Bus Fin Peta 1

A COMPARATIVE ANALYSIS
OF THE FINANCIAL STATEMENTS OF

SAN MIGUEL PURE
FOODS COMPANY, INC.
AND AGRINURTURE INC.
IN PARTIAL FULLFILLMENT
OF THE REQUIREMENTS OF THE LEARNING AREA
BUSINESS FINANCE
Prepared by:
01 Aboc, Trisha Mae O.
12 Florentin, Jairuz L.
13 Franada, Krezelle S.
22 Paño, Anna Mae A.
23 Perez, Ariana D.
26 Reyes, Aira Marie P.
27 Rodrigueza, Baby Ruth E.
31 Senen, Katherine Claire S.
36 Talbo, Adrianne Reign S.
12 ABM 17
COMPARATIVE ANALYSIS PAGE 1 OF 42
TABLE OF CONTENTS
Table of Contents 1
Business Background 2
Copy of Audited Financial Statements

Appendix A: SMPFC, Inc. 2016 and 2015 Statement of Financial Position 3
Appendix B: SMPFC, Inc. 2017 and 2016 Statement of Financial Position 3
Appendix C: SMPFC, Inc. 2017, 2016, and 2015 Statement of Comprehensive Income 4
Appendix D: ANI, Inc. 2016 and 2015 Statement of Financial Position 5
Appendix E: ANI, Inc. 2017 and 2016 Statement of Financial Position 6
Appendix F: ANI, Inc. 2017, 2016, and 2015 Statement of Comprehensive Income 7
8
Financial Ratios
Table 1. Financial Ratios of SMPFC Inc. and ANI Inc. 9
Financial Analysis
Table 2. Financial Analysis of SMPFC’s Income Statement 10
Table 3. Financial Analysis of ANI’s Income Statement 10
Table 4. Financial Analysis of SMPFC’s Balance Sheet 11
Table 5. Financial Analysis of ANI’s Balance Sheet 12
Conclusion
Financial Ratio 13
SMPFC’s Horizontal Analysis 2015-2016 (Balance Sheet) 24
SMPFC’s Horizontal Analysis 2016-2017 (Balance Sheet) 25
SMPFC’s Horizontal Analysis 2015-2016 (Income Statement) 26
SMPFC’s Horizontal Analysis 2016-2017 (Income Statement) 26
SMPFC’s Vertical Analysis 2015 (Income Statement) 27
SMPFC’s Vertical Analysis 2015 (Balance Sheet) 28
ANI’s Horizontal Analysis 2015-2016 (Balance Sheet) 31
ANI’s Horizontal Analysis 2016-2017 (Balance Sheet) 31
ANI’s Horizontal Analysis 2015-2016 (Income Statement) 32
ANI’s Horizontal Analysis 2016-2017 (Income Statement) 32
ANI’s Vertical Analysis 2015 (Income Statement) 33
ANI’s Vertical Analysis 2015 (Balance Sheet) 34
Recommendation kasya pa ba idagdag dito yung dalawang figures 37
Reflection
i. Group Reflection 39
ii. Individual Reflection 40
References 42
BUSINESS
BACKGROUND
San Miguel PureFoods company Inc.
San Miguel Pure Foods Company, Inc was incorporated on
October 13, 1956, as a manufacturing business for processed meat
products. San Miguel, through its subsidiaries, diversified into
poultry and livestock operations, feeds and flour milling, dairy and
coffee operations, f ranchising, and young animal ration
manufacturing and distribution. The company has been enlisted on
the Philippine Stock Exchange since 1973. (Philippine Stock
Exchange Inc.,n.d.) 1973 (Philippine Stock Exchange Inc., n.d.).
SMPFC is one of the leading food and beverage companies in the Philippines (San Miguel
Food and Beverage, Inc., n.d.). The company is further classified into three business groups:
Beer and non-alcoholic beverages; spirits; and food, that has their own target markets, so as to
employ strategic scopes and operational distinction. Having some of the most recognizable
brands in the Philippine food industry, that includes Magnolia for chicken, ice cream and dairy
products, Monterey for fresh and marinated meat, Purefoods for refrigerated processed meats
and canned meats, Star and Dari Crème for margarine, San Mig Coffee for coffee, B-Meg for
animal feeds and La Pacita for biscuit and snacks (San Miguel Corporation, n.d.).
Agrinurture Inc. iba po ba talaga kulay netong descrip ng ani sa smpfc?
Agrinurture Inc. (ANI) was incorporated on 04 February 1997. In

the same year, it started as an importer, trader and fabricator of
agricultural machinery for post-harvest, intended for increased
productivity and income of Filipino farmers. ANI was formerly
known as Mabuhay 2000 Enterprises, Inc. It was the first to bring
the Mega-Sun brand of grain dryers into the Philippine market,
subsequently establishing itself as one of the more reliable local
suppliers and manufacturers of conveyor systems and other rice
mill equipment. (Philippine Stock Exchange Inc.,n.d.) lipat yung period after nung citation
ANI eventually diversified into other various agro-commercial businesses, specifically

focusing on the export trading of fresh produce as its main revenue stream. Since then, ANI
has become one of the Philippines' produce exporters to the world market. AgriNurture, Inc.
engages in the cultivation, production, and trade of fruits, vegetables, and processed food. It
operates through the following segments: Exports; Distribution; Retail; Foreign Trading; and
othersOthers. The Exports segment is in charge of looking for markets abroad as well as sourcing the
best possible product to offer for clients abroad (Wall Street Journal, n.d.). ANI currently has
foreign operations in China, Hong Kong, the Middle East, North America and to different
European regions (Agrinurture Inc., 2018, p. 27).
12 ABM 17 GROUP 3 - Hilagyo

SMPFC
AUDITED
FINANCIAL STATEMENTS
Appendix A
San Miguel Pure Foods Company, Inc was incorporated on
October 13, 1956, as a manufacturing business for processed meat This is the audited
products. San Miguel, through its subsidiaries, diversified into Statement of Financial
poultry and livestock operations, feeds and flour milling, dairy and Position for the years
coffee operations, franchising, and young animal ration ended December 31, 2016
manufacturing and distribution. The company has been enlisted and 2015 as disclosed by
on the Philippine Stock Exchange since 1973. (Philipine Stock San Miguel Pure Foods
Company, Inc. on March
Exchange Inc.,n.d.) 16, 2017 in accordance
with the Philippine
Standards on Auditing.
(San Miguel Pure Foods
Company, Inc., 2016)
Link
Agrinurture Inc. h t t p : / /
www.smfb.com.ph/
Agrinurture Inc. (ANI) was incorporated on 04 February 1997.
files/reports/
In the same year, it started as an importer, trader and fabricator of
agricultural machinery for post-harvest, intended for increased
SMPFC2016AR_Web
productivity and income of Filipino farmers. ANI was formerly _ F i n a l . p d f ?
known as Mabuhay 2000 Enterprises, Inc. It was the first to bring fbclid=IwAR1-
the Mega-Sun brand of grain dryers into the Philippine market, mu0DcEQFxdoYnIJs4
subsequently establishing itself as one of the more reliable local ZGUCIbrtx8UWdDrW
suppliers and manufacturers of conveyor systems and other rice q8dbi-4SlZpoIraCJrs
mill equipment. (Philipine Stock Exchange Inc.,n.d.) mQU

SMPFC
AUDITED
Appendix B
This is the audited
Statement of Financial
Position for the years
ended December 31, 2017
and 2016 as disclosed by
San Miguel Pure Foods
Company, Inc. on March
14, 2018 in accordance
with the Philippine
(San Miguel Pure Foods
Company, Inc., 2018)
Link
h t t p s : / /
edge.pse.com.ph/
openDiscViewer.do?
edge_no=3f2dc89568
b3442b43ca035510b6
ec2b

SMPFC
AUDITED
Appendix C
This is the audited Statement of Comprehensive
Income for the fiscal year ended Dec. 31, 2017,
2016, 2015 as disclosed by San Miguel Pure Foods
Company, Inc. on March 14, 2018 in accordance
with the Philippine Standards on Auditing. (San
Miguel Pure Foods Company, Inc., 2018)

AGRINU
AUDITED
Appendix D
This is the audited

Agrinurture, Inc. on May 2,
2017 in accordance with
the Philippine Standards
on Auditing. (Agrinurture,
Inc., 2016)
Link
h t t p : / /
www.ani.com.ph/
agrinurture-1/wp-
content/uploads/
2017-Annual-
Report.pdf

AGRINU
AUDITED
Appendix E
This is the audited

Agrinurture, Inc. on April
27, 2018 in accordance
with the Philippine
(Agrinurture, Inc., 2017)
Link
h t t p s : / /
edge.pse.com.ph/
openDiscViewer.do?
edge_no=434e8170
4ebb0ecc43ca0355
10b6ec2b

AGRINU
AUDITED
Appendix F
This is the audited Statement of Comprehensive
Income for the fiscal year ended Dec. 31, 2017,
2016, 2015 as disclosed by Agrinurture, Inc. on April
27, 2018 in accordance with the Philippine
Standards on Auditing. (Agrinurture, Inc., 2017)

FINANCIAL
RATIOS
Table 1. Financial Ratios of SMPFC Inc. and ANI Inc.

FINANCIAL
ANALYSIS
SMPFC Inc.’s Income Statement

Table 2. Financial Analysis of
Agrinurture Inc.
Table 3. Financial Analysis of
ANI Inc.’s Income Statement

FINANCIAL
ANALYSISSan Miguel PureFoods company Inc.
Table 4. Financial Analysis of SMPFC Inc.’s Balance Sheet

FINANCIAL
ANALYSIS
Agrinurture Inc.
Table 5. Financial Analysis of ANI Inc.’s Balance Sheet

CONCLUSION
LIQUIDITY RATIOS
CASH RATIO
2016
SmPFC inc. Agrinurture inc.

A cash ratio of 0.32 indicates that the company A cash ratio of 0.02 means that the company
possesses enough cash and cash equivalents to possesses just enough cash and cash equivalents to
pay off 32% of its current liabilities. This means that pay off 2% of its current liabilities. This means that
the company is somewhat liquid and has cash and the company is still liquid but due to the low cash
cash equivalents to fund a percentage of its short- ratio, the company’s ability to comfortably fund its
term obligations. short-term obligations is uncertain.
A cash ratio of 0.21 indicates the company has Cash ratio for 2017 increased to 11% which indicates
2017
adequate cash and cash equivalents to pay off that the company is able to pay 11% of its current
21% of its current liabilities. However, it can be liabilities using their available cash and cash
seen that the funds available to cover their short- equivalents. This means that the company’s cash and
term obligations declined for this year. Despite this, cash equivalent possessions for this year increased
since the cash and cash equivalent values are and despite the low percentage, it can still be
higher than the current liabilities, it means that the assumed that they have enough cash and cash
company is still liquid and has cash and cash equivalents to settle a small percentage of their short
equivalents to fund a part of its short-term term obligations.
obligations.
Based on the results, San Miguel Pure Foods Company Inc. has a higher cash ratio. This shows that the
said company has greater cash and cash equivalent possessions available to settle short-term payables
during the years 2016-2017 as compared to Agrinurture Inc. This indicates that SMPFC Inc. is more capable
of meeting its current liabilities than Agrinurture Inc. Yet, it should still be noted that both companies have
low cash ratios which means that they might struggle on settling their current debts.
QUICK RATIO
2017 2016
The quick ratio of 0.80 suggests that the company A quick ratio of 0.09 means that the company
has enough liquid assets to pay 80% of its current possesses just enough liquid assets to pay off 9% of
liabilities without needing to sell its inventory or get its current liabilities. This means that the company is
additional financing. still liquid but due to the low quick ratio, the
company might struggle in funding its short-term
obligations using its liquid assets.
The quick ratio of 0.56 indicates that the firm has

adequate liquid assets to cover 56% of its short- Quick ratio rose to 0.47, which means the company
term obligations without having to sell its inventory has enough liquid assets to pay off 47% of its current
or raise additional financing. It is evident that there liabilities. This ensures that the company is liquid and
is a decrease in liquid assets for this year and this has more capacity to use its liquid assets to finance
lowers the company’s capacity to fund its current its short term obligations.
liabilities.
It is evident that the San Miguel Pure Foods Company Inc. is more liquid as compared to Agrinurture Inc.
The SMPFC Inc. possesses more liquid assets which gives them more opportunity to settle their short-term
payable than the Agrinurture Inc. This means that creditors and lenders would be much confident to offer
loans for SMPFC Inc.

