Financial Ratio

The following are the key performance indicators of the financial condition of the company:

Financial Ratio 2012

Liquidity Ratio

Current Ratio 1.34

Quick Ratio 1.24

Asset Management Efficiency

Asset Turnover 0.22

Receivable Turnover 5.68

Capital Structure

Debt Ratio 0.52

Debt-to-Equity Ratio 0.54

Net Debt to Equity Ratio 0.38

Asset to Equity Ratio 2.12

Interest Service Coverage 8.87

Debt to EBITDA 2.96

Profitability Ratio

Operating Income to Revenues 39%

EBITDA Margin 48%

Net Income to Revenues 28%

Return on investment properties 13%

Return on Equity 12%

Basic Earnings per Share: (in peso) 0.584

Diluted Earnings per Share: (in peso) 0.584

The following are the key performance indicators of the financial condition of the company:

Financial Ratio 2013

Liquidity Ratio

Current Ratio 1.51

Quick Ratio 0.99

Asset Management Efficiency

Asset Turnover 0.25

Receivable Turnover 3.62

Capital Structure

Debt Ratio 0.50

Debt-to-Equity Ratio 0.64

Net Debt to Equity Ratio 0.47

Asset to Equity Ratio 2.06

Interest Service Coverage 8.12

Debt to EBITDA 3.55

Profitability Ratio

Operating Income to Revenues 40%

EBITDA Margin 50%

Net Income to Revenues 27%

Return on investment properties 12%

Return on Equity 10%

Basic Earnings per Share: (in peso) 0.586

Diluted Earnings per Share: (in peso) 0.586

The following are the key performance indicators of the financial condition of the company:

Financial Ratio 2014

Liquidity Ratio

Current Ratio 2.09

Quick Ratio 1.33

Asset Management Efficiency

Asset Turnover 0.18

Receivable Turnover 2.29

Capital Structure

Debt Ratio 0.48

Debt-to-Equity Ratio 0.64

Net Debt to Equity Ratio 0.47

Asset to Equity Ratio 1.95

Interest Service Coverage 8.26

Debt to EBITDA 3.82

Profitability Ratio

Operating Income to Revenues 42%

EBITDA Margin 51%

Net Income to Revenues 28%

Return on investment properties 12%

Return on Equity 10%

Basic Earnings per Share: (in peso) 0.660

Diluted Earnings per Share: (in peso) 0.660

The following are the key performance indicators of the financial condition of the company:

Financial Ratio 2015

Liquidity Ratio

Current Ratio 1.40

Quick Ratio 0.85

Asset Management Efficiency

Asset Turnover 0.17

Receivable Turnover 2.31

Capital Structure

Debt Ratio 0.50

Debt-to-Equity Ratio 0.72

Net Debt to Equity Ratio 0.61

Asset to Equity Ratio 2.05

Interest Service Coverage 11.19

Debt to EBITDA 4.12

Profitability Ratio

Operating Income to Revenues 44%

EBITDA Margin 53%

Net Income to Revenues 29%

Return on investment properties 12%

Return on Equity 10%

Basic Earnings per Share: (in peso) 0.982

Diluted Earnings per Share: (in peso) 0.982

The following are the key performance indicators of the financial condition of the company:
Financial Ratio 2016
Liquidity Ratio

Current Ratio 2.10

Quick Ratio 1.21

Asset Management Efficiency

Asset Turnover 0.18

Receivable Turnover 2.49

Capital Structure

Debt Ratio 0.49

Debt-to-Equity Ratio 0.72

Net Debt to Equity Ratio 0.59

Asset to Equity Ratio 2.01

Interest Service Coverage 9.64

Debt to EBITDA 3.87

Profitability Ratio

Operating Income to Revenues 44%

EBITDA Margin 53%

Net Income to Revenues 30%

Return on investment properties 11%

Return on Equity 11%

Basic Earnings per Share: (in peso) 0.826

Diluted Earnings per Share: (in peso) 0.826

FINANCIAL RATIOS ANALYSIS

 Analysis of Liquidity or Short- Term Solvency

 Current Ratio

In every year the assets of the company exceeds its liabilities. In 2016, the

company has 2 times more current assets than its current liabilities. It shows

that SM Prime can easily make current debt payments.

 Quick or Acid Test Ratio

With the exception of year 2015, SM Prime can pay off all of its current

liabilities with quick assets and still have some quick assets left over. In 2016,

SM Prime has a quick ratio of 1.21 which is more than enough to cover all of

its current liabilities.

 Analysis of Asset Liquidity and Asset Management Efficiency

 Accounts Receivable Turnover

The company rarely collected its average receivables during 2012 to 2016,

with 2012 as the highest collection of 5.28 times. It shows that credit sales

were less likely to be collected. In this case, this turnover is unfavorable from

a cash flow standpoint as well because the company will not be able to use the

cash to pay bills and other obligations.

 Total Asset turnover

The asset turnover for the year 2012 is 0.22, 0.25 in 2013, 0.18 in 2014, 0.17

in 2015 and 0.17 again in 2016. There are minimal changes over the years. In

2016, SM Prime generates Php 0.17 in sales per peso of assets.

 Analysis of Leverage: Debt Financing and Coverage

 Debt Ratio

The higher the debt ratio, the higher the risk the company has taken on. During

2013 to 2016 the debt ratios have remained within the 50% range. It implies a

more stable business. It means less leveraged and stronger equity. And in

2016, liabilities are only 49% of the assets. There are enough assets to cover

all liabilities.

 Debt to Equity Ratio

Based on the ratios computed, SM Prime has more equity than liabilities. This

indicates that more investor financing is used than creditor financing. In 2016,

SM Prime total liabilities are 72% of the total equity.

 Interest Service Coverage

The year 2015 has the most favorable coverage of the interest expense. But

nevertheless the ratios of other years are still considered favorable since the

company could still pay the interest with its earnings before interest, taxes,

depreciation and amortization. In 2016, interest service coverage is 9.64. It

shows the company can afford to pay its interest payments when they come

due.

 Operating Efficiency and Profitability

 Gross Profit Margin

SM Prime’s gross profit margins for the year 2012 to 2015 gradually increased

which is a good sign. In 2016, the company has a higher ratio of 83.6% which

is more favorable.

 Operating Profit Margin

Since 2012, SM Prime has received at least 40% of its revenue from its

operation which means that the company is operating smoothly. Through the
 years the operating profit margin has increased and in 2016, the profit

attributable to the operations is 44%.

 Net Profit Margin

After all necessary deductions in the income for 2012 to 2016, the company

still received 27% to 30% of its revenue.

 Return on Investment Properties

In every peso that SM Prime invested in investment properties during the 5

years of operation the company earned 11% to 13%. The investment earned

11% return on 2016.

 Return on Equity

From the year 2012 to 2016, the company was able to maintain its positive

return on equity. 2012 has the ratio of 12%. And then return on equity has

been stable during 2013 to 2015 at 10% and in 2016 it increased to 11% which

is favorable to the investors.

E. Other Ratios used to Measure Returns to Investors

 Basic or Diluted Earnings Per Share

SM Prime’s earnings per share increased from Php0.584 in 2012 to Php0.826

in 2016 which is a clear indication in the improvement on the investment

return of ordinary shareholders.

 Dividend Payout Ratio

In 2016, SM Prime has a payout ratio of 29.0. The 2013 dividend payout ratio

has the greatest percentage of earnings paid to shareholders in dividends.