I.

Investment

The investments of Swift Foods, Inc. (SFI) for the year 2020 has amounted to a total of

78.56 million pesos and has been expected to increase due to fair value of the property, while

back in 2019 its investments have amounted to a total of 104 million pesos, according to its

financial position. On the other hand, its operational and financial information state that there

were no dividends declared in favor of common stockholders in the years 2020 and 2019.

In terms of investments in equity and debt security, within its common stockholders, PCD

Nominee Corporation (Filipino) holds a total of 72.95% in terms of percentage of shareholdings,

making it the biggest shareholder compared to the next one that only amounts to 6.45%. Thus,

the entity has significant influence as an investor to the company and can be accounted for using

the equity method of investment in associates. In terms of debt securities, SFI has declared in its

liquidity risk its debt instruments at amortized cost for the years 2019 and 2020. Thus, SFI has

the positive intent and capability to hold out its liabilities to maturity.

Based on SFI’s annual report, its receivables in 2020 amounted to 6,285 pesos while in

2019 its receivables amounted to 5,642 pesos. It can be observed that there has been an increase

in terms of receivables compared from the previous period. This increase has been attributed by

the company to the stricter implementation of health protocols as measures against the increase

of Covid-19 cases amidst the pandemic. In terms of disposal of assets, the annual report did not

mention any of its assets being disposed of.

In terms of whether SFI’s annual report has properly accounted for the recognition of

investments, the annual report has featured its top 20 investors along with the respective total

shares held, and the percentage of shareholdings.

 II. Inventories

Swift Foods, Inc. operates as a corporation that manufactures and distributes commercial

feeds, poultry products, and processed and canned meat products. It does not merchandise its

products but rather distributes them to third-party retailers to reach their consumers.

Based on its financial position for the year 2020, SFI’s inventory cost has increased by

1.13 million pesos due to the delay in chick-in to contract growers and has resulted in the

accumulation of feeds stocks, medicine, and vaccine inventories.

Upon analyzing Swift’s annual report, it can be observed that its balance sheet did not

include its cost of goods sold. Thus, the lack of information hinders the calculation of the cost of

goods sold, and further analysis to determine whether the company has efficiently managed its

inventory. However, based on its financial position, it has stated that there has been an increase

in its inventory as it was mentioned earlier due to the delay of distributing the chicks to contract

growers. From this limited information, we can infer that SFI’s inventory system should be

improved to prevent further losses for the company.