Market Study of AMIR'S CAR WASH (Medalla Dan Kevin L.)

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CHAPTER I
BACKGROUND OF THE STUDY
Introduction
Commuting can be stressful due to traffic jam experiences. Hassle in
commuting from morning to evening is one of the challenges most of the Filipinos
are facing on a daily basis. Sometimes public transport can break down, or it can
be difficult to get a rideshare vehicle.
However, owning a personal vehicle is equal to convenience. People are
acquiring a car mostly to reduce or at least eliminate stress from commuting
especially during the rush-hour traffic.
Further, owning one comes alongside a responsibility of maintaining its
cleanliness and good condition. It is ideal and significant that every owner must
be able to do it regularly. Even so, given the busy day-to-day activities of most of
the Filipino motorist, it really is a challenge to compromise much time and effort
to clean their own vehicle. Some people make it a point to do these tasks every
weekend, contrariwise, this scenario doesn’t happen the same exact way.
Besides, cleaning a personal vehicle in the driveway is very time consuming,
requires a significant amount of energy and it is a really messy job. The majority
of people still prefer a car wash for good reason. A car wash is quicker, more
convenient and offers advantages.
Nevertheless, car wash businesses are becoming a trend. It exists in
almost every corner of the street. In today’s situation, it is really undeniable that
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availing such service saves a lot of time and effort for every Filipino motorist for a
reasonable amount of money.
Brief Background of the Study
Filipinos love their cars and will spare no expense to dress them up. With
the high volume of vehicles on the streets nowadays, it’s no surprise that
carwashes seem to have sprung up everywhere. There are simple sidewalk
operations and neighborhood stops, as well as wash-and-clean services in gas
stations and elaborate shops where your car is carefully tucked away in a
garage. Whatever the set-up is, car washes capitalize on a desire common to all
owners: to keep their vehicles looking clean, shiny and new all the time. (Santos,
2012)
There are several advantages of taking a car to a car wash. First, it
provides thorough cleaning. Second, car washes are good for the environment.
When washing own vehicle in the driveway, there is a use of all different types of
cleaners with harmful chemicals that can negatively impact the environment.
These chemicals flow with the wash water right into lawns, storm drains and
ground water including precious streams, rivers and lakes. Taking your vehicle to
an automated car wash avoids this unnecessary pollution. Third, car wash
services do not damage vehicles because it utilize brushless and touch-less
technology along with a high pressure water spray to clean the surfaces of
vehicles. Last, car wash services preserve water. There are a number of studies
that prove the remarkable efficiency of car washes. When one washes his/her
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vehicle at home with a five-eighths-inch hose that operates at fifty pounds per
square inch, he/she’ll use about ten gallons of water in a single minute. This
means that an individual can use over one hundred and fifty gallons of water to
wash his/her automobile at home. In contrast, a car wash uses on average
twenty-five gallons of water for a complete wash and rinse. Factor in the speed of
car wash compared to the amount of time that it takes to wash a vehicle at home
and it is clear that a car wash is the best choice. (Gordon & Kerkowich, 2017)
This study is committed to deliver quality service by offering a level up or
innovative services in terms of process, promotional strategy and complimentary
business. All of these are designed, first and foremost, for convenience and
utmost customer satisfaction by exceeding their expectations.
AMIR’s Car Wash will be situated at Barangay San Miguel, Sto. Tomas,
Batangas. Barangay San Miguel belongs to a first class Municipality of Sto.
Tomas that is irrefutably making its way to cityhood through its growing industry.
The target market of this study are mainly residential households of the
barangay. The Maharlika Highway connects the Barangay San Miguel with Sto.
Tomas town proper and reaches as far as Bicol Region. It is also the home of
Pepsi-Cola Products Philippines, Inc. (PCPPI) mother plant. Since the business
is along the national highway, it is anticipated that many bystanders within and
nearby the area or even from the National Capital Region will be able to reach
the business.
Objectives of the Study

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Generally, this study was carrying out to determine the viability of the
proponent’s service in connection to the aspects of the market study. AMIR’s Car
Wash sets several objectives to attain profitability and assure business continuity
to:
1. perform carwash services with utmost customer satisfaction,
2. promote marketing strategy through customer loyalty,
3. maintain customer loyalty, and
4. execute efficient use of resources.
Given these, AMIR’s Car Wash will demonstrate appropriate strategies
regarding the product, price schemes, and promotional activities; and empower
the place to become an open area to do business.
Scope and Limitations
The study is conducted to determine market, technical, management,
financial and socio-economic aspects of the project. Those aspects serve as the
basis in order to determine the scope and limitations of this study.
In marketing aspect, it involves the techniques and strategies used for the
proposed product and to know the possible supply and demand for the next five
years. The study also discusses the strengths, weaknesses, opportunities and
threats and also the different marketing strategies. It focused on the
determination of the prices of the goods that the business will provide for the
people. The researchers used the descriptive method in order to obtain the
marketability of the proposed product. The proponents distributed four-hundred

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(400) consumer survey questionnaires last October 8-10, 2018 to four-hundred
(400) household out of three-thousand (3,003) households of Barangay San
Miguel, Sto. Tomas, Batangas. The source for the number of households are
taken from the barangay statistics. Survey was done in order to determine the
possible number of demand of the service. The group has given two to three
minutes to answer the survey questionnaire. The use of the Slovin’s formula was
utilized in computing the sample size with a five percent margin of error, and the
Arithmetic Geometric Curve method in computing the projected demand and
Statistical Parabolic Curve method for projected supply.
The technical aspect explains the process of manufacturing the product
using currently existing technology. It takes to account the required technology is
available or not and whether the required resources are available in terms of
manpower and equipment. It includes the channel of distribution of proposed
product, pricing, location, and promotion of proposed product to the market. The
proponents need to acquire information about the pricing in order to determine
the accurate number of direct materials and equipment needed.
Management aspect will focus on the form of ownership of the business. It
will also discuss the organization structure of the business, the current market of
car wash in the city of San Miguel, the anticipated future market potential of the
propose service, the competition that involve in entering to the market in an
existing business undertaking and the sales projections and potential buyers of
the propose product itself. The source of the legal requirements came from the
Municipality of Sto. Tomas.

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Financial aspects will cover the capital needed by the proponents, the
sources of capital and the possible return on investment. The proponents
decided to start with a capital which is P520,000. The increase in purchases is
6.7% based on the average inflation rate from the second semester of 2018
given by Philippine Statistics Authority.
Socio-economic benefits focuses on the environmental and economic
contribution of the business in the society at large. The proponents apply the
appropriate waste disposal with proper authorities or compliance with legal
requirement. The proponents also pay right taxes that could help the government
and contribute to the different communities for services and projects.
Definition of terms
In order to achieve appropriate comprehension and clearer perception of
the terms used in the study, the following terms are operationally and
conceptually defined.
Personal Vehicle. A vehicle which is not owned by the government and
which is in the possession of and used by the employee and/or his immediate
family for the primary purpose of providing personal transportation.
Car Wash. An area or structure equipped with facilities for washing
automobiles.
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High-Pressure Washing. The use of high-pressure water spray to
remove loose paint, mold, grime, dust, mud, chewing gum and dirt from surfaces
and objects such as buildings, vehicles and concrete surfaces.
Ozone or Air Humidifier. A device that increases humidity (moisture) in a
single room or an entire building.
Loyalty Card. A card issued by a supermarket or chain store to a
customer and used to record credit points awarded for money spent in the store.
Vendo or Vending Machine. An automated machine that provides items
such as snacks, beverages, cigarettes and lottery tickets to consumers after
money, a credit card, or specially designed card is inserted into the machine.
Target Market. It refers to a fairly homogenous group of people or
organization to whom the company wishes to appeal. (Go, 2007). In this study, it
refers to the personal vehicle owners of Brgy. San Miguel, Sto. Tomas, Batangas
where the business is to be placed.

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Chapter II
Market Study
Market Study is sought as the most critical parts of a market study in
which an idea will come up to create a proposal. This chapter will inform and
analyze the critics namely possible target market, competitors and other factors
that may affect how AMIR’S CARWASH will enter and maintain in the market.
A. Objective of the Study
As part of the ideals of establishing a car wash business within the area,
Amir’s Car Wash sets several objectives to attain profitability and assure
business continuity:
1. To perform carwash services with utmost customer satisfaction.
2. To promote marketing strategy through customer loyalty.
3. To maintain customer loyalty
4. To execute efficient use of resources.
With this objectives, Amir’s Car Wash demonstrated appropriate strategies
regarding the by product, price schemes, promotional activities and empower the
place to become an open area to do business.
B. Methodology
As part of this study conducted, the researchers aimed the best possible
conclusion regarding how feasible would be establishing Amir’s Car Wash. On

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pursuing the aim, the researchers conducted necessary information gathering
that will contribute this study. The source of data were based on the accuracy of
requirements in order to comprehend and align the notation required.
The process of data gathering were denoted to properly align with the aim.
Factors of defining the research design and the subject of the study (the target
market, location of the market and its characteristics) were the focal point to
gather the data. Data gathering instrument, procedure and its statistical treatment
were represented as a factor on getting the potential to tag this study as feasible.
The study also aligned probable business competitors that will properly define
the demand and supply analysis on how Amir’s Car Wash can penetrate within
the target market.
C. Research Design
The researchers used descriptive design and applied using survey
questionnaires and interviewed peers that may contribute to this study. The
survey was conducted by providing questions aligned to the objectives and were
given to the sample household and nearby companies as part of key accounts to
be served by Amir’s within the business location. The survey were provided to
sample household via in print survey questionnaire type.
The researchers also conducted an interview to possible competitors and
key accounts namely Pepsico, Nurian Dress Factory, Eun Hye Factory and
Mando’s and Elvie’s Restaurant in which further information from them provide
precise analysis of this study.

