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Introduction

On the start of 2013, former managers and brokers from Ayala Land Premier and Alveo
Land, two of the country’s biggest and best real estate developers in the Philippines,
envisioned to create a company that will further serve the needs of their real estate
clients. On 21st February of the same year, they incorporated CXXVIII Lyons Realty
Corp. and was registered with Securities and Exchange Commission. Its primary
purpose is to market and sell real estate of all kinds, including such as buildings, houses,
apartments, lands, and other structures and spaces.

Figure 1. Corporate Logo and Colors. CXXVIII Lyons Realty Corp.


affiliated themselves to the RE/MAX franchise to expand their customer reach

On November of 2013, CXXVIII Lyons Realty Corp., joined the RE/MAX franchise, the
top real estate company in the world, rebranding itself as RE/MAX Lyons. This
affiliation aims to further expand their reach, opening new markets and providing more
options for their customers.

The principal office of the company is located at 226 Wilson Building, Wilson Street, San
Juan City with eight and three employees as of December 31, 2016 and 2015,
respectively.

Figure 2. RE/MAX Lyons Team with the directors of the company (seated in front)
The corporation is owned and managed by the following directors: Oliver Joseph Lopez
(as the Chairman of the Board), Marvin Raymond Yan, Allan Ong, and Joseph Sonora.
Business Operations of the Company

RE/MAX Lyons operates as a full service office in which they provide marketing and
advertising of real estate properties either for sale or for lease. They have an inventory of
property listings from the top real estate developers in the country such as Ayala Land
Premier, Alveo Land, Rockwell Land, Shang Properties, Ortigas and Co., and Century
Properties. They provide their agents with all the tools they need to successfully
compete in the marketplace – this includes marketing materials and access to their real
estate network. They normally charge their clients a percentage commission from
successful transactions made by selling or leasing properties. From the collected
commission, agents will get higher part and the remaining part from that goes to the
company that will serve as a desk fee – this is where the company gets its revenue.

RE/MAX Lyons has three major service offerings:

1. Property Marketing and Sales


2. Property Lease and Rentals
3. Property Management

Their operations are mainly focused in the Metro Manila area and often extends up to
North and South Luzon.
Basis of Analysis

As a registered corporation under the Securities and Exchange Commission, I was able
to secure the latest copy of the Annual Financial Statement of the company from its
online facility, www.secexpress.ph. The attached statements in this term paper was
submitted to the office of Securities and Exchange Commission last 7 April 2017 on
which was compiled by Roan V. Francisco & Comapany (RVF & Co.) and audited by
MG Madrid & Company (MGM & Co.).

The accompanying financial statements have been prepared using the historical cost
analysis and with accordance with Philippine Financial Reporting Standards for Small
and Medium-sized entities (PFRS for SMEs).

The financial health of CXXVIII Lyons Realty Corp. will be measured using financial
ratio focusing on how the company is performing in terms of assets, generation of
profits from each sales, among others. The income statement and balance sheet for 2016
and 2015 will be the bases of the analyzation of the financial status of the business.
Analysis of Statement of Financial Position

CXXVIII LYONS REALTY CORP.


Statements of Financial Positio, Two-year Comparison
For the Years Ended December 31, 2016 and 2015

2016 2015 ₱ Variance % Variance

ASSETS

Current Assets
Cash
Petty Cash ₱ 15,000 ₱ 42,157 ₱ (27,157.00) -64.4%
Cash in Bank 474,071 3,373,446 (2,899,375) -85.9%
Receivables -
Advances to Employees and officers - net - 2,082,008 (2,082,008) -100.0%
Other receivables 57,055 240 56,815 23672.9%
Prepaid Expense and other Current Assets
Prepaid income tax 1,131,324 - 1,131,324 0.0%
Prepaid insurance 84,948 - 84,948 0.0%
Input VAT - services 21,883 - 21,883 0.0%
Prepaid withholding tax - compensation 1,714 - 1,714 0.0%
Total Current Assets 1,785,995 5,497,851 (3,711,856) -67.5%

Non-Current Assets
Property and equipment 337,465 177,212 160,253 90.4%
Accumulated depreciation - Property and equipment (95,517) (14,179) (81,338) 573.7%
Rental deposit 66,000 - 66,000 0.0%
Total Non-Current Assets 307,948 163,033 144,915 89%

Total Assets ₱ 2,093,943 ₱ 5,660,884 ₱ (3,566,941.00) -63%

LIABILITIES AND EQUITY

Current Liabilities
Accrued expenses and other liabilities
Witholding tax on expanded payable ₱ 3,535,222 ₱ 699,198 ₱ 2,836,024 405.6%
Accounts payable - nontrade 441,375 388,965 52,410 13.5%
Accounts payable - trade 144,151 - 144,151 0.0%
SSS loan payable 25,770 - 25,770 0.0%
Philhealth payable 13,938 - 13,938 0.0%
HDMF payable 12,400 - 12,400 0.0%
Salaries payable 7,794 - 7,794 0.0%
VAT payable - 235,360 (235,360) -100.0%
Income tax payable - 91,014 (91,014) -100.0%
Total Current Liabilities 4,180,650 1,414,537 2,766,113 196%

Equity
Share capital 100,000 100,000 - 0.0%
Retained earnings (2,186,707) 4,146,347 (6,333,054) -152.7%
Total Equity (2,086,707) 4,246,347 (6,333,054) -149%

Total Liabilities and Equity ₱ 2,093,943 ₱ 5,660,884 ₱ (3,566,941.00) -63%

Reference: Annual Financial Statements from SEC

Table1. CXXVIII Lyons Realty Corp’s Balance Sheets for 2016 and 2015
From Figure 3, the most obvious observation is the decrease on total assets and equity
along with the increase on the total liabilities of the company. The breakdown of each
accounts will be discussed on the next pages.

Breakdown of Assets

Cash

The cash account is consisted of petty cash and cash in bank. Take note that the cash in
bank earns interest at respective bank deposit rates. Interest received for the years ended
December 31, 2016 and 2015 amounted to nil and ₱ 100 respectively