Edita Financial

Statements

Dr/Alaa Safwat Thursday Youssef Mohamed 211006445 Youssef Mahmoud 211009346

Dr/Sara Diaa 10:30 Ashraf Mahmoud 211007708 Marwan Tamer 211006995
Agenda
Agenda
Introduction Short term solvency
Long term solvency

Asset Management
Financial Ratios Profitability
Market Value
Du Pont analysis

Comments

Comparison
 Introduction

Edita is an Egyptian company for food

industries Founded in 1996.
The Founder
 Market Share

The company has the largest market share in five sectors

of the snack food market in Egypt and the Middle East.
 Product Line

The company operates 32 production lines

 Portfolio

The company's portfolio includes well-known household brands like

Molto, HOHOs, Tiger tail, Twinkies, TODO, Bake Rolz, Bake Stix,
Freska, Mimix, and Onir
Short Term Solvency
 Short Term Solvency

Current Ratio Quick Ratio Net Working Capital Cash Ratio

 Current Ratio
2020 2021

CA=1,140,487,363 CL=895,172,324 CA=1,751,345,772 CL=1,229,164,863

CR=1,140,487,363/895,172,324 = 1.27 CR=1,751,345,772/1,229,164,863 = 1.42

Comments: Current Ratio (2020): Each $1 of current Comments: Current Ratio (2021): Each $1 of current
liabilities is covered by $1.27 of Edita company’s liabilities is covered by $1.42 of Edita company’s
current assets. current assets.

Comparison

the current ratio increased from 2020 to 2021 showing a better ability for the company to cover
short-term liabilities.
 Quick Ratio
2020 2021

CA=1,140,487,363 Inv= 295,420,425 CA=1,751,345,772 Inv= 526,494,164

CL=895,172,324 CL=1,229,164,863

QR=(1,140,487,363 -295,420,425)/895,172,324= 0.94 QR=(1,751,345,772 - 526,494,164)/ 1,229,164,863 =

0.99

Comments: Edita Company Without the need to sell inventory, each Comments: Edita Company Without the need to sell inventory, each
$1 of current liability is covered by $0.94 of cash and $1 of current liability is covered by $0.99 of cash and
accounts receivable.. accounts receivable.

Comparison

The quick ratio increased from 2020 to 2021, showing ability to cover short-term liabilities
without relying on inventory sales.
 Net Working Capital
2020 2021

CA=1,140,487,363 CL=895,172,324 CA=1,751,345,772 CL=1,229,164,863

NWC=1,140,487,363-895,172,324 = 245,315,039 NWC=(1,751,345,772 -1,229,164,863 = 522,180,909

Comments: Edita company had positive net working capital of Comments: Edita company had positive net working capital of
$245,315,039 , showing that its current assets $522,180,909, showing that its current assets
exceeded its current liabilities. exceeded its current liabilities.
.
Comparison

The ability of Edita to meet short-term financial liabilities has improved, showing improved liquidity.
 Cash Ratio
2020 2021

Cash=99,166,326 CL=895,172,324 Cash=1,751,345,772 CL=1,229,164,863

Cash Ratio= 99,166,326 / 895,172,324 = 0.11 Cash ratio=159,565,557/1,229,164,863 = 0.12

Comments: Edita company covered each $1 of current Comments: Edita company covered each $1 of current
liability by 0.11 of cash only liability by 0.12 of cash only.

Comparison

The cash ratio increased from 2020 to 2021, showing a stronger ability to cover
short-term liabilities with cash.
 Total Debt ratio
2020 2021

Cash=99,166,326 CL=895,172,324 Cash=1,751,345,772 CL=1,229,164,863

Total debt ratio= (3,331,021,725-1,650,077,504)/ NWC=(1,751,345,772 -1,229,164,863 = 522,180,909

3,331,021,725=0.504 times

Comments: Each $1 used for buying TA is financed using Comments: Edita company covered each $1 of current
$0.500 of debts in 2021 and $0.504 of debts in liability by 0.12 of cash only.
2020.