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D. Subject of the Study
The subject of the study were the households of Brgy. San Miguel, Sto.
Tomas and key accounts namely Pepsico, Nurian Dress Factory, Eun Hye
Factory and Mando’s and Elvie’ Restaurant. The identified total households is
3,003 based on August 2018 report by from the barangay office. The said
households are the target market of this study in which nowadays, having a
vehicle is a necessity. We also include as the subject the two (2) competitor near
the area namely Arsal Carwash and R and G Carwash.
Only 400 respondents were being sampled in which households were
divided to zones. Sample will be distributed to zones. Total sample per zone will
be based on the percentage of distribution of the total households.
Figure 2.1
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E. Data Gathering Instrument
The researchers use a questionnaire to get the pulse of the target market.
The said questions stated in the questionnaire was aligned with the objectives of
the study that can be summarize with the 4 P’s of marketing which is price,
product, place, and promotion.
The sampled households was based on the total households provided by
the barangay. Total household is divided to 11 Zones (See below table and its
distribution per zone to get the sample)
Total Household Sampled Household

Zone
Total Households/Zone Distribution % Sampled Household/Zone Distribution %
Zone 1 281 9.36% 33 9.36%
Zone 2 272 9.06% 32 9.06%
Zone 3 277 9.22% 33 9.22%
Zone 4 336 11.19% 39 11.19%
Zone 5 213 7.09% 25 7.09%
Zone 6 491 16.35% 58 16.35%
Zone 7 273 9.09% 32 9.09%
Zone 8 547 18.22% 64 18.22%
Zone 9 177 5.89% 21 5.89%
Zone 10 95 3.16% 11 3.16%
Zone 11 13 0.43% 2 0.43%
Zone Mountain View 28 0.93% 3 0.93%
Total 3003 100% 353 100%
Before the questionnaire was given to the sampled households, the
researchers explained the background regarding the reason of seeking time to
answer the questionnaire. See questionnaire on the next page:

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The researchers also have set of questions for two (2) competitors,
namely Arsal Carwash and R and G Carwash. See below questions to be include
1. How long your business operates?
2. Define the weekly average vehicles that your car wash cater.
3. Aside from the usual services you offer, what other special services you
may offer to customers?
4. Do you have further plans to expand the business? What particular
service would you add up?
The researchers also have another set of questionnaire for the three (3) key
accounts namely Pepsico, Nurian and Eun Hye that can probable boost further
the service revenue of the business:
1. How many Vehicle units (excluding delivery units) do you have?
2. Does your existing vehicle undergo carwash?
3. Are you open to have a MOA for at least 5 years to ensure that all Vehicle
Units be served by our car wash in order to at least extend the lifespan of
your vehicle in terms of its interior and exterior?
4. Once MOA is already set, how frequent it will be served per Vehicle Unit?
5. Do you plan to buy an additional vehicle unit within 5 years? How many?
F. Data Gathering Procedure
The researchers identified Brgy. San Miguel, Sto. Tomas, Batangas as the
prospect location to put-up Amir’s Carwash. Identifying the prospect location, the
researchers coordinated with the Barangay Hall staff of the said location to
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gather the total number of households as the subject. The researchers had
confidence check the market by using the number of households at the said
location as a subject. By getting the total number of households, the researcher
created a distribution table of households (Indicate in Data Gathering
Instrument). The researchers computed the sample size in which the number of
questionnaire to be distributed which is based on Slovin’s Formula.
After the total household and its sample size, the questionnaire was
validated and aligned by the researchers and its CPA. The questionnaire have
three (3) sets which were intended to sampled household, key accounts and the
two (2) competitors within the vicinity. The questionnaire is aligned on the
objectives of the study.
After the questionnaire was being validated and aligned, the researcher
conducted the survey at the subject. The first set was distributed to the subject
(which is the sampled household). The total number of questionnaires to be
distributed to the subject was based on the result of Slovin’s formula. It was
distributed per zone basis. (See Table on Date Gathering Instrument) The
second set was being to the key accounts that the car wash may cater. The third
set was being asked to the two (2) competitors within the vicinity.
All data gathered at the questionnaire was being tallied and tabulated in
order to describe the Demand Analysis, Supply Analysis, Demand and Supply
Analysis, Market Share, and SWOT Analysis to give life to the service and price
to be offered to the market.

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G. Statistical Treatment Data
As already indicated at data gathering procedure, there are three (3) sets
of questionnaire being used to gather data from the target market (the subject),
key accounts and the competitors. With thorough review and validations from
different ideology based on existing details with regards to the business, related
inputs from business professional and certain literature from random magazine,
the created questionnaire also transpires to answer a certain matter regarding
the supply and demand intended for the nature of the service to be offered by
Amir’s.
As the researchers already had the sample size of the subject, the aim is
to get the best available data. To get the best available data, the researchers
created a questionnaire that is aligned with the objectives. On getting of the
sample size of the subject, the researchers used the Slovin’s formula. See below
formula:
Sample Size: n = ___N____
1+Ne2
Where:
n = Sample size
N = August 2018 total number of
e = Margin of errors (5%)

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Using the formula: n = ___N____
1+Ne2
n = 3,003__
1 + (3,003) (0.5)2
n= 353 sample household
From the total number of households at Brgy. San Miguel (3,003
households), the sample size of 353 individuals was computed using five (5) % of
margin error.
The total number to be sampled per zone will be distributed using stratified
random sampling. The number of questionnaires to be given to different
household was determined by multiplying the number of sampled household and
Frequency Distribution of Total Household. See below formula:
Number of sample distribution per zone = Number of Sampled
household*Frequency Distribution of Total Household
The other data were being tabulated and describe in order to further
define the numbers and further connect it for analysis. Meaning, the frequency of
rendering the service will be the total platform to further know the market.
H. Demand Analysis
As part of capturing the market, the researchers were able to gather data
based on the questionnaire provided to its competitors and key accounts.

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Demand is a very important aspect in order to know to willingness of the target
market to render the business service.
H.1 Historical Demand
See below historical demand based on competitors yearly served
frequency of their car wash in reference to the household’s number of vehicle’s
aligned with estimated increase of household’s per year:
Historical Demand
Year Demand
2013 13,905
2014 15,554
2015 17,654
2016 19,692
2017 20,956
Table 2.1
Historical Demand
H.2 Projected Demand
Projected demand defines as the expected quantity to be served by a
same type of business offered.

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See below projected demand based on competitor’s yearly served
frequency plus a projection of increase of number of households (based on
questionnaire) and the vehicles owned by key accounts:
Projected Demand
Year Demand
2019 22,197
2020 24,675
2021 27,687
2022 30,729
2023 33,096
Table 2.2
Projected Demand
I. Supply Analysis
Supply determines the number of available service that businesses
may offer.
I.1 Historical Supply
See below historical supply which were offered by the competitors:
Historical Supply
Year Supply
2013 8,350
2014 9,340
2015 10,601
2016 11,825
2017 12,584
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Table 2.3
Historical Supply
I.2 Projected Supply
Due to rapid increase of number of vehicle in which also in line with
the increase of households of the area and the efforts of Amir’s to have
a MOA with three (3) key accounts, see below Projected Supplies
which also considered the number of vehicle that the respondents and
company willing to be served times the number of frequency they want
to do the service and10% projected increase per year of the number of
vehicles per based on the data from the municipality of the area.
Projected Supply
Year Supply
2019 8,292
2020 9,121
2021 10,033
2022 11,037
2023 12,140
Table 2.4
Projected Supply
J. Demand and Supply Analysis
The result of demand and supply analysis will determine the market gap
that requires if a line of businesses can cater the demand of the market. See
below analysis:
SUPPLY AND DEMAND ANALYSIS

Year Demand Supply Market Gap
2019 22,197 8,292 13,905
2020 24,675 9,121 15,554
2021 27,687 10,033 17,654
2022 30,729 11,037 19,692
2023 33,096 12,140 20,956
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Table 2.5
Supply and Demand Analysis
K. Market Share
The percentage of the total service revenue of a given type of product or
service that is attributable to a given company (Clow, 2002). It is also the ratio of
revenue of a brand and total sales of a service type in a defined area. The
increasing value of the market share is a good indicator that the business can
penetrate the unsatisfied demand. This market share tells whether to pursue the
business or not. The market share was calculated by dividing the annual
service volume over the projected demand.
Market Share = Annual Sales (per pack)
Market Gap
MARKET SHARE
Year Projected Sales Market Gap Market Share
2019 8,292.00 13,905.00 60%
2020 9,121.00 15,554.20 59%
2021 10,033.00 17,654.32 57%
2022 11,037.00 19,691.65 56%
2023 12,140.00 20,956.32 58%
Table 2.6
Market Share
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L. SWOT ANALYSIS
SWOT is an acronym that stands for Strength, Weaknesses,
Opportunities, and Threats. New business should use a SWOT analysis as a part
of their planning process. SWOT is intended to specify the objectives of the
business venture or project and external factors that are favorable and
unfavorable to achieving those objectives.
The following are the SWOT of the proposed product named “ AMIR’S Car
Wash”:
STRENGHTS
It is the characteristics of the business or project that give it an advantage
over others. The strength of the business may come from the product itself, good
relationship with the employees and other factors.
LOCATION. The location of the business is located nearly in different
establishments which would be a great impact to gain possible customers.
PRICE. The business offer reasonable price to attain customer’s loyalty.
EMPLOYEES. The business will hire skilled employees.
WEAKNESSES
It is the characteristics of the business that place the business that has a
disadvantage relative to others.

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LACK OF SUFFICIENT CAPITAL. The business will need to depend on
external funding providers.
OPPORTUNITIES
The strength of the business may come from the product itself, good
relationship with the employees and other factors. Weaknesses of other
companies serve as an opportunity in other companies. Having those
opportunities, the company should make a strategic way on how to capture that
factors and use it as their competitive advantage.
TARGET MARKET. Domestic and commercial.
INCREASE MARKETING IDEAS. Use multiple forms of media to ensure
we meet a broad range of market.
NEW PROVIDER. AMIR’S is a first ever Car Wash that offers Loyalty
Card for customers.
Elements in the environment that the business or could exploit to its
advantage.
THREATS
Elements in the environment that cause trouble for the business.
Competitors. Other Car wash services that offers cheaper price to
customers.
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M. Service offered.
Amir’s Carwash is under service category. The service that can be
rendered of this business entity is all about cleaning once all types of vehicles
using innovation to ensure its cleanliness. The services that the said carwash
offered are namely vacuum only, Body Wash with Vacuum, Wax, under wash,
acid rain, ozone dehumidifier and complete wash which includes body wash with
vacuum, wax and ozone dehumidifier.
N. Brand Name
Branding a business should be catchy to customer in which it become a
household name. The proposed service of the researchers was a carwash
services that will serve its possible customers at outmost quality thru using
innovative process and efficiently using new equipment and cleaning agents at
affordable price.
O. Business Logo
Amir was being formed based on the first letter of the names of the owners
namely A for Arlene Marcelino, M for Mariz Mapantay, I for Idy Nell Tayobong
and R for Robert Malijan. The term also means “ruler” based on Islamic countries
that the business aims to rule customer satisfaction, loyalty, and efficient use of
the resources to compete with the
customers.
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Figure 2.2
Business Logo
P. Price Study
Price is set to be the critical factor for customer. With good negotiation
power by its owners, they come up a better price offering versus competitor and
additional services to be provided. See below price list and its comparison versus
competitors:
AMIR CAR WASH

