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UNIVERSITY OF SARAJEVO

SCHOOL OF ECONOMICS AND BUSINESS

Analyze The Mercator Group’s Consolidated Balance Sheet – Equity and Liabilities in
Fiscal Year 2013 as compared to the previous year.
- CASE STUDY -

Subject: English language
Master: Financial management / Line 2
Students:

Professor:

Puškar Aida

3034 - 69773

Selimović Nejra

3031 - 69540

Šepić Almir

3160 - 69637

Tabaković Amer

3161 - 69506

Valjevac Amna

3030 - 70555

Srebren Dizdar, PhD

Sarajevo, april 2015.

Todorić. you can see the analysis of your balance sheet liability that can help in making future decisions. BiH 1st April 2014 Ivica Todorić Chairman of Agrokor Group Agrokor trgovina d. I wish to introduce case study on "Analyse The Mercator Group's Consolidated Balance Sheet .d. On behalf of my team. Selimović Nejra 1 . and the cause and change the data of liabilities. Ulica grada Vukovara 269F HR-10000 Zagreb.Selimović Nejra School of Economic and Business Trg Oslobođenja 1 71 000 Sarajevo.Equity and Liabilities and Fiscal Year 2013 as compared to the previous year". and we are looking forward for your positive feedback. Thank you for your consideration. At the end of the case studies we wrote in the conclusion that we have summarized our research and results. Through this case study. Each item of liabilities we have explained in detail and presented in tables and graphs. Kind Regards. In our report we will analyse the equity and liabilities (non-current and current) by means of horizontal and vertical analysis. Hrvatska Dear Mr. which is the goal of this work. Our team consists of five members with education in economics and management.

474 The Amount of increase (decrease) -24.77% -3.633 %increase (decrease) -4.547 2. 1.002 -75.000 2. str 225. Equity and liabilities in EUR (2013 vs 2012) 2. Zagreb. Skupina autora: Analiza financijskih izvještaja.000 500.1 Horizontal analysis of equity Now we are going to do and explain the horizontal analysis of capital Mercator Group for the year 2013 compared with 2012: 1 2 Skupina autora: Računovodstvo trgovačkih društava. while it is used ''comparative financial statements that enable consideration of tendencies changes using basic indices''2.000 Total equity and liabilities Total equity Total liabilities 1.789.841 538. it was found that the total equity and liabilities in 2013 decreased by 3.549 2.840.000 0 2013 2012 Illustration 1: Graphic representation of the change of the total equity and total liabilities in 2013 compared to 2012.1.000.77%. Zagreb.57% -2.294 1. based on which judges the success and safety of operations of district heating companies. Horizontal analysis of Total equity and liabilities Horizontal analysis of financial statements ''allows comparison of data across multiple computing period in order to detect tendencies and dynamics of changes of balance sheet captions''1. 2010.500.925 1.17% Comment: After completion of the horizontal analysis. Total capital in 2013 decreased by 4.379.303.57% compared to the previous year.631 -51. Masmedia.500. while total liabilities also decreased by 2. Equity and liabilities (in thousand EUR) Total equity Total liabilities Total equity and liabilities 2013 2012 514.17% compared to the year 2012. str 912.000 1. 2 .000. TEB – Poslovno savjetovanje. 2008.

