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FS Analysis Part I Case Study

The document outlines instructions for a financial analysis project due by April 2, 2024, requiring students to assess a company's financial health and suggest actions for improvement. It includes balance sheet and income statement data for 2021-2023, along with specific calculations and ratios to analyze liquidity, asset utilization, debt levels, profitability, and investor sentiment. Additionally, it highlights the importance of qualitative factors and potential limitations of financial ratio analysis.

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Mark Kevin G. Dizon
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7 views2 pages

FS Analysis Part I Case Study

The document outlines instructions for a financial analysis project due by April 2, 2024, requiring students to assess a company's financial health and suggest actions for improvement. It includes balance sheet and income statement data for 2021-2023, along with specific calculations and ratios to analyze liquidity, asset utilization, debt levels, profitability, and investor sentiment. Additionally, it highlights the importance of qualitative factors and potential limitations of financial ratio analysis.

Uploaded by

Mark Kevin G. Dizon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Instructions:

1. Choose a pair to work on the Financial Analysis


2. Provide your analysis on a long bond paper with your names and course
3. Submission is on or before April 2, 2024.
4. Send soft copy of your output through messenger.
5. 4 outputs will be selected for presentation in the class.

You are to prepare an analysis of where this company is now, what it must it do to regain its financial
health, and what actions should be taken.

Table 1. Balance Sheet


2023 E 2022 2021
Assets
Cash in bank 85,632,000 7,282,000 57,600,000
Accounts Receivable 878,000,000 632,160,000 351,200,000
Inventories 1,716,480,000 1,287,360,000 715,200,000
Total Current Assets 2,680,112,000 1,926,802,000 1,124,000,000
Gross Fixed Assets 1,197,160,000 1,202,950,000 491,000,000
Less: Accumulated Depreciation 380,120,000 263,160,000 146,200,000
Net Fixed Assets 817,040,000 939,790,000 344,800,000
Total Assets 3,497,152,000 2,866,592,000 1,468,800,000
Liabilities and Equity
Accounts Payable 436,800,000 524,160,000 145,600,000
Notes Payable 300,000,000 636,808,000 200,000,000
Accruals 408,000,000 489,600,000 136,000,000
Total Current Liabilities 1,144,800,000 1,650,568,000 481,600,000
Long Term Debt 400,000,000 723,432,000 323,432,000
Common Stock 1,721,176,000 460,000,000 460,000,000
Retained Earnings 231,176,000 32,592,000 203,768,000
Total Equity 1,952,352,000 492,592,000 663,768,000
Total Liabilities and Equity 3,497,142,000 2,866,592,000 1,468,800,000

Note: “E” indicates Estimated. The 2023 data are forecasts.

Table 2. Income Statement


2023 E 2022 2021
Sales 7,035,600,000 6,034,000,000 3,432,000,000
Cost of Goods Sold 5,897,992,000 5,528,000,000 2,864,000,000
Other Expenses 550,000,000 519,988,000 2,864,000,000
Total Operating Cost excluding Depreciation 6,425,992,000 6,047,988,000 3,222,672,000
EBITDA 609,608,000 (13,988,000) 209,328,000
Depreciation 116,960,000 116,960,000 18,900,000
EBIT 492,648,000 (130,948,000) 190,428,000
Interest Expense 70,008,000 136,012,000 43,828,000
EBT 422,640,000 266,960,000 146,600,000
Taxes (30%) 126,792,000 80,088,000 43,980,000
Net Income 295,848,000 186,872,000 102,620,000

Earnings per share 1,014 (1,602) 880


Dividend per share 220 110 220
Book Value per share 7,809 4,926 6,638
Stock price 1,217 225 850
Shares Outstanding 250,000 100,000 100,000
Lease Payment 40,000,000 40,000,000 40,000,000

Note: “E” indicates Estimated. The 2023 data are forecasts.


Given the following figures, answer the following and make a Financial Statement Analysis based on the
figures computed.

1. Calculate the 2023 current and quick ratios based on the projected balance sheet and income statement data.
What can you say about the company’s liquidity position in 2021 and 2022 and as projected for 2023?

2. Calculate the 2023 inventory turnover, days sales outstanding (DSO), fixed asset turnover, and total assets
turnover. How does the company’s utilization of assets stack up against other firms in its industry?

3. Calculate the 2023 debt and times-interest-earned ratios. Compare it with 2021 and 2022 and see if there is
improvement or none.

4.Calculate the 2023 operating margin, profit margin, basic earning power (BEP), return on assets (ROA), and
return on Equity (ROE). What can you say about these ratios?

5. Calculate the 2023 price/earnings ratio and marked/ booked ratio. Does these ratios indicate that investors are
expected to have high or low opinion on the company?

6. What are some potential problems and limitations of financial ratio analysis?

7. What are some QUALITATIVE factors analysts should consider when evaluating a company’s likely future
financial performance?

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