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Financial Analysis of Jollibee Foods Corporation and Subsidiaries For the Years
2010 - 2014
Research · December 2015

DOI: 10.13140/RG.2.2.31117.18400
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Financial Analysis of
Jollibee Foods Corporation and Subsidiaries
For the Years 2010 - 2014
Submitted by
RABINO, CRISTOBAL NEBRAO

2014-85130
as partial fulfillment of the requirements for BM 222 (Financial Management) for the
Master in Management major in Business Management Program of the
University of the Philippines – Manila
Submitted to
ANTONIO ROQUE W. PADERANGA

Course Specialist
December 2015
1
FINANCIAL ANALYSIS OF JOLLIBEE FOODS CORPORATION

AND SUBSIDIARIES FOR THE YEARS 2010 – 2014
Cristobal N. Rabino, CPA
University of the Philippines Manila
Padre Faura Street, Manila
Investment decisions require knowledge

of basic financial management. Since
it’s money we are investing, it should be
put into a cash flow stream where
returns would compensate the risk
taken.
There is never one rule in making

decisions involving investments. We
need to take into account several
factors before we come up with choices
on where we will invest idle cash.
This paper seeks to evaluate the

financial performance of Jollibee Foods
Corporation and its subsidiaries using
mathematical methods through ratio
analysis. A study of the environment in
which the company operates is also
factored-in in the study to provide a
holistic approach to the analysis.
The data being used in this study are the

financial performance of the company
for the past five years (2010-2014) as
presented in their audited financial
statements.
Keywords: financial analysis, ratio

