Saint Paul University Surigao

Cor. San Nicolas & Rizal St.

Surigao City, Philippines

PROJECT
IN
FINANCIAL MANAGEMENT

Submitted by:
Arlan, Anna Marie
Doron, Roselyn T.
Dugmoc, Delight B.
Basul, Ma. Sharon Ann
Ga,Ashley Dianne R.
Laosinguan, Lowella B.
Morales, Jeana
Juanite, Aljhunde
Buo, Shiella Yvonne

Submitted to:
Mr. Roed Pomoy, CPA, MBA

December 2017
 United Paragon Mining Corporation

About The Business

United Paragon Mining Corporation (“UPMC”) is a Philippine

corporation whose main business is the exploration, development,
exploitation, recovery, and sale of gold. UPMC was the result of
a merger in 1989 between United Asia and Geothermal Resources
(“UAR”) AND Abcar Paragon Mining Corporation (“Abcar Paragon”).
Under the terms of the merger, UAR became the surviving
corporation and Abcar Paragon transferred all of its assets and
properties (real and personal, including rights, franchises and
receivables, as well as the operating rights of the Longos Mine)
to UAR. UAR was renamed United Paragon Mining Corporation in
1990. UAR was formed as a corporation in 1970 while Abcar
Paragon was formed in 1986. Upmc’s principal mining operation is
the Longos Mine at Paracale, Camarines Norte. Upmc operated an
open pit area from august 01, 1988 to june 01, 1994 having
extracted 888,809 metric tonnes (mt) of ore which yielded 79,120
ounces of gold. This was more than twice its originally
calculated reserve. By April 1994, UPMC began commercial
operations of the underground at the same site. It was placed
under care and maintenance in December 1998 to preserve the
remaining reserves for future extraction at profitable level.
From 1988 to 1998, UPMC produced 290,580 ounces of gold from the
Longos mine. UPMC is presently pursuing various options to raise
the amount required to finance rehabilitation and further
development mine.
 FINANCIAL STATEMENT ANALYSIS

RATIO ANALYSIS

LIQUIDITY
Current Ratio
Current Ratio = Current Assets/Current Liabilities

Current Ratio
2016 2015
= 34,283,558 = 44,706,960
999,687,587 82,852,162
= 0.0343:1 = 0.0539:1

Interpretation: The ratio for 2016 indicates that the business

has 0.0343 of current assets to settle every 1 peso of their
current liabilities. This means that the business is financially
in trouble. On the other hand the ratio for 2015 is higher than
2016 which is 0.0539 however they ratio is less than 1 which
signifies a negative implications.

Acid Test Ratio

Acid Test Ratio = Quick Assets/Current Liabilities
Acid Test Ratio
2016 2015
= 513,875__ = 10,719,641
999,687,587 82,852,162
= 0.0169:1 = 0.0326:1

Interpretation: The ratio for 2016 indicates that the business

has 0.0169:1 of quick ratio to settle every 1 peso of their
current obligations in short run. It could be telling us that
the company’s balance sheet is over-leveraged. Or it could be
saying the company’s sales are decreasing, the company is having
a hard time collecting its account receivables or perhaps the
company is paying its bills too quickly. On the other hand the
ratio for 2015 is higher than 2016 which is 0.0326, however they
ratio is less than 1 which signifies a negative implications.

SOLVENCY
Times Interest Earned = Income before tax + interest expense /
interest expense
Times Interest Earned
2016 2015

=57,794,301+37,957,410 = 52,478,957+33,886,312
37,957,410 33,886,312
= 95,751,711 = 86,365,269
37,957,410 33,886,312

= 2.5214:1 = 2.5487:1

Interpretation: The ratio for 2016 indicates that the business

has 2.5214 times and 2.5487 times for 2015 they earned interest
to pay its interest charges as they become due. It could be
telling us that the business has an adequate net operating
income to protect the creditors’ interest in the firm.

Debt-equity Ratio = Total Liabilities / Total Equity

Debt-equity Ratio
2016 2015
= 1,000,716,810 = 949,617,557
113,418,393 171,320,606
= 8.8232:1 = 5.5429:1

Interpretation: The ratio for 2016 is 8.8232 which indicate that

the company has 8.8232 of their liabilities than there is
equity. Higher Debt-equity Ratio shows that the investors
haven’t funded the operations as much as creditors have.
Comparing to the year 2015 the company has 5.5429 of their
liabilities than equity. It shows a lower ratio than 2016
although both ratios are high on 2015 good year compared to
2016.