VEHICLE TYPE
SERVICE TYPE MOTORCYCLE/
SEDAN SUV/PICK-UP VAN
TRICYCLE
BODY WASH W/ VACUUM Php 70.00 Php 100.00 Php 140.00 Php 170.00
VACUUM ONLY Php - Php 40.00 Php 60.00 Php 80.00
WAX Php - Php 100.00 Php 120.00 Php 150.00
UNDERWASH Php - Php 100.00 Php 130.00 Php 160.00
ACID RAIN Php - Php 180.00 Php 220.00 Php 250.00
OZONE DEHUMIFIER Php - Php 200.00 Php 300.00 Php 450.00
Compelete Wash (W/O ACID RAIN) Php - Php 300.00 Php 400.00 Php 500.00
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ARSAL CARWASH
VEHICLE TYPE
TRICYCLE
BODY WASH W/ VACUUM Php 80.00 Php 110.00 Php 160.00 Php 200.00
OZONE DEHUMIFIER Php - Php - Php - Php -
Compelete Wash (W/O ACID RAIN) Php - Php - Php - Php -
R AND G CAR WASH

VEHICLE TYPE
TRICYCLE
BODY WASH W/ VACUUM Php 80.00 Php 120.00 Php 210.00
OZONE DEHUMIFIER Php - Php - Php - Php -
Compelete Wash (W/O ACID RAIN) Php - Php - Php - Php -
Q. Place and Distribution Channel
The primary place of the said business are the households within Brgy.
San Miguel, Sto. Tomas Batangas and existing business within the vicinity. The
vehicles will be drop off at the shop to have the service done. See below
channels:
Manufacturer of
chemicals
Amir’s Car Wash
KEY ACCOUNTS Households

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Figure 2.3
Place and Distribution Channel
R. Promotion
For promotion, Amir’s owners created a social media account (Facebook)
in order to advertise the service. Amir’s has a membership card that is free. See
below:
Figure 2.4
Loyalty Card
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Amir’s also setting up appointment with various business that has vehicles
in which promotes taking care of this items in order to extend the life of the
vehicle and good appearance. The business also invest for Equipment and Tools
that are relatively new versus competitor to provide the best quality of service
possible and customer loyalty. With regards to customer loyalty, they can also
promote thru word of mouth to other possible clients within the area and nearby
barangay to extend the service of the said car wash.
S. Generalization
With the valid strategies formalized based on questionnaire and existing
competitor of the business, it hereby say that Amir’s Car Wash is market feasible.
CHAPTER III
TECHNICAL ASPECT
The technical aspect of this study speaks of the service as to its components,
machineries, equipment, direct and indirect materials used in the service and its
processes. It also deals with the waste disposal, site and layout, labor
requirements and service cost.
A. Objectives of the Study

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The general objective of the study is to determine the technical soundness
of AMIR’s Car Wash. Specifically, it attempts to discuss the following objectives:
1. To determine the nature of the service and its use;
2. To illustrate the service process
3. To determine the necessary equipment, facilities, materials, labor and
other requirements to execute the service;
4. To identify the appropriate location, size and layout for the business
Service Description
AMIR’s Car Wash will offer a level-up or improved services from a mere
washing of exterior and interior parts into innovating aspects of car wash
process and/or operation. Thus, these aspects are committed to deliver
utmost satisfaction to its prospect customers.
In terms of service process – innovative use of modernized technology
namely Ozone or Air Humidifier in lieu to car freshener will be utilized by the
business. This will include choice of scent of the customer. Eliminating car
freshener that is considered as an add-on cost on the consumer’s part, is one
of the goals of this service.
In terms of marketing strategy – in the objective of promoting the service
while maintaining customer loyalty, a Loyalty Card will be introduced by
AMIR’s Car Wash to offer free services or discounts as a reward from the
accumulated services acquired in the business. Such is also what the service
proposes as an innovation.
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In terms of comfort – as an ease in the period of waiting, a coffee vendo-
machine will be made available for the customers. The vendo-machine will be
placed adjacent in the front line area.
B. Service Process
The following are the four major stages of car wash service processes:
 Pre-washing
During pre-washing, the vehicle is sprayed with descaling products.
They are specially designed to begin to undo the most stuck dirt, such as
mosquitoes, bird excreta, etc., which, at a later stage, will be eliminated
with the help of mechanical brushes or high-pressure washing. Also, often
due to customer’s request or depending on the cleaning program, a
product for tires is applied. After the spray with the descaling product, the
vehicle is washed with high-pressure water. The aim is to leave the
vehicle ready for the next phase (i.e., leave the surface wet and ready for
the application of detergents). At this stage, a large part of the deepest dirt
is already removed.
 Washing
The vehicle is sprayed with a mixture of water and shampoo through
sprinklers. Its function, in addition to cleaning, is to soften the surface of
paint, to maximize the later mechanical action of the brushes and to
prevent scratches. Another detergent (known as “active foam”) is often
applied; its aim is to create a dense foam completely covering the paint.
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The foam ensures the cleaning action, because it slowly removes the dirt
remaining on the surface, which makes the later rinsing easier. This phase
may also include specific arches for the wheels and lower lateral parts of
the vehicle (where mud easily adheres), to make a deeper washing. The
washing phase includes, besides arches with shampoo and active foam,
arches with brushes (vertical and/or horizontal). It is important that they
are accompanied by plenty of water and applying a minimum of detergent.
 Finishing
The finish includes a rinse with clean water after washing and
waxing. The wax application is optional, but it is a widespread phase in all
the washing and it is usually done through the washing machine and in
cold. Various waxes can be applied according to the aim. If so, first we
apply a polish wax that covers the possible scrapes on the painting and it
provides a smooth surface. Now the vehicle is in the best possible
conditions to be applied a protective or drying wax which, with its
hydrophobic nature, reduces the surface tension of the rinse water. The
water layer is broken and forms large droplets which are easily removed
(either by the effect of a drying stage with turbo fans or by gravity). Some
washing systems apply, after waxing, a final phase rinsing with soft water
(i.e., free from calcium and other ions). This is to avoid droplets once dry.
This step usually uses tap water and, depending on its hardness, a
treatment to soften it or demineralized it is applied. It is usually water that
has passed through an ion exchanger and/or reverse osmosis. Reverse

31
osmosis is a growing application in vehicle washing; especially if cars are
dried in air, a high-quality water is required to avoid stains.
 Drying The last stage of the washing process is drying the vehicle. It is
optional and it is mainly offered in the roll-over type. Generally, it is
done via blowers or turbo fans dragging the remaining water droplets on
the vehicle surface.
Figure 3.1 below shows the process flow chart of AMIR’s Car Wash
Services. The duration for every process will take 20-25 minutes.
Figure 3.1
PROCESS FLOW CHART
Spray down the whole car. If there are bugs or dried bird droppings, set a
wet soapy rag on the spot to loosen it up while working on the rest of the
Step1 car.
Clean the wheel wells and tires. Spray well; use wheel brush and soapy
water to scrub. Be sure to rinse the brush frequently to remove grit and
Step 2 small stones.
Starting on the top begin washing the car. Work in small sections using the
sponge or mitt. Rinse continually, do not let soap dry on the car.
Step 3
Towel dry the car working in long sweeping motions that follow the contours
of the car body. Blower dry the remaining water droplets on the vehicle
Step 4 surface.
32
C. Plant Location
Use a tire lubricant.
The
Step 5 location of the plant should be strategically planned in order to ensure
the effectiveness of the business.
AMIR’s Clean
Car Wash is placed
interiors. Vacuumat Brgy.
and San carpet.
shampoo Miguel, Sto. Tomas, Batangas.
Step 6
Brgy. San Miguel belongs to a first class Municipality of Sto. Tomas.
The Maharlika Highway connects the barangay with Sto. Tomas town proper

Execute
to Calamba, air humidifier
and reaches as fardiffuser in theRegion.
as Bicol interiors of the car
Given withthe
that the location
chosen is
scent of the customer.
Step 7
along the national highway, it is also a passing road going to St. Padre Pio
National Shrine. With this, it is expected that many bystanders nearby the area
and even from National Capital Region will be able to reach AMIR’s Car Wash.
Figure 3.2
PLANT LOCATION
33
D. Plant Size and Layout
The plant layout is one of the most important factors in managing
business. A good plant layout provides systematic work activities for the
workers of the plant. The space of the plant should be convenient so that
the employees can do their jobs comfortably. The plant size of the
business is 250 square meters.
Figure 3.3
PLANT LAYOUT
34
E. Factory Tools and Supplies
The factory tool and supplies comprises of the following:
Table 3.1
FACTORY TOOLS
Items Quantity Unit Cost Total Cost

2-step Ladder 3 Php550.00 Php1650.00
Drums 3 390.00 1,170.00
Hose 10 335.00 3,350.00
Pails/Buckets 20 90.00 1,800.00
Car polisher/Shine
(for detailing)
Scratch Remover 6 3,420.00 20,520.00
Ultra Hi-Gloss
Finish, 450ml
Power Sprayer 1/2
3 6,800.00 20,400.00
Horsepower, 26 inch
Mini Air Humidifier
5 1,200.00 6,000.00
Diffuser
Heavy Duty Rain-
Proof Extension 6 745.00 4,470.00
Roof
Total 59,360.00
Source: Ace Hardware
F. Factory and Office Equipment
Purchasing the right tools and equipment and machineries would be one of
the thought about requirement to start up the business. The enterprise

35
considered all possible sources of equipment and machineries. It took into
consideration what was really needed by the business. Cost of this equipment
and machineries were acquired through canvassing and the useful life of the
equipment is 5-10 years.
Table 3.2
FACTORY EQUIPMENT

Pressure Washer
Compact Electric
6 Php18,000.00 Php108,000.00
1600 watts, 5.5
liters/minute
Vacuum Cleaner
with Blower, 750 6 5,000.00 30,000.00
watts 6 meter
Pressure Tank 340L 3 7,140.00 21,420.00
Electrical hydraulic 2
post lift Car Lifts and

2 26,000.00 52,000.00
Automotive
Equipment
Portable Mini
Airbrush Air 6 8,930.00 53,580.00
Compressor
Total Php265,000.00
Source: Maquiling Builders Depot
Table 3.3
36
OFFICE EQUIPMENT

32” HD Smart Digital
1 Php20,502.00 Php20,502.00
Television
POS Cash Register 1 5,000.00 5,000.00
Laptop Pentium
Quad N4200 4GB 1 19,500.00 19,500.00
500HDD
6-in-1 Printer w/
CiSS, Wireless, 1 5,000.00 5,000.00
Duplex Print
Air Conditioner
2 16,499.00 32,998.00
1.5hp Inverter
Total Php83,000.00
Source: Emilio Lim Appliances
G. Factory Furniture and Fixtures
Furniture and fixtures were very well used in order to have an
organized working place, the useful life of the furniture and fixture is 5 years.
The cost of furniture and fixtures are displayed on table.
Table 3.4
FACTORY FURNITURE AND FIXTURES

