Rochina,Jason M.

BSAIS 2A

Financial Management-Critical Thinking Exercise

Jollibee
Fast food restaurant company

Jollibee is a Filipino multinational chain of fast food restaurants owned by Jollibee Foods
Corporation. As of April 2018, JFC had a total of about 1,200 Jollibee outlets worldwide; with
restaurants in Southeast Asia, the Middle East, East Asia, North America, and Europe.

Horizontal Analysis-Income Statement

Jollibee Food Corporation And Subsidiaries

Comparative Income Statement

For the Year Ended Dec. 31,2019 and Dec. 31,2020

Consolidated Statement of Comprehensive Income Horizontal Analysis

Amounts in thousand pesos, Except per share data 2020 2019 Increase/Decrease

REVENUE

Gross sales P124,577,293 P170,291,063 45,713,770 27%

Sales discount (3,332,250 ) (3,381,699) (3,048,474)

0.01%

Net sales 121,245,043 166,909,364 (45,664,321) 27%

Royalty, set-up fees and others 6,467,134 9,715,716 (3,248,582) 33%

127,712,177 176,625,080 (48,912,903) 28%

PFRS 15 Impact on system-wide advertising fees 1,600,825 3,001,108 (1,400,283) 47%

129,313,002 179,626,188 (50,313,186) 28%

DIRECT COSTS 115,726,337 150,257,881 (34,531,544) 23%

GROSS PROFIT 13,586,665 29,368,307 (15,781,642) 54%

EXPENSES

General and administrative expense-net 23,754,221 18,906,734 4,847,487 74%

Advertising and promotions 2,643,907 3,982,583 (1,338,676) 34%

26,398,128 22,889,317 3,508,811 85%

INTEREST INCOME (EXPENSE)

Interest Income 226,616 400,657 (174,041) 43%

Interest Expense (3,787,652) (3,187,298) 600,354 81%

(3,561,036) (2,786,641) 774,395 72%

EQUITY IN NET EARNINGS (LOSSES) OF JOINT

VENTURES AND ASSOCIATES-Net
(1,081,308) 23,384 1,057,924 76%

OTHER INCOME- Net 4,161,177 6,850,218 (2,689,041) 39%

INCOME (LOSS) BEFORE INCOME TAX (13,292,630) 10,565,951 2,726,679 74%

PROVISION FOR (BENEFIT FROM) INCOME TAX

Current 1,546,619 3,255,664 (1,709,045) 52%

Referred (2,205,626) (200,494) 2,005,132 99%

(659,007) 3,055,170 (2,396,163) 74%

NET INCOME (LOSS) (12,633,623) 7,510,781 5,122,842 32%

OTHER COMPREHENSIVE INCOME (LOSS)

Other Comprehensive Income (loss) to be

reclassified to profit or loss in subsequent periods:

Translations adjustments of foreign subsidiaries (1,331,909) 428,818 903,091 89%

Translation adjustments of foreign joint ventures

and associates
69,126 (131,893) (62,767) 47%
 Comprehensive income (loss) on derivative
liability
(83,239) (141,093) (57,854) 41%

(1,346,022) 155,832 1,190,190 36%

Other comprehensive income (loss) not to be

reclassified to profit or less in subsequent periods:

Remeasurement gain (loss) on pension-net of tax

(435,722) (657,396) (221,674) 34%

(1,781,744) (501,564) 1,280,180 45%

TOTAL COMPREHENSIVE INCOME(LOSS) (P14,415,367 ) P7,009,217 7,406,150 94%

Net Income (Loss) Attributable to:

Equity holders of the Parent Company (P11,510,727) P7,302,726 4,208,001 42%

Non-controlling interest (1,122,896) 208,055 914,841 60%

(P12,633,623) P7,510,781 5,122,842 32%

Total Comprehensive Income (Loss) Attributable

to:

Equity holders of the Parent Company (P13,339,322) P6,748,918 6,590,404 2%

Non-controlling interests (1,076,045) 260,299 815,746 87%

(P14,415,367) P7,009,217 7,406,150 94%

Earnings (Loss) Per Share for Net Income( Loss)