CONCLUSION
LIQUIDITY RATIOS
CURRENT RATIO
2017 2016
SmPFC inc. Agrinurture inc.

SMPFC Inc. had a current ratio of 1.73. This Agrinurture Inc. had a current ratio of 0.71. This
indicates that the company is in a desirable implies that the current assets are less than its
situation where it can meet its obligations enough current liabilities and may have difficulties in paying
with the current assets at hand. This also means its obligations. This also means that the company’s
that the company’s current assets are 1.73 times current assets are 0.71 times more than its current
more than its current liabilities. liabilities.
The company had a decrease in their current ratio The company had an increase in their current ratio
with 1.36. This still indicates that the company with 1.27. This indicates that the company can meet
would be able to pay off its current obligations its current obligations with its assets. This also means
with its current assets. This also means that the that the company’s current assets are 1.27 times more
company’s current assets are 1.36 times more than than its current liabilities.
its current liabilities.
It is observed that both companies had different movements on their current ratio. The decrease in SMPFC Inc.
suggests that the company is paying off its current liabilities. While the increase in the Agrinurture Inc. suggests that
the company grew its current assets and was able to pay its obligations. In the future, the progress of Agrinurture
shows that investors may invest in the business.
WORKING CAPITAL
Agrinurture Inc. had a negative working capital of Php
SMPFC Inc. had a positive working capital of Php
2017 2016
-399,899,313. This indicates that the company has

17,166,500. This indicates that the company has more current liabilities than its current assets. This also
the capacity to meet its short-term obligations and means that the business does not have enough liquid
bills with its liquid assets, without having to acquire assets to meet its current obligations and will have to
an outside loan or raise funds with a new stock acquire an outside loan or raise funds with a new
issuance. This also implies If all current liabilities stock issuance, which will in turn increase on its
are to be settled, the company would still have Php current obligations. This also suggests that the
17,166,500 left to continue its operations. company is investing heavily in its current assets, or
reducing its current liabilities.
SMPFC Inc. had a positive working capital of Php Agrinurture Inc. had an increase in their working
11,875,588, which is less than the previous year. This capital of Php 506,842,650. This indicates that the
implies that the company still has enough funds to company has a positive working capital and has the
pay off its current obligations with the said capacity to meet its short-term obligations and bills
amount. Although there's a decrease, this may with its liquid assets, without having to acquire an
suggest that the company paid more of its outside loan or raise funds with a new stock issuance.
liabilities this year, resulting in a decrease in the An increase implies that the business has either
working capital. This also implies If all current increased current assets or has decreased current
liabilities are to be settled, the company would still liabilities—for example has paid off some short-term
have Php 11,875,588 left to continue its creditors, or a combination of both. This also implies
operations. the company has Php 506,842,650 for its operations
It is evident that Agrinurture Inc. has showed a significant improvement in its working capital that
will be appealing to investors in the future, as the company has been able to resolve financial
problems compared to SMPFC Inc.

CONCLUSION
PROFITABILITY RATIOS
GROSS PROFIT MARGIN
2017 2016
SMPFC Inc. Agrinurture inc.

The company had 22.97% gross profit margin. This Agrinurture Inc. had 15.98% gross profit margin. This
implies that 22.97% of the company’s total revenue indicates that the company earned 15.98% profit
is the company's profit after paying off all costs from its revenue after paying all costs generated to
generated to produce its products. produce its products.
The company had 23.48% gross profit margin, The company had 29.74% gross profit margin which is
which is more than the previous year. The increase more than the previous year. This indicates that the
implies that the business is earning more profit company had earned 29.74% profit which is nearly
from its revenue and the efficient processes of the twice from last year's gross profit margin. This also
company is greater. This may also suggest that the suggests that the company had better output for the
company had less relative production cost of cost of goods sold and the efficiency production is
goods sold. greater.
Based on the results, both companies earned profit from its total revenue, however it can be observed that
Agrinurture Inc. showed more progress in earning profit from the previous year than the SMPFC Inc. However,
SMPFC Inc. also demonstrates that they can still gain income on the basis of their gross profit margin.
OPERATING PROFIT MARGIN

2017 2016
SMPFC Inc. has 8% operating profit margin. This Agrinurture Inc. has a -24.31% profit margin. Which
implies that SMFB Inc. incurred a sufficient amount may be caused by the lack of sales. This suggests that
of gross profit to cover all the operating expenses the company’s operating expenses for this year is
while still having operating profit left. This also greater than the gross profit acquired. This means that
means that after paying for the variable costs, 8% the company had incurred a loss.
of the sales left goes to operating profit which may
be used to cover non-operating expenses.
The operating profit margin increased to 8.45% Agrinurture Inc. made a 5.87% profit margin which
which is higher than the previous year. This indicates that their sales have improved this year. With
suggests that the company had greater this, they were able to pay for their operating
operating profit left this year. This means that the expenses and still have profit left to pay for the non-
8.45% of the company’s total sales after operating costs.
deducting all the variable costs is the company’s
operating profit.
It can be seen that San Miguel Pure Foods Company Inc. acquired a stable operating profit margin which
indicates that they did not change the origin of their variable costs and at the same time earned adequate gross
profit. It can also be noted that there is an improvement on the side of Agrinurture Inc. but despite this, it can be
concluded that SMPFC Inc. has more funds for their non-operating costs due to greater operating profit margin.

CONCLUSION
NET PROFIT MARGIN
2017 2016

SMPFC Inc. has a total net profit of 5.36%. Which Agrinurture Inc. has a -25.43% net profit for 2016.
indicates that the company is profitable. This This means that the company's management is not
indicates that 5.36% of its total revenue goes to generating enough profit from its sales to cover all
net profit. With this, we can conclude that the the costs.
company’s management is generating enough
profit from its sales.
5.88% of the company’s total revenue goes to net

profit. This shows a slight improvement when it 9.11% of their total revenue goes to net profit. This
comes to the company's profitability. The shows improvement on the company’s management.
company’s current practices are working and
improving on generating enough profit from its
sales.
San Miguel Pure Foods Company Inc. has a stable yet somewhat improving net profit margin which
means that the company has already invested in a certain way of company management which keeps their
company with good financial health. It can also be noted that the change occurred in Agrinurture might be
a good basis for investors since they have survived the loss in 2016 and were able to have a better
financial status in 2017.
RETURN ON ASSET
2017 2016
The total return on assets of SMPFC Inc. is 8.92%. Agrinurture Inc. return on assets is -6.20%. The
The company is effective on how they use their company is not able to convert their total assets into
assets to generate profit. Which means that in profit. This indicates that the company has a
2016, SMPFC Inc. is able to generate 8.92% as financial loss return on investment during 2016.
their net income.
The return on assets of SMPFC Inc. during this year

is 8.43% and the ROA decreased in decimal points The company’s total return of assets is 4.80%. Which
compared to the previous year. The ratio is still a means they improved in generating profits out of their
positive number, which means that there is still an assets. This year, they did not incurred a loss.
upward trend in profits. However, the slight
decrease may suggest that the company may have
little challenges converting any peso that the
company has invested in assets to profit.
If investors would compare the two companies, it could be seen that San Miguel Pure Foods
Company, Inc. is more effectively managing their assets to produce greater amounts of income.

CONCLUSION
RETURN ON EQUITY
2017 2016

SMPFC Inc. has generated about 13.84% return on The company’s return on equity is -19.04%. Meaning
equity. This indicates that about 13.84% is -19.04% from the income is reduced in the said year.
converted to profit. That means the company is This means that the company is inefficient on
efficient on generating income and growth on its producing income and growth on its equity.
equity.
The company’s total return on equity in 2017 is For the year 2017, about 13.10% of the total return on
14.34%. It states that about 14.34% is converted equity is generated. It means that 13.10% of income
to profit. That indicates an improvement on the has been produced in 2017. That indicates an
company’s practices on generating income and improvement on the Agrinurture Inc practices on
growing equity. generating income.
San Miguel Pure Foods Company, Inc. did not reduce any of its income from the past years compared to
Agrinurture Inc. which had a decrease on its equity and is inefficient on producing income and the growth of equity
LEVERAGE RATIOS
of their company.
DEBT RATIO
2017 2016
The company’s debts are up to 0.36 during 2016. Agrinurture Inc. has debts with a total of 0.67. Which
Meaning 36% of assets are liabilities. The company means that 67% of the company’s assets are financed
did not experience any loss since the revenue can by debt. But their revenue was capable of paying the
cover up the company’s debts. debts of the company.
SMPFC Inc. has debts that are up to 0.42 times Agrinurture Inc. has debts by 0.63 during 2017. Up to
during 2017. Which indicates that 42% of the 63% of the company’s assets are funded by debt. The
company’s assets are also liabilities. The company did not incur a loss since the company’s
company has not experienced any loss since the revenue can cover its debts.
company’s revenue can cover up its debts.
San Miguel Pure Foods Company Inc. and Agrinurture Inc. can manage to pay their debts with the use of their
revenue and both companies did not experience any loss because they both have low ratios. But, it is seen that
SMPFC Inc. has lower debt compared to Agrinurture Inc. which means SMPFC Inc. has a better financial situation.

CONCLUSION
DEBT TO EQUITY RATIO
2017 2016
The debt-to-equity ratio of the company is Agrinurture Inc. has a total of 2.07 debts-to-
0.55 as of 2016. About 55% of the company’s equity ratio. Which means that 207% assets of the
assets are financed by debts and the rest is company are funded by debt. This is not a normal
financed by equity. The percentage of the rate. The company’s debt is increasing.
assets of SMPFC Inc. is at a normal rate
because the company’s debts are not
increasing.
As of 2017, the company’s debt-to-equity As of 2017, the total debt-to equity ratios of the
ratio is up to 0.70. About 70% of the company is 1.73. Which indicates that 173% of
company’s assets are financed by debts and assets are funded by debt. This is also not a
the rest is financed by equity. It is still at the normal rate since the debt of the company is
normal rate like last year but it increased. increasing.
San Miguel Pure Foods Company, Inc. has low ratio, it means that they are able to pay for their debts
and they have a normal rate of debt for both years. For Agrinurture Inc., they may be experiencing a great
loss and can burden their company with high interest payments.
INTEREST COVERAGE RATIO

2017 2016
SMPFC Inc. could pay its interest-bearing Agrinurture Inc. has a negative interest coverage
obligations for 63.68 times during the period. of 2.42. This indicates that the company incurred
That is a high ratio which ensures that when a loss for the year. With this, their revenue cannot
payables become due, the company is more cover the interest payables so they will not be
than capable of meeting its interest able to meet their interest obligations when they
payables. become due
Agrinurture Inc. can pay its interest payables by

SMPFC Inc. can pay its interest expense 5.06 times. This indicates that they are able to
obligations by 98.75 This is a high ratio which meet their interest obligations yet, due to the low
means that the company is more than able to ratio, one can conclude that a large portion of
meet its interest payables when they become their income is allotted to meet their interest
due. payables.
lagyan ng period after 98.75
It can be inferred that San Miguel Pure Foods Company, Inc. is more capable of meeting its interest expense
obligations as compared to Agrinurture Inc.’s ability to pay its interest payables. This suggests that lenders or
creditors will be much more confident to offer loans on SMPFC Inc. rather than Agrinurture Inc.

CONCLUSION
EFFICIENCY RATIOS
TOTAL ASSET TURNOVER RATIO
2017 2016
The company has a positive turnover ratio of The business has a positive turnover ratio of 0.24.
1.67. This means that their total assets are This means their total assets have been converted
turned into sales by 1.67 times during the into sales by 0.24 times during the period. That
period. This indicates that the company is able implies that the company is capable of turning its
to utilize their given assets in generating sales. assets into revenue.
The company has a favorable 1.43 turnover The company has a positive sales ratio of 0.53
ratio. This means that their total assets are which means that their total assets are 0.53 times
converted 1.43 times into sales within the turned into sales within the period.It means that
period. This shows that the company is able the company is able to turn its assets into
to utilize their total assets to generate revenues.
revenue.
Although both companies resulted in positive total asset turnover ratio, it is evident that San Miguel
Pure Foods Company, Inc. has a higher turnover ratio which implies that it is more capable of turning all of
its assets into sales; therefore, the said company has better asset utilization than Agrinurture Inc.. This
suggests that it is better for investors to invest in SMPFC Inc. isang period lang
FIXED ASSET TURNOVER RATIO

2017 2016
The business has a positive fixed asset turnover The company has a positive 0.94 fixed asset
ratio of 6.31. This means their average fixed turnover ratio. That means they transformed their
assets have been converted into sales 6.31 average fixed assets into sales 0.94 times.
times. This implies that the company has the Despite the low turnover ratio, it can still be
ability to effectively turn its fixed assets into assumed that the business has the ability to turn
revenue. its fixed assets into sales effectively.
The business has a positive fixed asset The company has a positive 2.16 fixed asset
turnover ratio of 4.28. It is lower compared to turnover ratio. It is higher than the previous year
the previous year but still. a positive ratio which means that they have transformed their
means that their average fixed assets has fixed assets into sales in a more effective manner
been converted effectively into sales by 4.28 this year.
times. alisin yung period
Despite both companies having positive fixed asset turnover ratios, it is evident that San Miguel Pure
Foods Company, Inc. has better fixed asset utilization than Agrinurture Inc. which therefore resulting in
SMPFC Inc. having greater sales. This could be a basis to conclude that investing in SMPFC Inc. would be
a better decision.