analysis, investment decisions
INTRODUCTION
Eating is a universal experience. Wherever you are, whatever your status is, eating is something we all
share. Eating is more of a necessity than a luxury. Having this in mind, businesses venture into the food
business because of the available customer base.
Fast food invasion has been a successful business endeavor in the Philippines. Because of the busy
lifestyle of modern Filipinos, it is a common instinct that they simplify their eating habits. Instead of
Financial Analysis of Jollibee Foods Corporation and Subsidiaries For The Years 2010 – 2014 by Cristobal N. Rabino
2
spending a significant portion of their time shopping ingredients that needs to be cooked, they tend to
resort to fast food to save time and energy in getting their meals ready. Not only that it is fast and
convenient, people are more likely to buy from fast food chains because of the small amount of money
involved in exchange for a speedy meal.
One of the leading players in the Quick Service Restaurants (QSR) industry in the Philippines is the Jollibee
Foods Corporation (hereinafter referred to as “JFC” or “Jollibee”). Established in 1978, Jollibee still
continues to dominate the market through its cheap product offerings.
This paper aims to study the financial performance of Jollibee from 2010 – 2014. Specifically, this paper
delves on the computed financial ratios based on the available data (audited financial statements) and
assesses how well did Jollibee performed in handling corporate finance in the years covered by this study.
STATEMENT OF THE PROBLEM
This paper aims to analyze the financial performance of Jollibee for the years 2010-2014, in terms of
ratio analysis. Specifically, this paper aims to answer the following questions:
1. Did the company performed well, in terms of managing corporate finance, during 2010 – 2014?;
2. Is the company projected to perform well the next financial year?; and
3. Based on ratio analysis and projections, is it good to invest in the company?
STATEMENT OF ASSUMPTIONS
Assumptions that were taken into account prior to the actual conduct of the study are:
1. The financial statements are presented fairly, in all material respects;
2. The company will continue to operate in the near foreseeable future; and
3
3. All of the ending balances in the financial statements represent, in essence, the average balance
for the period.
SCOPE AND LIMITATIONS
This study is bounded within the following scopes and limitations:
1. The study is limited to the data for the past five years. All other financial data (Balance Sheet,
Income Statement, etc.) not falling within this time frame are excluded from the study;
2. The study used the audited consolidated financial statements of the company (which can be
downloaded on their website);
3. Subsidiaries of Jollibee were included in the study. This is tolerable because 95% of the
company’s subsidiaries are also engaged in fast food business;
4. Although benchmarking is important in determining the relative performance of the company
against the prescribed industry averages, the updated industry average for the Hotels and
Restaurants industry cannot be obtained from the Hotel and Restaurants Association of the
Philippines (HRAP). The procurement of the industry average for the Hotels and Restaurants
industry was not possible due to time constraints. For this reason, the researcher opted to use
the industry averages for the American Restaurant Industry, which can be easily obtained from
csimarket.com. The researcher still finds this effective because most of the competitors in the
Philippine market are also competing in the US market.
4
CONCEPTUAL FRAMEWORK
Gleaned from the literature cited in this study, the researcher deemed it appropriate to use the following
conceptual framework in the conduct of procedures towards the attainment of the research objectives:
Figure 1.
Conceptual Framework
1. Financial Data
2. Study of the
environment
a. Political
Ratio Analysis
b. Economic
Trend Analysis
c. Social Investment Decision
Business Analysis
d. Technological
SWOT Analysis
e. Legal
f. Environmental
3. Marketing Strategies
The conceptual framework consists of three (3) frames. Starting from the input to the process and to the
output. The input contains the data relating to the financial performance of JFC for the past five years
obtained from the financial statements as audited by their external auditor, SyCip, Gorres, Velayo and
Co. A study of the external factors surrounding JFC is also factored-in in the study as well as their
strategies pertinent to marketing their products. The process undertaken to arrive at the conclusion
includes Ratio Analysis, Trend Analysis, Business Analysis, Strengths, Weaknesses, Opportunities and
Threats (SWOT) Analysis, and Five Forces Analysis. The output is the investment decision arrived using
the analyses carried out throughout the conduct of the study.
5
SIGNIFICANCE OF THE STUDY
This study was anticipated to be helpful and to contribute additional information to the following
stakeholders:
Existing Investors. This study would provide existing investors an insight on how to assess whether their
stockholdings in JFC are performing well. This would also help them in deciding whether to continue or
not their respective shareholdings in the company.
Prospective Investors. This would give them enough basis for evaluating the performance of the
company in order to make sound financial decisions on whether to invest or not in this company.
General Public. They study would provide them the basic knowledge on financial management which
would probably spark their interest on the subject matter.
Academe. This study may serve as an actual reference case in teaching the basics of financial
management, specifically horizontal and vertical analysis of the financial statements.
Government and Regulatory Agencies. This study may provide vital information in formulating a more
comprehensive development agenda in the fast food industry. This would encourage them to reexamine
existing policies concerning the industry and its stakeholders.
Other Researchers. This can serve as an effective tool and reference for future researchers who would
intend to make any further relevant study.
6
OPERATIONAL DEFINITION
To aid in the better understanding and interpretation of this study, the following terms are operationally
defined:
Company. In this study, can be used interchangeably with “Jollibee” and “JFC”
Financial Analysis. Refers to the analysis of company’s financials through the use of the financial
statements.
Industry Average. Represents the average for a given ratio among competitors in a given industry.
JFC. Abbreviation for Jollibee Foods Corporation, which is the subject company for this financial analysis
paper. In this study, can be used interchangeably with “Jollibee” and “Company”.
Jollibee. In this study, can be used interchangeably with “company” and “JFC”.
7
CHAPTER TWO
Review of Related Literature and Studies
8
REVIEW OF RELATED LITERATURE AND STUDIES
Before delving into the thorough vertical and horizontal analysis of JFC, it is important to note important
literature anent to the founding and continuous growth of JFC. Included also in this part are some
information regarding the industry in which JFC operates.
Jollibee: Humble Beginnings
Born in a poor family who migrated from Fujian Province in China to the Philippines to search of a better
life, Mr. Tony Tan Caktiong became involved in the restaurant business at an early age when his father
opened a restaurant in Davao. The restaurant earned profits with the help of all family members and this
success enabled Mr. Caktiong to pursue a bachelor’s degree in chemical engineering in Manila.
At the age of 22, inspired by a visit to an ice cream plant, he set out to gain his own fortune in the
restaurant business. Relying on family savings, he seized a franchising opportunity with Magnolia Dairy
Ice Cream and opened two ice cream parlors. In response to customer requests, he added hot meals and
sandwiches to the menu, which soon proved a lot more popular than ice cream. Three years later, in
1978, he decided to capitalize on this development, discontinued the Magnolia franchise and converted
his parlors into fast food outlets upon the recommendation of Mr. Manuel C. Lumba, his business and
management mentor (http://www.wipo.int/ipadvantage/en/details.jsp?id=2531. Retrieved 13
September 2015)
As the business grew, they decided to incorporate a brand name. They were looking for a symbol that
would essentially represent their brand. Drawing inspiration from Disneyland characters, they decided
to use the bee as a symbol. The bee is a very busy creature that produces honey – one of life’s sweetest
things. They thought that it would be a very good symbol to represent everyone in their company. They
decided that everyone would be busy and happy, because if they were busy but not happy, it would be
worth it. This is the reason why they put the word “Jolly” and changed letter “y” into “i” to form a brand
name they never thought would be one of the most successful brands in Philippine history – JOLLIBEE.
9
Entrance of competitors and continued growth
McDonald’s came into the Philippines in 1982. They were not threatened by this. Although they found
out that McDonald’s was doing well at everything, it didn’t know the local culture. Jollibee knew the
Filipino taste buds and what they liked on food, so they offered a wide range of flavorful and good tasting
menu – pasta, burger, chicken. Jollibee know that the Filipinos are inclined to eat sweet foods. They
banked on this idea and became successful in doing so.
Jollibee was included in the list of the Top 1000 Corporations in 1981. Since then, the company grew as
it enters the Top 500 in 1984, the Top 250 in 1986, and Top 100 in 1987.
It was not until 1993 when Jollibee decided to go public. From a ₱ 9.60 stock price in 1993, the current
market price of Jollibee soared to ₱ 215 in 2014 (http://www.jollibee.com.ph/investors/jollibee-foods-
corporation/. Retrieved 13 September 2015).
Expansions and acquisitions
The company acquired 80% of Greenwich Pizza in 1994. From a 50-branch operation, Greenwich gradually
established a strong presence in the food service industry. In early 2006, Jollibee Foods Corp. bought out
the remaining shares of its partners in Greenwich Pizza Corporation, equivalent to a 20% stake, for ₱ 384
million in cash. In 1996, Jollibee became the sole franchisee of Délifrance for Philippines, staying in
operation in the country until late 2010. In 2000, the company acquired Chowking, a Chinese fast food
restaurant, thus making Jollibee a part of the Asian quick service restaurant segment.
In 2004, Jollibee acquired Chinese fast food chain Yonghe Dawang for $22.5 million. Jollibee entered
into a joint-venture contract with US-based Chow Fun Holdings LLC, the developer and owner of Jinja
Bar Bistro in New Mexico, in which Jollibee will have a 12% stake for $950,000. In 2005, Jollibee acquired
Red Ribbon, a bakeshop business in the Philippines. In less than 5 years, Jollibee managed to nurture the
business and transform it into a popular and rapidly growing bakeshop chain. In 2006, Jollibee purchased
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70% of Taipei restaurant Lao Dong in June and Chun Shui Tang tea house. In 2007, Jollibee acquired
the Chinese fast-food chain Hongzhuangyuan.
On August 26, 2008, Jollibee formally signed a ₱ 2.5 billion ($55.5 million) deal with Beijing-based Hong
Zhuang Yuan through its wholly owned subsidiary Jollibee Worldwide Pte. Ltd. The sale is subject to the
approval of China's Ministry of Commerce. On October 19, 2010, Jollibee acquired 70% share of Mang
Inasal, a Filipino food chain specializing in barbecued chicken, for ₱ 3 billion ($68.8 million). The same
month, Jollibee signed a deal to acquire 55 percent of China's Guangxi San Ping Wang Food and Beverage
Management Co. Ltd., operators of the San Pin Wang beef noodle business for 30 million RMB. On October
2011, Jollibee acquired a 54% stake in BK Titans, Inc., the sole franchisee of Burger King in the
Philippines.
In 2011, Jollibee opened 260 new stores, 167 of which were in the Philippines led by Mang Inasal (86)
and Jollibee (40). This brought the company's total number of stores to 2,001 as of end December 2011.
The same year, Jollibee closed Manong Pepe food chain in favor of Mang Inasal, and sold Délifrance to
Café France. Overseas, Jollibee opened 93 stores, led by Yonghe King in China (70) and Jollibee Vietnam
(11). In 2013, Jollibee opened its first store in Virginia Beach, Virginia as well as in Houston, Texas. Both
locations were chosen for their strong Filipino presence.
The restaurant plans to expand to Toronto in Canada, Malaysia and Indonesia. It also plans to expand
throughout the Southern United States such as Atlanta, Charlotte, Dallas and Chicago. Currently, aside
from its flagship brand Jollibee, the group's other brands and acquisitions are Chowking, Greenwich, Red
Ribbon, Mang Inasal, Yonghe King (China) and Hong Zhuang Yuan (China), as well as a majority stake in
the firm that controls the Burger King franchise in the Philippines
(https://en.wikipedia.org/wiki/Jollibee. Retrieved 13 September 2015).
JFC has a total store network of 2,951 stores worldwide as of March 31, 2015. In the Philippines, JFC’s
store network totals to 2,335: Jollibee brand 869, Greenwich 216, Chowking 419, Red Ribbon 334, Mang
11
Inasal 452, and Burger King 45. Abroad, it operates 616 stores: Yonghe King 313, Hong Zhuang Yuan 43,
and San Pin Wang, 53, all in China, Jollibee 123 (USA 32, Vietnam 60, Brunei 12, Saudi Arabia 10, Qatar
3, Kuwait 3, Singapore 2 and Hong Kong 1), Chowking 47 (US 19, UAE 20, Qatar 5, Oman 2 and Kuwait 1),
Red Ribbon US 34 and Jinja Bar US 3.
JFC also has a 50% share in joint ventures for the following stores: Highlands Coffee (Philippines, Vietnam)
77, Pho 24 (Vietnam, Indonesia, Philippines, Cambodia, Macau and Korea) 45, and 12 Sabu (China) 20.
JFC also operates commissaries or manufacturing plants to support the continued growth of its retail
chain. It has 12 commissaries and a distribution center in the Philippines. Abroad, it has 3 commissaries
in China, 3 in the United States and 1 in Vietnam (http://www.jollibee.com.ph/investors/jollibee-foods-
corporation/. Retrieved 13 September 2015).
Philippine Fast Food Industry Review
Fast Foods refer to types of food that can be prepared and served very quickly. They are characterized
as easy to prepare, accessible and cheap alternatives to home-cooked meals. Fast food chains, also
known as quick service restaurants, serve these types of food to customers packaged for immediate
consumption, either on or off the eating premises. Fast food customers normally order at the counter
and pay before eating (Bautista, 2013).
The fast food industry belongs to the Hotels and Restaurants industry of the Other Services Sector of the
National Accounts of the Philippines. The Gross Value Added (GVA) of this industry accounts for the
17.42% share of the Other Services Sector for the period 2008-2012, third to education (43.03%) and
