Cotabato State University

Cotabato City

Master of Business in Administration

Case study on Financial Analysis of Jollibee Foods Corporation and

subsidiaries for the years 2010 - 2014

Statistics with Data Analysis – MBACC 122

Submitted by: Jehan D. Ibrahim

Submitted to: Dr. Nick L. Aduana, CPA

Table of Contents

I. Cover Page i

II. Table of Contents ii

III. Executive Summary 1

IV. Description of the Case 2

V. Problems/Opportunities with statistical implication 12

VI. Evidence of the problem/opportunity 13

VII. Statistical analysis, models or tools 15

VIII.Strategies/Alternatives involving statistical method/approach 22

IX. References 22

X. Appendix 24
III. Executive Summary

Jollibee is the largest fast food chain in the Philippines, operating a nationwide network of over

750 stores. A dominant market leader in the Philippines, Jollibee enjoys the lion’s share of the

local market that is more than all the other multinational brands combined. The company has

also embarked on an aggressive international expansion plan in the USA, Vietnam, Hong Kong,

Saudi Arabia, Qatar and Brunei, firmly establishing itself as a growing international QSR player.

Jollibee was founded by Tony Tan and his family with its humble beginnings as an Ice Cream

Parlor which later grew into an emerging global brand. At the heart of its success is a family-

oriented approach to personnel management, making Jollibee one of the most admired employers

in the region with an Employer of the Year Award from the Personnel Management Association

of the Philippines, Best Employer in the Philippines Award from Hewitt Associated and a Top

20 Employer in Asia citation from the Asian Wall Street Journal. The Jollibee Foods Corporation

was incorporated on January 1978. It opened its first store overseas in Taiwan which later closed.

Eating is a universal experience. Wherever you are, whatever your status is, eating is something

we all share. Eating is more of a necessity than a luxury. Having this in mind, businesses venture

into the food Business because of the available customer base. Fast food invasion has been a

successful business endeavor in the Philippines. Because of the busy Life style of modern

Filipinos, it is a common instinct that they simplify their eating habits. Instead of spending a

significant portion of their time shopping ingredients that needs to be cooked, they tend to resort

to fast food to save time and energy in getting their meals ready. Not only that it is fast and
1
convenient, people are more likely to buy from fast food chains because of the small amount of

money involved in exchange for a speedy meal.

One of the leading players in the Quick Service Restaurants (QSR) industry in the Philippines is

the Jollibee Foods Corporation (hereinafter referred to as “JFC” or “Jollibee”). Established in

1978, Jollibee still continues to dominate the market through its cheap product offerings.

This paper aims to study the financial performance of Jollibee from 2010 – 2014. Specifically,

this paper delves on the computed financial ratios based on the available data (audited financial

statements) and assesses how well did Jollibee performed in handling corporate finance in the

years covered by this study.

IV. Description of the case

A. Current Performance or Situation

1. Past corporate performance indexes

Jollibee Foods Corporation current Ratio Calculation

The current ratio is mainly used to give an idea of the company's ability to pay back

its short-term liabilities with its short-term assets.

Jollibee Foods's Current Ratio for the fiscal year that ended in Dec. 2020

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Figure 1

. CSR postures of the Business

a. Mission Statement of Jollibee

To serve good tasting food, bringing the joy of eating to everyone.

Together with our partners, we (Jollibee) help our communities through:

o Improved access to Education for the youth

o Leadership development for local organizations

o Livelihood programs for small farmers

o Environment-friendly initiatives

o Decent housing and disaster relief for calamity-stricken regions.

. Vision statement of Jollibee

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 Jollibee Foundation envisions that every Filipino can access basic community

services and live a life defined by dignity, purpose and active participation in

nation-building

. Objectives of Jollibee

o Aims to be the largest homegrown quick service restaurant chain in Asia by

2020.

o Will be supported by continuous store expansions and acquisitions of

several more brands abroad.