CONCLUSION
EFFICIENCY RATIOS
ACCOUNTS RECEIVABLE TURNOVER RATIO
2017 2016
The company has collected receivables 0.94 Over the period the company received
times during the period. It implies that the receivables 1.21 times. It means that the
collection of receivables only happens accumulation of receivables also only happens
approximately once over the year. about once a year.
The company has collected receivables 0.95 During the period, the company received
times during the period. It implies that the receivables 0.94 times. The collection for 2017 is
company’s collection of receivables is stable slower as compared to 2016. It shows that the
at approximately once over the year. accumulation of receivables also only happens
about once a year.
Both companies collect their receivables at approximately only once per year which results in lower
assets on-hand. As a result, there is not much cash/sales available for other operating activities since
receivables take a lot of time to be collected.
AVERAGE COLLECTION PERIOD

This year the average collection period for the
2017 2016
The average collection period for the company

this year is 382.58. This means that it took business is 297.38. That means collecting its
382.58 days (1 year and a half month) to receivables took 297.38 days. The long payment
collect its receivables. The long period of period might influence other activities of the
collection may affect how long it takes for the company such as meeting its obligations would
company to pay its obligations. be difficult since there is not much cash/sales on
hand.
The business has an average collection

The collection period has taken a longer time
period of 377.80 this year. It means it took
during this period. This year, the company has an
377.80 days (1 and a half year and a half average collection time of 382. This means
month) to collect the receivables. The
obtaining the receivables has taken 382 days. The
collection period for both years, which are payment duration is lengthy and may have
closely estimated, is long and can have
adverse consequences on the company's ability
negative effects for the ability of the
to fulfill short-term obligations.
company to meet short-term obligations.
This suggests that both of the companies’ customers take about a year to pay their debts. This affects
the ability of both companies to meet their short-term obligations since there is not much available cash/
sales.

CONCLUSION
EFFICIENCY RATIOS
INVENTORY TURNOVER RATIO
2017 2016
The company is able to turn its inventories into cash The company is able to turn its inventories into cash
4.95 times during the period. This low ratio 17.10 times during the period. This ratio is higher than
indicates slow moving inventories which means that SMPFC Inc.'s turnover ratio during the period. This
it takes a lot of time for the inventories to be indicates a faster moving of inventories which means
converted into cash or sales. that it takes a shorter time for the inventories to be
converted into cash or sales compared to SMPFC Inc.
The company is able to turn its inventories into During this period the inventory turnover ratio
cash 4.28 times during the period. This shows decreased to 4.23. It implies that the company has
that the conversion of inventories into cash/sales slower conversion of inventories during this period
is slower than the previous year. compared to the previous year.
Based on the result, it can be seen that the San Miguel Pure Foods Company, Inc.’s has a more
stable progress of converting inventories into cash/sales. During 2017, it can be assumed that the
Agrinurture Inc. has stocked their inventories for a longer period compared to the previous year. Yet, both
companies are still able to effectively transform their inventories into cash/sales effectively.
AVERAGE AGE OF INVENTORY

2017 2016
The average age of the company's inventory during The average inventory age for this year is 21.05. This
this year is 72.66. This means that it takes an means it only took an average of 21.05 days (less than
average of 72.66 days (2 and a half month) to sell a month) to sell off its inventory. The company was
off inventory. able to sell goods efficiently and clear up its inventory
at a fast rate.
For this year the average age of the company's The average inventory age for this year is 85.08. This
inventory is 84.13. This means selling off inventory means that it took 85.08 days (3 months) to sell off
takes on an average of 84.13 days (3 months). the inventory.
Agrinurture Inc. is more efficient in converting its inventory into sales in comparison to both of the
company's inventory age. Based on the results, Agrinurture has been able to sell inventories with the same
period as San Miguel Pure Foods Company Inc., despite the fact that the average inventory has tripled in
2017. The quicker a company can sell its inventory for profit, the more profitable it is.

CONCLUSION
EFFICIENCY RATIOS
ACCOUNTS PAYABLE RATIO
2017 2016
The company’s accounts payable turned over The company's accounts payable turned over
approximately 4.76 times or rounded off to 5 times approximately 1.04 times or rounded off to 1 time. This
during the year. The higher the turnover ratio the means the company can only pay its debts 1 time in
more favourable it is for creditors because the more 360 days. This is a very low turnover ratio compared to
frequent the company can pay its obligations. the other company, and may deter creditors and
investors.
The company’s accounts payable turned over Compared to the previous year, the company’s
approximately 3.77 times or rounded off to 4 times accounts payable turned over approximately 1.88
during the year. Compared to the previous year, times or rounded off to 2 times during the year. The
the ratio decreased. A declining ratio may indicate ratio increased which may mean that the company is
either that a company is in financial distress or a managing its debt and cash flow more effectively
declining ratio may also mean that the company than before.
has negotiated different payment arrangements
with its suppliers and/or creditors (Murphy, 2019).
It is observed from the data that both in the year 2016 and 2017 San Miguel Pure Foods Company,
Inc. have a higher payable turnover ratio compared to Agrinurture Inc.. San Miguel Pure Foods Company,
Inc. would be favorable to investors and even creditors who can extend the credit line to the company.
Because of the higher turnover ratio of the payable, creditors would assume that the company would be
in a position to make regular interest and principal payments.
AVERAGE AGE OF PAYABLE

2017 2016
The company's average age of payable during the The company's average payable age for the year is
year is 75.65. This means that it takes an average 346.48. This means that it will take an average of
of 75.65 days (2 and a half months) for the 346.48 days (12 months or a year) to pay off its debts
company to pay off its debt to suppliers and/or to suppliers and/or creditors. In comparison with the
creditors. other company, this number of days to pay off a debt
is very long and may not be favorable for creditors.
The average age of payables of the company for Compared to the company’s average age of payable
this year is 95.49. This means that it takes the of the previous year, it decreased. This year, the
company an average of 95.49 days (3 months) to company takes an average of 191.26 days (6 months)
pay off its debts to suppliers and/or creditors. to pay off its debts. This is the effect of an increase in
Compared to the previous year, the average Accounts Payable turnover ratio and may also suggest
payable age increased, which means it took that they are managing debts and cash flow more
longer to pay debts this year effectively
It can be observed from the results that in both 2016 and 2017, San Miguel Pure Foods Company, has
a lower age of payables compared with Agrinurture Inc., which took almost one year to pay off its debts.
This means that San Miguel Pure Foods Company, handles its cash flows and obligations better, and would
thus be in favor with creditors, suppliers, retailers or other companies. Because if the business waits too
long to pay its creditors, it risks its relationships with the suppliers and creditors who might decline the
company in the future or may give it terms that may be less favorable for the company.

CONCLUSION
EFFICIENCY RATIOS
OPERATING CYCLE Agrinurture inc.
SMPFC Inc.
2017 2016
This year, the operating cycle of the company is

This year, the company's operating cycle is 455.24. 318.44. This means that there is an average of 318.44
This means that there is an average of 455.24 days days (10 and a half months) between the purchase of
(15 months) between the purchase of the inventory the inventory and the cash collected from the sale of
and the cash collected from the sale of the the inventory. The Operating Cycle period is shorter
inventory. This is the effect of having a long period and therefore more favorable compared to the other
of time on the collection of receivables (1 year and company. This is the effect of having a shorter period
a half month). of time for both its Collection and Inventory period
compared to the other company during the year.
The operating cycle of the company this year is The operating cycle of the company is 467.07 during
461.94. This means that there is an average of the year. This means that there is an average of
461.94 days (15 months) between the purchase of 467.07 days (15 months) between the acquisition of
the inventory and the cash collected from the sale the inventory and the cash collected from the sale of
of the inventory. Compared to the previous year, the inventory. The duration of the company's operating
the period has increased and this is also due to the cycle has increased, indicating a negative effect. This
increase in the company's inventory period during is the effect of the increase in the collection and
the year. inventory periods.
The two companies are taking approximately a year to complete their operating cycle. Given that both
companies have a long duration of receivables collection and even an inventory age, their respective operating cycle
has also been lengthened. Both businesses should always aim to reduce them as much as possible to ensure that fixed
assets are used efficiently. In exchange, they will gain a greater return on their investment. Reducing the cash cycle
helps free up cash and thus enhance profitability (Jan, 2019).
CASH CONVERSION CYCLE

The company's Cash Conversion Cycle this year is
The Cash Conversion Cycle of the Company during -28.04. The lower the CCC or having a negative
2017 2016
the year is 379.59. This means that it takes number, means that the company's working capital has
approximately 379.59 days (12 and a half months) not been tied up for a while, and the business has
to convert its investment in inventory and other greater liquidity (Lesonsky, 2018). This claim is also
resources into cash flows from sales. This long supported by Soleadea (2019) who notes that having a
CCC period is the effect of having a long negative CCC means that the company has less time to
collection period during the year. Long CCC sell its inventory and receive cash from its buyers
periods are not favorable for both the company compared to the time it has to pay its inventory
and its creditors. suppliers. In general, in order for the company to have a
favorable CCC, the inventory and collection period
must be short and the payable period must be long. The
The Cash Conversion Cycle of the Company longer the payable period, the shorter the cycle.
during the year is 366.45. This means that it takes
approximately 366.45 days (12 months) to
convert its inventory and other resources The company's Cash Conversion Cycle during the year is
investments into cash flows from sales. There is 275.81. This means that it takes approximately 275.81
not much difference from the previous year, days (9 months) to convert its investment in inventory
because when the collection period decreased, and other resources into cash flows from sales. The
the age of payable increased in return. increase in days is the result of a longer period in the
collection of receivables and inventory, as it is longer
than the payable period, which increases the CCC of
Based on the results, overall Agrinurture Inc. has a the company.
lower number of Cash Conversion Cycle days compared
to San Miguel Pure Foods Company, Inc. This is the effect of having a longer payable age of Agrinurture
compared to the latter company. As can be seen, Agrinurtre may have a negative Cash Conversion Cycle in 2016,
but it eventually increased the following year, while the number of days for San Miguel Pure Foods Company, is
more stable, in fact it even decreased a few days after a year.
SMPFC
CONCLUSION
HORIZONTAL ANALYSIS
BALANCE SHEET 2015 –2016
1 • Cash decreased by 18.79% because it could have been used to acquire more assets in order to minimize the company’s liability. It
can be seen that more assets have been gained since the PPE increased by 42.10%. Cash will also rise if 10.70% of accounts
receivable are collected. Another aspect that contributed to a drop in cash is the volume of inventory not sold.
2 • Accounts receivable rose to 10.70% due to the conversion of some retailers from cash to credit terms. It can be seen in the
vertical analysis that from 16.65% of 2015 it became 16.79% in 2016.
3
• The biological asset decreased to 5.95% from 2015 to 2016. It can be seen in the vertical analysis that from 5.44% in the year
2015, it became 4.66% in the year 2016. According to Neovia Group (2016), even though farm animals are in high demand in
2016, due to unpredictable weather in the Philippines, farm animals contract infections and respiratory diseases, which cause
them to die. Based on the financial statement, the mortality, retirement, and low production/growing of animals are some of the
contributors on why biological assets had a slight decrease in 2016.
4 • Prepaid expenses and other current assets declined in the year 2015-2016. Based on the financial statements, in 2016 the
prepaid income tax decreased from Php 1 million of 2015 to Php 200,000 in 2016. As a result, the prepaid income tax in 2016
may have been utilized causing the decrease of the account.
5
• Total current assets have risen marginally, even though cash and other current assets have declined. This is due to the company's
increasing inventory production. This is supported by the vertical analysis in which inventories rose from 24.57% in 2015 to 25.89%
in 2016.
6
• It can be seen that there is a small percentage of increase in SMPFC Inc.’s current assets with 1.86%. Meanwhile, there is a
significant increase in their non-current assets with 24.90%, particularly their Property, Plant and Equipment. It might suggest
that the company’s strategy for those years is to invest more on their non-current assets to gain future profits. This can be seen
7
in the vertical study wherein the PPE went up from 20.37% in 2015 to 26.37% in 2016.
• The other non-current assets declined by 0.05%. According to San Miguel Pure Foods Company, Inc. (2017), the San Miguel Pure
Foods Co., recognized an impairment loss in 2016 due to idle assets, which amounted to Php109.3 million.
8 • Other current liabilities increased to 33.8% as the notes payable were used to fund the company's expenditure. It can be seen
in the vertical analysis that from 6.79% in 2015, it became 8.28% in 2016.
9 • The company’s total liabilities increased by 8.21% and their total assets increased by 9.79%. These might imply that their
liabilities are used to increase their assets, particularly the non-current assets.
10 • Their total non-current liabilities decreased by 75.27% while their total current liabilities increased by 11.64%. This means that the
company resorted to short-term liabilities instead of long-term debts.
11 • There is a positive change in the total shareholder’s equity, which means that after all debts have been paid, the company still
has enough profit left to give shareholders their residual claims.
12 • Since the issued capital stock of the company is the same from 2015 to 2016, there is no change in this year. The same applies
to additional paid-in capital.
13
• In relation to retained earnings, there is an approximately a quarter percent increase. This implies that the business is
profitable. The company has a lot of room for the business owner(s) or the company management to utilize the surplus money
earned. With this, it can be inferred that there is a significant amount of money that can be used for investment. The decline in
the amount of cash is also relative to the rise in the retained earnings for 2015-2016. The reason why the cash decreased even
14
though the retained earnings increased is that the cash could have been used for investment purposes. The business was more
focused on using cash to invest and purchase more assets, which is the PPE.
• Other shareholders' equity rose to 2.16% in 2015-2016. It is due to the non-controlling interests that have risen from 2015 to 2016
and the reduction in the depletion of equity reserves.
15
• As per its shareholder’s equity, it can be seen that there is a prominent but not so large ratio of their profits paid back to its
shareholders. This means that a small portion of its profits are paid in dividends to its shareholders which increases their
shareholder’s equity and the remaining are retained for the purpose of company growth.