recreational, cultural and sporting activities (17.79%). As to the share of this industry to the Gross
Domestic Product (GDP), Hotels and Restaurants posted an average of annual share of 1.63% of the GDP.
12
Table 1
GVA of Hotels and Restaurants Industry: 2008-2012
(in Billions of Pesos at current prices)
Hotels and Restaurants
Other Hotels and Share to Growth
Year GDP Services' Restaurants'
Other Rate
GVA GVA GDP
Services' GVA
2008 7,720.90 692.67 121.36 1.57% 17.52% -
2009 8,026.14 758.31 129.53 1.61% 17.08% 6.73
2010 9,003.48 838.66 145.24 1.61% 17.32% 12.12
2011 9,706.27 912.50 161.34 1.66% 17.68% 11.09
2012 10,564.89 1,020.46 178.80 1.69% 17.52% 10.82
Average 9,004.34 844.52 147.25 1.63% 17.44% 10.19
Source: National Statistical Coordination Board (NCSB)
Among the popular fast food chains in the country are Jollibee, McDonald’s, Chowking, Mang Inasal, KFC
and Greenwich. Of the top ten fast food chains, six (6) are owned by the companies themselves while
four (4) are owned by various franchisees. They hold an average of 80% share of the total market value
of the entire fast food industry.
13
CHAPTER THREE
Research Methodology
14
RESEARCH METHODOLOGY
This section delves on the research design and procedures undertaken during the conduct of the study.
It also presented the procedural plans adopted by the researcher to conduct the study validly,
objectively, accurately and economically.
Research Method Used
This study made use of the quantitative historical research which allows to discuss past and present
events in the context of present conditions. It allows the researcher to reflect and provide possible
answers to current issues and problems.
Financial data, specifically the audited financial statements of JFC, for the past five years (2010-2014)
are used to project the financial performance of the company for the next five years. Trend analysis,
with the aid of external analysis of the political, legal, environmental, social, technological and economic
environment, is used as the basis for the forecasted financial statements. Inasmuch as financial trend
analysis could suffice as the basis, the researcher deemed it appropriate to underpin the forecast through
incorporating the aforementioned.
Moreover, business analysis, environment coverage, and marketing strategies are factored-in in the study
to provide a holistic approach to the analysis undertaken.
Sources of Data
The actual financial data from 2010 – 2014 are obtained from the Financial Statements of JFC as audited
by Sycip, Gorres, Velayo and Co.
Industry averages for the United States (US) Food Industry were obtained online from CSI Market.
Pertinent industry information were also obtained from online sources.
15
Analytical Treatment of Data
Conclusions were arrived using bases that are derived from various analytical tools and techniques, which
will be given detail in this section. This section is heavily drawn from online sources, minor paraphrasing
and modifications, to the ideas presented online, were made.
SWOT ANALYSIS
SWOT analysis (strengths, weaknesses, opportunities, and threats analysis) is a framework for recognizing
and interpreting the internal (SW) and external (OT) factors that can have an impact on the feasibility
of a project, product, place or person.
The tool is attributed to Albert Humphrey, who established the approach in 1960s and 1970s at the
Stanford Research Institute (SRI). Developed for business and based on data from Fortune 500 companies,
the SWOT analysis has been adopted by organizations of all types as a tool to making decisions.
As its name states, a SWOT analysis inspects four elements:
 Strengths - internal attributes and resources that support a successful outcome.
 Weaknesses - internal attributes resources that work against a successful outcome.
 Opportunities - external factors the project can exploit on or use to its advantage.
 Threats - external factors that could endanger the project.
Once the SWOT factors are known, decision makers should be able to better determine if the project or
goal is worth pursuing and what is required to make it successful. Often expressed in a two-by-two matrix,
the analysis aims to help an organization match its resources to the competitive environment in which it
operates (searchcio.techtarget.com/definition/SWOT-analysis-strengths-weaknesses-opportunities-
and-threats-analysis).
In this study, only the SWOT analysis is taken into consideration without formulating strategies based on
the analysis. Theoretically, SWOT is merely a list of the internal and external factors. It must be plotted
16
into what we call the TOWS Matrix (Threats, Opportunities, Weaknesses, and Strengths) and each
intersection must contain strategies on how to address those. To save time and to carry out the objectives
of this research, strategies to address the SWOT are not included in the study.
PESTLE ANALYSIS
PESTLE is a mnemonic which in its expanded form denotes P for Political, E for Economic, S for Social, T
for Technological, L for Legal and E for Environmental. It gives a bird’s eye view of the whole environment
from many different viewpoints that one wants to examine and monitor while contemplating on a certain
idea/plan.
The framework has undergone certain modifications, as gurus of Marketing have added certain things
like an E for Ethics to instill the element of demographics while utilizing the framework while researching
the market.
There are certain questions that one needs to ask while conducting this analysis, which give them an
idea of what things to keep in mind. They are:
 What is the political situation of the country and how can it affect the industry?
 What are the prevalent economic factors?
 How much importance does culture has in the market and what are its determinants?
 What technological innovations are likely to pop up and affect the market structure?
 Are there any current legislations that regulate the industry or can there be any change in the
legislations for the industry?
 What are the environmental concerns for the industry?
All the aspects of this technique are crucial for any industry a business might be in. More than just
understanding the market, this framework represents one of the vertebras of the backbone of strategic
17
management that not only defines what a company should do, but also accounts for an organization’s
goals and the strategies stringed to them.
It is very critical for one to understand the complete depth of each of the letters of the PESTLE. It is as
below:
 Political: These factors determine the extent to which a government may influence the economy
or a certain industry. [For example] a government may impose a new tax or duty due to which
entire revenue generating structures of organizations might change. Political factors include tax
policies, Fiscal policy, trade tariffs etc. that a government may levy around the fiscal year and
it may affect the business environment (economic environment) to a great extent.
 Economic: These factors are determinants of an economy’s performance that directly impacts a
company and have resonating long term effects. [For example] a rise in the inflation rate of any
economy would affect the way companies’ price their products and services. Adding to that, it
would affect the purchasing power of a consumer and change demand/supply models for that
economy. Economic factors include inflation rate, interest rates, foreign exchange rates,
economic growth patterns etc. It also accounts for the FDI (foreign direct investment) depending
on certain specific industries who’re undergoing this analysis.
 Social: These factors scrutinize the social environment of the market, and gauge determinants
like cultural trends, demographics, population analytics etc. An example for this can be buying
trends for Western countries like the US where there is high demand during the Holiday season.
 Technological: These factors pertain to innovations in technology that may affect the operations
of the industry and the market favorably or unfavorably. This refers to automation, research and
development and the amount of technological awareness that a market possesses.
 Legal: These factors have both external and internal sides. There are certain laws that affect
the business environment in a certain country while there are certain policies that companies
maintain for themselves. Legal analysis takes into account both of these angles and then charts
18
out the strategies in light of these legislations. For example, consumer laws, safety standards,
labor laws etc.
 Environmental: These factors include all those that influence or are determined by the
surrounding environment. This aspect of the PESTLE is crucial for certain industries particularly
for example tourism, farming, agriculture etc. Factors of a business environmental
analysis include but are not limited to climate, weather, geographical location, global changes
in climate, environmental offsets etc (http://pestleanalysis.com/what-is-pestle-analysis/).
In this study, PESTLE Analysis played an important role as it gives an insight of the future. The information
obtained from this analysis is carefully considered in making financial projections of JFC.
RATIO ANALYSIS
Financial ratios are mathematical comparisons of financial statement accounts or categories. These
relationships between the financial statement accounts help investors, creditors, and internal company
management understand how well a business is performing and areas of needing improvement.
Financial ratios are the most common and widespread tools used to analyze a business' financial standing.
Ratios are easy to understand and simple to compute. They can also be used to compare different
companies in different industries. Since a ratio is simply a mathematically comparison based on
proportions, big and small companies can be use ratios to compare their financial information. In a sense,
financial ratios don't take into consideration the size of a company or the industry. Ratios are just a raw
computation of financial position and performance.
Ratios allow us to compare companies across industries, big and small, to identify their strengths and
weaknesses (http://www.myaccountingcourse.com/financial-ratios/).
19
For making a proper use of ratios, it is essential to have fixed standards for comparison. A ratio by itself
has very little meaning unless it is compared to some appropriate standard. Selection of proper standards
of comparison is a most important element in ratio analysis. The four most common standards used in
ratio analysis are; absolute, historical, horizontal and budgeted.
Absolute standards are those which become generally recognized as being desirable regardless of the
company, the time, the stage of business cycle, or the objectives of the analyst. Historical standards
involve comparing a company’s own’ past performance as a standard for the present or future.
In Horizontal standards, one company is compared with another or with the average of other companies
of the same nature (http://www.yourarticlelibrary.com/financial-management/ratio-analysis-
meaning-classification-and-limitation-of-ratio-analysis/29418/).
In this study, some of the ratios computed are compared against US fast Food Industry standards to
provide a snapshot of JFC’s performance as against its competitors.
20
CHAPTER FOUR
Presentation, Analysis and Interpretation of Data
21
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
This chapter contains the analyses described in the previous chapter. This also presents the results of
the analyses undertaken towards the attainment of the research objectives.
BUSINESS ANALYSIS
This section tackles about the company’s vision and mission statements in relation to their conduct of
business. It uses evaluation matrices to examine the existing vision and mission statements of the
company.
JFC’s Vision and Mission Statements
JFC’s vision encapsulates its future outlook for the organization. Presented below is the company’s vision
statement.
Figure 2.
JFC’s Vision Statement
Source: Jollibee Company Website
22
Jollibee’s vision is currently designed to condense the aspirations of the company to develop an
international presence, while emphasizing its distinctly Filipino appeal. The vision also emphasizes the
key aspects of the fast food business that is important to Jollibee, namely product quality, customer
satisfaction and service excellence.
Table 2.
Vision Statement Evaluation Matrix
CRITERIA EVALUATION
The vision appears to be a
combination of varied
Focused concept No
aspirations of the company with
lack of unity in presentation.
Jollibee has stated in its vision
Plausible chance of success Yes a time frame for it to attain its
vision (Year 2020)
The purpose of Jollibee’s vision
is noble as evidenced by the
Noble purpose Yes
statement “being relevant to
the communities we serve
The major weakness of the current vision is that its ideas are presented in a disconnected manner, lacking
clarity in the way it is stated. There is a need to revise the vision in such a way that the major aspirations
of the company is clearly stated and unified in presentation.
23
The mission statement is very vital as it recognizes and reacts to various stakeholders of the company,
thus its helps the firm to present it positively. It differentiates one company from similar entity. It does
expose what an organization wants to be and whom it wants to serve. Also, mission statements are
important for successfully establishing objectives and formulating strategies. The company’s mission
statement is presented below:
Figure 3.
JFC’s Mission Statement
Source: Jollibee Company Website
Similarly, the mission manifests Jollibee’s commitment to deliver product quality (“serve great tasting
food”) and customer satisfaction (“bringing the joy of eating to everyone”). However, it doesn’t quite
capture what the business is about in totality. If evaluated using the criteria of designing a mission
statement, it would not be able to satisfy the components needed in establishing a good mission
statement.
24
Table 3.
Mission Statement Evaluation Matrix
CRITERIA EVALUATION
Customers Yes
Products and Services Yes
Markets No
Concern for Survival, Growth and Profitability No
Technology No
Philosophy No
Concern for Public Image Yes
Concern for Employees No
Nation Building No
25
SWOT ANALYSIS
This table represents a synopsis of some of the current strengths, weaknesses or challenges, opportunities
and future prospects, and threats which may pose future risks to the company.
Figure 4.
SWOT Analysis
26
PEST ANALYSIS
PEST (Political, Economic, Social, and Technological) Analysis examines the macro-environment in which
the company operates. In this study, PEST Analysis is used to help in the projection of financials, rather
than just understanding the external landscape of the industry.
Figure 5.
PEST Analysis
27
RATIO ANALYSIS
Presented below is the summary of JFC’s Key Financial Ratios.
Table 4.
Summary of Key Financial Ratios
INDUSTRY
RATIO 2010 2011 2012 2013 2014
AVERAGE
LIQUIDITY
Current Ratio 0.99 1.10 0.94 1.18 1.26 -

