LIQUIDITY RATIOS

RATIO COMPUTATION REFERENCE

Current
Ratio

Current Ratio
(a) Financial Ratios
(p. 129 )
Current assets
(a) Statement of
Financial Position (p. 1)
Current Liabilities
(b) Statement of
Financial Position (p. 1)





Quick Ratio

NO PREPAYMENTS
Current assets
(a) Statement of
Financial Position (p. 1)
Inventories
(a) Statement of
Financial Position (p. 1)
(b) Notes to Financial
Statement (Note 8, p.
57)
Current Liabilities
(a) Statement of
Financial Position (p. 1)









Cash Ratio

NO PREPAYMENTS
b
ACCOUNTS RECEIVABLE=TRADE AND OTHER RECEIVABLES
Current assets
(a) Statement of
Financial Position (p. 1)
Inventories
(a) Statement of
Financial Position (p. 1)
(b) Notes to Financial
Statement (Note 8, p.
57)
Trade and Other
Receivables
(a) Statement of
Financial Position (p. 1)
(b) Notes to Financial
Statements
(Note 7, p. 56)
Current Liabilities
(a) Statement of
Financial Position (p. 1)
BASIS 2013 2012
Current Ratio 1.76 1.29
Quick Ratio 1.74 1.27
Cash Ratio 1.11 0.71
INTERPRETATION
ABS-CBN is more liquid in 2013 compared to 2012 based on the respective liquidity ratios. In 2013,
they could pay their short- term debts when they became due since their current ratio was within the
satisfactory ratio of 2:1. Also, based on their inventory turnover which decreased, and quick ratio and cash ratio
which increased compared to 201s they did not depend on the selling of inventory to satisfy their creditors
Cash and cash equivalents alone couldnt satisfy their current liability though it can still be said that the
company was liquid because of good management regarding extending debts. They only extend debts to those
with good credit standings who are recognized and accredited.

ACTIVITY/EFFICIENCY RATIOS
RATIO COMPUTATION REFERENCE







Accounts
Receivable
Turnover

NET SALES=TOTAL REVENUES

b

Total Revenues
(a) Statement of Income
(p. 1)
Ending & Beginning
Accounts Receivable
(a) Statement of
Financial Position (p. 1)
(b) Notes to Financial
Statements
(Note 7, p. 56)





Average
Collection
Period

Inventory
Turnover

Production Costs
(a) Statement of Income
(p. 1)
(b) Notes to Financial
Statements
(Note 24, p. 83)
Cost of Services & Cost of
Sales
(a) Statement of Income
(p. 1)
(b) Notes to Financial
Statements
(Note 25, pp. 83-84)
Ending & Beginning
Inventories
(a) Statement of
Financial Position (p. 1)
(b) Notes to Financial
Statements
(Note 8, p. 57)





Average
Sales
Period

BASIS 2013 2012
Accounts Receivable Turnover 4.12x 3.90x
Average Collection Period 88.51 days 93.67 days
Inventory Turnover 84.03x 105.37x
Average Sales Period 4.34 days 3.46 days
INTERPRETATION
ABS- CBN has efficient management of receivables, most of their debtors are good payers. They can
collect the debts extended to clients within the term of the contract and on demand if due. Accounts receivable
turnover increased compared to s This means that in 2013, they were more efficient in turning their
accounts receivable into revenues compared to the year prior. The increase can be attributed to their augmented
capability to collect from clients and to the significant increase in their total revenues. The increase in total
revenues was not due to the selling of inventory since their inventory turnover declined, meaning the number of
days that their inventory stayed in storage before being sold increased. Instead, the increase in total revenues
was due to providing services.
It can be said that ABS- CBN had difficulties generating sales from inventory in 2013. Their
inventory that year consisted of records and other customer products held for sale for Merchandise Inventory;
Materials and supplies of the parent company and cable, construction, and installation supplies of Sky Cable for
Materials, Supplies, and Spare Parts.



LONG TERM SOLVENCY/ LEVERAGE RATIOS
RATIO COMPUTATION REFERENCE









Interest
Rate
Coverage
Ratio






arnings efore nterest and axes

()






Interest Rate Coverage
Ratio
(a) Financial Ratios
(p. 129 )
EBITDA, Depreciation &
Amortization,
Amortization of
Intangible Assets
(a) Notes to Financial
Statements
(Note 5, p. 53)
Interest Expense
(a) Statement of Cash
Flows (p. 1)
(b) Notes to Financial
Statements
(Note 27, p. 85)







Debt to
Asset Ratio

() ()

Total Liabilities
(a) Statement of
Financial Position (p. 1)
Total Assets (2012 &
2013)
(a) Statement of
Financial Position (p. 1)

Debt to
Equity
Ratio

()

()

Total Liabilities
(a) Statement of
Financial Position (p. 1)
Total Shareholders
Equity (2012 & 2013)
(a) Statement of
Financial Position (p. 2)
**Additional


