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The document provides a financial analysis of W Company, including horizontal and vertical analysis of its financial position for 2011 and 2012, highlighting changes in assets, liabilities, and shareholders' equity. It also includes profitability ratios for F Company and T Company, as well as growth ratios for R Company and J Company, requiring calculations for various financial metrics. The analysis aims to assess the financial performance and position of the companies based on the provided data.

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8 views2 pages

Output 1

The document provides a financial analysis of W Company, including horizontal and vertical analysis of its financial position for 2011 and 2012, highlighting changes in assets, liabilities, and shareholders' equity. It also includes profitability ratios for F Company and T Company, as well as growth ratios for R Company and J Company, requiring calculations for various financial metrics. The analysis aims to assess the financial performance and position of the companies based on the provided data.

Uploaded by

km barte
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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Carlos Hilado Memorial State University

FINMAN
Output 1

I. Horizontal and Vertical Analysis – Statement of Financial Position. The financial


position of W Company at the end of 2011 and 2012 is as follows (in thousands):

Assets 2011 2012


Cash and Cash Equivalents P 3,000 P 5,000
Trade and other receivables 40,000 25,000
Inventory 27,000 30,000
Investment Property 15,000 0
Property, plant, and equipment (net) 100,000 75,000
Intangible assets 10,000 10,000
Other noncurrent assets 5,000 20,000
_________
_________
Total Assets P 200,000 P 165,000
======
=======

Current liabilities P 30,000 P 47,000


Long term liabilities 88,000 74,000
_________
_________
Total liabilities 118,000 121,000

Shareholders’ Equity
8% Preference equity 10,000 9,000
Ordinary equity 54,000 42,000
Share premium 5,000 5,000
Retained earnings 13,000 (12,000)
________
_________
Total Shareholders’ equity 82,000 44,000

Total Liabilities and Shareholders’ equity P 200,000 P 165,000


======
======

Sales and cost of goods sold insignificantly change in 2012 in relation to 2011.

Required:
a. Prepare a comparative statement of financial position showing peso and
percentage changes for 2012 as compared with 2011. (Horizontal Analysis)
b. Prepare an ordinary-size statement of financial position as of December 31, 2011
and 2012. (Vertical Analysis)

c. Based on your data derived requirements 1 and 2, comment on the financial


position of W Company as of December 31, 2012.

II. Profitability Ratios. The following data were taken from the records of F
Company and T Company (amounts in thousands and statement of financial
position data are on the average).

F. Co. T. Co
Sales P 80,000 P 10,000
Profit (loss) 3,050 640
Interest expense 50 40
Total Assets 12,000 2,000
Ordinary shareholders’ equity 6,000 500
Preference dividends, cumulative 200 200
No. of ordinary shares outstanding 600 50
Tax rate 40% 40%

Required: Determine the following for F Company and T Company:

a. Return on sales or profit margin


b. Return on investment
c. Return on ordinary equity
d. Earnings per share

C. Basic Growth Ratio. Consider the following data for the year ended December
31, 2012:

R. Co J. Co
Earnings per share P 50 P 200
Market price per ordinary share 150 500
Dividend per ordinary share 40 120
Dividend per preference share 10 20
Total shareholders’ equity P10 million P 60 million
Ordinary shares outstanding 1 million 4 million
Preference shares outstanding 500,000 2 million,
cumulative
Preference shares liquidation value P1.30 per share P1.30 per share

Required: Calculate the following ratios for R Co. and J Co.:

a. Price-earnings rate
b. Dividend payout rate
c. Dividend yield rate
d. Book value per preference share
e. Market to book value per share

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