Quick Ratio 0.75 0.75 0.70 0.83 0.80 0.54
Cash Ratio 0.60 0.55 0.53 0.63 0.40 -
Cash Burn-out Ratio 457.56 335.09 390.13 398.69 257.32 -
Debt-to-Equity Ratio
0.91 0.89 0.92 0.97 0.93 0.76
Debt-to-Asset Ratio 0.48 0.47 0.48 0.49 0.48 -
SOLVENCY
Long Term Debt-to-Asset Ratio 0.00 0.10 0.02 0.09 0.08 -

Interest Coverage Ratio
22.67 16.09 24.60 41.84 45.33 0.17
Debt Service Coverage Ratio
0.20 0.18 0.19 0.21 0.21 0.76
Equity Multiplier 1.91 1.89 1.92 1.97 1.93 -
Inventory Turnover Ratio 20.26 17.96 22.22 18.34 12.35 29.25

ACTIVITY
Asset Turnover Ratio 1.50 1.54 1.62 1.66 1.59 1.07

Fixed Assets Turnover 5.76 5.60 6.10 6.48 6.45 -
Gross Profit Margin 0.20 0.19 0.19 0.20 0.20 0.36
Profit Margin 0.06 0.06 0.05 0.06 0.06 0.11

PROFITABILITY
Return on Asset Ratio 0.10 0.09 0.09 0.10 0.10 0.12
Return on Equity Ratio 0.18 0.16 0.17 0.20 0.20 0.28
Return on Investment Ratio 0.18 0.13 0.16 0.17 0.17 0.15

Return on Sales Ratio 0.06 0.06 0.05 0.06 0.06 -
Basic Earning Power Ratio 0.11 0.10 0.10 0.13 0.11 -
Earnings Per Share 3.12 3.17 3.58 4.45 5.08 -
CORPORATE VALUATION
Market Price per Share 88.90 90.45 102.00 173.10 215.00 -

Book Value per Share 17.05 19.66 20.75 22.20 26.37 -
Dividend per Share 2.25 1.07 2.20 3.36 1.64 -
Price-Earnings Ratio 28.51 28.55 28.52 38.90 42.36 30.92

Dividend-Yield 0.03 0.01 0.02 0.02 0.01 -
Dividend-Payout 0.72 0.34 0.62 0.76 0.32 0.24
28
Generally, we can observe at first glimpse a strong and stable JFC as evidenced by the increasing trend
of its key financial ratios. JFC may have had a shaky 2011 and 2012, but nevertheless the years after saw
how JFC still managed to rise amidst the erratic movement of its ratios in the mentioned years.
Liquidity
Liquidity ratios are used to measure JFC’s ability to meet its short-term obligations as they mature.
Typically, it is used to answer the question “how quickly” CEB can convert its assets to cash without
incurring any loss in value to meet short term obligations. The classical and the most commonly used
financial ratios in order to establish short-term liquidity are listed below.
Table 5.
Liquidity Ratios
FORMULA
RATIO
NUMERATOR DENOMINATOR
Current Ratio Current Assets Current Liabilities
Quick Ratio Quick Assets Current Liabilities
Cash Ratio Cash Current Liabilities
Cash Burn-out Ratio Cash Average daily Operating Expenses
It is perilous for a company to show favorable liquidity ratios mainly in a business do not provide a steady
and predictable cash flow. The short-term liquidity ratios are used in the evaluation of short-term
liquidity to transform current assets into cash in order to reduce the financial obligations of the company
as they become due. These ratios are particularly significant to the creditors and potential lenders of a
company because they determine the ability of that company to meet current payments of a debt
(Horngren, 2006).
29
Figure 6.
Current Ratio
CURRENT RATIO
1.40
1.20
1.00
0.80
0.60
0.40
0.20
-
2010 2011 2012 2013 2014
As shown in the chart below, JFC exhibited a strong growth over the past five years in its current ratio.
Current Ratio shows how the company’s current assets cover its current short-term liabilities. Typically,
a ratio higher than 1 is advised for it implies that the current assets of the company are enough to pay
for its short-term obligations as they fall due. Clearly, JFC has shown that except in 2012 where the ratio
is valued at 0.94. However, obtaining a close to one value has a positive implication.
Figure 7.
Quick Ratio
QUICK RATIO
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
-
2010 2011 2012 2013 2014
Quick Ratio Industry Average
30
JFC maintained to be above industry average, in terms of its quick ratio. Quick ratio includes in its
analysis only the quick assets of the company, or those that can be easily converted to cash. It means
that even though the company may have due and demandable current liabilities, it can survive because
it has a lot of assets that are liquid and can be easily converted to cash when all else fails.
Solvency
The main area of concern in the evaluation of JFC’s solvency is to assess and evaluate its ability to
repay long-term creditors. Accordingly, these ratios should not be high and be in the lowest ratio as
possible.
Table 6.
Solvency Ratios
FORMULA
RATIO
Debt-to-Equity Ratio Total Liabilities Total Shareholders' Equity
Debt-to-Asset Ratio Total Liabilities Total Assets
Long Term Debt-to-Asset Ratio Long Term Debt Total Assets
Interest Coverage Ratio Earnings Before Interest and Taxes Interest Expense
Debt Service Coverage Ratio Net Income Total Liabilities
Equity Multiplier Total Assets Total Shareholders' Equity
Solvency ratios will help to understand JFC’s ability to endure business downturns without suffering
net losses. It is noteworthy to remember that these ratios should not be taken at its face value as
they are dependent on lots of variables.
31
Figure 8.
1.20
1.00
0.80
0.60
0.40
0.20
-
2010 2011 2012 2013 2014
Debt-to-Equity Ratio Industry Average
Evidently, JFC’s Debt-to-Equity values are above standard and has maintained a generally strong upward
trend over the past years. Debt to total equity ratio is used to assess on what proportion of debt and
equity a company is using to finance its assets. Thus, it is expected that a lower ratio is associated with
lower risks for the creditors and means a strong and long term financial security for JFC.
Figure 9.
Interest Coverage Ratio
INTEREST COVERAGE RATIO

50.00
40.00
30.00
20.00
10.00
-
2010 2011 2012 2013 2014
Interest Coverage Ratio 22.67 16.09 24.60 41.84 45.33
Industry Average 0.17 0.17 0.17 0.17 0.17
Interest Coverage Ratio Industry Average

Linear (Interest Coverage Ratio)
32
Interest Coverage Ratio measures the company’s ability to meet interest payments. It is preferred to
have higher number which suggests that the company can meet easily its interest obligations thus can
possibly make additional debt for funding. In this particular ratio, EBIT is used as this is the income
amount that is available to cover payments for interest expenses.
Figure 10.
Other Solvency Ratios
SOLVENCY RATIOS
0.60
0.50
0.40
0.30
0.20
0.10
-
2010 2011 2012 2013 2014
Debt Service Coverage
0.20 0.18 0.19 0.21 0.21
Ratio
Debt-to-Asset Ratio 0.48 0.47 0.48 0.49 0.48
Long Term Debt-to-Asset
0.00 0.10 0.02 0.09 0.08
Ratio
Clearly, JFC’s ability to meet its long-term obligations are at a good health. Based on the figure above,
JFC’s solvency ratios are performing good as evidenced by an upward trend in most of its solvency ratios.
Activity and Profitability
To gauge and assess JFC’s ability to identify, measure, monitor and control its expenses and therefore
make the most of its earnings and profit on the employed resources, profitability ratios are calculated
and compared. These ratios measures JFC’s strength and weaknesses, results of operations and growth
potential. Also, these will aid gauging on how efficient JFC employed their assets to generate sales and
have a positive bottom line. Therefore, the higher the ratio means that JFC have been more effective in
using their resources.
33
Table 7.
Profitability Ratios
FORMULA
RATIO
Gross Profit Margin Gross Profit Sales
Profit Margin Net Income Sales
Return on Asset Ratio Net Income Total Assets
Return on Equity Ratio Net Income Total Shareholders' Equity
Long Term Debt and
Return on Investment Ratio Net Income
Shareholders' Equity
Return on Sales Ratio Net Income Sales
Basic Earning Power Ratio Operating Income Total Assets
Net Income – Dividends on Average Common
Earnings Per Share
preferred stock, if any Shares Outstanding
Using simple absolute comparison and horizontal analysis, total revenues is on an increasing trend as
seen in the comparative and common-size income statements.
34
Figure 11.
Profitability Ratios
PROFITABILITY RATIOS
Basic Earning Power Ratio
Return on Sales Ratio
Return on Investment Ratio
Return on Equity Ratio
Return on Asset Ratio
Profit Margin
Gross Profit Margin
- 0.05 0.10 0.15 0.20 0.25