Wooden Bench
1 Php20,000.00 Php20,000.00
Fixtures
Mini-table 1 3,000.00 3,000.00
Total Php23,000.00
37
Source: Ligaya Furniture & Gen. Mdse. And Emilio Lim Appliances
Table 3.4 shows the prices of factory furniture and fixture that will be used
by the production workers.
K. Office Furniture and Fixtures
Table 3.5 shows the prices of the office furniture and fixture that will be
used by the production workers. It is good for 5 years.
Table 3.5
OFFICE FURNITURE AND FIXTURES

Frontline Table 1 Php5,000.00 Php5,000.00
Office Table 2 4,500.00 9,000.00
Office Chairs 2 1,500.00 3,000.00
Total Php17,000.00
Source: Abenson and Ligaya Furniture & Gen. Mdse.
H. Maintenance Supplies
38
AMIR’s Car Wash commits to maintain the cleanliness and
orderliness of the firm for a common well-being – internal and external.
Table 3.6 enumerates maintenance supplies. It is good for 1 year.
The partnership will enter into an agreement with Century Home
Center (where the prices of direct and indirect materials are sourced-out)
to be a regular supplier. This is for a duration of 1-year-renewable
contract.
Table 3.6
MAINTENANCE SUPPLIES

Broom 4 Php50.00 Php200.00
Dust Pan 4 35.00 140.00
Rags 15 20.00 300.00
Trash Can 10 35.00 350.00
Soap 45 19.00 855.00
Mop 3 70.00 210.00
Sponge 40 16.00 640.00
Pail 5 30.00 150.00
Dipper 5 15.00 75.00
Fire Extinguisher 1 2,600.00 2,600.00
Hand towel 10 63.34 633.40
Total Php6,153.40
Source: Century Home Center
I. Office Supplies
39
Table 3.7 shows the office supplies that will be used by the company.
These are necessary to record the transaction of the business.
Table 3.7
OFFICE SUPPLIES
Description Quantity Unit Cost Total Cost

Ball pen 10 Php5.00 Php50.00
Bond Paper Ream 10 100.00 1,000.00
Eraser 3 5.00 15.00
Pentel Pen 5 10.00 50.00
Envelope 5 1.25 6.25
Folder 3 3.00 9.00
Pencil-Dozen 1 3.33 3.33
Record Book 2 41.00 82.00
Ink (Printer) 5 500.00 2,500.00
Correction tape 2 15.00 30.00
Staple wire 50 0.95 47.50
Ruler 1 6.50 6.50
Total Php3,799.58
Source: Eskwelaatbp.
Table 3.8
OFFICE TOOLS
Description Quantity Unit Cost Total Cost

Calculator 1 Php870.00 Php870.00
Scissors 2 25.00 50.00
Sharpener 3 5.00 15.00
Stapler 2 75.00 150.00
Water Dispenser 1 3,763.00 3,763.00
Electric Stand Fan 3 1,995.00 5,985.00
40
Refrigerator 1 14,807.00 14,807.00

Slim Origin Handheld Battery
1 15,000.00 15,000.00
Vacuum Cleaner
Total Php40,640.00
Source: Eskwelaatbp.
J. Direct Materials
The direct materials that will be utilized in the process of car wash
services are the following:
Table 3.9
DIRECT MATERIALS

Car Shampoo 1L 60 Php145.00 Php8,700.00
Car Wax Liquid Wax
30 500.00 15,000.00
Hi-Gloss Finish 1L
Tire Black 1L 30 450.00 13,500.00
Air Humidifier Oil
1 475.00 475.00
Scent Set of 3
Acid Rain Chemical
1 500.00 500.00
5L
Chamois 3 110.00 330.00
All-Purpose Rags 24 5.50 132.00
Car Sponge (Big) 4 45.00 180.00
Total Php38,817.00
Source: Wilcon Builder’s Depot
K. Indirect Materials
The indirect materials that used in the process of car wash services are
the following:
41
Table 3.10
INDIRECT MATERIALS

Brush 10 45.00 450.00
Total Php450.00
Source: Wilcon Builder’s Depot
The partnership will enter into an agreement with Wilcon Builder’s Depot
(where the prices of direct and indirect materials are sourced-out) to be a regular
supplier. This is for a duration of 1-year-renewable contract.
L. Lease and Leasehold Improvements
Lease and leasehold improvement is essential to improve the existing
place of the business. The location of AMIR’s Car Wash will be rented for
Php10,000 monthly. The rent expense will be fixed for the first five years of
the business.
Thus, following are enlisted to make the prospect workplace a better
working environment:
Table 3.12
LEASE AND LEASEHOLD IMPROVEMENTS
Description Quantity Unit cost Total Cost

Lumber 3 Php110.00 Php330.00
42
Ply wood 2 450.00 900.00

Paint 4 150.00 600.00
4 inch nails 2 50.00 100.00
5 inch nails 5 55.00 275.00
Lighting 2 200.00 400.00
Workers (2 days) 2 400.00 1600.00
Total Material Php4,205.00
Source: Fermin L. Solis Construction Supply
M. Utilities
The utilities are often regulated by the government and play an important
role to ease the day-to-day operations of any business.
Table 3.13
UTILITIES
Purchased Utilities Cost

Electric Bill Php12,445.00
Water Bill 31,112.50
Telephone 999.00
Contingency 20,000.00
Total Php64,556.50
Source: Meralco, Water District and PLDT
Electricity
To continue the operation of the business power is required.
Consumptions of electricity are necessary since it will be intended by company

43
maintenance. Manila Electric Company (Meralco) as the supplier of electricity
provides sufficient power supply with a fixed rate of Php10.732/kilowatt.
The use of electricity by the business will not always be exactly quantified. The
business assumed Php12,445.00 for their monthly electricity bill.
Water
It is not only a major necessity in the production but it also needed for
personal consumption. It is also necessary in maintaining the cleanliness of the
workplace. Sto. Tomas Water District will provide the supply of water with
estimated amount of Php31,112.50 per month.
Telephone
Philippine Long Distance and Telephone Communication will provide the
telephone service for the business. It generally needed by the business in placing
and receiving order from customers. The business chooses a plan amounting to
a fixed amount of Php999.00 for their monthly telephone and internet service.
N. Direct Labor Requirement
The lifeblood of the business is labor. It has been said that a business is not
only established to produce good products or deliver quality services, but also
for the welfare of its external society hence to create job opportunity. Owners or
stockholders alone cannot make the job done without the help of its workers.
44
The following are the expected manpower to be acquired by the business along
with its compensation and benefits:
Table 3.14
DIRECT LABOR REQUIREMENT
Monthly Salary
Worker Quantity + Total Cost
Contributions
Worker 7 Php6,800.00 Php47,600.00
Total Php47,600.00
Q. Others
One of the objectives of the business is to provide ease to the customers
while waiting to finish the carwash service – customer satisfaction. One way to
achieve such is to provide a coffee vendo-machine next to the front line desk –
just a meter away from the waiting area. Hence, the business will be a
distributor of a coffee vendo-machine. Obtaining a coffee vendo-machine as a
contributor requires only a minimum investment (low capital). It is also easy to
operate, and has no franchise fees and guarantees daily income. The following
45
are in-detailed cost of adding this business:
Table 3.15
COFFEE VENDO-MACHINE DISTRIBUTOR
Description Quantity Unit cost Total Cost

Coffee Vending
1 Php12,000.00 Php12,000.00
Machine
Coffee Powder
1 190.00 190.00
1KL/Pack
Choco Powder
1 190.00 190.00
1KL/Pack
Caramel Powder
1 190.00 190.00
1KL/Pack
Paper Cups 6.5 oz 300 0.70 210.00
Total Initial
Php12,780.00
Investment
46
Table 3.16
COFFEE VENDO MACHINE DISTRIBUTOR
(Cost Per Cup)
Consumables Costing Cost/Cup Remarks

Choco or Caramel Php170.00/kilo, makes
Php 2.25
Powder between 90 to 100 cups
Php210.00 for 300 pcs. of
Paper Cups 6.5oz Php 0.70
paper cups
Distilled Water (5 Php25.00/5 gallons make 151
Php 0.15
gallons) cups of 120ml
Electricity Php11.00 /100 cups
Php 0.10 Variable
Consumption dispensed
Total Cost per
Php3.00
Cup
The table 3.16 shows the cost per cup the business will acquire to
operate the coffee vendo-machine. The selling price for every cup will be
Php5.00.
U. Waste Disposal
The waste disposal is necessary for the company to continue its
operation. Waste disposal management continues to be a rising challenge
on different kind of business because of restrictions and regulations about

47
wastes are increasing. With this, the business has trash cans where the
plastics cups from the vendo-machine business along with the
accumulated garbage in the working area can be placed. These will be
collected by the dump truck every Monday.
V. Generalization
In general, the technical study assesses the details on how business
owners will deliver a product or service. It is the logistical or tactical plan of
how a business will produce, store, deliver, and track its products and
services.
One of the main focuses of this study is the service itself which is the
“AMIR’s Car Wash”. It is a carwash service which offers more innovative
ways of service process and the proponents also have considerations
regarding the supplies, utilities, machinery, equipment and the labor
requirements relevant to the business. This can be contributing for the
estimation and minimization of costs that can be incurred in the daily
operations. For proper sanitation of the business, proper waste disposal
must also be included. These aspects are the keys for efficient and
effective operation of the business.
Another aspect of this study is plant location and lay-out, plant
location can be the means to have accessibility with the customers.

48
CHAPTER IV
MANAGEMENT STUDY
Management is planning goals and specifying the purpose of the agency;
organizing people, finances, resources and activities; staffing, training, and
socializing employees; leading the organization and the staff; and controlling,
monitoring, and sanctioning when needed (Dwan, 2003).
Management has been defined through theory such as scientific
management, where those in charge of an organization are to maximize
productivity through selection, training, and planning of tasks and employees.
Management theory has also focused on Fayol’s (1949) five functions of
management—planning, organizing, commanding, coordinating, and providing
feedback—and bureaucratic management, where there is a clear division of
labor, rules, and procedures (Weber, 1947).
A. Objectives of the Study
In relation with the scope of the Management Study, the proponents
desired to fulfill the following objectives for Amir’s Carwash.
1. To determine and define the form of business organization to be used
by the business enterprise.
2. To identify the initial capital that the proponents contributed for the
starting operation of the business.