SMPFC
CONCLUSION
HORIZONTAL ANALYSIS
1 • Cash decreased by 6.57% because it could have been used to acquire more assets in order to minimize the company’s
growing liability. It can be seen that more assets have been gained since the PPE increased by 55.12%. Cash will still rise as
the company still has 2.85% to receive. Another aspect that contributed to a drop in cash is the volume of inventory not sold.
2 • Accounts receivable only rose to 2.85%, which means that there are only few retailers that are paying in credit terms. It can
be seen in the vertical analysis that it even decreased from 16.79% of 2016 to 14.13% in 2017.
3
• Biological assets rose from 9.64% in the year 2016-2017. The business produced a lot more broilers than pigs and cattle in
the year 2017. It can be seen in the financial statement that there is a big difference in the production of chicken. SMPFC
harvested 523.6 million kilograms of grown broilers (San Miguel Pure Foods Company, Inc, 2017, p.135). The company may
4
have predicted a higher demand for chicken in the year 2017. According to FAO.org (n.d), chicken is more affordable and
low in fat and is the world’s main source of protein.
• Prepaid expenditures and other current assets increased by 20.11% as a result of the rise in the amount of input taxes in
5
order to prevent future tax liabilities.
• Total current assets increased by 10.02%, even though cash decreased by 6.57%. This is mainly due to the growing
production of inventories. In vertical analysis, while the inventories produced in 2016 are higher than in 2017, inventories
production is still stable from 25.89% in 2016 to 25.65% in 2017. It has decreased from usual as the total assets have
increased in 2017, which makes it seem like inventory production is low.
yung numbers here di pantay
• It can be seen that the business did not only invest in PPE but also in other non-current assets as it increased to 12.05%. The
6
business focused more on investing on long-term assets; this action also explains why the non-current liabilities increased
by 242.39%.
• There is a significant increase in the accounts payable in the year 2016-2017. The accounts payable rose by 31.97% because
the company borrowed some money to raise its inventories. This is supported by the vertical analysis in which the accounts
7
payable grew from 26.95% to 29.11% in 2016 to 2017, respectively.
• There is a big increase in non-current assets, specifically Property, Plant and Equipment. It can be seen that the PPE has
risen by 55.12%. For this reason, non-current liabilities increased dramatically as the company concentrated more on
8
investing in the PPE. This is supported by the vertical analysis wherein the PPE raised from 26.37% in 2016 to 33.48% in 2017.
tanggalin na yung the
• Other current liabilities rose to 64.90% as notes payable and income tax payable increased from 2016 to 2017. This is done
in order to further sustain the expenditure of the company. The vertical analysis shows that the other current liabilities rose
9
from 8.28% in 2016 to 11.18% in 2017.
• The company’s total current liabilities increased by 39.71%, while its total non-current liabilities increased by 242.39%. This
suggests that the company focused more on investing in long-term debts rather than short-term debts. Overall, the total
10
liabilities of the company rose substantially due to the fact that they spent it in order to raise and gain further properties.
• There is a positive change in the total shareholder’s equity, which means that once all the debts have been paid, the
11
corporation still has enough earnings left to give the shareholders their remaining parts.
• Since the issued capital stock of the company is the same from 2016 to 2017, there is no change in this year. The same
12
applies to the additional paid-in capital.
• The companies’ retained earnings are rising by 24.28%. This indicates that the business is profitable and is likely to have
gained profits even after paying dividends. The remaining earnings can be used as a payment for debts or future dividends
or can also be used as an investment. With this, it is possible for the company to have a rise in retained earnings and a
decrease in cash. The decreasing amount of cash in comparison with the increasing amount of retained earnings in the
year 2016-2017 may be attributed to the use of cash for investment purposes. Rather than distributing it to the company’s
13
shareholders, the company concentrated more on using the cash for investing and acquiring more assets, which is the PPE.
• In the other shareholder’s equity there is only a slight increase as equity reserve losses increased from 2016 to 2017.
However, the non-controlling interest led to the rise of the other shareholder’s equity to 1.91%.
14 • As the shareholders equity increased by 11.49%, it indicates that it has generated profit. One of the things that make
shareholders equity increase is because of its retained earnings. If a company chooses to hold on to its retained earnings
and either uses it as cash or investment, the shareholder’s equity will go up because the earnings of the business will rise
without raising the company’s liabilities, since the remaining earnings can be used

SMPFC
CONCLUSION
HORIZONTAL ANALYSIS
INCOME STATEMENT 2015 –2016
1
2
• Based on the results, the gross sales and net sales has the same percentage increase of 4.42% since there are no recorded sales
discounts and returns. This means that the total sales of the company for 2016 is 4.42% higher than 2015.
• The cost of goods sold increased by 2.19%. This implies that the direct costs of producing the goods sold by a company have
3
increased. In addition, the operating expenses also increased by 10.56%. This suggests that the company did not reduce its
operating expenses to avoid compromising the quality of operations and the quality of their products.
4
• The increase in cost of goods sold and operating expenses did not affect the company’s profit in a negative way since there is
still a 16.84% increase in operating profit. This means that the business has raised enough money to cover its expenses while at
the same time making a profit from it.
5
• It can also be seen that there is a negative change in other income and expenses accounts. This implies that the company
incurred a loss in other income yet, decreased their expenses on sources not directly related to the business' core operations.
6
• The interest expense for 2016 had decreased by 66%. This might be due to the lowered interest rates or the slow payment of the
company to the creditors as their total payables increased within the same year.
• As for the income tax, there is a 16.82% increase. This suggests that since the income generated by the company increased, the
7
income tax moved proportionally. Moreover, this also indicates that the tax that the government imposed on the income
generated by business also increased.
• The net profit has a 25.75% increase. This suggests that the company generated an adequate amount of revenue which resulted
in a profit after deducting all the company’s expenses.
INCOME STATEMENT2016 –2017

1 • The company’s gross sales increased by 5.25%. In relation, there are no recorded sales discounts and returns which yields to net
2
sales having the same percentage increase.
• The direct costs of producing the goods sold by a company increased by 4.56%. This implies that the direct costs of producing
the goods sold by a company have increased. This is supported by the vertical analysis wherein the COGS in 2016 rose from
3
77.03% to 76.52% in 2017.
• An increase of 7.60% in the gross profit can also be noticed. This means that the gross sales incurred by the company for 2017 is
4
enough to cover the cost of goods sold.
• In addition, the operating expenses also increased by 5.70%. This indicates that the company did not minimize operating costs to
5
avoid decreasing the operational efficiency and quality of its goods.
• Correspondingly, the increase in the cost of the products sold and operating costs did not adversely impact the profit of the
company as there is still a rise in operating income of 11.14% percent. This means that the company has earned enough revenue to
6
cover its expenses and at the same time make a profit from it
• It is also shown that the other income and expense accounts show a negative change. It can be implied that the company has
7
experienced a loss in other sales, but has minimized spending on things that are not necessary or has no effect on the operations
of the business.
8
• As compared to 2016, interest expense for 2017 has decreased by 25.67%. This may be driven by lower interest rates or may be
due to the fact that the company's payments to its creditors also dropped whereas their total liabilities climbed in 2017.
• For income tax, there is an increase of 12.46%. This assumes that because the company's sales increased, the income tax shifted
9
proportionally. In addition, this may also imply that the tax imposed by the government on income generated businesses also
increased.
• Net profit has increased significantly by 15.57%. This shows that the company generated a sufficient amount of revenue
that resulted in a gain after all of the company's expenditures were deducted.

SMPFC
CONCLUSION
VERTICAL ANALYSIS
INCOME STATEMENT 2015
1 • Since there is no given sales discounts and sales returns for the given period, nothing will be deducted to the gross sales, which
means that the net sales will also be equivalent to 100% of the gross sales or simply, they will have the same amount.
2
• More than ¾ of the net sales consist of the cost of goods sold which is 78.71%. The higher the amount of the cost of goods sold,
the lesser gross profit there will be. di naka-bold
3
• In this case, because the cost of goods sold had a high amount, it resulted in a smaller amount of gross profit which is only
21.29%.
4
• From the gross profit, operating expenses shall be deducted to come up with the operating income. In the year 2015, the company
had 14.14% of the gross sales as their operating expenses to be deducted. The smaller the percentage of the operating expenses,
the larger the operating profit will be. paayos lang din pagkakabold
5
• A small percentage of the other income and other expenses, at 0.26% and 0.53% respectively, was reported for 2015. These percentages
show that for the given period, the company has only gained a small percentage of income not coming from the business operations and a
slightly higher percentage of other expenses that may come from operating costs or loss from fixed assets.
6
• 0.36% from the net sales was the interest expense. This statement shows that the company is in a good shape to be able to pay
off its short term obligations without any inconvenience. The higher percentage of the interest expense, the greater its effect on
the EBT.
7
• The earnings before taxes was 6.52% at the end of the period. The EBT will vary depending on the interest expense added. The
company's earnings before taxes shows that it is not that profitable since after deducting most of the expenses, only 6.52% was
left.
8
• The company's income tax for the year 2015 amounted to 2.07% of the total sales. From this, it can be implied that a small
percentage of income tax would only have a small impact to the net profit.
9
• The net profit has a 4.45% increase. This suggests that the company generated an enough amount of revenue which resulted in
a profit after deducting all the company’s expenses.

