CASE PROBLEM

❖ Create an Analysis on the revenue of the Agency on a year to year basis. Include in the
analysis the following:

(1) percentage of movement

2021 revenue 5,879,419.21
2020 revenue (6,707,019.86)
Decrease (827,600.65)/ 6,707,019.86 x 100 = -12.34%

• In the Statement of Financial Performance of Department of Finance for the year 2020
and 2021, the percentage movement shows a decrease of 12.34% which means that
the revenue from 2020 to 2021 had decreased.

(2) highest contributor in total revenue 2021

• The highest contributor in the total revenue in 2021 is the miscellaneous income
amounting to 3,442,998. This data is based from the given Statement of Financial
Performance of the Department of Finance for year 2021.

(3) new revenue streams in 2021

• The revenue stream for the year 2021 is same as for the year 2021. This data is from
the Statement of Financial Performance of Department of Finance.

❖ Create an Analysis of the expenses of the Agency on a year to year basis. Include in the
analysis the following:

(1) percentage of movement per object of expenditure

2021 2020 Increase/ Decrease %
Personal Service 538,091,534.30 462,210,560.69 75,880,973.61 16.42%
 Maintenance and Other
538,091,534.30 288,724,273.24 27,279,563.97 9.45%
Operating Expense

Financial Expense 6,073.20 5,622.20 451.00 8.02%

Non-Cash Expense 119,770,225.48 130,677,053.81 (10,906,828.33) -8.35%

• For a narrative presentation, data’s given from the Statement of Financial

Performance of Department of Finance, it shows that Personal Service had
increased by 16.42%, the Maintenance and Other Operating Expense also
increased by 9.45%, the Financial Expense also increased by 8.02%, and the
Non-cash expense had decreased to 8.35%.

(2) highest (object of) expenditures during the year 2021

• The highest object of expenditure during the year 2021 is the Personal
Services amounting to 538,091,534.30. This data is based on the Statement
of the Financial Performance of Department of Finance for year 2021.

(3) new expenses in the latest year 2021

• The new expenses is Non-Accountable Forms Expenses amounting to 193,480
under the Maintenance and Other Operating Expenses. This data is from the
Statement of the Financial Performance of Department of Finance for year
2021.

❖ Create a Narrative Analysis on the following Financial Statement Ratios:

● Current & Quick Ratio

Current Ratio = Current Asset
Current Liabilities
= 85,674,933.80
72,792,290.75
Current Ratio = 1.18
 • The current ratio is 1.18 which means that the assets are greater than the
liabilities and it tells that the obligations can be paid.

Quick Ratio = Current Asset - Inventories

Current Liabilities
= 85,674,933.80 - 11,034,388.01
72,792,290.75
Quick Ratio = 1.03

• It shows that the company can pay its current obligation within the year
because the current assets are greater than current liabilities.

● Government Revenue Ratio

Government Revenue Ratio = Revenue Stream/ Total Revenue

= 2,456,421.21 / 5,879,491.51

Government Revenue Ratio = 0.42

• The computation shows a government revenue ratio of 0.4 which means that
0.42 of the revenue is coming from the service and business income.

● Debt to Assets
Debt to Asset Ratio = Total Liabilities/ Total Assets
= 72,792,290.75 / 1,594,531,326.19
Debt to Asset Ratio = 0.046
• Since the ratio is less than 1, it suggests that the company has debts 0.046
times of its assets. It states that it has more assets than liabilities. The
company can fund its liabilities by selling assets if need be. The lower the debt-
to-asset ratio, the better it is for the company.
● Operating Cash Flow
Operating Cash Flow Ratio = Cash Flow from operation/ Current Liabilities

= (134,911,372.42) / 72,792,290.75

Operating Cash Flow Ratio = -1.85

• The result in the operating cash flow ratio had decreased by 1.85 which means
that the company needs more capital to survive.