29%. and the amount of 126 in 2012 to the amount of 100 in 2013.2 Horizontal analysis of liabilities Now we are going to do and explain the horizontal analysis of liabilities of Mercator Group for the year 2013 compared with 2012: 3 .63% compared to 2012.29% -20.57% -0.656 140.29% -17.52% 199.587 in 2013.235) 146.24% compared to 2012.008 (54.839) (78.29% compared to 2012 or the amount of -78. i.Equity (in thousand EUR) Share capital Share premium Treasury shares Revenue reserves Fair value reserve Retained loss Profit (loss) for the year Currency translation reserve Non-controlling interests Total equity        2013 157.872 (3.887) 18. Currency translation reserve in 2013 was reduced by 2.57% Horizontal equity analysis showed that the value of the share capital.839 in 2012 to the amount of 18. Revenue Reserves.623) 100 514.008 from 2012 to amount of 140.872 (3.695 in 2013. Profit (loss) for the year in 2013 increased by 199. 1. Non-controlling interests in 2013 was reduced by 20.534 -1.587 (63.525 37.294 2012 157. in 2013 decreased by 25.63% -4.389 -421 -9. the amount of 141.129 198.045 in 2012 to 146.656 in 2013.045 141. and with the amount of -54.887 in 2013.819 in 2012 to the amount of 80.819) 126 538.235) 197.000 Share premium 100. share premium and treasury shares is not increased nor decreased in 2013 compared to the year 2012.000 Treasury shares 0 2013 2012 Revenue reserves -100.925 The Amount of increase (decrease) 0 0 0 -50. Retained loss in 2013 decreased by 17.e.804 -26 -24. 300.000 Equity in EUR (2013 vs 2012) Share capital 200. Fair value reserve were also decreased in 2013 compared to the previous by 0.362) (18.57% compared to 2012 or from the amount of 197.362 from 2012 to the amount of -63. and with the amount of -18.129 198.631 %increase (decrease) -25.623 in 2013.24% -2.000 Illustration 2: Graphic display of changes in equity in 2013 compared to 2012.52% compared to 2012.695 (80.

Long-term liabilities:  Trade and other payables have increased in 2013 for 2.03% 152.583 37.38% -37. in 2013.15% 37.  Deferred tax liabilities were increased in 2013 for 11.169 1. and from the amount of 5.612 -242.459 661.507 411 686.547 1.12% 1.80% 11.047 414.26% 686.618 31.443 -51.583.225.840.469.455 25.269 to the amount of 1.Liabilities (in thousand EUR) Non-current liabilities Trade and other payables Financial liabilities Deferred tax liabilities Provisions Total Current liabilities Trade and other payables Current tax liabilities Financial liabilities Derivate financial instruments Total Total liabilities 2013 2012 The Amount of increase (decrease) %increase (decrease) 850 351.374.225 672.858 to the amount of 686.80% compared to the year 2012. 4 . and from the amount of 593. and from the amount of 500.462 to the amount of 850. were increased by 16.77% Current liabilities:  Trade and other payables are drastically reduced in 2013 for 65.837 -6.48% over the previous year or from the amount of 2.  Total current liabilities were in 2013 decreased by 37.57% -2.  Financial liabilities were reduced in 2013 for 40.15% compared to the year 2012.841 33.  Derivative financial instruments were reduced in 2013 for 72.789.269 -3.612 1.879 13.00% 1.  Provisions were reduced in 2013 for 20.57% compared to the previous year.12% compared to the year 2012.412 -246.41% -20.48% -40. and from the amount of 31.841 to the amount of 351.549 195.26% compared to the previous year. and from the amount of 163 to the amount of 411.455.459 to the amount of 25.469 5. and from the amount of 672.858 163 500.346 2.38% compared to the year 2012.618 to the amount of 37.03% compared to the year 2012.507.935 2.  Financial liabilities have increased in 2013 for 37% compared to the year 2012. and from the amount of 33.258 3.41% compared to the year 2012.  Total long-term liabilities.002 16.879 to the amount of 686.179.047.649 248 185.  Current tax liabilities are drastically increased in 2013 for 152.380 -1.445 -65.800 -72.462 593.

2010.000 Provisions Trade and other payables2 0 2013 Current tax liabilities 2012 Illustration 3: Graphic representation of change in liabilities in 2013 compared to 2012.547 22. Vertical analysis of total equity and liabilities Unlike the horizontal analysis.000 Deferred tax liabilities 200.32% 77.32% compared to the year 2012 or by 0. and comparing financial data.000 Liabilities in EUR (2013 vs 2012) Trade and other payables 600. str 916.35% 2. ie. in 2013 were decreased to 22. i.841 100% 2. By using both horizontal and vertical analysis will come to the same conclusions as the only structural financial statements more useful in comparison with other companies or when comparing the data of one company with another when there is an inflation in the economy.68%.925 1.33% or from the amount of 538. position in one year.68% 538.294.549 22.303. assets and liabilities are commonly equated with the 100. Zagreb.549 euros to 1. vertical analysis enables ''insight into the structure of the financial statements.e. 2.840.000 Financial liabilities 400.65% 77. which means that the individual positions in the balance sheet are calculated as a percentage of total assets or liabilities. 5 .925.000 euros. while in the income statement total revenues and expenditures equate with 100. In the balance sheet. from 1.294 1.789.379.800.000 euros to the amount of 514. the total capital. TEB – Poslovno savjetovanje.840.35% to 77.474 100% Skupina autora: Računovodstvo trgovačkih društava. As we can see in the table below. Total liabilities increased from 77.180 euros. and is used structural financial statements''3.865. Equity and liabilities (in thousand EUR) Equity Liabilities Total equity and liabilities (in thousand EUR) 3 2013 Amount 2012 Percentage Amount Percentage 514.