1
• From all the business transactions that the company has done in 2016, the total gross sales will be the 100% of the sales from all
the transactions that the company has recorded. No account and transactions have been deducted to the amount stated.
2
• The net sales that have been generated by the company in the given year was the same as the gross sales since there are no
recorded sales discounts and sales returns.
3
• The cost of goods sold which is 77.03%, mostly comprises the net sales. A high percentage of COGS is an indication that a lesser
amount will be obtained as your gross profit. Therefore, from a lower amount of gross profit, there is a higher tendency that the net
profit produce will be of low amount.
4
• After deducting COGS 22.97% of gross profit remained. The gross profit increases when COGS decreases. In this case, COGS
accounted for 77.03% of net sales, which means that the gross profit would be lower due to the higher value of the cost of
goods sold lagyan period
5
• For the year 2016, the amount of the operating expenses added up to 14.97%. With this information, it can be inferred that the total
operating income that the company can get will not amount more than its operating expenses. The company should cut their
operating expenses to result in an increase in the operating profit.
6
• Precisely 8% of the net sales will be left as the operating profit. Making just a small amount of operating income, it indicates that
the company can be effective in making sales but fails to turn it into income.
7
• A small percentage of the other income and other expenses, at 0.23% and 0.44% respectively, was reported for 2016. These
percentages show that for the given period, the company has only gained a small percentage of income not coming from the
business operations and a slightly higher percentage of other expenses that may come from operating costs or loss from fixed
8
• The small percentage of the company's interest expense, merely 0.12%, indicates that the company can easily settle these long-
term liabilities without needing a higher amount to pay them.
9
• More than a quarter of the earnings before taxes is the percentage of the income tax, which is 2.32%. The income tax can directly
affect the net profit because the amount of it also depends on the increasing or decreasing of the income tax per period.

SMPFC
CONCLUSION
VERTICAL ANALYSIS
1 • For the year 2017, the gross sales will be mirroring 100% of the transactions of the company with no sales discounts or returns to
be deducted.
2 • More than ¾ of the company consists of the cost of goods sold which concludes that the company is working on decreasing the
expenditures of the business while at the same time maintaining the quantity of sales.
3
• A ⅓ portion of the cost of goods sold consists of gross profit which infers that the company is working its way to increase their
profit while still efficiently managing the production process.
4
• A portion of the operating expenses comprising 15.03% is also deducted therefore once again decreasing the final net profit by
a significant amount.
5
• The company’s other income and other expenses are 0.10% and 0.11%, respectively. This indicates that the company does not dwell
much on particulars that are not business-centric.
6
• A 0.01% difference between the operating profit and earnings before interest and taxes indicates that the company tends to
focus solely on manufacturing, which is their main business.
• The interest expense of 0.08% indicates that the company only has a few long-term obligations wherein not a huge amount is
7
needed to be provided in order to settle previous liabilities.
• Based on the earnings of the company increased by 8.36%, the corresponding income tax to be deducted is higher for the
8
company to be able to earn more. Despite having a higher income tax due to an increase in earnings and still have a positive
outstanding amount left, this indicates that the company is profitable and stable.
9
• Net profit of 5.88% was gained by the company which can be concluded that the company is still able to gain profit despite all
expenses that occurred.
BALANCE SHEET 2015

1 • In the year 2015, it can be seen that cash increased by 15.21%, which could be attributed to retained earnings and shareholders
equity. Since, when a company has an increasing or positive retained earning, they may hold onto it and reflect it as cash. It can
2
also be seen that the cash can still increase since there is still 16.65% of money to be received.
• It can be seen that the inventory compromises the 24.57% of the current asset. These are goods that the company is ought to
3
sell. As the inventory has increased, it can also be seen that the company's accounts payable have increased as they were used
to buy the product in order to run the business. Since not all cash can be used to increase the inventory, the company borrowed
• One of the contributors to the current assets is the biological asset, which has risen to 5.44%. In order to raise their inventories,
the company needed to invest first in its biological assets and grow their broilers, hogs and cattle. In 2015, 477.9 kilograms of
4
broilers were produced (San Miguel Pure Foods Company Inc., 2016, p.44).
• The company’s total current asset is the highest among the other accounts in the asset. It comprises 65.59% of the company; this
5
means that the company’s liquidity is good. Current assets can be used for financial emergency situations as they can quickly be
transformed into cash.
• Non-current assets also include 34.42% of the company, consisting primarily of the PPE, which is 20.37% of the overall non-current
6
asset. This means that not only did the business concentrate on growing inventories, but also the PPE. However, it can be seen that
the company concentrated more on inventories than on PPE.
• It can be seen that the company raised its other non-current assets to 14.04% and its other current assets to 3.72%. This suggests
7
that the company invests in both long-term and short-term assets.
• The overall liabilities of the company rose by 36%. This may mean that their liabilities are used to increase their assets, especially
their current assets.
8
• It can be seen that the other current liabilities are slightly lower than the accounts payable, which is at 6.79%. The business did
not much settle on using notes to avail short-term borrowings.
9
• The company’s total current liabilities increased by 34.65%, while its total non-current liabilities increased by 1.43%. This
indicates that in 2015, the company focused more on investing in short-term debts rather than long-term debts.

SMPFC
CONCLUSION
VERTICAL ANALYSIS
BALANCE SHEET 2015
1
10 11 12 13 dapat numbering sa gilid
• In 2015, the company sold 3.29% of the capital stock and earned 57.73% of the additional capital paid-in. paid-in capital
2 • Since the retained earnings for the year 2015 is a positive 25.44%, it means that the company is profitable and can use the
company’s earnings to expand. However, as the SMPFC has been around since 1956, the remaining profits can be used to pay
3
dividends to its shareholders. In the future, they will draw more investors.
• The other shareholders’ equity decreased by 22.53% this is due to the increasing loss of equity reserves and because of the high
4
treasury stock of the company.
• Shareholders' equity in 2015 is 63.92%. Equity is the sum of money that will be returned to the shareholders after the liquidation
of all the properties and the payment of all the debt. Since the company's equity is growing, this could be due to an increase in
the capital of the shareholders or the earnings of the company. Now that the shareholders equity of the company is high, this
means that the company has enough money to support the company's rising liability.
BALANCE SHEET 2016

1
• For 2016, there was a significant gap between the cash of the company and the accounts receivable. The cash earned by the
organization was only 11.25%. Meanwhile, the cash to be received is 16.79%, which means that a lot of customers already owe the
firm. There is a strong probability that cash will continue to increase until the money is collected. It can also be seen that there are
2
still a lot of unsold inventories left for the company, as a result, the company only received a small portion of the revenue.
• As inventory rises to 25.89%, it can also be seen that the accounts payable have increased to 26.95%. This is because the
company cannot invest all of its money on inventories, which is why it relies on owning money from the suppliers. Since inventories
3
rose in 2016, they contributed to the growing GDP of the Philippine economy, which rose to 6.8% (San Miguel Pure Foods
Company, Inc., 2017, p.107)
4
• In the current asset, the SMPFC also has a biological asset account, as it also sells poultry and meat. In 2016, the company
increased 4.66% of its biological assets, concentrating primarily on chicken, cattle and pigs.
5
• The company raised its other non-current assets to 12.78% and its other current assets to 2.27%. It can be seen that the company
focuses not only on short term but also in long term assets.
• On the asset account, it can be seen that the company concentrated more on current assets than on non-current assets. The
6
enterprise may have decided that current assets are easier to turn to cash than non-current assets, which is why they have invested
more in their current assets.
• The total current and non-current liabilities have a huge gap for 2016. It can be seen that the overall liability for the year
7
concentrated more on current liabilities or liabilities that can be quickly repaid than on long-term debts. It explains why 60% of the
assets were current assets.
8
• Other current liabilities grew to 8.28% as notes payable increased in order to fund the company’s expenditure.
• The estimated total liabilities of the company rose by 35.56%. This indicates that their liabilities are used to increase their assets,
9
especially their current assets.
• The capital stock sold for 2016 amounted to 2.28% and the company earned a 52.58% of additional paid-in capital.
10 • The company's retained earnings consist of a positive 28.97%, which ensures that the company is still profitable and can use cash
for future operations, acquisitions, dividends for shareholders or even hold on to it for future financial circumstances.
11 • The other shareholders’ equity decreased by 20.10% this is due to the increasing loss of equity reserves and because of the high
treasury stock of the company.
12
• The company's shareholders' equity is 64.44%. This could be attributable to the operations of the company or to investments
made by other shareholders. Since the company still has a large equity, this ensures that it can still afford the company's
increasing liability.

SMPFC
CONCLUSION
VERTICAL ANALYSIS
BALANCE SHEET 2017
1 • In the year 2017, the total assets of the company mostly consisted of its current assets with 54.80%. Out of the
current assets, 25.65% and 14.03% comprising inventories and receivables, respectively, may infer that the
company’s significant growth in their sales drew them to grow and invest more on their inventories.
2 • Whereas the company’s biological assets and prepaid expenses and other current assets comprising 4.18% and
2.23%, respectively. It can be inferred that the company also offers a sufficient amount of its capital to invest in
3 • 45.20% of assets consist of non-current assets in which more than half of this is surpassed by Property, Plant and
Equipment which may infer that the company decided to invest more on improving their production.
4
• Total liabilities mostly consist of current liabilities which may infer that the company has a lot of liabilities incurred for
2017 in which these liabilities are obliged to be paid within the year. 29.11% of the current liabilities are comprised of
accounts payable which may infer that the company incurred a number of loans and debts to be paid for the current
5
year.
• The total non-current liabilities only consists of 0.90%. This may infer that the company only has a few long-term
6
obligations.
• A large portion of the overall shareholders’ equity comprises 29.47% of retained earnings which may infer that this
amount regained by the company was invested mostly in the growth of their inventories and property, plant and
7 • The total shareholders’ equity comprising 58.81%, is beyond half of the total liabilities and shareholders’ equity. It
may be concluded that the profit of the company for the year 2017 exceeded the liabilities.
8 • The company’s high rate of 43.04% of additional paid-in capital alongside with the growth of the capital stock by
2.45% may infer that the company is able to grow their equity and as a result gain more shareholders with the
stable profit and return the company is earning.

AGRINU
CONCLUSION
HORIZONTAL ANALYSIS
1 • In the year 2015-2016, majority of the components turned out to be negative except for other current assets, other non-current
liabilities and retained earnings. While the capital stock and additional paid-in capital both retained the amounts from the
2
previous year.
• Most asset components decreased due to the quick turnover of inventories to cash in order to settle the company’s previous
liabilities. The significant 8.68% decrease in Property, Plant and Equipment is also due to the company’s decision to divest and
dispose of some of their assets.
3 • The company was also affected by the decline of Philippine agriculture by 1.4% due to the damages brought by typhoons Karen
and Haima in the year 2016 (United States Department of Agriculture, January 26 2017). This may infer that a part of the
4
company’s decline of 37.43% within its inventories is due to the affected agricultural production.
• The liabilities of the company mostly decreased due to the payments the company has made. These include payments of both
current and non-current liabilities. While, 28.59% of other non-current liabilities is the only liability component that increased due
to the company’s lease payables, pensions liabilities and deferred tax asset. It can be inferred that with the increase of other non-
5
current liabilities, the company is not in a position wherein they withhold many assets to liquidize in order to decrease all their
liabilities.
• A significant portion of the long-term debts also decreased by 43.91% which may infer that the cash liquidated was used mostly to
6
pay for the company’s long-term obligations.
• With the increase of other shareholder’s equity of 158.06%, it can be inferred that the company decided to divest most of their
assets in order to pay off their liabilities and return money to their shareholders.
7
• As the total shareholders’ equity increased by 7.13%, it can be inferred that the company gained more profit in 2016 compared to
2015 based on the vertical analysis.
8
• The decrease in the total assets and total liabilities concludes that the company decided to divest and dispose most of their
assets in order to pay off more liabilities resulting in an increase in the total shareholders’ equity wherein the company
successfully gained more profit.

