E.

Financial Statement Analysis

2019 2020 2021 2022 2023

Asset turnover total assets/net sales 1.50x 1.77x 2.05x 2.33x 2.61x
Return on Net income/net sales 32.81% 35% 36.24% 37.84% 39.35%
sales
Return on Net 21.89% 18.50% 17.67% 16.22% 15.05%
investment income/investment
Payback period Investment/cash 52 mos and 10 59 mos and 65 mos and 71 mos 77 mos and
flows from operating days 12 days 12 days and 12 9 days
activities days

Working Capital is equal to current assets minus current liabilities.

The proposed business has a working capital of Php 6,051,655.36 on its first year, and on the preceding

years, working capital is increasing. If there is a debt, the firm will be able to pay it. As years goes by, the asset

turnover also increasing from 1.50x to 2.61x on its 5 th year. It indicates that the proposed business is solvent enough

to sustain it’s operation for a long period of time. Moreover, the return on sales of the proposed business on the first

year is 32.81% which means that 32.81% of the net sales is net income. Furthermore, return on investment shows

that in the first year of operation, 21.89% of the investment become income of the business. This means that the
business will be efficient because it generates high profit at lower cost. The investment will be returned to the

business at 52 months and 10 days on its first year, and as the investment increases the payback period becomes

longer.