Return on
Gross Profit Return on Return on Return on Basic Earning
Profit Margin Investment
Margin Asset Ratio Equity Ratio Sales Ratio Power Ratio
Ratio
2014 0.20 0.06 0.10 0.20 0.17 0.06 0.11
2013 0.20 0.06 0.10 0.20 0.17 0.06 0.13
2012 0.19 0.05 0.09 0.17 0.16 0.05 0.10
2011 0.19 0.06 0.09 0.16 0.13 0.06 0.10
2010 0.20 0.06 0.10 0.18 0.18 0.06 0.11
2014 2013 2012 2011 2010
If were to compare JFC’s profitability ratios as compared to industry averages (Table 4), we can conclude
that JFC is doing well financially and way above industry averages. Despite the economic downturns
experienced by the company in 2011 and 2011, JFC still managed to maintain its Profit Margin at an
average of 6% for the past five years.
35
Figure 12.
Earnings Per Share
EARNINGS PER SHARE

6.00
5.08
5.00
4.45
4.00 3.58
3.12 3.17
3.00
2.00
1.00
-
2010 2011 2012 2013 2014
EPS has been one of the most prevalent and usually used success measures for a company. It is one of
the easiest ratios to use when comparing other companies within similar industry because most entities
reveal this in their respective Audited Financial Statements.
JFC’s EPS showed an upward trend over the five-year period, which signifies that net income is increasing
greater relative to the increase in shares outstanding.
Table 8.
Activity Ratios
FORMULA
RATIO
Inventory Turnover Ratio Cost of Goods Sold Inventory
Asset Turnover Ratio Net Sales Total Assets
Fixed Assets Turnover Net Sales Fixed Assets
Activity ratios measure how well the company employed its asset base in profit maximization. It gives us
a snapshot of how many times each asset-peso is converted to profit-peso.
36
Figure 13.
Activity Ratios
ACTIVITY RATIOS
25.00
20.00
15.00
10.00
5.00
-
2010 2011 2012 2013 2014
Inventory Turnover Ratio 20.26 17.96 22.22 18.34 12.35
Asset Turnover Ratio 1.50 1.54 1.62 1.66 1.59
Fixed Assets Turnover 5.76 5.60 6.10 6.48 6.45
Figure 13 connotes that JFC employed its resources at an advantage that translates to earnings. Although
inventory turnover experienced decline over the years, its asset and fixed asset turnover ratios remained
increasing.
Market Ratios
Presented below are the commonly used market ratios in assessing the performance of companies
relevant to the market.
Table 9.
Market Ratios
FORMULA
RATIO
Average Common
Market Price per Share Market Price
Shares Outstanding
Total Shareholders' Equity

Average Common
Book Value per Share attributable to Common
Shares Outstanding
Shareholders
Number of Common Stocks

Dividend per Share Total Dividends
Outstanding
Price-Earnings Ratio Market Price per Share Earnings per Share
Dividend-Yield Dividends per Share Market Price per share
Dividend-Payout Dividends per Share Earnings per Share
37
An increasing trend can be noticed in the market ratios of JFC for the past five years. This maybe the
result of intense advertising and international expansion efforts of the company.
Figure 14.
Market Ratios
MARKET RATIOS
30.00
25.00
20.00
15.00
10.00
5.00
-
Book Value per Share Dividend per Share Dividend-Yield Dividend-Payout
2010 17.05 2.25 0.03 0.72
2011 19.66 1.07 0.01 0.34
2012 20.75 2.20 0.02 0.62
2013 22.20 3.36 0.02 0.76
2014 26.37 1.64 0.01 0.32
Primarily, JFC’s market ratios have a stable upward growth amidst the 2011 and 2014 decline.
38
VERTICAL ANALYSIS AND FINANCIAL PROJECTIONS
Vertical analysis of the Balance Sheet and Income Statement, where a line item is expressed as a
percentage of a certain amount, is presented on the appendices.
Financial projections, also presented on the appendices, shows the researchers insights on how JFC will
perform financially for the next five years. Generally, trend analysis is done to project the JFC’s financial
underpinned by the SWOT, PESTLE, and other external factors which may affect or may have impact on
the operations, and ultimately to the financial health of JFC.
39
CHAPTER FIVE
Conclusions and Recommendations
40
CONCLUSIONS AND RECOMMENDATIONS
This sections aims to integrate the results of the analyses undertaken that led to the conclusions
formulated.
Statement of the Problem
This paper aims to analyze the financial performance of Jollibee for the years 2010-2014, in terms of
ratio analysis. Specifically, this paper aims to answer the following questions:
1. Did the company performed well, in terms of managing corporate finance, during 2010 – 2014?;
2. Is the company projected to perform well the next financial year?; and
3. Based on ratio analysis and projections, is it good to invest in the company?
Conclusions and Recommendations
In the light of the foregoing, the following conclusions are hereby made:
1. The company performed well, generally, during 2010 – 2014 as evidenced by above-industry
average performance and upward trend on most financial indicators. In spite of the economic
downturns experienced by JFC, particularly in 2011 and 2012, the company still managed to be
financially healthy and recovered from little decline in 2013.
2. Based on the financial projections (as presented in the appendices), JFC will continue to be
financially well. The researcher has taken into account the external factors in making financial
projections.
3. Based on ratio analysis, and financial projections, the researcher deemed it appropriate to advise
the investors to BUY shares of JFC as it is forecasted to perform well for the next 12 months up
to the next five years.
41
APPENDICES
JOLLIBEE FOODS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2010 2011 2012 2013 2014

ASSETS
Current Assets
Cash and cash equivalents 8,170,489,301.00 6,655,312,875.00 8,848,591,584.00 9,903,877,068.00 7,618,473,267.00
Receivables 2,098,921,220.00 2,388,617,052.00 2,750,341,491.00 3,082,872,678.00 7,621,193,252.00
Inventories 2,134,467,159.00 2,860,103,279.00 2,629,743,477.00 3,560,432,134.00 5,971,813,991.00
Other current assets 1,168,579,617.00 1,354,914,695.00 1,394,525,363.00 1,836,995,105.00 2,809,910,944.00
Total Current Assets 13,572,457,297.00 13,258,947,901.00 15,623,201,915.00 18,384,176,985.00 24,021,391,454.00
Noncurrent Assets
Available-for-sale financial assets 176,283,046.00 120,649,438.00 128,149,438.00 21,479,461.00 21,479,461.00
Interests in and advances to joint ventures, co-venturers and an associate 21,622,471.00 3,188,515.00 3,011,501,581.00 3,322,393,765.00 3,388,902,606.00
Property, plant and equipment - net 8,770,518,572.00 10,580,366,696.00 11,059,464,042.00 11,772,440,510.00 13,363,567,166.00
Investment properties 777,719,894.00 772,468,616.00 754,012,771.00 751,767,041.00 1,025,645,035.00
Goodwill and other intangible assets 7,990,646,296.00 8,542,321,057.00 8,837,559,145.00 9,103,636,848.00 9,385,110,293.00
Operating lease receivables 33,086,384.00 26,838,873.00 22,560,089.00 21,267,251.00 21,089,606.00
Deferred tax assets - net 920,139,371.00 636,389,585.00 685,822,447.00 756,196,860.00 751,965,318.00
Other noncurrent assets 1,483,533,516.00 4,609,351,786.00 1,645,859,282.00 1,893,275,392.00 2,139,528,661.00
Total Noncurrent Assets 20,173,549,550.00 25,291,574,566.00 26,144,928,795.00 27,642,457,128.00 30,097,288,146.00
TOTAL ASSETS 33,746,006,847.00 38,550,522,467.00 41,768,130,710.00 46,026,634,113.00 54,118,679,600.00
LIABILITIES AND EQUITY