. Corporate Governance

1. Board of Directors

Tony Tan Caktiong Chairman

William Tan Untiong Secretary & Executive Director

2.
Ernesto Tanmantiong President, CEO & Executive Director

Cho Sit Ang Non-Executive Director

Poe Eng Chua Non-Executive Director

Cezar Consing Independent Director

Artemio Villaseñor Panganiban Non-Executive Director

Joseph C. Tanbuntiong Treasurer & Executive Director

Cesar Velasquez Purisima, Dr. 4 Independent Director

 Top Management

Ernesto Tanmantiong President, CEO & Executive Director

Ysmael Villoso Baysa CFO, Compliance Officer & VP-Corporate Finance

Cezar Consing Independent Director

Cesar Velasquez Purisima, Dr. Independent Director

Cossette B. Palomar Director-Investor Relations

Joseph C. Tanbuntiong Treasurer & Executive Director

William Tan Untiong Secretary & Executive Director

Daniel Rafael Ramon Z. Gomez Chief Marketing Officer

Susana K. Tanmantiong Chief Procurement Officer

Fernando S. Yu President - Jollibee Business Unit

. External Environment analysis

1. Natural Environment

Filipino farmers work hard every day, producing food for the country while trying to

sell enough to make a living for their families. But there is always the uncertainty of

who will buy their produce and at what price. This is where the Farmer

Entrepreneurship Program (FEP) comes in. FEP enables smallholder farmers to

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supply corporate buyers such as Jollibee Foods Corporation (JFC), while making sure

that the company procure goods without harming the environment. This means that

the vegetables needed to produce JFC’s delicious burgers, rice meals, pizzas and

pastas now come directly from farmers. Farmers then make sure that they harvest

goods responsibly without having to ruin the natural growth of their produce. Since

2008, FEP has partnered with various organizations to train smallholder farmer

groups on agro-entrepreneurship, building their capacities to supply vegetables in a

manner that meets the standards and requirements of corporate buyers while ensuring

farmers make a profit. Through FEP, farmers transform into well-equipped agro-

entrepreneurs.

Jollibee Foods Corporation also conducts environmental projects like the launching

and MOA signing of its Go Green Project at the Plaza Independencia participated by

representatives from 11 barangays in Cebu City.

With the use of Jollibee paper cups, buckets, tin cans and other recyclable materials,

the Go Green Project encourages residents of different barangays to promote vertical

vegetable gardening. This year’s

Go Green Project is making a more sustainable initiative towards enhancing good

practices in promoting urban vegetable gardening.

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 Participating barangays are from Cogon Pardo, Guadalupe, Capitol, Lahug, Poblacion

Pardo, Parian, Sambag II, Banilad, Talamban, Luz, and Mabolo. Until now, Jollibee is

making various efforts to promote Go green practices to help with the sustainability of

the environment.

2. Societal Environment
Jollibee continues to hold various programs and activities that maximize their

resources and strength in giving back to the community in an organized manner. For

instance, food-related issues in the community is addressed by school feeding

programs that provides meals for undernourished students and as a way also to

encourage them to go to school regularly. Jollibee Foundation’s Busog, Lusog, Talino

(BLT) brings together local education stakeholders and JFC employee volunteers to

mitigate hunger and undernourishment, widely attributed causes of school attendance

decline and drop-out among lower grade pupils. Daily lunch is provided to below

normal weight-for-age Grades 1 & 2 pupils with food prepared by parent groups

following menus developed by Jollibee Foundation. The parents also attend seminars

on food safety, cooking, health and nutrition. For SY 20082009, BLT is being

implemented in 54 public elementary schools benefiting 1,822 pupil beneficiaries.

Pupil’s exhibit marked improvements in weight and attendance while their parents

show improved budgeting and menu preparation skills as well as knowledge on

nutrition. The company also help farmers improve their production and income by

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bridging not only their company. On its 11th year, since it was established in 2008,

the Farmer Entrepreneurship Program (FEP) continued to scale up its efforts by

adding 12 potential new sites to the current roster of 700 smallholder farmers from 15

cooperatives and associations that are JFC suppliers. The Agro-enterprise Training

(AgenT) for Change began training the second batch of agro-enterprise (AE)

facilitators who will provide technical support to FEP farmer groups. The AE

facilitators are staff of partners from local government units, microfinance

institutions, and non-government organizations. The FEP Youth Challenge is an

initiative that enable college and university students to help smallholder farmers make

their farming activities more profitable through innovations in agro-entrepreneurship.

