ABC Merchandising

Comparative Statements of Financial Position

As of December 31
Assets 2014 2013
Current Assets
Cash PHP 75,000.00 PHP 64,000.00
Marketable Securities PHP 30,000.00 PHP 30,000.00
Accounts Receivable PHP 45,000.00 PHP 50,000.00
Merchandise Inventory PHP 41,000.00 PHP 30,500.00
Prepaid Expenses PHP 5,000.00 PHP 5,000.00
Total Current Assets PHP 196,000.00 PHP 179,500.00
Non-Current Assets
Property, plant and equipment (net) PHP 350,000.00 PHP 320,000.00
Total Assets PHP 546,000.00 PHP 499,500.00
Liabilities and Owner’s Equity
Current Liabilities
Accounts Payable PHP 29,000.00 PHP 20,000.00
Salaries Payable PHP 25,000.00 PHP 16,000.00
Utilities Payable PHP 12,000.00 PHP 7,000.00
Taxes Payable PHP 30,000.00 PHP 30,000.00
Total Current Liabilities PHP 96,000.00 PHP 73,000.00
Non-Current Liabilities

Notes Payable (due 2016) PHP 200,000.00 PHP 200,000.00

Total Liabilities PHP 296,000.00 PHP 273,000.00

Owner’s Equity
Juan Cabrera, Capital PHP 250,000.00 PHP 226,500.00
Total Liabilities and Owner’s Equity PHP 546,000.00 PHP 499,500.00
 ABC Merchandising
Comparative Income Statements
As of December 31
2014
Sales PHP 1,000,000.00
Less: Cost of Goods Sold
Merchandise Inventory, January 1 PHP 30,500.00
Purchases PHP 700,000.00
Total Goods Available for Sale PHP 730,500.00
Less: Merchandise Inventory, December 31 PHP 41,000.00 PHP 689,500.00
Gross Profit 310, 500
Less: Operating Expenses PHP 120,000.00
Earnings before Interest and Taxes PHP 190,500.00
Less: Interest Expenses PHP 2,500.00
Earnings before Tax PHP 188,000.00
Income Tax Expense PHP 60,160.00
Net Income PHP 127,840.00

COMPUTE THE FOLLOWING:

LIQUIDITY RATIOS 2014 2013

Current Ratio = Current Assets / Current Liabilities

Quick Ratio = (Cash+Securities+Receivables)/Current

Liabilities
Cash Ratio = (Cash+Securities)/Current Liabilities

SOLVENCY RATIOS

Debt Ratio = Total Liabilities / Total Assets

Equity Ratio = Total Equity / Total Assets

Debt to Equity = Total Liabilities / Total Equity
Times Interest Earned = Earnings Before Interest and
Taxes/ Interest Expense

PROFITABILITY RATIOS
Net Profit Margin = Net Income / Sales
Return on Assets = Net Income / Average Assets
Return on Equity = Net Income / Average Owner's
Equity

EFFICIENCY RATIOS
Asset Turnover = Sales / Average Assets

Accounts Receivable Turnover = Sales / Average

Accounts Receivable
Average Collection Period = 360 / Accounts
Receivable Turnover
Accounts Payable Turnover = Purchases / Average
Accounts Payable
Average Payment Period = 360 / Accounts Payable
Turnover
Inventory Turnover = Cost of Goods Sold / Average
Inventory
Average Age Inventory = 360 / Inventory Turnover
s

2013
PHP 700,000.00

PHP 25,000.00
PHP 450,000.00
PHP 475,000.00
PHP 30,500.00 PHP 444,500.00
PHP 255,500.00
PHP 75,000.00
PHP 180,500.00
PHP 2,500.00
PHP 178,000.00
PHP 56,960.00
PHP 121,040.00

Interpretation
 Pili Lang Retail Store
Comparative Statements of Financial Position
As of December 31
Assets 2021 2020
Current Assets
Cash PHP 87,000.00 PHP 69,000.00
Marketable Securities PHP 45,500.00 PHP 36,000.00
Accounts Receivable PHP 50,500.00 PHP 40,000.00
Merchandise Inventory PHP 35,000.00 PHP 34,500.00
Prepaid Expenses PHP 7,000.00 PHP 5,000.00
Total Current Assets PHP 225,000.00 PHP 184,500.00
Non-Current Assets
Property, plant and equipment (net) PHP 250,500.00 PHP 260,000.00
Total Assets PHP 475,500.00 PHP 444,500.00
Liabilities and Owner’s Equity
Current Liabilities
Accounts Payable PHP 45,000.00 PHP 30,000.00
Salaries Payable PHP 33,000.00 PHP 25,000.00
Utilities Payable PHP 15,000.00 PHP 10,000.00
Taxes Payable PHP 35,000.00 PHP 23,000.00
Total Current Liabilities PHP 128,000.00 PHP 88,000.00
Non-Current Liabilities