49
3. To set job description and job specification for each position needed
for the firm’s operation.
4. To identify the compensation and benefits that the employees/worker
will receive in exchange with the skills and work that they render for the
operation of the business.
4. To create organizational policies for employees and customers to
promote and improve the working environment of the organization.
5. To institute compliance from the law through requirements needed to
start the enterprise.
B. Form of Business Ownership
The company is to be registered as a general partnership consisting of
four entrepreneurs. Partnership is a form of business wherein two or more
entities contribute money, skills, property, or industry to operate a business.
C. Capitalization
The project was proposed by the proponents to offer carwash services
that provide convenience to the car owners in cleaning their services.

50
Below is the list of the persons who contributed capital for the business.
Partners Amount
Magpantay, Mariz N. Php 100,000.00
Medalla, Dan Kevin 100,000.00
Marcelino, Arlene M. 120,000.00
Tayobong, Idy Nell M. 200,000.00
Total Contributions Php 520,000.00
Capitalization of the Partners
Figure 4.1
D. Organizational Structure
Workers and personnel required in the business will be hired within the
vicinity of Brgy. San Miguel, Sto. Tomas Batangas and other nearby
municipalities.
Hiring workers residing or near the business location is an advantage
because it will be more convenient and easier for them to report to work and to
avoid any delays that might affect their job performance.

51
Figure 4.2
Organizational Structure
E. Job Specification
The proponents provide the specific qualifications required that shows the
skills, educational attainment and experience or background in the positions
offered.
The following personnel will be hired:
Manager
52
 Graduate of any business course (Business Administration or
Accountancy)
 With knowledge in managerial position
 Experience in the related field is required
 Hardworking
 With excellent communication skills both oral and written
Administrative Staff
 Male or female, 20 years old and above
 At least high school graduate/college level
 Hardworking and can easily adapt to change
 Must have an experience in the related field
 Can work under low supervision
 With excellent oral and written communication skills
 Computer literate especially in MS Office Applications
Car Wash Staff/Worker
 Must be male
 Must be physically fit and hard working
 Can work under time pressure
 With good moral character and trustworthy
 Must have knowledge and experience in the related field

53
F. Job Descriptions
GENERAL MANAGER
 Monitors all areas in the business
 Establish long term goals
 Plans business strategy
 Result driven
 Must be one of the partners
 Must be a graduate of any business related course (Accountancy,
Business Administration)
 Must have good oral and written communication skills
 Must possess a good leadership and organizational skills
 Must have good analytical and judgmental skill
 Must have good influencing, persuading, coaching negotiation skills
 Proven experience including the ability to work at both strategic and
operational level
 Shows reliable behavior and is persistent in achieving goals
 Pro-active, self-motivated and excellent in attention to details
 Must be a team player
 Can influence others and guide them to the goals and targets of the
organization
Operation, Production and Facilities Manager

54
 Maintain quality work standards, pays particular attention to internal
and external customer comments and complaints.
 Handle dissatisfied customers and customer complaints promptly
 Must be one of the partners
 Result driven
 Must have experience in planning
 Must possess a good leadership and organizational skills
 Monitor and improve the overall performance of their operation
 Evaluate the state and condition of the machines and equipment
 Manages the daily operation of the business
 Manages the facilities
Finance Manager
 Creates long-range forecasts and sustain long-range financial plans
 Collects, reviews and interprets financial information
 Formulates financial goals and objectives
 Manage payroll and employee benefits
 Produces financial reports
Marketing Manager
 Identifies potential market
 Develops, formulates and implements marketing strategies
 Analyze and study the market trends
 Monitors competitor trends

55
 Plan marketing and branding objectives
 Ensure effective, branded marketing communications
 Performs responsible and confidential duties and routine
 Aptitude to design, promote and adjust plan for a single activity
 Capacity to lead, instruct and monitor subordinate’s performance
 Create and implement initiatives in order to meet and exceed the firm’s
goals and standards
 Perform duties that may be assigned by the superior
Car Wash Staff
 Performs car wash activities such as applying soap solution, scrapping
loose dirt, cleaning tires, rinsing with a hose, drying, dusting and
vacuuming car interiors, removing trash, cleaning seats, and polishing
G. Compensation and Benefits
Compensation is defined as the total amount of the monetary and non-
monetary pay provided to an employee by an employer in return for work
performed as required. (Heathfield, 2018)

56
Compensation/Benefits Contributions
Compensation P5,680.00
Benefits
Social Security System 615.00
Philippine Health Insurance Corp. 275.00
230.00
Home Development Mutual Fund
Car Wash Staff
Compensation/Benefits Contributions
Compensation P5,680.00
Benefits
Social Security System 615.00
Philippine Health Insurance Corp. 275.00
230.00
Home Development Mutual Fund
H. Organizational Policies
57
1. The workers must report to work on time from seven o’ clock in the
morning (7:00AM) to five o’ clock in the afternoon (5:00PM) from
Mondays to Sundays.
2. Employees must wear their uniform in the workplace.
3. Tardiness and absenteeism will not be tolerated by the management.
4. Smoking and drinking alcoholic drinks is strictly not allowed.
5. Any irregularities should be reported to the immediate superior.
6. Salaries and wages of the employees will be paid on a weekly basis.
7. Equipment owned by the management is not allowed for personal use
of the employees/workers.
8. Employees will be given an hour break during lunch time from twelve o’
clock in the afternoon (12:00PM) to one o’ clock in the afternoon
(1:00PM). A twenty minutes break in the morning (9:30AM to 9:50AM)
and in the afternoon (3:00PM to 3:20PM).
9. Employees and even the managers must comply with the
organization’s rules and regulations.
10. Complaints must be attended promptly and the firm must prioritize the
satisfaction of the customer.
11. Possession of deadly weapons of any form is strictly not allowed.
I. Legal Requirements
58
To operate legally, the business must comply with the law and must
complete the permits and licenses needed.
Permits and Licenses
Particulars Time to Complete Amount

DTI Registration 1 day Php 400.00
BIR Registration 1 day 1,000.00
Barangay Clearance 1 day 1,000.00
Community Tax Certificate 1 day 1,500.00
Mayor's Clearance 1 day 5,000.00
Business Tax 1 day 1,000.00
Annual Solid Waste Mgt. Fee 1 day 1,000.00
Annual Inspection Fee 1 day 1,000.00
MENRO 1 day 100.00
Sanitary Fee 1 day 250.00
Business Plate Sticker 1 day 50.00
Medical Fee 1 day 200.00
BMBE 1 day 1,500.00
Total Php 14, 000.00
https://www.thebalancecareers.com/compensation-definition-and-inclusions-
1918085
Chapter V
FINANCIAL STUDY
This study assess the viability, stability and profitability of a business, sub-
business or project. Financial analysis is an aspect of the overall business
finance function that involves examining historical data to gain information about
the current and future financial health of a company. Financial analysis can be
59
applied in a wide variety of situations to give business managers the information
they need to make critical decisions.
Objectives of the Study
The proponents endeavor to determine the market study of AMIR’S Car Wash
to assess financing requirements, financial practicability, company’s position and
performance for five-year operation. Specifically, it aims to attain the following:
1. To recognize the initial capital investment needed by the proponents to
finance the funds needed in the formation of the firm.
2. To provide financial assumptions conduit in the preparation of the
financial statements.
3. To use financial mix ratios, cost volume profit analysis and capital
budgeting in determining the activity, profitability, liquidity and solvency
of the firm.
4. To present the financial statements of the firm which reflect their
financial position, success of operations, policies and strategies of
management and insights of future performance.
5. To predict AMIR’S Car Wash potential to generate profit in the future.
Table 5.1
Projected Capital
AMIR'S CAR WASH
Total Project Cost – For One Month
Property, Plant and Equipment

60
300,000.0
Machine Equipment
0
100,000.0
Tools
0
100,000.0
Office Equipment
0
500,000.0
Total Property, Plant and Equipment
0
Working Capital for Two Months
Supplies 25,000.00
Direct Labor 39,760.00 64,760.00
Rent Expense 7,840.00
SSS, PhilHealth and PAG IBIG Benefit 10,000.00 17,840.00
Administrative Expense
Business Permit and Licenses 12,445.00
Electrical and Phone 24,890.00
Water 31,112.50 68,447.50
651,047.5
TOTAL CASH REQUIREMENTS
0
Cash Contingency 18,952.50
670,000.0
TOTAL PROJECT COST
0
61
Initial Capital Requirements
Contribution of money, property or industry to a common fund is needed in
building a business or a partnership. The required capital must be provided by
each partner to successfully accommodate the acquisition of raw materials as
well as to defray expenses that will be incurred in the operation.
Investment is the commitment of money or capital to purchase financial
instruments or other assets in order to gain profitable returns in the form of
interest, income or appreciation of the value of the instruments. Investment cost
is defined as a sum of fixed capital and net working capital. The proponents will
contribute cash that will be enough to support unexpected expenses.
Table 5.2
Initial Capital Requirement
Equity Capital Php 520,000.00
Magpantay, Capital 100,000.00
Malijan, Capital 100,000.00
Marcelino, Capital 120,000.00
Tayobong, Capital 200,000.00
TOTAL Php 520,000.00
62
Financial Assumptions
The following assumptions were used by the proponents in the
computation and analysis of the financial capacity and stability of the firm;
1. Initial capital Requirement
The business has an initial capital of Php 520,000.00 contributed by
the partners.
2. Working days
There will be six (7) working days in a week, an average of thirty
(30) days in a month and three hundred sixty five (365) days in a year
at eight (9) working hours a day.
3. Accounting Reporting Period

63
A calendar year of business starting on January 2019 would be
implemented.
4. Accounts Receivable and Allowance for Doubtful Accounts:
a. Accounts receivable will be 9% of sales
b. 70% of total accounts receivable will be collected during the period.
5. Labor and Employee Benefits
a. There will be six workers for direct labor.
b. Labor rate for the workers is Php5,680.00 per month.
c. Total annual benefits will include the salary, SSS, PAG-IBIG,
Philhealth.
6. Utilities
Utilities Expense will increase 3.83% annually based on inflation rate.
7. Rent Expenses
a. Rent expense is assumed to be Php10,000.00 per month and
assumed to be fixed throughout the year and the following years.
8. Maintenance Expenses
a. Maintenance expense would be allocated to factory and office
according to the land occupies(80%- factory, 20% office)
9. Property, Plant and Equipment
a. Acquisition of equipment’s, furniture and fixtures is on cash basis. No
additional machinery would be purchased for the first five years of
operation.
64
b. The firm will use the straight line method of depreciation.
c. All property, plant and equipment will have 5 years useful life.
10. Leasehold Improvement
a. The firm will not be having major improvement on the plant location.
Only minor development of the location is needed and it will be expensed as
incurred.
b. Leasehold improvement would be allocated 80% to factory and 20% to
office.
11. Partnership equity:
a. The partners are allowed to have withdrawal every year which will not
exceed 70% of their share in net income.
b. Remaining profits are shared in 19:19:23:39 ratio by the partners in
accordance with the agreement of the partners as stipulated in the
contract.
12. BMBE
a. There will be no income tax payable in accordance to R.A 9178
Barangay Micro-Business Enterprise.
13. VAT Payable
a. The company will have 12% output VAT per year and is allowed to
claim 12% input VAT.
14. Inflation Rate

65
a. Inflation rate as peg at an average rate of 3.74% per year provided, by
the Philippine Statistics Authority.
Financial Statement
Financial statements are written records that convey the financial activities
and conditions of a business or entity and consist of four major components.
Financial statements are meant to present the financial information of the entity
in question as clearly and concisely as possible for both the entity and for
readers. Financial statements for businesses usually include income
statements, balance sheets, statements of retained earnings and cash flows but
may also require additional detailed disclosures depending on the relevant
accounting framework.
Owners and managers require financial statements to make important
business decisions that affect its continued operations. Financial analysis is then
performed on these statements to provide management with a more detailed
understanding of the figures.