Comparison

the total debt ratio in 2021 is better than 2020 cause the less the ratio, the better the result.
 Equity Ratio
2020 2021

Cash=99,166,326 CL=895,172,324 Cash=1,751,345,772 CL=1,229,164,863

Equity Ratio= (1,650,077,504)/ (3,331,021,725) = Equity Ratio= (2,111,668,776)/ (4,223,477,013) = 0.499

0.495 times times

Comments: For each $1 invested using equity in TA, the Comments: Edita company covered each $1 of current
company borrows $1.000 as debt in 2021 and liability by 0.12 of cash only.
$1.018 in 2020.

Comparison

Debt to Equity in 2021 is better than 2020 cause less reliant on borrowed funds 
 Equity Multiplier
2020 2021

Detb to Equity Ratio = CL=895,172,324 Detb to Equity Ratio = CL=1,229,164,863

1+1.018=2.018 1+1.018=1.000
Equity Multiplier = 1+1.018=2.018 times Equity Multiplier = 1+1.000=2.000 times

Comments: For each $1 invested in equity, the company Comments: Edita company covered each $1 of current
can purchase or finance assets of $2.000 in liability by 0.12 of cash only.
2021 and $2.018 in 2021.

Comparison

So, equity multiplier in 2021 is better than 2021; since, buying more assets will entitle more debt as the TE will
remain 1 in the ratio as it is.
 Times Interest Earned
2020 2021

EBIT= 549,712,733 Interest Expense= EBIT= 777,619,127 Interest Expense=

86,548,093 74,944,742
Times Interest Earned= (549,712,733)/ (86,548,093) = Times Interest Earned= (777,619,127)/ (74,944,742) =
6.351 times 10.375 times

Comments: Each $1 of interest is covered by $10 of EBIT in Comments: Edita company covered each $1 of current
2021 and $6 of EBIT in 2020 liability by 0.12 of cash only.

Comparison

So, EBIT interest covered in 2021 is better than 2020.As, less of a risk to investors and creditors in terms of
solvency.
 Cash Coverage
2020 2021
EBIT=549,712,733 Interest Expense=6,548,093
Depreciation&Ammortization= Cash=1,751,345,772 CL=1,229,164,863
192,550,0420

Cash Coverage= (549,712,733+192,550,0420)/ Cash Coverage= (777,619,127+195,546,403)/ (74,944,742)

(86,548,093) = 9.500 times = 12.985 times
Each $1 of interest is covered by $13 of EBIT in
Comments: Comments: Edita company covered each $1 of current
2021 after adding up depreciation and
amortization, since these are non-cash liability by 0.12 of cash only.
expenses and it covered $10 of EBIT in 2020

Comparison

So, interest covered in 2021 is better than 2020.

 
 Cash Ratio
2020 2021

Cash=99,166,326 CL=895,172,324 Cash=1,751,345,772 CL=1,229,164,863

Cash Ratio= 99,166,326 / 895,172,324 = 0.11 NWC=(1,751,345,772 -1,229,164,863 = 522,180,909

Comments: Edita company covered each $1 of current Comments: Edita company covered each $1 of current
liability by 0.11 of cash only liability by 0.12 of cash only.

Comparison

The cash ratio increased from 2020 to 2021, showing a stronger ability to cover
short-term liabilities with cash.
 Cash Ratio
2020 2021

Cash=99,166,326 CL=895,172,324 Cash=1,751,345,772 CL=1,229,164,863

Cash Ratio= 99,166,326 / 895,172,324 = 0.11 NWC=(1,751,345,772 -1,229,164,863 = 522,180,909

Comments: Edita company covered each $1 of current Comments: Edita company covered each $1 of current
liability by 0.11 of cash only liability by 0.12 of cash only.

Comparison

The cash ratio increased from 2020 to 2021, showing a stronger ability to cover
short-term liabilities with cash.