17% 36. which amounted to 10. 2. Revenue reserves fell to 28. Retained loss in 2013 decreased by 2.839) (78.91%. where they amounted to 36. in 2013.02% 100% Share capital.129 198.68% 0.02% 100% Amount 157. but the percentage has increased to 30.695 (80. which amounted to 26.52% 27.819) 126 538.623) 100 514.33% compared to the previous year.03% compared to the previous year. 6 .67% compared to 2012.52% in 2013 compared to 2012.33% compared to the previous year.235) 146.129 198.16% -10.887) 18.16%.872 (3.56% 26.56% of total capital.17% of 100% of total capital.63% 28. which amounted to 36.63% -15.55% compared to the previous year where it was 29.41% 3.60% 36.235) 197. Share premium amount is also unchanged.67% -0.91% -0.1 Vertical analysis of equity Now we are going to do and explain the vertical analysis of capital of Mercator Group for the year 2013 compared with 2012: Total equity (in thousand EUR) Share capital Share premium Treasury shares Revenue reserves Fair value reserve Retained loss Profit (loss) for the year Currency translation reserve Non-controlling interests Total equity       2013 Amount 157.09% of total capital.55% 38.Equity and liabilities in EUR (2013 vs 2012) 100% Liabilities Equity 50% 0% 2013 2012 Illustration 4: Graphic representation of equity and liabilities in 2013 compared to 2012.925 Percentage 29.50% -14.656 140.09% -3. but compared to the 100% total capital.045 141. in 2013 it increased to 38.872 (3.63% 0.362) (18. in the amount has not changed compared to the previous year.33% -12.587 (63.294 2012 Percentage 30. Treasury shares in 2013 were reduced by 0. Fair value reserve in 2013 increased to 27.008 (54.

 Profit (loss) has increased dramatically in 2013. when it amounted to 3.840. Long-term liabilities increased to 76.19% 76. Currency translation reserve in 2013.2 Vertical analysis of liabilities Now we are going to do and explain the vertical analysis of the total liabilities of the Mercator Group for the year 2013 compared with 2012: Liabilities (in thousand EUR) Non-current liabilities Current liabilities Total liabilities   2013 Amount 414. Non-controlling interests in 2013. or 18.935 1.169 1. or 18.07% 100% Short-term liabilities in 2013 were reduced to 23.81% 100% Amount 661.07% of total liabilities.93% of total liabilities.612 1.547 2012 Percentage 23.965 euros compared to the previous year which experienced a loss of 3.05% compared to the previous year. there was a decrease of 1. 7 . in the percentage remained unchanged.50% of the total capital.549 Percentage 35.63%.380 1.789.   Equity in EUR (20113 vs 2012) 100% 80% Non-controlling interests 60% Currency translation reserve 40% Profit (loss) for the year 20% Retained loss Fair value reserve 0% -20% 2013 2012 Revenue reserves Illustration 5: Graphic representation of equity in 2013 compared to 2012.19% compared to 2012 when they amounted to 35.374.93% 64.839 euros.81% compared to the previous year when they amounted to 64. 2.179.