Attributable to Equity Holders of the Parent
Company

Basic (P10.445) P6.684 3.761 44%

Diluted (10.433) 6.608 3.825 42%

 Horizontal Analysis-Balance Sheet

Jollibee Food Corporation And Subsidiaries

Comparative Balance Sheet

Dec. 31,2019 and Dec. 31,2020

2020 2019 Peso Percentage

ASSETS

Cash and cash equivalents P21,361,486 P20,892,021 P469,465 2.25%

Short-term investments 441,000 2,130,000 (1,689,000) 21%

Financial assets at fair value

through profit or loss
35,658,565 - - -

Receivable and contract assets 7,049,934 5,906,289 1,143,645 19.36%

Inventories 8,295,828 9,966,084 (1,670,256) 83%

Other current assets 7,233,744 6,725,008 508,736 8%

Total Current Assets 80,040,557 45,619,402 34,421,155 75%

Financial assets at fair value

through profit or loss
33,792 38,202 (4,410) 88%

Interests in and advances to

joint ventures, co-ventures and
associates
7,329,618 6,832,102 3,497,516 91%

Property, plant and equipment 28,684,131 32,592,122 (3,907,991) 88%

Right-of-use assets 34,224,143 42,466,962 (8,242,819) 81%

Investment properties 572,722 572,722 - -

Trademarks, goodwill and other

intangible assets
50,224,078 50,815,332 (591,254) 99%

Operating lease receivables 87,160 98,749 (11,589) 88%

Finance lease receivables 70,800 161,934 (91,134) 44%

Deferred tax assets-net 6,114,384 4,449,262 1,665,122 37%

Other noncurrent assets 3,428,745 3,795,974 (367,229) 90%

Total Noncurrent Assets 130,769,573 141,823,361 (11,026,788) 92%

Total Assets P210,810 P187,442,763 (187,231,953) -

LIABILITIES AND EQUITY

Trade payables and other

current liabilities and contract
P31,366,014 P34,317,557 (2,951,543) 91%
liabilities

Income tax payable 196,658 391,914 (195,256) 50%

Short-term debt 15,875,457 22,180,320 (6,304,863) 72%

Current portion of:

Lease liabilities 6,479,140 7,036,754 (557,614) 92%

Long-term debt 4,720,096 3,415,975 1,304,121 38%

Provisions 291,110 - - -

Liability for acquisition of a - 2,800 - -

business

Total Current Liabilities 58,928,475 67,345,320 (8,416,845) 88%

Senior debt securities 28,628,999 - - -

Noncurrent portion of:

Lease liabilities 32,604,585 40,270,650 (7,666,065) 81%

Long-term debt 14,538,117 19,179,748 (4,641,631) 76%

Interest in an associate 127,894 - - -

Pension liability 2,917,500 2,221,320 696,180 31%

Derivative liability 141,480 58,241 83,239 43%

Provisions 1,035,636 825,109 210,527 26%

Deferred tax liabilities-net 3,855,579 4,172,633 (317,054) 92%

Total Noncurrent Liabilities 83,849,790 66,727,701 17,122,089 26%

Total Liabilities P142,778,265 P134,073,021 P8,705,244 6%

Equity Attributable to Equity

Holders of the Parent Company

Capital stock-net of subscription

receivable
1,105,079 1,092,971 12,108 1%

Additional paid-in capital 9,913,890 8,797,360 1,116,530 13%

Other reserve 1,877,400 1,877,400 - -

Cumulative translation
adjustments of foreign
subsidiaries and interests in
joint ventures and associates (477,554) 832,080 (354,526) 57%

Remeasurement loss on net

defined benefit plan-net of tax
(1,401,113) (965,391) (435,722) 45%

Comprehensive loss on
derivative liability
(141,480) (58,241) (83,239) 43%

Excess of cost over the carrying

value of non-controlling
interests acquired
(2,026,340) (1,804,766) (221,574) 12%

Retained earnings:

Appropriated for future

expansion
 20,000,000 20,000,000 - -

Unappropriated 9,869,889 23,879,437 (14,009,548) 41%

38,539,260 53,470,339 (14,931,079) 72%

Less cost of common stock held

in treasury
180,511 180,511 - -

38,539,260 53,470,339 (14,931,079) 72%

Senior perpetual securities 30,588,000 - - -

Non-controlling interests (1,095,395) (100,597) (994,798) 89%

Total Equity 68,031,865 53,369,742 14,662,123 27%

P210,810,130 P187,442,763 23,367,367 12%

Vertical Analysis-Income Statement

Jollibee Food Corporation And Subsidiaries

Comparative Income Statement

Dec. 31,2019 and Dec. 31,2020

Amounts in thousand pesos, Except per share data 2020 2019 2020 2019
REVENUE

Gross sales P124,577,293 P170,291,063 2.75%

2.02%

Sales discount (3,332,250 ) (3,381,699) 2.75%

2.02%

Net sales 121,245,043 166,909,364 100% 100%

Royalty, set-up fees and others 6,467,134 9,715,716 3.33% 5.82%

127,712,177 176,625,080 5.33% 5.82%

PFRS 15 Impact on system-wide advertising fees 1,600,825 3,001,108 1.32% 1.80%

129,313,002 179,626,188 6.65% 7.62%

DIRECT COSTS 115,726,337 150,257,881 95.45%

90.02%

GROSS PROFIT 13,586,665 29,368,307 11.21% 17.60%

EXPENSES

General and administrative expense-net 23,754,221 18,906,734 19.59% 11.33%

Advertising and promotions 2,643,907 3,982,583 2.18% 2.39%

26,398,128 22,889,317 21.77% 13.71%

INTEREST INCOME (EXPENSE)

Interest Income 226,616 400,657 0.19% 0.24%

Interest Expense (3,787,652) (3,187,298) 3.12% 1.91%

(3,561,036) (2,786,641) 2.94% 1.67%

EQUITY IN NET EARNINGS (LOSSES) OF JOINT

VENTURES AND ASSOCIATES-Net
(1,081,308) 23,384 0.89% 0.01%

OTHER INCOME- Net 4,161,177 6,850,218 3.43% 4.10%

INCOME (LOSS) BEFORE INCOME TAX (13,292,630) 10,565,951 10.96% 6.33%

PROVISION FOR (BENEFIT FROM) INCOME TAX

Current 1,546,619 3,255,664 1.28% 1.95%

Referred (2,205,626) (200,494) 1.82% 0.12%

(659,007) 3,055,170 0.54% 1.83%

NET INCOME (LOSS) (12,633,623) 7,510,781 10.42% 4.50%

OTHER COMPREHENSIVE INCOME (LOSS)

Other Comprehensive Income (loss) to be

reclassified to profit or loss in subsequent periods:

Translations adjustments of foreign subsidiaries (1,331,909) 428,818 1.10% 0.26%

Translation adjustments of foreign joint ventures

and associates
69,126 (131,893) 0.06% 0.08%

Comprehensive income (loss) on derivative

liability
(83,239) (141,093) 0.07% 0.08%

(1,346,022) 155,832 1.11% 0.10%

Other comprehensive income (loss) not to be

reclassified to profit or less in subsequent periods:

Remeasurement gain (loss) on pension-net of tax

(435,722) (657,396) 0.36% 0.40%

(1,781,744) (501,564) 1.47% 0.30%

TOTAL COMPREHENSIVE INCOME(LOSS) (P14,415,367 ) P7,009,217 11.89% 4.20%

Net Income (Loss) Attributable to:

Equity holders of the Parent Company (P11,510,727) P7,302,726 9.49% 4.38%

Non-controlling interest (1,122,896) 208,055 0.93% 0.12%

(P12,633,623) P7,510,781 10.42% 4.50%

Total Comprehensive Income (Loss) Attributable

to:

Equity holders of the Parent Company (P13,339,322) P6,748,918 11% 4.04%

Non-controlling interests (1,076,045) 260,299 00.89% 0.16%

(P14,415,367) P7,009,217 11.89% 4.20%

Earnings (Loss) Per Share for Net Income( Loss)