66
Statement of Financial Performance
The statement of financial position is another term for the balance
sheet. The statement lists the assets, liabilities, and equity of an organization
as of the report date. The information on the statement of financial position
can be used for a number of financial analyses, such as comparing debt to
equity or comparing current assets to current liabilities . It is one of
the financial statements , and so is commonly presented alongside the income
statement and statement of cash flows .It is also shows the revenue which is
said to be the inflow of assets that results from sales of goods and services and
earnings from dividends, interest, and rent. There are expenses which will be the
economic costs that a business incurs through its operations to earn revenue. In
order to maximize profits, businesses must attempt to reduce expenses without
also cutting into revenues. There is a loss in the first year of the operation of the
business which is 4,830.00.

67
AMIR'S Car Wash

PROJECTED INCOME STATEMENT
For the year ended 2019 - 2023
2019 2020 2021 2022 2

REVENUE
Service Revenue 1,493,400.00 1,642,740.00 1,807,014.00 1,987,715.40 2,18
EXPENSES
Electricity/Telephone 149,340.00 164,274.00 180,701.40 198,771.54 21
Water 373,350.00 492,822.00 542,104.20 596,314.62 65
Salaries and Wages 571,200.00 571,200.00 571,200.00 571,200.00 57
Rent Expense 120,000.00 120,000.00 120,000.00 120,000.00 12
Supplies Expense 169,340.00 184,274.00 200,701.40 218,771.54 23
Machine & Equipment - Dep 60,000.00 60,000.00 60,000.00 60,000.00 6
Tools - Depreciation 20,000.00 20,000.00 20,000.00 40,000.00 4
Office Equipment - Depreciation 20,000.00 20,000.00 20,000.00 20,000.00 2
Other Taxes and Licenses 15,000.00 15,000.00 15,000.00 15,000.00 1
Total Expense 1,498,230.00 1,647,570.00 1,729,707.00 1,840,057.70 1,93
INCOME BEFORE TAX (4,830.00) (4,830.00) 77,307.00 147,657.70 24
Income Tax Expense - - 20,294.10 44,297.31 7
NET INCOME (4,830.00) (4,830.00) 57,012.90 103,360.39 17
Statement of Changes in Partner’s Equity
The statement of changes in partner’s equity shows the movements in the components
of the partner’s equity. It also presents each item of income or expense for the period that is
recognized directly in equity as required by the standards and total of these items and the
effects of changes in accounting policies and correction of errors (Valix,2010)

68
The partners agreed that the beginning capital of the partners is Php 520,000,00.
AMIR'S Car Wash

PROJECTED STATEMENT OF CHANGES IN OWNER'S EQUITY
2019 2020 2021 2022 2023
Beginning Capital 520,000.00 515,170.00 450,340.00 462,352.90 495,713.29

Add:
Share in Income - - 57,012.90 103,360.39 172,930.43

Additional
69
Investment - 10,000.00 10,000.00 20,000.00 20,000.00

Less:
Loss (4,830.00) (4,830.00) - - -
Withdrawals - (70,000.00) (55,000.00) (90,000.00) (105,000.00)
Ending Capital 515,170.00 450,340.00 462,352.90 495,713.29 583,643.72
Statement of Financial Position
Statement of financial position is also called balance sheet. It summarizes a company's
assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet
segments give investors an idea as to what the company owns and owes, as well as the
amount invested by the shareholders.The balance sheet must follow the following formula:
Assets = Liabilities + Shareholders' Equity.
AMIR’S Car Wash shows Financial Position of the company. Total asset of the
company for the first year is 671,172.50 which composed of current and non-current asset
271,172.50 and 400,000.00. Total Liabilities is 156,002.50 and Equity is 515,170.00.

70
AMIR'S Car Wash

PROJECTED STATEMENT OF FINANCIAL POSITION
2019 2020 2021 2022 2023

ASSETS
Cash 11,172.50 33,787.50 76,145.15 238,884.77 255,132.
Accounts receivables 150,000.00 165,000.00 181,500.00 199,650.00 219,615.
Supplies 30,000.00 10,000.00 40,000.00 20,000.00 50,000.0
Prepaid Rent 80,000.00 60,000.00 40,000.00 20,000.00 100,000.
Total Current Assets 271,172.50 268,787.50 337,645.15 478,534.77 624,747.

Machine & Equipment - net
71
240,000.00 180,000.00 120,000.00 60,000.00 -
Tools - net 80,000.00 60,000.00 40,000.00 100,000.00 60,000.0
Office Equipment - net 80,000.00 60,000.00 40,000.00 20,000.00 50,000.0
Total Noncurrent Assets 400,000.00 300,000.00 200,000.00 180,000.00 110,000.
Total Assets 671,172.50 568,787.50 537,645.15 658,534.77 734,747.
LIABILITIES
Accounts Payable 50,000.00 50,000.00 - 20,000.00 20,000.0
Accrued Payables 56,002.50 68,447.50 75,292.25 82,821.48 91,103.6
Total Current Liabilities 106,002.50 118,447.50 75,292.25 102,821.48 111,103.
Accounts Payable - Noncurrent 50,000.00 - - 60,000.00 40,000.0
Total Liabilities 156,002.50 118,447.50 75,292.25 162,821.48 151,103.
Capital 515,170.00 450,340.00 462,352.90 495,713.29 583,643.
Total Liabilities & Owner's Equity 671,172.50 568,787.50 537,645.15 658,534.77 734,747.
72
Financial Analysis
Financial analysis is used to evaluate economic trends, set financial policy, build long-term
plans for business activity, and identify projects or companies for investment. This is done
through the synthesis of financial numbers and data. Financial analysis is the process of
evaluating businesses, projects, budgets and other finance-related entities to determine their
performance and suitability. Typically, financial analysis is used to analyze whether an entity is
stable, solvent, liquid or profitable enough to warrant a monetary investment. When looking at
a specific company, a financial analyst conducts analysis by focusing on the income
statement, balance sheet, and cashflow .
Financial Ratios
73
A financial ratio (or accounting ratio) is a relative magnitude of two selected numerical
values taken from an enterprise's financial statements. Often used in accounting, there are
many standard ratios used to try to evaluate the overall financial condition of a corporation or
other organization. Financial ratios may be used by managers within a firm, by current and
potential shareholders (owners) of a firm, and by a firm's creditors. Financial analysts use
financial ratios to compare the strengths and weaknesses in various companies. If shares in a
company are traded in a financial market, the market price of the shares is used in certain
financial ratios. (Agamata, 2012)
A. Liquidity Ratio
Financial ratios are mathematical comparisons of financial statement accounts or
categories. These relationships between the financial statement accounts help investors,
creditors, and internal company management understand how well a business is performing
and of areas needing improvement.Financial ratios are the most common and widespread
tools used to analyze a business’ financial standing. Ratios are easy to understand and simple
to compute. They can also be used to compare different companies in different industries.
Since a ratio is simply a mathematically comparison based on proportions, big and small
companies can be use ratios to compare their financial information.
Current Ratio
The current ratio is a liquidity ratio that measures whether or not a firm has enough
resources to meet its short-term obligations. It compares a firm's current assets to its current
liabilities, and is expressed as follows: Current Ratio = Total Current Assets

74
Total Current Liabilities
Table 5.3
Current Ratio
Current
Year Current Asset Current Liabilities Ratio

201 271,172.5
9 0 106,002.50 256%
202 268,787.5
0 0 118,447.50 227%
202 337,645.1
1 5 75,292.25 448%
202 478,534.7
2 7 102,821.48 465%
202 624,747.3
3 4 111,103.62 562%
Table 5.3 shows that the current ratio of the company in 2019 is 2.56. A current ratio of
greater than 1 provides additional cushion against unforeseeable contingencies that may arise
in the short term.
Quick Ratio or Acid Ratio
The quick ratio or acid test ratio is a liquidity ratio that measures the ability of a
company to pay its current liabilities when they come due with only quick assets. Quick assets
are current assets that can be converted to cash within 90 days or in the short-term.
75
Quick Ratio = Total Current Asset – Inventories
Current Liabilities
Table 5.4
Quick Ratio
Quick
Year Quick Assets Current Liabilities Ratio

201
9 161,172.50 106,002.50 152%

202
0 198,787.50 118,447.50 168%

202
1 257,645.15 75,292.25 342%

202
2 438,534.77 102,821.48 427%

202
3 474,747.34 111,103.62 427%
Table 5.4 shows that the Quick Ratio of the company in 2019 is 1.52 which means that
the enterprise meet its obligation without having to liquidate or depend too heavily on its
inventory. A quick ratio of 1.00 means that the most liquid assets of a business are equal to its
total debts and the business will just manage to repay all its debts by using its cash and other
marketable securities. A quick ratio of more than one indicates that the most liquid assets of a
76
business exceed its total debts. On the opposite side, a quick ratio of less than one indicates
that a business would not be able to repay all its debts by using its most liquid assets.
Working Capital
Working capital is a financial metric which represents operating liquidity available to a
business, organisation or other entity, including governmental entities. Along with fixed assets
such as plant and equipment, working capital is considered a part of operating capital.
Working Capital Ratio = Current Assets - Current Liabilities
Table 5.5
Working Capital
Year Current Asset Current Liabilities Working Capital
2019 271,172.50 106,002.50 165,170.00
2020 268,787.50 118,447.50 150,340.00
2021 337,645.15 75,292.25 262,352.90
2022 478,534.77 102,821.48 375,713.30
2023 624,747.34 111,103.62 513,643.72
Table 5.5
Activity Ratio
77
An activity ratio is a metric which determines the ability of a company to convert its
balance sheet accounts into revenue.
Table 5.6
Working Capital to Asset Ratio
Yea Rati
r Working Capital Total Assets o

