Final project

We have been hired as an external auditor of a company and are presented

with the financial statements to perform the financial analysis of the following
statements. We have applied all the topics learned in this module.

BALANCE SHEET
March 31, 2003 and December 31, 2002
2003 2002
ASSETS
Deposits in banks (note 8) B/.1,546,171.00 B/.10,823,869.00
Financial leases receivable, net (Note 3) 4,048,748.00 5,099,196.00
Accounts Receivable 1,195,566.00 1,157,606.00
I spend Paid in advance 101,178.00 101,035.00
Foreclosed assets available forsale, net (Note 4 ) 2,552.330.00 2,605.143.00
Deferred income taxes (Note 6) 1,432,137.00 1,473,698.00
Other assets 308,276.00 313,070.00
Total assets 11,184,406.00 21,573,617.00
Liabilities and Shareholder Equity
Liabilities Bonds payable (note 5 and 8) 3,475,000.00 11,750,000.00

Trading securities payable (note 5 and 8) 3,000,000.00 5,237,000.00

Accrued interest payable 90,562.00 25,926.00

Other liabilities (note 8) 471,693.00 399,581.00

Total liabilities 7,037,255.00 17,412,507.00

Shareholder equity
Common actions, authorized 500
Shares without nominal value. Issued and 2,158,914.00 2,158,914.00
outstanding 14 shares
Subordinated Debt 10,000.000.00 10,000.000.00
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Undistributed utilities (8,011,763.00) (7,997,804.00)
Total, shareholder equity 4,147,151.00 4,161,110.00

Total liabilities and equity of the shareholder 11,184,406.00 21,573,617.00

Statement
March 31, 2003 and 2002

2003 2002
income
Interest income (Note 8 ) B / . 224.951 B /. 515,600
Deposits 18,572 55.893
Managementfees ----------- 27,637
Otherincome 29,821 26,088
Total revenue B /. 73,344 B/.625.218
Operating Expenses
Interest (Note 8) 196.809 119.060
Commissions (note 8) 1,637 1,767
Provision for doubtful leases (Note 3) -------- 1,000,000
Provision for losses on foreclosed assets (Note 4) 4,794 9,355
General and administrative expenses 42.501 111,260
Total operating expenses 1,241,442 245.741
Loss before income tax 27,603 (616.224)
Income tax (note 6 ) 41,561 (258.440)

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 Cash Flow Statement
March 31, 2003 and 2002

2003 2002
Cash flows from operating activities / provided
By (used in )
(Loss ) Net B /. ( 13,958 ) B / . ( 357.784 )
Net cash provided by operating activities :
Depreciation and amortization 4,794.00 9,355.00
Provision for losses on foreclosed assets ------ 1,000,000.00
Interest expense 196,809.00 119.06
Net changes in operating assets and liabilities
Lease receivable 1,050,448.00 2,368.00
Increase in foreclosed assets available for sale 52,813.00 -------
Increase in deferred income tax 41,561.00 -258.4
Increase (decrease ) in other assets -38,103 -43,164
Increase (decrease ) in other liabilities 72,112.00 11,969.00
Interest paid -132.174 -100,500
Net cash flows from operating activities 1, 234.302 2,748,564

Cash flows provided by investing activities

( used in) :
Loans 90 days biggest banks --- -2,150,000
Cash flow from investing activities --- -2,150,000
Cash flows from financing activities /
Provided by ( used in) :
Loans payable to banks --- -22,687
Bonds payable -8,275,000 -83
Marketable securities business payable -2,237,000 262 ,
Net cash flow from financing activities ( 10,512,00 ) -284.77
Increase ( decrease) in cash
And cash equivalents -9,277,698 313.794
Cash and cash equivalents at beginning of year 10,823,869.00 2,385.00
Cash and cash equivalents at end of year B/. 1,546,171 B /. 2, 699.450

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 PROJECT DEVELOPMENT

FINANCIAL RATIOS:
2003 2002

Solvency: current assets = 6,790,485 = 1.04 17,080,671 = 1.00

Current liabilities 6,475,000 16,987,000

Current assets of each covered in 1.04 times current liabilities for 2003 and
for 2002 corresponds to 1.00 times

Liquidity: current assets+ existence = 6,790,485 +2,552,330 = 1.44

liabilities 6,475,000

period 2002 17,080,671 + 5,237,000 = 1.31

16,987,000

Liquidity for the period shows that the company can meet its short-term
liabilities in 2003 to 1.44 times, while it does for 2002 by 1.31 times.

CASH: Cash = 1,546,171 = 0.23 10,823,869 = 0.63

Current liabilities 6,475,000 16,987,000

Cash can cover short-term liabilities by 0.23 times for 2003, among which for
2002 was 0.63 times.

Financial Burden: Interest expense = 245.741 = 8.90 1,241,442 = 2.01

Operating income 27,603 616.224

The costs for the period 2203 represent 8.9 % of income in the meantime that
by 2002 only 2.01 %.

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Leverage: = Total Liabilities 7,037,255 = 0.62% 17,412,507 = 0.80%
Total assets 11,184,406 21,573,617

For 2003, 62 % of total liabilities corresponds to company assets, including

both 2002 this corresponded to 80 %.