Kiara Gabrielle V.

Gelle December 15, 2020

ACCCOB2 Mr. Francisco Villamin Jr.

Online Reflection Paper 2

I have chosen Jollibee because I see potential and growth in the company, and of course
because I am a big fan of their products as well. In this reflection paper, I would determine
whether Jollibee’s financial statements and balance sheet would project more growth in the
incoming years in terms of their current assets and expenses. With this, I would be assessing in
this reflection paper their short-term and long-term investments and see how they stand as a
company this year of 2020. I would be able to determine if they prioritize short-term goals or
long-term ones. On the other hand, I would also be investigating or observing whether or not
JFC’s inventory assets and inventory turnover would show them growth in the last quarter of the
year 2020.

**see next page to continue**

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Company: Jollibee Foods Corporation

Acccob2​ – Reflection paper No. 2

Topic Reflection/Observation

Investments in According to WSJ website, Jollibee Foods Corporation has a total assets
Equity and Debt of around 200 Billion recorded annually for the year 2020. It actually has
Instruments increased as opposed to the past years namely 2015 to 2017 where JFC
only had around 60 Billion to 89 Billion in total assets. In 2019, it caught
up to 187 Billion. This goes to show how that the balance sheet says JFC
has been growing and had its peak so far in the year 2020. These are
financial instruments or assets at fair value, also includes intangible
assets amounting to 35B in the year 2019 (latest), which is also
significantly higher than former years which tend to be 2B to 17B only.
In terms of short and long term investments, there’s a huge difference as
short term is much higher than long term investment amounting to 23B
while long term is only 7.4B. This could mean that Jollibee could have
main projects that they want to attain easily in this period of time.
Short-term investments include assets such as bonds, cash, and annuities
which can be used to provide for goals like opening up more branches or
developing new marketing campaigns. Afterall, Jollibee is known for its
#kwentongjollibee campaign they have been producing since the start of
time. In this time of the pandemic, I personally think no one can
accurately predict the full extent of the impact the COVID-19 crisis will
ultimately have on the financial well-being of businesses. However, one
thing is clear—the prognoses of companies can change incredibly
quickly. Therefore, ensuring your organization has the liquidity it needs
to weather these worst of storms is among the single most essential
actions company directors can take.

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Inventories JFC, being a service business, will be hard to distinguish its inventory. ​In
a service industry, since there is no exchange of physical stock, the
inventory is mostly intangible in nature. So the service industry inventory
mostly includes the steps involved before completing a sale. Looking at
JFC’s annual balance sheet, we can see that the total inventory in the year
2019 is 9.9B which is still a little higher than 2016 to 2018. Let us see if
Jollibee efficiently runs its company by monetizing its inventory. Jollibee
Foods's Days Sales of Inventory for the three months ended in Sep. 2020
is total inventories (Q: Sept. 2020) over cost of goods sold (Q: Sept.
2020) times days of period equals 194.58/554.60*365/4 is equals to
32.01. As we can see, the DSI is high which could mean inefficient use
of inventory, outsourced production, and stuffing warehouses in
anticipation for a higher number of orders in the next accounting period.
Because of the pandemic, people are less likely to go out of their homes
which explains the inefficient use or monetization of Jollibee’s inventory.
I think the same goes for other businesses as well because we can’t really
avoid the situation right now and it is a really tough time for businesses
to sell goods to consumers. For computing the inventory turnover for the
quarter that ended in Sep. 2020, inventory turnover equals to cost of
goods sold (Q: Sept 2020) over total revenue (Q: Sept 2020) equals
554.60/194.58 equals 2.85. This low inventory turnover means low sales,
too much inventory or overstocking and poor liquidity of its inventory.
This is shocking because this goes to show that JFC for the quarter of
September 2020 was not effective or efficient in inventory management,
in other words, it could mean that JFC is not able to sell what it buys.

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References

Investing.com (2020). Jollibee Foods Corporation. Retrieved from

https://ph.investing.com/equities/jollibee-foods-balance-sheet

Wsj.com (2020). Jollibee Foods Corporation. Retrieved from

https://www.wsj.com/market-data/quotes/PH/XPHS/JFC/financials