Current Liabilities
Trade payables and other current liabilities 9,172,703,711.00 10,165,594,869.00 11,753,066,051.00 14,249,926,021.00 16,295,665,174.00
Income tax payable 167,751,504.00 154,717,083.00 78,958,189.00 154,744,537.00 181,829,126.00
Short-term debt 1,842,030,865.00 900,000,000.00 - - 1,865,000,000.00
Current portion of:
Long-term debt 2,341,125,065.00 777,301,991.00 4,572,839,927.00 1,106,275,244.00 715,520,000.00
Liability for acquisition of businesses 170,194,278.00 104,763,179.00 216,368,476.00 107,666,875.00 32,906,018.00
Total Current Liabilities 13,693,805,423.00 12,102,377,122.00 16,621,232,643.00 15,618,612,677.00 19,090,920,318.00
Noncurrent Liabilities
Noncurrent portion of:
Long-term debt 51,588,581.00 3,942,742,029.00 854,616,489.00 4,062,970,500.00 4,428,012,970.00
Provisions 30,500,639.00 30,500,639.00 30,500,639.00 30,500,639.00 30,500,639.00
Derivative liability - - 22,782,820.00 4,532,600.00 1,545,472.00
Pension liability 212,089,188.00 9,379,018.00 521,578,602.00 932,841,109.00 832,390,250.00
Operating lease payables 1,166,944,342.00 1,343,261,889.00 1,460,167,999.00 1,569,071,461.00 1,544,846,191.00
Deferred tax liabilities - net 768,381,238.00 528,426,655.00 374,744,826.00 318,157,118.00 11,377,928.00
Total Noncurrent Liabilities 2,370,758,656.00 6,033,275,017.00 3,415,595,039.00 7,047,081,359.00 6,949,737,761.00
Total Liabilities 16,064,564,079.00 18,135,652,139.00 20,036,827,682.00 22,665,694,036.00 26,040,658,079.00
Equity Attributable to Equity Holders of the Parent Company
Capital stock 1,053,438,818.00 1,037,775,349.00 1,046,681,675.00 1,051,430,791.00 1,063,862,430.00
Subscription Receivable (17,177,884.00) - - - -
Additional paid-in capital 2,773,682,164.00 2,914,463,925.00 3,284,139,309.00 3,640,716,729.00 4,452,162,323.00
Cumulative translation adjustments of foreign subsidiaries, joint ventures and an
associate (317,022,645.00) (187,186,852.00) (351,379,055.00) 38,306,710.00 (25,789,376.00)
Remeasurement gain (loss) on net defined benefit plan - net of tax - 128,728,399.00 (224,657,742.00) (472,054,212.00) (219,900,060.00)
Unrealized gains on available-for-sale financial assets 107,164,577.00 102,626,829.00 102,626,829.00 - -
Comprehensive loss on derivative liability - - (7,087,197.00) (3,411,504.00) (2,395,155.00)
Excess of cost over the carrying value of non-controlling interests acquired (542,764,486.00) (542,764,486.00) (542,764,486.00) (542,764,486.00) (542,764,486.00)
Retained earnings
Appropriated for future expansion 1,200,000,000.00 1,200,000,000.00 5,000,000,000.00 10,200,000,000.00 10,200,000,000.00
Unappropriated 13,042,709,169.00 15,238,047,410.00 12,871,154,204.00 8,817,166,243.00 12,445,662,470.00
17,300,029,713.00 19,891,690,574.00 21,178,713,537.00 22,729,390,271.00 27,370,838,146.00
Less cost of common stock held in treasury 180,511,491.00 180,511,491.00 180,511,491.00 180,511,491.00 180,511,491.00
17,119,518,222.00 19,711,179,083.00 20,998,202,046.00 22,548,878,780.00 27,190,326,655.00
Non-controlling Interests 561,924,546.00 703,691,245.00 733,100,982.00 812,061,297.00 887,694,866.00
Total Equity 17,681,442,768.00 20,414,870,328.00 21,731,303,028.00 23,360,940,077.00 28,078,021,521.00
TOTAL LIABILITIES AND EQUITY 33,746,006,847.00 38,550,522,467.00 41,768,130,710.00 46,026,634,113.00 54,118,679,600.00
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2010 2011 2012 2013 2014

REVENUES
Net sales 50,506,967,113.00 59,266,444,340.00 67,493,953,521.00 76,313,489,585.00 86,209,777,710.00
Royalty, franchise fees and others 2,864,757,569.00 3,288,482,719.00 3,565,085,633.00 3,969,279,614.00 4,461,460,490.00
53,371,724,682.00 62,554,927,059.00 71,059,039,154.00 80,282,769,199.00 90,671,238,200.00
COST OF SALES 43,254,730,460.00 51,366,071,947.00 58,435,498,743.00 65,284,763,064.00 73,727,792,141.00
GROSS PROFIT 10,116,994,222.00 11,188,855,112.00 12,623,540,411.00 14,998,006,135.00 16,943,446,059.00
EXPENSES
General and administrative expenses 5,271,066,845.00 5,939,317,810.00 6,908,802,947.00 7,427,887,196.00 8,953,711,295.00
Advertising and promotions 1,246,592,522.00 1,310,113,894.00 1,369,719,679.00 1,639,022,544.00 1,852,967,633.00
6,517,659,367.00 7,249,431,704.00 8,278,522,626.00 9,066,909,740.00 10,806,678,928.00
INTEREST INCOME (EXPENSE)
Interest income 163,081,118.00 179,763,236.00 270,114,157.00 245,573,808.00 242,045,341.00
Interest expense (193,201,203.00) (291,342,791.00) (206,012,700.00) (152,920,028.00) (152,471,253.00)
(30,120,085.00) (111,579,555.00) 64,101,457.00 92,653,780.00 89,574,088.00
EQUITY IN NET EARNINGS (LOSSES) OF JOINT VENTURES AND AN

ASSOCIATE (2,181,411.00) 299,710.00 (50,954,378.00) (115,560,608.00) (126,174,100.00)
OTHER INCOME 618,898,399.00 566,813,617.00 503,534,839.00 337,325,031.00 659,303,926.00
INCOME BEFORE INCOME TAX 4,185,931,758.00 4,394,957,180.00 4,861,699,703.00 6,245,514,598.00 6,759,471,045.00
PROVISION FOR INCOME TAX
Current 1,040,927,979.00 1,187,563,865.00 1,277,160,734.00 1,521,966,682.00 1,694,768,550.00
Deferred (67,532,217.00) (77,386,893.00) (127,456,683.00) 741,389.00 (424,239,011.00)
973,395,762.00 1,110,176,972.00 1,149,704,051.00 1,522,708,071.00 1,270,529,539.00
NET INCOME 3,212,535,996.00 3,284,780,208.00 3,711,995,652.00 4,722,806,527.00 5,488,941,506.00
OTHER COMPREHENSIVE INCOME (LOSS) (198,117,718.00) 257,397,277.00 (535,935,508.00) 71,635,297.00 177,973,962.00
TOTAL COMPREHENSIVE INCOME (LOSS) 3,014,418,278.00 3,542,177,485.00 3,176,060,144.00 4,794,441,824.00 5,666,915,468.00
EARNINGS PER SHARE

Basic 3.118 3.168 3.577 4.450 5.075
Diluted 3.077 3.125 3.513 4.360 4.955
Cash generated from Operations 7,924,290,356.00 6,982,137,328.00 9,442,045,435.00 10,441,465,031.00 4,317,239,555.00

Cash Payments used for purchase of Fixed Assets (2,553,449,151.00) (3,700,449,259.00) (3,755,906,880.00) (3,907,875,891.00) (5,045,474,419.00)
Cash Dividends (2,556,643,476.00) (1,196,621,682.00) (2,274,367,485.00) (3,232,637,120.00) (1,560,657,861.00)
FREE CASH FLOW 2,814,197,729.00 2,085,066,387.00 3,411,771,070.00 3,300,952,020.00 (2,288,892,725.00)
COMMON-SIZE STATEMENT OF FINANCIAL POSITION
2010 2011 2012 2013 2014