201
9 165,170.00 671,172.50 25%

202
0 150,340.00 568,787.50 26%

202
1 262,352.90 537,645.15 49%

202
2 375,713.30 658,534.77 57%

202
3 513,643.72 734,747.34 70%
Accounts Receivable Turnover
Accounts receivable turnover shows how many times a business’ accounts receivable
have been turn into cash during the year.
Accounts Receivable Net Credit Sales

=
Turnover Average Accounts Receivable
78
Table 5.7
Year Net Credit Sales Ave. Accounts Receivable Accounts Receivable Turnover
201 1,493,400.
9 00 150,000.00 9.96
202 1,642,740.
0 00 165,000.00 9.96
202 1,807,014.
1 00 181,500.00 9.96
202 1,987,715.
2 40 199,650.00 9.96
202 2,186,486.
3 94 219,615.00 9.96
Table 5.7 shows the number of credit sales completed during the period. The higher the ratio,
the better indication of good management of credit sales. The table shown that the fifth year
has the highest turnover ratio and the following years have a consistent and unchanging
turnover ratio which may indicate that there is no changes in the management of receivables
or credit sales.
Collection Period
79
The average collection period is the average number of days required to collect
invoiced amounts from customers. The measure is used to determine the effectiveness of
a company's credit granting policies and collection efforts.
The formula for the average collection period is:
365 days
Collection Period =
Table 5.8
Average Collection Period
Yea Account Receivable
r Days in Year Turnover Collection Period

201 360.
9 00 9.96 36.16
202 360.
0 00 9.96 36.16
202 360.
1 00 9.96 36.16
202 360.
80
2 00 9.96 36.16
202 360.
3 00 9.96 36.16
Table 5.8 reflects how effective AMIR’S Car Wash is managing the collection of all
accounts receivables.
Asset Turnover
This ratio measures how efficiently a firm uses its assets to generate sales, so a higher
ratio is always more favorable. Higher turnover ratios mean the company is using its assets
more efficiently. Lower ratios mean that the company isn’t using its assets efficiently and most
likely have management or production problems.
Table 5.9
Asset Turnover
Year Net Sales Ave. Total Assets Asset Turnover
201 1,493,400.
9 00 671,172.50 2.23
202 1,642,740.
0 00 568,787.50 2.89
202 1,807,014.
1 00 537,645.15 3.36
202 1,987,715.
2 40 658,534.77 3.02
202 2,186,486.
3 94 734,747.34 2.98
81
Table 5.9 shows that the firms use its assets to generate sales.
Operating Profit
Operating profit is an accounting figure that measures the profit earned from a
company's ongoing core business operations, thus excluding deductions of interest and taxes.
This value also does not include any profit earned from the firm's investments, such as
earnings from firms in which the company has partial interest.
Operating Profit
Operating Profit Margin =
Net Sales
Table 5.10
Gross Profit Margin
Yea Net Income after
r Tax Net Sales Ratio (%)

201 (4,830.0
9 0) 1,493,400.00 (0.00)
202 (4,830.0
82
0 0) 1,642,740.00 (0.00)
202 57,012.9
1 0 1,807,014.00 0.03
202 103,360.3
2 9 1,987,715.40 0.05
202 172,930.4
3 3 2,186,486.94 0.08
Table 5.10 shows the profitability of the operation of the business.
Net Profit Margin
The net profit margin is intended to be a measure of the overall success of a
business. A high net profit margin indicates that a business is pricing its products correctly
and is exercising good cost control. It is useful for comparing the results of businesses
within the same industry, since they are all subject to the same business environment and
customer base, and may have approximately the same cost structures
Net Profit margin = Net Income
Net Sale
Table 5.11
83
Net Profit Margin

Yea
r Net Income Net Sales Ratio (%)

201 (4,830.
9 00) 1,493,400.00 (0.00)

202 (4,830.
0 00) 1,642,740.00 (0.00)

202 77,307.0
1 0 1,807,014.00 0.04
202 147,657.7
2 0 1,987,715.40 0.07
202 247,043.4
3 7 2,186,486.94 0.11
Table 5.11 shows the net profit margin ratio, the higher the profit margin indicates a
more profitable company that has a better control over its cost. The table shows that the
business is excellent in year 2023.
Rate of Return on Assets
Return on assets (ROA) is a financial ratio that shows the percentage of profit a
company earns in relation to its overall resources. It is commonly defined as net income
84
divided by total assets. Net income is derived from the income statement of the company and
is the profit after taxes.
Rate of Return on Assets = Net Income
Average Total Assets
Table 5.12
Rate of Return on Asset
Yea
r Net Income Ave. Total Asset Ratio (%)

201 (4,830.
9 00) 671,172.50 (0.01)

202 (4,830.
0 00) 568,787.50 (0.01)

202 77,307.0
1 0 537,645.15 0.14
202 147,657.7
2 0 658,534.77 0.22
202 247,043.4
3 7 734,747.34 0.34
85
Table 5.12 shows that return on assets every year of the operation of the business. The
higher values of return on assets show that business is more profitable.
B. Profitability Ratios
Profitability ratios are financial metrics used by analysts and investors to measure and
evaluate the ability of a company to generate income (profit) relative to revenue, balance sheet
assets, operating costs, and shareholders’ equity during a specific period of time. They show
how well a company utilizes its assets to produce profit and value to shareholders.
Rate of Return on Equity
The return on equity ratio or ROE is a profitability ratio that measures the ability of a firm to
generate profits from its shareholders investments in the company.
Rate of Return on Equity = Net Income
Average Partner’s Equity

86
Table 5.13
Rate of Return on Equity
Yea
r Net Income Ave. Partners Equity Ratio (%)

201 (4,830.
9 00) 515,170.00 (0.01)

202 (4,830.
0 00) 450,340.00 (0.01)

202 77,307.0
1 0 462,352.90 0.17
202 147,657.7
2 0 495,713.29 0.30
202 247,043.4
3 7 583,643.72 0.42
Table 5.13 shows that Return on equity from negative 1% to 42% in 2023.
87
C. Solvency Ratio
Solvency ratio measures Company’s ability to services debts, expressed as percentage.
It is calculating by adding the company’s post-tax net profit and depreciation, and dividing the
sum by quantity of long-term and short-term liabilities, resulting amount that is expressed as a
percentage.
A high solvency ratio indicates a healthy company, while a low ratio indicates the oppos
ite. A low solvency ratiofurther indicates likelihood of default.
Debt Ratio
Solvency ratio is a key metric used to measure an enterprise’s ability to meet its debt
and other obligations. The solvency ratio indicates whether a company’s cash flow is sufficient
to meet its short-term and long-term liabilities. The lower a company's solvency ratio, the
greater the probability that it will default on its debt obligations.
Debt Ratio = Total Liabilities

88
Total Assets
Table 5.14
Debt Ratio
Year Total Liabilities Total Assets Ratio (%)
2019 156,002.50 671,172.50 0.23
2020 118,447.50 568,787.50 0.21
2021 75,292.25 537,645.15 0.14
2022 162,821.48 658,534.77 0.25
2023 151,103.62 734,747.34 0.21
Table 5.14 shows that during 2019 debt ratio is equivalent to lower debt ratio usually
implies a more stable business with the potential of longevity because a company with lower
ratio also has lower overall debt.
Equity Ratio
The Equity Ratio is a good indicator of the level of leverage used by a company. The
Equity Ratio measures the proportion of the total assets that are financed by stockholders, as
89
opposed to creditors. A low equity ratio will produce good results for stockholders as long as
the company earns a rate of return on assets that is greater than the interest rate paid to
creditors.
Equity Ratio = Total Partner’s Equity
Total Assets
Table 5.15
Equity Ratio
Year Total Partners’ Equity Total Assets Ratio (%)
2019 515,170.00 671,172.50 0.77
2020 450,340.00 568,787.50 0.79
2021 462,352.90 537,645.15 0.86
2022 495,713.29 658,534.77 0.75
2023 583,643.72 734,747.34 0.79
Table 5.15 shows that the Equity ratio increased by 77% to 79% .It indicates that the
companies increase their equity ratios which are typically favorable for companies.
Debt to Equity Ratio
The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion
of shareholders' equity and debt used to finance a company's assets.

90
Debt to Equity Ratio= Total Liabilities
Total Partner’s Equity
Table 5.16
Debt to Equity Ratio
Yea
r Total Liabilities Total Partners Equity Ratio (%)

201 156,002.
9 50 515,170.00 0.30
202 118,447.
91
0 50 450,340.00 0.26
202 75,292.
1 25 462,352.90 0.16
202 102,821.
2 48 495,713.29 0.21
202 111,103.
3 62 583,643.72 0.19
Table 5.16 shows that at the first year of operation of the firm, the company has view a
higher debt to equity ratio as risky, it shows that the investors haven't funded the operations.
But on the next succeeding years it indicates that the decreasing percentage occurs. It means
that the investors have the capability to fund the operations as much as creditors.
Contribution Margin
The contribution margin is also useful for determining the impact on profits of
changes in sales. In particular, it can be used to estimate the decline in profits if sales
drop, and so is a standard tool in the formulation of budgets.
Contribution Margin = Service Revenue - Variable Cost/unit
Table 5.17
Contribution Margin
Year Service Revenue Variable Cost Contribution Margin
92
201 1,493,400.0
9 0 707,030.00 786,370.00
202 1,642,740.0
0 0 856,370.00 786,370.00
202 1,807,014.0
1 0 938,507.00 868,507.00
202 1,987,715.4
2 0 1,028,857.70 958,857.70
202 2,186,486.9
3 4 1,128,243.47 1,058,243.47
Table 5.17 show the contribution margin is increasing from 786, 370.00 to 1,
058243.47.
Contribution Margin Ratio
The contribution margin ratio is the difference between a company's sales
and variable expenses , expressed as a percentage. The total margin generated by an
entity represents the total earnings available to pay for fixed expenses and generate a
profit. When used on an individual unit sale, the ratio expresses the proportion of profit
generated on that specific sale.
Contribution Margin
Contribution Margin Ratio =
Service Revenue
93
Table 5.18
Contribution Margin
Year Contribution Margin Service Revenue Ratio

