1.

HORIZONTAL AND VERTICAL ANALYSIS

A.) HORIZONTAL AND VERTICAL ANALYSIS (OMNIBUS BIO-MEDICAL SYSTEMS INC)

HORIZONTAL VERTICAL
2015 2014
Amount Percentage 2015 2014

REVENUE 125,655,609 94,044,315 31,611,294 33.61% 100.00% 100.00%

COST OF SALES 110,286,260 80,166,939 30,119,321 37.57% 87.77% 85.24%

GROSS PROFIT 15,369,349 13,877,376 1,491,973 10.75% 12.23% 14.76%

DISTRIBUTION COSTS/SELLING
EXPENSES 1,963,063 1,416,055 547,008 38.63% 1.56% 1.51%
ADMINISTRATIVE EXPENSES 12,793,514 11,871,555 921,959 7.77% 10.18% 12.62%

NET INCOME BEFORE INCOME

TAX 612,772 589,766 23,006 3.90% 0.49% 0.63%
INCOME TAX EXPENSE
(BENEFIT)
CURRENT 307,387 277,548 29,839 10.75% 0.24% 0.30%
DEFERRED (123,555) (100,618) (22,937) 22.80% -0.10% -0.11%
183,832 176,930 6,902 3.90% 0.15% 0.19%

NET INCOME AFTER INCOME

TAX 428,940 412,836 16,104 3.90% 0.34% 0.44%

B.) HORIZONTAL AND VERTICAL ANALYSIS (DAKILA TRADING CORPORATION)

HORIZONTAL VERTICAL
2015 2014
Amount Percentage 2015 2014

SALES 135,055,797 118,914,181 16,141,616 13.57% 100.00% 100.00%

COST OF SALES 81,178,801 70,332,726 10,846,075 15.42% 60.11% 59.15%

GROSS MARGIN OF SALES 53,876,995 48,581,455 5,295,541 10.90% 39.89% 40.85%

OPERATING EXPENSES 43,802,252 39,671,234 4,131,018 10.41% 32.43% 33.36%

NET INCOME FROM OPERATIONS 10,074,744 8,910,221 1,164,523 13.07% 7.46% 7.49%

OTHER (EXPENSES) INCOME

Interests & bank charges (1,203,688) (1,197,829) -5,859 0.49% -0.89% -1.01%
 Interests earned 9,859 8,679 1,180 13.60% 0.01% 0.01%
(1,193,829)
NET INCOME BEFORE INCOME TAX 8,880,915 7,721,071 1,159,844 15.02% 6.58% 6.49%

PROVISION FOR INCOME TAX 2,662,870 2,315,085 347,785 15.02% 1.97% 1.95%

NET INCOME AFTER INCOME TAX 6,218,044.60 5,405,985.62 812,059 15.02% 4.60% 4.55%

2.) RATIOS ANALYSIS AND INTERPRETATION

A.) OMNIBUS BIO-MEDICAL SYSTEMS INC.

LIQUIDITY and Interpretation or status

FORMULA 2015 2014
A ACTIVITY RATIOS qou of the firm's

Current assets Ability to cover short term

1.) Current ratio 1.26 1.24 debt as it comes due.
Current liabilities
Firms ratio is poor an ideal
ratio is atleast 2:1
Cash and all receivables
2.) Quick ratio 0.19 0.13 Firm ratio is not good it's
Current liabilities shows the inability to
covered current liabilities
Net credit sales Measure average length
3.) Receivables turnover 23.28 13.26 of time it takes then firm
Trade receivables (BS)
to collect the sales made
on credit. Status is strong
365 days Indicate the average
Collection period 15.68 27.52 length of the firm must
Receivables turnover
wait after making a sale
before it receives
payment
4.) Cost of sales Ideal ratio is at least 8 times
Inventory turnover 1.61 0.98 indicate good turn over not
Inventory (BS)
overstocking as for trading
business line. Poor status.
Days to sell 365 days Firms inventory stock for
227.12 373.77 long period of time.
inventories Inventory turnover
Indicates poor inventory
control
PROFITABILITY
B
RATIOS

Net income after tax Firms measure profit

5.) Net profit margin 0.34% 0.44% percentage per peso sales.
Revenue Very low profit rate

6.) Return on total assets Net income after tax 0.48% 0.42% Measure the of the return of total

Return on
7.)
Stockholders Equity
Earning per share
8.)
No. of common shares outstanding (BS)
Book value per share
9.)
No. of common shares outstanding (BS)
10.) Price/Earnings ratio
C SOLVENCY RATIOS
11.) Debt to Assets
12.) Debt to Equity
13.) Equity to Assets
14.) Times interest earned
B.) DAKILA TRADING CORPORATION
A PROFITABILITY RATIOS
1.) Current ratio
2.) Quick ratio
Total Assets (BS) investment in the firm. Indicate
ineffective assets employed by the
management.
Net income after tax
2.07% 2.04% Measure the percentage of
Total Stockholders' Equity income for every peso of
owner’s equity. Poor status.
Net income after tax Measures the rate of
0.0429 0.0413 earnings per share of
common stock. Indicate low
return
Indicate the value of the stock on
Stockholders equity's 2.07 2.03
the perspective, the relevance of
this ratio diminishes when the
balance sheet valuation does not
approach market values.
Price per share Its show how may times the
48.29 49.14 annual earnings the present
Earning per share shareholders are willing to pay
to get the share.
Total liabilities Firm’s relative share of
0.77 0.79 creditors over the total
Total Assets
resources of the firm is high.
Indication of poor structure.
Total liabilities Firms ability to pay its
3.29 3.87 long term creditors
Total SHE
indicates poor financial
structure
Total SHE Firm's amount of resources
0.23 0.21 provide by owners is low.
Total Assets
Indication of poor long term
solvency.
Income before interest &
taxes n/a n/a No Available loans
Interest expenses
Interpretation or status qou of
2015 2014
the firm's
3.19 2.89 Ability to cover short term debt
as it comes due. Firms ratio is
stable more than the ideal 2:1
Firm's ratio is very stable to cover
2.83 2.52
the current due.
3.) Receivables turnover
Collection period
4.) Inventory turnover
6.40 6.61 Measure average length of time
it takes the firm’s to collect the
sales made on credit. Status is
strong
57.07 55.24 Indicate the average length of
the firm must wait after making a
sale before it receives payment
Ideal ratio is at least 8 times indicate
40.47 36.67 good turn over not overstocking as
for trading business line. Strong
status.

Days to sell inventories 9.02 9.95 Firm's stock sells immediately to

customer. Indicates good inventory
control

Firms measure profit percentage per

5.) Net profit margin 4.60% 4.55%
peso sales. Low profit but growing

6.) Return on total assets 10.24% 9.88% Measure the return of total investment
in the firm. Indicate effective assets
employed by the management.

7.) Return on Stockholders 13.59% 13.50% Measure the percentage of income

Equity for every peso of owner’s equity.
High returns

8.) Earning per share 34.54 30.03 Measures the rate of earnings per
share of common stock. Indicate
high return
Indicate the value of the stock on the
9.) Book value per share 254.17 222.44 perspective, the relevance of this ratio
diminishes when the balance sheet valuation
does not approach market values.

10.) Price/Earnings ratio 7.36 7.41 Its show how many times the annual
earnings the present shareholders are
willing to pay to get the shares.

C SOLVENCY RATIOS

11.) Debt to Assets 0.25 0.27 Firm’s relative share of creditors

over the total resources of the firm
is low. Indication of strong structure.

12.) Debt to Equity
13.) Equity to Assets
0.33 0.37 Firm’s ability to pay its long term
creditor are stable and strong
financial structure.
Firm's amount of resources provide
0.75 0.73 by owners is high. Indication of
strong solvency.
 Firm ability to pay its interest
14.) Times interest earned 8.37 7.44
when due is very stable.

3.) RATIOS CONSOLIDATED TABLES SUMMARY

OMNIBUS DAKILA Ideal ratios for

Ratios summary
2015 2014 2015 2014 Trading
1 Current ratio 1.26 1.24 3.19 2.89 Atleast 2:1
2 Quick ratio 0.19 0.13 2.83 2.52 Atleast 1:1
Normal 6 - 12
3 Receivables turnover (times) 23.28 13.26 6.40 6.61 times
Normal 30 -60
Collection period (Days) 15.68 27.52 57.07 55.24 Days
4 Inventory turnover (times) 1.61 0.98 40.47 36.67 Normal 8-12 times
Normal 30 -60
Days to sell inventories (Days) 227.12 373.77 9.02 9.95 Days
5 Net profit margin 0.34% 0.44% 4.60% 4.55% Atleast 5-10%
6 Return on total assets 0.48% 0.42% 10.24% 9.88% Atleast 10-12%
7 Return on Stockholders Equity 2.07% 2.04% 13.59% 13.50% Atleast 12-15%
8 Earning per share 0.0429 0.0413 34.54 30.03 Higher the better
9 Book value per share 2.07 2.03 254.17 222.44 Higher the better
10 Price/Earnings ratio 48.29 49.14 7.36 7.41 Higher the better
11 Debt to Assets 0.77 0.79 0.25 0.27 Ideal 0.5:1
12 Debt to Equity 3.29 3.87 0.33 0.37 Ideal 2:1
13 Equity to Assets 0.23 0.21 0.75 0.73 Ideal 0.5:1
14 Times interest earned n/a n/a 8.37 7.44 atleast 2:1

4.) BEST COURSES OF RATIO ANALYSIS

Best Alternative Course of action based on consolidated table analysis is Dakila Trading Corporation. Its
shows that based on the above ratio analysis Dakila Trading Corporation are continuously growing,
profitable and stable financial structure for profitability, liquidity and solvency ratios results.

5. Budgeted Statement of Financial Position and Statement of Financial Performance

A.) OMNIBUS BIO- MEDICAL SYSTEMS INC

OMNIBUS BIO-MEDICAL SYSTEMS INC.

THREE YEARS BUDGETED STATEMENTS OF FINANCIAL PERFORMANCE

YEARS 2015 2016 2017 2018

REVENUE 125,655,609 168,378,516 225,627,212 302,340,463
 Ratio cost sales/Total
COST OF SALES 110,286,260 revenue 147,783,588 198,030,008 265,360,211
GROSS PROFIT 15,369,349 20,594,928 27,597,203 36,980,252
DISTRIBUTION COSTS/SELLING Ratio of DCSE/Total
EXPENSES 1,963,063 Revenue 2,630,504 3,524,876 4,723,334
ADMINISTRATIVE EXPENSES 12,793,514 Ratio of AE/Total revenue 17,143,309 22,972,034 30,782,525
NET INCOME BEFORE INCOME TAX 612,772 821,114 1,100,293 1,474,393
INCOME TAX EXPENSE (BENEFIT) 183,832 CIT at 30% 246,334 330,088 442,318
NET INCOME AFTER INCOME TAX 428,940 574,780 770,205 1,032,075

OMNIBUS BIO-MEDICAL SYSTEMS INC.

THREE YEARS BUDGETED STATEMENTS OF FINANCIAL POSITION

YEARS 2015 2016 2017 2018

CURRENT ASSETS
Cash 965,735 Ratio of cash/Revenue 1,294,084.90 1,734,073.77 2,323,658.85
Trade and Other Receivables 11,845,835 Ratio of TOR/Revenue 15,873,419 21,270,381 28,502,311
Merchandise Inventory 68,625,875 Ratio MI/Revenue 91,958,673 123,224,621 165,120,992
Other Current Assets 4,828,545 Ratio of OCA/Revenue 6,470,250 8,670,135 11,617,981
Total Current Assets 86,265,990 115,596,427 154,899,212 207,564,944
Non-Current Assets 2,675,162 Ratio of NCA/Revenue 3,584,717 4,803,521 6,436,718
Total Assets 88,941,152 119,181,144 159,702,733 214,001,662

LIABILITIES AND EQUITY

Total current liabilities 68,227,438 Ratio of TCL/Revenue 91,424,767 122,509,188 164,162,311
Total shareholders' equity 20,713,714 Ratio of TSE/Revenue 27,756,377 37,193,545 49,839,350
Total Liabilities and Equities 88,941,152 119,181,144 159,702,733 214,001,662

Forecasted Revenue 135,055,797 At 14% increased annually 153,963,608 175,518,513 200,091,105

DAKILA TRADING CORPORATION

THREE YEARS BUDGETED STATEMENT OF FINANCIAL PERFORMANCE

YEARS 2015 2016 2017 2018

SALES 135,055,797 153,963,608 175,518,513 200,091,105
Ratio cost sales/Total
COST OF SALES 81,178,801 revenue 92,543,833 105,499,970 120,269,966
GROSS MARGIN OF SALES 53,876,995 61,419,775 70,018,543 79,821,139
Ratio of DCSE/Total
OPERATING EXPENSES 43,802,252 Revenue 49,934,567 56,925,406 64,894,963
NET INCOME FROM OPERATIONS 10,074,744 11,485,208 13,093,137 14,926,176
OTHER (EXPENSES) INCOME 1,193,829 Ratio of OEI/Total Revenue 1,360,965 1,551,500 1,768,710
NET INCOME BEFORE INCOME TAX 8,880,915 10,124,243 11,541,637 13,157,466
PROVISION FOR INCOME TAX 2,662,870 CIT at 30% 3,037,272.79 3,462,490.98 3,947,239.72
NET INCOME AFTER INCOME TAX 6,218,045 7,086,970 8,079,146 9,210,226

DAKILA TRADING CORPORATION

THREE YEARS BUDGETED STATEMENT OF FINANCIAL POSITION

YEARS 2015 2016 2017 2018

CURRENT ASSETS
Ratio of
Cash on hand & in banks 1,987,584 COHIB/Revenue 2,265,845 2,583,064 2,944,692
Advances to officers and employees 298,868 Ratio of AOE/Revenue 340,709 388,408 442,785
Accounts receivable trade and non-
trade 21,770,982 Ratio ARTN/Revenue 24,818,920 28,293,569 32,254,668
Inventories 2,005,879 Ratio of Inv/Revenue 2,286,702 2,606,840 2,971,798
Input tax 930,989 Ratio of IT/Revenue 1,061,327 1,209,913 1,379,301
Prepaid expenses 87,695 Ratio of PE/Revenue 99,973 113,969 129,925
Total Current Assets 27,081,996 30,873,476 35,195,762 40,123,169
Non-Current Assets 33,635,864 38,344,884 43,713,168 49,833,012
Total Assets 60,717,860 69,218,360 78,908,931 89,956,181