ASSETS
Current Assets
Cash and cash equivalents 24.21% 17.26% 21.19% 21.52% 14.08%
Receivables 6.22% 6.20% 6.58% 6.70% 14.08%
Inventories 6.33% 7.42% 6.30% 7.74% 11.03%
Other current assets 3.46% 3.51% 3.34% 3.99% 5.19%
Total Current Assets 40.22% 34.39% 37.40% 39.94% 44.39%
Noncurrent Assets
Available-for-sale financial assets 0.52% 0.31% 0.31% 0.05% 0.04%
Interests in and advances to joint ventures, co-venturers and an associate 0.06% 0.01% 7.21% 7.22% 6.26%
Property, plant and equipment - net 25.99% 27.45% 26.48% 25.58% 24.69%
Investment properties 2.30% 2.00% 1.81% 1.63% 1.90%
Goodwill and other intangible assets 23.68% 22.16% 21.16% 19.78% 17.34%
Operating lease receivables 0.10% 0.07% 0.05% 0.05% 0.04%
Deferred tax assets - net 2.73% 1.65% 1.64% 1.64% 1.39%
Other noncurrent assets 4.40% 11.96% 3.94% 4.11% 3.95%
Total Noncurrent Assets 59.78% 65.61% 62.60% 60.06% 55.61%
TOTAL ASSETS 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabilities
Trade payables and other current liabilities 27.18% 26.37% 28.14% 30.96% 30.11%
Income tax payable 0.50% 0.40% 0.19% 0.34% 0.34%
Short-term debt 5.46% 2.33% 0.00% 0.00% 3.45%
Current portion of:
Long-term debt 6.94% 2.02% 10.95% 2.40% 1.32%
Liability for acquisition of businesses 0.50% 0.27% 0.52% 0.23% 0.06%
Total Current Liabilities 40.58% 31.39% 39.79% 33.93% 35.28%
Long-term debt 0.15% 10.23% 2.05% 8.83% 8.18%
Liability for acquisition of businesses 0.42% 0.46% 0.36% 0.28% 0.19%
Provisions 0.09% 0.08% 0.07% 0.07% 0.06%
Derivative liability 0.00% 0.00% 0.05% 0.01% 0.00%
Pension liability 0.63% 0.02% 1.25% 2.03% 1.54%
Operating lease payables 3.46% 3.48% 3.50% 3.41% 2.85%
Deferred tax liabilities - net 2.28% 1.37% 0.90% 0.69% 0.02%
Total Noncurrent Liabilities 7.03% 15.65% 8.18% 15.31% 12.84%
Total Liabilities 47.60% 47.04% 47.97% 49.24% 48.12%
Capital stock 3.12% 2.69% 2.51% 2.28% 1.97%
Subscription Receivable -0.05% 0.00% 0.00% 0.00% 0.00%
Additional paid-in capital 8.22% 7.56% 7.86% 7.91% 8.23%
Cumulative translation adjustments of foreign subsidiaries, joint ventures and an
associate -0.94% -0.49% -0.84% 0.08% -0.05%
Remeasurement gain (loss) on net defined benefit plan - net of tax 0.00% 0.33% -0.54% -1.03% -0.41%
Unrealized gains on available-for-sale financial assets 0.32% 0.27% 0.25% 0.00% 0.00%
Comprehensive loss on derivative liability 0.00% 0.00% -0.02% -0.01% 0.00%
Excess of cost over the carrying value of non-controlling interests acquired -1.61% -1.41% -1.30% -1.18% -1.00%
Retained earnings 0.00% 0.00% 0.00% 0.00% 0.00%
Appropriated for future expansion 3.56% 3.11% 11.97% 22.16% 18.85%
Unappropriated 38.65% 39.53% 30.82% 19.16% 23.00%
51.27% 51.60% 50.71% 49.38% 50.58%
Less cost of common stock held in treasury 0.53% 0.47% 0.43% 0.39% 0.33%
50.73% 51.13% 50.27% 48.99% 50.24%
Non-controlling Interests 1.67% 1.83% 1.76% 1.76% 1.64%
Total Equity 52.40% 52.96% 52.03% 50.76% 51.88%
TOTAL LIABILITIES AND EQUITY 100.00% 100.00% 100.00% 100.00% 100.00%
COMMON-SIZE STATEMENT OF COMPREHENSIVE INCOME
2010 2011 2012 2013 2014

REVENUES
Net sales 94.63% 94.74% 94.98% 95.06% 95.08%
Royalty, franchise fees and others 5.37% 5.26% 5.02% 4.94% 4.92%
100.00% 100.00% 100.00% 100.00% 100.00%
COST OF SALES 81.04% 82.11% 82.24% 81.32% 81.31%
GROSS PROFIT 18.96% 17.89% 17.76% 18.68% 18.69%
EXPENSES
General and administrative expenses 9.88% 9.49% 9.72% 9.25% 9.87%
Advertising and promotions 2.34% 2.09% 1.93% 2.04% 2.04%
12.21% 11.59% 11.65% 11.29% 11.92%
Interest income 0.31% 0.29% 0.38% 0.31% 0.27%
Interest expense -0.36% -0.47% -0.29% -0.19% -0.17%
-0.06% -0.18% 0.09% 0.12% 0.10%
EQUITY IN NET EARNINGS (LOSSES) OF JOINT VENTURES AND AN

ASSOCIATE 0.00% 0.00% -0.07% -0.14% -0.14%
OTHER INCOME 1.16% 0.91% 0.71% 0.42% 0.73%
INCOME BEFORE INCOME TAX 7.84% 7.03% 6.84% 7.78% 7.45%
PROVISION FOR INCOME TAX 0.00% 0.00% 0.00% 0.00% 0.00%
Current 1.95% 1.90% 1.80% 1.90% 1.87%
Deferred -0.13% -0.12% -0.18% 0.00% -0.47%
1.82% 1.77% 1.62% 1.90% 1.40%
NET INCOME 6.02% 5.25% 5.22% 5.88% 6.05%
OTHER COMPREHENSIVE INCOME (LOSS) -0.37% 0.41% -0.75% 0.09% 0.20%
TOTAL COMPREHENSIVE INCOME (LOSS) 5.65% 5.66% 4.47% 5.97% 6.25%
PROJECTED STATEMENT OF FINANCIAL POSITION
2015 2016 2017 2018 2019

ASSETS
Current Assets
Cash and cash equivalents 8,380,320,593.70 9,218,352,653.07 8,140,187,918.38 8,954,206,710.21 9,849,627,381.24
Receivables 8,383,312,577.20 9,221,643,834.92 5,221,643,834.92 8,500,643,834.92 8,021,643,834.92
Inventories 6,568,995,390.10 7,225,894,929.11 7,948,484,422.02 8,743,332,864.22 9,617,666,150.65
Other current assets 3,090,902,038.40 3,399,992,242.24 3,739,991,466.46 4,113,990,613.11 4,525,389,674.42
Total Current Assets 26,423,530,599.40 29,065,883,659.34 25,050,307,641.78 30,312,174,022.47 32,014,327,041.22
Noncurrent Assets
Available-for-sale financial assets 23,627,407.10 25,990,147.81 28,589,162.59 31,448,078.85 34,592,886.74
Interests in and advances to joint ventures, co-venturers and an associate 3,388,902,606.00 3,388,902,606.00 3,388,902,606.00 3,388,902,606.00 3,388,902,606.00
Property, plant and equipment - net 13,363,567,166.00 13,363,567,167.00 13,363,567,168.00 13,363,567,169.00 13,363,567,170.00
Investment properties 1,128,209,538.50 1,241,030,492.35 1,365,133,541.59 1,501,646,895.74 1,651,811,585.32
Goodwill and other intangible assets 10,323,621,322.30 11,355,983,454.53 12,491,581,799.98 13,740,739,979.98 15,114,813,977.98
Operating lease receivables 23,198,566.60 25,518,423.26 28,070,265.59 30,877,292.14 33,965,021.36
Deferred tax assets - net 827,161,849.80 909,878,034.78 1,000,865,838.26 1,100,952,422.08 1,211,047,664.29
Other noncurrent assets 2,353,481,527.10 2,588,829,679.81 2,847,712,647.79 3,132,483,912.57 3,445,732,303.83
Total Noncurrent Assets 31,431,769,983.40 32,899,700,005.54 34,514,423,029.79 36,290,618,356.37 38,244,433,215.51
TOTAL ASSETS 57,855,300,582.80 61,965,583,664.88 59,564,730,671.58 66,602,792,378.84 70,258,760,256.73

