Philippine Accounting Standards Philippine Financial Reporting Standards

PAS 1 Presentation of Financial Statements PFRS 1 First-time Adoption of Philippine Financial

PAS 2 Inventories Reporting Standards
PAS 7 Statement of Cash Flows PFRS 2 Share-based Payment
PAS 8 Accounting Policies, Changes in Accounting PFRS 3 Business Combinations
Estimates and Errors PFRS 5 Non-current Assets held for Sale and
PAS 10 Events after the Reporting Period Discontinued Operations
PAS 12 Income Taxes PFRS 6 Exploration for and Evaluation of Mineral
PAS 16 Property, Plant and Equipment Resources
PAS 19 Employee Benefits PFRS 7 Financial Instruments: Disclosures
PAS 20 Accounting for Government Grants and PFRS 8 Operating Segments
Disclosure of Government Assistance PFRS 9 Financial Instruments
PAS 21 The Effects of Changes in Foreign Exchange PFRS 10 Consolidated Financial Statements
Rates PFRS 11 Joint Arrangements
PAS 23 Borrowing Costs PFRS 12 Disclosure of Interests in other Entities
PAS 24 Related Party Disclosures PFRS 13 Fair Value Measurement
PAS 26 Accounting and Reporting by Retirement PFRS 14 Regulatory Deferral Accounts
Benefit Plans PFRS 15 Revenue from Contracts with Customers
PAS 27 Separate Financial Statements PFRS 16 Leases
PAS 28 Investments in Associates and Joint Ventures PFRS 17 Insurance Contracts
PAS 29 Financial Reporting in Hyperinflationary
Economies
PAS 32 Financial Instruments: Presentation
PAS 33 Earnings per Share
PAS 34 Interim Financial Reporting
PAS 36 Impairment of Assets
PAS 37 Provisions, Contingent Liabilities and
Contingent Assets
PAS 38 Intangible Assets
PAS 40 Investment Property
PAS 41 Agriculture

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 TOOLS AND TECHNIQUES IN FINANCIAL ANALYSIS d. Average age of inventory
360
Inventory turnover
HORIZONTAL ANALYSIS
e. Operating Cycle
1. Comparative Analysis
Ave. collection period + Ave. age of inventory
Later year-Base year
×100% f. Fixed-asset Turnover
Base year
Net Sales
2. Trend Ratios Average net fixed assets
Year 1 Year 2 g. Total Asset Turnover
× 100% × 100%
Base year Base year Net Sales
Average total assets

VERTICAL ANALYSIS
3. Leverage Ratios
1. Liquidity Ratios
a. Debt Ratio
a. Working Capital
Total liabilities
Current assets – Current liabilities Total assets
b. Current Ratio b. Debt-to-Equity Ratio
Current Assets Total liabilities
Current Liabilities Stockholder's Equity
c. Quick Ratio (Acid-test Ratio) c. Times Interest Earned Ratio
Cash + Marketable securities + Accounts receivable Earnings before interest and taxes (EBIT)
Current liabilities Interest expense
d. Cash Position Ratio
Cash + Marketable securities 4. Profitability Ratios
Current liabilities a. Gross Profit Margin
Gross profit
2. Activity Ratios
Net sales
a. Accounts Receivable Turnover b. Profit Margin
Net credit sales Net income after interest and taxes
Average accounts receivable Net sales
b. Average Collection Period
360 5. Return on Investment
Accounts receivable turnover a. Return on total assets
c. Inventory Turnover Net income after interest and taxes
Cost of goods sold Average total assets
Average inventory b. DuPont Analysis
Profit margin × Total asset turnover

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 c. Return on Equity
Net income after tax - Preferred stock dividend req.
Average stockholder's equity - Preferred stock

* using DuPont model:

ROA × Equity multiplier
or
Net income after taxes Ave. total assets
×
Ave. total assets Ave. common equity
d. Equity Multiplier
Average total assets
Average common equity

6. Market Value Ratios

a. Earnings per Share
Net income after tax - Preferred stock dividend req.
Common stock outstanding
b. Price/Earnings Ratio
Market price per share
Earnings per share
c. Book Value per Share
Total stockholder's equity - Preferred stock
Common shares outstanding
d. Market-to-Book Value Ratio
Market price per share
Book value per share

7. Dividend Ratios
a. Dividend Yield
Dividends per share
Market price per share
b. Dividend Payout Ratio
Dividends per share
Earnings per share

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