RETURN ON TOTAL ASSETS

Return on Total Assets = Net Income ÷ Average Total Assets

      2017 2018 2019 2020 2021

Net ₱ ₱ ₱ ₱ ₱
Income   1,899,508.07 2,249,319.02 2,452,252.61 2,712,850.00 2,911,085.38
Ave. Total ₱ ₱ ₱ ₱ ₱
Assets 26,747,801.29 27,624,906.13 28,696,480.09 30,068,366.52 31,600,014.71
Ratio     7.10% 8.14% 8.55% 9.02% 9.21%

Return on Total Assets measure overall asset profitability and indicates

management’s effective use of total assets. The ratio is considered an
indicator of how effectively a company is using its assets to generate
earnings before contractual obligations must be paid. It is similar to the
fixed asset turnover ratio but takes into consideration the totality of the
assets in raising revenue. The higher the ratio is, the better the firm
manages its assets. Even though the ratio increases, its increases should
be measured against the industry average to know if it is high enough or
not.

FINANCIAL LEVERAGE

Financial Leverage = Average Total Assets ÷ Average Total Equity

      2017 2018 2019 2020 2021

Ave. Total     ₱ ₱ ₱ ₱
Assets ₱26,747,801.2 27,624,906.1 28,696,480.0 30,068,366.5 31,600,014.7
 9 3 9 2 1
₱ ₱ ₱ ₱
Ave. Total ₱13,899,508.0 15,024,167.5 17,374,953.3 19,957,504.7 22,769,472.3
Equity 7 8 9 0 9
Ratio 192.44% 183.87% 165.16% 150.66% 138.78%

Financial Leverage measure the risk in financing the business through

debt. The financial leverage computed in this table refers to the equity
multiplier. Equity multiplier measures how much of the assets are
financed by the owners. The table above shows that 1.92 of the assets
are supported by the owners, and the remaining portion must be financed
by debt. In the long-run, there is a danger to the partnership that it will
rely more on debt financing than equity financing basing from the ratios
above as lesser portion of the assets are supported by the partners’
capital.