Current Liabilities
Trade payables and other current liabilities 17,925,231,691.40 19,717,754,860.54 23,131,610,939.60 26,665,852,626.47 26,467,618,481.93
Income tax payable 200,012,038.60 220,013,242.46 242,014,566.71 266,216,023.38 292,837,625.71
Short-term debt 2,051,500,000.00 2,256,650,000.00 2,482,315,000.00 2,730,546,500.00 3,003,601,150.00
Current portion of: - - - - -
Long-term debt 787,072,000.00 865,779,200.00 952,357,120.00 1,047,592,832.00 1,152,352,115.20
Total Current Liabilities 21,000,012,349.80 23,100,013,584.78 26,852,095,536.27 30,758,385,682.80 30,969,404,843.89
Long-term debt 4,870,814,267.00 5,357,895,693.70 5,893,685,263.07 6,483,053,789.38 7,131,359,168.31
Provisions 30,500,639.00 30,500,639.00 30,500,639.00 30,500,639.00 30,500,639.00
Derivative liability 1,700,019.20 1,870,021.12 2,057,023.23 2,262,725.56 2,488,998.11
Pension liability 915,629,275.00 1,007,192,202.50 1,107,911,422.75 1,218,702,565.03 1,340,572,821.53
Operating lease payables 1,699,330,810.10 1,869,263,891.11 2,056,190,280.22 2,261,809,308.24 2,487,990,239.07
Deferred tax liabilities - net 12,515,720.80 13,767,292.88 15,144,022.17 16,658,424.38 18,324,266.82
Total Noncurrent Liabilities 7,641,661,473.20 8,402,777,556.62 9,240,005,248.38 10,160,955,709.32 11,174,001,216.35
Total Liabilities 28,641,673,823.00 31,502,791,141.40 36,092,100,784.65 40,919,341,392.12 42,143,406,060.24
Capital stock 1,170,248,673.00 1,287,273,540.30 1,416,000,894.33 1,557,600,983.76 1,713,361,082.14
Subscription Receivable - - - - -
Additional paid-in capital 4,897,378,555.30 5,387,116,410.83 5,925,828,051.91 6,518,410,857.10 7,170,251,942.81
Cumulative translation adjustments of foreign subsidiaries, joint ventures
and an associate (28,368,313.60) (31,205,144.96) (34,325,659.46) (37,758,225.40) (41,534,047.94)
Remeasurement gain (loss) on net defined benefit plan - net of tax (241,890,066.00) (266,079,072.60) (292,686,979.86) (321,955,677.85) (354,151,245.63)
Unrealized gains on available-for-sale financial assets - - - - -
Comprehensive loss on derivative liability (2,634,670.50) (2,898,137.55) (3,187,951.31) (3,506,746.44) (3,857,421.08)
Excess of cost over the carrying value of non-controlling interests acquired (542,764,486.00) (542,764,486.00) (542,764,486.00) (542,764,486.00) (542,764,486.00)
Retained earnings -
Appropriated for future expansion 10,200,000,000.00 10,200,000,000.00 1,200,000,000.00 1,200,000,000.00 1,200,000,000.00
Unappropriated 13,054,473,692.60 13,724,166,038.46 15,096,582,642.31 16,606,240,906.54 18,266,864,997.19
28,506,443,384.80 29,755,609,148.48 22,765,446,511.93 24,976,267,611.72 27,408,170,821.49
Less cost of common stock held in treasury 180,511,491.00 180,511,491.00 180,511,491.00 180,511,491.00 180,511,491.00
28,325,931,893.80 29,575,097,657.48 22,584,935,020.93 24,795,756,120.72 27,227,659,330.49
Non-controlling Interests 887,694,866.00 887,694,866.00 887,694,866.00 887,694,866.00 887,694,866.00
Total Equity 29,213,626,759.80 30,462,792,523.48 23,472,629,886.93 25,683,450,986.72 28,115,354,196.49
TOTAL LIABILITIES AND EQUITY 57,855,300,582.80 61,965,583,664.88 59,564,730,671.58 66,602,792,378.84 70,258,760,256.73
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PROJECTED STATEMENT OF COMPREHENSIVE INCOME
2015 2016 2017 2018 2019

REVENUES
Net sales 101,899,000,000.00 116,376,000,000.00 131,332,000,000.00 144,465,200,000.00 158,911,720,000.00
Royalty, franchise fees and others 4,907,606,539.00 5,398,367,192.90 5,938,203,912.19 6,532,024,303.41 7,185,226,733.75
106,806,606,539.00 121,774,367,192.90 137,270,203,912.19 150,997,224,303.41 166,096,946,733.75
COST OF SALES 87,154,190,935.82 99,367,883,629.41 112,012,486,392.35 123,213,735,031.58 135,535,108,534.74
GROSS PROFIT 19,652,415,603.18 22,406,483,563.49 25,257,717,519.84 27,783,489,271.83 30,561,838,199.01
EXPENSES
General and administrative expenses 10,296,156,870.36 11,739,048,997.40 13,232,847,657.14 14,556,132,422.85 16,011,745,665.13
Advertising and promotions 2,832,258,076.67 2,545,084,274.33 2,868,947,261.76 3,155,841,987.94 3,471,426,186.74
13,128,414,947.02 14,284,133,271.73 16,101,794,918.90 17,711,974,410.79 19,483,171,851.87
Interest income 331,100,480.27 377,500,538.30 425,537,632.13 468,091,395.34 514,900,534.87
Interest expense (160,209,909.81) (182,661,550.79) (205,905,305.87) (226,495,836.46) (249,145,420.10)
170,890,570.46 194,838,987.51 219,632,326.26 241,595,558.89 265,755,114.77
EQUITY IN NET EARNINGS (LOSSES) OF JOINT VENTURES AND

AN ASSOCIATE (138,791,510.00) (152,670,661.00) (167,937,727.10) (184,731,499.81) (203,204,649.79)
OTHER INCOME 725,234,318.60 725,234,318.60 659,303,926.00 725,234,318.60 797,757,750.46
INCOME BEFORE INCOME TAX 7,281,334,035.21 8,889,752,936.88 9,866,921,126.10 10,853,613,238.71 11,938,974,562.58
PROVISION FOR INCOME TAX
Current 1,864,245,405.00 2,050,669,945.50 2,255,736,940.05 2,481,310,634.06 2,729,441,697.46
Deferred (466,662,912.10) (513,329,203.31) (564,662,123.64) (621,128,336.01) (683,241,169.61)
1,397,582,492.90 1,537,340,742.19 1,691,074,816.41 1,860,182,298.05 2,046,200,527.85
NET INCOME 5,883,751,542.31 7,352,412,194.69 8,175,846,309.69 8,993,430,940.66 9,892,774,034.73
OTHER COMPREHENSIVE INCOME (LOSS) 169,068,553.00 160,163,144.00 151,257,735.00 142,352,326.00 133,446,917.00
TOTAL COMPREHENSIVE INCOME (LOSS) 6,052,820,095.31 7,512,575,338.69 8,327,104,044.69 9,135,783,266.66 10,026,220,951.73

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RABINO, CRISTOBAL NEBRAO

ANTONIO ROQUE W. PADERANGA

FINANCIAL ANALYSIS OF JOLLIBEE FOODS CORPORATION

Investment decisions require knowledge

There is never one rule in making

This paper seeks to evaluate the

The data being used in this study are the

Keywords: financial analysis, ratio

business because of the available customer base.

involved in exchange for a speedy meal.

continues to dominate the market through its cheap product offerings.

STATEMENT OF THE PROBLEM

3. Based on ratio analysis and projections, is it good to invest in the company?

1. The financial statements are presented fairly, in all material respects;

for the period.

SCOPE AND LIMITATIONS

This study is bounded within the following scopes and limitations:

downloaded on their website);

company’s subsidiaries are also engaged in fast food business;

4. Although benchmarking is important in determining the relative performance of the company

Philippine market are also competing in the US market.

the analyses carried out throughout the conduct of the study.

SIGNIFICANCE OF THE STUDY

not their respective shareholdings in the company.

would probably spark their interest on the subject matter.

management, specifically horizontal and vertical analysis of the financial statements.

existing policies concerning the industry and its stakeholders.

intend to make any further relevant study.

REVIEW OF RELATED LITERATURE AND STUDIES

information regarding the industry in which JFC operates.

Jollibee: Humble Beginnings

management mentor (http://www.wipo.int/ipadvantage/en/details.jsp?id=2531. Retrieved 13

Entrance of competitors and continued growth

banked on this idea and became successful in doing so.

market price of Jollibee soared to ₱ 215 in 2014 (http://www.jollibee.com.ph/investors/jollibee-foods-

corporation/. Retrieved 13 September 2015).

Expansions and acquisitions

the Chinese fast-food chain Hongzhuangyuan.

locations were chosen for their strong Filipino presence.

(https://en.wikipedia.org/wiki/Jollibee. Retrieved 13 September 2015).

Red Ribbon US 34 and Jinja Bar US 3.

in China, 3 in the United States and 1 in Vietnam (http://www.jollibee.com.ph/investors/jollibee-foods-

corporation/. Retrieved 13 September 2015).

Philippine Fast Food Industry Review

and pay before eating (Bautista, 2013).

of the entire fast food industry.

objectively, accurately and economically.

Research Method Used

answers to current issues and problems.

incorporating the aforementioned.

to provide a holistic approach to the analysis undertaken.

by Sycip, Gorres, Velayo and Co.

Pertinent industry information were also obtained from online sources.

Analytical Treatment of Data

and modifications, to the ideas presented online, were made.

of a project, product, place or person.

As its name states, a SWOT analysis inspects four elements:

 Strengths - internal attributes and resources that support a successful outcome.

 Weaknesses - internal attributes resources that work against a successful outcome.