Notes Payable (due 2016) PHP 93,500.00 PHP 158,500.00

Total Liabilities PHP 221,500.00 PHP 246,500.00

Owner’s Equity

Juan Cabrera, Capital PHP 254,000.00 PHP 198,000.00

Total Liabilities and Owner’s Equity PHP 475,500.00 PHP 444,500.00
 Pili Lang Store
Comparative Income Statements
As of December 31
2021
Sales PHP 900,000.00
Less: Cost of Goods Sold
Merchandise Inventory, January 1 PHP 34,000.00
Purchases PHP 630,000.00
Total Goods Available for Sale PHP 664,000.00
Less: Merchandise Inventory, December 31 PHP 50,000.00 PHP 614,000.00
Gross Profit PHP 286,000.00
Less: Operating Expenses PHP 130,000.00
Earnings before Interest and Taxes PHP 156,000.00
Less: Interest Expenses PHP 2,300.00
Earnings before Tax PHP 153,700.00
Income Tax Expense PHP 50,500.00
Net Income PHP 103,200.00

COMPUTE THE FOLLOWING:

LIQUIDITY RATIOS 2014 2013

Current Ratio = Current Assets / Current Liabilities 1.76 2.10

Quick Ratio = (Cash+Securities+Receivables)/Current

1.43 PHP 1.65
Liabilities

Cash Ratio = (Cash+Securities)/Current Liabilities 1.04 PHP 1.19

SOLVENCY RATIOS

Debt Ratio = Total Liabilities / Total Assets 47% 55%

Equity Ratio = Total Equity / Total Assets 53% 45%

Debt to Equity = Total Liabilities / Total Equity ₱ 0.87 ₱ 1.24

Times Interest Earned = Earnings Before Interest and

68 75
Taxes/ Interest Expense
 PROFITABILITY RATIOS

Net Profit Margin = Net Income / Sales 11% 17%

Return on Assets = Net Income / Average Assets 22% 22%

Return on Equity = Net Income / Average Owner's

46% 45%
Equity

EFFICIENCY RATIOS

Asset Turnover = Sales / Average Assets 2.0 1.3

Accounts Receivable Turnover = Sales / Average

19.89 13.26
Accounts Receivable

Average Collection Period = 360 / Accounts

Receivable Turnover 18 27

Accounts Payable Turnover = Purchases / Average

16.80 9.73
Accounts Payable

Average Payment Period = 360 / Accounts Payable

21 37
Turnover

Inventory Turnover = Cost of Goods Sold / Average

2.0 1.2
Inventory

Average Age Inventory = 360 / Inventory Turnover 181 309

s

2020
PHP 600,000.00

PHP 25,000.00
PHP 365,000.00
PHP 390,000.00
PHP 32,500.00 PHP 357,500.00
PHP 242,500.00
PHP 93,000.00
PHP 149,500.00
PHP 2,000.00
PHP 147,500.00
PHP 45,000.00
PHP 102,500.00

Interpretation
In 2014, there is 1.76 of current assets to cover every peso of current liabilities. In 2013,
there is 2.10 of current assets to cover every peso of current liabilities.

In 2014, there is 1.43 of cash,securities,receivable to cover every peso of current liabilities.

In 2013, there is 1.65 of current assets to cover every peso of current liabilities.

In 2014, there is 1.04 of cash and securities to cover every peso of current liabilities. In
2013, there is 1.19 of current liabilities to cover every peso of current liabilities.

In 2014, 47% of the total assets is financed by the total liabilities. In 2013, 55% of the total
assets is financed by the total liabilities.

In 2014, 47% of the total assets is financed by the total equity. In 2013, 55% of the total
assets is financed by the total equity.

In 2014, Pili Lang Retail Store uses ₱0.87 in debt for every ₱1 of equity. In 2013, Pili Lang
Retail Store uses ₱1.24 in debt for every ₱1 of equity.

In 2014, Pili Lang Retail Store can pay off its interest 68 times over. In 2013, Pili Lang Retail
Store can pay off its interest 75 times over.
In 2014, Pili Lang Retail Store generates 11% profit from its sales. In 2013, Pili Lang Retail
Store generates 17% profit from its sales.

In 2014, Pili Lang Retail Store generates 22% profit from its assets. In 2013, Pili Lang Retail
Store generates 22% profit from its assets.

In 2014, Pili Lang Retail Store generates 46% profit from its owner's equity. In 2013, Pili
Lang Retail Store generates 45% profit from its owner's equity.

In 2014, The company is generating 2 pesos of sales for every peso invested in assets. In
2013, The company is generating 1.3 pesos of sales for every peso invested in assets.

In 2014, The accounts receivable have been collected 19.89 times during that time period.
In 2013, The accounts receivable have been collected 13.26 times during that time period.