Net Debt to
Equity
Ratio

Net Debt to Equity Ratio
(a) Financial Ratios
(p. 129 )
Total Shareholders
Equity
(a) Statement of
Financial Position (p. 2)



Asset to
Equity
Ratio

Asset to Equity Ratio
(a) Financial Ratios
(p. 129 )
Total Assets
(a) Statement of
Financial Position (p. 1)
Total Shareholders
Equity
(a) Statement of
Financial Position (p. 2)
BASIS 2013 2012
Interest Rate Coverage Ratio 4.44x 3.48x
Debt to Asset 58.64% 65.65%
Debt to Equity 141.45% 168.08%
INTERPRETATION
For ABS- CBN, higher debt to asset ratio is good as long as it is not equal to one because this will
lead to a negative worth (bankruptcy). For 2012 and 2013, the debt to asset ratio of the company constituted
65.65% and 58.64% respectively. The reason for the high percentages is that the company use these borrowings
for the acquisition or investment on new businesses and expansions. Also, they use these funds for shortages if
there are any. There was a decrease in the percentage because ABS- CBN paid their debts on time to protect their
credit ratings. They also decreased their borrowing during 2013.
Generally, it is safer to have lower debt to equity ratio. The debt should be between 50% and 80%
of equity. But in the case of the company, it had 168.08% in 2012 and 141.45% in 2013. By looking at these
figures, it can be said that their debts were very large. However, as said earlier, uses borrowings for the
generation of income.
With ABS- CNs high debts they paid higher interests ven though they had high debts the
profits they earned could pay interests 3.48 times in 2012 and 4.44 times in 2013. This is the reason behind their
high credit rating. Also, since the profits they earned could pay interests 4.44 times, it can be concluded that they
could still manage to borrow more.


PROFITABILITY RATIOS
RATIO COMPUTATION REFERENCE



Gross
Profit
Margin

Net Sales=Total Revenues
Gross Profit Margin
Ratio
(a) Financial Ratios
(p. 129 )
Gross Profit
(a) Statement of Income
(p. 1)
Total Revenues
(a) Statement of Income
(p. 1)



Profit
Margin

Net Sales=Total Revenues
Profit Margin
(a) Financial Ratios
(p. 129 )
Net Income
(a) Statement of Income
(p. 1)
Total Revenues
(a) Statement of Income
(p. 1)


Total
Assets
Turnover

Net Sales=Total Revenues


Total Revenues
(a) Statement of Income
(p. 1)
Total Assets
(a) Statement of
Financial Position (p. 1)



Return on
Assets

Return on Assets
(a) Financial Ratios
(p. 129 )
Net Income
(a) Statement of Income
(p. 1)
Total Assets
(a) Statement of
Financial Position (p. 1)




Return on
Equity

Return on Equity
(a) Financial Ratios
(p. 129 )
Net Income
(a) Statement of Income
(p. 1)
otal Shareholders
Equity
(a) Statement of


Financial Position (p. 2)



Earnings
per Share

Net Income attributable to equity holders of the parent company


Notes to Financial
Statements
(Note 33, p. 108)
**EPS computation


Price-
Earnings
Ratio

Market price per share as of December 31, 2013




Dividend
Pay- Out

Dividend per share as of December 31, 2013





Dividend
Yield

Dividend per share as of December 31, 2013
b
Market price per share as of December 31, 2013






Book Value
per Share

otal Shareholders
Equity
(a) Statement of
Financial Position (p. 2)
Preferred Shares &
Number of Ordinary
Shares
(a) Notes to Financial
Statements
(Note 21, p. 75)


Working
Capital





Current Assets
(a) Statement of
Financial Position (p. 1)
Current Liabilities
(a) Statement of
Financial Position (p. 1)
BASIS 2013 2012
Gross Margin 39% 36%
Profit Margin 6.1% 5%
Return on Assets 3.50% 3%
Total Asset Turnover 0.58x 0.56x
Return on Equity 7.82% 8%
INTERPRETATION
There is a progress in the profitability of the ABS CBN Corporation since its gross margin and profit
margin from that of 2012 are 36% and 5% increased to 39% and 6.1% respectively. Due to the transactions and
contracts successfully made by ABS CBN to related entities like Direct TV, they were able to generate higher
revenue compared to 2012.
As of December 31, 2013, total consolidated assets stood at P57.992 billion, 13% higher than total
assets of P51,394 billion as at December 31, 2012 and the Company generated a net income of P2.028 billion, up
by 25% compared to P1.618 billion in the previous year. In line to this, the return on assets increases from 3% to
3.5% which indicates management efficiency in using the assets to generate sales.
Shareholders equity stood at P25.923 billion, 33% higher compared as at December 31, 2012 due to
the issuance of preferred shares and additional common shares, as well as the capital paid in excess of par value
recognized in relation to the additional common shares issued.
he amount of income generated using the shareholders equity is lower having a return on equity of
in to in hus the use of shareholders equity is more efficient in 2012 compared to 2013.