Debt Ratio = Total Liabilities/Total Assets

Debt Ratio
2016 2015
= 1,000,716,810 = 949,617,557
1,114,135,203 1,120,938,163
= 0.8982:1 = 0.8472:1

Interpretation: Table shows the ratio for 2016 of 0.8982 and

0.8472 for 2015. Both ratios are considered as high that
indicates that the business have most of their assets funded by
debt and would be a high risk for the bank.

Equity Ratio = Total Equity / Total Assets

Equity Ratio
2016 2015
= 113,418,393 = 171,320,606
1,114,135,203 1,120,938,163
= 0.1018:1 = 0.1528:1

Interpretation: Table shows the ratio for 2016 of .10 percent

and 0.15 percent of their company’s assets are owned by
shareholders and not creditors.
TESTS OF PROFITABILITY

RATE OF RETURN OR RETURN ON INVESTMENT = _______INCOME_______

INVESTED CAPITAL

2016 2015 2014

43,069,509 2.92 38,418,796 2.73 52,142,188 3.44
14,724,792 14,060,161 15,140,061

Interpretation: Table shows the return on investment for 2016

of 2.92, for 2015 of 2.73 and for 2014 of 3.44. Both investments
are classified as high but the higher is way back in the year
2014, it is indicates that the business has the high investment
rather than the latest years. It means that the business have
the high profit in the year 2014. The more on investing money
and it helps to earn more profit in business.

RETURN ON ASSETS = INCOME BEFORE INTEREST EXPENSE+INCOME TAX

AVERAGE TOTAL ASSETS

2016 2015
P(6,571)+P131 0% P(397,535)+P7,951 0%
P1,114,135,203 P1,120,938,163

Interpretation: Table shows that there are no assets be return

in the business and shows that 0%.

RETURN ON ASSETS= NET INCOME+INTEREST EXPENSE+INCOME TAX

AVERAGE TOTAL ASSETS
2016 2015
P(6,571)+P37,951,410+P131 0.03 P(397,535)+ 0.03
P33,886,312+P7,951
P1,114,135,203 1,120,938,163

Interpretation: Table shows that both are considered as short-

run that indicates the business for not improving their sales or
same the latest year and 2015.

RETURN ON OWNERS/STOCKHOLDERS EQUITY= NET INCOME

AVE. EQUITY
2016 2015 2014
P(6,571) 0% P(397,535) 0% P(361,989) 0%
P113,418,393 P171,320,606 P223,834,471+
P290,962,212

Interpretation: It shows that the both year have no difference

and it indicates that the business having low profit or the
sales are not “mahalin”. It causes the company risk for having
\loss products.

EARNINGS PER SHARE = NET INCOME-PREFERRED DIVIDENDS (IF ANY)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
2016 2015
P(6,571)- -0.01 P(397,535)- -0.01
26,100,000 26,100,000
P2,613,147,971 P2,613,147,971

PRICE-EARNING RATIO= __PRICE PER SHARE

EARNINGS PER SHARE

P 1.28
-0.01 -128% or -
1.28:1

Interpretation: The table of price-earnings ratio has -1.28:1 of

the business. It indicates that pesos are required to buy a
pesos worth of earnings is low. It usually affect in the company
risk or a business firm.

-MEANS THAT IT COSTS P1.28 TO BUY P1 OF XYX ANNUAL EARNINGS

DIVIDEND YIELD= DIVIDEND PER SHARE/PRICE PER SHARE

P 1
P1.28 0.78 or 78 %

Interpretation: The table shows that the business has 0.78. It

indicates that the company pays to people who own stock in
business is high.
*COMPARE THE ROI TO KNOW THE DESIRABILITY OF INVESTING

DIVIDEND PAYOUT = COMMON DIVIDEND PER SHARE/EARNINGS PER SHARE

P1
-0.01 -100% or -1.00

Interpretation: The table shows that the dividend payout has -

1.00. It indicates that the outcome of the business firm is low
which is negative.

Interpretation of Horizontal Analysis:

As shown on the statement of financial position, the percentage of decrease in total

current asset (-23.31 %) was lower than the percentage of increase in total current liabilities
(20.61%). It can be observed that accounts payable and related parties increased significantly.
This indicates slower conversion of inventory and receivable to cash. As a result, this is
considered unsatisfactory or unfavorable because of the lower current assets that means
ineffective in utilizing their assets.