Operations
Total Project Cost

Amount
200,000.00
150,000.00
80,000.00

P430,000.00
206,600.00
118,400.00
12,680.00

20,365.00
77,600.00
45,000.00
5,000.00
147,965.00
P915,645.00
100,000.00
P1,015,645.00

Management and Legal Study

Organizational Chart
PARTNERS

MANAGER

RESERVATION
OFFICER

ACCOUNTANT

LIAISON

Management and Legal Study

Job Specification and Functions
Manager-Plans, directs and coordinates the operations of the
business. Duties and responsibilities is generalized such as
formulating business policies, managing daily operations, and
planning and implementing strategic management in operating,
financial, marketing, human resource and administrative aspects.
Liaison Officer-Establishes and maintains mutual understanding
and cooperation as between the company and other entities to
whom the company transacts with.
Accountant-In-charge of the general accounting functions and the
preparations of reports that are vital to the business.

Management and Legal Study

On-call Computer Technician-A skilled professional who can offer
quality technical support. Responsible for maintenance of
computers.
On-call Electrician-Responsible for any electrical problems within
the office.
On-call Janitor-Responsible for the cleanliness and orderliness of
the office.

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 and
orientation.
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 responsibilities
The officers and employees will be paid every 15th and 30th of the month.
The cut-off for the computation of payroll is on the 10th and 25th day of the month.

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 adequately
protected and secured.

Collection Policies
The payments made by the customers are non-refundable for the
unconsumed/unused tickets.

Credits are not allowed.

Management and Legal Study

Financial Policies
Loans will be acquired if the company needs additional cash either for operations
expense or purchase of additional equipment.
Payment of interest will be made at the end of each month. It assumed that a legal
per annum rate of 12% is the interest rate and the principal is payable in one year.

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 obsolete or
fully-depreciated.
New equipment will be acquired when the old equipment are damaged or cannot
be repaired.
Old equipment will be disposed when the equipment is obsolete or fullydepreciated.
Old equipment will be disposed when the equipment is damaged and cannot be
repaired.

Management and Legal Study

Legal and Taxation Aspects]
The business will comply with all the necessary legal requirements
with an estimate cost of P20,365.00.
The business will pay an income tax according to the provisions of
NIRC (30% regular corporate income tax).
The business is also required to pay a value-added tax of 12% on its
gross receipts and must file the return not later than the 25th day
following the end of each month or 20th day following the end of
each quarter.

Financial Study
SAFE AND SOUND TRAVEL AGENCY
Comparative Statement of Comprehensive Income
For the Periods Ended, December 31, 20XX
Schedule

2015

2016

2017

2018

2019

Commission Income

5.1

1,179,669

1,318,451

1,473,192

1,645,697

1,837,971

Service Income

5.2

361,664

404,212

451,652

504,539

563,486

Total Income

5.3

1,541,333

1,722,663

1,924,845

2,150,236

2,401,458

6.1

839,600

839,600

839,600

839,600

839,600

465,600

465,600

465,600

465,600

465,600

Depreciation Expense

9.4

144,500

144,500

144,500

144,500

144,500

Office Supplies Expense

10.2

12,046

11,195

11,364

11,589

11,820

Utilities Expense

11.5

106,011

107,281

108,576

109,897

111,245

Advertising Expense

12.2

45,000

45,900

46,818

47,754

48,709

Permit and Licenses

13.2

20,365

1,100

1,100

1,100

1,100

Miscellaneous Expense

14

70,000

65,000

65,000

65,000

65,000

Interest Expense

16

60,000

60,000

60,000

60,000

60,000

(221,788)

(17,513)

182,286

405,196

653,883

(88,715)

(7,005)

72,914

162,078

261,553

(133,073)

(10,508)

109,372

243,117

392,330

Operating Expenses
Salary Expense
Rent Expense

Net Income
Income Tax Expense (Benefit)

Net Income after Taxes

17

SAFE AND SOUND TRAVEL AGENCY

Comparative Statement of Partners Equity
For the Periods Ended, December 31, 20XX
Abariso,
Capital

Cruz, Capital

Dalangin,
Capital

Espiritu,
Capital

Fernandez,
Capital

Mateo, Capital

Total

Capital, 01/01/15

200,000

200,000

200,000

200,000

200,000

200,000

1,200,000

Net Income, 2015

(22,179)

(22,179)

(22,179)

(22,179)

(22,179)

(22,179)

(133,073)

Capital, 01/01/16

177,821

177,821

177,821

177,821

177,821

177,821

1,066,927

Net Income, 2016

(1,751)

(1,751)

(1,751)

(1,751)

(1,751)

(1,751)

(10,508)

Capital, 01/01/17

176,070

176,070

176,070

176,070

176,070

176,070

1,056,419

Net Income, 2017

18,229

18,229

18,229

18,229

18,229

18,229

109,372

Capital, 01/01/18

194,298

194,298

194,298

194,298

194,298

194,298

1,165,791

Net Income, 2018

40,520

40,520

40,520

40,520

40,520

40,520

243,117

Capital, 01/01/19

234,818

234,818

234,818

234,818

234,818

234,818

1,408,908

Net Income, 2019

65,388

65,388

65,388

65,388

65,388

65,388

392,330

Capital, 31/12/19

300,206

300,206

300,206

300,206

300,206

300,206

1,801,238

SAFE AND SOUND TRAVEL AGENCY

Comparative Statement of Cash Flows
For the Periods Ended, December 31, 20XX
2015

2016

2017

2018

2019

Cash flow from Operating Activities

Gross Receipts
Salary Paid
Rent Paid
Office Supplies Paid
Utilities Paid
Advertising Paid
Permit and Licences Paid
Miscellaneous Paid
Advances to Lessor
SSS Contribution Paid
PhilHealth Contribution Paid
Pag-IBIG Contribution Paid
Withholding Tax Paid
Income Tax Paid