Attributable to Equity Holders of the Parent
Company

Basic (P10.445) P6.684 8.61% 4%

Diluted (10.433) 6.608 8.60% 3.96%

Vertical Analysis-Balance Sheet

Jollibee Food Corporation And Subsidiaries

Comparative Balance Sheet

Dec. 31,2019 and Dec. 31,2020

PERCENTAGE

2020 2019 2020 2019

ASSETS

Cash and cash equivalents P21,361,486 P20,892,021 33.05% 11.15%

Short-term investments 441,000 2,130,000 9.19% 1.14%

Financial assets at fair value

through profit or loss
35,658,565 - - -

Receivable and contract assets 7,049,934 5,906,289 44.21% 3.15%

Inventories 8,295,828 9,966,084 35.21% 5.32%

Other current assets 7,233,744 6,725,008 31.40% 3.59%

Total Current Assets 80,040,557 45,619,402 68.10% 24.34%

Financial assets at fair value

through profit or loss
 33,792 38,202 16.02% 0.02%

Interests in and advances to joint

ventures, co-ventures and
associates
7,329,618 6,832,102 76.88% 3.64%

Property, plant and equipment 28,684,131 32,592,122 6.62% 17.39%

Right-of-use assets 34,224,143 42,466,962 34.59% 22.66%

Investment properties 572,722 572,722 71.68% 0.31%

Trademarks, goodwill and other

intangible assets
50,224,078 50,815,332 24.33% 27.10%

Operating lease receivables 87,160 98,749 41.34% 0.05%

Finance lease receivables 70,800 161,934 33.58% 0.09%

Deferred tax assets-net 6,114,384 4,449,262 0.42% 2.37%

Other noncurrent assets 3,428,745 3,795,974 26.46% 2.02%

Total Noncurrent Assets 130,769,573 141,823,361 3.19% 75.66%

Total Assets P210,810 P187,442,763 100% 100%

LIABILITIES AND EQUITY

Trade payables and other current

liabilities and contract liabilities
P31,366,014 P34,317,557 21.97% 25.6%

Income tax payable 196,658 391,914 0.14% 0.29%

Short-term debt 15,875,457 22,180,320 11.12% 16.54%

Current portion of:

Lease liabilities 6,479,140 7,036,754 4.54% 5.25%

Long-term debt 4,720,096 3,415,975 3.31% 2.55%

Provisions 291,110 - - -
Liability for acquisition of a - 2,800 - -
business

Total Current Liabilities 58,928,475 67,345,320 41.27% 50.23%

Senior debt securities 28,628,999 - - -

Noncurrent portion of:

Lease liabilities 32,604,585 40,270,650 22.84% 30.04%

Long-term debt 14,538,117 19,179,748 10.18% 14.31%

Interest in an associate 127,894 - - -

Pension liability 2,917,500 2,221,320 2.04% 1.66%

Derivative liability 141,480 58,241 0.10% 0.04%

Provisions 1,035,636 825,109 0.72% 0.62%

Deferred tax liabilities-net 3,855,579 4,172,633 2.70% 3.11%

Total Noncurrent Liabilities 83,849,790 66,727,701 58.72% 49.77%

Total Liabilities P142,778,265 P134,073,021 100% 100%

Equity Attributable to Equity

Holders of the Parent Company

Capital stock-net of subscription

receivable
1,105,079 1,092,971 0.52% 0.58%

Additional paid-in capital 9,913,890 8,797,360 4.70% 4.69%

Other reserve 1,877,400 1,877,400 0.89% 1%

Cumulative translation
adjustments of foreign subsidiaries
and interests in joint ventures and
associates (477,554) 832,080 0.23% 0.44%

Remeasurement loss on net

defined benefit plan-net of tax
(1,401,113) (965,391) 0.66% 0.52%
Comprehensive loss on derivative
liability
(141,480) (58,241) 0.07% 0.03%

Excess of cost over the carrying

value of non-controlling interests
acquired
(2,026,340) (1,804,766) 00.96% 0.96%

Retained earnings:

Appropriated for future

expansion
20,000,000 20,000,000 9.49% 10.67%

Unappropriated 9,869,889 23,879,437 4.68% 12.74%

38,539,260 53,470,339 18.28%

Less cost of common stock held in

treasury
180,511 180,511 0.09% 0.10%

38,539,260 53,470,339 18.28% 28.53%

Senior perpetual securities 30,588,000 - - -

Non-controlling interests (1,095,395) (100,597) 0.52% 0.05%

Total Equity 68,031,865 53,369,742 32.27% 28.47%

P210,810,130 P187,442,763 100% 100%

Financial Ratio Analysis

Liquidity Ratio 2020 2019

Current Ratio 1.35 0.68

Quick Ratio 1.34 0.67

Leverage Ratios 2020 2019

Debt-to-Total- Asset- Ratio .77 0.71

Debt-to-Equity 2.10 2.68

Activity Ratio 2020 2019

Total Asset Turn Over 575.13 0.89

Inventory Turn Over 13.95 15.07

Profitability Income 2020 2019

Gross Profit Margin 0.9 0.15

Operating Profit Margin