455 25.79% 5.462 593.08% of the total short-term liabilities. 2.459 661.841 33. when they amounted to 0.76% 100% Trade and other payables in 2013 were reduced to 0.06% compared to the previous year.37% 89.76%.583 37. 8 . Provisions were increased to 6.03% 6.618 31.21% compared to 2012.380 Percentage 0. Non-current liabilities in EUR (2013 vs 2012) 100% 80% Provisions 60% Deferred tax liabilities 40% Financial liabilities 20% Trade and other payables 0% 2013 2012 Illustration 7: Graphic display of short-term liabilities in 2013 compared to 2012.08% 4. Deferred tax liabilities in 2013 increased by 9.03%. while in the previous year amounted to 4.1 Vertical analysis of non-current liabilities Non-current liabilities (in thousand EUR) Trade and other payables Financial liabilities Deferred tax liabilities Provisions Total non-current liabilities     2013 Amount 850 351.03% compared to the previous year when they amounted to 5.2.047 414.21% 84. Financial liabilities in 2013 were reduced by 5.37% of total capital.935 2012 Percentage 0.100% Liabilities in EUR (2013 vs 2012) 50% Current liabilities Non-current liabilities 0% 2013 2012 Illustration 6: Graphic representation of liabilities in 2013 compared to 2012.03% 100% Amount 2.73% 9.

225 1.94% 0. such as the amount of debts.2013 amount to 1.507 411 686.858 163 500.06% 0.037. Decrease in loans and other financial obligations is the result of effective action towards reducing the debt of the Group.179. Derivatives financial instruments decreased to 0. Our focus was on the horizontal and vertical analysis.269 1.2.01% 42.02% compared to the previous year.45% 100% Trade and other payables in 2013 were reduced to 49.03% 49.11% in 2013.912 euros.169 57. they are faced with additional business challenges.2.48% 0. In addition to the unfavorable economic environment that has a negative impact on consumption and changes in consumer habits. CONCLUSION In this case study. Current tax liabilities increased by 0. Financial liabilities were also increased in 2013 by 7. there was an analysis of balance sheet liabilities of the Mercator Group for the year 2013 and it was carried out its comparison with the same items in 2012. Current liabilities in EUR (2013 vs 2012) 100% 80% 60% 40% 20% 0% Derivate financial instruments Financial liabilities Current tax liabilities Trade and other payables 2013 2012 Illustration 8: Graphic display of long-term liabilities in 2013 compared to 2012.06% of the total long-term liabilities. 9 . 3.12. We have found that loans and other financial liabilities of the Mercator Group at day 31.44%.94% compared to the previous year when they amounted to 57. as compared to year 2012.45% of the total long-term liabilities. compared to the previous year when they amounted to 0.469 1. low profitability of past investment and low efficiency of the company. there is a decrease of 56.374.808 euros.612 49.879 5.2 Vertical analysis of current liabilities Current liabilities (in thousand EUR) Trade and other payables Current tax liabilities Financial liabilities Derivate financial instruments Total current liabilities     2013 Amount 2012 Percentage 686.92% 0.11% 100% Amount Percentage 672.

The implementation of the restructuring strategy focuses on increasing traffic. and other positions are considered in relation to total assets or liabilities. EXECUTIVE SUMMARY With horizontal analysis are comparing the individual items of assets or liabilities in relation to previous periods. Vertical analysis implies insight into the structure of assets and liabilities. ensuring long-term sustainable and stable financial structure that will have a positive impact on profitability and the achievement of positive results of subsidiaries. after successfully stopping the downward trend in their business with rehabilitation measures implemented in the first part of year 2013. Mercator Group operates in an extremely difficult situation.Mercator Group improves key performance indicators. in addition to changes in absolute values are compared and the relative (percentage) changes. and our main objective was to determine the actual state of the company and compare it with the transitional period. For this company. improving operations and profitability. The assets and liabilities are equals with 100. we have done both analyzes. although the pace of change is not satisfactory. They have successfully implemented the withdrawal from the market of Bulgaria and Albania in this period. in the structure of assets of capital-intensive businesses we expect higher proportion of long-term assets than for entities operating in the labor intensive sectors). Mercator Group in 2012 and 2013 was actively focused on the optimization of working capital in all companies within the Group. 10 . It allows the detection of trends and the dynamics of change of balance sheet items. The structure of the balance sheet is important to analyze in the temporal context (previous period) in relation to the characteristics of the activities in which the company operates (e. and through this analysis we saw in what it reflects.g. which has improved liquidity. 4.

 Skupina autora: Računovodstvo trgovačkih društava. Bibliography  “Mercator – Annual Report 2013” (Prof. TEB – Poslovno savjetovanje. 2015). 2008.  http://mbh. Zagreb. Masmedia. dr. Srebren Dizdar. Zagreb.ba/ 11 . 2010.mercator.5.  Skupina autora: Analiza financijskih izvještaja.