1,541,333
(750,359)
(465,600)
(12,680)
(106,011)
(45,000)
(20,365)
(70,000)
(77,600)
-

1,722,663
(750,359)
(465,600)
(11,150)
(107,281)
(45,900)
(1,100)
(65,000)
(17,440)
(6,600)
(3,600)
(61,601)
-

1,924,845
(750,359)
(465,600)
(11,373)
(108,576)
(46,818)
(1,100)
(65,000)
(17,440)
(6,600)
(3,600)
(61,601)
-

2,150,236
(750,359)
(465,600)
(11,600)
(109,897)
(47,754)
(1,100)
(65,000)
(17,440)
(6,600)
(3,600)
(61,601)
(22,806)

2,401,458
(750,359)
(465,600)
(11,832)
(111,245)
(48,709)
(1,100)
(65,000)
(17,440)
(6,600)
(3,600)
(61,601)
(116,466)

Cash flow from Investing Activities

Purchase of Equipment
Purchase of Furniture and Fixtures
Purchase of Leasehold Improvements

(206,600)
(118,400)
(430,000)

Cash Flow from Financing Activities

Original Investment
Issuance of Notes payable
Interest Paid

1,200,000
500,000
(60,000)

(60,000)

(60,000)

(60,000)

(60,000)

878,718
878,718

127,032
878,718
1,005,750

326,777
1,005,750
1,332,527

526,878
1,332,527
1,859,405

681,905
1,859,405
2,541,310

Net Cash Flow

Cash Balance, beg
Cash Balance, end

SAFE AND SOUND TRAVEL AGENCY

Comparative Statement of Financial Position
For the Periods Ended, December 31, 20XX
Schedule

2015

2016

2017

2018

2019

Assets
Current Assets
Cash
Office Supplies

CF
10.2

878,718
634

1,005,750
589

1,332,527
598

1,859,405
610

2,541,310
622

Noncurrent Assets
Advances to Lessor
Equipment, net
Furniture and Fixtures, net
Leasehold Improvements, net
Income Tax Benefit

8.0
9.1
9.2
9.3
17

77,600
169,412
97,088
344,000
88,715

77,600
132,224
75,776
258,000
95,721

77,600
95,036
54,464
172,000
22,806

77,600
57,848
33,152
86,000
-

77,600
20,660
11,840
-

1,656,168

1,645,660

1,755,031

2,114,615

2,652,032

17,440
6,600
3,600
61,601
-

17,440
6,600
3,600
61,601
-

17,440
6,600
3,600
61,601
-

17,440
6,600
3,600
61,601
116,466

17,440
6,600
3,600
61,601
261,553

Total Assets
Liabilities
Current Liabilities
SSS Contribution Payable
PhilHealth Contribution Payable
Pag-IBIG Contribution Payable
Withholding Tax Payable
Income Tax Payable

6.3
6.4
6.5
6.6

Schedule
Noncurrent Liabilities
Notes Payable

2015

2016

2017

2018

2019

500,000

500,000

500,000

500,000

500,000

589,241

589,241

589,241

705,707

850,794

Shareholder's Equity
Abariso, Capital

177,821

176,070

194,298

234,818

300,206

Cruz, Capital

177,821

176,070

194,298

234,818

300,206

Dalangin, Capital

177,821

176,070

194,298

234,818

300,206

Espiritu, Capital

177,821

176,070

194,298

234,818

300,206

Fernandez, Capital

177,821

176,070

194,298

234,818

300,206

Mateo, Capital

177,821

176,070

194,298

234,818

300,206

1,066,927

1,056,419

1,165,791

1,408,908

1,801,238

1,656,168

1,645,660

1,755,031

2,114,615

2,652,032

15

Total Liabilities

Total Shareholer's Equity

Total Liabilities and Shareholder's Equity

Financial Study
Financial Evaluation Measures
2015
Liquidity Ratio
A.Working Capital= Current Assets-Current Liabilities
B. Current Asset Ratio=Current Assets/Current Liabilities
C. Acid Test Ratio=Quick Assets/Current Liabilities

2016

2017

2018

2019

790111.68
9.85
9.85

917098.60
11.28
11.27

1243884.70
14.94
14.93

1654308.27
9.04
9.04

2191138.22
7.25
7.24

-9%
-12%
-8%

-1%
-1%
-1%

6%
9%
6%

11%
17%
11%

16%
22%
15%

Total Assets Turnover = Sales / Total Assets

0.93

1.05

1.10

1.02

0.91

Debt Management Ratio

A. Debt Ratio = Total Liabilities / Total Assets
B. Debt/ Equity Ratio = Total Liabilities / Total Owners Equity

0.36
0.55

0.36
0.56

0.34
0.51

0.33
0.50

0.32
0.47

Profitability Ratio
A. Net Profit Margin = Net Income / Sales
B. Return on Investment = Net Income / Capital
C. Return on Asset = Net Income / Total Assets
Asset Management Ratio

Financial Study
Capital Budgeting Evaluation Measures
Payback Period:

Remaining amount of
investment to recover
1,015,645
136,927
9,895
2.03 years

Year
1
2
3

Payback Period:
Net Present Value:

NPV=
Profitability Index:

Required Rate of Return (assumption)

Year
Cash Flows
1
878,718
2
127,032
3
326,777
4
526,878
5
681,905
699,644.72
1.69

Cash Flows
878,718
127,032

15%

Socio-Economic Study
Provide opportunities for competent and qualified job seekers and
unemployed individuals.
Will help generate income for the government through payment of
taxes.

Will help our countrymen by promoting tourism within the

country.
Coordinates with various organizations and groups that aim to
protect natural resources.