FINANCIAL STATEMENT ANALYSIS
Required:
1. Compute for the financial ratios by filling up the table below.
2. Analyze the historical performance of the firm through the use of financial ratios.
3. Compare and analyze the performance of the firm against the industry averages (ratios table).
4. What can you say about the performance of the firm?
		THE FIRM
			2020	2021	2022
		ASSETS
		Current Assets
		Cash	702,750	1,490,125	1,362,500
		Accounts Receivable	500,000	300,000	700,000
		Inventory	700,000	700,000	1,000,000
		Total Current Assets	1,902,750	2,490,125	3,062,500
		Non-Current Assets
		Land	3,000,000	3,000,000	3,000,000
		Building (Gross)	3,000,000	3,000,000	3,000,000
		Less: Accumulated Depreciation	150,000	300,000	450,000
		Building (Net Book Value)	2,850,000	2,700,000	2,550,000
		Machine (Gross)	3,000,000	3,000,000	3,000,000
		Less: Accumulated Depreciation	300,000	600,000	900,000
		Machine (Net Book Value)	2,700,000	2,400,000	2,100,000
		Total Non-Current Assets	8,550,000	8,100,000	7,650,000
		TOTAL ASSETS	10,452,750	10,590,125	10,712,500
		LIABILITIES
		Current Liabilities
		Accounts Payable	1,000,000	1,100,000	1,200,000
		Taxes Payable	51,750	8,625	3,000
		Total Current Liabilities	1,051,750	1,108,625	1,203,000
		Long Term Debt	-	-	-
		TOTAL LIABILITIES	1,051,750	1,108,625	1,203,000
		CAPITAL
		The Firm Capital, Beginning	8,918,000	9,401,000	9,481,500
		Add: Net Income	483,000	80,500	28,000
		Less: Drawing
		The Firm Capital, Ending	9,401,000	9,481,500	9,509,500
		TOTAL LIABILITIES AND CAPITAL	10,452,750	10,590,125	10,712,500
			-	-	-
		INCOME STATEMENT
			2020	2021	2022
		Sales (all on credit)	7,000,000	6,900,000	7,500,000
		Less: Cost of Goods Sold	4,900,000	5,175,000	5,850,000
		Gross Profit	2,100,000	1,725,000	1,650,000
		Less: Operating Expenses
		Selling and Marketing Expenses	400,000	500,000	500,000
		Administrative Expenses	500,000	600,000	600,000
		Depreciation Expense *	150,000	150,000	150,000
		Total Operating Expenses	1,050,000	1,250,000	1,250,000
		Operating Income	1,050,000	475,000	400,000
		Less: Interest Expense	360,000	360,000	360,000
		Income Before Tax	690,000	115,000	40,000
		Less: Tax	207,000	34,500	12,000
		Net Income After Tax	483,000	80,500	28,000
		* does not include P300,000 depreciation in CGS
			2020	2021	2022	INDUSTRY
		Financial Ratios (Indices)				AVERAGE
		Gross Profit Margin	?	?	?	40%
		Operating Profit Margin	?	?	?	20%
		Net Profit Margin	?	?	?	10%
		Return on Assets	?	?	?	8%
		Return on Equity	?	?	?	9%
		Current Ratio	?	?	?	3.5
		Acid test Ratio	?	?	?	2.7
		Days Receivables (days)	?	?	?	10.0
		Days Inventory (days)	?	?	?	30.0
		Debt Ratio	?	?	?	10%
		Fixed Asset Turnover Ratio	?	?	?	2.0
		Total Asset turnover Ratio	?	?	?	1.7
		* assume that the company has constant inventory and sales