1 • With Agrinurture Inc., for the years 2016-2017, there is a significant increase in their current and non-current assets, particularly in
their Property, Plant and Equipment. There is also a significant increase in their current and non-current liabilities. These may suggest
that the company uses its loans from its liabilities to invest in its non-current assets which are to be used in order to gain more current
2
assets.
• In the case of Agrinurture Inc., since their retained earnings for the years 2016-2017 is negative, it does not have a lot of room to the
business owner(s) or the company management to utilize the surplus money earned. With this, it can be concluded that the company’s
profits are regularly paid out to its shareholders, which increases the shareholder’s equity. However, there would be no fund left for
3
reinvestment.
• The significant increase in inventories comprising 1142.50%, it can also conclude that a part of the total liability increase was meant to
grow the company’s inventories which also helped them increase their sales therefore having an increase in their receivables by
4
538.45%.
• As the other non-current assets decrease by 17.01%, it can be concluded that these are assets divested by the company in which they
used the money liquidized from these assets before they decided to loan and therefore result in an increase in their liabilities.
5
• As for the increase in accounts payable and other current liabilities, it can be concluded that most transactions of the company were
loaned due to the company’s decision to grow most of their assets and pay their obligations afterwards.
• An increase of 2121.38% and 125.95% of their company’s other non-current liabilities and long-term debts respectively may infer that
6
the company incurred a huge number of loans or long-term obligations in which the payment is not to be done within 2017 for they
wish to grow most of their assets and slowly pay their obligations as they earn money.
• With the increase of the total shareholders’ equity of 91.29%, it can be inferred that the company improved in their day to day
7
operations therefore gaining more profit.
• As for the capital stock of the company increased by 7.45%, it can be concluded that the company is able to produce more profit for
2017 which also yields a higher amount of liquidation for common stockholders.
812ABM17
• A significant increase in additional paid-in capital by 7.45% may also conclude that the company was able to sell more of their
stocks in the market therefore gaining more shareholders and at the same time still having an increase in shareholders’ equity.
GROUP 3 - Hilagyo
AGRINU
CONCLUSION
HORIZONTAL ANALYSIS
1
• ANI’s gross sales decreased by 53.43%. As there are no recorded sales discounts and returns, the net sales decreased by the same rate. Decrease
in sales are caused by lower banana exports due to divestments with Tagum Resources Agri Industries, Inc., decrease of 112 million in domestic rice
distribution, reorganization of stores and lower foreign mango sales (Agriculture Inc., 2018, pp. 30-31). Also, on January 26, 2017 the United States
Department of Agriculture (2017) reported a 1.4% decrease in Philippine agriculture with 3.3% decrease in the crops sub-sector brought by typhoons
2
Karen and Haima, which affected ANI’s inventories and sales of locally-sourced produce.
• Cost of goods sold decreased by 59.75%, in relation to the decrease in net sales; however, there was an unexpected increase in the gross profit
3
by 166.97%, which implies that there was an increase in the markup for products, given that previous years had losses in profit. This is supported by
the vertical analysis which shows a decreasing ratio of the cost of goods sold to the net sales for 2015 and 2016 were 97.21% and 84.02%,
respectively.
4
• Operating expenses decreased by 17.89%. This is mainly caused by less salary expenses in 2016 (Agrinurture Inc., 2018, p.115). This implies that
company personnel were discouraged by ANI’s losses and deteriorating performance in 2015 to 2016. In relation to this, there was an increase in
the operating profit by 43.58%.
• Other income increased greatly by 264.26% since there was income from discontinued operations, which incurred losses from the previous year
5
(Agrinurture Inc., 2017, p.110). Meanwhile, the other expenses account decreased by 63.27%, which was mainly caused by less asset impairments
and write-offs (Agrinurture Inc., 2018, p.116). As an effect, all earnings before interest and tax have increased by 79.28%.
Interest expense decreased by 36.88%, because of recapitalization and reduced debts during this period. Company recapitalization is supported
6
•
by the continual decrease in debt-to-equity ratio, and by the vertical analysis of its balance sheet which shows a decrease in liabilities for this
period. With that, earnings before tax has increased by 70.01%.
• The income tax decreased by 61.34%, even though earnings have increased. This was caused by tax deductions granted since the company had
7
continually incurred losses in previous years. It is also worth noting from the income statement that 86.04% and 90.99% of the provisions for
income tax for 2016 and 2015, respectively, are deferred (Agrinurture Inc., 2018, p.57).
• Although still at a loss, the net profit increased by more than half at a rate of 69.54%. Even though there were less sales during this period, the
decrease in expenses and increase in product markup was a factor for this decrease in loss.

1
• ANI’s gross sales increased by 267.34% in 2017. As there are no recorded sales discounts and returns, the net sales increased by the same rate. This
was caused by higher export supplies, increased domestic rice trading, expanded distribution channels, higher franchise revenue, and intensified
foreign operations (Agrinurture Inc., 2018, p 28). According to Gatpolitan (2018, January 19), agriculture has boomed by 3.95% in 2017, with a
4.37% increase in rice output, which will positively affect ANI’s inventories and sales. There were also more favorable conditions in foreign
2
exchange with a more stable Hong Kong dollar, at ranges 7.75 to 7.85 HKD/USD (Hong Kong Monetary Authority, 2017, p.57-58), and stronger
Chinese Yuan by 6.72% (Xinhua News, December 31, 2017).
• Cost of goods sold increased by 207.21%, given the increase in sales. With that, there was an increase in the gross profit by 166.97%, which implies
that there was an increase in markup for products, since the vertical analysis shows a decreasing ratio of the cost of goods sold to the net sales
3
for 2016 and 2017 were 84.02% and 70.26% respectively.
• Operating expenses increased by 117.64%. This is mainly due to massive increases in taxes and licenses, and for representation and entertainment,
because ANI has introduced Zhongshan Fucang Trading Co., Ltd. and Xuzhou Shengmei Real Estate Co., Ltd. to its foreign operations this year
4
(Agrinurture Inc., 2018, p.8). As reported by Wildau and Hornby (2018, January 18), China’s economy has boomed 6.9%, which will also further
strengthen ANI’s foreign expansion. Despite this increase in expenses, there was still a 188.67% increase in the operating profit, meaning that there
was adequate gross profit to yield profit, after years 2015 and 2016 that had operating losses.
• Other income increased by 138.70%, greatly from the derecognition of payables. Meanwhile, the other expenses account decreased by 25.11%,
5
mostly because of lesser losses in foreign exchange, caused by the mentioned foreign exchange status. As an effect, all earnings before interest
and tax has increased by 513.10%.
• Interest expenses decreased by 4.19%. Since there is only little change, the decrease may have only been caused by lower interest rates; however,
6
recapitalization is still ongoing since the debt-to-equity ratio is continually decreased. With that, earnings before taxes have increased by 279.05%.
decreasing
• Income tax increased by 488.14%, which means that income tax shifted proportionally as ANI’s income increased. This was also caused by
payments of previous deferred tax liabilities. There was also an advanced payment of Php 5,249,652 deferred tax as declared in the income
7
statement (Agrinurture Inc., 2018, p.57).
• Even though there were increases in expenses, the net profit has more than doubled at 226.76%. After suffering losses in 2015 and 2016, ANI has
performed enough to have a Php 191,050,344 net profit for their shareholders. For this period, ANI had higher markups, more aggressive sales
strategies, and more intensified foreign operations, to sustain profit.

CONCLUSION
AGRINU
VERTICAL ANALYSIS
1 • With the net sales of Php 1,225,752,838 as the basis account, the gross sales would have the same percentage of 100%, since
there are no recorded sales discounts and returns.
2
• Cost of goods sold is 97.21% of the net sales, which implies that there is very little markup for the products, as it will yield a gross
profit of only 2.79% of the net sales. This implies that the company must revise its pricing schemes with a higher markup to sustain
profit.
3
• Operational expenses amount to 22.85% of the net sales, but since there is only a gross profit of 2.79%, there will be an operating
loss of 20.06% of the net sales. This means that there is not enough markup and inadequate gross profit to match their operating
expenses.
4
• There is 4.34% of the net sales as loss for the other income since as seen from the income statement, ANI’s discontinued
operations suffered a Php 54,128,006 loss during this year (Agrinurture Inc., 2018, p.57). Meanwhile, other expenses are at 5.44%
of the net sales, which are mostly due to asset impairments and write-offs (Agrinurture Inc., 2018, p.116). Overall, the earnings
before interest and taxes further extends the loss to 29.85% of the net sales.
5
• The interest expense amounts to 8.35% of the net sales. The further loss of 38.20% of the net sales as earnings before tax implies
that ANI has performed inadequately to pay the interest accompanying its liabilities.
6
• The income tax expense of ANI is at 2.17% of the net sales, 90.99% of which are deferred, or to be paid in the future (Agrinurture
Inc., 2018, p.57). Given that earnings before tax are already at a loss, the company has deferred most of it since they are not in
the condition to be able to pay.
7
• The net loss of ANI amounts to 40.37%, which is almost half of the net sales. This shows that the company has performed
inadequately this period. The main deduction was from the cost of goods sold, which implies that the company needs higher
markup for its sales. Furthermore, losses and expenses were too much to sustain a profit for its shareholders.

1 • With the net sales of Php 570,843,248 as the basis account, the gross sales would have the same percentage of 100% since there
are no recorded sales discounts and returns. Moreover, it is also worth noting from the horizontal analysis that the sales have more
than halved, as compared to 2015.
2
• The cost of goods sold is 84.02% of the net sales, which shows that there is enough markup to sustain a gross profit of 15.98% or
more than a quarter of the net sales.
3
• Operational expenses amount to 40.29% of the net sales which is too much since there will be an operating loss of 24.31% of the
net sales. Since losses are mostly from salary expenses, and depreciation, the company needs to reduce personnel or sell some of
its non-current assets.
4
• Other income amounts to 15.32% of the net sales, since ANI’s discontinued operations had an income of Php 80,276,732 as
compared to the previous year’s loss (Agrinurture Inc., 2018, p.57). Meanwhile, other expenses are at 4.29% of the net sales, this is
due to reduced asset impairments and write-offs as supported by the horizontal analysis (Agrinurture Inc., 2018, p.116). In total, the
earnings before interest and taxes lessens the loss to 13.58% of the net sales.
5
• The interest expense is 11.32% of the net sales. Similar to the previous year, further loss of 24.60% of the net sales as earnings
before tax shows that ANI has performed inadequately to be able to pay the interest accompanying its liabilities; therefore, there is
6
a need for further recapitalization and reduction of debt.
• The income tax amounts to 1.80% of the net sales. Just like the previous year, 86.04% of which are deferred (Agrinurture Inc., 2018,
p.57). As the company has been at a loss, even in the previous year, they deferred most of the taxes to be paid at a future time.
7 • As ANI is once again at a net loss, by 26.40% of the net sales. Surprisingly, although the company has more than halved its sales,
it still performed better than the previous year; however, there is still a need to increase sales, and further reduce expenses,
especially operational and interest expenses.

AGRINU
CONCLUSION
VERTICAL ANALYSIS
1 • With the net sales of Php 2,096,962,338 as the basis account, the gross sales would have the same percentage of 100% since
there are no recorded sales discounts and returns. The company’s records had significantly increased in its sales and had reduced
2
its interest and operating expenses.
• The cost of goods sold is 70.26% of the net sales. This implies that there is an increase in the gross profit leading to a total of
29.74% of the net sales. During the year, the company was able to gain more than enough funds left to cover for the other
3
expenses required in its held operations.
• The operating profit is equivalent to 5.87% of the net sales. This is a good indicator that the company has gained profit from the
write-offs for the held debts and impairment of assets made during 2016. The operating expenses consist of selling and
4
administrative expenses (Securities and Exchange Commission, 2017, p. 27).
• The other income account held 9.95% of the company’s net sales. The company has gained a lesser amount of revenue from its
fixed assets since more focus was given to the held operations in producing goods and services which increase the cash available.
5
• There had been a huge decrease in the interest expense. The company’s interest expense during the year is equivalent to 2.95%.
Since there was a reduction in the interest expense, there had been lesser costs for the company’s borrowed expenses.
6
• The income tax increased as expected for when the company was at loss, most of their taxes were deferred. 2.88% of the net
sales is consumed by the income tax. Since there had been an increase in the earnings obtained by the business, most of the
company’s tax obligations can be covered.
7
• The net profit of ANI amounts to 9.11%. This shows that the company has performed effectively this period and has gained profit
after deducting all the expenses that occurred.
BALANCE SHEET 2015

1 • The overall assets amounted to 62.82% of non-current assets and 37.18% of current assets. Most of the company’s held assets
decreased because of the liabilities it settled, daily conducted operations, quick turnover of inventories into cash and divestments
of some subsidiaries during the period (Agrinurture, 2016, p.28).
2
• Majority of the total current assets belong to the other current assets which amounted to 28.16%. include input-valued added tax,
deposits, prepaid insurance, creditable withholding taxes and other current assets. The remaining portion consists of 6.32%
accounts receivable, 1.55% inventories and 1.15% of cash and equivalent
3
• The overall liabilities make up 75.34% of the total liabilities and shareholders’ equity. It consists of 64.77% of current liabilities and
10.57% account to the non-current liabilities. The remaining portion, which amounts to 24.66%, belongs to the total shareholders’
equity. This implies that the company did not gain enough profit to settle the obligations it has incurred during the period.
4
• Majority of the current liabilities belong to the other current liabilities held by the company which amounts to 43.15% and the
remaining 21.63% belongs to the accounts payable. Payment of loans, borrowings and trade payables caused the decrease in its
held liabilities. (Agrinurture, 2016, p.28)
5
• There had been additional charges given to the company because of the 2014 write-offs related to the receivables, goodwill,
intangibles, investments, advance, biological assets and other assets and the addition of convertible bonds and interest rates of
the incurred loans.
6
• As for the non-current liabilities, there is 10.26% of long-term debt and 0.30% of other non-current liabilities. The majority belongs
to the long-term debts of the company. This is to be expected since a lot of taxes are deferred due to the company’s loss.
• Majority of the total shareholders’ equity, amounting to 80.76%, is held by the additional paid-in capital since in 2015 21.54% of
7
capital stock was sold. The remaining portion comes from the retained earnings which amount 73.25% and 4.39% from the other
shareholders’ equity.
• With that being said, the company was given the opportunity to gain additional profit from its stockholders. Moreover, the investing
8
activities came from divestment of subsidiaries, payment of loans and application of the convertible loans (Agrinurture, 2016, p.28).
• It was the company’s decision to invest more on the properties of the company which gain value over time. The properties include
9
rentals which are held to earn from and for capital appreciation instead of being used for supply production of goods and services
in selling the ordinary course of business (Agrinurture Inc., 2016, p.27).
• Upon computing the total asset turnover ratio during the period, the company is 42.47% efficient in generating revenues for every
10
peso of asset that is invested. The group is exposed to liquidity risk, credit risk and foreign currency risk. Therefore, financial risk
management was imposed to monitor the said risks on an ongoing basis and consider the necessary actions that can lessen these
risks (Agrinurture Inc., 2016, p.51).

CONCLUSION
VERTICAL ANALYSIS AGRINU
BALANCE SHEET 2016
1 • Majority of the total assets owned by the company, amounting to 57.24%, belong to the non-current assets. Similar to 2015, the
company sustains its long term investments more than its current assets. Meanwhile, 42.76% belonged to the current assets.
2 • Most of the assets did not increase much but are somehow used to settle the company’s financial obligations. Some of these are the
daily operations conducted, improved collections, advanced liquidations of properties, and divestments of some subsidiaries.
3
• The other current assets, which is 35.98% of the company's total assets, increased in 2016. On the contrary, the other accounts did not
increase much. The cash and equivalent contribute 1.01%, the accounts receivable is equivalent to 4.57% and the inventories held 1.20%
of the portion.
4 • The majority of non-current assets consist of other non-current assets comprising 31.22% of non-current assets. The remaining 26.02% of
the portion belongs to the plant, property and equipment. This implies that the company’s loans and borrowings are initially recognized
at fair value and are carried at amortized cost.
5 • The liabilities amounted to 67.43% whereas the shareholder’s equity amounts to 32.57% of the total liabilities and shareholder’s equity.
Despite remaining a weak performance in gaining profit and maintaining a greater amount of incurred debts, there were improvements
6
in the held transactions of the company.
• The company’s overall liabilities account comprises 59.85% of current liabilities and 7.58% of non-current liabilities. With that being
said, there was a greater account held under the current liabilities of the company. This means that the company resorted more to
short-term debts in 2016.
7• Majority of the company’s current liabilities, which is 40.13%, belong to the other current liabilities while the remaining 19.72% belongs to
the accounts payable. The other current liabilities account increased due to a significant loan made by the company.
8• As for the total non-current liabilities, the account for long-term debts held 7.10% of the portion while the other non-current liabilities
amounted to 0.48%. With that being said, the company has been effective in reducing its long-term financial liabilities. The account
9
mainly consisted of the pension liability and deferred tax liabilities.
• The capital stock sold for 2016 amounted to 26.56% and the company earned a 99.58% of additional paid-in capital. The company’s
other shareholders equity increased due to more funds of the foreign currency translation reserve. However, since the company has more
debts than profit, the retained earnings decreased to 96.70%.
10• Additional profit was obtained from the stockholders. Most of the funding allotted for the investing activities is mainly related to the
settlement and liquidation of advances to the stockholder. Most of the cash was used in the operating activities held by the company
11
and its loan payments.
• Upon computing the period’s total asset turnover ratio, the company is 24.39% efficient in generating revenues for every peso of asset
that is invested. Similar to the previous year, there has been a huge decrease in the company’s efficiency in using its assets to generate
more sales. It shows that there is a huge loss in the company’s conducted operations during the year.
12• To address the loss of the company during 2015, the company has decided to continue expanding its core business and increase the
distribution including fruits, vegetables and rice, as well as its channels of retail and export sales. Moreover, there should be a
continuation in the rationalization, consolidation and reorganization of the operations initiated during 2015 (Agrinurture, 2017, p.1).

AGRINU
CONCLUSION
VERTICAL ANALYSIS
BALANCE SHEET 2017
1 • The total assets consist of 60.33% current assets and 39.67% non-current assets. There was an increase in the collections and
additional funds received through the company’s subscriptions, sales and consolidation of Fucang operations, inventory balance and
2
advance payment for the company’s projects and future investments in China (Agrinurture, 2018, p. 29). Since the current asset
increased abundantly, this means that the company’s liquidity is good in 2017.
• The overall current assets consist of 29.08% from the other current asset, 17.17% from the account receivable, 8.76% from the inventories
and 5.33% from the cash and equivalent. With that being said, the company is now more capable of settling its financial obligations It
3
can also be seen that accounts receivable rose substantially, this means that some of the retailers converted from cash to credit terms.
• The company still had a greater amount of liabilities, amounting to 63.33%, than the shareholder’s equity which is equivalent to 36.67%.
4
As the liability is much higher than the equity, this means that the company does not have enough capital to cover all its obligations and
must use its current assets for the mean time.
5
• The company’s liabilities account consists of 47.59% current liabilities and 15.74% non-current liabilities. This illustrates that the
company still resorted more in short-term debts.
6
• The current liabilities consist of 27.90% other current liabilities and 19.68% accounts payable. The other current liabilities account
increased due to the significant short-terms loans made by the company.
• Under the non-current liabilities, 9.44% of the portion belonged to the long-term debt while 6.30% were of the other current liabilities.
7
These resulted from the deposits made for future stock subscriptions of the company incorporated in Japan. The full payment was
received during the year, thus enabling the subscription to be executed next year (Agrinurture, 2018, p.20).
• The capital stock sold for 2017 amounted to 16.80% and the company earned a 62.97% of additional paid-in capital. The company’s
8
other shareholders equity increased due to non-controlling interests. However, since the company has more debts than profit, the
retained earnings decreased to 54.94%.
• The increase in the value obtained from retained earnings and shareholder’s equity suggests that there had been a greater amount of
9
profits gained by the company from the stockholders and its operations that are to be distributed in dividends (Agrinurture, 2018, p.67).
• Upon computing the total asset turnover ratio, the company is 52.73% efficient in generating revenues for every peso of asset that is
invested. There had been a significant improvement in the performance in the held transactions because the company’s cash and
10
inventories increased.
• There is a greater amount of resources which can be considered as a factor in the growth of the funds obtained by the company.
Therefore, the company is now more profitable in conducting services and selling products which could cover its incurred debts. The
abrupt change had greatly affected the financial health of the company. Somehow, the presumed possible risks of the company are
prevented.

RECOMMENDATIO
RECOMMENDATIONS
The analysis has shown that investing in San Miguel Pure Foods Company, Inc. is seen to
be presently a more profitable option, since the company has shown a slow but steady growth. As
for Agrinurture Inc., although they suffered losses in 2015 and 2016, reforms in their systems and
strategies, as well as intensified expansions for their foreign operations have given them a more
aggressive and more rapid growth as compared to San Miguel. This is an indication that ANI is a
riskier option but it may be more profitable in the future.
Figure 1: Agrinurture Inc.

Net Profit Forecast,
2018-2020
Company
Figure 2: San Miguel Pure

Foods Corporation Net
Profit
2018-2020
Forecast,
In support of the previous paragraph, the figures above show the 2018-2020 forecast of
net profit for both companies, given the data from 2015-2017. Figure 1 shows the net profit
forecast for ANI, while Figure 2 shows the net profit for SMPFC. Although both companies have
linear growths, ANI has steeper curve that illustrates a more aggressive growth and more rapid
growth, than SMPFC, which has a shallower curve showing slow and steady growth. In comparison,
the short-term forecasts show in favor of ANI as the company that is more profitable in the
future and may give more returns to investors. These forecasts, however, may still vary depending
on the future practices of each company and on external events, such as the fluctuation of the
economy, period

RECOMMENDATIO
RECOMMENDATIONS
In terms of liquidity, SMPFC is more capable to meet their short-term obligations than
ANI. But as both companies are capable of paying their debts, ANI has more debts as
compared to San Miguel Pure Foods Company; However, as ANI is undergoing recapitalization,
which is recommended for this to be continued so that ANI will not rely on financial debts for
future financial growth. however
SMPFC leverage is greater than Agrinurture Inc. It shows that SMPFC can generate more
income to be used in paying off their debts. Meanwhile, ANI’s leverage is questionable since it
shows that they are more in the riskier side of business and that they may not currently produce
enough cash to pay off their debts. This indicates that ANI’s assets rely more on debts. One
reason why ANI is questionable is because of their slow management of debts. In 2016, they took
almost 1 year to settle and took 6 months in 2017. Meanwhile, SMPFC only took 2-3 months to
settle their obligations, which shows how liquid SMFB is. Furthermore, SMPFC is much better
when it comes to efficiency especially total and fixed asset turnover ratio. It can be seen that
they make use of their fixed assets more to produce revenue.
Compared to ANI, SMPFC is much more capable in sustaining the profitability of their
business. SMPFC was able to attain efficient resources which greatly contributed to the
company’s owned assets. ANI, on the other hand despite facing loss during 2015 and 2016, is
maintaining its gradual pace when it comes to sustainability. In order to prevent the situation
faced by the ANI, the SMPFC company must also monitor its conducted operations because
despite being profitable, its productivity has decreased compared to its previous year.
Earlier established in the industry, SMPFC had advantages over Agrinurture, which began
at a later date. SMPFC has the first mover advantage and the stability of numbers in its
financial statements reflects it. Being the first, they were able to develop strong brand
recognition and consumer loyalty before rivals entered the market, and were also able to attract
more investors to help sustain the business. They had more time to refine their products and set
consumer preferences. SMPFC has built significant market share and a consumer base large
enough to retain the majority of the market to this day; However, in an ever-changing economy,
it is recommended that SMPFC to not be complacent in its regular practices and to implement
fresher schemes and strategies to level their competition. As seen in the vertical analysis, SMPFC
manages to maintain consistent ratios of expenses to sales, unlike ANI which has varying but
decreasing ratios. Although consistent expenses are fairly beneficial for the company, it implies
that SMPFC is not developing new practices, but rather maintaining regularity, which lessens its
competitiveness as competitors, like ANI, continue to develop. however
With it's massive growth, ANI should continue its foreign expansion; However, it should not
limit its expansion to China alone, since any event that will handicap the Chinese economy will
affect ANI's foreign operations there. There should be expansions also in other Southeast Asian
countries since these countries are also productive on agriculture, before further expanding into
Europe or the Americas.

REFLECTION
GROUP REFLECTION
In working as a group on analyzing the companies of the food, beverage
and tobacco industry, we have learned the importance of Chief Financial Officers
(CFO), their tasks, and what it takes to do them. Conducting comparative
analysis requires prior knowledge and background in order to completely
understand the financial statements of companies. As we started this task, it
took us great patience and persistence to check if the data that we computed
was really correct. With all honesty, looking through financial statements and
finding specific data required were visually tiring for all of us. It was very crucial
that we must examine the data thoroughly without any mistakes. The
interpretation of this data required us to have a deeper understanding of the
numbers presented in front of us, as these numbers are not solely numbers, but
they are indicators of a company’s financial performance that are affected by
both internal and external factors. Proper financial analysis requires a solid
foundation with its tools. It is through diligence in this repetitive process that one
is going to be good at financial analysis. In short, knowledge must be matched by
experience.
Also, we have learned that the job of the CFO is not only limited to the
company itself, but also of the ever changing world around us. One must be able
to answer the how’s and why's of these numbers and their coming about. There
are various factors and numerous possibilities that must be considered in making
sensible conclusions and recommendations. This task has shown us how crucial
and critical every decision a CFO is making. Accuracy and precision needs to be
present in every detail being recorded in order to come up with the right results.
This activity also teaches us not only from the point of view of the CFO,
but also from the perspective of the investor, and what to look for in a company.
In conclusion, this activity taught us to become more critical thinkers when it
comes to making decisions to ensure the success of a company in the following
years.

REFLECTION
INDIVIDUAL REFLECTION
Jairuz Florentin Krezelle Franada
The job required for CFOs is one that needs critical Business companies have their own management
thinking and flexible analysis. A CFO must have strategies — whether in the short or long term, this is
knowledge beforehand and open-mindedness to see all done in order to make the business more financially
possibilities and factors that explain a company’s competitive, as can be seen in their financial
performance, both internal and the external events are statements. Using financial ratios and vertical/horizontal
to be examined so as to create more valid inferences. analysis, we can compare businesses of the same
Furthermore, the CFO is to report objectively and industry on how efficiently they are managing their
truthfully to formulate precise conclusions and effective
resources and how well their financial health is. I have
recommendations. In conclusion, CFO is a complex, but
essential position that must be able to forecast and discovered that accounts may have a direct or indirect
guide the company in the most appropriate direction, correlation and that an increase in one account may be
but it is not an easy position, and not everyone has an increase or decrease of another. As a potential
what it takes to be a CFO, since there are certain investor, I myself discovered how to evaluate company
qualities to be possessed. management wherein I realized that there are indicators
of the company’s financial health which can help in
deciding which business is worth the money.
Ariana Perez
In the process of making the entirety of the Performance Task, Adrianne Reign Talbo
going through the financial statements of the two companies
made me realize that creating a financial statement for a This task has enlightened me to the deeper parts of
company takes time and effort to put together. Businesses do what needs to be done to achieve success in business.
not simply revolve around the sales that they generate but Making a business successful and maintaining it does
they also grow with the investors they attract from the not only require consistency in making profits, it requires
transparency they show from intheir financial statements.
the accuracy of all financial results that are being
According to Kumaran (2018), investors need a sign that a
reported and the critical evaluation of every data. This
company is doing well and they can put their hard earned
money in its business. This entails that the more transparent a way, the company can monitor which aspects of the
company is in recording their financial statement, the more business operations must be improved or removed. As a
the investors see their business as profitable and worth business student, I was able to learn a lot of the ins and
investing in. outs of a business through this task.
Trisha Mae Aboc
Not only are businesses concerned with profits, but they also prioritize their financial obligations, determine the
relative risk of each investment, and focus on how to sustain the business in the long term. The analysis of financial
statements is a vital part of the business owners, investors and creditors' decision-making process, as financing and
the assessment of income and losses are the most critical factors of the business and should be carefully evaluated
to determine the company's financial condition presently and in the future. Each financial statement also has its
own function in presenting a company's different financial aspects but are interrelated by the fact that the change
on one account would have an impact on another account. Overall, basic accounting skills, the ability to read and
comprehend financial statements, analytical thinking skills, and the ability to explain what a business person can do
from calculated numbers are what a person needs to complete this output. This output has made me feel how
difficult it is to simply interpret what numbers and percentages mean and it has also made me fully grasp how it is
in the real business and finance industry.

REFLECTION
INDIVIDUAL REFLECTION
Katherine Claire Senen Aira Marie Reyes
In a business, the Chief Financial Officer (CFO) is the

In order to be successful in business, one should be one responsible for the financial operations of a
adaptable and possess great planning and company. According to Grant (2019), a CFO analyzes
organizational skills (Seabury, 2019). Learning the the financial strengths and weaknesses and
financial statements and history of different companies recommends corrective actions. With this performance
is helpful for business students like us. We have made task, I was able to have a glimpse of how a CFO works.
adequate use of our time and also learned the Being able to experience this as early as now, gives me
importance of teamwork to accomplish this task, a lot of learning not just only in the financial aspect but
also in life. Analyzing financial statements requires
although at times it was quite challenging, but with the
persistence, patience, honesty, accountability and
help of each other we made it possible. We did not just critical thinking. It is a high-risk job that must have
learned the importance of teamwork but we had accuracy and credibility. With this task, I was able to
learned to manage our time. become competent and cautious in analyzing the data
and background of the companies. Since, one mistake
could mislead the growth and results of the businesses.
It is important to remember that reckless decisions must
not be made either in life or in business. Although there
Baby Ruth Rodrigueza is a saying that mistakes are often necessary in order to
learn lessons, being a CFO who manages financial data
The responsibility of managing a business includes the must not make mistakes as an option.
consideration of the transactions held in an entity for the
whole company’s greater good, flexible broad analytical
skills. Further studying the scenarios situated plays a Anna Mae Paño
huge role in an entity’s endeavors. Each business has
their own strengths and weaknesses. As part of the From this output I have experienced how financial
students who are interested in a course related to statements are useful in making investment decisions.
business management, it is important that I clearly For it to be effective, it needs to be understandable
understand which standards I should follow when it and make sense to serve its purpose. For a company to
comes to analyzing the nature of businesses. Through be successful it must always have grounds for any
the activity, I have learned that there are things which strategy they will imply, so in the long-term it will still be
tremendously need wise and cautious actions because effective. Analyzing financial statements is an
there are moments in our life which can no longer be important part of decision making because finances
repeated and that by all means one should avoid being and the valuation of profits and losses are the most
careless about certain matters to avoid greater risks in important drivers in business. They are used to diagnose
the future. flexibility and broad analytical skills. weaknesses in the current strategy of the company and
key in making decisions to mitigate against such losses.
The decision-maker should then make the decision in
time to reinforce the strengths and solve the weak
spots. evaluation ba dapat to or hindi?

REFERENCES
REFERENCES
● Agrinurture Inc. (2016). 2015 Annual Report. Retrieved ● Philippine Stock Exchange Inc. (n.d.). Agrinurture Inc.:
from http://www.ani.com.ph/agrinurture-1/wp- Company Information. Retrieved from https://
content/uploads/2019/07/Annual-Report-as-of-31- edge.pse.com.ph/companyInformation/form.do?
December-2016.pdf cmpy_id=619
● Agrinurture Inc. (2017). 2016 Annual Report. Retrieved ● Philippine Stock Exchange Inc. (n.d.). San Miguel Food
from http://www.ani.com.ph/agrinurture-1/wp- and Beverage Inc.: Company Information. Retrieved
content/uploads/2017-Annual-Report.pdf from https://edge.pse.com.ph/companyInformation/
form.do?cmpy_id=151
● Agrinurture Inc. (2018). 2017 Annual Report. Retrieved
from https://edge.pse.com.ph/openDiscViewer.do? ● Randstad. (2017). do you have what it takes to be a
edge_no=434e81704ebb0ecc43ca035510b6ec2b financial reporting accountant. Retrieved from
https://www.randstadusa.com/jobs/career-
● FAO.org. (n.d.). Poultry Products and Processing. resources/career-advice/is-financial-reporting-
Retrieved from http://www.fao.org/poultry- accounting-right-for-you/487/
production-products/products-processing/en/
● San Miguel Corporation. (n.d.) Food and Beverages.
● Gatpolitan, L. (2018). Agriculture output grows 3.95% Retrieved from https://www.sanmiguel.com.ph/
in 2017. Retrieved from https://www.pna.gov.ph/ article/food-and-beverages
index.php/articles/1022232
● San Miguel Food and Beverage, Inc. (n.d.). Corporate
● Grant, M. (2020). Chief Financial Officers: An Inside Profile. Retrieved from http://www.smfb.com.ph/
Look. Retrieved from https://www.investopedia.com/ page/corporate-profile
terms/c/cfo.asp
● Seabury C. (2019). 9 Tips for Growing a Successful
● Hong Kong Monetary Authority. (2017). 2017 Annual Business. Retrieved from,
Report. Retrieved from https://www.hkma.gov.hk/ https://www.investopedia.com/articles/pf/08/
media/eng/publication-and-research/annual-report/ make-money-in-business.asp
2017/AR2017E.pdf
● Soleadea. (2019). Cash Conversion Cycle EXPLAINED
● Jan, O. (2019). Operating Cycle. Retrieved April 28,
in 60 SECONDS. Retrieved April 28, 2020, from
2020, from https://xplaind.com/357698/operating-
https://soleadea.org/cfa/cash-conversion-cycle
cycle
● The United States Department of Agriculture (2017).
● Kumaran, S. (2018). Importance of Accurate Financial
Philippines: Philippine Agriculture Declines in 2016.
Statements for a Business. Retrieved from https:// Retrieved from https://www.fas.usda.gov/data/
www.invensis.net/blog/finance-and-accounting/ philippines-philippine-agriculture-declines-2016
importance-accurate-financial-statements-business/
● Wall Street Journal (n.d.). ANI.PH | AgriNurture Inc.
● Murphy, C. B. (2019). The Accounts Payable Turnover Company Profile & Executives - WSJ. Retrieved from
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Retrieved April 27, 2020, from https:// XPHS/ANI/company-people
www.investopedia.com/terms/a/
accountspayableturnoverratio.asp ● Wildau, G. & Hornby, L. (2018). China’s economy grows
6.9% in 2017 on strong exports and property. Retrieved
● Lesonsky, R. (2018). Understanding the Cash from https://www.ft.com/content/53473650-
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● Xinhua News. (2017). Economic Watch: 4 reasons why
● Neovia Group. (2016). Swine production in the RMB stood tall in 2017. Retrieved from http://
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A COMPARATIVE ANALYSIS

OF THE FINANCIAL STATEMENTS OF

Copy of Audited Financial Statements

Agrinurture Inc. iba po ba talaga kulay netong descrip ng ani sa smpfc?

Agrinurture Inc. (ANI) was incorporated on 04 February 1997. In

ANI eventually diversified into other various agro-commercial businesses, specifically

12 ABM 17 GROUP 3 - Hilagyo

12 ABM 17 GROUP 3 - Hilagyo

12 ABM 17 GROUP 3 - Hilagyo

12 ABM 17 GROUP 3 - Hilagyo

This is the audited

12 ABM 17 GROUP 3 - Hilagyo

This is the audited

12 ABM 17 GROUP 3 - Hilagyo

12 ABM 17 GROUP 3 - Hilagyo

Table 1. Financial Ratios of SMPFC Inc. and ANI Inc.

12 ABM 17 GROUP 3 - Hilagyo

SMPFC Inc.’s Income Statement

12 ABM 17 GROUP 3 - Hilagyo

ANALYSISSan Miguel PureFoods company Inc.

Table 4. Financial Analysis of SMPFC Inc.’s Balance Sheet

12 ABM 17 GROUP 3 - Hilagyo

12 ABM 17 GROUP 3 - Hilagyo

SmPFC inc. Agrinurture inc.

The quick ratio of 0.56 indicates that the firm has

12 ABM 17 GROUP 3 - Hilagyo

SmPFC inc. Agrinurture inc.

-399,899,313. This indicates that the company has

12 ABM 17 GROUP 3 - Hilagyo

SMPFC Inc. Agrinurture inc.

OPERATING PROFIT MARGIN

12 ABM 17 GROUP 3 - Hilagyo

SMPFC Inc. Agrinurture inc.

5.88% of the company’s total revenue goes to net

The return on assets of SMPFC Inc. during this year

12 ABM 17 GROUP 3 - Hilagyo

SMPFC Inc. Agrinurture inc.

12 ABM 17 GROUP 3 - Hilagyo

INTEREST COVERAGE RATIO

Agrinurture Inc. can pay its interest payables by

12 ABM 17 GROUP 3 - Hilagyo

FIXED ASSET TURNOVER RATIO

12 ABM 17 GROUP 3 - Hilagyo

AVERAGE COLLECTION PERIOD

The average collection period for the company

The business has an average collection

12 ABM 17 GROUP 3 - Hilagyo

AVERAGE AGE OF INVENTORY

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AVERAGE AGE OF PAYABLE

12 ABM 17 GROUP 3 - Hilagyo

This year, the operating cycle of the company is

CASH CONVERSION CYCLE

12 ABM 17 GROUP 3 - Hilagyo

12 ABM 17 GROUP 3 - Hilagyo

INCOME STATEMENT2016 –2017

12 ABM 17 GROUP 3 - Hilagyo

INCOME STATEMENT 2016

12 ABM 17 GROUP 3 - Hilagyo

BALANCE SHEET 2015

12 ABM 17 GROUP 3 - Hilagyo

BALANCE SHEET 2016