Twenty student teams participated in the program’s first edition, with top-three

coming from the University of Santo Tomas and University of San Carlos. Team

Catalyst from USC designed a low-cost greenhouse with an LED lighting system to

shorten harvest time for lettuce and improve its quality.

The BLT School Feeding Program which started in 2007 providing daily lunch to

help undernourished children remain in school. The program has since taken a

different approach to further strengthen JGF’s support to the Department of

Education’s School Based Feeding Program (SBFB) in collaboration with Dep-Ed,

local government units and other organizations. BLT-School Feeding kitchens were

built to facilitate food preparation for a cluster of schools. Aside from providing

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 facilities and equipment parent volunteers in the Kitchens were also trained on

preparing healthy and nutritious recipes and food safety and quality standards, the

centralized process eases the implementation of SBFP and enables feeding more

children with a shorter preparation time. Eleven new Kitchens were built in 2018,

bringing the total number of across the country to 33 and serving thousands of

children daily.

3. Industry analysis
Jollibee experienced rapid growth. It was able to withstand the entry of McDonald's in

the Philippines in 1981 by focusing on the specific tastes of the Filipino market,

which differed from the American fast food company. On July 13, 1993, JFC was

listed at the Philippine Stock Exchange. In 2011, JFC opened 260 new stores, of

which 167 were in the Philippines led by Mang Inasal and Jollibee. This brought the

company's total number of stores to 2,001 as of the end of December 2011. The same

year, Jollibee closed Manong Pepe foodchain in favor of Mang Inasal, and sold

Délifrance to CaféFrance. Overseas, Jollibee opened 93 stores, led by Yonghe King in

China and Jollibee Vietnam. In 2013, Jollibee opened its first stores in Virginia

Beach, Virginia, as well as in Houston, Texas. Both locations were chosen for their

strong Filipino presence. A location in the Chicago suburb of Skokie, Illinois opened

up in July 2016. One year later, Jollibee opened its first Florida restaurant on March

18, 2017, located in Jacksonville. Jollibee expanded into Canada in November 2017

9
 by opening two restaurants in the Toronto area The Company acquired 80% of

Greenwich Pizza in 1994. From a 50-branch operation, Greenwich gradually

established a strong presence in the food service industry. In early 2006, Jollibee

Foods Corp. bought out the remaining shares of its partners in Greenwich Pizza Corp.,

equivalent to a 20% stake, for P384 million in cash. In 2000, the company acquired

Chowking, a Chinese fast food restaurant, thus making Jollibee a part of the Asian

quick service restaurant segment. In 2005, Jollibee acquired Red Ribbon, a bakeshop

business in the Philippines. On October 19, 2010, Jollibee acquired 70% share of

Mang Inasal, a Filipino food chain specializing in barbecued chicken, for P3 billion

($68.8 million).

JFC subsidiary Fresh N' Famous Foods, Inc. manages the Greenwhich and Chowking

brands. The Red Ribbon brand is under Red Ribbon Bakeshop Inc. which in turn is

managed by a holding company of the JFC, RRB Holdings, Inc. The firm has also

stakes on Burger King's outlets in the Philippines through Perf Restaurants, Inc. which

is 54 percent owned by JFC as of 2012.

D. Internal environment analysis

1. Corporate structure

10
Figure 2

2. Corporate culture

The brand name Jollibee was initially coined to denote bees busy and happily working

together to produce the sweetest honey.

Jollibee’s employer brand is beelong. The word “bee” in “Beelong” connotes employees

in Jollibee who are happily working together to produce the best results. By being a

member of the Jollibee family, employees find the belongingness they desire.

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 As an organization, Jollibee is committed to the continuous development of all its

people. With the support of its leaders, Jollibee provides development interventions

through the four Es: Experience, Exposure, Environment, and Education.

Through the development tools and coaching from Jollibee’s leaders, you are sure to

excel and make your mark in the organization.

In Jollibee, employees experience strong positive support through relationships they

have built inside the organization. Jollibee believes that employee happiness is the key

to prosperity in the organization as highly engaged employees are more productive

when they are happy in their workplace. With this, Jollibee continues to revolutionize

more ways to motivate employees through holistic engagement activities that boost

health and wellness, family bonds, work relations, and community relations.