In 2014, 18 days it takes Pili Lang Retail Store to collect and convert its accounts receivable
into cash. In 2013, 27 days it takes Pili Lang Retail Store to collect and convert its accounts
receivable into cash.

In 2014, 16.80 times Pili Lang Retail Store pays off its accounts payable during a period. In
2013, 9.73 times Pili Lang Retail Store pays off its accounts payable during a period.

In 2014, It takes 21 days Pili Lang Retail Store to pay the amount payable to its supplier. In
2013, It takes 37 days Pili Lang Retail Store to pay the amount payable to its supplier.

In 2014, Pili Lang Retail Store had to replenish their full inventory twice(2) over the past
year. In 2013, Pili Lang Retail Store had to replenish their full inventory 1.2 over the past
year.

In 2014, It takes 181 days for Pili Lang Retail Store to sell off inventory. In 2013, It takes 309
days for Pili Lang Retail Store to sell off inventory.
 Mini-Mall Ni Ferson
Comparative Statements of Financial Position
As of December 31
Assets 2021 2020
Current Assets
Cash PHP 1,300,000.00 PHP 950,000.00
Marketable Securities PHP 800,000.00 PHP 650,000.00
Accounts Receivable PHP 230,000.00 PHP 330,000.00
Merchandise Inventory PHP 98,000.00 PHP 120,000.00
Prepaid Expenses PHP 25,500.00 PHP 30,000.00
Total Current Assets PHP 2,453,500.00 PHP 2,080,000.00
Non-Current Assets
Property, plant and equipment (net) PHP 1,500,000.00 PHP 1,200,000.00
Total Assets PHP 3,953,500.00 PHP 3,280,000.00
Liabilities and Owner’s Equity
Current Liabilities
Accounts Payable PHP 130,000.00 PHP 120,000.00
Salaries Payable PHP 350,000.00 PHP 250,000.00
Utilities Payable PHP 340,000.00 PHP 360,000.00
Taxes Payable PHP 134,500.00 PHP 124,000.00
Total Current Liabilities PHP 954,500.00 PHP 854,000.00
Non-Current Liabilities

Notes Payable (due 2016) PHP 999,000.00 PHP 1,076,000.00

Total Liabilities PHP 1,953,500.00 PHP 1,930,000.00

Owner’s Equity
Juan Cabrera, Capital PHP 2,000,000.00 PHP 1,350,000.00
Total Liabilities and Owner’s Equity PHP 3,953,500.00 PHP 3,280,000.00
 Mini-Mall Ni Ferson
Comparative Income Statements
As of December 31
2021
Sales PHP 3,000,000.00
Less: Cost of Goods Sold
Merchandise Inventory, January 1 PHP 125,000.00
Purchases PHP 1,500,000.00
Total Goods Available for Sale PHP 1,625,000.00
Less: Merchandise Inventory, December 31 PHP 150,000.00 PHP 1,475,000.00
Gross Profit PHP 1,525,000.00
Less: Operating Expenses PHP 310,000.00
Earnings before Interest and Taxes PHP 1,215,000.00
Less: Interest Expenses PHP 65,500.00
Earnings before Tax PHP 1,149,500.00
Income Tax Expense PHP 123,000.00
Net Income PHP 1,026,500.00

COMPUTE THE FOLLOWING:

LIQUIDITY RATIOS 2021 2020

Current Ratio = Current Assets / Current Liabilities

Quick Ratio = (Cash+Securities+Receivables)/Current

Liabilities
Cash Ratio = (Cash+Securities)/Current Liabilities

SOLVENCY RATIOS

Debt Ratio = Total Liabilities / Total Assets

Equity Ratio = Total Equity / Total Assets

Debt to Equity = Total Liabilities / Total Equity
Times Interest Earned = Earnings Before Interest and
Taxes/ Interest Expense

PROFITABILITY RATIOS
Net Profit Margin = Net Income / Sales
Return on Assets = Net Income / Average Assets
Return on Equity = Net Income / Average Owner's
Equity

EFFICIENCY RATIOS
Asset Turnover = Sales / Average Assets

Accounts Receivable Turnover = Sales / Average

Accounts Receivable
Average Collection Period = 360 / Accounts
Receivable Turnover
Accounts Payable Turnover = Purchases / Average
Accounts Payable
Average Payment Period = 360 / Accounts Payable
Turnover
Inventory Turnover = Cost of Goods Sold / Average
Inventory
Average Age Inventory = 360 / Inventory Turnover
s

2020
PHP 2,900,000.00

PHP 130,000.00
PHP 1,600,000.00
PHP 1,730,000.00
PHP 90,000.00 PHP 1,640,000.00
PHP 1,260,000.00
PHP 250,000.00
PHP 1,010,000.00
PHP 50,000.00
PHP 960,000.00
PHP 85,000.00
PHP 875,000.00

Recommendations

Interpretation
Recommendations: