A.

Common sizing

Table 26. Return on Capital Employed

2013 2014 2015 2016 2017

ASSETS

CURRENT
Cash 1.79% 3.64% 2.05% 7.63% 14.42%
Receivables 40.15% 45.33% 43.23% 42.61% 35.97%
Inventories 3.67% 2.96% 1.92% 2.88% 3.57%
Others 4.71% 1.11% 1.46% 1.22% 1.32%
50.33% 53.04% 48.66% 54.34% 55.28%

NONCURRENT
Property & Equipment, net 49.67% 46.96% 51.34% 45.66% 44.72%

TOTAL ASSETS 100.00% 100.00% 100.00% 100.00% 100.00%

LIABILITIES AND STOCKHOLDERS'

EQUITY

CURRENT
Accounts Payable 25.42% 26.63% 28.59% 28.61% 35.79%
Current Portion of Loans Payable 24.08% 9.34% 8.83% 3.69% 2.53%
Others 5.20% 5.84% 5.38% 5.29% 5.19%
54.70% 41.81% 42.80% 37.58% 43.51%

NONCURRENT
Loans Payable - net of current portion 2.83% 20.07% 10.31% 17.99% 10.26%
Others 9.00% 1.06% 1.14% 1.01% 1.22%
11.84% 21.13% 11.46% 19.00% 11.48%

STOCKHOLDERS' EQUITY
Share Capital 10.50% 10.92% 11.78% 10.44% 10.18%
Retained Earnings 22.96% 29.41%
Unappropriated 6.49% 5.14% 7.69%
Appropriated 27.48% 27.84% 27.14%
33.46% 39.05% 45.75% 43.41% 45.01%

TOTAL LIABILITIES & STOCKHOLDERS'

EQUITY 100.00% 100.00% 100.00% 100.00% 100.00%

Table 27 shows the asset accounts as a percentage of the total assets

and liability and equity accounts as a percentage of the total liabilities and
stockholders’ equity. Assets for the latest year are mostly composed of property
and equipment which is 44.72% of the total assets this is followed by the entity’s
receivables which is 35.97%. Its liabilities and equity on the other hand is mostly
composed of accounts payable which is 35.79%. The entity has little cash for the
past five years. For the years 2013 to 2016 the entity’s cash does not exceed
10% of its total assets. This goes to show that cash alone cannot support its
current obligations which are ranging from 40 to 50% of its total liabilities and
stockholders’ equity. Receivables on the other hand are very high composing
more or less 40% of the total assets for the past five years. The entity also has
high property and equipment due to its operational needs as a manufacturing
entity. Inventories for the past five years range from 1.92 to 3.67% indicating that
the entity keeps low levels of inventory. Overall, the entity’s low level of cash
imposes a threat to its liquidity and receivables indicate high level of idle cash.

Table 28. Common Sized of Statement of Comprehensive Income

2013 2014 2015 2016 2017

SALES 100.00% 100.00% 100.00% 100.00% 100.00%

COST OF SALES 87.14% 84.95% 88.35% 88.25% 87.41%

GROSS INCOME 12.86% 13.83% 11.65% 11.75% 12.59%

OPERATING EXPENSES 7.03% 6.77% 6.92% 6.90% 7.81%

INCOME FROM OPERATIONS 5.83% 7.06% 4.73% 4.86% 4.79%

OTHER CHARGES
Interest Income 0.02%
Interest Expense -0.73% -0.34% -0.32% -0.36% -0.43%
-0.73% -0.34% -0.32% -0.36% -0.41%

INCOME BEFORE TAX 5.10% 6.72% 4.41% 4.49% 4.38%

Provision for Income Tax 1.53% 2.02% 1.32% 1.35% 1.48%

Deficiency Tax 0.22% 0.30%

NET INCOME AFTER TAX 3.35% 4.40% 3.08% 3.15% 2.89%

Table 25 shows the accounts under the statement of income and

expenses as percentages of the sales. The biggest portion of the entity’s sales
goes to the cost of sales account which is 87.41% this is the same for the past
four years where the cost of sales is ranging from 84 to 89% of the total sales.
Operating expenses on the other hand is only 6 to 8% of the total sales. The
entity also has very low net income after all the deductions which are only 2 to
4% of the total sales. It is also shown that the values of every account do not
vary much for the past five years. This makes for a very low profit margin.
Overall, the high level of cost of sales indicates that the entity is having difficulty
in managing its cost structure thus, it affects the profitability of the entity.