STATE OF 20X7 Analysis 20x6 Analysis Analysis

SITUATION
vertical Vertical Horizontal
HERITAGE
Current Asset
Boxes and Banks 12,500 2% 9,000 2% 39%
Investments (Note 25,000 4% 30,000 7% -17%
2.a)
Credits for 60,000 11% 49.000 11% 22%
Sales (Note 2.b)
Other Credits 37.500 7% 25,000 6% 50%
(Note 2.c)
Goods in Exchange 90,000 16% 73,000 16% 23%
(Note 2.d)
Total Assets 225,000 40% 186,000 42% 21%
Current
Non-Current Asset
Investments (Note 2.a) 20,000 4% 30,000 6% -33%
Use Goods (Note 300,000 54% 225,000 50% 33%
2.e)
Intangible Assets 10,000 2% 10,000 2% 0
Total of the Asset No 330,000 60% 256,000 58% 25%
Current
Total Assets 555,000 100% 451,000 100% 23%
Current Liabilities
Accounts Payable 100,000 23% 75,000 23% 33%
(Note 2.f)
Loans (Note 2.g) 45,000 10% 70,000 22% -36%
Remunerations and 6,000 1% 4,500 1% 33%
Social Charges
Tax Burdens 17.500 4% 22,500 7% -22%
Forecasts 10,000 2% 7,500 2% 33%
Total Liabilities 178.500 41% 179.500 55% 2%
Current
Non-Current Liabilities
Loans (Note 2.g) 230,000 53% 125,000 39% 84%
Forecasts 25,000 6% 20,000 6% 25%
Total Liabilities No 255,000 59% 145,000 45% -39%
Current
Total Liabilities 433,000 100% 324,000 100% 34%
Net Worth 121.500 22% 126.500 28% -4%
Net Worth Plus 550,000 100% 451,000 100% 22%
Current Liabilities

Income Statement 20x7 Analysis 120 Analysis Analysis

Vertical Vertical Horizontal
Ventas Netas 525,000 100% 450,000 100% 17%
Cost of Sales -360.000 69% -275,000 -61% 31%
Gross Utility 165,000 31% 175,000 39% -6%
Expenses of -15.000 -3% -12.500 -3% 20%
Administration (Annex
H)
Expenses of -45.000 -8% -30,000 -7% 33%
Marketing
 (Annex H)
Operational Utility 110,000 21% 132.500 29% -17%
Generated Interests 12,500 2% 4.000 1% 213%
By Actvos
Generated Interests -7.000 -1% -4.500% -1% 56%
By Liabilities
Net Utility Before 115.500 22% 132,000 29% -13%
Tax on the
Profits
Taxes on the -40.425 -8% -46.200 -10% -13%
Profits
Net Utility 75.075 14% 85.800 19% -13%

In relation to the provided states, you are requested to respond to the following instructions:

1. 10 points. Perform the horizontal and vertical analysis of both statements for all possible years and
answer each of the accounting exercises:
a. What is the asset category with the highest participation (in each year)?
b. ¿Cuál es rubro patrimonial de mayor evolución porcentual (tendencia) positva? ¿Y el de mayor
negative percentage evolution (trend)?
c. What is the sector of results with the highest participation (in each year)?
d. Which category of results has the highest positive percentage evolution (trend)? And the one for
largest negative percentage evolution (trend)?

1.a The asset category with the largest share is Current Assets from the year 2007 with a
percentage of 54% participation and in the year 2006 with a participation of 50%.

2.b The asset category with the greatest percentage growth and positive trend is Loans.
of Non-Current Liabilities with an increase of 84% rising from 125,000 million in the year
2006, to 230 billion in 2007. And the patrimonial category with the greatest evolution
the percentage of negative trend is the Current Liabilities with a decrease of -
36%, decreasing from 70 billion in 2006 to 45 billion in 2007.

In the year 2006 and 2007, the results with the highest participation are the net sales with the
same percentage of 100%.

The category with the highest percentage growth trend is the

Interest generated by assets with an increase of 213% rising from 4 billion in the year
2006 to 12.5 billion in 2007. And the item of results with the highest percentage evolution.
With a negative trend, marketing expenses have increased by 33% with -30000.
millions in the year 2006 to 40,000 million in the year 2007.

Is the company's financing mainly from third parties or from the owners?
Support your answer with the calculation of the debt and solvency ratios.

Did you make a profit during the period? Compared to previous periods,
Were they superior? By what percentage?

How would you rate short-term financial capacity? Support your answer with ratios.
liquidity, operating and financial cycle.

d. Is the company's profitability good? Consider the sector in which it operates.

it experienced the following average profitability indicators: ROS 7%, ROA 12%, ROE
15% (all calculated using the net profit or net earnings of the period).
e. Would you recommend this company to take on debt to finance investments? Support your answer.
response with the financial leverage ratio

f. If you were an investor, would you lend to this company? Why?

g. If you were the credit risk analyst of a bank, would you recommend granting a
loan? Why?

2a. The financing of the company is primarily from third parties because the loans are
greater than the contributions of the owners, supported by the times of indebtedness
which gives a 3.56 in the year 2007 and a 2.56 in the year 2006 and in solvency gives a 1.28 in the
2007 and a 1.39 in 2006, therefore the largest contribution comes from third parties.

2b. It obtained profits for the period of 75,075 million, but compared to the previous year it was
less since the value for that year was 85.800 million. That is, the percentage of difference
between the two years is 5%.

It can be classified, in terms of short-term financial capacity, as capable of paying its own
passive in both years

Rats 20x7 20x6

Current Liquidity 1.26 1.03
Acid Liquidity 0.54 0.59
Absolute Liquidity 0.21 0.21
Operational Cycle 50.15 -
Financial Cycle -24.69 -

2d. Knowing that the gross margin or return on sales (ROS) of this company fell by 7%
from 175 billion in 2006 to 165 billion in 2007, we note that the company was not very
efficient last year. We also found that the Return on Invested Assets
(ROA) was 12%, which reflects the lowest percentage of profitability of operating income.
about average assets, since a higher percentage leads to higher profitability. In addition to this,
the partner receives a low profit (ROE) of 15% of the invested capital. Conclusion: Based on
this analysis, based on the results of the index, we can show that the company is less
rentable.

I recommend that the company incur debt to finance the investment, as it incurs debt to
a rate lower than its return on assets, thus increasing its profitability, being
that the relationship between financial profitability (ROE) and economic profitability (ROA) is 1.25
(ROE/ROA = Leverage Effect → 0.15/0.12 = 1.25).

If I were an investor, I would lend to this company because my financing will increase the
return on capital.

2g. Taking into account the results of the company's current liquidity ratio (2006:
1.4; 2007: 1.26) and the absolute liquidity index (20x6: 0.21; 20x7: 0.21), both higher than
optimal coverage value generally considered for liabilities; as a risk analyst
Credit manager, I recommend that you take out a loan that you know you can pay back.