V. Problems/Opportunities with statistical implication

A. Problem Statement

This paper aims to analyze the financial performance of Jollibee for the years 2010-2014, in

terms of ratio analysis. Specifically, this paper aims to answer the following questions:

1. Did the company performed well, in terms of managing corporate finance, during

2012– 2014?

2. Is the company projected to perform well the next financial year? ; and

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

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 B. Scope and Limitations

This study is bounded within the following scopes and limitations:

1. The study is limited to the data for the past five years. All other financial data

(Balance Sheet, Income Statement, etc.) not falling within this time frame are excluded from

the study;

2. The study used the audited consolidated financial statements of the company

(which can be downloaded on their website);

3. Subsidiaries of Jollibee were included in the study. This is tolerable because 95%

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

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

company against the prescribed industry averages, the updated industry average for

the Hotels and Restaurants industry cannot be obtained from the Hotel and

Restaurants Association of the Philippines (HRAP). The procurement of the industry

average for the Hotels and Restaurants industry was not possible due to time constraints. For

this reason, the researcher opted to use the industry averages for the American Restaurant

Industry, which can be easily obtained from csimarket.com. The researcher still finds this

effective because most of the competitors in the Philippine market are also competing in the

US market.

VI. Evidence of the problem/opportunity

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5
Financial Analysis of Jollibee Foods
Corporation and Subsidiaries For The Years
2010 – 2014 by Cristobal N. Rabino
SIGNIFICANCE OF THE
STUDY
This study was anticipated to be helpful and to contribute additional information to the

following stakeholders:

 Existing Investors. This study would provide existing investors an insight on how to

assess whether their stockholdings in JFC are performing well. This would also help them

in deciding whether to continue or not their respective shareholdings in the company.

 Prospective Investors. This would give them enough basis for evaluating the

performance of the company in order to make sound financial decisions on whether to

invest or not in this company.

 General Public. The study would provide them the basic knowledge on financial

management which would probably spark their interest on the subject matter.

14
  Academe. This study may serve as an actual reference case in teaching the basics

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

statements.

 Government and Regulatory Agencies. This study may provide vital information in

formulating a more comprehensive development agenda in the fast food industry. This

would encourage them to reexamine existing policies concerning the industry and its

stakeholders.

 Other Researchers. This can serve as an effective tool and reference for future researchers

who would intend to make any further relevant study.

VII. Statistical analysis, models or tools

A. SWOT Analysis

This table represents a synopsis of some of the current strengths, weaknesses or challenges,

opportunities and future prospects, and threats which may pose future risks to the company.

15
Figure 3

PEST ANALYSIS
B. PEST Analysis

PEST (Political, Economic, Social, and Technological) Analysis examines the macro-

environment in which the company operates. In this study, PEST Analysis is used to help in

the projection of financials, rather than just understanding the external landscape of the

industry.

16
Figure 4

17
Figure 5

C. Ratio Analysis
Generally, we can observe at first glimpse a strong and stable JFC as evidenced by the

increasing trend of its key financial ratios. JFC may have had a shaky 2011 and 2012, but

nevertheless the years after saw how JFC still managed to rise amidst the erratic movement

of its ratios in the mentioned years.

18
19
Figure 6

D.
D. Liquidity Ratio

Liquidity ratios are used to measure JFC’s ability to meet its short-term obligations as they mature.
Typically, it is used to answer the question ‘how quickly’ CEB can convert its assets to cash without
incurring any loss I value to meet short term obligations. The classical and the most commonly used
financial ratios in order to establish short-term liquidity are listed below.

E. Liquidity ratios are used to

measure JFC’s ability to meet
its short-term obligations as
they mature.