201 786,370.0
9 0 1,493,400.00 0.53
202 786,370.0
0 0 1,642,740.00 0.48
202 868,507.0
1 0 1,807,014.00 0.48
202 958,857.7
2 0
94
1,987,715.40 0.48
202 1,058,243.4
3 7 2,186,486.94 0.48
Table 5.18 shows that the firm has a decrease in contribution margin ratio that is for the five-
year period of operation
Break-Even Point Analysis
The break-even analysis lets you determine what you need to sell, monthly or annually,
to cover your costs of doing business—your break-even point.
Break-Even Sales Volume and Break-Even Peso Sales
Breakeven sales volume is the amount of your product that you will need to produce
and sell to cover total costs of production. While, break-even peso sales is the amount of sales
in peso that is needed to be earned by the firm and must be exceed to gain profit.
Break-Even Sales Volume Total Fixed Costs

=
Contribution Margin per unit
95
Table 5.19
Break Even Volume Analysis
Contribution Margin/Net Sales Per Break Even Volume
Year Total Fixed Cost Unit Analysis

201
9 791,200.00 4,366.26 181.21

202
0 791,200.00 4,366.26 181.21

202
1 791,200.00 4,822.32 164.07

202
2 811,200.00 5,323.99 152.37

202
3 811,200.00 5,875.82 138.06
Table 5.19 shows that the break-even Volume Analysis is decreasing for five years.
96
Total Fixed Costs

Break-Even Peso Sales =
Table 5.20
Break Even Peso Sales
Year Total Fixed Cost Contribution Margin Ratio Break Even Peso Sales
201 791,200.
9 00 0.53 1,502,572.68
202 791,200.
0 00 0.48 1,652,829.95
202 791,200.
1 00 0.48 1,646,169.20
202 811,200.
2 00 0.48 1,681,620.47
202 811,200.
3 00 0.48 1,676,058.73
97
Table 5.21
Break Even Sales Analysis
Break Even Sales
Year Total Fixed Cost Contribution Margin per Unit Analysis

201 791,200.
9 00 85.27 9,279.14
202 791,200.
0 00 93.89 8,427.07
202 791,200.
1 00 93.54 8,458.50
202 811,200.
2 00 93.22 8,701.82
202 811,200.
3 00 92.93 8,728.81
Margin of Safety in Peso and Marginal of Safety in Ratio
This is the excess of actual or budgeted sales over break-even sales and indicates the
amount by which sales could decrease before losses are incurred. (Agamata,2012). The
margin of safety can be expressed in peso or as a percentage.

98
Margin of Safety in Peso = Budgeted Sales - Break-even Sales
Table 5.22
Margin Safety in Peso
Year Bugdeted Sales Break Even Sales Peso Margin Safety in Peso
201 1,493,400.
9 00 1,502,572.68 (9,172.68)
202 1,642,740.
0 00 1,652,829.95 (10,089.95)
202 1,807,014.
1 00 1,646,169.20 160,844.80
202 1,987,715.
2 40 1,681,620.47 306,094.93
202 2,186,486.
3 94 1,676,058.73 510,428.21
Table 5.22 shows an increasing margin of safety.
Margin of Safety in Peso

Marginal of Safety in Ratio =
Actual or Budgeted Sales
99
Table 5.23
Margin of Safety in Ratio
Yea
r Margin of Safety in Peso Actual or Budgeted Sales Margin of Safety in Ratio

201 (9,172.
9 68) 1,493,400.00 (0.01)

202 (10,089.
0 95) 1,642,740.00 (0.01)

202 160,844.8
1 0 1,807,014.00 0.09
202 306,094.9
2 3 1,987,715.40 0.15
202 510,428.2
3 1 2,186,486.94 0.23
Table 5.23 shows an increasing margin of safety.
Payback Period
The payback period is the length of time required to recover the cost of an investment.
The payback period of a given investment or project is an important determinant of whether to

100
undertake the position or project, as longer payback periods are typically not desirable for
investment positions.
Payback period = Investment
Annual Cash Return
Table 5.24
Payback Period
Year Investment Annual Cash Return Payback Period
201 520,000.
9 00 11,172.50 46.54
202 515,170.
0 00 33,787.50 15.25
202 450,340.
1 00 76,145.15 5.91
101
202 462,352.
2 90 238,884.77 1.94
202 495,713.
3 29 255,132.34 1.94
Generalization
The financial aspect of a Market study is one of the most essential
components of the plan. Financial examinations were made and the proponents
believed that the proposed business will become successful.

102
CHAPTER VI
SOCIO-ECONOMIC CONTRBUTIONS
The purpose of the business is not centered for the maximization of profit alone but it
should lend to contribute for the socio-economic improvement of the country. The business
proposes to become more worthy for it is not formed for self-benefit but for the advantage of
people and the community.
CONTRIBUTION TO THE PHILIPPINE ECONOMY
AMIR’S Car Wash has to perform what the economy requires. The business can
contribute to the economic and national development by providing job opportunities to people.
The business also wants to meet the demand of the market.
The proposed business will have an effect in the maximization of employed individuals
especially when they are given an opportunity to expand. This may help employed individuals
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to provide for the daily needs of their family. Given the opportunity to the employees, the cases
of poverty in the community will become lower.
SOCIAL DESIRABILITY
The proposed business can contribute to the community by providing individuals a best
quality service.
The mutual relationship of the workers and the business should meet. Business should
give to the workers what is due to them and in return the workers should maintain and provide
a good quality service to every customer. Proper disposal of waste are also considered.
EMPLOYMENT GENERATION
AMIR’S Car Wash creates jobs and these economic opportunities uplift and support
communities through increasing the quality of life and overall standard of living.
For the pre-operation of the business, workers such as carpenter are given a job
opportunity in a short period of time for the leasehold improvement . For the operation of the
AMIR’S Carwash most of the workers will be hired from the site and nearby areas considering
the competency and skills of the applicants. The proposed business will contribute for the
minimization of unemployed individuals within the community. Fairness in the distribution of
salary and wages are also considered.
ENVIRONMENT IMPACT
AMIR’S Car Wash strives for the protection of environment in all aspects of the
business. The business will use some alternative cleaners that are less harmful to the
environment. The equipment that will be used in the service are environmental friendly. Proper
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waste disposal will be observed to maintain a clean surrounding. Also, usage of water and
electricity are being observed.
CUSTOMERS BENEFIT
The primary objective of the business is to provide a best quality service to its
customers. The business provides a more comfortable waiting area for its customers. The
company also offers a reasonable price and high quality service to its customers. Also,
customers are given a privilege to avail discounts and free services.
SUPPLIER BENEFIT
The business wants to have a strong relationship towards his suppliers. A better
transaction will be performed by both parties especially when it comes in complying the rules
and regulations agreed upon in terms of payment.
GENERALIZATION
The proposed business will bring different opportunities not just to partners but also to the
whole economy of the country. The business is not established for profit alone but also in the
contribution to the economy through the employment it will generate. On the other hand, the
business will be providing a great opportunity to those unemployed individuals which can help
them to support their primary needs. The primarily objective of the business is to give a
reasonable price to meet the demand of the customers which is having a low price and high
quality service. They also established a good relationship between their workers, suppliers and
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customers. The proponents believed that the establishment of the business will have a great
impact to the whole community in where it is located.

Market Study of AMIR&#39;S CAR WASH (Medalla Dan Kevin L.)

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Market Study of AMIR&#39;S CAR WASH (Medalla Dan Kevin L.)

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1

Commuting can be stressful due to traffic jam experiences. Hassle in

be difficult to get a rideshare vehicle.

However, owning a personal vehicle is equal to convenience. People are

acquiring a car mostly to reduce or at least eliminate stress from commuting

especially during the rush-hour traffic.

Further, owning one comes alongside a responsibility of maintaining its

Besides, cleaning a personal vehicle in the driveway is very time consuming,

convenient and offers advantages.

Nevertheless, car wash businesses are becoming a trend. It exists in

reasonable amount of money.

Brief Background of the Study

carwashes seem to have sprung up everywhere. There are simple sidewalk

operations and neighborhood stops, as well as wash-and-clean services in gas

There are several advantages of taking a car to a car wash. First, it

services do not damage vehicles because it utilize brushless and touch-less

wash his/her automobile at home. In contrast, a car wash uses on average

This study is committed to deliver quality service by offering a level up or

innovative services in terms of process, promotional strategy and complimentary

utmost customer satisfaction by exceeding their expectations.

Batangas. Barangay San Miguel belongs to a first class Municipality of Sto.

barangay. The Maharlika Highway connects the Barangay San Miguel with Sto.

Objectives of the Study

1. perform carwash services with utmost customer satisfaction,

2. promote marketing strategy through customer loyalty,

3. maintain customer loyalty, and

4. execute efficient use of resources.

Given these, AMIR’s Car Wash will demonstrate appropriate strategies

the place to become an open area to do business.

Scope and Limitations

The study is conducted to determine market, technical, management,

basis in order to determine the scope and limitations of this study.

threats and also the different marketing strategies. It focused on the

marketability of the proposed product. The proponents distributed four-hundred

(400) consumer survey questionnaires last October 8-10, 2018 to four-hundred

(400) household out of three-thousand (3,003) households of Barangay San

Arithmetic Geometric Curve method in computing the projected demand and

Statistical Parabolic Curve method for projected supply.

The technical aspect explains the process of manufacturing the product

using currently existing technology. It takes to account the required technology is

manpower and equipment. It includes the channel of distribution of proposed

proponents need to acquire information about the pricing in order to determine

the accurate number of direct materials and equipment needed.

Management aspect will focus on the form of ownership of the business. It

propose service, the competition that involve in entering to the market in an

Municipality of Sto. Tomas.

sources of capital and the possible return on investment. The proponents

decided to start with a capital which is P520,000. The increase in purchases is

given by Philippine Statistics Authority.

Socio-economic benefits focuses on the environmental and economic

appropriate waste disposal with proper authorities or compliance with legal

and contribute to the different communities for services and projects.

In order to achieve appropriate comprehension and clearer perception of

Personal Vehicle. A vehicle which is not owned by the government and

family for the primary purpose of providing personal transportation.

Car Wash. An area or structure equipped with facilities for washing

High-Pressure Washing. The use of high-pressure water spray to

and objects such as buildings, vehicles and concrete surfaces.

Ozone or Air Humidifier. A device that increases humidity (moisture) in a

single room or an entire building.

Loyalty Card. A card issued by a supermarket or chain store to a

Vendo or Vending Machine. An automated machine that provides items

such as snacks, beverages, cigarettes and lottery tickets to consumers after

money, a credit card, or specially designed card is inserted into the machine.

Market Study of AMIR'S CAR WASH (Medalla Dan Kevin L.)

Market Study of AMIR'S CAR WASH (Medalla Dan Kevin L.)

Sample Size: n = _N__

Using the formula: n = _N__