FINANCIAL ANALYSIS

Test of Liquidity

1. Current Ratio

The current ratio is a liquidity and efficiency ratio that measures a firm's ability to pay off its short-term
liabilities with its current assets. The current ratio is an important measure of liquidity because short-
term liabilities are due within the next year.

2016 2017 2018 2019 2020

Current Asset PHP 40,319,951.77 PHP 50,399,939.72 PHP 62,994,936.70 PHP 78,737,435.95 PHP 98,415,248.26
Divide by: Current Liabilities PHP 5,227,333.46 PHP 5,468,095.11 PHP 5,715,423.04 PHP 5,974,128.08 PHP 6,238,170.58
Current Ratio 7.71 9.22 11.02 13.18 15.78

There is a positive current ratio from 2017 to 2021 which means that the company would have the
capacity to pay its short term obligations. But since the current ratios is greater than 1, it implies that
there is an inefficient use of the resources tied up in working capital of the organization that may
instead be put into more profitable uses elsewhere. Thus, it suggests an improved liquidity of the
company or a more conservative approach to working capital management.

2016 The 7.71 current ratio signifies that the business would have an available current asset of Php 7.71 to settle every Php 1.00 current liability.
2017 The 9.22 current ratio signifies that the business would have an available current asset of Php 9.22to settle every Php 1.00 current liability.
2018 The 11.02 current ratio signifies that the business would have an available current asset of Php 11.02 to settle every Php 1.00 current liability.
2019 The 13.18 current ratio signifies that the business would have an available current asset of Php 13.18 to settle every Php 1.00 current liability.
2020 The 15.78 current ratio signifies that the business would have an available current asset of Php 15.78 to settle every Php 1.00 current liability.

Test of Profitability

1. Return on Revenue

Return on Revenue is a measure of a corporation's profitability that compares net income to revenue. It
is useful in comparing profitability from year to year and evaluating its profitability performance, by
comparing the net income and the revenue.

2016 2017 2018 2019 2020

Net Income PHP 17,414,552.77 PHP 17,988,054.12 PHP 18,575,119.71 PHP 19,176,046.43 PHP 19,791,136.36
Divide by: Net service Revenue PHP 36,174,000.00 PHP 37,078,350.00 PHP 38,005,308.75 PHP 38,955,441.47 PHP 39,929,327.51
Return on Revenue 0.48 0.49 0.49 0.49 0.50

There is a positive return on revenue every year which means that the company would realize more
income if the company would be able to meet its target revenue and the expenses are being handled
efficiently.
 2016 Every Php 1.00 revenue, there is net income of Php 0.48.
2017 Every Php 1.00 revenue, there is net income of Php 0.49
2018 Every Php 1.00 revenue, there is net income of Php 0.49.
2019 Every Php 1.00 revenue, there is net income of Php 0.49
2020 Every Php 1.00 revenue, there is net income of Php 0.50.

2. Return on Total Assets

Return on Total Assets is an indicator of how profitable a company is relative to its total assets.

2016 2017 2018 2019 2020

Income before Tax PHP 24,877,932.54 PHP 25,697,220.17 PHP 26,535,885.30 PHP 27,394,352.04 PHP 28,273,051.94
Divide by: *Average total asset PHP 88,369,719.97 PHP 180,173,014.82 PHP 188,297,668.99 PHP 199,253,578.68 PHP 213,750,896.04
Return on Asset 0.28 0.14 0.14 0.14 0.13

*Average Total Asset 2016 2017 2018 2019 2020

Total Asset, beg PHP - PHP 176,739,439.94 PHP 183,606,589.71 PHP 192,988,748.27 PHP 205,518,409.10
Total Asset, end PHP 176,739,439.94 PHP 183,606,589.71 PHP 192,988,748.27 PHP 205,518,409.10 PHP 221,983,382.99
Total PHP 176,739,439.94 PHP 360,346,029.65 PHP 376,595,337.98 PHP 398,507,157.37 PHP 427,501,792.09
Divide by: 2 2 2 2 2
Average Total Asset PHP 88,369,719.97 PHP 180,173,014.82 PHP 188,297,668.99 PHP 199,253,578.68 PHP 213,750,896.04

There is a positive return on assets from 2016 to 2020 which means the company would attract more
investors because it shows that the company is more effectively managing its assets to produce greater
amounts of net income. In addition, a positive ROA ratio usually indicates an upward profit trend as well.

2016 Every Php 1.00 asset owned bt the company, it generates a net income before tax of Php 0.28.
2017 Every Php 1.00 asset owned bt the company, it generates a net income before tax of Php 0.14..
2018 Every Php 1.00 asset owned bt the company, it generates a net income before tax of Php 0.14..
2019 Every Php 1.00 asset owned bt the company, it generates a net income before tax of Php 0.14..
2020 Every Php 1.00 asset owned bt the company, it generates a net income before tax of Php 0.13.