20
F. Typically, it is used to
answer the question “how
quickly” CEB can convert its
assets to cash without
G. incurring any loss in value to
meet short term obligations.
The classical and the most
commonly used
H. financial ratios in order to
establish short-term liquidity
are listed below
I. Liquidity ratios are used to
measure JFC’s ability to meet
21
 its short-term obligations as
they mature.
J.Typically, it is used to answer
the question “how quickly”
CEB can convert its assets to
cash without
K. incurring any loss in value to
meet short term obligations.
The classical and the most
commonly used
L. financial ratios in order to
establish short-term liquidity
are listed below
22
Figure 7

It is perilous for a company to show favorable liquidity ratios mainly in a business do not

provide a steady and predictable cash flow. The short-term liquidity ratios are used in

the evaluation of short-term liquidity to transform current assets into cash in order to

reduce the financial obligations of the company as they become due. These ratios are

particularly significant to the creditors and potential lenders of a company because they

determine the ability of that company to meet current payments of a debt (Horngren,

2006).

E. Current Ratio

F. 29
G.
H.Financial Analysis of Jollibee Foods
Corporation and Subsidiaries For The Years
2010 – 2014 by Cristobal N. Rabino
I. Figure 6.
23
J.Current Ratio
As shown in the chart below, JFC exhibited a strong growth over the past five years in its

current ratio. Current Ratio shows how the company’s current assets cover its current short-

term liabilities. Typically, a ratio higher than 1 is advised for it implies that the current assets

of the company are enough to pay for its short-term obligations as they fall due. Clearly, JFC

has shown that except in 2012 where the ratio is valued at 0.94. However, obtaining a close

to one value has a positive implication.

Figure 8

F. Quick Ratio

FC maintained to be above industry average, in terms of its quick ratio. Quick ratio

includes in its analysis only the quick assets of the company, or those that can be easily
24
converted to cash. It means that even though the company may have due and demandable

current liabilities, it can survive because it has a lot of assets that are liquid and can be easily

converted to cash when all else fails.

Figure 9

G. Vertical Analysis and Financial projections

H. 38
I.
J. Financial Analysis of Jollibee Foods
Corporation and Subsidiaries For The Years
2010 – 2014 by Cristobal N. Rabino
25
 K. VERTICAL ANALYSIS
AND FINANCIAL
PROJECTIONS
L.
M.
Vertical analysis of the Balance Sheet and Income Statement, where a line item is

expressed as a percentage of a certain amount, is presented on the appendices.

Financial projections, also presented on the appendices, show the researchers insights on how

JFC will perform financially for the next five years. Generally, trend analysis is done to

project the JFC’s financial underpinned by the SWOT, PESTLE, and other external factors

which may affect or may have impact on the operations, and ultimately to the financial health

of JFC

VIII. Strategies/alternatives involving statistical method/approach

IX. Conclusions and Recommendations

X.
In the light of the foregoing, the following conclusions are hereby made:

26
 1. The company performed well, generally, during 2010 – 2014 as evidenced by

above-industry average performance and upward trend on most financial indicators. In

spite of the economic downturns experienced by JFC, particularly in 2011 and 2012, the

company still managed to be financially healthy and recovered from little decline in 2013.

2. Based on the financial projections (as presented in the appendices), JFC will

continue to be financially well. The researcher has taken into account the external factors in

making financial projections.

3. Based on ratio analysis, and financial projections, the researcher deemed it appropriate

to advise the investors to BUY shares of JFC as it is forecasted to perform well for the next

12 months up to the next five years.

IX. References

Rabino, Cristobal. (2015). Financial Analysis of Jollibee Foods Corporation and Subsidiaries

For the Years 2010 - 2014. 10.13140/RG.2.2.31117.18400.

International Business, By Charles W L Hill and Arun K jain (McGraw th Hill Companies), 6

Edition

Jolibee official website

https://www.jollibee.com.ph/jollibee-careers/find-a-home-in-jollibee/

Business News Daily. "SWOT Analysis: What It Is and When to Use

It.https://www.businessnewsdaily.com/4245-swot-analysis.html"

27
Panmore. "Home Depot SWOT Analysis & Recommendations http://panmore.com/home-depot-
swot-analysis-recommendations”

Liquidity ratios are used to

measure JFC’s ability to meet its
short-term obligations as they
mature.
Typically, it is used to answer the
question “how quickly” CEB can
convert its assets to cash without
incurring any loss in value to
meet short term obligations. The
classical and the most commonly
used
28
financial ratios in order to
establish short-term liquidity are
listed below

29